Preview
1 Luanne Sacks (SBN 120811) 12/21/2020
lsacks@srclaw.com
2 Michele Floyd (SBN 163031)
mfloyd@srclaw.com
3 Robert B. Bader (SBN 233165)
rbader@srclaw.com
4 Jacqueline Young (SBN 280374)
jyoung@srclaw.com
5 SACKS, RICKETTS & CASE LLP
177 Post Street, Suite 650
6 San Francisco, CA 94108
Tel: (415) 549-0580
7 Fax: (415) 549-0640
8 Attorneys for Defendant
Massage Envy Franchising, LLC
9
SUPERIOR COURT OF CALIFORNIA
10
COUNTY OF SAN MATEO
11
UNLIMITED CIVIL JURISDICTION
12
13 JANE DOE #1 (N.K.); ASSIGNED FOR ALL PURPOSES TO
DEPARTMENT 2
14 Plaintiff,
v. Case Nos. 18CIV03706 ; 18CIV03706A
15
MASSAGE ENVY FRANCHISING, LLC; ME DEFENDANT MASSAGE ENVY
16 TIME, INC.; ANGELINE SEBASTIAN- FRANCHISING, LLC’S REPLY IN
STAFFORD; and DOES 1-400, inclusive; SUPPORT OF MOTION TO AFFIRM
17 Defendants. DESIGNATION OF DOCUMENTS
CONFIDENTIAL
18 JANE DOE #2 (L.T.); JANE DOE #3 (J.V.);
JANE DOE #4 (K.M.): and JANE DOE #6 Date: January 19, 2020
19 (L.S.); Time: 2:00 p.m.
Dept.: 2
20 Judge: Hon. Marie S. Weiner
Plaintiffs,
21 Documents Filed/Lodged Herewith:
v. 1. Supplemental Declaration of Robert Bader
22 MASSAGE ENVY FRANCHISING, LLC;
JDSEME, INC.; LEOCADIA ELLEN SALAS;
23 REDONDO CLINIC DEVELOPMENT, INC.;
10 NORTH, INC.; RAVELLO VENTURES,
24 INC.; ERIKA RICE; MARY GUIDRY; and
DOES 1-400, inclusive;
25
Defendants.
26
27
28
MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS.
18CIV03706 & 18CIV03706A
1 TABLE OF CONTENTS
2 Page
3 I. INTRODUCTION ................................................................................................................ 5
4 II. ARGUMENT ....................................................................................................................... 6
A. Plaintiffs Fail to Rebut MEF’s Showing That The Documents Are Confidential ....6
5
1. MEF Has Established that the Documents Are Confidential ........................6
6
2. Plaintiffs Seek to Apply the Wrong Standard .............................................10
7 B. Plaintiffs Fail to Establish Any Countervailing Public or Private Interests in
8 Maintaining Confidentiality of the Documents Under the SPO .............................12
C. Neither the Motion Nor the Parties’ Designation is Untimely ................................13
9
III. CONCLUSION .................................................................................................................. 14
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-2-
MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS.
18CIV03706 & 18CIV03706A
1 TABLE OF AUTHORITIES
2
3 Page(s)
Cases
4
Bridgestone/Firestone, Inc. v, Super. Ct.,
5 7 Cal. App. 4th 1384 (1992) .......................................................................................................... 10
6 Brown & Williamson Tobacco Corp. v. FTC,
710 F.2d 1165 (6th Cir. 1983) ....................................................................................................... 11
7
Davis v. Soc. Serv. Coordinators, Inc.,
8 2012 WL 1940677 (E.D. Cal. May 29, 2012) ............................................................................... 10
9 Davis v. Social Service Coordinators, Inc.,
2012 WL 2376217 (E.D. Cal. June 22, 2012) ................................................................................. 9
10 Foltz v. State Farm Mut. Auto. Ins. Co.,
11 331 F.3d 1122 (9th Cir. 2003) ....................................................................................................... 11
Glassdoor Inc. v. Super. Ct.,
12 9 Cal. App. 5th 623 (2017) .............................................................................................................. 6
13 H.B. Fuller Co. v. Doe,
151 Cal. App. 4th 879 (2007) ........................................................................................................ 11
14
In re Providian Credit Card Cases,
15 96 Cal. App. 4th 292 (2002) ...................................................................................................... 9, 11
16 Kamakana v. City & County of Honolulu,
447 F.3d 1172 (9th Cir. 2006) ....................................................................................................... 11
17
Mercury Interactive Corp. v. Klein,
18 158 Cal. App. 4th 60 (2007) .......................................................................................................... 11
19 Navarro v. Eskanos & Adler,
2007 WL 902550 (N.D. Cal. Mar. 22, 2007) .............................................................................. 8, 9
20 NBC Subsidiary (KNBC-TV, Inc.) v. Super. Ct.,
21 20 Cal. 4th 1178 (1999)....................................................................................................... 6, 11, 12
Proctor & Gamble Co. v. Bankers Trust Co.,
22 78 F.3d 219 (6th Cir. 1996) ........................................................................................................... 11
23 Raymond Handling Concepts Corp. v. Superior Court,
30 Cal. App. 4th (1995) ................................................................................................................ 13
24
Seattle Times Co. v. Rhinehart,
25 467 U.S. 20 (1984) .................................................................................................................. 11, 12
26 Stadish v. Superior Court,
71 Cal. App. 4th 1130 (1999) .................................................................................................. 11, 12
27
Westinghouse Elec. Corp. v. Newman & Holtzinger,
28 39 Cal. App. 4th 1194 (1995) ........................................................................................................ 12
-3-
MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS.
18CIV03706 & 18CIV03706A
1 Statutes
2 Cal. Code Civ. Proc. § 2031.060 ......................................................................................................... 6
3 Cal. Evid. Code § 1060 ..................................................................................................................... 10
Rules
4
Cal. R. Ct. 2.550 ................................................................................................................................ 11
5
Cal. R. Ct. 2.550(d) ........................................................................................................................... 11
6 Cal. R. Ct. 2.551 ................................................................................................................................ 11
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-4-
MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS.
18CIV03706 & 18CIV03706A
1 I. INTRODUCTION
2 Contrary to Plaintiffs’ sweeping generalizations, MEF’s Motion seeks to affirm
3 confidentiality designations for only three categories of documents: (1) the Operations Manual
4 (“OPM”) and derivative and related policies and procedures materials; (2) training documents, scripts
5 and checklists; and (3) incident reports. See Opening Br., pp. 11-14. These documents form the
6 basis of MEF’s proprietary business model. As the evidence shows, MEF has spent over a decade,
7 and millions of dollars, in the creation of these documents, and has gone to great lengths to keep
8 them confidential. Paiva Decl., ¶¶ 6-9, 11-14. This showing is more than sufficient to establish that
9 the documents are entitled to confidentiality under the Stipulated Protective Order (“SPO”).
10 Plaintiffs make no attempt whatsoever to rebut these central facts and instead attempt to
11 distract and mislead the Court. Contrary to Plaintiffs’ suggestion, and as Plaintiffs well know, MEF
12 did not ask the Court to affirm the confidentiality of the entire production of documents. Instead,
13 MEF submitted a motion tailored to the trade secrets and proprietary information inadvertently
14 included in the produced documents. Plaintiffs’ counsel did not meaningfully engage in meet and
15 confer efforts and did not provide MEF with a list of documents they were challenging, despite their
16 representations to this Court that they would endeavor to do so. In fact, Plaintiffs have now
17 apparently reneged on the only concession—that the OPM materials were properly designated as
18 confidential—Plaintiffs offered during the parties’ meet and confer efforts. Bader Decl., ¶ 13;
19 Supplemental Bader Decl., ¶ 3 & Exh. A.
20 Plaintiffs now take the untenable position that MEF’s evidentiary showing is insufficient,
21 and that the Court must make a specific finding as to each line of every single document that MEF
22 seeks to designate as confidential in this case. See e.g., Opp., at p. 10:11 (advocating “a line-by-line
23 approach” to reviewing confidentiality designations). In so arguing, Plaintiffs put the cart before the
24 horse. This dispute is not about sealing information in the public record. Nor is it about limiting the
25 production of documents or the universe of discoverable information. The dispute is simply about
26 whether the documents produced must be kept confidential under the terms of the agreed-upon
27 protective order until such time as they may be offered into the public record. To the extent
28 Plaintiffs may later wish to introduce these documents into the public record in this or any other
-5-
MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS.
