Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_14-cv-00703/USCOURTS-casd-3_14-cv-00703-1/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

WILLIAM EASTMAN and PATRICIA

EASTMAN, as individuals, Case No. 3:14-CV-00703-WQH-WVG

Plaintiffs,

ORDER ON WITNESS

OBJECTIONS TO PLAINTIFF’S

SUBPOENA TO TESTIFY TO

BENJAMIN D. BAUSLEY 

(Doc. Nos. 26, 28, 29, 30)

v.

ALLSTATE INSURANCE COMPANY

and DOES 1–100, inclusive, 

Defendants.

I. INTRODUCTION

Before the Court are four documents–Witness Objections to Plaintiff’s1/ Subpoena

to Testify to Benjamin D. Bausley (“Objection”), (Doc. No. 26); Opposition to Witness

Objections to Plaintiff’s Subpoena to Testify to Benjamin D. Bausley (“Opposition”),

(Doc. No. 28); Reply to Opposition to Objection to Subpoena to Testify (“Reply”), (Doc.

No. 29); and Allstate’s Response to Plaintiffs’ Opposition to Objections to Plaintiffs’

Subpoena to Benjamin D. Bausley (“Response”), (Doc. No. 30)–related to a single issue:

1/ The use of the singular “Plaintiff’s” is no oversight, for only the writer of the fourth used the correct

caption, i.e. “Plaintiffs’” instead of “Plaintiff’s,” (Doc. No. 30). In its early filings, however, this author

too mistakenly used the singular. (Doc. Nos. 5, 9.)

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the deposition subpoena served on Mr. Benjamin D. Bausley, both in his personal

capacity and on behalf of his corporation, Bausley & Associates, Inc., (“Bausley”),2/ by

counsel for Mr. William Eastman (“Mr. Eastman”) and Ms. Patricia Eastman (“Ms.

Eastman”) (collectively, “Plaintiffs”) that ordered him to produce a slew of documents

requested by Plaintiffs for purposes of the present action, a suit for breach of contract

filed by Plaintiffs against Allstate Insurance Company (“Allstate” or “Defendant”),3/ in

accordance with Federal Rule of Civil Procedure 30.4/ In bare essence, Plaintiffs, Bausley,

and Defendant dispute the extent to which a specific provision of California law applies,

whether the possible breach of a confidentiality agreement provides sufficient grounds

for quashing an otherwise proper subpoena, and whether the evidence sought by

Plaintiffs from Bausley satisfies the minimal relevance standard or the balancing test

governing discovery under the Rules. 

For the reasons more fully explicated below, this Court DENIES the Objection IN

PART and WITHOUT PREJUDICE. While this Court is generally unconvinced by the

Opposition, Reply, and Response, the reasons stated therein do have some cognizable

merit, and this Court therefore exercises its power under Rule 26(b)(2)(C) to limit

Plaintiffs’ requests in some measurable way in light of this case’s particular needs.

Accordingly, subject to the discrete limitations imposed in this order’s final paragraphs, it

orders Bausley to provide the requested documents at a date to be mutually determined

upon by Bausley and Plaintiffs. 

2/ According to the Objection, the subpoena was served on Benjamin Bausley. (Doc. No. 26 at 1.)

Through his Reply, however, Mr. Bausley refers to Bausley & Associates only. (Doc. No. 29.) For

purposes of this order, “Bausley” refers to both the latter and the former, prompting this Court to utilize

the third-person singular throughout.

3/ Technically, Allstate is not the sole defendant; the complaint lists “Does 1–50.” As these persons

remain unknown and unknowable and Allstate stands forth as the sole responsive Defendant, this Court

will not use the plural form. Defendant derides these “50 ‘Doe’ defendants “ as “fictitious.” (Doc. No. 1

at 2.)

4/ In this order, the terms “Rule” and “Rules” refer to the Federal Rules of Civil Procedure unless

otherwise noted. 

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II. BACKGROUND

A. Procedural History 

This case arose from a complaint filed in the Superior Court of the State of

California for the County of San Diego on January 9, 2013. (Doc. No. 1-2 at 73.)

Plaintiffs served Defendant on March 10, 2014. (Doc. No. 1 at 2.) The currently operative

complaint, an amended one, was filed on March 20, 2014. (Doc. No. 1-2 at 102; Doc. No.

10 at 1.) 

This regnant filing tells a simple tale. On May 19, 2009, Plaintiffs purchased an

“Allstate Insurance Company Deluxe Plus Homeowners Policy” (“Policy”), coverage

commencing on that May date and extending through May 19, 2010. (Doc. No. 1-2 at

87–88.) Merely an extension, this policy insured a house located at 3046 Colley Lane,

Escondido, CA 92025-7740 (“Subject Property”). (Id. at 88.) Consistently and without

disruption, Plaintiffs paid each and every premium owed for 2009–10. (Id.) On August

30, 2009, a fire struck the Subject Property, purportedly “engulf[ing] the master bedroom

and other areas” and “causing extensive damage inside and outside the home.” (Id.)

Seemingly, this conflagration rendered it “uninhabitable.” (Id.) On behalf of Plaintiffs,

Ms. Eastman reported this incident to Defendant on August 30, 2009. (Id.) Afterward, as

authorized by the Policy, Plaintiffs submitted an insurance claim for the badly damaged

Subject Property. (Id.)

