# Outlaw Laboratory, LP v. DG in PB, LLC

> District Court, S.D. California · March 23, 2021

URL: https://www.frixlaw.com/law-library/cases/10083418

## Case

- **Court:** District Court, S.D. California
- **Decided:** March 23, 2021
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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8 UNITED STATES DISTRICT COURT
9 SOUTHERN DISTRICT OF CALIFORNIA
10
11 IN RE: OUTLAW LABORATORIES, LP Case No.: 18CV840 GPC (BGS)
LITIGATION,
12
ORDER REGARDING
.
13 CONFIDENTIAL DESIGNATION OF
SETTLEMENT AGREEMENT AND
14
FILING UNDER SEAL
15
16 [ECF 311, 313]
17
18 I. INTRODUCTION
19 Tauler Smith, LLP (“Tauler Smith”), Roma Mikha, Inc., NMRM, Inc., and Skyline
20 Market, Inc. (“the Stores”), and Outlaw Laboratory, LP, Michael Wear, and Sean Lynch
21 (“Outlaw”) have filed a Joint Statement raising a dispute as to the Stores’ and Outlaw’s
22 designation of the Stores’ and Outlaw’s Settlement Agreement as confidential under the
23 parties’ Stipulated Protective Order and whether it should be filed under seal with the
24 Court. (ECF 313.)
25 This Order addresses that dispute and finds Outlaw and the Stores have not met
26 their burden in showing good cause for a protective order designating the Settlement
27 Agreement as confidential or to file it under seal.
28 ///
1 II. BACKGROUND
2 A. Claims in Consolidated Action
3 The Court has summarized the claims, counterclaims, and third-party claims of this
4 consolidated action in numerous prior orders on discovery disputes. The Court
5 incorporates those summaries here and only very briefly summarizes the case here. (ECF
6 177 at I.; ECF 215 at II.; ECF 230 at II.; ECF 246 at II; ECF 265 at II; ECF 314 at II;
7 ECF 346 at II.)
8 This consolidated action encompasses two cases brought by Outlaw against retail
9 stores. (Case Nos. 18cv840 (“DG in PB”) and 18cv1882 (“SD Outlet”).) Outlaw’s
10 claims in both were premised on the defendant stores selling products similar to its own,
11 but allegedly containing undisclosed drugs, resulting Outlaw missing out on sales of its
12 product. (ECF 147 at 1, 3-6;1 ECF 209 (SD Outlet action).) Summary Judgment was
13 granted to defendants in the DG in PB action, and a motion for judgment on the pleadings
14 and subsequent motion for reconsideration in the SD Outlet action were granted
15 dismissing with prejudice all of Outlaw’s claims. (ECF 147, 209, 251.)
16 Three stores, the Stores, filed counterclaims as a class action on behalf of
17 themselves and other targeted stores against Outlaw and its former counsel, Tauler Smith,
18 under the Racketeer Influenced and Corrupt Organizations Act (“RICO”) along with a
19 rescission claim. (“Second Amended Counter Claims (“SACC”) [ECF 114].) Concisely,
20 the SACC alleges Outlaw and Tauler Smith engaged in a scheme that included use of
21 investigators to target stores, sending demand letters to small businesses threatening
22 liability for over $100,000 under RICO and the Lanham Act based on false and
23 misleading statements about potential liability for the sale of certain products by the
24 stores in competition with Outlaw’s TriSteel product, and follow-up communications
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1 offering to settle for lower amounts. (SACC ¶¶ 2, 15, 23-24, 26-52, 66-68, 73, 84-88, 91-
2 92.)
3 B. Relevant Procedural History2
4 On June 15, 2020, the parties filed a Joint Motion for Entry of Stipulated
5 Protective Order. (ECF 226.) The Joint Motion was granted on June 19, 2020 and the
6 parties’ Stipulated Protective Order was entered by the Court. (ECF 235.)
7 On July 7, 2020, Outlaw and the Stores filed a Joint Notice of Settlement of the
8 Stores’ Claims Against Outlaw Laboratory, Michael Wear, and Shawn Lynch with a
9 Request for Entry of Stipulated Injunction. (ECF 249.) The filing notified the court that
10 the Stores and Outlaw had reached a settlement and requested entry of a “Consent
11 Judgment and Stipulated Permanent Injunction.” (ECF 249.) A flurry of filings
12 followed. Tauler Smith filed an Objection and the Stores and Outlaw separately
13 responded to the Objection. (ECF 250 (Tauler Smith Objection), 252 (Stores’ Response
14 to Objection), 253 (Outlaw Response to Objection).) Tauler Smith then filed a response
15 to the Stores’ response to its Objection. (ECF 254.) The Stores and Outlaw then filed a
16 Joint Supplemental Brief of the Stores and the Outlaw Defendants Re: Request for Entry
17 of Stipulated Injunction. (ECF 261.)