18CIV03706 & 18CIV03706A
1 action, those questions should be dealt with then, when there is a live dispute—as the SPO envisions.
2 See SPO (distinguishing use of confidential materials in discovery from use of confidential materials
3 in court). Plaintiffs’ motivation is not the public interest in accessing these documents—which have
4 not been offered into the record—but the desire to use these documents in other litigation across the
5 country. The Court should reject Plaintiffs’ challenge and affirm MEF’s designation of the
6 Confidential Documents as confidential pursuant to the terms of the SPO.
7 II. ARGUMENT
8 A. Plaintiffs Fail to Rebut MEF’s Showing That The Documents Are Confidential
9 Plaintiffs do not dispute that the SPO protects against disclosure of “trade secrets, or
10 confidential business or financial information.” Nor do they address any of MEF’s authorities
11 demonstrating that a business may have a protectable interest in confidential business information
12 even if that information is not a trade secret. See Opening Br., at pp. 9-10 (citing Cal. Code Civ.
13 Proc. § 2031.060; NBC Subsidiary (KNBC-TV, Inc.) v. Super. Ct., 20 Cal. 4th 1178, 1222 n.46
14 (1999); Glassdoor Inc. v. Super. Ct., 9 Cal. App. 5th 623, 644 (2017)). Instead, Plaintiffs argue that
15 MEF has not made a sufficient showing that the documents constitute trade secrets. See Opp., pp.
16 11-14. This argument fails both because Plaintiffs failed to rebut MEF’s evidentiary showing and
17 because Plaintiffs apply the wrong standard.
18 1. MEF Has Established that the Documents Are Confidential
19 MEF’s Motion is narrow and is limited to three categories of documents – OPM documents,
20 training documents, and incident report documents.1 As described in the Opening Brief and in the
21 Paiva and Bader Declarations, these documents not only contain MEF’s confidential business
22
1
23 Plaintiffs muddy the water by interspersing challenges in their Opposition to documents that were
not raised in MEF’s Motion or were not even in the production at issue. See, e.g., Opp. pp. 7-8
24 (listing ten categories of documents purportedly at issue). Of the documents listed, only the
following are within the ambit of MEF’s Motion: the OPM; the “Behind Closed Doors,” “Code of
25 Conduct,” “Crisis Communication Guide”, and “Massage Therapist/Esthetician Standards of
26 Practice” documents; and the incident reports and related internal communications. As Plaintiffs
know, MEF has not asked the Court in its motion to affirm the confidentiality of several documents
27 that Plaintiffs misleadingly lay out in their Opposition, including (1) franchise agreements; (2)
“communications by and between Plaintiff and MEF and ME Time”; and (3)
28 “Promotional/Marketing materials such as advertisements related to sales/specials (which were
disseminated to the public)”.
-6-
MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS.
18CIV03706 & 18CIV03706A
1 information but also qualify as trade secrets because they include methods, techniques and processes
2 from which MEF derives economic value. Moreover, MEF takes reasonable steps to maintain their
3 confidentiality.
4 a. Category 1: The OPM documents
5 The OPM documents (produced as AS-S_ME-TIME0000294-306) contain mandatory and
6 suggested specifications, standards, operating procedures and rules necessary for the operation of
7 Massage Envy franchised locations. These documents go to the heart of MEF’s confidential and
8 proprietary information—they present a detailed roadmap of MEF’s standardized business systems.
9 See Paiva Decl., ¶¶ 7-8. As MEF’s General Counsel Ms. Paiva explained, MEF’s business is
10 granting business licenses to use the Massage Envy® name, trademark and standardized business
11 operations in exchange for a franchise fee. See id. ¶¶ 3-5. In other words, standardized business
12 documents, like the OPM documents, are MEF’s product, and the product’s value is inherently
13 derived from its restricted access. Id., ¶¶6-8. As further detailed in the Paiva Declaration, MEF
14 takes reasonable steps to limit access to and maintain the confidentiality of these documents,
15 including imposing contractual obligations on its franchisees; employing visible indicia of
16 confidentiality, such as legends, on the documents themselves; and pursuing protective orders in
17 litigation. Id., ¶¶11-14.2 Likewise, derivative policies and procedure documents—those that are
18 derived from or related to the OPM documents3—are confidential and constitute trade secrets for the
19 exact same reasons. Paiva Decl., ¶¶6-8. Plaintiffs’ counsel has already conceded the confidentiality
20 of the OPM documents, and they offer no argument for why derivative materials should be treated
21 any differently.
22 Plaintiffs make no meaningful attempt to rebut MEF’s showing that the OPM documents
23 merit confidentiality under the SPO. Plaintiffs simply declare, without factual support, that MEF
24 cannot establish “trade secret” protection over its policies and procedures because many of the
25 2
Plaintiffs concede, and do not challenge, MEF’s reasonable efforts to maintain the secrecy of these
26 documents. Opp., p. 13:17-19 (conceding that “MEF may take steps to keep these documents
secret”).
3
27 These documents were produced as AS-S_ME-TIME000213, 376-385, 1268, 1271-1276, 1292-
1293, 1369-1391, 1877-1906, 2068, 2242-2250, 2306, 2339-2341, 2546-2554, 2743-2747, 2753-
28 2764, 2764, 2765-2774, 2776-2779, 2790-2792, 2794-2800, 2808-10, 2815, 3092-3096, 3128, 3244-
3251.
-7-
MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS.
18CIV03706 & 18CIV03706A
1 policies and procedures “are industry standards”, which are “commonly used by businesses and are
2 routine within the massage industry” and are therefore not “special” or “worthy of economic value”.
3 Opp., p. 13. These unsupported and erroneous assertions should be disregarded. Furthermore,
4 Plaintiffs’ arguments are directly refuted by MEF’s evidence establishing that thousands of
5 franchisees have paid licensing fees to access and utilize the Massage Envy standardized business
6 systems, including the OPM documents, demonstrating the substantial economic value of these
7 documents. Paiva Decl., ¶¶3-5. Plaintiffs also entirely ignore MEF’s authorities in which courts
8 have found good cause to protect exactly the types of policies and procedures documents as issue
9 here. See, e.g., Navarro v. Eskanos & Adler, 2007 WL 902550, at *6 (N.D. Cal. Mar. 22, 2007)
10 (upholding confidentiality of training documents that were “tailored to Defendants’ policies and
11 procedures” because disclosure would give competitors “the benefit of Defendants’ ‘how-to’ guide
12 without incurring the administrative and legal expense of developing its own manual”); Jane Doe v.
13 Massage Envy Franchising, LLC, No. 2017-00210331-CU-PO (Sacramento Super. Ct. Apr. 16,
14 2018) (affirming confidential designation of OPM and policy and procedure documents over
15 plaintiffs’ counsel’s objections).4 In short, MEF has met its burden to demonstrate the confidentiality
16 of the OPM and derivative documents, and the Court should affirm the designations.
17 b. Category Two: Training documents, scripts and checklists
18 The training documents, scripts and checklists5 are protectable on the same basis as the
19 OPM materials. As MEF has demonstrated, these documents constitute MEF’s proprietary and
20 confidential work product. They are important resources that MEF developed over time and at great
21
4
Notably, Plaintiffs’ erroneous claim that “99.9% of [the] subject documents” are “commonly used . .
22 . by 99.9% of business[es]”, (Opp., p. 5), undercuts all of their theories of liability, as well as their
23 alternative argument that these documents would be of any interest or value. It is difficult to imagine
how MEF’s policies and procedures could be the tools of a “conspiracy” to “cover up” sexual
24 assaults, when these very policies and procedures are, in Plaintiffs’ own words, “industry standard”.