From that moment onward, Plaintiffs contend, Defendant performed sundry

misdeeds. In Plaintiffs’ recounting, Defendant breached its obligation under the Policy by

“[f]ailing to conduct a prompt, full and complete investigation into the acts and

circumstances of Plaintiffs’ claims”; “[c]ontinuing to delay in providing Plaintiffs their

contractually bargained-for Policy benefits”; “[u]sing improper standards to deny

Plaintiffs’ claims”; “[e]ngaging in improper claims handling”; “[a]voiding payment of

Plaintiffs’ claims by accepting an incorrect version of facts or circumstances or contract

interpretation that supported a basis to deny or improperly limit coverage under the

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[p]olicy”; and “[f]ailing to give at least as much consideration to Plaintiffs’ welfare as

Defendants gave to their own interests.” (Id. at 93.) By these and other alleged actions,

Defendant violated more than the Policy’s express terms; it defied contract law’s

omnipresent “implied covenant of good faith and fair dealing.” (Id. at 94–95.) Its

conduct, Plaintiffs continue, even violated the prohibition on “unfair business practices”

in California’s Unfair Competition Law (“UCL”). (Id. at 96–97.) Based on the Policy’s

professed breach, Plaintiffs crafted three other causes of action, including a prayer for

declaratory relief and the torts of intentional and negligent infliction of emotional

distress.5/ (Id. at 98–100.) The complaint ends by asseverating two causes arising from

Defendant’s alleged violation of the Parties’ Stipulation for the Appointment of a Neutral

General Contract to Determine Binding Cost of Repair of the Eastmans’ Fire Loss

Damages. (Id. at 91.) In particular, even though the mutually selected expert apparently

estimated the cost of repair as $718,613.25, (Id. at 92), Defendant has yet to honor that

determination, a refusal from which Plaintiffs’ final two causes of action–“Breach of

Contract-Stipulation” and “Breach of Covenant of Good Faith and Fair Dealing”–spring,

(Id. at 100–01). In the amended complaint’s final page, Plaintiffs plead for a panoply of

remedies, including: general, compensatory , and punitive damages; restitution; costs;

attorneys’ fees; a permanent injunction; and all other “economic/non-economic damages

in an amount according to proof at trial.” (Id. at 102.)

Defendant, naturally, responded. On March 27, 2014, it removed the action to the

United States District Court for the Southern District of California. (Doc. No. 1 at 1.)

Defendant filed the Motion to Dismiss Plaintiff’s First Amended Complaint on April 14,

2014. (Doc. No. 5.) On October 20, 2014, the Honorable William Q. Hayes dismissed

Plaintiffs’ fifth and sixth claims and their third to the extent they sought an injunction

under the UCL (“Order on MTD”). (Doc. No. 10 at 16.) With the amended complaint’s

5/ Both emotional distress claims have also been dismissed. (Doc. No. 10 at 16.)

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range now tapered, Defendant finally answered on November 18, 2014. (Doc. No. 12.)

Conceding little–that the Policy was purchased, and that it related to a home later set

ablaze, (Id. at 2)–and repeatedly recapping the content of the Order on MTD, (Id. at 6–9),

general denials pepper the answer’s first nine pages, (Id. at 1–9.) In the remainder,

Defendant propounded forty-six (46) affirmative defenses, concluding with a reservation

of “additional affirmative defenses.” (Id. at 9–23.) 

The Parties first appeared before this Court on February 4, 2015, for an Early

Neutral Evaluation Conference, (Doc. No. 19), set by an order dated January 15, 2014,

(Doc. No. 17). When the Parties proved unable to settle this case at this first colloquy,

this Court issued the Order Following Early Neutral Evaluation Conference, Setting Rule

26 Compliance, and Notice of Case Management Conference. (Doc. No. 18.) In

accordance with this order’s final numbered paragraph, on March 23, 2015, this Court

held a telephonic Case Management Conference, (Doc. No. 21), and issued the Case

Management Conference Order Regulating Discovery and Other Pretrial Proceedings,

(Doc. No. 20). On April 6, 2015, Defendant filed the Joint Motion for Protective Order

and the Joint Motion for Discovery re Interrogatories, Depositions, and Counsel. (Doc.

Nos. 22, 23.) On April 7, 2015, the Court granted both these motions. (Doc. Nos. 24, 25.) 

On April 13, 2015, the relevant subpoena was served on Bausely. (Doc. No. 28 at

2.) Originally, the subpoena sought documents in ten categories: 

(1) “[t]he complete file RELATING TO the property located at 3046 Colley

Lane, Escondido, California” (“Category One”); 

(2) “[a]ny and all DOCUMENTS evidencing COMMUNICATIONS

between YOU and ALLSTATE INSURANCE COMPANY, at any time”

(“Category Two”); 

(3) “[a]ny and all documents evidencing COMMUNICATIONS between

YOU and PLAINTIFFS, at any time” (“Category Three”); 

(4) “[a]ny and all DOCUMENTS which YOU received from ALLSTATE

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INSURANCE COMPANY at any time” (“Category Four”); 

(5) “[a]ny and all DOCUMENTS which YOU received from PLAINTIFFS

at any time” (“Category Five”);

(6) “[a]ny and all DOCUMENTS from YOU to ALLSTATE INSURANCE

COMPANY at any time” (“Category Six”); 

(7) “[a]ny and all DOCUMENTS from YOU to PLAINTIFFS at any time”

(“Category Seven”); 

(8) . . . (“(“Category Eight”);6/

(9) “[a]ny and all DOCUMENTS showing the total amount of revenue YOU

received from ALLSTATE INSURANCE COMPANY from 2008 to

present” (“Category Nine”); and 

(10) “[a]ny and all DOCUMENTS showing the total amount of work YOU

have performed or been contracted to perform on behalf of ALLSTATE

INSURANCE COMPANY in any matter from 2008 to the present”

(“Category Ten”). 

