Aqui Es Texcoco, Inc. et al v. Lopez et al
Filing
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Amended ORDER Granting 14 Motion for Protective Order. Signed by Magistrate Judge William V. Gallo on 1/14/2013.(knb)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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EDUARDO MALDONADO LOPEZ,
et al.,
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Plaintiffs,
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v.
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AQUI ES TEXCOCO, et al.,
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Defendants.
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AQUI ES TEXCOCO, et al.,
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Plaintiffs,
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v.
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EDUARDO MALDONADO LOPEZ,
et al.,
Defendants.
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Civil No. 12-1215-BEN(WVG)
AMENDED
ORDER REGARDING
PROTECTIVE ORDER
Civil No. 12-2113-BEN(WVG)
AMENDED
ORDER GRANTING MOTION
FOR PROTECTIVE ORDER
(DOC. NO. 14)
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On January 9, 2013, the Court held a Status Conference in the
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above-entitled
cases.
Douglas
Clearly
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Plaintiffs (“Lopez”) in case no. 12-1215 (wage and hour lawsuit).
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appeared
on
behalf
of
12cv1215
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Reed Smith appeared on behalf of Defendants on case no. 12-1215 and
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Plaintiffs in case no. 12-2113 (“Aqui”). Harry McGahey appeared on
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behalf of Defendants (“Lopez”) in case no. 12-2113 (trade libel
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lawsuit).
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At the Status Conference, the Court discussed with counsel
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the need for, and the propriety of, a protective order for the
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production of Aqui’s financial information in its initial disclo-
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sures.
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Case no. 12-1215 involves Plaintiffs Lopez’ and Alejandro
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Lopez Ferreira’s (“Ferreira”) allegations that they worked for Aqui,
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a restaurant, and inter alia, were not properly paid for the hours
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that they worked, were not afforded meal and rest periods, were not
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paid their wages upon their discharge, and that Aqui failed to
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properly provide them with itemized pay statements. One of Aqui’s
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affirmative defenses to Lopez’ and Ferreira’s claims is that the
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amount alleged to be owed is offset by amounts that Lopez and
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Ferreira owe Aqui in Aqui’s trade libel lawsuit. On July 25, 2012,
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the Court ordered the parties to provide their initial disclosures
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to each other by September 13, 2012. Thereafter, on October 26,
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2012, the Court held a Case Management Conference, the result of
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which, inter alia, was that Aqui was ordered to disclose its damages
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estimate to Lopez and Ferreira on or before November 9, 2012.
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In the wage and hour lawsuit, Aqui did not disclose its
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damages estimate as ordered at the October 26, 2012 Case Management
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Conference, nor did it object to the disclosure of the estimate.
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Aqui’s counsel argued that while it did not object to production of
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its financial information, the financial information is protected by
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its financial privacy rights and is Aqui’s trade secret.
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Case no. 12-2113 involves Aqui’s allegations that Lopez and
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Ferreira (and Sandra Castillo) have committed trade libel and have
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misappropriated Aqui’s name and trade secrets by opening a competing
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restaurant with a same or similar name that serves the same or
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similar food. On December 14, 2012, the Court ordered the parties to
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provide their initial disclosures to each other by January 23, 2013.
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Lopez’ counsel in case no. 12-1215 argued that since Aqui did
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not object to producing its financial information (stating that such
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information is protected from disclosure by Aqui’s financial privacy
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rights and that such information is Aqui’s trade secret) and did not
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produce
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objections have been waived. Therefore, Aqui should produce its
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financial information to Lopez, without restriction. See Burlington
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Northern & Santa Fe Ry. Co. v. U.S. District Court, 408 F.3d 1142,
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1147-1148 (9th Cir. 2005).
a
privilege
log
for
the
financial
information,
those
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Fed. R. Civ. P. 26(a)(1)(A)(iii) requires that in a party’s
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initial disclosure, a party must provide to all other parties: “a
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computation of each category of damages claimed by the disclosing
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party - who must make available for inspection and copying as under
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Rule
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privileged or protected from disclosure, on which each computation
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is based...”
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the
documents
or
other
evidentiary
material,
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Fed. R. Civ. P. 26(c)(1) states in pertinent part:
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unless
The Court may, for good cause, issue an order to
protect a party... from annoyance, embarrassment,
oppression, or undue burden or expense, including one
or more of the following...
(B) specifying terms, including time and place for the
disclosure or discovery;..
(G) requiring that a trade secret or... commercial
information not be revealed or be revealed only in a
specified way.
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Here, in case no. 12-1215 (wage and hour lawsuit), Aqui did
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not comply with Rule 26(a)(1)(A)(iii). Instead, it provided a
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general statement regarding the damages it claims to have suffered.
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A general statement regarding alleged damages is insufficient under
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Rule 26(a)(1)(A)(iii). Therefore, Aqui shall provide to all other
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counsel in both cases detailed financial information that supports
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its claim for damages.