Nor is it obvious how documents “commonly used . . . by 99.9% of businesses” could implicate
25 “public health” interests. Opp., pp. 15-16.
5
26 These documents were produced as AS-S_ME-TIME000307-308, 330-370, 473-708, 710-988, 991-
996, 1008-1065, 1072-1078, 1110-1157, 1159-1164, 1169-1201, 1203-1254, 1329-1367, 1603-1637,
27 1646-1651, 1676-1761, 1763-1790, 1791-1819, 1823-1824, 1840-1875, 2022, 2437, 2560-2561,
2604, 2632-2637, 2728-2730, 2734-2737, 2748-2751, 3066-3074, 3101-3104, 3107-3109, 3111,
28 3113-3116, 3130, 3154-3162, 3170-3178, 3189-3190, 3211-3212, 3217-3220, 3235-3237, 3258,
3261-3269, 3276-3294, 3298-3302, 3304-3307, 3357-3366.
-8-
MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS.
18CIV03706 & 18CIV03706A
1 expense, which MEF makes available on an exclusive basis to franchisees to assist them in operating
2 their franchised locations and to maintain consistency in the Massage Envy® brand. Paiva Decl., ¶¶
3 7-9; Bader Decl., ¶ 5.
4 Plaintiffs raise no specific objection to the designation of these documents, except to suggest
5 that if any of the scripts were “publically disclosed”, they may no longer be entitled to confidentiality
6 protection. Opp., pp. 11:3-6 (citing In re Providian Credit Card Cases, 96 Cal. App. 4th 292, 305
7 (2002) (involving review of unsealing order). As an initial matter, Plaintiffs do not demonstrate that
8 any of the training documents or scripts at issue here have been “publically disclosed” or are akin to
9 “sales pitches” as was the case in Providian. In re Providian, 96 Cal. App. 4th at 305. But even if
10 they were, the SPO affords protection to “confidential business or financial information,” not merely
11 trade secrets. (SPO ¶ 1.) See Navarro, 2007 WL 902550, at *3. MEF has demonstrated good cause
12 for protection—namely, that public disclosure would harm MEF and would allow MEF’s competitors
13 to gain an unearned advantage. See, e.g., Davis v. Social Service Coordinators, Inc., 2012 WL
14 2376217, at *2 (E.D. Cal. June 22, 2012) (finding good cause to protect “scripts for employees to
15 follow when interacting with customers” where dissemination would allow competitors to “reap the
16 benefit . . . without having to incur the costs associated with developing the scripts”).
17 c. Category Three: Incident reports
18 The incident report documents6 are protectable both as derivative OPM materials, (Paiva
19 Decl., ¶ 8), and because they contain sensitive third-party information. Bader Decl., ¶ 5. Plaintiffs
20 concede that incident reports involving third parties are properly designated as confidential under the
21 SPO. See Opp., p.12:27 (conceding that “protections provided by the SPO” apply to information
22 about “other individuals”). But they argue that incident reports describing incidents involving
23 Plaintiffs neither implicate third-party privacy interests nor are protectable as trade secrets. Opp., p.
24 12:22-26. Specifically, they argue that Plaintiffs’ incident reports are no more protectable as trade
25 secrets than would be “a police report of a car crash involving an MEF employee.” Id., p. 12:23-24.
26 This argument ignores that, as MEF has demonstrated, the underlying incident report template is part
27
6
These documents were produced as AS-S_ME-TIME000224, 226, 233-239, 241-271, 281-293, 999,
28 1000-1006, 2466-2499, 2513-2523, 2536, 2553-2554, 2679-2683, 2687-2693, 2701-2703, 2705,
2824-2826, 2836-2837, 2927-2928, 3059-3062, 3086-3087.
-9-
MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS.
18CIV03706 & 18CIV03706A
1 of the confidential OPM. Plaintiffs do not contest this point. Paiva Decl., ¶ 8; see also Davis v. Soc.
2 Serv. Coordinators, Inc., 2012 WL 1940677, at *3 (E.D. Cal. May 29, 2012) (granting motion to seal
3 “business-specific form used to efficiently run the business and better facilitate the exchange and
4 recording of critical information from clients and relevant employee groups”). So, while the details
5 in the reports as to these specific Plaintiffs may not be protectable business information, the incident
6 reporting format, structure, and procedure revealed in the reports is, and there is no way to separate
7 one from the other in the documents identified.
8 2. Plaintiffs Seek to Apply the Wrong Standard
9 Rather than rebut the evidence, Plaintiffs complain that MEF did not make a
10 “particularized” showing on a “line-by-line” basis that each “specific document” in the production
11 qualifies as a trade secret. See Opp., at 10:8-15 &11:15-23.7 Not only does the SPO contain no such
12 requirement, but Plaintiffs cite no authority supporting the need for such a stringent analysis in the
13 context of confidentiality designations under a stipulated protective order. To the contrary, Plaintiffs’
14 argument effectively imports the analysis required for sealing motions into a motion challenging
15 confidentiality designations, which exactly reverses the order of procedures set forth under the SPO.
16 In other words, Plaintiffs are trying to skip a step.
17 Under “Part One” of the SPO, which dictates the “Use of Confidential Materials in
18 Discovery,” any party has the right to designate documents as confidential so long as they have a
19 “good faith” belief that documents “contain information involving trade secrets, or confidential
20 business or financial information.” (SPO, ¶ 1.) These procedures are in place, as stated, for
21 “discovery” purposes, so that the parties need not run to Court for an evidentiary hearing over the
22
7
23 Plaintiffs also argue, without citing any authority, that the fraud and injustice exception to the trade
secret privilege under California Evidence Code section 1060 somehow applies to prevent any
24 document from being designated confidential if the document “will help prove [Plaintiffs’] fraud and
conspiracy claims.” Opp., p. 14:11-19. This argument fails because the exception is inapplicable.
25 MEF has not invoked the privilege to withhold any documents from Plaintiffs, let alone documents
26 that they claim are necessary to prove their case. And, regardless, it is Plaintiffs’ burden to
demonstrate that the exception applies, which Plaintiffs have made no effort to do. See, e.g.,
27 Bridgestone/Firestone, Inc. v, Super. Ct., 7 Cal. App. 4th 1384, 1393 (1992) (discussing fraud and
injustice exception, holding that the burden is on the party seeking disclosure to invoke the exception
28 by making a “particularized showing that the information sought is relevant and necessary to the
proof of, or defense against, a material element of one or more causes of action”).
-10-
MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS.
18CIV03706 & 18CIV03706A
1 confidentiality of every single document (or every single line thereof) produced in discovery. This is
2 for good reason, given that Constitutional “right of access” concerns are not implicated at this stage.
3 See, e.g., Seattle Times Co. v. Rhinehart, 467 U.S. 20, 33 (1984) (“[P]retrial depositions and
4 interrogatories are not public components of a civil trial. . . . Much of the information that surfaces
5 during pretrial discovery may be unrelated, or only tangentially related, to the underlying cause of
6 action. Therefore, restraints placed on discovered, but not yet admitted, information are not a
7 restriction on a traditionally public source of information.”); NBC Subsidiary (KNBC-TV), Inc., 20
8 Cal. 4th at 1208 n. 25 (no right of “public access to discovery materials that are neither used at trial
9 nor submitted as a basis for adjudication”); Mercury Interactive Corp. v. Klein, 158 Cal. App. 4th 60,
10 89 (2007) (same).