(Id. at 2–3.) Apparently, though Bausley is by no means a party to this action, no attempt

to meet and confer with Plaintiffs’ counsel was initiated by Bausley or Defendant upon

this subpoena’s receipt. (Id. at 3.)

The Objection was filed on April 21, 2014, (Doc. No. 26), at which time this Court

set forth a briefing schedule, (Doc. No. 27). On May 1, 2015, Plaintiffs filed the

Response. (Doc. No. 28.) Bausley soon thereafter retorted with the Response, (Doc. No.

28), which was followed by Plaintiffs’ Reply, (Doc. No. 29). Defendant filed the last

relevant piece on May 8, 2015. (Doc. No. 30.) 

B. Arguments Before the Court

Brief, the Objection presents three discrete grounds of opposition to Plaintiffs’

6/ This category was apparently withdrawn due to an unspecified typographical error. (Doc. No. 28 at 2.)

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subpoena. (Doc. No. 26.) First, the “confidential” documents sought are protected from

disclosure by Section 791.13 of California’s Insurance Code, commonly known as the

Insurance Information and Privacy Protection Act (“IIPPA”).7/ (Id. at 1.) Second, four of

Plaintiffs’ nine live requests8/ seek “proprietary records . . . in breach of a confidentiality

agreement between” Defendant and Bausley. (Id. at 2.) Third, the documents are “neither

relevant nor reasonably calculated to lead to discovery of admissible evidence,” as Rule

26(b)(1) requires. (Id.) 

Far more comprehensive than Bausley’s opening three paragraphs, Plaintiff’s

Reply contains four counters. (Doc. No. 28.) First, because Bausley was the supposedly

key investigator assigned to Plaintiffs’ Allstate file and because Plaintiffs are alleging

Defendant acted in bad faith in evaluating the Plaintiffs’ claim, Bausley’s file on

Plaintiffs’ case likely “contains documents that are relevant to both the Plaintiffs’ claim

as well as Allstate’s defense.” (Id. at 3.) In fact, all the documents sought “are either

specifically related to the Plaintiffs[‘] loss or are relevant to show bias and a relationship

with Allstate.” (Id. at 5.) Third, citing to IIPPA’s statutory purpose, Plaintiffs assert that

IIPPA is not relevant to “discovery procedures during a bad faith litigation,” and nothing

within this act “provides that a witness can avoid proper discovery and a subpoena.” (Id.

at 4.) Finally, regarding Bausley’s statement that four categories of documents include

proprietary records encompassed by a confidentiality agreement, Plaintiffs first note the

absence of any evidence for this assertion–“There is no evidence before this Court that a

confidentiality agreement between Allstate and Mr. Bausley exists beyond a mere

statement in an objection nor does Mr. Bausley explain how the requested documents

would be proprietary”–and then give a reason: “These documents are necessary to

explore [the] potential bias of this expert[, Bausley,]” as well as any possible “lack of

7/ Throughout this order, IIPPA will either be referred to by name or by its section number, i.e. “Section

791.13" or “§ 791.13.”

8/ These four request are numbers two, four, nine, and ten. See supra 5–6.

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independence” or his usual “methods of handling this [and other] claims.” (Id. at 4–5.)

The Reply boosts far more detail than Bausley’s Opposition. (Doc. No. 29.)

Without citing to Rule 26(b)(2)(C), Bausley nonetheless rests on the balancing test that it

enthrones. (Id. at 2.) First, Bausley argues that records made in the 1990s and unrelated to

this case’s precipitating fire cannot be relevant. (Id. at 3.) Second, Plaintiffs have no need

to rely upon these documents to show Bausley’s potential bias in favor of Allstate; rather,

“[t]he issue can be resolved by a hand full of deposition questions and does not require

the tens of thousands of pages of documents that Plaintiff contends are necessary to

produce.” (Id.) Third, Plaintiffs have made an “overly broad” request, as they have no

true need for “all documents” exchanged by Bausley and Allstate, their demand not even

limited to “the Colley Lane fire, to business in Southern California, to fire, or even to

disaster mediation.” (Id.) Fourth, with the exception of Categories Nine and Ten,

Plaintiffs placed no time limit on their subpoena, seeking for all documents transmitted

by Bausley and Allstate at “any time,” and thereby have importuned for far too much that

is unnecessary. (Id.) The Reply continues, once more invoking the existence of a

confidentiality agreement and insisting, in light of Bausley’s willingness to “freely admit

that it is retained by Allstate and does significant business with Allstate,” that “[t]he price

of invading the witnesses privacy for additional financial information is not counter

balanced by the benefit to Plaintiff.” (Id. at 4.) Along this vein, the Reply adds: “The

breadth of the document requests are all encompassing and are of no relationship to

disaster remediation generally, let alone this particular fire. The time period is essentially

forever.” (Id.) It again insists that knowing of Bausley’s retention is enough to

demonstrate bias, no need existing “to uncover the financial relationship between Bausley

& Associates and Allstate Insurance Company,” and once more emphasizes the

applicability of a confidentiality agreement. (Id.) In light of these four causes, the

subpoena should be limited “to matters pertaining to the property located at 3046 Colley

Lane,” documents purportedly contained in categories one, three, five, and seven alone

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(Id. at 5.) To Bausley, the right result is obvious: “The Subpoena should be modified.”

