2 UNITED STATES DISTRICT COURT 3 DISTRICT OF NEVADA 4 * * * 5 GINA ALCANTARA, Case No. 2:18-cv-00882-JAD-DJA 6 Plaintiff, v. 8 BODEGA LATINA CORP., 9 Defendant. 10 11 This matter is before the Court on Defendant’s Motion for Protective Order (ECF No. 78), 12 Motion to Extend Time (ECF No. 79), and Motion to Amend Answer (ECF No. 80), filed on May 13 15, 2020. Plaintiff filed Responses (ECF Nos. 82-84) on May 29, 2020 and Defendant filed 14 Replies (ECF Nos. 85-86 and 89) on June 5 and June 9, 2020. The Court finds this matter 15 properly resolved without a hearing. See Local Rule 78-1. 16 I. Background 17 The Court and the parties are familiar with the facts of this case and they will only be 18 repeated as necessary. The Court conducted a hearing on Plaintiff’s Motion to Compel (ECF No. 19 44) on February 5, 2020. It ordered that three years of prior incidents from all three Las Vegas 20 stores, excluding the bathrooms and produce sections, be produced within thirty days of the 21 hearing. On April 7, 2020, the Court further ruled on a subsequent dispute regarding the scope of 22 production and redaction requests. (ECF No. 77). It also ordered the parties to meet and confer 23 on a stipulated protective order governing the exchange of discovery material and submit it for 24 the Court’s approval. 25 Defendant seeks a protective order to be entered by the Court pursuant to Fed.R.Civ.P. 26 26(c) as the parties have been unable to agree to the terms of a stipulated protective order to 27 govern the disclosure of discovery documents. (ECF No. 78). Defendant proposed Exhibit A as 1 the protective order to be entered, but indicates that Plaintiff has objected to the following four 2 provisions: it is overbroad to the extent it covers other documents that might be discovered; 3 precludes Plaintiff from contacting customers; requires a hearing regarding the documents to be 4 conducted in camera; and requires certain steps for handling documents after the conclusion of 5 the litigation. As a result, Defendant proposed a revised protective order (Exhibit C) but two of 6 the issues remain unresolved: Part II, Subpart H’s prohibition on contacting customers and Part 7 V, Subpart B’s requirement for an in camera hearing. Further, Defendant continued to meet and 8 confer and offered to stipulate to liability, which it claims would make the documents irrelevant. 9 Plaintiff responds that a protective order is unwarranted at this point given that the 10 discovery documents disclosed by Defendant did not include medical records. (ECF No. 84). 11 Further, Plaintiff argues that Defendant has failed to establish that an injured person’s name and 12 how they became injured, which is information included in the incident reports, constitutes a 13 trade secret. Accordingly, Plaintiff claims there is not good cause for a protective order at all. 14 Defendant replies that Plaintiff’s position that no protective order should be issued at all 15 despite agreeing to all but two terms is untenable. (ECF No. 89). It requests that the Court enter 16 the proposed protective order as to the terms the parties agreed upon along with the two 17 provisions that Defendant seeks to add, and again relies on its contention that incident reports are 18 entitled to trade secret protection. 19 Defendant also seeks an order extending the deadline to amend pleadings, which expired 20 on March 5, 2019. (ECF No. 79). It indicates that the parties have participated in private 21 mediation, which was unsuccessful, but it has taken into account the posture of the case and is 22 seeking to admit liability. Defendant cites to the former Local Rule 26-4, which it should be 23 noted was moved to Local Rule 26-3 in the amendments that were adopted on April 17, 2020. It 24 simply claims good cause and excusable neglect exists given the result of the November 22, 2019 25 hearing was an adverse jury instruction against Defendant. Accordingly, Defendant seeks to 26 amend its answer to admit liability. (ECF No. 80). 27 Plaintiff responds that Defendant’s request to extend the deadline and amend its answer 1 pleadings. (ECF No. 83). In fact, Plaintiff claims that Defendant is only seeking to amend, six 2 months after sanctions were issued in the form of an adverse jury instruction, to avoid the 3 consequence of the adverse jury instruction. Plaintiff argues that Defendant cannot satisfy the 4 excusable neglect standard as the reason for delay is bad faith given that Defendant has 5 aggressively litigated Plaintiff’s access to relevant liability evidence, failed to disclose evidence, 6 and misrepresented the existence of evidence. (ECF No. 82). 