18 On September 15, 2020, the assigned district judge, Judge Curiel, denied the
19 Motion for Permanent Injunction, (ECF 290 at 5-6), found Tauler Smith lack standing to
20 challenge the settlement, (id. at 6-9), conducted an analysis of the need for class notice
21 prior to class certification under Diaz v. Trust Territory of Pac. Islands, 876 F.2d 1401,
22 1408-11 (9th Cir. 1989), and found a review of the terms of the Settlement Agreement
23 was necessary to complete that analysis. (ECF 290 at 5-6 (denial of permanent
24 injunction), 6-9 (lack of standing), and 9-11 (analysis under Diaz). Judge Curiel then
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2 The Court only briefly summarizes the procedural history related to the Settlement
28
1 ordered the Stores to provide the court and Tauler Smith with a copy of the Settlement
2 Agreement and for the parties to submit supplemental briefing. (ECF 290 at 12.)3
3 On September 29, 2020, Tauler Smith filed an opposed Motion to Modify the Case
4 Schedule. (ECF 298.) In support of the Motion, Tauler Smith filed a motion to file the
5 Settlement Agreement between the Stores and Outlaw under seal. (ECF 295). However,
6 in the Motion requesting to file it under seal, Tauler Smith argued the Settlement
7 Agreement should not be filed under seal because it should not have been designated as
8 “CONFIDENTIAL” under the parties’ Stipulated Protective Order. (Id. at 2-3.) In short,
9 Tauler Smith requested to file it under seal only because it was required to based on it
10 having been designated “CONFIDENTIAL,” but Tauler Smith disagreed with the
11 designation. (Id.) As the Motion to File Under Seal also indicates, at the same time, the
12 parties also submitted a joint discovery dispute letter in which the parties very briefly
13 summarized their positions on the confidential designation dispute and Tauler Smith
14 requested the designation be removed or that it be allowed to further brief the issue. (Id.
15 at 3.)
16 In ruling on the underlying Motion to Modify the Case Schedule, the Court
17 conditionally granted the request to file the Settlement Agreement under seal, but also
18 granted Tauler Smith’s request to fully brief the dispute. (ECF 311 at 16.) The Court set
19 a schedule for the parties to brief the challenge through this Joint Statement. (Id.)
20 III. DISCUSSION
21 There are two closely related issues presented by the parties’ briefing: (1) whether
22 the Stores and Outlaw have shown good cause for the Settlement Agreement to be
23 designated as confidential and (2) whether the Settlement Agreement should be filed
24 under seal.
25 ///
26
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3 The Court only provides this information as context to explain how Tauler Smith came
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1 A. Legal Standards
2 1. Protective Orders
3 a) Types of Protective Orders
4 Court’s regularly issue two types of protective orders: (1) particular protective orders
5 and (2) blanket protective orders. See Gillard v. Boulder Valley School Dist. Re.-2, 196
6 F.R.D. 382, 385-86 (D. Colo. 2000) (identifying three types of protective orders).4
7 Particularized protective orders address a specific document or identified piece of
8 information and require the court to determine whether good cause exists to protect the
9 specific document or piece of information from disclosure. Id. For example, as the Stores
10 and Outlaw point out in their briefing, the Court issued a protective order under Federal
11 Rule of Civil Procedure Rule 26(c) as to a specific group of documents (confidential
12 settlement agreements between Outlaw/Tauler Smith and targeted stores) to address
13 confidentiality concerns as to third parties in granting a motion to compel their production.
14 (ECF 177 at 32.) The Court required they be designated confidential, limited their use to
15 this litigation, and limited who they could be disclosed to, but noted the parties could seek
16 modification or enter into a more comprehensive protective order. (Id.)
