Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-02889/USCOURTS-casd-3_11-cv-02889-5/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 42:2000e Job Discrimination (Employment)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

JOHN SIMMONS,

Plaintiff,

Case No. 11cv2889-WQH (MDD)

ORDER ON JOINT MOTION

FOR DETERMINATION OF

DISCOVERY DISPUTE

REGARDING PROTECTIVE

ORDER

[ECF NO. 71]

vs.

MORGAN STANLEY SMITH

BARNEY, LLC,

Defendant.

Before the Court is the joint motion of the parties to determine a

discovery dispute regarding a proposed protective order. The motion was

filed on March 20, 2013. (ECF No. 71). Although the parties have

agreed to most of the terms in their proposed protective order (see ECF

No. 71-1), Plaintiff seeks to have the protective order apply to the

companion arbitration proceeding before the Financial Industry

Regulatory Authority (“FINRA”). Defendant opposes. Defendant seeks to

have persons shown documents delineated as confidential pursuant to

the protective order confirm that they will maintain the confidentiality

of such documents even if they were the originator, author or a recipient

of the document. Plaintiff opposes. The Court believes that there is

sufficient information present for the Court to decide the dispute without

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a hearing. 

Background

The instant case began in September 2011 when the Defendant

commenced an arbitration proceeding before FINRA alleging breach of

contract by Plaintiff. (ECF No. 71 at 3). Defendant alleged that Plaintiff

owed Defendant monies purportedly loaned to Plaintiff during his

employment. (Id.). On December 1, 2011, Plaintiff commenced suit in

California Superior Court in San Diego against Defendant alleging

claims for fraud, breach of contract and discrimination. (Id.). That

action was removed to this Court by Defendant on December 12, 2011.

(ECF No. 1). On May 24, 2012, the Hon. William Q. Hayes of this Court 

granted in part and denied in part Defendant’s motion to compel

arbitration of the entire action. (ECF No. 37). All but Plaintiff’s claims

for employment discrimination in violation of 42 U.S.C. § 2000e and

Cal.Govt.Code § 12940(a) were compelled to arbitration before FINRA.

(Id.). In the claim remaining in this Court, Plaintiff asserts that he was

discriminated against by Defendant in his employment based upon his

membership in the Church of Jesus Christ of Latter Day Saints. 

Discussion

Fed.R.Civ.P. 26(c)(1) authorizes the court to issue protective orders,

based upon good cause, to protect a party, among other things, from

undue burden or expense. Rule 26(c)(1)(G) specifically provides that the

court may enter appropriate orders regarding discovery or disclosure of

confidential information. 

The proposed protective order expressly provides that it is intended

to protect the confidentiality of certain information. (ECF No. 71-1 at 1).

The protective order allows for each party to designate material as

confidential and provides for restrictions on the disclosure of material so

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designated. (Id. at 2-6). The protective order also provides a procedure

for recovering inadvertently disclosed material subject to the attorneyclient privilege. (Id. at 6-7).

Availability of Documents Produced for Use in FINRA

Plaintiff wants the protective order to allow for the use in the

companion FINRA arbitration proceedings of materials produced

pursuant to the proposed protective order in this case. Plaintiff argues

that allowing these materials to be available in the FINRA action will

“prevent the needless duplication of identical discovery efforts, would

save the parties tens of thousands of dollars in attorney fees and

litigation costs, and would foster judicial economy and efficiency.” (ECF

No. 71 at 11). 

Defendant argues that this Court lacks jurisdiction to order that

discovery produced pursuant to the protective order be available for use

before FINRA. Defendant claims that much of the information produced

in connection with the pending litigation before this Court is irrelevant

in the FINRA action. Defendant asserts that there is no prejudice to

Plaintiff in requiring Plaintiff to abide by FINRA discovery rules. (Id. at

7-9). 

At the outset, the Court is comfortable that it can issue discovery

orders that may impact other litigation. For example, Fed.R.Evid.

502(d) provides that a federal court may order that any disclosure of

privileged or work-product protected information in connection with

litigation before the court does not constitute a waiver of the privilege or

protection before it or in any other federal or state proceeding. 

The Court otherwise finds Defendant’s position puzzling. Allowing

information produced pursuant to this protective order to be available

for use in the FINRA proceeding is not a finding that any particular

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document or testimony is relevant or admissible in that proceeding. All

it does is limit the necessity for Plaintiff to propound new discovery

requests for potentially identical information, limits the need for

Defendant to reproduce materials that may have been supplied earlier

and potentially dispenses with the need for another protective order for

this information before FINRA. 

The Court finds good cause for the proposed protective order to

allow that materials produced for this litigation be available for use in

the companion FINRA proceeding. Each party may draw from the pool

of material produced for use before FINRA. This does not mean that

either side may use the discovery processes of this Court to obtain

information relevant only in FINRA. Nor does it mean that the parties

are prohibited from seeking additional information relevant in the

FINRA action using FINRA discovery procedures. 

By granting Plaintiff’s request, the Court cannot discern how it

would be directing, controlling or interfering with the FINRA arbitration

proceeding. Determining the extent to which information produced

pursuant to this Court’s protective order may be used certainly is within

this Court’s jurisdiction and discretion. The only impact on FINRA may

be salutary as it may limit the need for duplicative discovery requests

and productions.

Protecting Disclosures of Confidential Information

The proposed protective order provides that confidential

information may be shown to independent experts, witnesses and

mediators only if they sign a confidentiality agreement the terms of

which have been stipulated by the parties. (ECF No. 71-1 at 4-5). 

Plaintiff proposes that confidential material may be shown to the

originator, author or recipient of a copy of the document without

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requiring those persons to sign the confidentiality agreement. (Id. at p.

4 ¶9). Defendant wants these persons, mostly former employees of

Defendant, to have to sign the stipulated confidentiality agreement. 

Plaintiff argues that these persons likely are bound by

confidentiality agreements imposed during their employment and upon

their separation from Defendant. For those persons, Plaintiff claims

that those confidentiality agreements continue to bind them and there is

no need for another. For persons who had previous contacts with this

material without confidentiality, Plaintiff argues that imposing a

confidentiality clause now may be unenforceable as these persons were

free to disclose this information earlier. Plaintiff also points to this

Court’s model rules which do not suggest that a separate confidentiality

agreement is necessary for persons who authored or received documents.

Consequently, Plaintiff states that good cause is lacking. 

Defendant claims that many of these individuals are now employed

with competitors, may not remember the details of these materials and

asserts that the need for continued confidentiality must be impressed

upon them. 

The Court finds that Plaintiff has the better argument. Persons

already bound by a confidentiality agreement need not sign a new one;

they may be reminded of their obligations during their testimony. The

Court finds that to impose a confidentiality obligation now upon

originators, authors or recipients of a copy of the material not previously

subject to a confidentiality agreement would create confusion and lead

to disputes. According, the Court finds that good cause is lacking to

include Defendant’s proposed language in disputed paragraph 9 of the

proposed protective order. 

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Conclusion

Plaintiff’s proposed amendments to the proposed protective order

are GRANTED. Defendant’s proposed amendment to the protective

order is DENIED. A copy of the conformed protective order is attached.

IT IS SO ORDERED.

DATED: March 22, 2013

 

 Hon. Mitchell D. Dembin

 U.S. Magistrate Judge

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