(Id. at 4.)

Briefing on this issue terminated with Defendant’s Response. (Doc. No. 30.) In this

lengthy piece, Defendant concedes that it has “no objection to Bausley producing

documents pertaining to the Eastmans, their property, or their Allstate claim.” (Id. at 4.)

However, as to documents “pertaining to other Allstate policyholders, properties by other

Allstate policyholders, or claims presented by other Allstate policyholders,” it objects for

two reasons. (Id. (emphasis in original)) First, “[t]hese documents have nothing

whatsoever to do with the Eastmans, their property, or their case.” (Id.) Second,

production would violate “settled California law” as embodied in IIPPA. (Id.) Defendant

even cites a string of cases supposedly standing for the proposition that “California

district courts routinely apply Section 791.13 to protect the privacy of . . . non-party

insured.” (Id. at 4–5.) They insist Bausley, as a person and an entity hired by Allstate to

collect information related to insurance coverage, is covered by the statute. (Id. at 6.) As

such, IIPPA’s prohibition against disclosing personal or private information without

written consent surely applies, and this Court must deem Plaintiffs’ subpoena legally

improper as a matter of California law to the extent it seeks documents unrelated to their

own case or their own file. 

III. DISCUSSION

A. Introduction: Applicable Standards for a Rule 30 Subpoena’s Quashing 

Applicable to subpoenas for producing documents under Rule 30(b)(2) as surely as

to the production of documents under Rule 34(a), Rule 26(b)(1) permits discovery

“regarding any nonprivileged matter that is relevant to any party’s claim or defense.”

FED. R. CIV. P. 26(b)(1); see, e.g., Pucket v. Hot Springs Sch. Dist. No. 23-2, 239 F.R.D.

572, 579 (D.S.D. 2006) (noting that the “broad scope of discovery” in Rule 26(b)(1)

“applies to depositions”); Bell v. Bd. of Educ., 225 F.R.D. 186, 193 (S.D. W. Va. 2004)

(same). Assuming this famously low threshold is met, Rule 26 allows “two approaches to

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seeking the protection of sensitive . . . information.” Pearson v. Miller, 211 F.3d 57, 65

(3d Cir. 2000). First, a party may argue that the information is protected by some

evidentiary privilege. Id. at 66. When, as here, state law supplies the rule of decision,

“state privileges apply.” FED. R. EVID. 501; Gill v. Gulstream Park Racing Ass’n, 399

F.3d 391, 401 (1stc Cir. 2005) (citing id.). Second, in the absence of such a privilege,

Rule 26 “affords the courts the power to balance of privacy and discovery interests by

allowing for a protective order when ‘justice requires to protect a party or person from

annoyance, embarrassment, oppression, or undue burden or expense.’” ICG Commc’ns,

Inc. v. Allegiance Telecom, 211 F.R.D. 610 (N.D. Cal. 2002) (construing Rule 26(c)); see

also, e.g., Gill v. Gulstream Park Racing Ass’n, 399 F.3d 391, (1st Cir. 2005)

(“Evidentiary privileges formally recognized by state law are not the only relevant factors

in the Rule 26 balancing act.”); In re Sealed Case (Medical Records), 381 F.3d 1205,

1216 (D.C. Cir. 2004) (citing Pearson, 211 F.3d at 65). In sum, then, the existence of a

privilege, followed by the application of Rule 26’s balancing test, constitute the twin

methods for any party to oppose a Rule 30(b)(2) subpoena, the only means afforded by

the Rules for the disfavored practice of limiting apparently relevant discovery, cf. United

States v. Nixon, 418 U.S. 683, 710, 94 S. Ct. 2090, 3108, 41 L. Ed. 2d 1039 (1974)

(“[T]he public . . . has a right to every man’s evidence, except for those persons protected

by a constitutional, common-law, or statutory privilege.” (internal quotation marks

omitted)).

Defendants and Bausley choose both routes available to them under this Rule 26

framework. In their opposition to Plaintiffs’ subpoenas, Bausley first and Defendants

alone relied on a privilege embodied in state law, IIPPA.9/ (Doc. Nos. 26, 29, 30.)

9/ Neither entity has relied on the qualified right to privacy set forth in Article I of the California

Constitution. Whether either would have the standing to do so is beyond this order’s scope. See

Edu-Science (USA) Inc. v. IntuBrite, LLC, No. 12cv1078 BAS (JLB), 2015 U.S. Dist. LEXIS 79409, at

*7, 2015 WL 3796111, at *3 (S.D. Cal. June 17, 2015) (“A party that is not the recipient of the

(continued...)

