Sony Computer Entertainment America LLC v. Hotz et al

Filing 100

MOTION for Protective Order filed by George Hotz. Motion Hearing set for 4/21/2011 09:00 AM in Courtroom A, 15th Floor, San Francisco before Magistrate Judge Joseph C. Spero. (Kellar, Stewart) (Filed on 3/17/2011)

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YASHA HEIDARI (admitted Pro Hac Vice) [e-mail] Heidari Power Law Group LLC P.O. Box 79217 Atlanta, Georgia 30357 Telephone: [phone] Facsimile: 404-601-7852 STEWART KELLAR (SBN 267747) [e-mail] E-ttorney at Law 148 Townsend Street, Suite 2 San Francisco, California 94107 Telephone: [phone] JACK PRAETZELLIS (SBN 267765) [e-mail] MBV LAW LLP 855 Front Street San Francisco, California 94111 Telephone: [phone] Facsimile: 415-989-5143 Attorneys for Defendant George Hotz UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION

SONY COMPUTER ENTERTAINMENT AMERICA LLC, a Delaware limited liability company, Plaintiff, v. GEORGE HOTZ, et al., Defendants.

Case No. 11-CV-000167 SI (JCS) GEORGE HOTZ'S MOTION FOR PROTECTIVE ORDER

Now Comes Defendant George Hotz, by and through counsel, and moves this Court for Protective Order pursuant to Federal Rules of Civil Procedure Rule 26(c) and FRCP 26(b)(2)(c), seeking to protect Defendant George Hotz from Plaintiff Sony Computer Entertainment LLCs ("SCEA") overbroad jurisdictional discovery requests,
MOTION FOR PROTECTIVE ORDER (No. 11-CV-00167-SI)

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which are for the purpose of annoyance, embarrassment, oppression, and are an undue burden and undue expense on Defendant. Please note that this Motion is in addition to the Joint Protective Order, which is currently being drafted with Plaintiff's counsel.

I.

PRELIMINARY STATEMENT Mr. Hotz is a 21-year-old individual, who resides in New Jersey and who has not

consented to the jurisdiction of this Court. Despite the fact that SCEA has filed this action and represented that this matter belongs in the Northern District of California, SCEA now attempts to engage in a jurisdictional fishing expedition as a means to utilize jurisdictional discovery to achieve other ends. Although the Court has limited discovery to jurisdictional issues, SCEA has demanded overly burdensome and expensive discovery from Plaintiffs that bears little, if any, relevance to the issues at hand. The Defendant has shown good cause for the protective order sought herein, as the discovery SCEA seeks is harassing, irrelevant, burdensome, expensive, and intrusive. In addition, the confidential information sought to be protected could cause Defendant irreparable harm if mishandled or exposed. Mr. Hotz is not seeking to withhold information from Plaintiff. Instead, Mr. Hotz seeks only to (1) protect the information he is willingly providing by directing that the copy of his hard drive be created as-is and unaltered, and (2) relieve the undue burden and expense of appearing in this forum for a deposition where Mr. Hotz will gladly offer the same information through written deposition. Mr. Hotzhas been extremely accommodating to SCEA's demanding requests-- being responsive to questions and inquiries at all hours of the day and night, providing his personal hard drive with commercial, confidential, and valuable information so that SCEA can determine that nothing pertaining to jurisdiction resides on such drive, turning over his Playstation Computer, and remaining accessible despite the fact that he is not in the forum. Mr. Hotz files this Motion for a Protective Order to limit the issues at hand to the matters of jurisdiction, and to limit such discovery to less burdensome means. The 2MOTION FOR PROTECTIVE ORDER (NO. 11-CV-000167 SI)

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protection Defendant seeks would prevent irreparable harm and undue burden on Defendant, while still granting SCEA the information it seeks to discover, without any burden.

II.

LEGAL ARGUMENT AND AUTHORITY FRCP 26(c) provides the court may, for good cause, issue an order to protect a

party or person from annoyance, embarrassment, oppression, or undue burden or expense. Moreover, FRCP 26(b)(2)(c) provides that limitations on discovery is required and the Court must impose such limitations if "the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive" or "the burden or expense of the proposed discovery outweighs its likely benefit".

