Aqui Es Texcoco, Inc. et al v. Lopez et al, No. 3:2012cv02113 - Document 16 (S.D. Cal. 2013)
Court Description: Amended ORDER Granting 14 Motion for Protective Order. Signed by Magistrate Judge William V. Gallo on 1/14/2013.(knb)
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Aqui Es Texcoco, Inc. et al v. Lopez et al Doc. 16 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 EDUARDO MALDONADO LOPEZ, et al., 12 Plaintiffs, 13 v. 14 15 AQUI ES TEXCOCO, et al., 16 Defendants. 17 18 AQUI ES TEXCOCO, et al., 19 Plaintiffs, 20 v. 21 22 EDUARDO MALDONADO LOPEZ, et al., 23 Defendants. 24 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Civil No. 12-1215-BEN(WVG) AMENDED ORDER REGARDING PROTECTIVE ORDER Civil No. 12-2113-BEN(WVG) AMENDED ORDER GRANTING MOTION FOR PROTECTIVE ORDER (DOC. NO. 14) 25 26 On January 9, 2013, the Court held a Status Conference in the 27 above-entitled 28 Plaintiffs (“Lopez”) in case no. 12-1215 (wage and hour lawsuit). cases. Douglas Clearly 1 appeared on behalf of 12cv1215 Dockets.Justia.com 1 Reed Smith appeared on behalf of Defendants on case no. 12-1215 and 2 Plaintiffs in case no. 12-2113 (“Aqui”). Harry McGahey appeared on 3 behalf of Defendants (“Lopez”) in case no. 12-2113 (trade libel 4 lawsuit). 5 At the Status Conference, the Court discussed with counsel 6 the need for, and the propriety of, a protective order for the 7 production of Aqui’s financial information in its initial disclo- 8 sures. 9 Case no. 12-1215 involves Plaintiffs Lopez’ and Alejandro 10 Lopez Ferreira’s (“Ferreira”) allegations that they worked for Aqui, 11 a restaurant, and inter alia, were not properly paid for the hours 12 that they worked, were not afforded meal and rest periods, were not 13 paid their wages upon their discharge, and that Aqui failed to 14 properly provide them with itemized pay statements. One of Aqui’s 15 affirmative defenses to Lopez’ and Ferreira’s claims is that the 16 amount alleged to be owed is offset by amounts that Lopez and 17 Ferreira owe Aqui in Aqui’s trade libel lawsuit. On July 25, 2012, 18 the Court ordered the parties to provide their initial disclosures 19 to each other by September 13, 2012. Thereafter, on October 26, 20 2012, the Court held a Case Management Conference, the result of 21 which, inter alia, was that Aqui was ordered to disclose its damages 22 estimate to Lopez and Ferreira on or before November 9, 2012. 23 In the wage and hour lawsuit, Aqui did not disclose its 24 damages estimate as ordered at the October 26, 2012 Case Management 25 Conference, nor did it object to the disclosure of the estimate. 26 Aqui’s counsel argued that while it did not object to production of 27 its financial information, the financial information is protected by 28 its financial privacy rights and is Aqui’s trade secret. 2 12cv1215 1 Case no. 12-2113 involves Aqui’s allegations that Lopez and 2 Ferreira (and Sandra Castillo) have committed trade libel and have 3 misappropriated Aqui’s name and trade secrets by opening a competing 4 restaurant with a same or similar name that serves the same or 5 similar food. On December 14, 2012, the Court ordered the parties to 6 provide their initial disclosures to each other by January 23, 2013. 7 Lopez’ counsel in case no. 12-1215 argued that since Aqui did 8 not object to producing its financial information (stating that such 9 information is protected from disclosure by Aqui’s financial privacy 10 rights and that such information is Aqui’s trade secret) and did not 11 produce 12 objections have been waived. Therefore, Aqui should produce its 13 financial information to Lopez, without restriction. See Burlington 14 Northern & Santa Fe Ry. Co. v. U.S. District Court, 408 F.3d 1142, 15 1147-1148 (9th Cir. 2005). a privilege log for the financial information, those 16 Fed. R. Civ. P. 26(a)(1)(A)(iii) requires that in a party’s 17 initial disclosure, a party must provide to all other parties: “a 18 computation of each category of damages claimed by the disclosing 19 party - who must make available for inspection and copying as under 20 Rule 21 privileged or protected from disclosure, on which each computation 22 is based...” 34 the documents or other evidentiary material, 23 Fed. R. Civ. P. 26(c)(1) states in pertinent part: 24 unless The Court may, for good cause, issue an order to protect a party... from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following... (B) specifying terms, including time and place for the disclosure or discovery;.. (G) requiring that a trade secret or... commercial information not be revealed or be revealed only in a specified way. 25 26 27 28 3 12cv1215 1 Here, in case no. 12-1215 (wage and hour lawsuit), Aqui did 2 not comply with Rule 26(a)(1)(A)(iii). Instead, it provided a 3 general statement regarding the damages it claims to have suffered. 4 A general statement regarding alleged damages is insufficient under 5 Rule 26(a)(1)(A)(iii). Therefore, Aqui shall provide to all other 6 counsel in both cases detailed financial information that supports 7 its claim for damages. 