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It is true that Aqui may have waived any objection in the
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wage and hour lawsuit by not making a timely objection to the
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disclosure of its financial information. However, in the trade libel
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lawsuit, Aqui’s objections have been timely made. Given the fact
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that the opposing parties in each case are virtually identical (with
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the exception of Ms. Castillo), it makes little sense to order
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disclosure on the one hand without a protective order, but insist on
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a
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interests and trade secrets of Aqui which may be protected in the
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trade libel lawsuit will be completely eviscerated with unprotected
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disclosure in the wage and hour lawsuit.
protective
order
on
the
other.
Whatever
financial
privacy
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Despite Aqui’s blatant violation of 26(a)(1)(A)(iii), and
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this Court’s Order of October 26, 2012, it is well recognized that
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federal judges have fairly wide latitude to manage discovery to
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ensure that litigation efficiently moves forward. California ex.
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rel. Cal. Dept. of Toxic Substances Control v. Campbell, 138 F.3d
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772, 779 (9th Cir. 1988), Jardin v. DATAllegro, 2011 WL 3299395 at
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*5 (S.D. Cal. 2011). Also, despite Aqui’s violation, the Court must
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not blindly and reflexively simply order all potentially sensitive
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financial information to be disclosed to Aqui’s competitors, without
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12cv1215
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considering options to mitigate the damage that may result from
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unrestricted disclosures of Aqui’s financial information.
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Accordingly, Aqui shall not be compelled to produce its
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financial information without restriction. Even though Aqui failed
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to object to producing its financial information without restric-
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tion, the financial information is still protected from disclosure
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by Aqui’s financial privacy rights and is Aqui’s trade secret.
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Further, at the January 9, 2013 Status Conference, Aqui’s counsel
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noted that both case no. 12-1215 and case no. 12-2113 involve the
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same employees (Lopez and Ferreira), same or similar restaurant
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names (Aqui Es Texcoco and Aqui Esta Texcoco)1/ the same type of food
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being sold in the same limited geographic area. The Court finds
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these
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information should be produced pursuant to a protective order.
factors
to
be
compelling
reasons
why
Aqui’s
financial
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Here, the Court simply rules that Aqui’s general statement
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regarding its damages is insufficient under Rule 26 (a)(1)(A)(iii),
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and fashions a remedy for the insufficiency. The Court finds that a
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protective order (to be drafted by the parties) will meet the needs
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of all parties in these actions.
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that certain to-be-produced documents may be designated as for
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“Attorney’s Eyes Only.” Rule 26(c)(1)(B),(G). The protective order
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shall include the following language:
The protective order may provide
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No document shall be filed under seal unless counsel
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secures
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document under seal. An application to file a document
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under seal shall be served on opposing counsel, and on
a
court
order
allowing
the
filing
of
a
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1/
Defendants in the trade libel lawsuit represent that they no longer use
the name “Aqui Esta Texcoco.”
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the person or entity that has custody and control of
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the document, if different from opposing counsel. If
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opposing counsel, or the person or entity who has
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custody and control of the document, wishes to oppose
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the application, he/she must contact the chambers of
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the judge who will rule on the application, to notify
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the judge’s staff that an opposition to the applica-
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tion will be filed.
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Lopez’ counsel in case no. 12-1215 objects to a provision in
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the protective order that would allow Aqui to designate some to-be-
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produced documents as for “Attorney’s Eyes Only.” Specifically,
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Lopez’ counsel believes that since he will not be able to show those
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to-be-produced documents to his clients, he will be unable to
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properly advise them regarding Aqui’s financial status and alleged
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damages.
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However,
the
there
is
documents
nothing
stopping
designated
Lopez’
Eyes
from
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reviewing
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himself, and/or from seeking assistance from financial professionals
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to interpret the data contained in the documents, and formulating
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opinions about what the documents state, so as to properly advise
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his clients. Furthermore, as Aqui’s counsel suggested, counsel for
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Lopez and Ferreira may discuss the financial information in general
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terms. While this may have certain limitations, it is an avenue that
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counsel should explore and include within the protective order. In
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addition, the Court is not foreclosing counsel from seeking relief
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from the Court to permit full or enhanced disclosure of Aqui’s
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financial information to Lopez and Ferreira. Therefore, Lopez’
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counsel’s objection in this regard is overruled.
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“Attorney’s
counsel
Only,”
by
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As a result, in case no. 12-2113, Defendants’ Motion for
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Protective Order (Doc. No. 14) is GRANTED. The protective order
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shall apply in case no. 12-1215.
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On or before January 14, 2013, counsel for Aqui shall provide
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to all other counsel a protective order that provides that any party
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may designate certain documents as for “Attorney’s Eyes Only”.
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On or before January 21, 2013 counsel for all other parties
shall approve the protective order as to form.
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On or before January 22, 2013, counsel for Aqui shall
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produce to all other counsel the documents that evidence Aqui’s
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claimed damages.
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DATED:
January 14, 2013
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Hon. William V. Gallo
U.S. Magistrate Judge
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