(1)

Defendant Has Shown Good Cause for Entry of a Protective Order. The U.S. Supreme Court has held that the discovery provisions, as all of the

Federal Rules of Civil Procedure, are subject to the injunction of Rule 1 that they "be construed to secure the just, speedy, and inexpensive determination of every action." Herbert v. Lando, 441 U.S. 153, 177 (1979). The Court goes on to elucidate that the material sought in discovery be "relevant" should be firmly applied, and the district courts should not neglect their power to restrict discovery where "justice requires protection for a party or person from annoyance, embarrassment, oppression, or undue burden or expense" pursuant to FRCP 26(c).Id. The federal courts have long recognized a qualified evidentiary privilege for confidential information, and such qualified protection for confidential information is also contemplated in the civil discovery context. Federal Open Market Committee of Federal Reserve System v. Merrill, 443 U.S. 340, 356 (1979); E. I. du Pont de Nemours Powder Co. v. Masland, 244 U.S. 100, 103 (1917).

-3MOTION FOR PROTECTIVE ORDER (NO. 11-CV-000167 SI)

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 (2) Mr. Hotz's Hard Drive Should Be Copied As-Is Because it Does Not Impact Jurisdictional Discovery, It Contains Confidential Information, and it is Consistent with the Neutral's Certification. Mr. Hotz moves this Court for an Order directing Michael Grennier, the neutral tasked with inspecting Mr. Hotz's devices, to copy the hard drive as-is, without first making any changes to the hard drive. Defendant has agreed and already complied with producing his hard drive and allowing a copy to be made. However, Defendant seeks to prevent an unencrypted copy of his hard drive to be created, maintained, and possibly exploited. Defendants hard drive contains sensitive personal information, other individuals personal information and data, clients proprietary data, and confidential business information, which includes high value breakthrough innovations in the field of technology. The information on Defendants hard drive is highly confidential, is not available to the public, and the emergence of any of that information would cause Defendant irreparable harm. On the other hand, copying the hard drive as-is would not cause Plaintiff any harm or burden. This Court contemplates that only discovery pertaining to jurisdiction will be conducted, but the Order provided by Sony, which this Court adopted, states that a copy of Mr. Hotz's entire unencrypted hard drive shall be made and preserved. SCEAs sweeping discovery request seeks to create and maintain a copy of Defendants private, personal information, confidential business information, and his clients proprietary information, which is irrelevant to the jurisdictional issue and is overbroad, burdensome and harassing. Discovery in this context must be limited to the issue at hand, which is determining jurisdiction, and it should be limited accordingly. SCEA now attempts to engage in a jurisdictional fishing expedition as a means to utilize jurisdictional discovery to achieve other ends. This should not be allowed by this Court. "District courts need not condone the use of discovery to engage in ,,fishing expeditions." Rivera v. NIBCO, Inc., 364 F.3d 1057, 1072 (9th Cir. 2004). 4MOTION FOR PROTECTIVE ORDER (NO. 11-CV-000167 SI)

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The Certification of Michael Grennier, the neutral tasked with inspecting Mr. Hotz's devices, provides and delineates certain procedures that constitute best business practices to examine Mr. Hotz's hard drive. Mr. Grennier's certification provides that a copy of the hard drive must be decrypted to perform certain searches, but nothing provides that a copy of the unencrypted drive must be or should be made. Indeed, Mr. Grennier's certification contemplates that the hard drive shall be maintained in encrypted form. Mr. Hotz is requesting this Court ensure that the hard drives maintained remain encrypted for two primary reasons. First, the hard drive provided by Mr. Hotz contains confidential information related to a number of sensitive contracts with business entities, and such information is required to be kept classified pursuant to the agreement Mr. Hotz has with such entities. A large portion of this data relates to significant breakthroughs in technology, including the SHA-1 cryptographic hash function. Such research and breakthroughs have no relevance whatsoever to the current dispute involving SCEA. Second, beyond information required to be kept classified, there is information on Mr. Hotz' hard drive that is of extreme commercial value. Most such information has not been released to the public and remains confidential at this time. Mr. Hotz gained initial fame as an innovative software wunderkind and Mr. Hotz has been offered significant amounts of money for the sale of his applications. Currently, Mr. Hotz has commercially valuable data and applications on his hard drive that, if released or disclosed, whether through error or intentional actions, would be disastrous for Mr. Hotz, both financially and to his reputation. Last, it is significant to note that Mr. Hotz's request to maintain only an encrypted copy of his hard drive is consistent with the procedures proscribed by Mr. Grennier in his certification. Equally significant, Plaintiff will in no way be prejudiced by such an order, as this in no way limits the information Plaintiff may obtain pursuant to its discovery. Such Order will maintain and preserve the hard drive in its current protected -5MOTION FOR PROTECTIVE ORDER (NO. 11-CV-000167 SI)

