Case Name:   Guang Tian, et al vs. Ma Laboratories, Inc., et al.

Case No.:       1-11-CV-195373

 

This is a putative wage and hour class action by named plaintiffs Guang Tian, Yan Nie, Jing Jian Wu, Zhen Shang Yin, Tiequan Ma, Mie Fang Tie, Yu Hong Chang, Yi Wu, Bao Jie Zhang, Chao Hui Liu and Christopher Cavaliere (collectively “Plaintiffs”) on behalf of all present and former employees of defendant Ma Labs, Inc. (“Ma Labs”), a computer component distributor doing business in California.  The operative Second Amended Complaint (“SAC”), filed July 9, 2013, asserts causes of action for failure to pay overtime and minimum wages, failure to provide off-duty meal and rest periods, failure to timely pay wages upon separation from employment, failure to furnish and keep accurate wage statements, wrongful termination in violation of public policy, retaliation, unfair competition, and violation of Private Attorney General Act.

 

On June 12, 2013, the Court appointed Thomas Denver, Esq. as the Discovery Referee in this action pursuant to California Code of Civil Procedure section 639, subdivision (a)(5).

 

On June 25, 2014, the Discovery Referee filed his Recommended Order No. 9 on Plaintiffs’ motion to remove the Attorneys’ Eyes Only (“AEO”) restriction on the deposition transcript of non-party Yong Song Chen (“Chen”).  The Discovery Referee found that under applicable case law, including Hill v. National Collegiate Athletic Association (1994) 7 Cal.4th 1, discretion should be exercised to deny the AEO designation because: (1) Chen’s fears of retaliation by one or more of the Plaintiffs and their counsel, Ms. Valerian, were not “in the least persuasive”; (2) Chen has already provided two declarations without AEO restrictions in the companion federal Lou case in which she made allegations against the Plaintiffs; (3) in a hearing before the Court on May 16, 2014, references were made to Chen’s deposition testimony without AEO restrictions;[1] and (4) an AEO designation of the transcript had the potential to significantly prejudice Plaintiffs.  The Discovery Referee found that a balancing of the considerations as called for by Hill tilts in favor of denying the AEO designation.[2]  The Discovery Referee denied Plaintiffs’ request for sanctions, but reallocated his fees on the motion to Defendants only.[3]

 

Defendants now object to Recommended Order No. 9.  Defendants argue that Chen’s fears are justified based on the conduct of plaintiff Jing Jian Wu, who allegedly threatened Ma Labs’ in-house counsel when he was terminated, actively pushed Chen to participate in the lawsuit, stated that he was going to record her telephone conversations, boasted that his sister was incarcerated for paying someone to commit murder, and had an employee tell Chen to cooperate during her deposition.  Defendants argue the cases cited by the Discovery Referee are inapplicable and the Discovery Referee failed to consider Planned Parenthood Golden Gate v. Superior Court (2000) 83 Cal.App.4th 347, which addresses the balance between the safety concerns of nonparties and the right of discovery.  Defendants argue that under Planned Parenthood, a privacy interest does not need to be violated before it can be acknowledged.  Defendants cite criminal cases for the position that even where a criminal defendant has a constitution right of confrontation, the court has discretion to bar disclosure of contact information and identity of eyewitnesses in order to protect that person’s safety.  Defendants argue that Plaintiffs will not be prejudiced from the AEO designation because they can discuss the contents of the transcript with their clients without identifying Chen, or Plaintiffs’ counsel themselves can provide counterevidence or seek declarations from their own clients without discussing Chen’s name.  Defendants argue they have not waived an AEO designation because the declarations in the Lou matter were in a different case and court and were only vaguely related to the case at hand, and Chen did not assert an AEO designation as to those declarations.  As for the references to Chen’s deposition transcript made at the May 16, 2014 court hearing, Defendants argue this excerpt did not disclose the substance of Chen’s testimony and was read in response to issues raised by Plaintiffs, and any waiver would be limited only to what was said in open court, not the entire deposition transcript.

 

Plaintiffs argue the Discovery Referee properly applied the balancing framework of Hill to conclude that the use of the AEO designation was inappropriate.  Plaintiffs argue that Chen did not identify a clearly defined privacy interest because she did not offer any rational basis for her fears, and she never expressed any similar fears about her declarations being used in Lou.  Plaintiffs argue that Chen’s fears are vague, speculative and unpersuasive.  Plaintiffs argue an AEO restriction would impede discovery of the truth of Chen’s statements and interfere with Plaintiffs’ relationship with their counsel.  Plaintiffs request an award of sanctions.

