MAO-MSO Recovery II, LLC et al v. State Farm Mutual Automobile Insurance Company

Filing 128

OPINION entered by U.S. Magistrate Judge Tom Schanzle-Haskins. Defendant State Farm's Motion to Enforce Protective Order 123 is ALLOWED in part and DENIED in part. See written order. (LB, ilcd)

E-FILED

Monday, 22 April, 2019 11:28:15 AM
Clerk, U.S. District Court, ILCD

IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS, PEORIA DIVISION
MAO-MSO RECOVERY II, LLC,
et al.
Plaintiffs,
v.
STATE FARM
MUTUAL AUTOMOBILE
INSURANCE CO.,
Defendant.

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No. 17-cv-1537

OPINION
TOM SCHANZLE-HASKINS, U.S. MAGISTRATE JUDGE:
This matter comes before the Court on Defendant State Farm Mutual
Automobile Insurance Co.’s (State Farm) Motion to Enforce Protective
Order (d/e 123) (Motion). The Court entered an agreed Protective Order
(d/e 56). The Protective Order limited access to material produced in
discovery designated as “Confidential.” For the reasons set forth below,
the Motion is ALLOWED in part and DENIED in part. The Court modifies
the Protective Order to allow attorneys retained to represent a party in the
prosecution or defense of this litigation to see material marked
“Confidential” even if the attorney has not entered an appearance in this

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case. The Court prohibits disclosure to other attorneys not otherwise
allowed to see material marked “Confidential”.
On November 6, 2017 an agreed Protective Order (d/e 56) was
entered in this case. Under the terms of the Protective Order, parties could
designate materials produced in discovery as “Confidential” (Confidential
Material). Only certain persons could see Confidential Material:
5. Confidential Matters, including information derived therefrom,
shall not be reviewed, inspected, or disclosed in any manner to
any person or entity except:
a.

Counsel of record in the Litigation; attorneys employed in
the same firm with counsel of record; clerical, paralegal
and secretarial staff employed by such counsel;

b.

Service vendors of Counsel of record in the Litigation
(including outside copying and litigation support services)
who need to review such information in connection with
this Litigation, provided that each has completed the
certification contained in Attachment A (“Acknowledgment
of Understanding and Agreement to Be Bound by
Protective Order”);

c.

Any court, including appellate courts, having subject
matter jurisdiction of this Litigation, including court
personnel;

d.

The Parties and the officers, directors, or employees of
any Party to this Litigation; or any parent, managing
member, subsidiary, or affiliate thereof; or in-house
counsel who need to review such information in
connection with this Litigation;

e.

Counsel to and employees of insurers that may be
obligated to satisfy all or part of a judgment against, or to
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pay or advance all or part of the defense costs of, any
defendant in this Litigation, who need to review such
information in connection with this Litigation, provided that
each has completed the certification contained in
Attachment A (“Acknowledgment of Understanding and
Agreement to Be Bound by Protective Order”);
f.

Consultants or experts assisting a Party in the evaluation,
prosecution, or defense of this Litigation; and partners,
associates, paralegals, secretaries, clerical, and service
vendors of such consultants and experts, provided that
each has completed the certification contained in
Attachment A (“Acknowledgment of Understanding and
Agreement to Be Bound by Protective Order”);

g.

Court reporters, stenographers, or videographers
employed in connection with this Litigation, provided that
each has completed the certification contained in
Attachment A (“Acknowledgment of Understanding and
Agreement to Be Bound by Protective Order”);

h.

Any witness appearing or preparing to appear at trial, at
an evidentiary hearing, or in deposition, provided that
each has completed the certification contained in
Attachment A (“Acknowledgment of Understanding and
Agreement to Be Bound by Protective Order”), with the
understanding that witnesses testifying in open court shall
not be restricted in their testimony based upon the terms
of this Order;

i.

Any person indicated on the face of a document or
accompanying covering letter, email, or other
communication to be the author, addressee, or an actual
or intended recipient of the document;

j.

Any person in the courtroom during an evidentiary
hearing or the trial of the matter; and

k.

