Noble v. Wells Fargo Bank, N.A.

Filing 128

ORDER DENYING plaintiff's Motion to Strike, document 121 , and Defendant Wells Fargo's Motion for Protective Order, document 119 , and vacating the hearings associated with said motions. Order signed by Magistrate Judge Erica P. Grosjean on 2/7/2017. (Rooney, M)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

EASTERN DISTRICT OF CALIFORNIA

10
11
12
13

Case No. 1:14-cv-01963-DAD-EPG

BROOKE NOBLE,
Plaintiff,

ORDER DENYING
MOTION FOR PROTECTIVE ORDER

vs.

14
15

(ECF No. 119)

WELLS FARGO BANK, N.A., et al.,
Defendants.

ORDER DENYING
MOTION TO STRIKE

16

(ECF No. 121)

17
18

I.

19

Plaintiff initiated this action on December 10, 2014. (ECF No. 1) A First Amended

20

Complaint was filed on October 15, 2015. (ECF No. 25.) After a ruling on the Defendants’

21

motions to strike and/or dismiss on July 5, 2016, three claims remain against Defendant Wells

22

Fargo Bank, N.A. (“Wells Fargo”). (ECF No. 86.) Specifically, this case is proceeding on

23

Plaintiff’s wrongful death, negligent infliction of emotional distress and intentional infliction of

24

emotional distress claims against Wells Fargo. (Id.) Plaintiff’s allegations stem from the

25

manner that Wells Fargo evicted Plaintiff’s mother, Marsha Kilgore, who was on oxygen and

26

died shortly after the eviction due to respiratory failure.

27
28

BACKGROUND

The Court held a hearing on the motions to compel on January 12, 2017. (ECF No.
110.) Plaintiff's counsel Lenore Albert and Defendant's counsel Kamran Javandel
1

1

telephonically appeared on behalf of their clients. (Id.) For the reasons stated on the record and

2

in a follow-up order issued January 7, 2016 (ECF Nos. 111-12), the motions to compel (ECF

3

Nos. 107, 019) were granted, in part, and denied, in part.

4

A Wells Fargo request for entry of a confidential protective order was denied at the

5

January 12, 2017, hearing for failure abide by the specific requirements of Local Rule 141.1(c).

6

(ECF No. 111 at 4.) However, the Court granted leave for Wells Fargo to file a proposed

7

confidential protective order that complies with the Local Rule. (Id.)

8
9

At the January 12, 2017, hearing and in the January 13, 2017, order, the issue of
whether or not Wells Fargo’s policies and procedures are confidential and should only be

10

produced pursuant to a confidential protective order was discussed. (ECF No. 111 at 7.) The

11

Court permitted further briefing on the issue as follows:

12

14

Wells Fargo may submit a brief of no more than 5 pages by January 25, 2017.
Plaintiff may submit a response by January 31, 2017. To the extent that the
parties need to file confidential information to fully explain their position, those
exhibits may be filed separately and under seal.

15

(Id.) To facilitate a tight discovery schedule, the Court permitted temporary designation of the

16

policies and procedures as confidential until the issue could be fully resolved. (Id.)

13

17

On January 25, 2017, Wells Fargo filed a motion for protective order, notice of hearing,

18

and memorandum of points and authorities, as well as two supporting affidavits. (ECF Nos.

19

119 – 119-2.) The pages 3-7 of the memorandum of points and authorities contained argument

20

as to why Wells Fargo’s policies and procedures are confidential and should only be produced

21

pursuant to a confidential protective order. (ECF No. 119 at 3-7.) The motion also included a

22

request for sanctions requesting the Court to order Plaintiff to pay for Wells Fargo’s expenses

23

in making the motion for protective order, including attorney fees. (Id. at 7.) Wells Fargo also

24

filed a proposed protective order on January 25, 2017. (ECF No. 120.)

25

In response to Wells Fargo’s January 25, 2017, filings, Plaintiff filed, on the following

26

day, a motion to strike the motion for protective order. (ECF No. 121.) On January 30, 2017,

27

Plaintiff filed a self-titled supplemental brief on whether the policies and procedures are

28

confidential. (ECF Nos. 122 – 122-1.)
2

PLAINTIFF’S MOTION TO STRIKE

1

II.

2

Plaintiff requests that the Court strike Wells Fargo’s January 25, 2017, filings for failure

3

to follow the Court’s briefing directives. (ECF No. 121 at 2-4.) Specifically, Plaintiff argues

4

that Wells Fargo did not comply with Court’s page limitation of 5 pages; instead, Wells Fargo

5

filed a 7-page brief. (Id. at 2.) Next, Plaintiff argues that Wells Fargo improperly requested

6

sanctions and “focused [the motion] on a request for sanctions.” (Id. at 4.)