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Bausley subsequently relied on the documents’ alleged confidentiality provision, their

limited relevance, and a balancing of the equities decidedly favorable to his own position.

(Doc. Nos. 26, 29.) This Court considers each argument in turn. 

B. IIPPA’s Inapplicability 

At first blush, Defendant and Bausley appear to advance a most credible reading of

IIPPA. True, as Defendant argues, (Doc. No. 30 at 4), this statute reads: “An insurance

institution, agent, or insurance-support organization shall not disclose any personal or

privileged information about an individual collected or received in connection with an

insurance transaction unless the disclosure” is made pursuant to the relevant individual’s

“written authorization,” CAL. INS. CODE § 791.13. True, as Defendant contends,

“California district courts routinely apply § 791.13 to protect the privacy interests of its

non-party insured.” (Doc. No. 30 at 5.) Based on this section’s first few paragraphs, if

read no further, and on a handful of unpublished precedents, if dissected in no greater

depth, Defendant and Bausley would be indisputably correct to claim with strident

certainty and confidence that, because “[t]he Eastmans have presented no evidence that

Allstate’s customers have authorized the disclosure of their personal information (indeed

there is no such evidence),” their subpoena’s enforcement, by virtue of Federal Rule of

Evidence 501, would violate “Section 791.13’s prohibition against disclosing personal or

private information of Allstate customer’s without written consent.” (Id. at 6; see also

Doc. No. 26 at 1.) 

Ostensibly beguiling, such conclusion does not follow from any thorough

dissection of this statute’s plain and unambiguous terms. While written authorization is

9/(...continued)

subpoena has standing to challenge the subpoena where its challenge asserts that the information is

privileged or protected to itself.” (internal quotation marks omitted) (citing Diamond State Ins. Co. v.

Rebel Oil Co., 157 F.R.D. 691, 695 (D. Nev. 1994))). For the relevant analytical framework, see Pioneer

Electronics (USA), Inc. v. Super. Ct., 150 P.3d 198 (2007), and Hill v. Nat’l Collegiate Athletic Ass’n, 865 P.2d 633 (1994).

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normally required for the disclosure of “any personal or privileged information about an

individual collected or received in connection with an insurance transaction,” CAL. INS.

CODE § 791.13(a); Quadrant Info. Servs., LLC v. LexisNexis Risk Solutions, Inc., No. C

11-6648 SBA, 2012 U.S. Dist. LEXIS 108596, at *13, 2012 WL 3155559, at *5 (N.D.

Cal. Aug. 2, 2012), as Defendant rightly contends, (Doc. No. 30), the statute’s second

paragraph enumerates a multitude of exceptions, CAL. INS. CODE § 791.13(b). Most

relevant here, no written authorization is required if (1) the release“[t]o a person other

than an insurance institution, agent, or insurance-support organization” and (2) is “[i]n

response to a facially valid administrative or judicial order, including a search warrant or

subpoena.” Id. § 791.13(h) (emphasis added). In fact, an even broader exception appears

to exist in subparagraph (g), which exempts any disclosure to “a person other than an

insurance institution, agent, or insurance-support organization” that is either “permitted

or required by law.” Id. § 791(g) (emphasis added); Conn. Indem. Co. v. Super. Ct., 3

P.3d 868, 875 (Cal. 2000) (citing id.). As other courts have noted, the language in these

two sections is rather clear, unambiguously exempting from IIPPA’s nondisclosure bar

and written authorization requirement any disclosure made pursuant to a judicial order or,

more specifically, a subpoena duly authorized by law,10/ or if the release is permitted by

applicable governing law. See, e.g., Cerone v. Reliance Std. Life Ins., No. 13cv184-AJB

(DHB), 2013 U.S. Dist. LEXIS 175300, at *14 n.1, 2013 WL 6579006, at *5 n.1 (S.D.

Cal. Dec. 13, 2013) (applying § 791(h) as to an order requiring production of

documents); Wahl v. Am. Sec. Ins. Co., No. C 08-0555 RS, 2010 U.S. Dist. LEXIS

84878, at *11–12, 2010 WL 2867130, at *4 (N.D. Cal. July 20, 2010) (applying § 791(g)

10/ Though issued pursuant to a federal rule, the subpoena at issue is no less authorised by law than any

other order issued pursuant to a federal statutory command. See Chandler v. James, 180 F.3d 1254,

1266-67 (11th Cir. 1999) (noting that a refusal to comply with a subpoena duces tecum is violation of a

court’s judicial authority).

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as to disclosure of information necessary for class notice to be mailed).11/ Authorized by

Rule 30, a procedural rule bearing the full force and effect of federal statutory law,

Plaintiffs’ subpoena cannot be rightly deemed anything but a disclosure either “permitted

by law” or compelled by a subpoena, two of IIPPA’s explicitly encoded exceptions. In

such cases, no consent can be required, and no bar can be raised, by IIPPA alone. See,

e.g., In re Ins. Installmant Fees Cases, 150 Cal. Rptr. 3d 618, 639 n.18 (Cal. Ct. App.

2012) (construing Conn. Indem., 3 P.3d 868, as stating that compliance with subpoenas is

permitted under IIPPA “without notice or consent to the insureds . . .when [the]

disclosure is otherwise permitted or required by law”). 