7 Defendant replies that it could not have foreseen the Court would sanction it for spoliation 8 of evidence and the attorneys fees award. (ECF No. 85). It claims Plaintiff will not be prejudiced 9 because no further discovery is needed, no delay to the litigation will occur, and it acted in good 10 faith. (ECF No. 86). 11 II. Analysis 12 a. Protective Order 13 Federal Rule of Civil Procedure 26(b)(1) provides for broad and liberal discovery. 14 “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s 15 claim or defense.” Id. However, a court may limit discovery via Rule 26(c), which permits the 16 court to issue a protective order to protect a party or person from annoyance, embarrassment, 17 oppression, or undue burden or expense when the party establishes good cause. For good cause 18 to exist, the party seeking protection bears the burden of showing specific prejudice or harm will 19 result if no protective order is granted. See Beckman Indus., Inc., v. Int’l. Ins. Co., 966 F.2d 470, 20 476 (9th Cir. 1992). Rule 26(c) requires more than “broad allegations of harm, unsubstantiated 21 by specific examples or articulated reasoning.” Id; see also Foltz v. State Farm, 331 F.3d 1122, 22 1130 (9th Cir. 2003) (citing San Jose Mercury News, Inc., v. District Court, 187 F.3d 1096, 1102 23 (9th Cir. 1999) (holding that the party must make a particularized showing of good cause)). 24 The Supreme Court has interpreted the language of Rule 26(c) as conferring “broad 25 discretion on the trial court to decide when a protective order is appropriate and what degree of 26 protection is required.” Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984). Additionally, the 27 Supreme Court has acknowledged that the “trial court is in the best position to weigh fairly the 1 discovery process requires that the trial court have substantial latitude to fashion protective 2 orders.” Id. 3 As the Court previously noted on two occasions, it finds that a protective order governing 4 the disclosure of discovery is warranted in this case. The Court will approve Defendant’s 5 proposed protective order as it addresses third party privacy concerns in discovery disclosures, 6 but with the following modifications to the two outstanding issues. First, it will not approve Part 7 II, Subpart H as Defendant has not met its burden of demonstrating customer information is a 8 trade secret and that customers should not be contacted. Defendant contends that the Part II, 9 Subpart H’s prohibition on contacting customers is needed because the information gathered by 10 the store in the process of recording incidents reported by customers is a trade secret protected by 11 NRS § 600A.030 and would be misappropriated by Plaintiff contacting those customers.
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2 UNITED STATES DISTRICT COURT 3 DISTRICT OF NEVADA 4 * * * 5 GINA ALCANTARA, Case No. 2:18-cv-00882-JAD-DJA 6 Plaintiff, v. 8 BODEGA LATINA CORP., 9 Defendant. 10 11 This matter is before the Court on Defendant’s Motion for Protective Order (ECF No. 78), 12 Motion to Extend Time (ECF No. 79), and Motion to Amend Answer (ECF No. 80), filed on May 13 15, 2020. Plaintiff filed Responses (ECF Nos. 82-84) on May 29, 2020 and Defendant filed 14 Replies (ECF Nos. 85-86 and 89) on June 5 and June 9, 2020. The Court finds this matter 15 properly resolved without a hearing. See Local Rule 78-1. 16 I. Background 17 The Court and the parties are familiar with the facts of this case and they will only be 18 repeated as necessary. The Court conducted a hearing on Plaintiff’s Motion to Compel (ECF No. 19 44) on February 5, 2020. It ordered that three years of prior incidents from all three Las Vegas 20 stores, excluding the bathrooms and produce sections, be produced within thirty days of the 21 hearing. On April 7, 2020, the Court further ruled on a subsequent dispute regarding the scope of 22 production and redaction requests. (ECF No. 77). It also ordered the parties to meet and confer 23 on a stipulated protective order governing the exchange of discovery material and submit it for 24 the Court’s approval. 