7

The motion to strike (ECF No. 121) is denied. The argument submitted to the Court in

8

the motion for protective order was timely (filed on January 25, 2017) and does not exceed 5

9

pages. (ECF No. 119 at 3-7.) Therefore, Wells Fargo complied with the Court’s briefing

10

directives. As discussed in Part C, below, the Court agrees that Wells Fargo should not have

11

included a request for sanctions in the motion for protective order. The Court will deny the

12

request on the merits. Accordingly, the portion of the motion to strike requesting that the

13

request for sanctions be stricken is denied as moot.

14

III.

WELLS FARGO REQUEST FOR PROTECTIVE ORDER

15

Wells Fargo requests entry of a protective order to protect from public disclosure 19

16

different procedures concerning the eviction of defaulting borrowers. (ECF No. 119 at 5.) The

17

Court previously found that all policies and procedures regarding evictions in place from

18

January 1, 2012 to December 31, 2013, were discoverable under Rule 26(b)(1) of the Federal

19

Rules of Civil Procedure, and ordered Wells Fargo to produce the documents. (ECF No. 111 at

20

6.) Defendant has thus far provided those procedures to Plaintiff for use in the litigation, but

21

subject to confidentiality restrictions.

22
23

A. Legal Standards
“In the federal judicial system trial and pretrial proceedings are ordinarily to be

24

conducted in public.” Olympic Ref. Co. v. Carter, 332 F.2d 260, 264 (9th Cir. 1964) (“The

25

purpose of the federal discovery rules, as pointed out in Hickman v. Taylor, 329 U.S. 495, 501,

26

67 S.Ct. 385, 91 L.Ed. 451, is to force a full disclosure.”) “As a general rule, the public is

27

permitted ‘access to litigation documents and information produced during discovery.’” In re

28

Roman Catholic Archbishop of Portland in Oregon, 661 F.3d 417, 424 (9th Cir. 2011) (quoting
3

1

Phillips v. Gen. Motors Corp., 307 F.3d 1206, 1210 (9th Cir.2002) and citing San Jose Mercury

2

News, Inc. v. U.S. Dist. Court, 187 F.3d 1096, 1103 (9th Cir.1999) (“It is well-established that

3

the fruits of pretrial discovery are, in the absence of a court order to the contrary, presumptively

4

public.”)).

5

As an exception to the general rule of public access to pretrial litigation discovery, a

6

party may move for a court order “to protect a party or person from annoyance, embarrassment,

7

oppression, or undue burden or expense, including … requiring that a trade secret or other

8

confidential research, development, or commercial information not be revealed or be revealed

9

only in a specified way.” Fed. R. Civ. P. 26(c)(1)(G).

10

The burden is on the moving party to demonstrate “good cause” for the entry of such an

11

order. See Fed. R. Civ. P. 26(c)(1); Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122,

12

1130 (9th Cir. 2003) (“A party asserting good cause bears the burden, for each particular

13

document it seeks to protect, of showing that specific prejudice or harm will result if no

14

protective order is granted.” (citations omitted)).

15

“A party asserting good cause bears the burden, for each particular document it seeks to

16

protect, of showing that specific prejudice or harm will result if no protective order is granted.”

17

Foltz, 331 F.3d at 1130–31 (citing Phillips v. Gen. Motors, 307 F.3d 1206, 1210-11 (9th Cir.

18

2002)). Broad allegations of harm, unsubstantiated by specific examples or articulated

19

reasoning, will not suffice. Id. (citations omitted). Instead, the moving party must provide

20

specific demonstrations of fact, supported where possible by affidavits and concrete examples,

21

rather than broad, conclusory allegations of potential harm. Id. at 1130-31 (citations omitted);

22

see also Culligan v. Yamaha Motor Corp., USA, 110 F.R.D. 122, 125 (S.D.N.Y. 1986)

23

(“[W]hen a party asserts that discovery will cause competitive injury because of the revelation

24

of trade secrets, it cannot generally rely upon conclusory statements, but must present evidence

25

of specific damage likely to result from disclosure.” (citations omitted)).

