O'M and Associates, LLC et al v. Ozanne et al

Filing 177

ORDER denying defendant Matthew Stoen's 120 Amended Motion for Order to Show Cause why Plaintiffs and/or Peter Hilger should not be held in contempt of court for violation of the January 3, 2011 protective order. Plaintiffs' request that the Court strike the Amended Motion for Order to Show Cause is also denied. Signed by Magistrate Judge Ruben B. Brooks on 06/01/11. (All non-registered users served via U.S. Mail Service)(cge) (mam).

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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O’M AND ASSOCIATES, LLC, an
Illinois limited liability
company, d/b/a O’Malley and
Associates; PRESERVE CAPITAL,
LLC, an Illinois limited
liability company; and MBM
SETTLEMENTS, LLC, an Illinois
limited liability company,

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Plaintiffs,
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v.
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BRENDAN K. OZANNE, BRIAN C.
DAWSON, AND DAWSON & OZANNE, a
California general partnership,
as escrow agent; MATTHEW STOEN,
individually and as manager and
agent for KODIAK FAMILY, LLC, a
Nevada limited liability
company; KODIAK FAMILY, LLC,
individually and as agent for
XYZ CORPORATION,
Defendants.

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Civil No. 10cv2130 AJB(RBB)
ORDER DENYING DEFENDANT MATTHEW
STOEN’S AMENDED MOTION FOR
ORDER TO SHOW CAUSE WHY
PLAINTIFFS AND/OR PETER HILGER
SHOULD NOT BE HELD IN CONTEMPT
OF COURT FOR VIOLATION OF THE
JANUARY 3, 2011 PROTECTIVE
ORDER [ECF NO. 120]

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On February 23, 2011, Defendant Matthew Stoen filed a Motion

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for Order to Show Cause Why Plaintiffs and/or Peter Hilger Should

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Not Be Held in Contempt of Court for Violation of the January 3,

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2011 Protective Order [ECF No. 111].

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Stoen asked that the Court

10cv2130 AJB(RBB)

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issue an order to show cause why Plaintiffs and Hilger should not

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be held in contempt of court, and that the Limited Temporary

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Restraining Order issued by United States District Court Judge

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Marilyn E. Huff be dissolved.

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111.)

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Court, vacated the motion hearing, and reset the hearing for April

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4, 2011, at 10:00 a.m. before this Court [ECF No. 116].1

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(Mot. Order Show Cause 6, ECF No.

On March 1, 2011, Judge Huff referred the Motion to this

On March 3, 2011, Defendant Matthew Stoen filed an Amended
Motion for Order to Show Cause Why Plaintiffs and/or Peter Hilger

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Should Not Be Held in Contempt of Court for Violation of the

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January 3, 2011 Protective Order, along with Exhibit A and a

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redacted version of Exhibit B [ECF No. 120].

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subsequently lodged the confidential version of Exhibit B with the

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Court, pursuant to the Protective Order entered on January 3, 2011

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[ECF Nos. 72-73, 118-119].

The Defendant

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On March 18, 2011, Plaintiffs’ Response in Opposition to

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Defendant’s Amended Motion for Order to Show Cause Why Plaintiffs

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and/or Peter Hilger Should Not Be Held in Contempt of Court for

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Violation of the January 3, 2011 Protective Order was filed, along

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with the Affidavit of Peter Hilger [ECF No. 125].

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2011, this Court vacated the April 4, 2011 motion hearing and

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reset it for May 23, 2011, at 10:00 a.m.

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Defendant Stoen’s Reply and a redacted exhibit was filed on May

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16, 2011 [ECF No. 159].

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confidential version of the Reply and exhibit with chambers [ECF

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Nos. 160, 164].

On March 28,

A redacted version of

The next day, Defendant Stoen lodged a

The Court found Defendant Stoen’s Motion suitable

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This case was transferred to United States District Court
Judge Anthony J. Battaglia on March 15, 2011 [ECF No. 124].
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10cv2130 AJB(RBB)

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for resolution on the papers, pursuant to Southern District of

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California Civil Local Rule 7.1(d)(1), and vacated the hearing set

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for May 23, 2011, at 10:00 a.m. [ECF No. 168].

