Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-01882/USCOURTS-cand-3_07-cv-01882-45/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 28:1331 Fed. Question: Anti-trust

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United States District Court

For the Northern District of California

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NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

IN RE EBAY SELLER ANTITRUST

LITIGATION

 /

No. C07-01882 JF (HRL)

ORDER ON MOTION TO MODIFY

PROTECTIVE ORDER

[Re: Docket No. 608]

INTRODUCTION

In this antitrust case, one of the law firms representing the plaintiffs also represents a

different plaintiff in another case in which eBay, Inc. (eBay) is also a defendant. Those lawyers

move here to modify the existing protective order to allow them to use in the other case

discovery that was obtained in the instant action. As we will see, the sticking point is not so

much the modification of the protective order, so that relevant discovery in one lawsuit can be

used in the other. Instead, it is this: Who gets to comb through the antitrust discovery produced

by eBay in order to decide which few documents may be relevant in the other case? The

plaintiffs’ lawyers or eBay’s?

BACKGROUND

Plaintiffs in the instant action (the “Antitrust Case”) claim that eBay is a monopolist in

the online auction market and abuses its market dominance by engaging in anticompetitive acts

*E-FILED 07-19-2010*

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aimed at reducing or eliminating existing or potential future competitive threats. The alleged

anticompetitive activities include, for example, buying up strategic competitors or entering into

agreements with them that protect eBay’s dominance. One of the plaintiffs’ law firms in this

putative class action is Hagens Berman Sobol Shapiro LLP (“Hagens Berman”).

In the Antitrust Case, the court entered a stipulated protective order which provides, in

relevant part:

All documents and other materials produced in this litigation shall

be used for purposes of this litigation only, whether or not a producing

party designates such documents or materials as Confidential.

* * * * *

Confidential Information or Highly Confidential Information shall

be used by any person, other than the producing party, solely for the

purpose of conducting the actions and shall in no event be used for any

business, competitive, personal, private, public or other purpose.

(Docket No. 68, Mar. 26, 2008 Protective Order, ¶1(c) and ¶3)).

The Antitrust Case is over, at least at the trial level. The court granted summary

judgment for eBay. Plaintiffs appealed, and the appeal is pending.

After the filing of the Antitrust Case, Hagens Berman filed another putative class action,

Sawyer v. Bill Me Later, et al. eBay owns Bill Me Later and is also a defendant in that case. 

Sawyer originally was filed in the Northern District of California and assigned to Judge Jeffrey

White. Judge White ultimately dismissed it for lack of subject matter jurisdiction, without

prejudice to refiling the claims in state court. (See C10-00014JSW, Docket No. 37). Hagens

Berman subsequently filed the complaint in Los Angeles County Superior Court. Thereupon,

defendants removed it to federal court, and the suit currently is pending in the Central District

of California.

Sawyer is not an antitrust case. Rather, Sawyer alleges that Bill Me Later, aided by

eBay, violates California consumer protection laws by charging usurious interest and imposing

impermissible penalty fees on loans made to online purchasers of good and services. Bill Me

Later says it is not subject to consumer protection laws that apply to lenders because it is merely

a servicing agent and not a lender. There is a bank, says Bill Me Later, that makes the loans. 

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1 It is a coincidence that Hagens Berman represents the plaintiffs in both the

Antitrust Case and in Sawyer. It is actually Mr. Sawyer, and not the plaintiffs in the

Antitrust Case, who wants the protective order modified. It seems that Hagens Berman

should have moved on behalf of Mr. Sawyer to intervene in the Antitrust Case so that

Sawyer could seek the modification. However, eBay does not quibble with Hagen Berman’s

procedural shortcut, and this court will not take issue with it either.

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(Banks are, apparently, not subject to the consumer protection laws in question.) Not so, says

Sawyer: Bill Me Later is the actual lender, and the bank’s presence in the transaction is mere

window dressing to mask Bill Me Later’s true role. The key legal issue in Sawyer is how to

characterize Bill Me Later’s role when online buyers finance their purchases through Bill Me

Later.

DISCUSSION

Hagens Berman now moves in this Antitrust Case to modify the protective order.1 They

want a “limited modification [that] will allow Plaintiffs’ counsel to use a discrete subset of the

documents produced in this action that are highly relevant in the Sawyer litigation . . ..” (Mot.

at 1:4-5). Although the movants go to lengths to disguise it, their seemingly simple request is

not so simple in fact and raises two distinct issues, one of them easy to decide and one not so.

1. Modify the Protective Order?

A decision which guides this court’s analysis is Foltz v. State Farm Mutual Automobile

Ins. Co., 331 F.3d 1122 (9th Cir. 2003). The Ninth Circuit “strongly favors access to discovery

materials to meet the needs of parties engaged in collateral litigation.” Id. at 1131. And, the

existence of a protective order in one case should not bar litigants in another, related, case from

obtaining the discovery they need. Id. Thus, this first question is an easy one. eBay should not

be able to use the Antitrust Case protective order as a shield to bar Sawyer from discovering

documents which happen to be subject to that protective order. In other words, in Sawyer, eBay

may not object to producing a responsive document on the basis that it is subject to a protective

order in the Antitrust Case. To that extent, the motion to modify the protective order is granted.