Any other person only upon (i) order of the Court entered
upon notice to the Parties, or (ii) written stipulation of, or
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statement on the record by, the Producing Party who
provided the Case Material disclosed, provided that each
has completed the certification contained in Attachment A
(“Acknowledgment of Understanding and Agreement to
Be Bound by Protective Order”).
Protective Order ¶ 5.
As quoted above, the Protective Order ¶ 5(a) allows counsel of
record to see Confidential Material. Plaintiffs allowed attorneys from the
law firm of La Ley con John H. Ruiz P.A. d/b/a MSP Recovery Law Firm
(Ruiz Law Firm) to see Confidential Material. Attorney John Ruiz owns the
Ruiz Law Firm. The Plaintiffs have retained the Ruiz Law Firm as
“Exclusive Lead Counsel” in this litigation. See State Farm’s Memorandum
in Support of Motion to Enforce the Protective Order (d/e 124) (State Farm
Memorandum), at 2-3. The Ruiz Law Firm has retained four firms to
appear as counsel of record in this case but has not entered an
appearance itself and so is not counsel of record. State Farm is correct
that allowing members of the Ruiz Law Firm other than John Ruiz see
Confidential Material violates the Confidentiality Order.
The Ruiz Law Firm’s owner, John Ruiz, however, may see
Confidential Material under ¶ 5(d) because he is either the managing
member or an affiliate of Plaintiff MSP Recovery, LLC. A family limited
partnership owns MSP Recovery, LLC. The general partners of the family
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limited partnership are the living trusts of John Ruiz and his wife. John
Ruiz and his wife are the trustees of these two trusts. As a result, John
Ruiz and his wife control the partnership that owns Plaintiff MSP Recovery,
LLC. See State Farm Memorandum, at 4-5.1 John Ruiz, thus, controls the
managing member of a party, MSP Recovery LLC, and so, is effectively the
managing member or an affiliate of MSP Recovery LLC who may view
Confidential Material. Moreover, Ruiz or a member of his immediate family
has an ownership interest in several of the other named Plaintiffs. Id. He,
therefore, may see Confidential Material to the extent that he is an affiliate
of any of the other Plaintiffs.
Plaintiffs argue that other members of the Ruiz Law Firm should be
considered consultants who are allowed to see Confidential Material under
¶ 5(f) of the Confidentiality Agreement. The Court disagrees. The Plaintiffs
have retained the Ruiz Law Firm as Exclusive Lead Counsel in this
litigation. The Ruiz Law Firm clearly represents the Plaintiffs as their
attorneys. The attorneys of the Ruiz Law Firm are not consultants.
In the alternative, Plaintiffs ask the Court to modify the Protective
Order to allow members of the Ruiz Law Firm the see Confidential Material.

1

The Plaintiffs do not dispute the accuracy of State Farm’s description of John Ruiz and his immediate
family’s ownership interests in the Plaintiffs. See Plaintiff’s Response to State Farm’s Motion to Enforce
Protective Order (d/e 126), at 9-11.

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The Court, in its discretion, agrees that this is the correct solution. John
Ruiz can already see Confidential Material. The Plaintiffs have also
retained the Ruiz Law Firm as the Exclusive Lead Counsel. The Ruiz Law
Firm has elected not to enter an appearance, but to retain other law firms to
appear and litigate the case. The Plaintiffs should be allowed to retain their
counsel of choice and their counsel should be allowed to decide how to
proceed with the litigation. Because the Ruiz Law Firm is retained to
represent the Plaintiffs in this matter, and because the owner of the Ruiz
Law Firm, John Ruiz, can view Confidential Material anyway, the Court
finds that members of the Ruiz Law Firm should be allowed to see
Confidential Material even if the Ruiz Law Firm does not enter an
appearance in the case. The Court will modify the Protective Order to
allow any attorney retained to represent a party in the prosecution or
defense of this litigation may see Confidential Material even if those
attorneys do not enter an appearance and so are not counsel of record.2
THEREFORE, IT IS ORDERED that Defendant State Farm’s Motion
to Enforce Protective Order (d/e 123) is ALLOWED in part and DENIED in

2

State Farm also argues that the relationship between John Ruiz, the Ruiz Law Firm, and the Plaintiffs
affects issues related to class certification. State Farm Memorandum, at 9-10. The Motion concerns
compliance with the Protective Order, not class certification. The Court does not address class
certification at this time.

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part. The Court modifies paragraph 5(a) of the Protective Order (d/e 56) to
provide:
(a) Counsel of record in the Litigation or counsel otherwise
retained by a party to represent the party in the prosecution or
defense of this litigation; attorneys employed in the same firm of
such counsel; clerical, paralegal and secretarial staff employed
by such counsel;
The Protective Order otherwise remains in full force and effect.
ENTER: April 22, 2019

s/ Tom Schanzle-Haskins
TOM SCHANZLE-HASKINS
UNITED STATES MAGISTRATE JUDGE

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