 

Applications to Seal

 

Defendants have filed applications to seal various documents filed in connection with their Objection to Recommended Discovery Order No. 9.  On July 7, 2014, Defendants filed an application for order sealing: (1) Objection to Discovery Order No. 9; and (2) Exhibit A to Declaration of Christine Long ISO Defendants’ Objection to Discovery Order No. 9.  Long Exhibit A contains excerpts from Chen’s May 6, 2014 deposition.

 

On July 17, 2014, in opposition to Defendants’ Objection, Plaintiffs lodged under seal their unredacted opposition brief as well as Exhibit B to the Declaration of Thomas Marc Litton ISO Plaintiffs’ Opposition to Defendants’ Objection to Discovery Order No. 9.  Litton Exhibit B also contains excerpts from Chen’s May 6, 2014 deposition.  Plaintiffs filed a Notice of Lodgment of Documents Filed Conditionally Under Seal under California Rules of Court, rule 2.551.  On July 25, 2014, Defendants filed an application to seal Litton Exhibit B, Plaintiffs’ unredacted opposition brief, Defendants’ reply brief, and the reply declaration of Christine Long.

 

In their applications to seal, Defendants argue that Chen’s interest in her privacy and safety outweighs the public’s interest in access to her deposition transcript and would be prejudiced by disclosure.

 

The Sealed Records Rules expressly “do not apply to discovery motions and records filed or lodged in connection with discovery motions or proceedings.  However, the rules do apply to discovery materials that are used at trial or submitted as a basis for adjudication of matters other than discovery motions or proceedings.”  (Cal. Rules of Court, rule 2.550(a)(3).)  “[T]here is a First Amendment right of access to documents in civil litigation that are filed in court as a basis for adjudication.  But there is no similar right of access to discovery materials that are neither used at trial nor submitted as a basis for adjudication.”  (Mercury Interactive Corp. v. Klein (2007) 158 Cal.App.4th 60, 89.)  Here, the documents at issue were submitted in connection with an objection to the Discovery Referee’s recommended ruling on a discovery motion.

 

In H.B. Fuller Co. v. Doe (2007) 151 Cal.App.4th 879, the California Court of Appeal for the Sixth Appellate District refused to apply a categorical sealing exemption for all records filed or lodged in connection with discovery motions or proceedings.

 

[N]ot all discovery motions involve routine matters or essentially procedural questions.  At the heart of some discovery motions are questions of great significance to members of the public.  The present case is one of them.  While it may be said to arise from a “discovery motion”—a motion to quash a discovery subpoena—the discovery in question is not merely ancillary or preliminary to some larger litigation but is the whole end and purpose of the case, at least insofar as California courts are concerned.  Moreover, the information sought is invested with a substantial constitutional interest, i.e., the First Amendment right to speak anonymously.  [Citation.]

 

(H.B. Fuller, supra, 151 Cal.App.4th at p. 893.)  Here, the discovery materials in question are excerpts from Chen’s deposition regarding the conduct of Plaintiffs and their counsel, which is ancillary to the litigation and is not the whole end and purpose of the case.  Chen’s testimony does not pertain to an issue of “substantial constitutional interest.”

 

Nevertheless, the propriety of sealing of these documents dovetails with the issue of whether Chen has a privacy interest that justifies maintaining an AEO restriction on her deposition transcript.

 

Discussion

 

Plaintiffs’ objection to new evidence submitted by Defendants with their reply papers is OVERRULED.  The reply evidence is responsive to the opposition arguments and does not raise new matters that were not addressed in some manner in the original papers.

 

Defendants are correct that Planned Parenthood sets forth the applicable legal standards for this matter.  Hill articulated the elements of a state constitutional cause of action for invasion of privacy against a private entity (e.g., university student athletes against the NCAA for its drug testing program), but Planned Parenthood deals with a discovery order compelling disclosure of a nonparty’s private information.  Under Planned Parenthood, “ ‘ “[w]here discovery involves matters encompassed by the right to privacy, courts recognize that ‘judicial discovery orders inevitable involve state-compelled disclosure . . . .’ [Citation.]  Therefore, in reviewing a party’s resistance to a discovery order, based on the claim that it entrenches upon a constitutional right, we treat the compelled disclosure as a product of state action subject to constitutional constraints. [Citation.]” ’ [Citation.]”  (Planned Parenthood, supra, 83 Cal.App.4th at p. 357, original italics.)