26
27
28

B. The Parties’ Positions
In its motion for protective order, Wells Fargo argues that good cause for entry of
protective order exists to protect its policies and procedures and procedures concerning
4

1

evictions because the documents at issue constitute a trade secret or other confidential research,

2

development, or commercial information” within the meaning of Rule 26(c)(1)(G) of the

3

Federal Rules of Civil Procedure. (ECF No. 119 at 5.)
Wells Fargo states the eviction procedures were developed “at significant effort and

4
5

expense,” allow Wells Fargo to collect on debts efficiently, “provide a competitive advantage

6

against competitors who have not gone to the time and expense of developing such

7

procedures,” and that “Wells Fargo takes all reasonable steps to safeguard this information and

8

protect against its disclosure.” (Id.) In support of these statements, Wells Fargo provides the

9

declaration of Nathan Miller, a Wells Fargo Vice President of Loan Documentation in the Real

10

Estate Owned department. (ECF No. 119-1 ¶¶ 2-4.)

11

Next, Wells Fargo asserts that disclosure the relevant eviction procedures would cause

12

Wells Fargo significant harm. (ECF No. 119 at 6.) Wells Fargo argues that if its competitors

13

obtained the procedures, they could “implement the procedures Wells Fargo developed at

14

significant expense, without the competitors incurring any expenses, developing any expertise

15

or experience within the field, or undergoing any independent legal review and revision, thus

16

putting Wells Fargo at a significant competitive disadvantage.” (Id.) Mr. Miller again provides

17

an attestation to this statement in his declaration. (ECF No. 119-1 ¶ 5.)
Plaintiff’s response challenges the procedure Defendant used to bring this issue to the

18
19

attention of the Court, and also argues that “policies and procedures followed by national banks

20

are in place for the purpose of provide safe and sound banking to the protection of the

21

consumer/public and that federal agencies routinely inspect their procedures.” (ECF No. 121 at

22

4).

23

Plaintiff also filed a supplement in opposition to the motion for protective order. (ECF

24

No. 123). Plaintiff argues that the policies and procedures at issue are subject to federal agency

25

review, and thus should not be considered confidential. In support, Plaintiff submitted the

26

Declaration of Walter Hacket, who purports to be “an expert in all areas of banking associated

27

with the origination, documentation and servicing of loans including mortgage loans.” (ECF

28

No. 122-1 at 2.) Mr. Hacket states in part:
5

1
2
3
4
5
6
7
8
9
10

[I]t is my opinion both based upon my over 25 years in the financial services
industry and my knowledge of the Federal Rules of Evidence that the claims of
Wells offered to justify its refusal to produce the evidence demanded are without
merit or basis in fact. Indeed, a review of documents issued by the Office of the
Comptroller of the Currency (“OCC”) particularly its documents relative to the
examination of large banks (of which Wells is one) make clear that the
requested materials would have to be made available on demand to the OCC, a
public, federal agency. Wells misrepresents the function of the OCC which is
charged with, primarily, ensuring the safety and soundness of the financial
institutions for which it is responsible.
Further, I am aware of no legal privilege that does or could attach to documents
required to be presented upon demand to the OCC as a matter of ensuring the
safety and soundness of America’s financial services institutions. The OCC
documents which I reviewed as part of my analysis of Wells responses to
discovery are several hundred pages long however they can be found online at . .
..

11
12
13
14
15
16

Wells Fargo Bank’s objections are wholly baseless and, indeed, are grossly
misleading and constitute a misrepresentation of fact to the Court. The
documents requested are in most cases documents relevant to third party
systems as Wells Fargo Bank uses virtually no systems that were entirely
developed in-house. Additionally, even if any systems were developed in house
the very notion that the manuals would constitute some form of attorneyclient
communication or attorney work product would also necessarily imply that they
could be kept from Wells Fargo Bank’s federal regulators, an implication that is
patently false.

17
18

(ECF No. 122-1 at 3-4). Mr. Hackett includes links to OCC regulations describing its role in

19

supervision, and also attached certain Wells Fargo policies and procedures that it deemed not

20

confidential including its Foreclosure Attorney Procedure Manual.

21

C. Application of Law to Defendant’s Requested Protective Order

22

Wells Fargo has not met its burden for entry of the protective order. The Court is not

23

convinced that the procedures constitute a trade secret or other confidential research,

24

development, or commercial information” within the meaning of Rule 26(c)(1)(G).