That modification, however, does not mean that Mr. Sawyer will ultimately obtain all

the discovery that he wants. Nor does it mean that eBay is stripped of its right to object to their

production in that case. As explained in Foltz:

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Even if the issuing court modifies the protective order, it does not decide

whether the collateral litigants will ultimately obtain the discovery

materials. As the Fifth and Tenth Circuits have noted, once the district

court has modified its protective order, it must refrain from embroiling

itself in the specific discovery disputes applicable only to the collateral

suits.

* * * * *

The disputes over the ultimate discoverability of specific materials

covered by the protective order must be resolved by the collateral courts. 

Allowing the parties to the collateral litigation to raise specific relevance

and privilege objections to the production of any otherwise properly

protected materials in the collateral courts further serves to prevent the

subversion of limitations on discovery in the collateral proceedings. These procedures also preserve the proper role of each of the courts

involved: the court responsible for the original protective order decides

whether modifying the order will eliminate the potential for duplicative

discovery. If the protective order is modified, the collateral courts may

freely control the discovery processes in the controversies before them

without running up against the protective order of another court.

Id. at 1133 (citations omitted) (emphasis added).

2. With the Protective Order modified as just described, what degree of “use” do

Sawyer’s lawyers get to make of the Antitrust Case discovery?

This is the harder question. The facts are somewhat unique, because Sawyer’s

lawyers, on account of their role in the Antitrust Case, already are in possession of all of the

documents disclosed by eBay in that case. So, suggests Hagens Berman, since we already

have that body of information, let us comb through it and pick out the documents relevant to

Sawyer’s claims against Bill Me Later and eBay. According to Hagens Berman, that will

save eBay the time and trouble of doing that job itself. Not surprisingly, eBay vigorously

objects to that procedure, pointing out that, under the Federal Rules of Civil Procedure, it is

the litigant responding to discovery requests, and that litigant’s own lawyer, who searches for

and identifies responsive documents that are relevant to the asserted claims or defenses. The

opposing lawyer does not get that luxury.

This court’s answer might be different if the Antitrust Case and Sawyer were truly

“collateral” cases. They are not. The Antitrust Case alleges violations of Sections 1 and 2 of

the Sherman Act as well as comparable California laws prohibiting restraints on trade. 

Sawyer alleges violations of California’s usury laws and consumer protection statutes. There

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2 This court is not told what percentage of these documents are stored

electronically. If so, then whoever is doing the looking would probably use one of the

commercially available software search programs.

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is little or no overlap of issues. Indeed, in response to Judge White’s Order to Show Cause

Regarding Subject Matter Jurisdiction (the original Sawyer action filed in the Northern

District, No. 10 CV-0014 JSW), Hagens Berman stated that “the [Sawyer] Complaint focuses

primarily on Bill Me Later’s business model, which predates the purchase by eBay. The

allegations do not concern the distinct business of the parent eBay, which include online

auctions, online classifieds, secondary tickets, shopping segments, apartment listings, fixedprice media and online communications.” (See C07-01882, Docket No. 605 (Llyr Decl., Ex.

G at 5:10-14); Case No. C10-00014JSW, Docket No. 35 at 5:10-14).

Since the Antitrust Case is on appeal, there would presumably be no legitimate reason

for Hagens Berman to be rooting through eBay’s Antitrust Case discovery documents now. 

But, its lawyers claim to remember that there were some that discussed the Bill Me Later

business model. That is, some of the Antitrust Case documents are relevant (i.e., would be

responsive to a request for production) to the claims in Sawyer. How many? Hagens Berman

does not know, but says it is not too many. eBay’s lawyers concede that there are some

among the 197,000 documents (2.2 million pages), but surely less than 1,000. Hagens

Berman does not appear to disagree with that estimate. No one suggests that these 1,000 or so

are segregated, or in a particular “file,” or somehow readily identifiable. They apparently are

mixed in the 197,000, and someone would have to go looking for them.2

To the heart of the issue: who searches through the 197,000 documents to locate the

1,000 or less that would be relevant to Sawyer’s claims? Hagens Berman argues that, since

they already posses the whole corpus of eBay’s Antitrust Case document production, it makes

sense that this court should modify the protective order so that they (and not eBay) should

search them and decide what they want in Sawyer. They disarmingly describe their proposal

as follows: “The modification would instead simply enable the mechanics of identifying

particular documents to be used in the Sawyer litigation.” (Reply at 1:12-13). Under this

procedure, once eBay found out (how?) what Hagens Berman chose for use in Sawyer, it

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would then—presumably—have to seek a protective order if it disagreed with any of Hagens

Berman’s choices. This stands discovery practice on its head.

eBay argues forcefully that, while Hagens Berman has the 197,000 documents for

Antitrust Case purposes, they do not have the right to “mine” through them and decide what

they would like to use in Sawyer. eBay maintains that it is eBay’s obligation (and right)

under federal discovery rules to make a reasonable and diligent search through all of its

documents—including, presumably, its Antitrust Case document production—to locate

documents responsive to appropriate requests for production in Sawyer.