Four distinct elements of the cases cited by Defendant leave this Court

unpersuaded by their relatively brief ratiocination regarding IIPPA’s reach to the present

dispute. (Doc. No. 30 at 5–6.) First, each is an unpublished opinion by a trial court in

which an analysis of IIPPA did not amount to the relevant court’s central concern. At

best, this statute, so pivotal to the arguments raised by Defendant and Bausley, was the

focus of a few short sentences. Second, and somewhat relatedly, not one of these four

opinions discussed the application of the exception detailed in subparagraphs (g) and (h)

and directly applicable to a valid subpoena, whether issued under Rule 30(c)(2) or Rule

45, or a disclosure mandated by existing law. See J&M Assocs. v. Nat’l Union Fire Ins.

Co., No. 06-CV-0903-W (JMA), 2008 U.S. Dist. LEXIS 16855, at *10, 2008 WL

638137, at *4 (S.D. Cal. Mar. 4, 2008) (citing to subparagraph (a) alone); Cecena v.

Allstate Ins. Co., No. C05-03178 JF (HRL), 2006 U.S. Dist. LEXIS 86291, at *5 (N.D.

11/ It is notable, albeit neither directly apposite nor decisive to the issue at hand, that California’s ligation

privilege would bar any suit premised on Defendant’s alleged violation of § 791.13. The California

Supreme Court has held that the ligation privilege encoded in California Civil Code § 47 bars purely

statutory claims of invasion of privacy where the damages available are actual and monetary rather than

statutory. Grant v. United States, No. 2:11-cv-00360 LKK KJN PS, 2011 U.S. Dist. LEXIS 61833, at

*31–32, 2011 WL 2367656, at *11 (E.D. Cal. June 9, 2011). Contravention of § 791.13 entitles the

winning plaintiff to no more than actual damages. CAL. INS. CODE § 791.20(b). Accordingly, “[t]he

litigation privilege” encoded in California Civil Code § 47 may yet bar any tort action “based on

disclosure of information obtained in discovery.” Westinghouse Elec. Corp. V. Newman & Holtzinger, P.C., 46 Cal. Rptr. 2d 151, 156 n.1 (Cal. Ct. App. 1995) (analyzing Cal. Civ. Code § 47). 

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Cal. Nov. 9, 2006) (construing California law to require “that non-party insureds must

first give their consent to disclosure in writing in response to a letter approved by the

court”); Shapiro v. Paul Revere Life Ins. Co., No. C-96-1758 FMS (JL), 1997 U.S. Dist.

LEXIS 16286, at *9, 1997 WL 601430, at *3 (N.D. Cal. Sept. 18, 1997) (same). Third, at

least one–Quadrant Information Services, LLC v. LexisNexis Risk Solutions–actually

found the prohibition not to apply to the case at hand, as Quadrant had failed to allege

that LexisNexis was “an ‘insurance institution,’ ‘agent,’ or ‘insurance-support

organization.’” Quadrant Info. Servs., LLC, 2012 U.S. Dist. LEXIS 108596, at *13, 2012

WL 3155559, at *5. This same case, moreover, specifically alluded to the existence of

“specific conditions” that may justify disclosure, though it did not deal with subparagraph

(h). Id. Finally, and most definitively, the statute’s plain language is clear–an exception is

made for a subpoena such as the one employed by Plaintiffs–and cannot be set aside by

any court, the text as written limiting judicial ingenuity and offering no recourse in light

of its clarity. 

In sum, due to the existence of an explicit statutory exception for subpoenas, IIPPA

provides no defense of use to either Defendant or Bausley. 

B. Irrelevance of Confidentiality Clause

However much Bausley might so insist, (Doc. No. 26 at 2; Doc. No. 29 at 4), his

objection to Categories Two, Four, Nine, and Ten on the basis of the existence of a

confidentiality clause will not suffice by itself as a matter of law.12/

Despite Bausley’s protestations, the law on this issue is well-settled, a fact

obscured by his failure to cite a single case to buttress this argument in either the

Objection or the Reply. Undeniably, “in exercising their discretion under the rule, courts

12/ The Court cannot quite decipher Bausley’s meaning when he calls his records “proprietary.” (Doc.

No. 26 at 2.) The adjective itself means nothing more than that he is the records’ owners. BLACK’S LAW

DICTIONARY (14thg ed. 2014) (“proprietary”). To the extent Bausley intends to imply his records

contain information that must be hidden as a business secret, the analysis in this section as to

confidential business information would remain unchanged. 

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have long recognized that interests in privacy may call for a measure of extra protection,

even where the information sought is not privileged.” FED. R. CIV. P. 26(b) advisory

committee’s note (1970 amend.). However, courts have long refused to recognize any

“absolute privilege for trade secrets and similar confidential information” in favor of a

case-by-case approach that balances “privacy against the need for disclosure.” Fed. Open

Mkt. Comm. v. Merrill, 443 U.S. 340, 362, 99 S. Ct. 2800, 2813, 61 L. Ed. 2d 587 (1979)

(citations omitted). Other confidential business information is generally afforded even

less protection than trade secrets. Littlejohn v. BIC Corp., 851 F.2d 673, 685 (3d Cir.