11 Once a party seeks to submit a document into the public record, however, “Part Two” of the
12 SPO is triggered. Under “Part Two: Use of Confidential Materials in Court”, when any party seeks to
13 use materials in a court filing that were previously designated confidential, the designating party must
14 bring a motion to seal pursuant to California Rules of Court 2.550 and 2.551, and submit a
15 particularized declaration setting forth a sufficient basis for sealing under Rule 2.550(d). (SPO, ¶¶
16 12-14.) As Plaintiffs’ cited authorities all confirm, this is the appropriate stage to address
17 Constitutional “right of access” concerns, on the specific factual basis presented. See, e.g., In re
18 Providian, 96 Cal. App. 4th 292 (considering whether court abused its discretion in weighing
19 evidence presented in unsealing motion); H.B. Fuller Co. v. Doe, 151 Cal. App. 4th 879 (2007)
20 (considering whether any evidence supported request to seal documents in appellate court record); see
21 also Kamakana v. City & County of Honolulu, 447 F.3d 1172, 1179-80 (9th Cir. 2006) (discussing
22 right of access in context of motion to unseal records); Brown & Williamson Tobacco Corp. v. FTC,
23 710 F.2d 1165 (6th Cir. 1983) (same); Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122 (9th
24 Cir. 2003) (discussing the standard applicable to sealing records attached to dispositive motions); cf.
25 Proctor & Gamble Co. v. Bankers Trust Co., 78 F.3d 219, 222, 227 (6th Cir. 1996) (criticizing
26 portions of protective order related to sealing requirements); Stadish v. Superior Court, 71 Cal. App.
27 4th 1130, 1139 (1999) (evaluating propriety of protective order that allowed parties to unilaterally
28 determine documents could be filed under seal). Any other approach necessarily collapses “Part
-11-
MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS.
18CIV03706 & 18CIV03706A
1 One” and “Part Two” of the SPO into one another and vitiates the purpose of the discovery
2 protections in the order. Accordingly, MEF’s confidentiality designations should remain for purposes
3 of discovery and any sealing determinations should be made at the appropriate time.
4 B. Plaintiffs Fail to Establish Any Countervailing Public or Private Interests in
Maintaining Confidentiality of the Documents Under the SPO
5
6 Accepting that MEF has met its burden to demonstrate that the Confidential Documents
7 qualify as confidential under the SPO, Plaintiffs next argue that the Court should nonetheless lift the
8 protective order and allow Plaintiffs to disseminate the documents as they see fit, due to
9 countervailing public and private interests. Specifically, Plaintiffs argue that in determining whether
10 MEF’s confidentiality designations should be upheld, the Court must also weigh whether (1) the
11 documents are germane to “public health or safety” (Opp., p. 15:11); and (2) principles of “judicial
12 efficiency” warrant sharing across “similar” litigations. (id., p. 16:19-20). Neither of these
13 contentions holds merit.
14 First, as to “public health or safety” concerns, Plaintiffs’ argue that the Court is required to
15 “consider the public interest when determining whether good cause exists for a protective order”.
16 Opp., 15-16 (quoting Westinghouse Elec. Corp. v. Newman & Holtzinger, 39 Cal. App. 4th 1194,
17 1208 (1995)). In support of this proposition, Plaintiffs cite a pair of opinions—Stadish and
18 Westinghouse—both of which rely on First Amendment right of access concerns as the basis for
19 weighing public interest in issuing a protective order. Stadish, 71 Cal. App. 4th at 1145 (relying on
20 Westinghouse, 39 Cal. App. 4th at 1208 (discussing First Amendment concerns)). As discussed
21 above, however, First Amendment access concerns are not implicated until documents are admitted
22 into the public record, and any suggestion that the Court must consider those interests now, as to
23 unfiled discovery documents, runs contrary to both U.S. and California Supreme Court precedent.
24 See, e.g., Seattle Times Co., 467 U.S. at 33; NBC Subsidiary (KNBC-TV), Inc., 20 Cal. 4th at 1208 n.
25 25. Nevertheless, even under Stadish and Westinghouse, the Court need only weigh public interest
26 concerns when the party resisting the protective order demonstrates that “the documents are relevant
27 to public health.” Stadish, 71. Cal. App. 4th at 1145-46 (requiring finding that “documents sought to
28 be protected are relevant to public health” before court “will be required to consider the public
-12-
MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS.
18CIV03706 & 18CIV03706A
1 interest in determining whether good cause exists for a protective order”).
2 Here, Plaintiffs fail to draw any connection at all between the Confidential Documents—
3 which, according to Plaintiffs, consist almost entirely of documents “commonly used . . . by 99.9% of
4 business[es]” (Opp., p. 5)—and any matter relevant to public health or safety, and there is none.
5 Plaintiffs have offered no basis for the Court even to consider the public interest in ruling on the
6 Motion, let alone sufficient public interest concerns to override MEF’s confidentiality interests.
7 Second, Plaintiffs argue the Court should lift the SPO in the name of “judicial efficiency”,
8 so that Plaintiffs’ counsel may share MEF’s Confidential Documents with litigants in other, “similar”
9 litigation. Opp., pp. 16-17. Plaintiffs rely on a single authority, Raymond Handling Concepts Corp.
10 v. Superior Court, 30 Cal. App. 4th 584 (1995), for the assertion that such “sharing provisions” are
11 authorized under California law. But the permissible use of documents under the protective order in
12 Raymond Handling Concepts was far more limited than what Plaintiffs propose here, and the Court in
13 that case afforded no greater rights than are already contemplated in the SPO. The Raymond
14 Handling Concepts court found no abuse of discretion in a protective order that granted plaintiffs’
15 counsel a limited right to disclose the opposing party’s confidential documents to other plaintiffs’
16 counsel—not litigants—in pending similar litigation, after first notifying the opposing party so that
17 they would have an opportunity to be heard, if needed, prior to the disclosure. Id. at 590-91. Here,
18 Plaintiffs are afforded the same rights. Under the SPO, Plaintiffs may request leave from any
19 designating party to share confidential documents, and if the designating party refuses, Plaintiffs may
20 seek leave of Court after providing notice and opportunity to be heard. (See SPO, ¶ 4.)8 Plaintiffs
21 offer no authority or justification for any different protocol, here, and the existing protocol adequately
22 protects both MEF’s confidentiality interests and any “judicial efficiency” interests that may exist.
23 C. Neither the Motion Nor the Parties’ Designation is Untimely
24 Finally, Plaintiffs recycle the argument that MEF’s confidentiality designations are
25 8
It is worth noting that there is no need for any “sharing” procedure as a practical matter, here,
26 because Plaintiffs in the related cases are largely represented by the same counsel and therefore have
access to the same information. What Plaintiffs are really asking for is not the right to share
27 information, but rather carte blanche to use MEF’s confidential materials however they wish, in any
litigation they wish, so long as they determine in their own discretion that a litigation is “similar” to
28 the instant action and would benefit from MEF’s confidential documents. The SPO does not support
such a procedure, nor does any legal authority sanction it, and the Court should not consider it.
-13-
MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS.
18CIV03706 & 18CIV03706A
1 untimely. The Court already rejected this argument during the October 14, 2020 Informal Discovery
2 Conference and should do so again here. First, it is irrelevant to MEF’s designations that ME Time
3 produced the documents prior to entry of the SPO. MEF was not the producing party and so cannot
4 be penalized because the Confidential Documents were produced by ME Time after the parties
5 agreed in principle to the SPO, but a short time before formal entry of the SPO.. Second, it is not
6 “too late” to designate the Confidential Documents confidential under the SPO.9 Plaintiffs’ continue
7 to misconstrue the SPO to create a phantom 30-day time limit for a party to designate documents,
8 even those produced by another party. Opp., p. 18. There is no 30-day or any other deadline for a
9 party to designate documents produced by another party as confidential. See SPO, ¶ 1. Paragraph 1
10 governs the confidential designation of documents produced by parties and imposes no
11 confidentiality designation deadline at all. Plaintiffs’ misinterpretation is based on Paragraphs 2 and
12 7 of the SPO. Paragraph 2 governs the confidentiality designation of deposition transcripts and
13 written discovery responses, and Paragraph 7 governs the confidentiality designation of documents
14 produced by non-parties. Neither Paragraph 2 nor 7 govern the designation of documents produced
15 by a party. MEF’s designation of the Confidential Documents as confidential is timely.