17 The parties’ Stipulated Protective Order here, entered into well after the particular
18 protective order noted above, falls into the second category. Blanket protective orders
19 “require[] that counsel for a producing party review the information to be disclosed and
20 designate the information it believes, in good faith, is confidential or otherwise entitled to
21 protection.” Gillard, 196 F.R.D. at 386. The protections of the designations, including
22 limitations on disclosure to others then apply “unless the designation is objected to by an
23 opposing party,” and “[j]udicial review of a party’s designation as confidential occurs only
24 when there is such an objection.” Id.
25 ///
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4 The Gillard decision also identifies a third and disfavored type, umbrella protective
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1 Blanket protective orders, like the parties’ Stipulated Protective Order here, “are
2 regularly relied on in civil litigation because they serve the interests of a just, speedy, and
3 less expensive determination of complex disputes by alleviating the need for and delay
4 occasioned by extensive and repeated judicial intervention.” Gillard, 196 F.R.D. at 386.
5 Parties can review and appropriately designate the large volume of documents regularly
6 exchanged during discovery without having to seek a court order to designate them under
7 Rule 26(c) as to each document being produced. Parties routinely stipulate to these types
8 of protective orders, particularly when there is an expectation that discovery will include
9 confidential documents, to allow discovery to be efficiently exchanged. In addition to the
10 provisions noted below that provide criteria for confidentiality designations, who may have
11 access to them when designated confidential, steps to challenge designations, and how to
12 handle seeking to file them under seal, they also often include provisions on how those
13 documents must be treated during depositions or how they may be disclosed to experts.
14 b) Parties’ Stipulated Protective Order
15 There are a few portions of the parties’ Stipulated Protective Order that are of
16 significance here. Paragraph 4 indicates that the parties may designate materials
17 produced as CONFIDENTIAL:
18 Each party to this litigation that produces or discloses any materials,
answers to interrogatories, responses to requests for admission, trial
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testimony, deposition testimony, and transcripts of trial testimony and
20 depositions, or information that the producing party believes should be
subject to this Protective Order may designate the same as
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“CONFIDENTIAL” or “CONFIDENTIAL - FOR COUNSEL ONLY.
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23 Paragraph 4 also indicates the allowable basis for a CONFIDENTIAL designation:
24 Designation as “CONFIDENTIAL”: Any party may designate
information as “CONFIDENTIAL” only if, in the good faith belief of
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such party and its counsel, the unrestricted disclosure of such
26 information could be potentially prejudicial to the business or
operations of such party.
27

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1 Paragraph 12 provides that “[b]efore any . . . documents which are designated as
2 confidential information are filed with the Court for any purpose, the party seeking to file
3 such materials must seek permission of the Court to file the material under seal.”
4 Paragraph 14 then provides that:
5 At any stage of these proceedings, any party may object to a designation
of the materials as confidential information. The party objecting to
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confidentiality must notify, in writing, counsel for the designating party
7 of the objected-to materials and the grounds for the objection. If the
dispute is not resolved consensually between the parties within seven
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(7) days of receipt of such a notice of objections, the objecting party
9 may move the Court for a ruling on the objection. The materials at issue
must be treated as confidential information, as designated by the
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designating party, until the Court has ruled on the objection or the
11 matter has been otherwise resolved.5

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a) Good Cause for the Protective Order
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“The law . . . gives district courts broad latitude to grant protective orders to prevent
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disclosure of materials for many types of information, including, but not limited to, trade
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secrets or other confidential research, development, or commercial information. Phillips
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v. Gen. Motors. Corp., 307 F.3d 1206, 1211 (9th Cir. 2002) (citing Fed. R. Civ. P. 26(c)(7).
17
Federal Rule of Civil Procedure 26(c)(1) provides that “the court may, for good cause
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shown, issue an order to protect a party or person from annoyance, embarrassment,
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oppression, or undue burden or expense.” Fed. R. Civ. P. 26(c)(1). “The Supreme Court
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has interpreted this language as conferring ‘broad discretion on the trial court to decide
21

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23 5 A footnote in this section of the Stipulated Protective Order requires the parties to
follow applicable rules to raise these issues as a discovery dispute. (ECF 235 at 8 n.2.)
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Judge Skomal’s Chambers Rules require a timely joint call to Chambers to identify
25 discovery disputes to receive guidance as to next steps. (Chambers Rules V.B.)
However, due to the volume of discovery disputes being raised in this case, earlier in the
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case, the Court required the parties to identify the nature of their disputes by submission
27 of very short joint letter briefs. The parties did so here by submission of the joint letter
brief referenced above.
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1 when a protective order is appropriate and what degree of protection is required.’” Phillips,
2 307 F.3d at 1211 (citing Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984)).
