Judge: Yolanda Orozco, Case: 21STCV25741, Date: 2023-03-15 Tentative Ruling
Case Number: 21STCV25741 Hearing Date: March 15, 2023 Dept: 31
MOTION FOR A PROTECTIVE ORDER
TENTATIVE RULING
Defendants’ Motion for a
Protective Order is GRANTED.
Background
The operative First Amended Complaint
asserts causes of action for:
1)
Gender Discrimination in Violation of Government Code
§12940(a);
2)
Race Discrimination in Violation of Government Code §
12940(a);
3)
Harassment in Violation of Government Code §§ 12923 and
12940(j);
4)
Violation of Government Code § 12940(k);
5)
Violation of Government Code § 12940(h);
6)
Retaliation in Violation of Labor Code § 1102.5;
7)
Violation of Labor Code §§ 1197.5, 1194.5;
8)
Wrongful Termination in Violation of Public Policy;
9)
Defamation; and
10)
Intentional Infliction of Emotional Distress (IIED).
On
February 21, 2023, Defendants Netflix, Inc.; David B.
McLean; and Josephine Choy filed a Motion for a Protective Order.
Plaintiff filed opposing papers on March 02, 2023.
Defendants filed a reply on March 02, 2023.
Legal Standard
The court, for good cause shown, may make an order that
justice requires to protect a party from unwarranted annoyance, embarrassment,
oppression, or undue burden and expense.¿ A protective order may include, but
is not limited to, an order that: (1) the set of requests or particular requests
in the set need not be answered at all; (2) that the number of requests is
unwarranted; (3) that the time specified to respond to the requests be
extended; (4) that a trade secret or other confidential research not be
admitted or be admitted only in a certain way; or (5) that some or all of the
answers to requests be sealed and thereafter opened only on order of the
court.¿ (Code of Civ. Proc., §§ 2030.090, subd. (b), 2031.060, subd. (b),
2033.080, subd. (b).)¿¿
¿¿
If the motion is denied in whole or in part, the court may
order that the responding party provide the discovery against which protection
was sought on terms and conditions that are just.¿ (Code of Civ. Proc., §§
2030.090, subd. (c), 2031.060, subd. (c), 2033.080, subd. (c).)¿Courts have
considerable discretion in granting and crafting protective orders. (Raymond
Handling Concepts Corp. v. Superior Court (1995) 39 Cal.App.4th 584, 588.)
Discussion
Defendants Netflix, Inc.; David B. McLean; and Josephine Choy (collectively “Defendants”) move for a protective order regarding the designation of “Highly Confidential” documents and who should have access to the documents.
Defendants drafted a proposed protective order similar to the Los Angeles Superior Court’s Model Stipulation and Protective order for Confidential and Highly Confidential Designations (“Model Protective Order”). The proposed protective order is attached as Exhibit 1 to the Declaration of Megan M. Lawson, with Exhibit 1A showing a redlined version of the proposed order against the Model Protective Order. Plaintiff’s version of the proposed protective order is attached as Exhibit 1 to the Declaration of Chester R. Ostrowski, with the redlined version of the proposed order against the Model Protective Order attached as Exhibit 1A.
Defendants assert that good cause exists for the protective order to protect the privacy interest of Netflix employees and its Indian subsidiaries (which includes information such as salary, bonus, compensation data, complaints of harassment and discrimination), protect Netflix’s sensitive business information (such as tax practices in India and formation of its Indian entities); and prevent Plaintiff’s from misusing the information.
At issue is whether Plaintiff, rather than just Plaintiff’s counsel, should also have access to documents Defendants designated as “Confidential” and “Highly Confidential” and if the Court should adopt Plaintiff’s proposed protective order that limits what information can be labeled as “Highly Confidential.”
A
Showing of Good Cause is Required to Issue a Protective Order
Plaintiff
does not dispute that it seeks access to sensitive information including the
private personal files of Defendants McLean and Choy, including complaints or
grievances and compensation of Netflix employees. (Lawson Decl. ¶ 2.) Plaintiff
also seeks a tax memorandum and Defendant Netflix anticipates that Plaintiff
will seek further information regarding Netflix’s tax practices in India and
other confidential business information. Therefore, Defendants assert a
protective order is necessary to protect third-party privacy rights and
sensitive business information while also allowing Plaintiff’s counsel access
to the information.
“The right of privacy is an
‘inalienable right’ secured by article I, section 1 of the California
Constitution. [Citation.] The right of privacy protects against the
unwarranted, compelled disclosure of private or personal information and
‘extends to one's confidential financial affairs as well as to the details of
one's personal life.’ [Citation.] ‘Personal financial information comes
within the zone of privacy protected by [A]rticle I, [S]ection 1 of the
California Constitution.’ [Citations.]” (SCC Acquisitions, Inc. v. Superior Court (2015) 243
Cal.App.4th 741, 755-756 [internal quotation marks omitted].)