This court sees no efficiency in permitting Hagens Berman to go through the Antitrust

Case eBay documents. It may save eBay the “trouble” of going through them, but eBay does

not want to be saved that “trouble.” It likewise does not save time. True, Hagens Berman

says they may get the documents they want faster if they choose them themselves, but—with

the Sawyer case still in its infancy—the “sooner rather than later” argument does not carry

much weight.

When pressed at the motion hearing to articulate how Mr. Sawyer would be harmed if

his lawyers had to obtain discovery in the prescribed, normal manner, rather than by an

abnormal process that reversed the role of who searches for and identifies relevant material,

all that plaintiff’s counsel could offer was that they do not trust eBay to turn over everything

that it should.

This court appreciates that opposing attorneys, particularly in high stakes litigation,

may come to distrust each other. Distrust is practically an occupational hazard of that work. 

But, based on nothing more tangible than feelings of distrust (no evidence, no indisputable

examples) should the court give the go ahead to Sawyer’s lawyers? If all, or even most, of the

Antitrust Case discovery was relevant to Sawyer, then the decision would be easy. Here,

though, the best estimate is that less than one-half of one percent of the Antitrust Case

documents would be discoverable in Sawyer. That is very slim relevance to support what

amounts to an extraordinary request. This court declines to take that step.

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That is not to say that Hagens Berman cannot obtain relevant documents from eBay to

support Sawyer’s claims; and, certainly the Antitrust Case discovery documents are one of

what are likely numerous places where such documents will be found. But, Hagens Berman

cannot get them through a “self-help” search of documents they happen to have in their

possession, for an entirely different reason and subject to a protective order.

In conclusion, the protective order is modified to the extent that it may not be used as a

shield by eBay to prevent Sawyer’s lawyers from obtaining documents otherwise discoverable

from eBay. The order is not “modified” to allow Sawyer’s lawyers to go through their set of

eBay’s Antitrust Case document productions and select what they want to use for Sawyer.

SO ORDERED.

Dated:

 

HOWARD R. LLOYD

UNITED STATES MAGISTRATE JUDGE

July 19, 2010

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5:07-cv-01882-JF Notice has been electronically mailed to:

Aaron H. Darsky aarondarsky@msn.com

Beverly Tse btse@kmllp.com

Brynly R. Llyr bllyr@omm.com

Christine Pedigo Bartholomew cbartholomew@finkelsteinthompson.com,

sanfran@finkelsteinthompson.com

Christopher S. Studebaker cstudebaker@kmllp.com

Daniel Hume dhume@kmslaw.com

David E. Kovel dkovel@kmllp.com

Dixie Lee Noonan dnoonan@omm.com, bbelina@omm.com

Elaine T. Byszewski elaine@hbsslaw.com, jenniferb@hbsslaw.com

George W. Sampson george@hbsslaw.com

I. Stephen Rabin srabin@rabinpeckel.com

Jeff D Friedman jefff@hbsslaw.com, george@hbsslaw.com, pashad@hbsslaw.com,

sf_filings@hbsslaw.com

Jeffrey Squire squire@bragarwexler.com

Joseph P. Garland jpg65@columbia.edu

Joseph V. McBride jmcbride@rabinpeckel.com

Julie Dawn Wood jwood@omm.com, ihaas@omm.com

Karina Kosharskyy kkosharskyy@kmllp.com

Katherine Robison krobison@omm.com, rgonzalez@omm.com

Kenneth G. Walsh kwalsh@kmllp.com

Michael Andrew McShane mmcshane@audetlaw.com, jbaker@audetlaw.com

Michael Frederick Tubach mtubach@omm.com, kquintanilla@omm.com

Randall W. Edwards REdwards@omm.com

Read Ambler readambler@yahoo.com

Reginald Von Terrell reggiet2@aol.com

Robert L. Stolebarger robert.stolebarger@hro.com

Rosemary M. Rivas rrivas@finkelsteinthompson.com, jdito@finkelsteinthompson.com,

mpunzalan@finkelsteinthompson.com, sdoerrer@finkelsteinthompson.com,

srenwick@finkelsteinthompson.com, ttien@finkelsteinthompson.com

Shana E. Scarlett pashad@hbsslaw.com, shanas@hbsslaw.com

Steve W. Berman carrie@hbsslaw.com, steve@hbsslaw.com

Susan L. Germaise sgermaise@mcguirewoods.com

Thomas Patrick Brown tbrown@omm.com, dbordessa@omm.com 

Counsel are responsible for distributing copies of this document to co-counsel who have not

registered for e-filing under the court’s CM/ECF program.

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