16 III. CONCLUSION
17 For the foregoing reas
Preview
1 Luanne Sacks (SBN 120811) 12/21/2020 lsacks@srclaw.com 2 Michele Floyd (SBN 163031) mfloyd@srclaw.com 3 Robert B. Bader (SBN 233165) rbader@srclaw.com 4 Jacqueline Young (SBN 280374) jyoung@srclaw.com 5 SACKS, RICKETTS & CASE LLP 177 Post Street, Suite 650 6 San Francisco, CA 94108 Tel: (415) 549-0580 7 Fax: (415) 549-0640 8 Attorneys for Defendant Massage Envy Franchising, LLC 9 SUPERIOR COURT OF CALIFORNIA 10 COUNTY OF SAN MATEO 11 UNLIMITED CIVIL JURISDICTION 12 13 JANE DOE #1 (N.K.); ASSIGNED FOR ALL PURPOSES TO DEPARTMENT 2 14 Plaintiff, v. Case Nos. 18CIV03706 ; 18CIV03706A 15 MASSAGE ENVY FRANCHISING, LLC; ME DEFENDANT MASSAGE ENVY 16 TIME, INC.; ANGELINE SEBASTIAN- FRANCHISING, LLC’S REPLY IN STAFFORD; and DOES 1-400, inclusive; SUPPORT OF MOTION TO AFFIRM 17 Defendants. DESIGNATION OF DOCUMENTS CONFIDENTIAL 18 JANE DOE #2 (L.T.); JANE DOE #3 (J.V.); JANE DOE #4 (K.M.): and JANE DOE #6 Date: January 19, 2020 19 (L.S.); Time: 2:00 p.m. Dept.: 2 20 Judge: Hon. Marie S. Weiner Plaintiffs, 21 Documents Filed/Lodged Herewith: v. 1. Supplemental Declaration of Robert Bader 22 MASSAGE ENVY FRANCHISING, LLC; JDSEME, INC.; LEOCADIA ELLEN SALAS; 23 REDONDO CLINIC DEVELOPMENT, INC.; 10 NORTH, INC.; RAVELLO VENTURES, 24 INC.; ERIKA RICE; MARY GUIDRY; and DOES 1-400, inclusive; 25 Defendants. 26 27 28 MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS. 18CIV03706 & 18CIV03706A 1 TABLE OF CONTENTS 2 Page 3 I. INTRODUCTION ................................................................................................................ 5 4 II. ARGUMENT ....................................................................................................................... 6 A. Plaintiffs Fail to Rebut MEF’s Showing That The Documents Are Confidential ....6 5 1. MEF Has Established that the Documents Are Confidential ........................6 6 2. Plaintiffs Seek to Apply the Wrong Standard .............................................10 7 B. Plaintiffs Fail to Establish Any Countervailing Public or Private Interests in 8 Maintaining Confidentiality of the Documents Under the SPO .............................12 C. Neither the Motion Nor the Parties’ Designation is Untimely ................................13 9 III. CONCLUSION .................................................................................................................. 14 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS. 18CIV03706 & 18CIV03706A 1 TABLE OF AUTHORITIES 2 3 Page(s) Cases 4 Bridgestone/Firestone, Inc. v, Super. Ct., 5 7 Cal. App. 4th 1384 (1992) .......................................................................................................... 10 6 Brown & Williamson Tobacco Corp. v. FTC, 710 F.2d 1165 (6th Cir. 1983) ....................................................................................................... 11 7 Davis v. Soc. Serv. Coordinators, Inc., 8 2012 WL 1940677 (E.D. Cal. May 29, 2012) ............................................................................... 10 9 Davis v. Social Service Coordinators, Inc., 2012 WL 2376217 (E.D. Cal. June 22, 2012) ................................................................................. 9 10 Foltz v. State Farm Mut. Auto. Ins. Co., 11 331 F.3d 1122 (9th Cir. 2003) ....................................................................................................... 11 Glassdoor Inc. v. Super. Ct., 12 9 Cal. App. 5th 623 (2017) .............................................................................................................. 6 13 H.B. Fuller Co. v. Doe, 151 Cal. App. 4th 879 (2007) ........................................................................................................ 11 14 In re Providian Credit Card Cases, 15 96 Cal. App. 4th 292 (2002) ...................................................................................................... 9, 11 16 Kamakana v. City & County of Honolulu, 447 F.3d 1172 (9th Cir. 2006) ....................................................................................................... 11 17 Mercury Interactive Corp. v. Klein, 18 158 Cal. App. 4th 60 (2007) .......................................................................................................... 11 19 Navarro v. Eskanos & Adler, 2007 WL 902550 (N.D. Cal. Mar. 22, 2007) .............................................................................. 8, 9 20 NBC Subsidiary (KNBC-TV, Inc.) v. Super. Ct., 21 20 Cal. 4th 1178 (1999)....................................................................................................... 6, 11, 12 Proctor & Gamble Co. v. Bankers Trust Co., 22 78 F.3d 219 (6th Cir. 1996) ........................................................................................................... 11 23 Raymond Handling Concepts Corp. v. Superior Court, 30 Cal. App. 4th (1995) ................................................................................................................ 13 24 Seattle Times Co. v. Rhinehart, 25 467 U.S. 20 (1984) .................................................................................................................. 11, 12 26 Stadish v. Superior Court, 71 Cal. App. 4th 1130 (1999) .................................................................................................. 11, 12 27 Westinghouse Elec. Corp. v. Newman & Holtzinger, 28 39 Cal. App. 4th 1194 (1995) ........................................................................................................ 12 -3- MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS. 18CIV03706 & 18CIV03706A 1 Statutes 2 Cal. Code Civ. Proc. § 2031.060 ......................................................................................................... 6 3 Cal. Evid. Code § 1060 ..................................................................................................................... 10 Rules 4 Cal. R. Ct. 2.550 ................................................................................................................................ 11 5 Cal. R. Ct. 2.550(d) ........................................................................................................................... 11 6 Cal. R. Ct. 2.551 ................................................................................................................................ 11 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -4- MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS. 18CIV03706 & 18CIV03706A 1 I. INTRODUCTION 2 Contrary to Plaintiffs’ sweeping generalizations, MEF’s Motion seeks to affirm 3 confidentiality designations for only three categories of documents: (1) the Operations Manual 4 (“OPM”) and derivative and related policies and procedures materials; (2) training documents, scripts 5 and checklists; and (3) incident reports. See Opening Br., pp. 11-14. These documents form the 6 basis of MEF’s proprietary business model. As the evidence shows, MEF has spent over a decade, 7 and millions of dollars, in the creation of these documents, and has gone to great lengths to keep 8 them confidential. Paiva Decl., ¶¶ 6-9, 11-14. This showing is more than sufficient to establish that 9 the documents are entitled to confidentiality under the Stipulated Protective Order (“SPO”). 10 Plaintiffs make no attempt whatsoever to rebut these central facts and instead attempt to 11 distract and mislead the Court. Contrary to Plaintiffs’ suggestion, and as Plaintiffs well know, MEF 12 did not ask the Court to affirm the confidentiality of the entire production of documents. Instead, 13 MEF submitted a motion tailored to the trade secrets and proprietary information inadvertently 14 included in the produced documents. Plaintiffs’ counsel did not meaningfully engage in meet and 15 confer efforts and did not provide MEF with a list of documents they were challenging, despite their 16 representations to this Court that they would endeavor to do so. In fact, Plaintiffs have now 17 apparently reneged on the only concession—that the OPM materials were properly designated as 18 confidential—Plaintiffs offered during the parties’ meet and confer efforts. Bader Decl., ¶ 13; 19 Supplemental Bader Decl., ¶ 3 & Exh. A. 20 Plaintiffs now take the untenable position that MEF’s evidentiary showing is insufficient, 21 and that the Court must make a specific finding as to each line of every single document that MEF 22 seeks to designate as confidential in this case. See e.g., Opp., at p. 10:11 (advocating “a line-by-line 23 approach” to reviewing confidentiality designations). In so arguing, Plaintiffs put the cart before the 24 horse. This dispute is not about sealing information in the public record. Nor is it about limiting the 25 production of documents or the universe of discoverable information. The dispute is simply about 26 whether the documents produced must be kept confidential under the terms of the agreed-upon 27 protective order until such time as they may be offered into the public record. To the extent 28 Plaintiffs may later wish to introduce these documents into the public record in this or any other -5- MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS. 18CIV03706 & 18CIV03706A 1 action, those questions should be dealt with then, when there is a live dispute—as the SPO envisions. 