 

“ ‘The constitutional right to privacy is not absolute and must therefore be balanced against other important interests.’  [Citations.]  ‘Whenever the compelled disclosure treads upon the constitutional right of privacy, there must be a compelling state interest.  [Citation.]’  [Citation.]  To justify a substantial infringement of First Amendments rights, disclosure must serve a ‘compelling’ state purpose, and that ‘ “purpose cannot be pursued by means that broadly stifle fundamental personal liberties when the end can be more narrowly achieved.” ’ [Citation.]  Even when ‘an intrusion on the right of privacy is deemed necessary under the circumstances of a particular case, any such intrusion should be the minimum intrusion necessary to achieve its objective.’  [Citation.]”  (Planned Parenthood, supra, 83 Cal.App.4th at pp. 357-358.)

 

The court in Planned Parenthood recognized “ ‘ “ ‘the historically important state interest of facilitating the ascertainment of truth in connection with legal proceedings’ ” ’ [Citation.]  The state has an interest in ‘making certain that parties … disclose relevant information to the fullest extent allowable[.]’ ”  (Planned Parenthood, supra, 83 Cal.App.4th at pp. 359-360.)

 

Balanced against the state’s compelling interest in discovery of relevant information to the fullest extent possible is Chen’s asserted privacy right.  Defendants seek to maintain the AEO designation on Chen’s transcript due to her fear of retaliation by J. Wu for her testimony.  As Plaintiffs point out, however, Chen’s identity and the fact of her giving testimony in this case are already known.  In contrast, Planned Parenthood involved a discovery order requiring an abortion provider’s facility to disclose the names and contact information of staff and volunteers who had knowledge relevant to the litigation, and the appellate court found that the discovery order implicated these nonparties’ rights of association and informational privacy in their addresses and telephone numbers.  Unlike Planned Parenthood, there is no contention here that Chen’s deposition transcript contains personal information or that disclosure of her testimony interferes with her constitutional right to privately associate with others.

 

As the Discovery Referee pointed out, Chen also provided two declarations without AEO restrictions in the Lou case, and in these declarations, Chen discussed the conduct of several Plaintiffs in an adverse light.[4]  Defendants argue that these declarations in Lou were “only vaguely related to the case at hand”[5] but as Plaintiffs point out, the March 20, 2013 Chen declaration was filed as an exhibit in this action.[6]  The declaration was submitted in support of an ex parte application by Defendants to enjoin Plaintiffs’ counsel from contacting putative class members.  According to Plaintiffs’ counsel, Plaintiffs took Chen’s deposition in order to investigate the veracity of the statements in these declarations.[7]  Furthermore, at the May 16, 2014 hearing before this Court, Defendants’ counsel read portions of Chen’s deposition transcript in which she expressed fear of retaliation from “Lou Wu” or Jing Jian Wu for giving testimony that would be adverse to Plaintiffs.[8]

 

Nevertheless, even if the fact of Chen’s testimony is already known, the AEO designation would prevent others from knowing the full contents of her testimony.  Contrary to Plaintiffs’ arguments in opposition, the record does support a rational basis for Chen’s fears.  The record supports the fact that Chen was threatened in direct and indirect ways by an individual who was terminated from Ma Labs for allegedly acting in a very threatening manner,[9] and these threats were related to her giving adverse testimony in this action.  Arguably, this is more actual evidence of intent to harm than was present in Planned Parenthood.  (See Planned Parenthood, supra, 83 Cal.App.4th at p. 364 [no actual evidence of intent to harm].)  The Court is not inclined to simply dismiss these threats as far-fetched if they were actually made.

 

Even if Chen’s testimony (which was given under the condition of an AEO restriction) constitutes a minimal privacy interest under the circumstances, it must still outweigh the state’s interest in full and complete discovery.  In balancing the parties’ interests, the appellate court in Planned Parenthood found that there was no actual evidence of need for the specific information at issue.  “[W]hen an intrusion on the right of privacy is necessary, that intrusion must be the ‘minimum intrusion necessary’ to satisfy the state’s countervailing interest.  [Citation.]”  (Planned Parenthood, supra, 83 Cal.App.4th at p. 369.)  Here, Plaintiffs do not raise a particular need for any specific portion of Chen’s testimony, and Defendants reasonably propose that Plaintiffs’ counsel can discuss the contents of deposition transcript without attributing the testimony to Chen.[10]  If Plaintiffs must identify Chen as the source of the testimony for a particular reason, they can seek to do so on a showing of good cause.

 

For these reasons, Defendants’ objection to Recommended Discovery Order No. 9 is SUSTAINED and the AEO restriction on Chen’s deposition transcript is to remain in place.  However, this is WITHOUT PREJUDICE to Plaintiffs’ ability to move for removal of the AEO restriction as to particular portions of the Chen transcript on a showing of good cause.

 

Because the Court recognizes that Chen has a privacy interest in maintaining the AEO restriction on her deposition transcript, the applications to seal the papers filed in connection with this objection are GRANTED.