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state, allow Plaintiff to obtain the information it seeks, and ensure that an identical copy of the hard drive is maintained for redundancy and back-up purposes. (3) An In-Person Deposition is Unduly Burdensome and Written Deposition is a less burdensome alternative. Unlike a multi-billion dollar company composed of subsidiaries and complex operations, Mr. Hotz is a 21-year-old young man that has no ties to California. His affidavits and all information provided thus far indicate this point. Despite this, SCEA is attempting to drag Mr. Hotz into this forum where jurisdiction has not yet been established for a deposition in which the number of questions that could be asked of him are, at best, severely limited, and at worst, interposed for the purpose of annoyance, harassment, prolonging litigation, and increasing costs. Under Rule 26(b)(2), the court must consider whether the discovery sought is cumulative or duplicative, or can be obtained from some another source; whether the party seeking discovery has had ample opportunity to obtain the information pursuant to prior discovery in the action; and whether the burden or expense of the proposed discovery outweighs its likely benefit. Fed. R. Civ. P. 26(b)(2). Mr. Hotz is currently out of the country, and to hail him into California for a deposition is unduly burdensome and disruptive in the clearest sense of the phrase. This, coupled with the fact that the desired information could just as easily be obtained from some other source that is more convenient and less burdensome, requires a showing of good cause from the Plaintiff, and an order effectuating such. See In re Google Adwords Litigation (N.D. Cal., 2010). Indeed, the information sought is likely cumulative from the interrogatories already provided to Mr. Hotz, rendering such deposition of dubious value. For these reasons, Defendant seeks a protective order from this Court that limits the deposition of George Hotz to a written deposition, in order to avoid undue burden and expense where the information Plaintiff seeks could just as easily be obtained in written form. // // 6MOTION FOR PROTECTIVE ORDER (NO. 11-CV-000167 SI)

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III.

CONCLUSION For the reasons set forth above, Defendant Hotz respectfully requests that the

Court grant his motion for a protective order directing that Defendants hard drive be copied as-is, in its encrypted form, and limiting the deposition to written form.

Dated: March 15, 2010

By /s/ Stewart Kellar Stewart Kellar Attorneys for Defendant George Hotz
4813-8668-2888, v. 1

-7MOTION FOR PROTECTIVE ORDER (NO. 11-CV-000167 SI)

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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION SONY COMPUTER ENTERTAINMENT AMERICA LLC, a Delaware limited liability company, Plaintiff, Case No. 11-CV-000167 SI [PROPOSED] ORDER ON GEORGE HOTZ'S MOTION FOR PROTECTIVE ORDER

Defendants.

This Court, having read all pleadings and papers in this matter, as well as considering the entire record, hereby ORDERS:

The Order of this Court, entered on March 15, 2011, pertaining to discovery, is

hereby modified, such that TIG shall only make a copy of Mr. Hotzs encrypted hard drive, and any search and procedures shall move forward as consistent with the affidavit provided by Certification of Michael Grennier. (2) A deposition of Mr. Hotz shall be conducted via a written deposition.

IT IS HEREBY ORDERED. Dated:_______________ ____________________ Honorable Joseph C. Spero United States, Magistrate Judge

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CERTIFICATION OF CONFERENCE PURSUANT TO F.R.C.P. 26(c)

I hereby certify that I have in good faith conferred or attempted to confer with opposing counsel in an effort to resolve this dispute without Court action.

Dated: March 17, 2010

By /s/ Stewart Kellar Stewart Kellar Attorney for George Hotz

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