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The Court has reviewed Defendant’s Amended Motion and

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exhibits, Plaintiffs’ Opposition and Affidavit of Peter Hilger,

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and Defendant’s Reply and exhibit.

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Defendant’s Amended Motion for Order to Show Cause is DENIED.

For the reasons stated below,

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I.

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BACKGROUND

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On January 3, 2011, Judge Marilyn Huff granted the parties’

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Joint Motion for Entry of Protective Order.

(Joint Mot. Entry

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Protective Order 1, ECF No. 72; Order Granting Joint Mot.

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Protective Order 1, ECF No. 73.)

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to Show Cause, Defendant Matthew Stoen generally argues that Peter

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Hilger, a member of Plaintiff Preserve Capital, LLC [ECF No. 120],

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violated the Protective Order by deliberately and wrongfully

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disclosing confidential information to Stoen’s father-in-law, Jon

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Monson.

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No. 159.)

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default against him was set aside, he produced confidential

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information to Plaintiffs’ counsel in compliance with the Limited

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Temporary Restraining Order [ECF Nos. 36-37, 96, 100].

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Order Show Cause 3, ECF No. 120.)

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February 17, 2011, Peter Hilger sent an e-mail to Stoen’s father-

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in-law disclosing the signatory on a bank account into which a

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portion of the disputed funds had been deposited.

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response, Plaintiffs argue that the mere identity of the holder of

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the account into which the funds were deposited is not

In his Amended Motion for Order

(Am. Mot. Order Show Cause 5, ECF No. 120; Reply 2, ECF
Stoen claims that on January 31, 2011, after the

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(Am. Mot.

The Defendant alleges that on

(Id. at 5.)

In

10cv2130 AJB(RBB)

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“confidential information” within the meaning of the Protective

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Order.

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Peter Hilger’s belief that it did not constitute confidential

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information was a reasonable interpretation of the Protective

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Order, and any violation was unintentional.

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#1 Hilger Aff. 2.)

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A.

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(Opp’n 3, ECF No. 125.)

Even if it is, Plaintiffs assert,

(Id.; see id. Attach.

The November 2, 2010 Limited Temporary Restraining Order
On October 13, 2010, Plaintiffs filed a Verified Motion for

Temporary Restraining Order with supporting affidavits attached

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[ECF No. 4].

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Defendants from spending or disbursing approximately $700,000 in

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escrowed funds that had been wired into the Defendants’ IOLTA

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account until further court order.

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ECF No. 4.)

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Temporary Restraining Order [ECF Nos. 36-37], instructing the

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following:

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Plaintiffs sought an order prohibiting the

(Verified Mot. TRO 4-6, 10,

On November 2, 2010, Judge Huff granted a Limited

(1)

Brendan Ozanne and Dawson & Ozanne and its
principals, including but not limited to Matthew
Stoen, individually and as agent of Kodiak Family,
LLC, are enjoined and restrained from directly or
indirectly transferring the Deposited Funds plus
any interest earned thereon, or any portion
thereof, from any account over which any of
Defendants have ownership, possession, or control
and into which the Deposited Funds have been
identifiably transferred;

(2)

Ozanne, Dawson & Ozanne, Stoen and Kodiak are to
provide, within 10 days from the effective date of
this order, all relevant information regarding all
accounts to which the Deposited Funds were
transferred and are now held, including but not
limited to: the location and identity of the
transferee account, the date on which the funds
were transferred, the accounts to which they were
transferred, the reason for the transfer, and the
identities of all signatories to the account to
which the funds were transferred;

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10cv2130 AJB(RBB)

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(3)

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Discovery may commence in this matter immediately
and be expedited as to accounting and issues raised
in the application for the temporary restraining
order . . . .

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(Order Granting Limited TRO 3-4, ECF No. 36; Mem. Decision

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Granting Limited TRO 8-9, ECF No. 37.)

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B.

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The Protective Order
On January 3, 2011, the parties filed a Joint Motion for

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Entry of Protective Order.

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ECF No. 72.)

