Asia Economic Institute et al v. Xcentric Ventures LLC et al

Filing 56

SUPPLEMENT to MOTION to Compel Deposition of Edward Magedson MOTION for Order for To Bifurcate Discovery and Regarding Conduct at Depositions MOTION for Protective Order for Confidentiality or Ordering Discovery Without Protective Order Regarding Confidentiality 52 Supplemental Memorandum of Law pursuant to Local Civil Rule 37-2.3 filed by Plaintiffs Asia Economic Institute, Iliana Llaneras, Raymond Mobrez. (Borodkin, Lisa)

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DANIEL F. BLACKERT, ESQ., CSB No. 255021 LISA J. BORODKIN, ESQ., CSB No. 196412 Asia Economic Institute 11766 Wilshire Blvd., Suite 260 Los Angeles, CA 90025 Telephone [phone] Facsimile [phone] [e-mail] [e-mail] [e-mail] [e-mail] Attorneys for Plaintiffs, Asia Economic Institute LLC, Raymond Mobrez, and Iliana Llaneras UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ) ) ) ) ) ) Plaintiffs, ) ) vs. ) ) XCENTRIC VENTURES, LLC, an Arizona LLC, d/b/a as BADBUSINESS ) ) BUREAU and/or ) BADBUSINESSBUREAU.COM ) and/or RIP OFF REPORT and/or ) RIPOFFREPORT.COM; BAD ) BUSINESS BUREAU, LLC, organized ) ) and existing under the laws of St. ) Kitts/Nevis, West Indies; EDWARD MAGEDSON an individual, and DOES ) ) 1 through 100, inclusive, ASIA ECONOMIC INSTITUTE, a California LLC; RAYMOND MOBREZ an individual; and ILIANA LLANERAS, an individual, Defendants. Case No.: 2:10-cv-01360-SVW-PJW DISCOVERY MATTER The Honorable Patrick J. Walsh PLAINTIFFS' SUPPLEMENTAL MEMORANDUM OF LAW IN FURTHER SUPPORT OF MOTION (1) BIFURCATING DISCOVERY; (2) REGARDING A PROTECTIVE ORDER; (3) TO COMPEL DEPOSITION OF EDWARD MAGEDSON; AND (4) REGARDING CONDUCT AT DEPOSITIONS [Local Civ. Rule 37-2.3] Date: June 24, 2010 Time: 11:00 a.m. Courtroom: 827A Discovery Cut-off: None Pretrial Conf. Date: August 2, 2010 Trial Date: August 3, 2010

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Supp. Memorandum of Law in Support of Plaintiffs' Motion on Discovery Issues 10-cv-1360
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PLAINTIFFS' SUPPLEMENTAL MEMORANDUM OF LAW Plaintiffs submit this Supplemental Memorandum of Law in further support of their motion on discovery matters. DN-52. The original hearing date of this motion was June 25, 2010. DN-25 However, on June 10, 2010, at the request of Defendants, the hearing date on this motion was advanced to June 24, 2010. DN55. Plaintiffs respectfully request this Court to consider this brief as timely filed. 1. Further Legal Argument on Issue II: Protective Order A. Defendants Fail To Show "Good Cause" for a Protective Order "In the [Ninth] circuit, we start with a strong presumption in favor of access to court records." Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003) (citing Hagestad v. Tragesser, 49 F. 3d 1430, 1434 (9th Cir. 1995)). As the Defendants correctly state, the common law right of access is not absolute and can be overridden given sufficiently compelling reasons for doing so. "[T]he party seeking a protective order has the burden of showing the existence of good cause." See San Jose Mercury News, Inc., 187 F.3d 1096, 1103 (9th Cir. 1999). The Defendants attempt to meet this burden by suggesting the Plaintiffs are seeking to proceed without a protective order solely "to gratify private spite, promote public scandal, circulate libelous statements or release trade secrets." DN52 ("Joint Stip.") at 29. Defendants offer no proof of this claim. They rely on their experiences with non-parties to this action with whom the Defendants are currently or previously "embroiled in litigation." Joint Stip. at 29-30. These individuals have no relevance to the present discovery dispute. Plaintiffs have stated that this case should be blogged and reported on. That is an opinion, not an intention. This is a high-profile case likely to be of public interest. Plaintiffs' counsel are mindful of California Rule of Professional Conduct 5-120 regarding trial publicity. Plaintiffs were responding to Defendant Edward Magedson's admission that "We will all be blogged." Joint Stip. at 23.

