Cohen v. Trump

Filing 172

ORDER Re: Confidential Portions of Deposition Transcript. Signed by Magistrate Judge William V. Gallo on 3/14/16.(dlg)(jao).

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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Case No. 13-CV-2519-GPC(WVG)

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ART COHEN, Individually and
on Behalf of All Others Similarly
Situated,
Plaintiffs,

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ORDER RE: CONFIDENTIAL
PORTIONS OF DEPOSITION
TRANSCRIPT

v.
DONALD J. TRUMP,
Defendant.

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1. OVERVIEW

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The present dispute arises from Defendant’s January 21, 2016, deposition.

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Under the terms of the parties’ Protective Order, Defendant designated portions of

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the transcript as confidential. Plaintiffs hereby challenge the propriety of that

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designation for three topics discussed by Defendant. Plaintiffs challenge whether

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statements concerning (1) public figures; (2) a licensing agreement between Trump

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University, LLC, and a third party; and (3) profits shared between Defendant and the

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university bearing his name, can maintain a confidential designation. Plaintiffs move

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the Court for an order de-designating these portions from their confidential status.

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On February 18, 2016, counsel for the parties notified the Court of the dispute.

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The parties lodged the disputed portions of the transcript and a Joint Statement

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explaining their respective positions. On February 25, 2016, at 7 a.m., the Court
convened a telephonic Discovery Conference. Mr. Jason Forge, Ms. Rachel Jensen,
and Amber Eck appeared on behalf of Plaintiffs. Mr. David Kirman, appeared as lead
counsel on behalf of Defendant. Following the Discovery Conference, the parties
lodged additional briefing concerning the issues in dispute.

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The Court has reviewed the parties’ Joint Statement, supplemental briefing,
supporting exhibits, other relevant documents filed in this action and the related
action of Makaeff v. Trump University, LLC, et al., 10-cv-940-GPC(WVG), and
listened to the arguments asserted by counsel for all parties during the Discovery
Conference. For the reasons set forth below, the Court hereby GRANTS IN PART

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and DENIES IN PART Plaintiffs’ request for an Order to de-designate portions of

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Defendant’s January 21, 2016, deposition transcript.

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2. ARGUMENT

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This dispute involves Defendant’s deposition transcript and three categories of
testimony, which were designated as confidential pursuant to the controlling
Protective Order. 1 Plaintiffs dispute whether three categories of testimony can be
designated as confidential including (1) statements concerning public figures, (2)
statements concerning a licensing agreement between Trump University, LLC, and a
third party, and (3) statements concerning monetary exchanges between Defendant
and Trump University, LLC. Each is addressed in turn below.

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a. PLAINTIFFS’ ARGUMENTS

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Plaintiffs argue that Defendant has misused the Protective Order and “over-

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designated” portions of Defendant’s deposition transcript.

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Protective Order, which states that, “Any party may designate information as

They point to the

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The Protective Order was entered on November 17, 2011, in the corresponding case of Makaeff
v. Trump University, LLC, et al., Case No. 10-cv-940-GPC(WVG). (“Makaeff”). (Makaeff Doc.
No. 91). On March 21, 2014, several months after the above captioned case was filed, the parties
filed a First Amended Protective Order in the Makaeff case. (Doc. No. 316.) The First Amended
Protective Order simply granted the parties’ request for the same protections to apply to the instant
case. (Id.) This controlling document is herein referred to as “the Protective Order.”

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‘CONFIDENTIAL’ only if, in the good faith belief of such party and its counsel, the
unrestricted disclosure of such information could be potentially prejudicial to the
business or operations of such party.” (Makaeff Doc. Nos. 91, 316.) Plaintiffs assert
that Defendant has ignored the narrow provisions of the Protective Order by
designating large portions of non-sensitive, non-prejudicial information as
confidential. They argue that even where the transcript includes legitimately
confidential information, only that specific information which is protected from the
public view, may be designated confidential.

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Plaintiffs also contend that the disputed confidentiality designations are
tremendously burdensome. Plaintiffs argue that Defendant’s “over designation” adds
significant additional costs and fees for future substantive motion filings because the
transcript portions designated as confidential must be filed under seal.