2 See SPO (distinguishing use of confidential materials in discovery from use of confidential materials 3 in court). Plaintiffs’ motivation is not the public interest in accessing these documents—which have 4 not been offered into the record—but the desire to use these documents in other litigation across the 5 country. The Court should reject Plaintiffs’ challenge and affirm MEF’s designation of the 6 Confidential Documents as confidential pursuant to the terms of the SPO. 7 II. ARGUMENT 8 A. Plaintiffs Fail to Rebut MEF’s Showing That The Documents Are Confidential 9 Plaintiffs do not dispute that the SPO protects against disclosure of “trade secrets, or 10 confidential business or financial information.” Nor do they address any of MEF’s authorities 11 demonstrating that a business may have a protectable interest in confidential business information 12 even if that information is not a trade secret. See Opening Br., at pp. 9-10 (citing Cal. Code Civ. 13 Proc. § 2031.060; NBC Subsidiary (KNBC-TV, Inc.) v. Super. Ct., 20 Cal. 4th 1178, 1222 n.46 14 (1999); Glassdoor Inc. v. Super. Ct., 9 Cal. App. 5th 623, 644 (2017)). Instead, Plaintiffs argue that 15 MEF has not made a sufficient showing that the documents constitute trade secrets. See Opp., pp. 16 11-14. This argument fails both because Plaintiffs failed to rebut MEF’s evidentiary showing and 17 because Plaintiffs apply the wrong standard. 18 1. MEF Has Established that the Documents Are Confidential 19 MEF’s Motion is narrow and is limited to three categories of documents – OPM documents, 20 training documents, and incident report documents.1 As described in the Opening Brief and in the 21 Paiva and Bader Declarations, these documents not only contain MEF’s confidential business 22 1 23 Plaintiffs muddy the water by interspersing challenges in their Opposition to documents that were not raised in MEF’s Motion or were not even in the production at issue. See, e.g., Opp. pp. 7-8 24 (listing ten categories of documents purportedly at issue). Of the documents listed, only the following are within the ambit of MEF’s Motion: the OPM; the “Behind Closed Doors,” “Code of 25 Conduct,” “Crisis Communication Guide”, and “Massage Therapist/Esthetician Standards of 26 Practice” documents; and the incident reports and related internal communications. As Plaintiffs know, MEF has not asked the Court in its motion to affirm the confidentiality of several documents 27 that Plaintiffs misleadingly lay out in their Opposition, including (1) franchise agreements; (2) “communications by and between Plaintiff and MEF and ME Time”; and (3) 28 “Promotional/Marketing materials such as advertisements related to sales/specials (which were disseminated to the public)”. -6- MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS. 18CIV03706 & 18CIV03706A 1 information but also qualify as trade secrets because they include methods, techniques and processes 2 from which MEF derives economic value. Moreover, MEF takes reasonable steps to maintain their 3 confidentiality. 4 a. Category 1: The OPM documents 5 The OPM documents (produced as AS-S_ME-TIME0000294-306) contain mandatory and 6 suggested specifications, standards, operating procedures and rules necessary for the operation of 7 Massage Envy franchised locations. These documents go to the heart of MEF’s confidential and 8 proprietary information—they present a detailed roadmap of MEF’s standardized business systems. 9 See Paiva Decl., ¶¶ 7-8. As MEF’s General Counsel Ms. Paiva explained, MEF’s business is 10 granting business licenses to use the Massage Envy® name, trademark and standardized business 11 operations in exchange for a franchise fee. See id. ¶¶ 3-5. In other words, standardized business 12 documents, like the OPM documents, are MEF’s product, and the product’s value is inherently 13 derived from its restricted access. Id., ¶¶6-8. As further detailed in the Paiva Declaration, MEF 14 takes reasonable steps to limit access to and maintain the confidentiality of these documents, 15 including imposing contractual obligations on its franchisees; employing visible indicia of 16 confidentiality, such as legends, on the documents themselves; and pursuing protective orders in 17 litigation. Id., ¶¶11-14.2 Likewise, derivative policies and procedure documents—those that are 18 derived from or related to the OPM documents3—are confidential and constitute trade secrets for the 19 exact same reasons. Paiva Decl., ¶¶6-8. Plaintiffs’ counsel has already conceded the confidentiality 20 of the OPM documents, and they offer no argument for why derivative materials should be treated 21 any differently. 22 Plaintiffs make no meaningful attempt to rebut MEF’s showing that the OPM documents 23 merit confidentiality under the SPO. Plaintiffs simply declare, without factual support, that MEF 24 cannot establish “trade secret” protection over its policies and procedures because many of the 25 2 Plaintiffs concede, and do not challenge, MEF’s reasonable efforts to maintain the secrecy of these 26 documents. Opp., p. 13:17-19 (conceding that “MEF may take steps to keep these documents secret”). 3 27 These documents were produced as AS-S_ME-TIME000213, 376-385, 1268, 1271-1276, 1292- 1293, 1369-1391, 1877-1906, 2068, 2242-2250, 2306, 2339-2341, 2546-2554, 2743-2747, 2753- 28 2764, 2764, 2765-2774, 2776-2779, 2790-2792, 2794-2800, 2808-10, 2815, 3092-3096, 3128, 3244- 3251. -7- MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS. 18CIV03706 & 18CIV03706A 1 policies and procedures “are industry standards”, which are “commonly used by businesses and are 2 routine within the massage industry” and are therefore not “special” or “worthy of economic value”. 3 Opp., p. 13. These unsupported and erroneous assertions should be disregarded. Furthermore, 4 Plaintiffs’ arguments are directly refuted by MEF’s evidence establishing that thousands of 5 franchisees have paid licensing fees to access and utilize the Massage Envy standardized business 6 systems, including the OPM documents, demonstrating the substantial economic value of these 7 documents. Paiva Decl., ¶¶3-5. Plaintiffs also entirely ignore MEF’s authorities in which courts 8 have found good cause to protect exactly the types of policies and procedures documents as issue 9 here. See, e.g., Navarro v. Eskanos & Adler, 2007 WL 902550, at *6 (N.D. Cal. Mar. 22, 2007) 10 (upholding confidentiality of training documents that were “tailored to Defendants’ policies and 11 procedures” because disclosure would give competitors “the benefit of Defendants’ ‘how-to’ guide 12 without incurring the administrative and legal expense of developing its own manual”); Jane Doe v. 13 Massage Envy Franchising, LLC, No. 2017-00210331-CU-PO (Sacramento Super. Ct. Apr. 16, 14 2018) (affirming confidential designation of OPM and policy and procedure documents over 15 plaintiffs’ counsel’s objections).4 In short, MEF has met its burden to demonstrate the confidentiality 16 of the OPM and derivative documents, and the Court should affirm the designations. 17 b. Category Two: Training documents, scripts and checklists 18 The training documents, scripts and checklists5 are protectable on the same basis as the 19 OPM materials. As MEF has demonstrated, these documents constitute MEF’s proprietary and 20 confidential work product. They are important resources that MEF developed over time and at great 21 4 Notably, Plaintiffs’ erroneous claim that “99.9% of [the] subject documents” are “commonly used . . 