(Joint Mot. Entry Protective Order 1,

That same day, the Court issued an Order Granting

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Joint Motion for Entry of Protective Order as Modified by the

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Court.

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73.)

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information or documents shall be used by the receiving party

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solely for litigation purposes.

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the dissemination of “confidential information.”

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(Order Granting Joint Mot. Protective Order 1, ECF No.

The Protective Order states that all confidential

1.

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(Id. at 2.)

The Order limited

For purposes of this Order, “Confidential
Information” shall mean information or data of any
kind or description containing proprietary,
competitively sensitive, and/or financial or
customer information which is produced by any party
or third party, is confidential to the producing
party in that it is not generally available to the
public or third persons, and is designated in good
faith by the producing party as “Confidential,”
including, but without limitation, tax returns,
financial statements, bank account records and
statements, and other financial information.

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. . . .
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3.
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Except as expressly stated herein or by further
Order of this Court, Confidential Information shall
not be given, shown, made available, communicated,
or disclosed to anyone other than:

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(a)

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(b)

The attorneys of record in this action,
and their legal assistants and staff
members;
the parties to this action;

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10cv2130 AJB(RBB)

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(c)

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(d)

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(e)
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(f)
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Independent consultants and/or experts
retained by the parties to work on the
action, provided that before any such
consultant or expert is shown or receives
any Confidential Information he must read
a copy of this Order and agree to abide
by same by executing an affidavit
specifying that such person has read a
copy of the Order and agrees to abide by
same;
Stenographic reporters engaged for
depositions or other proceedings
necessary to the conduct of this action;
Such persons as counsel for the parties
may mutually consent to in writing or on
the record prior to the proposed
disclosure; and
The Court and appropriate Court
personnel.

(Id.)

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II.

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LEGAL STANDARDS

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“‘Civil contempt . . . consists of a party’s disobedience to

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a specific and definite court order by failure to take all

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reasonable steps within the party’s power to comply.’”

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Racing Ass’n v. McCord, 452 F.3d 1126, 1130 (9th Cir. 2006)

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(quoting In re Dual-Deck Cassette Recorder Antitrust Litig., 10

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F.3d 693, 695 (9th Cir. 1993)).

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protective order, a district court may impose the remedies it

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deems appropriate.

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Holtzinger, P.C., 992 F.2d 932, 934-35 (9th Cir. 1993); Lew v.

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Kona Hosp., 754 F.2d 1420, 1426-27 (9th Cir. 1985); see Yates v.

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Applied Performance Techs., Inc., 205 F.R.D 497, 500 (S.D. Ohio

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2002) (citing 6 James Wm. Moore et al., Moore’s Federal Practice §

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26.108[2] (3d ed. 1997)).

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Reno Air

When a party violates a

Westinghouse Elec. Corp. v. Newman &

Rule 37(b) of the Federal Rules of Civil Procedure authorizes
district courts to impose a wide range of sanctions, including

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10cv2130 AJB(RBB)

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contempt, on a party that fails to comply with a discovery order

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or a protective order.

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Westinghouse Elec. Corp., 992 F.2d at 934-35 (citing support for

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the proposition that Rule 37(b)(2) should provide for enforcement

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of Rule 26(c) joint protective orders); United States v. Nat’l

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Med. Enters., Inc., 792 F.2d 906, 910 (9th Cir. 1986) (upholding a

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Rule 37(b) sanction for a party’s violation of the protective

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order); see O’Phelan v. Loy, No. 09-00236, 2010 U.S. Dist. LEXIS

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129030, at *7-8 (D. Haw. Dec. 6, 2010); Mora v. Target Corp., No.

Fed. R. Civ. P. 37(b)(2)(A)(vii);

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07cv719 MMA (WMc), 2010 U.S. Dist. LEXIS 123681, at *2-3 (S.D.

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Cal. Nov. 22, 2010); Lambright v. Ryan, No. CV-87-235-TUC-JMR,

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2010 U.S. Dist. LEXIS 52781, at *14-15 (D. Ariz. May 4, 2010)

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(citations omitted); contra Lipscher v. LRP Publ’g, Inc., 266 F.3d

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1305, 1323 (11th Cir. 2001) (finding that violating a protective

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order is not sanctionable under Rule 37(b)(2) because a protective

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order is not an order “to provide or permit discovery”).