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b. DEFENDANT’S ARGUMENT

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Defendant opposes Plaintiffs’ arguments, asserting that his confidential
designations are proper and only span a relatively small portion of the several
hundred pages of deposition testimony. Defendant argues that there is no basis to
order the de-designation of the disputed portions of the transcript, either in whole or
in part, because they are properly protected under the terms agreed to by the parties.
Further, Defendant asserts that Plaintiffs’ piecemeal confidentiality designation
proposal is impractical and unduly burdensome to require a party to parse the
confidentiality status of the deposition transcript on a line by line basis as requested
by Plaintiffs. Defendant also argues that much of the disputed testimony stems from
documents that are properly designated as confidential, a designation not challenged
by Plaintiffs.2

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During the Discovery Hearing, counsel for Defendant noted that these underlying documents were
produced over the course of the litigation, and Plaintiffs are just now disputing their confidentiality
designations. However, the Protective Order states that any party may object to a designation of
materials as confidential “[a]t any stage of these proceedings.” (Makaeff Doc. No. 91 at 5; Doc.
No. 316 at 6.) Accordingly, Plaintiffs’ objections to the deposition testimony referencing these
documents are not untimely.

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3. LEGAL STANDARD
The burden of proof to maintain the confidentiality of any document is on the
party seeking to maintain the confidentiality. In re Roman Catholic Archbishop of

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Portland in Oregon, 661 F.3d 417, 424 (9th Cir. 2011) (“When the protective order

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‘was a stipulated order and no party ha[s] made a ‘good cause’ showing,’ then ‘the

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burden of proof ... remain[s] with the party seeking protection.’”). There are several

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factors the Court must consider in determining whether to protect discovery materials
from disclosure under Rule 26(c), including: (1) whether the party seeking protection
has shown particularized harm; (2) whether the balance of public and private interests
weighs in favor of maintaining a protective order; and (3) the possibility of redacting
sensitive material. Id. at 425. Even when first two factors weigh in favor of protecting
the discovery of material, a court must still consider whether redacting portions of
the discovery material will nevertheless allow disclosure. Foltz v. State Farm Mut.
Auto. Ins. Co., 331 F.3d 1122, 1130 (9th Cir. 2003). In Foltz, an insurer argued that

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documents produced in discovery “contained confidential information that would

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satisfy the ‘good cause’ standard of Rule 26(c).” Foltz, 331 F.3d at 1131. Specifically

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the documents included confidential financial information, third-party medical
records, personnel files, and trade secrets. Id. at 1136. There, the court concluded that
“the limited number of third-party medical and personnel records [could] be redacted
easily to protect third-party privacy interests while leaving other meaningful
information.” Id. at 1137. The Court looks to these guiding principles in determining
the parties’ present dispute.
4. ANALYSIS AND RULING
In this dispute, Defendant carries the burden to demonstrate that the disputed
portions of his deposition transcript merit a confidential designation. Plaintiffs
dispute the designation in three categories of Defendant’s deposition testimony
including statements concerning (1) public figures, (2) a licensing agreement

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between Trump University, LLC, and a third party, and (3) monetary exchanges
between Defendant and Trump University, LLC.
a. PUBLIC FIGURE COMMENTS

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Over twenty pages of Defendant’s deposition transcript concern questions and

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answers regarding Defendant’s prior statements about various public figures. The

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disputed portions span pages 192:9-201:17 and 454:23-471:4 and implicate
deposition exhibits 519, 520, and 489. Defendant contends that these portions of the
transcript are properly designated as confidential. He argues that the designation is
necessary to protect against the likelihood that such testimony will be publicly
disseminated and used against him in the current presidential campaign. However,
Plaintiffs argue that these statements by Defendant are already publicly available,

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and, as such, merit no further protection. Nonetheless, Defendant asserts that “[e]ven

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if this information is already “public” in some sense, it does not mean that there is

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not value in preventing Plaintiffs from using the discovery process to aggregate that
data for public consumption.” (Joint Statement, at 5:28-6:2.)
The Court finds that these portions of the transcript are not entitled to a
confidential designation. Most, if not all, of Defendant’s original statements about
various public figures appear to originate from public sources, including past blog
articles published by Trump University, LLC.