22 . by 99.9% of business[es]”, (Opp., p. 5), undercuts all of their theories of liability, as well as their 23 alternative argument that these documents would be of any interest or value. It is difficult to imagine how MEF’s policies and procedures could be the tools of a “conspiracy” to “cover up” sexual 24 assaults, when these very policies and procedures are, in Plaintiffs’ own words, “industry standard”. Nor is it obvious how documents “commonly used . . . by 99.9% of businesses” could implicate 25 “public health” interests. Opp., pp. 15-16. 5 26 These documents were produced as AS-S_ME-TIME000307-308, 330-370, 473-708, 710-988, 991- 996, 1008-1065, 1072-1078, 1110-1157, 1159-1164, 1169-1201, 1203-1254, 1329-1367, 1603-1637, 27 1646-1651, 1676-1761, 1763-1790, 1791-1819, 1823-1824, 1840-1875, 2022, 2437, 2560-2561, 2604, 2632-2637, 2728-2730, 2734-2737, 2748-2751, 3066-3074, 3101-3104, 3107-3109, 3111, 28 3113-3116, 3130, 3154-3162, 3170-3178, 3189-3190, 3211-3212, 3217-3220, 3235-3237, 3258, 3261-3269, 3276-3294, 3298-3302, 3304-3307, 3357-3366. -8- MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS. 18CIV03706 & 18CIV03706A 1 expense, which MEF makes available on an exclusive basis to franchisees to assist them in operating 2 their franchised locations and to maintain consistency in the Massage Envy® brand. Paiva Decl., ¶¶ 3 7-9; Bader Decl., ¶ 5. 4 Plaintiffs raise no specific objection to the designation of these documents, except to suggest 5 that if any of the scripts were “publically disclosed”, they may no longer be entitled to confidentiality 6 protection. Opp., pp. 11:3-6 (citing In re Providian Credit Card Cases, 96 Cal. App. 4th 292, 305 7 (2002) (involving review of unsealing order). As an initial matter, Plaintiffs do not demonstrate that 8 any of the training documents or scripts at issue here have been “publically disclosed” or are akin to 9 “sales pitches” as was the case in Providian. In re Providian, 96 Cal. App. 4th at 305. But even if 10 they were, the SPO affords protection to “confidential business or financial information,” not merely 11 trade secrets. (SPO ¶ 1.) See Navarro, 2007 WL 902550, at *3. MEF has demonstrated good cause 12 for protection—namely, that public disclosure would harm MEF and would allow MEF’s competitors 13 to gain an unearned advantage. See, e.g., Davis v. Social Service Coordinators, Inc., 2012 WL 14 2376217, at *2 (E.D. Cal. June 22, 2012) (finding good cause to protect “scripts for employees to 15 follow when interacting with customers” where dissemination would allow competitors to “reap the 16 benefit . . . without having to incur the costs associated with developing the scripts”). 17 c. Category Three: Incident reports 18 The incident report documents6 are protectable both as derivative OPM materials, (Paiva 19 Decl., ¶ 8), and because they contain sensitive third-party information. Bader Decl., ¶ 5. Plaintiffs 20 concede that incident reports involving third parties are properly designated as confidential under the 21 SPO. See Opp., p.12:27 (conceding that “protections provided by the SPO” apply to information 22 about “other individuals”). But they argue that incident reports describing incidents involving 23 Plaintiffs neither implicate third-party privacy interests nor are protectable as trade secrets. Opp., p. 24 12:22-26. Specifically, they argue that Plaintiffs’ incident reports are no more protectable as trade 25 secrets than would be “a police report of a car crash involving an MEF employee.” Id., p. 12:23-24. 26 This argument ignores that, as MEF has demonstrated, the underlying incident report template is part 27 6 These documents were produced as AS-S_ME-TIME000224, 226, 233-239, 241-271, 281-293, 999, 28 1000-1006, 2466-2499, 2513-2523, 2536, 2553-2554, 2679-2683, 2687-2693, 2701-2703, 2705, 2824-2826, 2836-2837, 2927-2928, 3059-3062, 3086-3087. -9- MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS. 18CIV03706 & 18CIV03706A 1 of the confidential OPM. Plaintiffs do not contest this point. Paiva Decl., ¶ 8; see also Davis v. Soc. 2 Serv. Coordinators, Inc., 2012 WL 1940677, at *3 (E.D. Cal. May 29, 2012) (granting motion to seal 3 “business-specific form used to efficiently run the business and better facilitate the exchange and 4 recording of critical information from clients and relevant employee groups”). So, while the details 5 in the reports as to these specific Plaintiffs may not be protectable business information, the incident 6 reporting format, structure, and procedure revealed in the reports is, and there is no way to separate 7 one from the other in the documents identified. 8 2. Plaintiffs Seek to Apply the Wrong Standard 9 Rather than rebut the evidence, Plaintiffs complain that MEF did not make a 10 “particularized” showing on a “line-by-line” basis that each “specific document” in the production 11 qualifies as a trade secret. See Opp., at 10:8-15 &11:15-23.7 Not only does the SPO contain no such 12 requirement, but Plaintiffs cite no authority supporting the need for such a stringent analysis in the 13 context of confidentiality designations under a stipulated protective order. To the contrary, Plaintiffs’ 14 argument effectively imports the analysis required for sealing motions into a motion challenging 15 confidentiality designations, which exactly reverses the order of procedures set forth under the SPO. 16 In other words, Plaintiffs are trying to skip a step. 17 Under “Part One” of the SPO, which dictates the “Use of Confidential Materials in 18 Discovery,” any party has the right to designate documents as confidential so long as they have a 19 “good faith” belief that documents “contain information involving trade secrets, or confidential 20 business or financial information.” (SPO, ¶ 1.) These procedures are in place, as stated, for 21 “discovery” purposes, so that the parties need not run to Court for an evidentiary hearing over the 22 7 23 Plaintiffs also argue, without citing any authority, that the fraud and injustice exception to the trade secret privilege under California Evidence Code section 1060 somehow applies to prevent any 24 document from being designated confidential if the document “will help prove [Plaintiffs’] fraud and conspiracy claims.” Opp., p. 14:11-19. This argument fails because the exception is inapplicable. 25 MEF has not invoked the privilege to withhold any documents from Plaintiffs, let alone documents 26 that they claim are necessary to prove their case. And, regardless, it is Plaintiffs’ burden to demonstrate that the exception applies, which Plaintiffs have made no effort to do. See, e.g., 27 Bridgestone/Firestone, Inc. v, Super. Ct., 7 Cal. App. 4th 1384, 1393 (1992) (discussing fraud and injustice exception, holding that the burden is on the party seeking disclosure to invoke the exception 28 by making a “particularized showing that the information sought is relevant and necessary to the proof of, or defense against, a material element of one or more causes of action”). -10- MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS. 18CIV03706 & 18CIV03706A 1 confidentiality of every single document (or every single line thereof) produced in discovery. This is 2 for good reason, given that Constitutional “right of access” concerns are not implicated at this stage. 3 See, e.g., Seattle Times Co. v. Rhinehart, 467 U.S. 20, 33 (1984) (“[P]retrial depositions and 4 interrogatories are not public components of a civil trial. . . . Much of the information that surfaces 5 during pretrial discovery may be unrelated, or only tangentially related, to the underlying cause of 6 action. Therefore, restraints placed on discovered, but not yet admitted, information are not a 7 restriction on a traditionally public source of information.”); NBC Subsidiary (KNBC-TV), Inc., 20 8 Cal. 4th at 1208 n. 25 (no right of “public access to discovery materials that are neither used at trial 9 nor submitted as a basis for adjudication”); Mercury Interactive Corp. v. Klein, 158 Cal. App. 4th 60, 10 89 (2007) (same). 