3 “Although courts may be more likely to grant protective orders for the information
4 listed in Rule 26(c)(7), courts have consistently granted protective orders that prevent
5 disclosure of many types of information,” including inadvertently disclosed “letters
6 protected under attorney-client privilege, . . . medical and psychiatric records, . . . federal
7 and grand jury secrecy provisions, [and] . . . confidential settlement agreements.” Id. at
8 1212 (citing KL Group v. Case, Kay, and Lynch, 829 F.2d 909, 917–19 (9th Cir. 1987),
9 Pearson v. Miller, 211 F.3d 57, 62–64 (3d Cir. 2000), Krause v. Rhodes, 671 F.2d 212,
10 216 (6th Cir. 1982), Hasbrouck v. BankAmerica Housing Serv., 187 F.R.D. 453, 455
11 (N.D. N.Y. 1999) (confidential settlement agreement), Kalinauskas v. Wong, 151 F.R.D.
12 363, 365–67 (D. Nev. 1993) (confidential settlement agreement)).
13 As discussed in more detail below, in determining whether good cause has been
14 shown, the Court must proceed in two steps, first determining whether Outlaw and the
15 Stores, as the parties seeking to maintain the confidential designation, have identified a
16 “particularized harm that will result from disclosure” and second to balance “the public
17 and private interests to decide whether maintaining a protective order [as to the
18 Settlement Agreement] is necessary.” In re Roman Archbishop of Portland Oregon, 661
19 F.3d 417, 424 (9th Cir. 2011) (citing Phillips, 307 F.3d at 1211).
20 b) Standard for Filing Under Seal
21 Here, Tauler Smith sought to file the Settlement Agreement under seal in support of
22 an opposed Motion to Modify the Case Schedule. (ECF 295, 298.) This was a non-
23 dispositive motion. This is significant because documents filed in support of non-
24 dispositive motions are treated differently for purposes of filing them under seal.
25 Kamakana v. City and Cnty. of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 2002) (citations
26 omitted) “Those who seek to maintain the secrecy of documents attached to dispositive
27 motions must meet the high threshold of showing that ‘compelling reasons’ support
28 secrecy,” but “a ‘good cause’ showing under Rule 26(c) will suffice to keep sealed records
1 attached to non-dispositive motions.” Id. at 1180 (citing Foltz v. State Farm Mut. Ins. Co.,
2 331 F.3d 1122, 1135-36 (9th Cir. 2003)).
3 B. Parties Positions
4 1. Tauler Smith
5 Tauler Smith argues the Settlement Agreement should not be filed under seal or
6 designated confidential because the Stores and Outlaw have not shown good cause for the
7 designation or to file it under seal. Tauler Smith argues Outlaw’s interest in avoiding
8 copycat litigation is not sufficient to show good cause for the confidentiality designation
9 or to file the Settlement Agreement under seal. (ECF 313 at 3-4.) Tauler Smith asserts
10 that the Settlement Agreement should be open to the public because it impacts the
11 viability of the claims of absent class members and that Outlaw and the Stores “should
12 not be permitted to cloak their agreement in secrecy in order to preclude a broader set of
13 prospective claims.” (Id. at 4.) And finally, Tauler Smith argues that even if the
14 Settlement Agreement were prejudicial to Outlaw’s business or operations, that prejudice
15 is outweighed by the rights of absent class members. (Id. at 5.) Tauler Smith’s briefing
16 does not address the Stores’ and Outlaw’s arguments regarding it misusing the Settlement
17 Agreement against Outlaw and the Stores’ counsel.6
18 2. The Stores
19 The Stores dispute Tauler Smith’s reliance on the good cause standard and cases
20 applying it, arguing it does not apply here because it is neither a litigation document nor
21 information produced in discovery. (ECF 313 at 5.) The Stores also point to the Court
22
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6 Although the briefing is provided in a joint filing, the parties are required to exchange
25 their briefing in advance of filing the Joint Statement to allow the parties to address each
other’s arguments. The Court specifically noted this in the Order setting the briefing on
26
this dispute. (ECF 311 at 17 n. 11.) Tauler Smith’s portion of the briefing does not
27 indicate it was denied this opportunity and there has been no indication since the Joint
Statement was filed that Tauler Smith was not able to fully respond to all of the Stores
28
1 having previously imposed a protective order under Federal Rule of Civil Procedure
2 26(c) as to the settlement agreements between Outlaw/Tauler Smith and targeted stores,
3 arguing the Court has already recognized the propriety of the confidential designation.