Supp. Memorandum of Law in Support of Plaintiffs' Motion on Discovery Issues 10-cv-1360
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Plaintiffs previouslu offered to protect any trade secrets identified by Defendants. See Borodkin Dec. at ¶24; Ex. 14. "If there is a particular algorithm for determining the cost of enrollment and monthly fee for the Corporate Advocacy Program (CAP), then we may consider a provisional proposal for solely that as well as the actual prices." See Borodkin Dec. ¶24, Ex. 14 at 3. For reasons unknown to the Plaintiffs, this was unacceptable to the Defendants. Defendants' cursory arguments do not demonstrate "good cause" for a protective order. This case should proceed without one until good cause is shown. B. The Public Has a Great Interest in the Legitimacy of a Purported Consumer Advocate. The public interest in this litigation greatly outweighs the Defendants' need for confidentiality. The products of pretrial discovery are, in the absence of a court order, presumptively public. See San Jose Mercury News, Inc. v. United States District Court, 187 F.3d 1096, 1103 (9th Cir. 1999); see also In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litigation, 101 F.R.D. 34 (C.D. Cal. 1984) ("American courts have long recognized the general presumption of open court records and proceedings.") "[P]ublic access to court proceedings is one of the numerous `checks and balances' of our system because `contemporaneous review in the forum of public opinion is an effective restraint on possible abuse of judicial power.'" Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555 (1980) (Brennan, J.), quoting In re Oliver, 333 U.S. 257 (1943). The interest in access to court proceedings is particularly forceful in cases which involve matters of significant public concern. See In re Petroleum Products Antitrust Litigation, 101 F.R.D. at 38. This is a matter of great public concern. There are over 500,000 reports on Defendants' website affecting over 100,000 businesses. Defendants purport to be consumer advocates. They describe themselves as a "worldwide consumer reporting Web site and publication, by consumers, for consumers..."
Supp. Memorandum of Law in Support of Plaintiffs' Motion on Discovery Issues 10-cv-1360
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As a self-appointed regulatory body, Defendants have undertaken the task of discovering and publishing companies that are so-called "Ripoffs" with little to no due process. Having undertaken this responsibility on behalf of the public, the legitimacy of this "agency" would be important to the "millions of consumers" who view the Defendants' Web site, http://www.ripoffreport.com. Defendants' business thrives on the publication of derogatory and negative statements affecting hundreds of thousands of people. They claim the nature of the Ripoff Report website is "exposing frauds, shams and similar conduct." Joint Stip. at 29. Accordingly, the operation of this site is of great public interest, and no protective order is warranted. 2. Further Legal Argument on Issue III: Motion to Compel Deposition of Edward Magedson Defendants refuse to answer particular questions at the Rule 30(b)(6) depositions of Xcentric Ventures LLC and the deposition of Edward Magedson, citing the lack of a protective order as the reason. Relevant portions of the deposition transcripts will be provided upon the Court's request. Moreover, Defense counsel impermissibly "coached" Mr. Magedson throughout the June 7, 2010 deposition, even after admonitions by examining counsel. The coaching took the form of ambiguous and suggestive "objections" that were neither objections nor instructions not to answer. These ambiguous, speaking objections took the form of "object to the extent that . . ." and otherwise in a manner that frustrated a "fair examination." See, e.g., Hall v. Clifton Precision, 150 F.R.D. 525, 530 (E.D. Pa. 1993). See also Univ. Trading & Inv. Co. v. Kiritchenko, 2007 U.S. Dist. LEXIS 98149 (N.D. Cal. Aug. 2, 2007) at *10-11 ("under Rule 30(d)(1) of the Federal Rules of Civil Procedure, any objection "must be stated concisely and in a non-argumentative and non-suggestive manner"); C.D. Cal. "Professionalism and Civility Guidelines" Rule B.4.5 ("When a question is

Supp. Memorandum of Law in Support of Plaintiffs' Motion on Discovery Issues 10-cv-1360
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