25 Defendant seeks a protective order to be entered by the Court pursuant to Fed.R.Civ.P. 26 26(c) as the parties have been unable to agree to the terms of a stipulated protective order to 27 govern the disclosure of discovery documents. (ECF No. 78). Defendant proposed Exhibit A as 1 the protective order to be entered, but indicates that Plaintiff has objected to the following four 2 provisions: it is overbroad to the extent it covers other documents that might be discovered; 3 precludes Plaintiff from contacting customers; requires a hearing regarding the documents to be 4 conducted in camera; and requires certain steps for handling documents after the conclusion of 5 the litigation. As a result, Defendant proposed a revised protective order (Exhibit C) but two of 6 the issues remain unresolved: Part II, Subpart H’s prohibition on contacting customers and Part 7 V, Subpart B’s requirement for an in camera hearing. Further, Defendant continued to meet and 8 confer and offered to stipulate to liability, which it claims would make the documents irrelevant. 9 Plaintiff responds that a protective order is unwarranted at this point given that the 10 discovery documents disclosed by Defendant did not include medical records. (ECF No. 84). 11 Further, Plaintiff argues that Defendant has failed to establish that an injured person’s name and 12 how they became injured, which is information included in the incident reports, constitutes a 13 trade secret. Accordingly, Plaintiff claims there is not good cause for a protective order at all. 14 Defendant replies that Plaintiff’s position that no protective order should be issued at all 15 despite agreeing to all but two terms is untenable. (ECF No. 89). It requests that the Court enter 16 the proposed protective order as to the terms the parties agreed upon along with the two 17 provisions that Defendant seeks to add, and again relies on its contention that incident reports are 18 entitled to trade secret protection. 19 Defendant also seeks an order extending the deadline to amend pleadings, which expired 20 on March 5, 2019. (ECF No. 79). It indicates that the parties have participated in private 21 mediation, which was unsuccessful, but it has taken into account the posture of the case and is 22 seeking to admit liability. Defendant cites to the former Local Rule 26-4, which it should be 23 noted was moved to Local Rule 26-3 in the amendments that were adopted on April 17, 2020. It 24 simply claims good cause and excusable neglect exists given the result of the November 22, 2019 25 hearing was an adverse jury instruction against Defendant. Accordingly, Defendant seeks to 26 amend its answer to admit liability. (ECF No. 80). 27 Plaintiff responds that Defendant’s request to extend the deadline and amend its answer 1 pleadings. (ECF No. 83). In fact, Plaintiff claims that Defendant is only seeking to amend, six 2 months after sanctions were issued in the form of an adverse jury instruction, to avoid the 3 consequence of the adverse jury instruction. Plaintiff argues that Defendant cannot satisfy the 4 excusable neglect standard as the reason for delay is bad faith given that Defendant has 5 aggressively litigated Plaintiff’s access to relevant liability evidence, failed to disclose evidence, 6 and misrepresented the existence of evidence. (ECF No. 82). 7 Defendant replies that it could not have foreseen the Court would sanction it for spoliation 8 of evidence and the attorneys fees award. (ECF No. 85). It claims Plaintiff will not be prejudiced 9 because no further discovery is needed, no delay to the litigation will occur, and it acted in good 10 faith. (ECF No. 86). 11 II. Analysis 12 a. Protective Order 13 Federal Rule of Civil Procedure 26(b)(1) provides for broad and liberal discovery. 14 “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s 15 claim or defense.” Id. However, a court may limit discovery via Rule 26(c), which permits the 16 court to issue a protective order to protect a party or person from annoyance, embarrassment, 17 oppression, or undue burden or expense when the party establishes good cause. For good cause 18 to exist, the party seeking protection bears the burden of showing specific prejudice or harm will 19 result if no protective order is granted. See Beckman Indus., Inc., v. Int’l. Ins. Co., 966 F.2d 470, 20 476 (9th Cir. 1992). Rule 26(c) requires more than “broad allegations of harm, unsubstantiated 21 by specific examples or articulated reasoning.” Id; see also Foltz v. State Farm, 331 F.3d 1122, 22 1130 (9th Cir. 2003) (citing San Jose Mercury News, Inc., v. District Court, 187 F.3d 1096, 1102 23 (9th Cir. 1999) (holding that the party must make a particularized showing of good cause)). 