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“‘Civil contempt is a refusal to do an act the court has

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ordered for the benefit of a party; the sentence is remedial.

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Criminal contempt is a completed act of disobedience; the sentence

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is punitive to vindicate the authority of the court.”

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Ward, 100 F.3d 653, 655 (9th Cir. 1996) (quoting In re Sequoia

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Auto Brokers Ltd., 827 F.2d 1281, 1283 n.1 (9th Cir. 1987)).

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the Ninth Circuit, a contempt order is for civil contempt if the

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sanction coerces compliance with a court order or compensates the

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injured party for losses sustained.

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N.V. v. KXD Tech., Inc., 539 F.3d 1039, 1044 (9th Cir. 2008).

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Civil contempt sanctions are often imposed against individuals who

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violate protective orders.

Bingman v.

In

Koninklijke Philips Elecs.,

6 James Wm. Moore et al., Moore’s

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10cv2130 AJB(RBB)

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Federal Practice § 26.108[2], at 26-570 (3d ed. 2011); see Quinter

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v. Volkswagen of Am., 676 F.2d 969, 975 (3d Cir. 1982) (finding

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that the court properly imposed a civil contempt sanction when the

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expert witness disclosed confidential information to another

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attorney).

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Defendant Stoen seeks an award of fees incurred to address

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Hilger’s conduct, monetary sanctions, and the dissolution of the

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Limited Temporary Restraining Order.

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6, ECF No. 120.)

(Am. Mot. Order Show Cause

Although Stoen does not specify whether he seeks

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an order holding Hilger in civil or criminal contempt, the failure

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to comply with a protective order or other discovery order in

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these circumstances would give rise to civil contempt.

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Wm. Moore et al., Moore’s Federal Practice § 26.108[2], at 26-570

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(citing Quinter, 676 F.2d at 975); see Reno Air Racing Ass’n, 452

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F.3d at 1130.

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6 James

“The party alleging civil contempt must demonstrate that the

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alleged contemnor violated the court’s order by ‘clear and

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convincing evidence,’ not merely a preponderance of the evidence.”

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In re Dual-Deck Cassette Recorder Antitrust Litig., 10 F.3d at

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695; Vertex Distrib., Inc. v. Falcon Foam Plastics, Inc., 689 F.2d

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885, 889 (9th Cir. 1982).

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contempt sanction only if there is clear and convincing evidence

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that “(1) the contemnor violated a court order, (2) the

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noncompliance was more than technical or de minimis (substantial

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compliance is not punishable as contempt), and (3) the contemnor’s

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conduct was not the product of a good faith or reasonable

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interpretation of the violated order.”

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Moore’s Federal Practice § 37.51[7], at 37-109 (footnotes

Therefore, a court may impose a civil

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7 James Wm. Moore et al.,

10cv2130 AJB(RBB)

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omitted); see United States v. Bright, 596 F.3d 683, 694 (9th Cir.

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2010) (quoting Labor/Cmty. Strategy Ctr. v. L.A. County Metro.

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Trans. Auth., 564 F.3d 1115, 1123 (9th Cir. 2009)).

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as to whether these requirements have been met in a particular

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case must be resolved in favor of the party accused of the civil

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contempt.”

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37.51[7], at 37-109 (footnote omitted).

“Any doubts

7 James Wm. Moore et al., Moore’s Federal Practice §

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III.

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DISCUSSION

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Defendant argues that the information Peter Hilger disclosed

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to Stoen’s father-in-law, Jon Monson, was confidential, and the

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disclosure was wrongful.

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No. 120; Reply 2, ECF No. 159.)

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Plaintiffs a “Compliance Document” and bank statements identifying

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the account into which funds were transferred, in accordance with

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the Limited Temporary Restraining Order requiring that Stoen

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produce the identities of the signatories to the transferee

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accounts.

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Order Granting Limited TRO 3, ECF No. 36); see Order Granting Def.