25

Wells Fargo argues that the eviction procedures constitute trade secrets under the

26

definition that a “trade secret may consist of any formula, pattern, device or compilation of

27

information which is used in one's business, and which gives him an opportunity to obtain an

28

advantage over competitors who do not know or use it.” Restatement of Torts § 757, cmt. b;
6

1

endorsed by In re Elec. Arts, Inc., 298 F. App'x 568, 569–70 (9th Cir. 2008). However, Wells

2

Fargo does not describe how its eviction procedures give it a competitive advantage over other

3

eviction procedures. For example, Wells Fargo does not describe how it makes more money by

4

using its eviction procedures in contrast to a competitor’s procedures, or how it would be at a

5

competitive disadvantage if every bank used the same eviction procedures. Indeed, it is

6

difficult to envision what a more competitive eviction procedure means in this context.

7

Rather than arguing that the procedures themselves provide a competitive advantage

8

over banks with other eviction procedures, Wells Fargo argues that other competitors who have

9

not yet written any such procedures could avoid the work of compiling such procedures

10

themselves. This argument appears based on the unwarranted speculation that competitors

11

have no such eviction procedures already. Moreover, if such an argument justified

12

confidentiality protection, it could be used to keep confidential any internal procedure without

13

regard to whether such a procedure conferred any competitive advantage to the party. See

14

Travelers Property Cas. Co. of America v. Centex Homes, 2013 WL 707918, at *1 (N.D. Cal.

15

Feb. 26, 2013) (“Plaintiff argues that the Guidelines are trade secrets, regardless of whether

16

they are outdated, because they were never disclosed to Plaintiff's competitors. This argument

17

conflates trade secrets with ordinary secrets. Information does not have value to a competitor

18

merely because the competitor does not have access to it.”) (internal citations omitted); Braack

19

v. Home Depot U.S.A., Inc., 2007 WL 2156371, at *4 (W.D. Wash. Jul. 23, 2007) (“Home

20

Depot has made a generalized claim that disclosure of its policies and procedures will result in

21

harm if the public obtains access to them. That harm could apply to all businesses that develop

22

policies and procedures. If the court were to issue a protective order based upon such a

23

generalized showing, the general principle of open access that underlies the judicial system

24

would be eviscerated.”).

25

Furthermore, the Court finds the statements within the declaration far too broad and

26

conclusory to establish good cause for protection under Rule 26(c)(1)(G). For example, Wells

27

Fargo does not provide any detail or specific example in paragraph three of declaration as to the

28

effort and expense invested to develop the procedures. See GoDaddy.com LLC v. RPost
7

1

Commc'ns Ltd., 2016 WL 1158851, at *4 (D. Ariz. Mar. 24, 2016), on reconsideration in part,

2

2016 WL 1274120 (D. Ariz. Mar. 31, 2016) (“[T]he Court is not persuaded that the ‘very

3

sensitive nature’ of GoDaddy's marketing survey or generic financial information constitutes a

4

compelling reason that justifies redaction. Aside from its blanket statement that the survey and

5

financial data constitutes ‘very sensitive’ information which, if revealed publicly, could

6

potentially cause harm, GoDaddy has not demonstrated what ‘specific prejudice or harm will

7

result’ if the information is not redacted.”); Hodges v. Apple Inc., 2013 WL 6070408, at *2

8

(N.D. Cal. Nov. 18, 2013) (“An unsupported assertion of ‘unfair advantage’ to competitors

9

without explaining ‘how a competitor would use th[e] information to obtain an unfair

10

advantage’ is insufficient.”); Ingram v. Pacific Gas & Electric Company, 2013 WL 5340697, at

11

*3 (N.D. Cal. Sep. 24, 2013) (“It is not apparent, and PG & E does not explain, how public

12

disclosure of its discipline guidelines could disadvantage PG & E competitively. PG & E's

13

‘conclusory arguments’ and ‘blanket’ assertions that Exhibit A is ‘confidential and proprietary’

14

are insufficient to overcome the presumption against sealing.”).

15

Wells Fargo cites to an unreported case from the Northern District of West Virginia in

16

support of its argument that “Court’s routinely hold that such harms justify issuance of a

17

protective order allowing discovery but prohibiting public disclosure.” (ECF No. 119, at p. 6),

18

citing Sheets v.Caliber Home Loans, Inc., 2015 U.S. Dist. LEXIS 160616, *6, *18 (N.D. W.

19

Va. Dec. 1, 2015). Setting aside the fact that the case has no precedential value to this Court, it

20

is also distinguishable in that the Court rested its decision on the fact that the policies and

21

procedures at issue were “’the results of years of labor’ in fine-tuning its own interpretations of

22

the WVCCPA, they are economically valuable.” Sheets, 2015 U.S. Dist. LEXIS at *6.

