Michael Malone v. eBay, Inc.

Filing 607

ORDER by Magistrate Judge Howard R. Lloyd denying 595 eBay, Inc.'s Motion for Sanctions. (hrllc2, COURT STAFF) (Filed on 5/25/2010)

1 2 3 4 5 6 7 8 9 10 NOT FOR CITATION IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION IN RE EBAY SELLER ANTITRUST LITIGATION No. C07-01882 JF (HRL) ORDER DENYING EBAY, INC.'S MOTION FOR SANCTIONS [Re: Docket No. 595] / 16 17 18 19 20 21 22 23 24 25 26 27 28 After the instant motion was briefed, the Sawyer Action was dismissed for lack of subject matter jurisdiction, without prejudice to Sawyer to re-file his claims in state court. At the motion hearing, this court was informed that Sawyer has re-filed his claims in state court.
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*E-FILED 05-25-2010*

United States District Court

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For the Northern District of California

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eBay, Inc. moves for monetary and other sanctions against plaintiffs' counsel at the Hagens, Berman, et al. law firm ("Hagens Berman") for a claimed violation of the court's Protective Order (Docket No. 68). Although though no documents have been disclosed to anyone or filed in any matter other than the instant action, eBay contends that Hagens Berman violated the Protective Order by reviewing eBay's documents produced in the instant action, with an eye toward evaluating the documents' potential relevance and possible use in another litigation filed against eBay: Sawyer v. Bill Me Later, et al., C10-00014JSW (the "Sawyer Action").1 Hagens Berman opposes the motion. Upon consideration of the moving and responding papers, as well as the arguments of counsel, this court rules as follows:

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The Protective Order provides that documents designated "Confidential" or "Highly Confidential" shall be used by any person (other than the producing party) solely for the purpose of the instant action. (See Docket No. 68, ¶ 3). Such designated documents are not to be used "for any business, competitive, personal, private, public or other purpose." (Id.). In any event, "[a]ll documents and other materials produced in this litigation shall be used for purposes of this litigation only, whether or not a producing party designates such documents or materials as Confidential." (Id. ¶ 1(c)). To be clear, eBay does not contend that the filing of the Sawyer Action violated the Protective Order. This court is informed that no documents produced in the instant lawsuit have been filed in the Sawyer Action. And Hagens Berman represents that no third parties relevant to the Sawyer Action have been shown any documents produced in the instant antitrust litigation. Essentially, the instant dispute boils down to a disagreement whether the Protective Order permits plaintiffs to so-called "mine" eBay's document production in the instant action as source material for the Sawyer Action or other potential claims or actions. Plaintiffs protest that there is no record that any such "mining" has occurred. And, they maintain that, at any rate, the Protective Order should not be construed so broadly as to constrain plaintiffs' counsel's right and ability to practice law. eBay, however, does not seem to be going that far. Indeed, it agrees that plaintiffs' counsel need not wipe their memories clean or somehow compartmentalize the mental impressions formed in the course of the instant action. At oral argument, eBay also seemed to agree that, to the extent Hagens Berman believes that documents produced in the instant lawsuit are also relevant to issues in the Sawyer Action, plaintiffs may pursue separate discovery as to those documents in that case. Nevertheless, eBay contends that if Hagens Berman were to review documents produced in the instant litigation for some purpose other than the instant litigation, then that review constitutes a prohibited "use" under the Protective Order. Under the plain language of the Protective Order, this court agrees that any such review, if it occurred, would violate the Protective Order. At the same time, however, it is not clear whether an actual violation occurred here. eBay's suspicions are fueled more by the absence of evidence as to what Hagens Berman may (or may not) have been doing with respect to eBay's 2

United States District Court

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For the Northern District of California

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documents. And, as discussed at the motion hearing, any such violation would be devilishly hard to police. At any rate, it is equally unclear what harm, if any, has been visited upon eBay as a result. Without more, this court is disinclined to impose sanctions for civil contempt. Accordingly, eBay's motion for sanctions is denied. For good measure, however, this court makes the following admonition: the subject discovery shall not be reviewed, used, or disclosed in connection with any matter other than the instant action, absent a court order or eBay's consent. Hagens Berman's request for an order directing plaintiffs' counsel to review and search for documents from the instant litigation that they contend are relevant to the Sawyer Action is also denied. The dispute over the factual overlap (or not) of the two cases has provided the backdrop for the instant motion. However, the question whether the Protective Order ought to be modified to permit use of discovery from the instant litigation in the Sawyer Action is not properly before this court on the instant motion. SO ORDERED. Dated: May 25, 2010 HOWARD R. LLOYD

United States District Court

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For the Northern District of California

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UNITED STATES MAGISTRATE JUDGE

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5:07-cv-01882-JF Notice has been electronically mailed to: Aaron H. Darsky [e-mail] Beverly Tse [e-mail] Brynly R. Llyr [e-mail] Christine Pedigo Bartholomew [e-mail], [e-mail] Christopher S. Studebaker [e-mail] Daniel Hume [e-mail] David E. Kovel [e-mail] Dixie Lee Noonan [e-mail], [e-mail] Elaine T. Byszewski [e-mail], [e-mail] George W. Sampson [e-mail] I. Stephen Rabin [e-mail] Jeff D Friedman [e-mail], [e-mail], [e-mail] Jeffrey Squire [e-mail] Joseph P. Garland [e-mail] Joseph V. McBride [e-mail] Julie Dawn Wood [e-mail], [e-mail] Karina Kosharskyy [e-mail] Katherine Robison [e-mail], [e-mail] Kenneth G. Walsh [e-mail] Michael Andrew McShane [e-mail], [e-mail] Michael Frederick Tubach [e-mail], [e-mail] Randall W. Edwards [e-mail] Read Ambler [e-mail] Reginald Von Terrell [e-mail] Robert L. Stolebarger [e-mail] Rosemary M. Rivas [e-mail], [e-mail], [e-mail], [e-mail] Shana E. Scarlett [e-mail], [e-mail] Steve W. Berman [e-mail], [e-mail] Susan L. Germaise [e-mail] Thomas Patrick Brown [e-mail], [e-mail] Counsel are responsible for distributing copies of this document to co-counsel who have not registered for e-filing under the court's CM/ECF program.

United States District Court

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For the Northern District of California

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