24 The Supreme Court has interpreted the language of Rule 26(c) as conferring “broad 25 discretion on the trial court to decide when a protective order is appropriate and what degree of 26 protection is required.” Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984). Additionally, the 27 Supreme Court has acknowledged that the “trial court is in the best position to weigh fairly the 1 discovery process requires that the trial court have substantial latitude to fashion protective 2 orders.” Id. 3 As the Court previously noted on two occasions, it finds that a protective order governing 4 the disclosure of discovery is warranted in this case. The Court will approve Defendant’s 5 proposed protective order as it addresses third party privacy concerns in discovery disclosures, 6 but with the following modifications to the two outstanding issues. First, it will not approve Part 7 II, Subpart H as Defendant has not met its burden of demonstrating customer information is a 8 trade secret and that customers should not be contacted. Defendant contends that the Part II, 9 Subpart H’s prohibition on contacting customers is needed because the information gathered by 10 the store in the process of recording incidents reported by customers is a trade secret protected by 11 NRS § 600A.030 and would be misappropriated by Plaintiff contacting those customers. 12 Specifically, Defendant argues that the process used by the store to gather information from 13 customers is not generally known and has actual or potential value. Further, Defendant claims 14 that the data gathered by the store during its investigation – including customer names, addresses, 15 contact information, dates of incidents, descriptions, and other data – has independent economic 16 value from not being generally known. Finally, Defendant again claims that the customers from 17 the prior incidents are not relevant. The Court is not persuaded by these arguments and will 18 therefore not approve Part II, Subpart H. 19 Second, as for Defendant’s proposed Part V, Subpart B’s provision that the Court conduct 20 an in camera hearing, it simply claims this provision is needed so that the information regarding 21 customers is not disclosed publicly. This fails to meet the governing standard to seal and the 22 Court is not inclined to issue an advisory opinion permitting all discovery motions to be 23 conducted in camera. 24 b. Reopening of the Amending the Pleadings Deadline for Defendant to 25 Amend Answer 26 Rule 15(a)(2) of the Federal Rules of Civil Procedure, regarding the amendment of 27 pleadings, directs that “[t]he court should freely give leave when justice so requires.” The Ninth 1 to amend its pleading.” Sonoma Cnty. Ass’n of Ret. Emps. v. Sonoma Cnty., 708 F.3d 1109, 1117 2 (9th Cir. 2013). “Courts may decline to grant leave to amend only if there is strong evidence of 3 ‘undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure 4 deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue 5 of allowance of the amendment, or futility of amendment, etc.’” Id. at 1117 (quoting Foman v. 6 Davis, 371 U.S. 178, 182 (1962)). 7 When leave to amend is sought after the amendment deadline in the court’s scheduling 8 order has expired, the movant must also show good cause to reopen the amendment period and 9 excusable neglect for the delay. See Fed. R. Civ. P. 6(b)(1)(B) (stating “the court may, for good 10 cause, extend the time . . . on motion made after the time has expired if the party failed to act 11 because of excusable neglect.”); see also Fed. R. Civ. P. 16(b)(4). 12 In evaluating excusable neglect, the court weighs: “(1) the danger of prejudice to the non- 13 moving party, (2) the length of the delay and its potential impact on judicial proceedings, (3) the 14 reason for the delay, including whether it was within the reasonable control of the movant, and 15 (4) whether the moving party’s conduct was in good faith.” Pincay v. Andrews, 389 F.3d 853, 16 860 (9th Cir. 2004) (citing Pioneer Investment Services Co. v. Brunswick Associates Limited 17 Partnership, 507 U.S. 380, 395 (1993)). The weight assigned to these factors is left to the court’s 18 discretion. Id. When a court can “conceive of facts that would render plaintiff’s claim viable,” or 19 “it appears at all possible that the plaintiff can correct the defect,” an amendment should not be 20 found futile. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 701 (9th Cir. 1988) (internal 21 quotation marks and citations omitted). 22 As Defendants filed its Motion to Amend after the expiration of the March 5, 2019 23 deadline to amend the pleadings, it falls under Rule 16. (ECF No. 20). As noted above, 24 Defendant cites to the former Local Rule 26-4, which was replaced by Local Rule 26-3 in the 25 amendments to the Local Rules that were adopted on April 17, 2020, in support of its request to 26 reopen the amending the pleadings deadline. Moreover, Defendant simply claims good cause and 27 excusable neglect exists to amend its answer at this stage of the litigation because it has evaluated 1 the November 22, 2019 hearing. Notably, the only deadline that Defendant seeks to extend is the 2 amending the pleadings deadline – as all discovery deadlines have closed. Plaintiff also cites the 3 old version of the Local Rules, including LR 26-4, but is correct that the excusable neglect 4 standard applies as the deadline has expired. 5 Ultimately, the Court finds that Defendants should be permitted to amend its answer as 6 requested in order to streamline the disputed issues left for trial. While the deadline to amend 7 pleadings expired over 14 months ago, the passage of time is not reason enough to preclude 8 amendment. See, e.g., Roberts v. Arizona Bd. of Regents, 661 F.2d 796, 798 (9th Cir. 1981) 9 (“Ordinarily, leave to amend pleadings should be granted regardless of the length of time of delay 10 by the moving party absent a showing of bad faith by the moving party or prejudice to the 11 opposing party.”). Moreover, the Court has considered all of the arguments of the parties in the 12 briefing and finds that amendment at this stage would be neither extraordinarily disruptive nor 13 prejudicial to Plaintiff. 14 As for Plaintiff’s argument regarding prejudice, the Court recognizes that it imposed an 15 adverse jury instruction as a sanction in November 2019. Subsequently, the parties attended a 16 private mediation and were unable to resolve this case via settlement. As such, Defendant is only 17 now, 6 months after the sanction was imposed, seeking to admit to liability. Plaintiff claims that 18 she would no longer have the benefit of the adverse jury instruction and the Court should not 19 condone Defendant’s discovery behavior by permitting the amendment as it is made in bad faith. 20 Plaintiff highlights that Defendant is seeking to make prior incidents irrelevant on issues of notice 21 and foreseeability, but still disputing causation as Defendant’s proposed amendment still denies 22 paragraphs 15 and 17 of the Complaint. As such, Plaintiff claims she would be prejudiced 23 without the adverse jury instruction in presenting her evidence on causation. However, the Court 24 does not agree that the adverse jury instruction is eliminated simply by permitting the requested 25 amendment. Indeed, the Court is not reconsidering its Order that provided an adverse jury 26 instruction and that remains preserved for the District Judge’s discretion at trial. As such, the 27 Court is not excusing Defendant’s discovery conduct nor removing the sanction imposed at this 1 As for the disruption to the litigation, the Court recognizes that no further discovery would 2 be needed. Also, there would be no delay to the case as the next steps are the settlement 3 conference and filing of the joint pretrial order. As such, the Court cannot find the amendment to 4 be extraordinary disruptive even though it is sought at this late stage of the litigation. Therefore, 5 the Court will grant Defendant’s request to reopen the deadline to amend the pleadings and 6 request to amend its answer at this stage of the litigation. 8 IT IS THEREFORE ORDERED that Defendant’s Motion for Protective Order (ECF No. 9 78) is granted in part and denied in part as outlined above. 10 IT IS HEREBY RECOMMENDED that Defendant’s Motion to Extend Time (ECF No. 11 79) is granted only to the extent that Defendant may file an amended answer. 12 IT IS FURTHER ORDERED that Defendant’s Motion to Amend Answer (ECF No. 80) is 13 granted. Defendant shall file and serve its proposed amended answer. 14 DATED: June 24, 2020. 15 DANIEL J. ALBREGTS 16 UNITED STATES MAGISTRATE JUDGE 17 18 19 20 21 22 23 24 25 26 27