1988). Indeed, to handle such confidential information in other contexts, courts have

endorsed the use of protective orders rather than condoned nondisclosure. See, e.g., Soto

v. City of Concord, 162 F.R.D. 603, 614 (N.D. Cal. 1995); Chism v. Cnty. of San

Bernadino, 159 F.R.D. 531, 535 (C.D. Cal. 1994) (endorsing use of protective order to

keep internal use-of-force tactics secret); Hampton v. City of San Diego, 147 F.R.D. 227,

231 (S.D. Cal. 1993) (endorsing use of protective order to protect privacy interests of

police officers); Miller v. Pancucci, 141 F.R.D. 292, 301 (C.D. Cal. 1992) (encouraging

the use of well tailored protective orders in discovery of police files); Kelly v. San Jose,

114 F.R.D. 653, 662, 665 (N.D. Cal. 1987) (contending that “pre-weighting is consistent

with the well-established notion that because privileges operate in derogation of the truth

finding process the law places the burden of proving all the elements essential to

invoking any privilege on the party seeking its benefits,” and later adding, “protective

orders can be used to prevent disclosure to the public generally”).

In light of this preponderance of case law, Bausley’s argument must fail for two

reasons. First, an absolute claim of confidentiality has never been favored; instead, courts

have opted for a balancing of interests akin to that already mandated under Rule

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26(b)(2)(C).13/ Second, in this case, a protective order had already been entered, (Doc.

No. 24), providing Bausley with the kind of security typically afforded confidential

information in case after case. Regardless, a mere confidentiality clause cannot prove that

anything worthy of protection is in fact involved, as Plaintiffs cogently stress, (Doc. No.

28 at 4–5.) Even if the documents referenced could be deemed truly secret, an order will

prevent their general broadcasting, and even their possible secrecy will not obviate the

need to balance every germane interest. An absolute claim of confidentiality will, in

essence, never do. 

As such, this Court rejects this second ground for quashing Plaintiffs’ subpoena.

C. Evidence of Bias

In his Reply, Bausley added a third reason. Because he will testify to the fact that

he and his company have had a longstanding relationship with Allstate, no more is

needed to possibly show his potential bias. (Doc. No. 28 at 3.) In his own words,

“Bausley & Associates is retained by Allstate and Plaintiff knows that”; “there is no need

to uncover evidence of the obvious.” (Id. at 4.) These documents were “[o]stensible . .

sought to in order to show potential bias by Bausley & Associates in favor of All state

Insurance Company.” (Id.) To wit, no need for such records can be credibly posted,

Bausley maintains, as he will readily admit to his longtime relationship with Allstate.

(Id.) In his view, such a bare admission affords Plaintiffs with all the evidence they may

rightly need without an unnecessary impugning.

Despite Bausley’s vociferous insistence, this Court respectfully disagrees. As one

jurist has succinctly observed in a case directly on point, “[o]ther insureds’ claim files

may be relevant to show whether there have been other instances of misconduct in the

past by a particular claims representative and the insurer's knowledge of it.” Cecena,

13/ For more, see Part III.D.

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2006 U.S. Dist. LEXIS 86291, at *4.14/ This conclusion has been echoed by other courts,

including this state’s supreme tribunal, applying the very code under which Plaintiffs

now proceed. See, e.g., Colonial Life Accident Ins. Co. v. Super. Ct., 647 P.2d 86, 89

(Cal. 1982) (ruling that based on California’s version of Rule 26(b)(1), encompassing an

identical minimal relevance standard, “Colonial’s suggestion that the discovery of other

insureds whose claims were negotiated by Sharkey will not yield relevant, admissible

evidence, is patently meritless”). Either case fatally undermines Bausley’s position.

Certainly, as it explicates controlling substantive law, the latter strikes this Court as more

than enough to tip the scales against Bausley’s stand. 

Logic, moreover, suggests the very opposite of Bausley’s belief, for the extent to

which Bausley depends upon Allstate’s business and thus goodwill may raise legitimate

doubts about his objectivity that the relationship’s mere existence can never do. For

example, the kinds of cases in which it has served as an investigator and the results that it

has netted may yet suggest a pattern that could undermine the credibility of Bausley’s

future testimony or its past analyses, most especially its evaluation of Plaintiffs’

insurance claim. If Bausley’s business relied on Allstate for only 2% of its revenue, the

relationship itself may hint at little of significance to the present matter. In contrast, if

Allstate’s payments constituted the vast majority of Bausley’s earning and if its files

reveal a pattern, both persistent and obvious, of undervaluing other similar fire claims in

which Allstate was the insurer, the intimation of bias may be graver still. Regardless, the

fact that a relationship exists will tell little, while the particular of an multi-decade

association, from the dollars and cents exchanged and accumulated to the individual cases

weighed to the standard used, may amount to far more in the caldron of a future

examination. Recently, in an oral ruling soon to be memorialized in a written order, this

Court has so decided in a different case; now new argument is here propounded of

14/ Interestingly, the Defendant here was the defendant in the cited case. Defendant, however, does not

make this argument; Bausley alone does so.

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sufficient gravity to dissuade it from reaching these same conclusion once more.

Based on reason and on case law, this Court rejects Bausley’s third ground for

opposing Plaintiffs’ subpoenas. 