4 (Id. at 5.)
5 As to Tauler Smith’s argument that the Settlement Agreement should be disclosed
6 to protect absent class members, the Stores argue the Court should take a practical
7 approach. As the Stores explain, “if Judge Curiel holds that notice is required under
8 Diaz, then the terms of the settlement will be disclosed. But those terms should not be
9 disclosed simply to facilitate Mr. Tauler’s demonstrated desire to continue to abuse his
10 former clients.” (Id. at 5-6.) Beyond this, the Stores acknowledge that their interest in
11 the Settlement Agreement being designated confidential and being filed under seal is to
12 honor their confidentiality agreement with Outlaw. (Id. at 5.) The Settlement Agreement
13 has a confidentiality provision that prohibits disclosure.
14 3. Outlaw
15 Outlaw argues that the Settlement Agreement is properly designated as
16 confidential under the parties’ Stipulated Protective Order because Outlaw has a good
17 faith belief that the unrestricted disclosure of the Settlement Agreement by Tauler Smith
18 “‘could be potentially prejudicial to the business or operations’ of Outlaw and its
19 principals.” (ECF 313 at 6 (quoting Stipulated Protective Order [ECF 235] ⁋ 4).) There
20 are two ways Outlaw argues public disclosure of its Settlement Agreement would be
21 prejudicial to it.
22 First, Outlaw argues Tauler Smith will “publish, disseminate, or use Outlaw’s
23 settlement agreement to ‘gratify private spite.’” (Id. at 8 (quoting Kamakana v. City and
24 Cnty. of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 2006)).) In support of this assertion,
25 Outlaw includes numerous excerpts of Tauler Smith’s unprofessional communications,
26 including one specific to this settlement. Along the same lines, Outlaw also argues that it
27 was forced to settle this case because of Tauler Smith’s “off-the-rails” behavior and
28 misconduct, including refusing to provide Outlaw its client file, providing an accounting
1 of money taken in through litigation, or the list of stores that were sent demand letters.
2 (Id. at 6.) And now that it has settled, in part because of Tauler Smith’s conduct, it
3 argues it is still being forced to endure the expense of briefing more issues because
4 Tauler Smith is intentionally seeking to make the resolution of this case as expensive and
5 burdensome as possible for Outlaw out of spite. (Id. at 6-8.)
6 Second, Outlaw argues there a real risk of copycat litigation against Outlaw based
7 on Tauler Smith’s targeting of stores. As Outlaw explains, other stores victimized by
8 Tauler Smith could review Outlaw’s Settlement Agreement with the Stores, copy the
9 pleadings in this case, and subject Outlaw to those claims in other forums in hopes of
10 obtaining a similar settlement. (Id. at 9.)
11 Outlaw, like the Stores, also argues that this Settlement Agreement is a private
12 document unrelated to the merits of this case. (Id.) Outlaw notes that no class has been
13 certified in this case, but also asserts that the Settlement Agreement does not affect any
14 claims that may be asserted against Outlaw by absent class members and that it does not
15 prejudice the claims of absent class members. In summary, Outlaw argues that “Tauler
16 Smith’s feigned interest in protecting the interests of absent class members (where no
17 class has been certified) is outweighed by the likelihood that Tauler Smith—as he has
18 threatened to do—will find some way to use the settlement agreement in a spiteful and
19 vengeful way, which could be “potentially prejudicial to the business or operations” of
20 Outlaw.
21 B. Analysis
22 1. Not Produced in Discovery
23 Before considering whether the Stores and Outlaw have shown good cause to
24 designate the Settlement Agreement confidential, the Court addresses the Stores’ and
25 Outlaw’s argument that the Settlement Agreement is not subject to this requirement
26 because it was not produced in discovery. First, neither the Stores nor Outlaw cite any
27 cases suggesting that the same analysis would not apply under these circumstances. As
28 noted above, Judge Curiel ordered it be provided to Tauler Smith and the court to allow a
1 full analysis of whether notice to absent class members was required for Outlaw and the
2 Stores to settle the claims between them in this case and he allowed the parties to file
3 supplemental briefing on the issue after the Settlement Agreement was provided.