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Matthew Stoen’s Mot. Set Aside Default 6-7, ECF No. 100; Notice

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Compliance Ct.’s Order 1-2, ECF No. 103.)

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that the signatory to the transferee account falls within the

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definition of “confidential information” in the Protective Order.

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(Reply 2-3, ECF No. 159.)

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(Am. Mot. Order Show Cause 2-3, 5, ECF
On January 31, 2011, Stoen served

(Am. Mot. Order Show Cause 3, ECF No. 120 (quoting

The Defendant argues

Even if the information was not confidential, Stoen contends

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the information was still designated confidential by defense

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counsel in good faith, and Plaintiffs did not challenge the

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designation.

(Id.; see Am. Mot. Order Show Cause 3-5, ECF No. 120

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10cv2130 AJB(RBB)

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(citing id. Attach. #1 Ex. A, at 2).)

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seal and lodged with the Court a confidential version of a copy of

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the e-mail sent from Hilger to Monson disclosing the identity of

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one of the transferee accounts.

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No. 120; see id. Attach. #2 Ex. B, at 2.)

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disclosure, Defendant asks that the Court issue an order to show

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cause why Peter Hilger should not be held in contempt and to

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ultimately find him in contempt.

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ECF No. 120; Reply 4, ECF No. 159).)

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Defendant Stoen filed under

(Am. Mot. Order Show Cause 5, ECF
Based on this

(Am. Mot. Order Show Cause 6,

In response, the Plaintiffs argue that the identity of the

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holder of the account into which funds were transferred is not

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“confidential information.”

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point to the language in the Protective Order describing

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“confidential information” as including “bank account records and

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statements, and other financial information,” to demonstrate that

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Hilger did not disclose confidential information.

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(Opp’n 3, ECF No. 125.)

Plaintiffs

(Id. at 2-3.)

Alternatively, Plaintiffs argue that any violation was

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unintentional because Hilger did not believe he was disclosing

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information he could not share.

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Hilger Aff. 2.)

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actual bank statements and similar financial documents constituted

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confidential information, which is a good faith interpretation of

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the Protective Order.

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the Court to strike paragraphs eight and nine in Defendant’s

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Amended Motion as “irrelevant and unsubstantiated” and to strike

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Stoen’s request that the Limited Temporary Restraining Order be

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dissolved.

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asking the Court to strike the Amended Motion in its entirety or,

(Id. at 3; see id. Attach. #1

Plaintiffs contend that Hilger believed that the

(Opp’n 3, ECF No. 125.)

(Id. at 4.)

The Plaintiffs ask

Plaintiffs conclude their Opposition by

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10cv2130 AJB(RBB)

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alternatively, to find that an order to show cause should not

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issue.

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A.

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(Id.)

Violation of a Court Order
Defendant Stoen must show by clear and convincing evidence

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that Peter Hilger violated a court order.

In re Dual-Deck

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Cassette Recorder Antitrust Litig., 10 F.3d at 695.

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Protective Order defines confidential information as “information

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or data of any kind or description containing proprietary,

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competitively sensitive, and/or financial or customer information

The

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. . . including, but without limitation, tax returns, financial

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statements, bank account records and statements, and other

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financial information.”

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Protective Order 2, ECF No. 73.)

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the Compliance Document and the bank statements as confidential,

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and Plaintiffs did not object in writing to the designations as

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required by the Protective Order.

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Show Cause Attach. #1, at 2, ECF No. 120; see also Reply 3, ECF

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No. 159.)

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expressly required Defendant Stoen to disclose information

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regarding “the identities of all signatories to the account to

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which the funds were transferred.”

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ECF No. 36.)

(Order Granting Joint Mot. Entry
Defense counsel designated both

(Id. at 3-4; see Am. Mot. Order

Additionally, the Limited Temporary Restraining Order

(Order Granting Limited TRO 3,

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There is clear and convincing evidence that the definition of

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“confidential information” in the Protective Order is broad enough

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to include the identity of a transferee account holder.

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Accordingly, Peter Hilger violated the Order.

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Cassette Recorder Antitrust Litig., 10 F.3d at 695.

See In re Dual-Deck

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10cv2130 AJB(RBB)

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B.