The corresponding deposition

testimony (i.e. affirming or denying these past statements) merely reiterates this
already public information. Based on documents presented by Plaintiffs, these prior
statements by Defendant have also been subjected to media attention in the current
presidential election.

Thus, the Court finds that de-designating Defendant’s

deposition questions and answers concerning various public figures will not result in
particularized harm to Defendant and therefore these portions of the transcript do not
merit a confidential designation. Accordingly the Court ORDERS that deposition
pages 192:9-201:17 and 454:23-471:4 be de-designated from their confidential status.

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b. LICENSING
AGREEMENT
BETWEEN
UNIVERSITY AND THIRD PARTY

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TRUMP

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Plaintiffs next challenge the confidential designation of deposition pages

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264:24-267:2, which concern testimony regarding a licensing agreement between

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Trump University, LLC, and a third party. 3 Plaintiffs argue that Defendant’s

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testimony regarding the licensing agreement is not entitled protection because Trump

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University, LLC, is a shell entity with no current operations. Plaintiffs also argue

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that a ten year old agreement could not possibly implicate Defendant’s present

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business dealings. Defendant argues that the testimony is protected from disclosure

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because it reveals operating and fee information that may impact Defendant’s future

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business dealings, and thereby the agreement meets the definition of a trade secret

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under federal law.

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The Court finds that Defendant has demonstrated good cause and that the

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challenged testimony is entitled to a confidential designation. Because the parties do

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not challenge the confidential designation of the underlying licensing agreement, the

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Court declines to rule on the issue of whether the licensing agreement is in fact a

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“trade secret.” Nonetheless, trade secret law is instructive. In order to constitute a

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protectable trade secret, information must “(1) Derive[] independent economic value,

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actual or potential, from not being generally known to the public or to other persons

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who can obtain economic value from its disclosure or use; and (2) Is the subject of

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efforts that are reasonable under the circumstances to maintain its secrecy.” Cal. Civ.

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Code § 3426.1(d); SkinMedica, Inc. v. Histogen, Inc., 869 F.Supp.2d 1176, 1192

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(S.D. Cal. 2012); Religious Tech Ctr. v. Netcom On-Line Commc’n Serv., Inc., 923

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F.Supp. 1231, 1250-51 (N.D. Cal. 1995). Material, otherwise individually not

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protectable, may also be a protectable trade secret if combined in a compilation. See

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SkinMedica, Inc. v. Histogen, Inc., 869 F.Supp.2d at 1194. A trade secret may consist

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The underlying licensing agreement, Deposition Exhibit 487, was produced as confidential and
Plaintiffs do not challenge that designation.

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of several elements, each of which is generally known, put together in a novel and
previously unknown combination. Id.; citing O2 Micro Intern. Ltd. v. Monolithic
Power Sys., Inc., 420 F.Supp.2d 1070, 1089–90 (N.D.Cal. 2006) (“Combinations of
public information from a variety of different sources when combined in a novel way
can be a trade secret. It does not matter if a portion of the trade secret is generally
known, or even that every individual portion of the trade secret is generally known,
as long as the combination of all such information is not generally known.”) Here,
the law supports shielding sensitive business information from public disclosure,
including that which represents a compilation of private figures and data.

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Accordingly, the Court finds that Defendant’s testimony regarding the
licensing agreement is entitled to protection from public disclosure. Regardless of

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when the agreement was drafted, the challenged testimony meets the parties’ own

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definition for “confidential information” in the Protective Order.4 Moreover, the

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testimony summarizes many details about business operations and fee schedules,
which has not been made public to date. Plaintiffs rely principally, if not exclusively
on the “moribund” status of Trump University, LLC, to support their argument that
no harm could result by the de-designation of the testimony. Moreover, Plaintiff
contends that any revitalization of Trump University, LLC, is purely speculative in
nature. While this may all be true, Trump University, LLC, is not the Defendant in
this case. Regardless of the outcome of Defendant’s presidential campaign, it is not
speculation to believe the Defendant will continue his own private business dealings.
If this portion of the testimony is not protected as confidential, this information may
likely impact Defendant’s future business dealings as the licensing agreement
invariably reflects Defendant’s business strategy and acumen. Accordingly, the Court
upholds the confidential designation.