However, “[t]he constitutional
right of privacy does not provide absolute protection “‘but may yield in the furtherance
of compelling state interests.’ [Citation.] ‘[C]ourts must balance the
right of civil litigants to discover relevant facts against the privacy
interests of persons subject to discovery.’ [Citation.] ‘In
determining whether disclosure is required, the court must indulge in a
‘careful balancing’ of the right of a civil litigant to discover relevant
facts, on the one hand, and the right of the third parties to maintain
reasonable privacy regarding their sensitive personal affairs, on the other. [Citation.]
The court must consider the purpose of the information sought, the effect that
disclosure will have on the affected persons and parties, the nature of the
objections urged by the party resisting disclosure and availability of
alternative, less intrusive means for obtaining the requested information.
[Citation.] Based on an application of these factors, the more sensitive the
nature of the personal information that is sought to be discovered, the more
substantial the showing of the need for the discovery that will be required
before disclosure will be permitted. [Citations.]’” (SCC Acquisitions,
Inc., supra, 243 Cal.App.4th at 754.)
The Court finds that Defendants
have articulated good cause as to why employee information should be limited in
disclosure to only certain individuals. The Court is less convinced that a
protective order is needed to protect commercially sensitive information that
is not a trade secret. “[C]orporations do not have a right to privacy protected by the
California Constitution. ‘Article I, [S]ection 1 of the California
Constitution protects the privacy rights of ‘people’ only.’ [Citations.]” (SCC
Acquisitions, Inc., supra, 243 Cal.App.4th at 756.)
“The
difference between a protective order issued by the trial court and a secrecy
agreement between the parties is that the protective order balances the
interests of the public, the plaintiff, and the defendant by requiring the
party seeking to restrict dissemination of discovered documents to demonstrate ‘good
cause’ for the restriction.” (Westinghouse Electric Corp. v.
Newman & Holtzinger (1995) 39
Cal.App.4th 1194, 1209 [italics original].)
Plaintiff has the right to be
concerned that Defendants will over-designate documents as “Highly
Confidential.” Accordingly, Plaintiff asserts that its proposed protective
order (1) allows Plaintiff to maintain the right to review all relevant material
produced by Defendants in discovery in order to aid her attorneys in the
prosecution of her claims and (2) limit the types of material that Defendants
are permitted to designate as “Highly Confidential” to “propriety or
competitively sensitive” materials. (Ostrowski Decl. Ex. A. [Plaintiff’s
Proposed Order].) By Plaintiff’s own admission, the “Highly Confidential”
designation does not extend to the personal records of Defendants McLean and
Choy.
Designation of Highly
Confidential Documents and Limitations on Disclosure
The Model Protective Order
defines “Highly Confidential” to mean “any information which belongs to a
Designating Party who believes in good faith that the Disclosure of such
information to another Party or non-party would create a substantial risk of
serious financial injury that cannot be avoided by less restrictive means.”
Plaintiff’s protective order
proposes that “Highly Confidential” mean only:
“[A]ny proprietary or competitively sensitive
Documents, Testimony, or Information which belongs to a Designating Party who
believes in good faith that the Disclosure of such Documents, Testimony, or
Information to another Party or non-Party would create a substantial risk of
serious financial injury to the Designating Party’s business that cannot be
avoided by less restrictive means.”
(Ostrowski Decl. Ex. 1)
Defendants’ protective order proposes that “Highly
Confidential” mean:
“[A]ny
Documents, Testimony, or Information which belongs to a Designating Party who
believes in good faith that the Disclosure of such Documents, Testimony, or
Information to another Party or non-Party would create a substantial risk of
serious financial or other injury that cannot be avoided by less restrictive
means.”
(Lawson Decl. Ex. 1.)
The Model Protective Order states:
“Highly Confidential” means any Documents, Testimony, or Information
which belongs to a Designating Party who believes in good faith that the
Disclosure of such Documents, Testimony, or Information to another Party or non-Party
would create a substantial risk of serious financial or other injury that
cannot be avoided by less restrictive means.”
Plaintiff’s proposed order
states:
“The Designating Party shall have the right to designate as
“Highly Confidential” any proprietary or competitively sensitive Documents,
Testimony, or Information that the Designating Party in good faith believes
would create a substantial risk of serious financial injury to the Designating
Party’s business, if Disclosed to another Party or non-Party, and that such
risk cannot be avoided by less restrictive means. The Designating Party shall
have the right to designate as “Confidential” any Documents, Testimony, or
Information that the Designating Party in good faith believes to contain
non-public information that is entitled to confidential treatment under the
law.”
(Otrowski Decl. Ex. 1.)
Defendants’ proposed order states:
“The Designating Party shall have the right to designate as “Highly
Confidential” any Documents, Testimony, or Information that the Designating
Party in good faith believes would create a substantial risk of serious
financial or other injury, if Disclosed to another Party or non-Party, and that
such risk cannot be avoided by less restrictive means. The Designating Party
shall have the right to designate as “Confidential” any Documents, Testimony,
or Information that the Designating Party in good faith believes to contain
non-public information that is entitled to confidential treatment under the
law.”