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Substantial Compliance
“‘Substantial compliance’ with the court order is a defense

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to civil contempt, and is not vitiated by ‘a few technical

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violations’ where every reasonable effort has been made to

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comply.”

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891).

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Defendant Stoen produce the identities of the transferee account

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holders to Plaintiffs; their identities is among the confidential

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information relevant to this lawsuit.

Id. at 695 (citing Vertex Distrib., Inc., 689 F.2d at

The Limited Temporary Restraining Order required that

(See Order Granting Limited

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TRO 3, ECF No. 36; Order Granting Def. Matthew Stoen’s Mot. Set

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Aside Default 6-7, ECF No. 100.)

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to set aside the default judgment entered against him on January

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26, 2011, Judge Huff ordered him to “provide Plaintiffs with

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information regarding all accounts to which deposited funds were

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transferred” within five days, or by January 31, 2011.

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Granting Def. Matthew Stoen’s Mot. Set Aside Default 6-7, ECF No.

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100.)

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transferee account holders to Jon Monson is a violation of the

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Protective Order.

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Litig., 10 F.3d at 695.

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been produced to Plaintiffs, Hilger wrongfully disclosed one item

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of confidential information.

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the court order.

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convincing evidence of more than a technical violation.

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C.

After granting Stoen’s request

(Order

Hilger’s disclosure of the identity of one of the

See In re Dual-Deck Cassette Recorder Antitrust
Although much financial information has

He is in substantial compliance with

Therefore, Defendant has not produced clear and
See id.

Based on a Good Faith and Reasonable Interpretation

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Finally, Defendant Stoen must demonstrate by clear and

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convincing evidence that Hilger’s disclosure was not based on a

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10cv2130 AJB(RBB)

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good faith interpretation of the protective order.

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695; Vertex Distrib., Inc., 689 F.2d at 889.

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See id. at

The Plaintiffs state that Hilger’s belief that the actual

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bank statements and similar financial information constitute

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confidential information is a good faith interpretation of the

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Protective Order.

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“Mr. Hilger did not believe he was disclosing information he could

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not share, as well as the fact that he understood that such

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information (which he could not share) existed.”

(Opp’n 3, ECF No. 125.)

They further allege,

(Id.)

Peter

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Hilger contends, “In the e-mail to [the third party], I did not

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disclose any confidential information or documents; I specifically

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told [Jon Monson] I could not.”

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(Id. Attach. #1 Hilger Aff. 2.)

Stoen disputes Hilger’s claim that any disclosure of

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confidential information was unintentional; Defendant argues that

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Hilger’s conduct was “willful, deliberate, and wrongful.”

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3-4, ECF No. 159.)

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his knowledge that he is prohibited from disclosing the

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information” in the e-mail.

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120.)

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there was something (the Protective Order) that prohibited him

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from disclosing the information.

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would supply the information to Monson when he could ‘legally

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release’ it.”

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(Reply

The Defendant notes that Hilger “alludes to

(Am. Mot. Order Show Cause 6, ECF No.

Stoen further maintains, “Hilger was acutely aware that

Hilger said it himself -– he

(Reply 4, ECF No. 159.)

The Court has reviewed the e-mail sent by Peter Hilger on

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February 17, 2011, that was filed under seal in support of

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Defendant’s Motion.

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identity of the transferee account holder, Hilger stated, “[W]ill

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be able to share info with you shortly.”

In the sentence that precedes disclosing the

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(Am. Mot. Order Show

10cv2130 AJB(RBB)

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Case Attach. #2 Ex. B, at 2, ECF No. 120.)

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support of Stoen’s Reply, he submitted an earlier e-mail sent from

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Peter Hilger to Monson on January 25, 2011.

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A, at 2, ECF No. 159.)

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legally release the massive amount of info to you I will so you

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can see the facts.”

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Additionally, in

(Reply Attach. #1 Ex.

There, Hilger explained, “As soon as I can

(Id.)

Defendant Stoen submitted new material, the January 25, 2011

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e-mail, with his Reply.

“It is improper for a moving party to

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introduce new facts or different legal arguments in the reply

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brief than those presented in the moving papers.”