4 Additionally, the Stores and Outlaw have designated it confidential under the parties’
5 Stipulated Protective Order in this case. The Stores and Outlaw cannot use the Stipulated
6 Protective Order for this litigation to protect the Settlement Agreement from disclosure,
7 but argue the good cause standard identified in it and that they agreed to (and applicable
8 under Rule 26(c)) does not apply because it was not produced in response to a specific
9 discovery request but was instead ordered by district judge for purposes of supplemental
10 briefing in this case.7
11 Nor will the Court speculate as to whether it would have found the Settlement
12 Agreement relevant to the claims or defenses in this case under Rule 26(b)(1) because
13 Judge Curiel has found review of its terms relevant enough to his analysis that it has been
14 provided by his order. However, before proceeding to analyze whether good cause has
15 been shown to continue the confidential designation under Rule 26(c)(1), the Court notes
16 that as to the Settlement Agreement, the parties have started where parties often end up
17 when one party seeks production of a confidential settlement agreement in discovery.
18 “Federal courts have typically found that a settlement agreement ‘is discoverable despite a
19 confidential designation, especially when there is a protective order in place to prevent
20 unauthorized disclosure.” Moser v. Health Ins. Innovations, Inc., Case No. 17cv1127-
21 WQH (KSC), 2019 WL 2996950, at * 4 (S.D. Cal. July 8, 2019) (emphasis added).
22 Confidential settlement agreements are often disclosed in discovery when relevant because
23 “the simple fact that the parties to a settlement agreement agreed to its confidentiality does
24
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7 While it is factually accurate to say the Settlement Agreement was not produced in
26
discovery, it could have been had Judge Curiel not ordered it provided. As noted in his
27 Order, Tauler Smith could have sought to compel its production, (ECF 290 at 8),
although there would have been more procedural steps given discovery was closed by the
28
1 not shield it from discovery.” Board of Trustees of Leland Stanford Junior Univ. v. Tyco
2 Int’l Inc., 253 F.R.D. 521, 522-23 (C.D. Cal. 2008). However, “[t]his is especially true . .
3 . where there is a Confidentiality order in place . . . that is more than adequate to protect . .
4 . information from misuse.” Id. at 523.
5 2. Good Cause under Rule 26(c)
6 Here, the Court has not previously made any specific finding as to good cause as to
7 any documents subject to the parties’ Stipulated Protective Order, including the Settlement
8 Agreement. “While courts generally make a finding of good cause before issuing a
9 protective order, a court need not do so where (as here) the parties stipulate to such an
10 order.” In re Roman Archbishop of Portland Oregon, 661 F.3d 417, 424 (9th Cir. 2011).
11 “When the protective order ‘was a stipulated order and no party ha[s] made a ‘good cause’
12 showing,’ then ‘the burden of proof ... remain[s] with the party seeking protection.’” Id.
13 (citing Phillips v. Gen. Motors. Corp., 307 F.3d 1206, 1211 n. 1 (9th Cir. 2002)). As the
14 parties seeking to maintain or continue the confidential designation as to the Settlement
15 Agreement, the Stores and Outlaw have the burden of showing good cause. “The party
16 opposing disclosure has the burden of proving ‘good cause,’ which requires a showing ‘that
17 specific prejudice or harm will result’ if the protective order is not granted.” Id. (citing
18 Foltz., 331 F.3d at 1130).
19 Where, as here, a “court [is] considering a motion for a continuation of the protective
20 order, [the court] must proceed in two steps,” first determining whether “particularized
21 harm will result from disclosure” and second to balance “the public and private interests to
22 decide whether [maintaining] a protective order is necessary.” Id. (citing Phillips, 307 F.3d
23 at 1211).
24 a) First Step
25 The Stores or Outlaw must “allege specific prejudice or harm.” Id. “[B]road
26 allegations of harm, unsubstantiated by specific examples or articulated reasoning, do not
27 satisfy the Rule 26(c) test.” Id. (citing Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d
28 470, 476 (9th Cir.1992). As discussed above, here, the Stores and Outlaw have asserted
1 two ways they could be harmed or prejudiced from public disclosure of the Settlement
2 Agreement.
3 First, they allege that public disclosure of the Settlement Agreement may result in
4 copycat litigation. The Court is not particularly persuaded by this reasoning because it
5 could arguably be said about any settlement of a claim for conduct that could have
6 befallen others. That the case has settled between Outlaw and the Stores is disclosed in a
7 public filing by Outlaw and the Stores so the significant non-public pieces of information
8 are the terms, including the amount of the settlement. However, Outlaw does not identify
9 anything specific about this Settlement Agreement that increases the likelihood it would
10 result in copycat litigation. Simply saying others will pursue the same course to get the
11 same settlement is not a specific prejudice or harm justifying a protective order.