(Lawson Decl. Ex. A.)
Plaintiff admits its proposed order deviates from the
Model Protective Order in that it would limit the designation of Defendant
Mclean’s and Choy’s personal files to “Confidential” with the caveat that
Plaintiff would have access to Defendants’ personal files.
However, as stated above, the Court agrees that a
protective order is warranted in relation to Defendant Mclean and Choy’s
personal files. Defendants have also articulated good cause as to why
information about Defendants’ personal files should remain confidential. First,
Defendants properly point out that the Model Protective Order does not
anticipate Plaintiff having access to the confidential information.
Secondly, Defendants have cited legal authorities
supporting the limitation on the disclosure of certain information. In GT, Inc. v. Super. Ct.
(1984) 151 Cal.App.3d 748, the First District noted that there was good cause
for granting the protective order partially based on the risk of misuse by the
opposing party. (Id. at 54.) Here, Plaintiff is preemptively seeking to
limit Defendants’ ability to designate employee personal files as “Highly
Confidential” while also allowing Plaintiff to view the personal files even
if the documents are only designated “Confidential.” (See Ostrowski Decl.
Ex. 1.) As stated above, the Court finds that Defendants have articulated good
cause as to why Defendants’ employee personal files should remain confidential
and only viewed by certain individuals.
“Parties to
civil litigation, recognizing the broad policies favoring discovery, often
choose to avoid costly and time-consuming motion practice by entering into
stipulations for protective orders that permit production but limit disclosure
and use of discovered information deemed by the producing party to contain
confidential, proprietary, and/or private information. They thereby defer or
obviate the need for specific court determination as to the propriety of
designating materials confidential unless and until that designation is challenged.”
(Mercury Interactive Corp. v.
Klein (2007) 158 Cal.App.4th 60, 98–99.)
More importantly, Plaintiff is preemptively
challenging the designation of Defendants’ employee personal files as
“Confidential” and “Highly Confidential.” As explained by the Court in Overstock.com,
Inc., “[e]very protective order should
include language obligating the parties to be as sparing as possible in their
use of protected materials” such as language requiring the parties to ‘endeavor
in good faith to restrict their ... submissions to Confidential Information ...
reasonably necessary for the Court’s deliberations.” (Overstock.com, Inc. v. Goldman Sachs Group, Inc. (2014)
231 Cal.App.4th 471, 499.) Here, both Plaintiff’s and Defendants’ proposed
orders contain language limiting the designation of “Highly Confidential” and
“Confidential” to information the Designating Party believes in good faith to
be Confidential/Highly Confidential.
Defendants correctly point out its proposed order,
like the Model Protective Order, provides a mechanism for challenging the designation
of “Highly Confidential” and “Confidential Materials” by submitting a written
objection to the designation and the reasons for the objections. (See Lawson
Decl. Ex. 1 [at p. 6 ¶ 7.) If no resolution is reached, the receiving party can
file a motion with the court seeking to de-designate any or all designations on
the “Documents, Testimony, or Information.” (Id.) Plaintiff’s proposed
order contains a similar provision. (Ostrowski Decl. Ex. 1 [at p. 6, ¶ 7.)
Furthermore, the Court in Overstock.com, Inc., outlined other remedies a
party could seek for violations of the protective order, such as sanctions
under Code of Civil Procedure section 128.5. (Overstock.com, Inc., supra,
231 Cal.App.4th at 499.)
Therefore, the Court finds that Plaintiff has failed
to articulate why its narrower proposed protective order should be followed by
the parties. It is improper for Plaintiff to prematurely seek to limit the
classification of certain documents before they are produced because the Court
has not reviewed the dispute documents and would not be able to address the
issue on the merits. The Court also notes that Plaintiff’s reliance on Raymat
Materials, Inc. v. A & C Catalysts, Inc., (N.D. Cal. Mar. 6, 2014) 2014
WL 939976, and Del Campo v. Am. Corrective Counseling Servs., Inc. (N.D.
Cal. Nov. 6, 2007) 2007 WL 3306496, is unavailing since both cases involved
disputes that arose after the parties entered into a protective order and after
document production had occurred.
Plaintiff has also not adequately explained how
limiting Plaintiff’s ability to review “Highly Confidential” and “Confidential”
documents hinders the prosecution of her claims. To the extent that Plaintiff
feels she should be allowed to view certain documents accessible only to her
Counsel, Plaintiff may challenge the designation of those documents she
believes are necessary for her to review after Defendants have produced
them and after Plaintiff’s counsel has viewed them and determined a good basis
exists for challenging the designation of the specific documents.
Accordingly, the Court finds that Defendants have
articulated good cause for the issuance of the Defendants’ Proposed Order.
Based on the foregoing, the Defendants’ Motion for
a protective order is GRANTED.
Conclusion
Defendants’ Motion for a Protective Order is GRANTED.
Moving party to give notice.