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ex rel. Giles v. Sardie, 191 F. Supp. 2d 1117, 1127 (C.D. Cal.

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2000) (citing Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 894-95

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(1990)); see Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007)

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(“The district court need not consider arguments raised for the

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first time in a reply brief.”).

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provides, “[C]opies of all documentary evidence which the movant

17

intends to submit in support of the motion, or other request for

18

ruling by the court, must be served and filed with the notice of

19

motion.”

20

Stoen improperly submitted additional new evidence in the Reply,

21

depriving Plaintiffs of their opportunity to respond.

22

however, does not prejudice Plaintiffs or Hilger.

23

contrary, the January 25 and February 17 e-mails show that Hilger

24

consistently intended to comply with the Protective Order.

25

United States

Further, Civil Local Rule 7.1

S.D. Cal. Civ. L.R. 7.1(f)(2)(a).

Therefore, Defendant

The e-mail,

On the

Stoen has not produced clear and convincing evidence that

26

Peter Hilger’s violation was based on an unreasonable

27

interpretation of the Protective Order.

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the two e-mails demonstrate that he knew a protective order was in

14

Hilger’s statements in

10cv2130 AJB(RBB)

1

place.

2

the identity of a transferee account holder was not confidential

3

information.

4

with you shortly,” and “[a]s soon as [he] can legally release the

5

massive amount of info” to Monson, he will.

6

Case Attach. #2 Ex. B, at 2, ECF No. 120; Reply Attach. #1 Ex. A,

7

at 2, ECF No. 159.)

8

financial information that was confidential and could not be

9

shared at that time; his disclosure of the identity of one of the

10

transferee account holders is consistent with Hilger’s belief that

11

this piece of information was not confidential.

12

Peter Hilger’s acknowledgment suggests that he believed

Hilger stated that he “will be able to share info

(Am. Mot. Order Show

Hilger understood there was a large amount of

A good faith and reasonable reading of the Protective Order

13

is that it applied to confidential financial records, “including,

14

but without limitation, tax returns, financial statements, bank

15

account records and statements, and other financial information.”

16

(Order Granting Joint Mot. Protective Order 2, ECF No. 72); see In

17

re Dual-Deck Cassette Recorder Antitrust Litig., 10 F.3d at 695

18

(“For the protective order to comply with common sense, a

19

reasonable reading must connect its prohibitions to its purpose .

20

. . .”)

21

Order as applying to actual bank statements and financial

22

documents, but not to the general identity of an account holder.

23

Defendant Stoen has not established by clear and convincing

24

evidence that Peter Hilger’s interpretation of the Protective

25

Order was unreasonable.

26

889.

It is not unreasonable to construe the language of the

Id.; Vertex Distrib., Inc., 689 F.2d at

Doubts must be resolved in Hilger’s favor.

27
28

15

10cv2130 AJB(RBB)

1
2

CONCLUSION
There can no longer be any question that the identity of a

3

transferee account holder is confidential information covered by

4

the definition set forth in the Protective Order.

5

disclosed this confidential information to a third party who is

6

not among the categories of persons to whom disclosure is

7

permitted.

8

Nonetheless, the Defendant has failed to establish by clear and

9

convincing evidence that at the time of the disclosure, Peter

10

Hilger’s conduct was not based on a good faith and reasonable

11

interpretation of the Order.

12

Recorder Antitrust Litig., 10 F.3d at 695.

13

reasons, Defendant Matthew Stoen’s Motion for Order to Show Cause

14

is DENIED.

15

Motion for Order to Show Cause, or portions thereof, is also

16

DENIED.

17

Peter Hilger

Accordingly, he violated the Protective Order.

See In re Dual-Deck Cassette
For all of these

Plaintiffs’ request that the Court strike the Amended

IT IS SO ORDERED.

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DATED: June 1, 2011
Ruben B. Brooks, Magistrate Judge
United States District Court

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cc:
Judge Battaglia
All Parties of Record

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K:\COMMON\BROOKS\CASES\O'M2130\OrderDenyAmMotionForOSC.wpd

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10cv2130 AJB(RBB)