Gilbert v. Bank of America, N.A. et al
Filing
313
Amended Discovery Order. The attached order corrects a typographical error on page 5, line 8, and is otherwise unchanged. (Beeler, Laurel) (Filed on 5/10/2016)
1
2
3
4
5
6
7
8
UNITED STATES DISTRICT COURT
9
NORTHERN DISTRICT OF CALIFORNIA
10
San Francisco Division
United States District Court
Northern District of California
11
SEAN L. GILBERT, et al.,
Case No. 13-cv-01171-JSW (LB)
Plaintiffs,
12
v.
13
14
AMENDED DISCOVERY ORDER
MONEYMUTUAL, LLC, et al.,
Re: ECF No. 303
Defendants.
15
16
17
INTRODUCTION
18
The plaintiffs in this class action challenge payday loans that they allege were illegal primarily
19
because the lenders were unlicensed.1 David Johnson (a defendant who successfully moved to
20
compel arbitration2) and the plaintiffs dispute whether the plaintiffs’ counsel is misusing contact
21
information to solicit clients to file arbitrations against Mr. Johnson and others. The MoneyMutual
22
defendants produced the information as “Highly Confidential” in the related state case Pham v. JP
23
Morgan Chase Bank, NA and as “Protected Material” in this lawsuit. Generally, both protective
24
orders provide that the plaintiffs can use such confidential information only for prosecuting the
25
26
1
27
28
See Fifth Amended Complaint — ECF No. 256. Citations are to the Electronic Case File
(“ECF”); pinpoint citations are to the ECF-generated page numbers at the top of the documents.
2
4/8/15 Order — ECF No. 186.
AMENDED ORDER (No. 13-cv-01171-JSW (LB))
1
litigation.3 The court held hearings on April 28 and May 5, 2016. On this record and argument, the
2
court accepts the plaintiffs’ counsel’s representation that he is not violating the protective orders
3
because he is not using confidential information to solicit clients within the meaning of California
4
Rule of Professional Conduct 1-400. Counsel agreed, and the court orders, that he will continue to
5
abide by this practice.
STATEMENT
6
The contact information is for individuals marketed as “leads” to short-term lenders.4 One of
7
8
the short-term lenders was Hong Kong Partners.5 The plaintiffs and the MoneyMutual defendants
9
agreed that the contact information could be used in this case subject to the terms of the Pham
protective order; later, they entered into a protective order that a receiving party (here, the
11
United States District Court
Northern District of California
10
plaintiffs) may use “Protected Material that is disclosed or produced by another Party or by a Non-
12
Party in connection with this case only for prosecuting, defending, or attempting to settle this
13
litigation.”6 Mr. Johnson separately produced documents regarding loans that Hong Kong Partners
14
made to California residents between 2008 and 2013; the plaintiffs agreed to keep the information
15
confidential and to use it only in connection with the motion for class certification in this case.7
16
Mr. Johnson contends that the plaintiffs’ counsel is misusing the contact information to file
17
arbitrations against Mr. Johnson and other defendants who successfully moved to compel
18
arbitration.8 Apparently the plaintiffs’ counsel filed arbitrations after the district judge granted the
19
defendants’ motions to compel arbitration.9 The plaintiffs’ counsel asserts that he acted only to
20
protect his clients’ interests. Mr. Johnson counters that tolling protects clients, and this is an
21
attempt to leverage settlement; the plaintiffs’ counsel apparently filed 94 arbitrations since April
22
23
3
24
4
25
Letter Brief — ECF No. 292 at 1-2.
Id. at 1.
5
Id.
Id. at 2 (citing Protective Order — ECF No. 260).
7
Id.
8
Id.
9
4/8/15 Order — ECF No. 186.
6
26
27
28
AMENDED ORDER (No. 13-cv-01171-JSW (LB))
2
1
2015, each costing Hong Kong Partners $10,000, $3,000 of which is non-refundable.10 (For a
2
point of reference, the plaintiffs’ counsel said at the hearing that the class size is 40,000.) The
3
discovery dispute is whether this practice violates the protective order’s requirement that the
4
plaintiffs’ counsel can use confidential information only “in this litigation.”
5
At the April 28 hearing, the plaintiffs’ counsel represented that he would use information from
6
Mr. Johnson only to 1) determine which persons should be sent notice of class certification and 2)
7
prove damages at trial.11 The court ordered that limitation but also explained that a further
8
limitation might interfere with the plaintiffs’ counsel’s communications with clients.12 Because the
9
MoneyMutual defendants did not participate in the drafting of the letter brief or attend the April 28
hearing, the court clarified — at the plaintiffs’ counsel’s request — that the order applied only to
11
United States District Court
Northern District of California
10
Mr. Johnson’s disclosures.13 Mr. Johnson then asked the court to reconsider its clarification on the
12
ground that it is inappropriate for the plaintiffs’ counsel to solicit class members using contact
13
information designated for use only in this litigation.14 The court set the May 5 hearing to obtain
14
the MoneyMutual defendants’ input. Basically, the input was that the protective order at ECF No.