23

Moreover, defendants had demonstrated that “if Defendant’s competitors obtain its internal

24

policies and procedures, they will be able to collect upon debts more profitably and

25

competitively, causing harm to Defendant.” Id. Wells Fargo has made no such particularized

26

showing in this case.

27
28

Next, the fact that Wells Fargo does not ordinarily release the document to third-parties,
as indicated in paragraph four of the declaration, does not by itself render the policies “trade
8

1

secret or other confidential research, development, or commercial information” within the

2

meaning of Rule 26(c)(1)(G). By that rationale, any internal document, such as an email

3

between two employees, would garner such protection, which is clearly not the intent of Rule

4

26(c).

5

Wells Fargo also argues that the Court should keep the procedures confidential because

6

“such disclosure could lead to legal expense for Wells Fargo in defending against mertiless

7

[sic], opportunistic litigation is would not otherwise face.” (ECF No. 119, at p. 6:15-17).

8

Wells Fargo does not explain or support this statement. Nor is there any support in the Federal

9

Rules or case law for keeping a document confidential because disclosure could result in

10

litigation. To the extent Wells Fargo is arguing that disclosure of its own procedures would

11

cause litigation by revealing that Wells Fargo violates its own procedures, such a consequence

12

is a legitimate consequence of the public nature of litigation. After all, Plaintiff is seeking the

13

procedures to challenge Wells Fargo’s compliance with them in her mother’s eviction, and the

14

issue will certainly be part of any public trial against Wells Fargo. Put another way, it would

15

be wholly improper and against the goals of a public court system to issue a protective order in

16

order to shield a party from public knowledge of improper behavior. See GoDaddy.com, 2016

17

WL 1158851, at *4 (refusing to redact party’s proposed royalty rate because “Mr. Smith's

18

proposed royalty rate is the element of his report that GoDaddy predominantly challenges as

19

unreliable under Daubert, thereby ensuring public interest in the information, . . . GoDaddy is

20

undoubtedly aware that the royalty rate will be brought to the jury's attention at trial—in

21

unsealed format. For these reasons, the proposed royalty rate does not overcome the strong

22

presumption of public access . . . .).

23

In conclusion, the Court has previously determined that the procedures are discoverable

24

under Rule 26(b)(1), and Wells Fargo has not met its burden for entry of a protective order

25

Rule 26(c). Accordingly, the motion for protective order (ECF No. 119) is denied.

26

The Court acknowledges that Wells Fargo may want to exercise its right to object to

27

this order pursuant to Rule 72 of the Federal Rules of Civil Procedure. Therefore, the

28

documents at issue shall remain designated as confidential until the expiration of the time to
9

1

object under Rule 72 (i.e. if no objection is filed) or until the objection is finally resolved by the

2

District Judge.
WELLS FARGO’S REQUEST FOR SANCTIONS

3

IV.

4

Wells Fargo requests sanctions in the form of a Court to order Plaintiff to pay for Wells

5

Fargo’s expenses in making the motion for protective order, including attorney fees. (ECF No.

6

119 at 7.) Wells Fargo argues that “Rule 37(a)(5)(A) and (C) provide that a court must award a

7

party’s expenses, including attorney fees, in making a successful motion to compel or for

8

protective order…” (Id.)

9

The request for sanctions is without merit and procedurally improper. Rule 37(a)(5)(A)

10

provides that a successful movant for a motion to compel may receive expenses in limited

11

circumstances. See Fed. R. Civ. P. 37(a)(5)(A). Rule 37(a)(5)(B)-(C) then speaks to when a

12

Rule 26(c) protective order may be entered if the motion to compel is denied in whole or in

13

part. See Fed. R. Civ. P. 37(a)(5)(B)-(C). Nowhere does Rule 37(a)(5) does provide that a

14

successful movant for entry of protective order can receive expenses, including attorney fees,

15

as Wells Fargo suggests. Thus, the request for sanctions is denied.

16

V.

CONCLUSION

17

Wells Fargo’s motion for protective order (ECF No. 119) is DENIED.

18

Plaintiff’s motion to strike (ECF No. 121) is DENIED.

19

The noticed hearing dates for these motions are VACATED.

20

The documents at issue shall remain designated as confidential until the expiration of

21

the time to object under Rule 72 (i.e. if no objection is filed) or until the objection is finally

22

resolved by the District Judge.

23
24
25

IT IS SO ORDERED.
Dated:

February 7, 2017

/s/
UNITED STATES MAGISTRATE JUDGE

26
27
28
10

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
11