11 Once a party seeks to submit a document into the public record, however, “Part Two” of the 12 SPO is triggered. Under “Part Two: Use of Confidential Materials in Court”, when any party seeks to 13 use materials in a court filing that were previously designated confidential, the designating party must 14 bring a motion to seal pursuant to California Rules of Court 2.550 and 2.551, and submit a 15 particularized declaration setting forth a sufficient basis for sealing under Rule 2.550(d). (SPO, ¶¶ 16 12-14.) As Plaintiffs’ cited authorities all confirm, this is the appropriate stage to address 17 Constitutional “right of access” concerns, on the specific factual basis presented. See, e.g., In re 18 Providian, 96 Cal. App. 4th 292 (considering whether court abused its discretion in weighing 19 evidence presented in unsealing motion); H.B. Fuller Co. v. Doe, 151 Cal. App. 4th 879 (2007) 20 (considering whether any evidence supported request to seal documents in appellate court record); see 21 also Kamakana v. City & County of Honolulu, 447 F.3d 1172, 1179-80 (9th Cir. 2006) (discussing 22 right of access in context of motion to unseal records); Brown & Williamson Tobacco Corp. v. FTC, 23 710 F.2d 1165 (6th Cir. 1983) (same); Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122 (9th 24 Cir. 2003) (discussing the standard applicable to sealing records attached to dispositive motions); cf. 25 Proctor & Gamble Co. v. Bankers Trust Co., 78 F.3d 219, 222, 227 (6th Cir. 1996) (criticizing 26 portions of protective order related to sealing requirements); Stadish v. Superior Court, 71 Cal. App. 27 4th 1130, 1139 (1999) (evaluating propriety of protective order that allowed parties to unilaterally 28 determine documents could be filed under seal). Any other approach necessarily collapses “Part -11- MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS. 18CIV03706 & 18CIV03706A 1 One” and “Part Two” of the SPO into one another and vitiates the purpose of the discovery 2 protections in the order. Accordingly, MEF’s confidentiality designations should remain for purposes 3 of discovery and any sealing determinations should be made at the appropriate time. 4 B. Plaintiffs Fail to Establish Any Countervailing Public or Private Interests in Maintaining Confidentiality of the Documents Under the SPO 5 6 Accepting that MEF has met its burden to demonstrate that the Confidential Documents 7 qualify as confidential under the SPO, Plaintiffs next argue that the Court should nonetheless lift the 8 protective order and allow Plaintiffs to disseminate the documents as they see fit, due to 9 countervailing public and private interests. Specifically, Plaintiffs argue that in determining whether 10 MEF’s confidentiality designations should be upheld, the Court must also weigh whether (1) the 11 documents are germane to “public health or safety” (Opp., p. 15:11); and (2) principles of “judicial 12 efficiency” warrant sharing across “similar” litigations. (id., p. 16:19-20). Neither of these 13 contentions holds merit. 14 First, as to “public health or safety” concerns, Plaintiffs’ argue that the Court is required to 15 “consider the public interest when determining whether good cause exists for a protective order”. 16 Opp., 15-16 (quoting Westinghouse Elec. Corp. v. Newman & Holtzinger, 39 Cal. App. 4th 1194, 17 1208 (1995)). In support of this proposition, Plaintiffs cite a pair of opinions—Stadish and 18 Westinghouse—both of which rely on First Amendment right of access concerns as the basis for 19 weighing public interest in issuing a protective order. Stadish, 71 Cal. App. 4th at 1145 (relying on 20 Westinghouse, 39 Cal. App. 4th at 1208 (discussing First Amendment concerns)). As discussed 21 above, however, First Amendment access concerns are not implicated until documents are admitted 22 into the public record, and any suggestion that the Court must consider those interests now, as to 23 unfiled discovery documents, runs contrary to both U.S. and California Supreme Court precedent. 24 See, e.g., Seattle Times Co., 467 U.S. at 33; NBC Subsidiary (KNBC-TV), Inc., 20 Cal. 4th at 1208 n. 25 25. Nevertheless, even under Stadish and Westinghouse, the Court need only weigh public interest 26 concerns when the party resisting the protective order demonstrates that “the documents are relevant 27 to public health.” Stadish, 71. Cal. App. 4th at 1145-46 (requiring finding that “documents sought to 28 be protected are relevant to public health” before court “will be required to consider the public -12- MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS. 18CIV03706 & 18CIV03706A 1 interest in determining whether good cause exists for a protective order”). 2 Here, Plaintiffs fail to draw any connection at all between the Confidential Documents— 3 which, according to Plaintiffs, consist almost entirely of documents “commonly used . . . by 99.9% of 4 business[es]” (Opp., p. 5)—and any matter relevant to public health or safety, and there is none. 5 Plaintiffs have offered no basis for the Court even to consider the public interest in ruling on the 6 Motion, let alone sufficient public interest concerns to override MEF’s confidentiality interests. 7 Second, Plaintiffs argue the Court should lift the SPO in the name of “judicial efficiency”, 8 so that Plaintiffs’ counsel may share MEF’s Confidential Documents with litigants in other, “similar” 9 litigation. Opp., pp. 16-17. Plaintiffs rely on a single authority, Raymond Handling Concepts Corp. 10 v. Superior Court, 30 Cal. App. 4th 584 (1995), for the assertion that such “sharing provisions” are 11 authorized under California law. But the permissible use of documents under the protective order in 12 Raymond Handling Concepts was far more limited than what Plaintiffs propose here, and the Court in 13 that case afforded no greater rights than are already contemplated in the SPO. The Raymond 14 Handling Concepts court found no abuse of discretion in a protective order that granted plaintiffs’ 15 counsel a limited right to disclose the opposing party’s confidential documents to other plaintiffs’ 16 counsel—not litigants—in pending similar litigation, after first notifying the opposing party so that 17 they would have an opportunity to be heard, if needed, prior to the disclosure. Id. at 590-91. Here, 18 Plaintiffs are afforded the same rights. Under the SPO, Plaintiffs may request leave from any 19 designating party to share confidential documents, and if the designating party refuses, Plaintiffs may 20 seek leave of Court after providing notice and opportunity to be heard. (See SPO, ¶ 4.)8 Plaintiffs 21 offer no authority or justification for any different protocol, here, and the existing protocol adequately 22 protects both MEF’s confidentiality interests and any “judicial efficiency” interests that may exist. 23 C. Neither the Motion Nor the Parties’ Designation is Untimely 24 Finally, Plaintiffs recycle the argument that MEF’s confidentiality designations are 25 8 It is worth noting that there is no need for any “sharing” procedure as a practical matter, here, 26 because Plaintiffs in the related cases are largely represented by the same counsel and therefore have access to the same information. What Plaintiffs are really asking for is not the right to share 27 information, but rather carte blanche to use MEF’s confidential materials however they wish, in any litigation they wish, so long as they determine in their own discretion that a litigation is “similar” to 28 the instant action and would benefit from MEF’s confidential documents. The SPO does not support such a procedure, nor does any legal authority sanction it, and the Court should not consider it. -13- MEF’S REPLY ISO MOTION TO AFFIRM DESIGNATION OF DOCUMENTS CONFIDENTIAL; CASE NOS. 18CIV03706 & 18CIV03706A 1 untimely. The Court already rejected this argument during the October 14, 2020 Informal Discovery 2 Conference and should do so again here. First, it is irrelevant to MEF’s designations that ME Time 3 produced the documents prior to entry of the SPO. MEF was not the producing party and so cannot 4 be penalized because the Confidential Documents were produced by ME Time after the parties 5 agreed in principle to the SPO, but a short time before formal entry of the SPO.. Second, it is not 6 “too late” to designate the Confidential Documents confidential under the SPO.9 Plaintiffs’ continue 7 to misconstrue the SPO to create a phantom 30-day time limit for a party to designate documents, 8 even those produced by another party. Opp., p. 18. There is no 30-day or any other deadline for a 9 party to designate documents produced by another party as confidential. See SPO, ¶ 1. Paragraph 1 10 governs the confidential designation of documents produced by parties and imposes no 11 confidentiality designation deadline at all. Plaintiffs’ misinterpretation is based on Paragraphs 2 and 12 7 of the SPO. Paragraph 2 governs the confidentiality designation of deposition transcripts and 13 written discovery responses, and Paragraph 7 governs the confidentiality designation of documents 14 produced by non-parties. Neither Paragraph 2 nor 7 govern the designation of documents produced 15 by a party. MEF’s designation of the Confidential Documents as confidential is timely. 16 III. CONCLUSION 17 For the foregoing reas