Judge: David S. Cunningham, Case: 19STCV40706, Date: 2022-12-19 Tentative Ruling

Case Number: 19STCV40706    Hearing Date: December 19, 2022    Dept: 11

Tentative Ruling Re: Motion for Protective Order Re: 19STCV40706 (Albright)

Date:                           12/19/22

Time:                          11:00 am

Moving Party:           Farmers Insurance Company, Inc., et al. (jointly “Farmers Defendants”)

Opposing Party:        James Albright and Christine Albright (jointly “Plaintiffs”)

Department:              11

Judge:                        David S. Cunningham III

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TENTATIVE RULING

The Farmers Defendants’ request for judicial notice is granted in full.  The Court judicially notices the existence of the documents because they constitute court records.

The motion for protective order is granted with modifications.

BACKGROUND

The second amended complaint (“SAC”) alleges:

[T]he Farmers Defendants utilize a software program throughout California known as 360Value to determine the replacement cost of an insured’s dwelling.  The Farmers Defendants use that replacement cost to set policy limits for the insurance policies they sell to insureds in California.  However, 360Value is inherently inaccurate.  Nonetheless, despite the many flaws inherent to both 360Value and the Farmers Defendants’ use of it, the Farmers Defendants hold themselves out through their agents, marketing materials, websites (for both the Farmers Defendants and for their agents), and other publicly available information, as having expertise in the field of insurance and, more specifically, determining a dwelling’s replacement cost.  The Farmer Defendants and their agents tout 360Value as a sophisticated software program that accurately calculates the replacement cost of a dwelling. . . . By doing so, the Farmers Defendants and their agents undertake a duty to their insureds and breach that duty (along with California law) through their persistent and knowing implementation of their 360Value Scheme.

(SAC, ¶ 2.)

Here, the Farmers Defendants move for a protective order.

DISCUSSION

On 9/14/20, the parties filed a joint status conference statement, agreeing that a protective order is necessary.

On 7/30/21, Judge Ann Jones lifted the discovery stay to allow class discovery to commence.

On 3/11/22, in response to a document request, the Farmers Defendants produced testimony from 15 depositions taken in an Oklahoma lawsuit.

On 5/13/22, the Farmers Defendants produced the exhibits to the 15 Oklahoma depositions.

On 9/23/22, Plaintiffs’ counsel advised defense counsel via email that, based on his review of the public file, he did not believe a protective order had ever been entered.

On 9/26/22, defense counsel responded.  He agreed with Plaintiffs’ counsel’s assessment, and the parties started meeting and conferring.

On 11/14/22, the Farmers Defendants filed the instant motion.

Both sides agree that the Court should issue a protective order that covers discovery going forward, but they disagree as to whether it should cover the Oklahoma depositions and exhibits. 

The Farmers Defendants contend the Oklahoma documents should be covered because they are covered by Oklahoma protective orders, the parties intended to execute a protective order, and the failure to submit a protective order was due to mistake, inadvertence, surprise, or excusable neglect.  (See Motion, pp. 3-9.)

Plaintiffs contend the documents should not be covered because the Farmers Defendants waived the right to rely on the Oklahoma protective orders, Code of Civil Procedure section 473 is irrelevant, the documents are not confidential, and the Farmers Defendants’ proposed remedy – exempting past disclosures and only making future disclosures violative – is unworkable.  (See Opposition, pp. 1-5.)

In reply, the Farmers Defendants assert that protective orders “routinely appl[y] retroactively,” they did not “intentionally relinquish their right” to protect confidential documents, the Court does not need to scrutinize the confidential designations to decide the motion, the Oklahoma protective orders are relevant, and Plaintiffs misrepresent the Farmers Defendants’ motive.  (Reply, pp. 3-8.)

“Protective orders are frequently sought to prevent disclosure of documents containing confidential commercial information (e.g., trade secrets, customer lists, etc.).”  (Edmon & Karnow, Cal. Prac. Guide: Civ. Proc. Before Trial (The Rutter Group 2022) ¶ 8:1456.)  “If ‘good cause’ is shown, discovery of this information may be denied altogether or disclosure narrowly limited to certain persons for certain purposes.”  (Ibid.)

“The fact that a party has waived a privilege (e.g., trade secret) by failure to object does not mean the court is powerless to prevent misuse of the privileged information.”  (Id. at ¶ 8:1454.3, emphasis in original.)  “Although the responding party must produce the privileged document or information, the court may by protective order limit the opposing party or counsel’s misuse of it (e.g., by public dissemination).”  (Ibid.)  Bottom line, California law permits a party “to seek a protective order to prevent use of the information provided” despite waiver.  (Id. at ¶ 8:1454.2 [quoting Stadish v. Superior Court (1999) 71 Cal.App.4^th 1130, 1144 for the proposition that “a party may – even after it has waived its right to object to the production of documents, and has produced most of the documents requested – seek a protective order restricting dissemination of the documents”], emphasis added.) 

The Farmers Defendants produced the Oklahoma documents without a protective order in place.  This fact is undisputed. 

Moreover, Plaintiffs’ counsel represents that he used the documents and attached them as exhibits during several depositions, and the Farmers Defendants did not try to restrict their use or claim confidentiality.  (See Weber, Jr. Decl., ¶¶ 3-5.) 

Waiver or not, the bell cannot be unrung.  The Farmers Defendants provided the Oklahoma documents to Plaintiffs notwithstanding the Oklahoma protective orders.[1]  The documents have been unprotected, available, seen, and utilized in this case for months, so it would be futile and inappropriate, at this point, to require Plaintiffs to challenge confidential designations to continue utilizing them in this case.  Accordingly, the Court rejects the Farmers Defendants’ proposed remedy and declines to analyze whether the documents qualify as confidential documents.

But it is appropriate to limit future disclosures to this case and to the parties, witnesses, attorneys, and attorneys’ staffs, consultants, and experts in this case since the failure to obtain a protective order sooner appears to have resulted from a “personnel change” at defense counsel’s firm and attorney mistake.  (Wagner Decl., ¶¶ 5, 6.)

The Court finds good cause to grant the motion for protective order with these modifications.