15
260 governs the use of information produced in the litigation, and the plaintiffs’ counsel cannot
16
use information in a manner that violates the protective order.
17
ANALYSIS
18
The plaintiffs’ counsel first asserts that the MoneyMutual defendants produced the contact list
19
under the Pham protective order, and any claim of misuse needs to be raised in state court.15 That
20
may be one forum, but there is a protective order here that — like the Pham protective order —
21
limits use of information to the prosecution of this litigation.
Next, the plaintiffs’ counsel argues that the “arbitrations are part of the same Pham
22
23
24
10
25
11
See Letter Brief — ECF No. 292 at 3 n.4.
4/29/16 Order — ECF No. 299.
Id.
13
ECF No. 301; 4/29/16 Order — ECF No. 302.
14
ECF No. 303 at 2.
15
Letter Brief — ECF No. 292 at 4.
12
26
27
28
AMENDED ORDER (No. 13-cv-01171-JSW (LB))
3
1
litigation.”16 He explains that the protective order there limited use of the information to litigating
2
the claims in the lawsuit (as opposed to using it for some other purpose). If a claim is sent to
3
another forum (such as another court or arbitration), that does not cut off use of the discovery; it is
4
the same litigation.17 That is not a fair reading of the protective orders. “Litigation” in both is
5
defined as (essentially) the lawsuit. Also, the ordinary way to address use of information is to
6
dispute confidentiality designations.
More fundamentally, the plaintiffs’ counsel argues that he has not used confidential
7
8
information in violation of the protective orders. The spreadsheet has contact information for class
9
members. He began contacting class members from the list and other sources, gathering
information to support class certification and his prosecution of the case. He informed the class
11
United States District Court
Northern District of California
10
members that certain claims were split and sent to arbitration. He did not solicit them to file
12
arbitrations (and at the hearing, defined “solicitation” as the definition in California Rule of
13
Professional Conduct 1-400, meaning, a communication concerning his availability for
14
professional employment in which a significant motive is pecuniary gain). Instead, he told them
15
only the status of their case and the consequences of action and inaction. Thereafter, certain class
16
members filed arbitrations to preserve their rights in the event that the arbitrator upheld the
17
enforceability of the arbitration agreement and the class-action waiver.18
The court cannot conclude on this record and argument that the plaintiffs’ counsel violated the
18
19
protective orders (and more particularly, the protective order at ECF No. 260). The court
20
recognizes that courts routinely prohibit the use of confidential information in other litigation. For
21
example, one cannot use confidential information learned in one lawsuit to file a separate lawsuit.
22
See, e.g., On Command Video Corp. v. LodgeNet Entm’t Corp., 976 F. Supp. 917, 921 (N.D. Cal.
23
1997). But the cases generally involve the misuse of proprietary information (such as trade secrets
24
or source code or competitive information). See id.; Avago Techs., Inc. v. IPtronics Inc., No. 5:10-
25
cv-02863-EJD (PSG), 2015 WL 3640626, at *1 (N.D. Cal. June 11, 2016). By contrast, the
26
16
27
28
Id.
Id.
18
Id.
17
AMENDED ORDER (No. 13-cv-01171-JSW (LB))
4
1
alleged misuse here involves an attorney giving advice to actual class members (albeit those
2
identified through discovery) who are his clients. Mr. Johnson cites no authority that compels (or
3
even persuades) a conclusion that the plaintiffs’ counsel — who is allowed to contact those on the
4
spreadsheet — cannot communicate information about the status of the litigation, advise them, and
5
act to protect their interests. Mr. Johnson’s counsel was careful to specify that he did not object to
6
the arbitrations themselves. But the court sees no path to imposing — through a discovery ruling
7
— a blanket limitation on counsel’s communications with persons on the spreadsheet. To do so
8
intrudes into the attorney-client relationship. Moreover, the plaintiffs’ counsel represented that he
9
is not using protected information to solicit (within the meaning of Rule 1-400) clients.
10
On this record and argument, the best that the court can do is to order the plaintiffs’ counsel to
United States District Court
Northern District of California
11
do what he agrees to do: not solicit (as defined in Rule 1-400) clients through use of the contact
12
information disclosed by the MoneyMutual defendants or Mr. Johnson.
13
The court is not unsympathetic to the concerns that Mr. Johnson raises, especially given what
14
may be the premature, serial filings of arbitrations at Mr. Johnson’s expense. The parties are free
15
to raise any solutions — including a proposal for ADR — at the June 9 motions hearing.
CONCLUSION
16
17
The court orders the plaintiffs’ counsel to do what he has agreed to do: not solicit (within the
18
meaning of California Rule of Professional Responsibility 4-100) clients through use of the
19
contact information disclosed by the MoneyMutual defendants or Mr. Johnson. This disposes of
20
ECF No. 303.
21
IT IS SO ORDERED.
22
Dated: May 6, 2016
23
24
______________________________________
LAUREL BEELER
United States Magistrate Judge
25
26
27
28
AMENDED ORDER (No. 13-cv-01171-JSW (LB))
5
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?