8 It is true that Aqui may have waived any objection in the 9 wage and hour lawsuit by not making a timely objection to the 10 disclosure of its financial information. However, in the trade libel 11 lawsuit, Aqui’s objections have been timely made. Given the fact 12 that the opposing parties in each case are virtually identical (with 13 the exception of Ms. Castillo), it makes little sense to order 14 disclosure on the one hand without a protective order, but insist on 15 a 16 interests and trade secrets of Aqui which may be protected in the 17 trade libel lawsuit will be completely eviscerated with unprotected 18 disclosure in the wage and hour lawsuit. protective order on the other. Whatever financial privacy 19 Despite Aqui’s blatant violation of 26(a)(1)(A)(iii), and 20 this Court’s Order of October 26, 2012, it is well recognized that 21 federal judges have fairly wide latitude to manage discovery to 22 ensure that litigation efficiently moves forward. California ex. 23 rel. Cal. Dept. of Toxic Substances Control v. Campbell, 138 F.3d 24 772, 779 (9th Cir. 1988), Jardin v. DATAllegro, 2011 WL 3299395 at 25 *5 (S.D. Cal. 2011). Also, despite Aqui’s violation, the Court must 26 not blindly and reflexively simply order all potentially sensitive 27 financial information to be disclosed to Aqui’s competitors, without 28 4 12cv1215 1 considering options to mitigate the damage that may result from 2 unrestricted disclosures of Aqui’s financial information. 3 Accordingly, Aqui shall not be compelled to produce its 4 financial information without restriction. Even though Aqui failed 5 to object to producing its financial information without restric- 6 tion, the financial information is still protected from disclosure 7 by Aqui’s financial privacy rights and is Aqui’s trade secret. 8 Further, at the January 9, 2013 Status Conference, Aqui’s counsel 9 noted that both case no. 12-1215 and case no. 12-2113 involve the 10 same employees (Lopez and Ferreira), same or similar restaurant 11 names (Aqui Es Texcoco and Aqui Esta Texcoco)1/ the same type of food 12 being sold in the same limited geographic area. The Court finds 13 these 14 information should be produced pursuant to a protective order. factors to be compelling reasons why Aqui’s financial 15 Here, the Court simply rules that Aqui’s general statement 16 regarding its damages is insufficient under Rule 26 (a)(1)(A)(iii), 17 and fashions a remedy for the insufficiency. The Court finds that a 18 protective order (to be drafted by the parties) will meet the needs 19 of all parties in these actions. 20 that certain to-be-produced documents may be designated as for 21 “Attorney’s Eyes Only.” Rule 26(c)(1)(B),(G). The protective order 22 shall include the following language: The protective order may provide 23 No document shall be filed under seal unless counsel 24 secures 25 document under seal. An application to file a document 26 under seal shall be served on opposing counsel, and on a court order allowing the filing of a 27 28 1/ Defendants in the trade libel lawsuit represent that they no longer use the name “Aqui Esta Texcoco.” 5 12cv1215 1 the person or entity that has custody and control of 2 the document, if different from opposing counsel. If 3 opposing counsel, or the person or entity who has 4 custody and control of the document, wishes to oppose 5 the application, he/she must contact the chambers of 6 the judge who will rule on the application, to notify 7 the judge’s staff that an opposition to the applica- 8 tion will be filed. 9 Lopez’ counsel in case no. 12-1215 objects to a provision in 10 the protective order that would allow Aqui to designate some to-be- 11 produced documents as for “Attorney’s Eyes Only.” Specifically, 12 Lopez’ counsel believes that since he will not be able to show those 13 to-be-produced documents to his clients, he will be unable to 14 properly advise them regarding Aqui’s financial status and alleged 15 damages. 16 However, there is nothing stopping Lopez’ counsel from 17 reviewing 18 himself, and/or from seeking assistance from financial professionals 19 to interpret the data contained in the documents, and formulating 20 opinions about what the documents state, so as to properly advise 21 his clients. Furthermore, as Aqui’s counsel suggested, counsel for 22 Lopez and Ferreira may discuss the financial information in general 23 terms. While this may have certain limitations, it is an avenue that 24 counsel should explore and include within the protective order. In 25 addition, the Court is not foreclosing counsel from seeking relief 26 from the Court to permit full or enhanced disclosure of Aqui’s 27 financial information to Lopez and Ferreira. Therefore, Lopez’ 28 counsel’s objection in this regard is overruled. the documents designated 6 “Attorney’s Eyes Only,” by 12cv1215 1 As a result, in case no. 12-2113, Defendants’ Motion for 2 Protective Order (Doc. No. 14) is GRANTED. The protective order 3 shall apply in case no. 12-1215. 4 On or before January 14, 2013, counsel for Aqui shall provide 5 to all other counsel a protective order that provides that any party 6 may designate certain documents as for “Attorney’s Eyes Only”. 7 8 On or before January 21, 2013 counsel for all other parties shall approve the protective order as to form. 9 On or before January 22, 2013, counsel for Aqui shall 10 produce to all other counsel the documents that evidence Aqui’s 11 claimed damages. 12 13 DATED: January 14, 2013 14 15 Hon. William V. Gallo U.S. Magistrate Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 7 12cv1215
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