D. Balancing Test

Whether on motion or sua sponte, though the text itself is mandatory, a court

“must limit the frequency or extent of discovery otherwise allowed by these rules or by

local rule if it determines that: (i) the discovery sought is unreasonably cumulative or

duplicative, or can be obtained from some other source that is more convenient, less

burdensome, or less expensive; (ii) the party seeking discovery has had ample

opportunity to obtain the information by discovery in the action; or (iii) the burden or

expense of the proposed discovery outweighs its likely benefit, considering the needs of

the case, the amount in controversy, the parties’ resources, the importance of the issues at

stake in the action, and the importance of the discovery in resolving the issues.” FED. R.

CIV. P. 26(b)(2)(C); Kiln Underwriting, Ltd. v. Jesuit High Sch. Of New Orleans, Nos.

05-04350c, 06-05060, 06-05057, 2008 U.S. Dist. LEXIS 83535, at *4–6, 2008 WL

4286491, at *2 (E.D. La. Sept. 18, 2008). In addition to this power, “[a] court may, for

good cause, issue an order to protect a party or person from annoyance, embarrassment,

oppression, or undue burden or expense.” FED. R. CIV. P. 26(c)(1). In this analysis, the

key criteria are not the relevance of the information sought, for its relevance is assumed,

the information being not otherwise discoverable.15/ Rather, it is whether production of

the documents demanded would probably create a burden far greater than the probable

benefit, a matter of purely judicial discretion.

Even at first glance, it is clear that Plaintiffs’ subpoena is written broadly. In

Plaintiffs’ own words, they have sought “[a]ny and all DOCUMENTS” between

15/ Thus, while the evidence may be relevant to show bias, the sheer scale of production requested may

seem to exceed that possibility. Though oft-obscured, relevance and discoverability, in the end, remain

disparate notions subject to discrete consideration.

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Defendant and Bausley exchanged “at any time” (Category Two), “[a]ny and all

DOCUMENTS” Bausley received from Defendant, even if unsolicited, “at any time”

(Category Four), and “[a]ny and all DOCUMENTS” from Bausley to Allstate “at any

time” (Category Six). (Doc. No. 28 at 2.) In contrast, their ninth request specifically

limits its request for “[a]ny and all DOCUMENTS showing the total amount of revenue”

Bausley received from Allstate during a time period: “2008 to present.” (Id.) The same

temporal constraint is appended to the tenth request, which concerns itself with “[a]ny

and all DOCUMENTS showing the total amount of work YOU have performed or been

contracted to perform on behalf of ALLSTATE INSURANCE COMPANY.” (Id. at 3.)

The reason behind the time period’s appearance in two categories and not in others is left

unexplained, while Plaintiffs rest wholly on the relevance of the documents sought, not

necessarily their pressing need, in the Reply. (Id. at 3, 5.) 

For this Court, the sheer breadth of Plaintiffs’ subpoena demands some

curtailment. Categories Two, Four, and Six seemingly subject Bausley to an incredible

burden, requiring him to produce every possible documentary record touching upon any

aspect of his relationship with Allstate for all time. Instead of eternity, the addition of a

reasonable range of years would have sharply reduced this request’s onus, as would have

some focus on fire-related claims rather than any and all claims for which Bausley was

the appointed investigator. Concurrently, this Court cannot see the need for Plaintiffs to

obtain “[a]ny and all DOCUMENTS showing the total amount of revenue” Bausley has

earned from Allstate, as Category Nine commands. (Id. at 2.) Not only is such a request

impossibly vague, but Plaintiffs’ probable purposes would be far better served by a

simple spreadsheet, with supporting documentation attached, enumerating the revenue

earned by Defendant during the years of its relationship with Bausley. To wit, several

categories of documents are so deliberately broad, as Bausley less than eloquently

maintains, (Doc. No. 29), as to necessarily subject Bausley to an undue burden or

expense. Plaintiffs could have written them more narrowly, just as they circumscribed

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Categories Nine and Ten, but instead asked for the world entire, invoking only relevance

as their touchstone. In light of Rule 26(b)(2) and (c), however, the contents of an eternal

universe is not theirs to claim at Bausley’s (or Defendant’s) expense by a mere

conclusory assertion of discovery’s minimal relevance measure. More was needed, but no

more was proffered.

Accordingly, a narrowing of some of Plaintiffs’ Categories seems essential. 

IV. CONCLUSION

For the foregoing reasons, this Court DENIES the Objection IN PART and

WITHOUT PREJUDICE. Bausley is ordered to provide “any and all DOCUMENTS”

responsive to Categories One, Three, Five, and Seven. On its own motion, this Court

limits the remaining classes of documents subpoenaed in the following manner. 

1. Categories Two, Four, and Six is hereby limited to documents related to Plaintiffs’

specific insurance file and/or a fire-related investigation conduced by Bausley. 

2. Category Nine is limited solely to invoices documenting every payment received

from Allstate and the total revenue earned from Allstate by Bausley for 2008

through the present, both in absolute terms and as a proportion of its total revenue.

3. Category Ten is limited to any final reports and non-final memoranda showing the

work performed by Bausley for Allstate from 2008 to the present. 

IT IS SO ORDERED.

DATED: July 15, 2015

 Hon. William V. Gallo

 U.S. Magistrate Judge

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