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The Protective Order at issue states that “Any party may designate information as
‘CONFIDENTIAL’ only if, in the good faith belief of such party and its counsel, the unrestricted
disclosure of such information could be potentially prejudicial to the business or operations of such
party.” (Makaeff Doc. No. 316.)
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Plaintiffs suggest that Defendant has waived his right to designate testimony
concerning the licensing agreement as confidential. They point to a single question
asked at the deposition of former Trump University President, Michael Sexton, that
concerned the agreement. Mr. Sexton responded that he did not recall a provision of
the licensing agreement. Plaintiffs imply that because this question and answer were
not designated as confidential in Mr. Sexton’s deposition transcript, that somehow
impacts the Court’s ruling regarding the instant dispute. The Court is not persuaded.
Failing to designate such a question and non-affirming response as confidential has
no impact on the instant dispute. The Court DENIES Plaintiffs’ request to dedesignate this portion of the deposition transcript, and therefore it retains the

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confidential designation.
c. TESTIMONY CONCERNING PROFIT SHARING BETWEEN
DEFENDANT AND TRUMP UNIVERSITY, LLC

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Lastly, Plaintiffs challenge the confidential designation of pages 441:14-

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444:11, which concern testimony regarding profits shared between Trump

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University, LLC, and Defendant. 5 Plaintiffs argue that Defendant’s testimony

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regarding the profits shared between Defendant and the university bearing his name

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are entitled to minimal protection as Defendant has publicly disclosed information

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regarding his finances during the presidential campaign. Plaintiffs also assert that

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Defendant has improperly over-designated the entire line of questioning as

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confidential. Plaintiffs contend that any concerns can be addressed by redacting and

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protecting specific numerical figures from disclosure. Defendant argues that the

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testimony is properly designated as confidential because it reveals highly sensitive

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financial information that is not publicly available.

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While the Court agrees that specific dollar amounts merit a confidential

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designation, the Court disagrees that the entire line of questioning regarding the

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The underlying financial documents, including Deposition Exhibit 517 and 517A,
were produced as confidential and Plaintiffs do not challenge that designation.

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profits shared between Defendant and Trump University, LLC, is subject to
protection. Accordingly, the Court ORDERS Defendant de-designate as confidential
this portion of transcript for all but the following four provisions: 442:12-13 (starting
with “2 on line 12, and ending with “.” on line 13); 443:19 (numerical figure only);
443:22 (numerical figure only); 443:25 (numerical figure only). These four portions
of this disputed portion of the transcript shall maintain a confidential designation.
5. CONCLUSION
The Court has reviewed the parties’ Joint Statement, supplemental briefing,
supporting exhibits, other relevant documents filed in this action and the related
action of Makaeff v. Trump University, LLC et al., 10-cv-940-GPC(WVG), and
listened to the arguments asserted by counsel for all parties during the Discovery
Conference. For the reasons set forth below, the Court hereby GRANTS IN PART

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and DENIES IN PART Plaintiffs’ request for an Order to de-designate portions of

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Defendant’s January 21, 2016, deposition transcript as follows: Defendant is

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ORDERED to de-designate pages 192:9-201:17 and 454:23-471:4 as the Court finds
these pages are not entitled to confidential protection. Defendant is also ORDERED
to de-designate pages 441:14-444:11, with the exception of four provisions including
pages 442:12-13 (starting with “2 on line 12, and ending with “.” on line 13); 443:19
(numerical figure only); 443:22 (numerical figure only); 443:25 (numerical figure
only). These four portions of this disputed portion of the transcript shall maintain a
confidential designation. Plaintiffs’ request for an order de-designating pages
264:24-267:2 as confidential is DENIED, as the Court finds these are properly
protected from public disclosure. IT IS SO ORDERED.
Dated: March 14, 2016