12 Similarly, Outlaw and the Stores’ reliance on the Court’s prior order imposing a
13 confidentiality designation for settlement agreements between Outlaw/Tauler Smith and
14 other stores is misplaced. The Court imposed the designation and limitations out of
15 concern for third parties not involved in this litigation and unaware their settlement
16 agreements were being produced. There is no similar concern here. Additionally,
17 Outlaw or the Stores must “allege specific prejudice or harm” that will result from the
18 disclosure of this Settlement Agreement. Id. Because it is a particularized inquiry,
19 settlement agreements involving third parties on different issues has no bearing on this
20 Court’s decision as to this particular Settlement Agreement.
21 The second reason advanced is that Tauler Smith will misuse the Settlement
22 Agreement to harm Outlaw out of spite or animosity. Outlaw alleges it “has a good-faith
23 basis for believing that its jilted former attorney would publish, disseminate, or use
24 Outlaw’s settlement agreement with the Stores in a way that ‘could be potentially
25 prejudicial to the business or operations’ of Outlaw or is principals. As noted above,
26 Outlaw argues Tauler has already threatened and will certainly find a way to use the
27 settlement agreement to ‘gratify private spite.” (ECF 313 at 8 (quoting Kamakana, 447
28 F.3d at 1179).) Outlaw also argues “[t]he confidential designation of the settlement
1 agreement at issue must be maintained in light of the animosity expressed by Tauler
2 toward his former clients and Tauler’s generally unpredictive nature.” (ECF 313 at 9.)
3 The challenge with Outlaw and the Stores’ argument that Tauler Smith will
4 improperly use the Settlement Agreement is no explanation how it will do it. Based on
5 Tauler Smith’s past conduct and the excerpts included in the Joint Statement, the Court is
6 also concerned about Tauler Smith’s motives in seeking disclosure. Additionally, the
7 Court is not persuaded that Tauler Smith is acting out of any genuine concern for absent
8 class members or the public. However, the Court must follow the standard and it requires
9 Outlaw or the Stores to “show[] specific prejudice or harm will result if no protective
10 order is granted.” Phillips, 307 F.3d at 1210-11 (emphasis added). The Court is not
11 requiring Outlaw or the Stores to identify the prejudice or harm to a certainty, but they
12 are at least required to identify what it is that they think Tauler Smith will do with the
13 Settlement Agreement if disclosed.
14 The Court can only move on to the second balancing step of the inquiry if “the
15 court finds particularized harm will result from disclosure of information to the public.”
16 Id. at 1211. Here, the Court cannot find the particularized harm that will result when
17 Outlaw and the Stores have not identified what they think Tauler Smith will do.
18 Outlaw’s own briefing reflects the vagueness of their assertions. For example, Outlaw
19 argues Tauler Smith “will certainly find a way to use the settlement agreement to gratify
20 public spite” and “use the settlement agreement to drive up Outlaw’s expenses,” (ECF
21 313 at 8), but there is no explanation how. Similarly, Outlaw points to Tauler Smith’s
22 animosity for Outlaw and “generally unpredictive nature,” but there is again, no
23 explanation what it is they fears will happen. (Id. at 9.)
24 Outlaw and the Stores have not identified a particularized harm they believe will
25 result if the Settlement Agreement is disclosed. Rather they have speculated because
26 Tauler Smith has conducted itself poorly in the past that it will again with this Settlement
27 Agreement. But even if the Court agreed with this assertion, it still falls short of showing
28 what specific harm or prejudice will result. “[B]road allegations of harm, unsubstantiated
| || by specific examples or articulated reasoning, do not satisfy the Rule 26(c) test.” Jn re
2 ||Roman Archbishop of Portland Oregon, 661 F.3d at 424. Outlaw and the Stores have
3 ||not shown good cause under Rule 26(c) to continue the confidential designation under the
4 || Stipulated Protective Order.
5 CONCLUSION
6 The confidential designation 1s lifted as to the Settlement Agreement and it may be
7 || filed without sealing. As noted above, a specific showing of good cause is required to
8 || file documents filed in support of non-dispositive motions under seal. Because Outlaw
9 the Stores have not made this showing, the Settlement Agreement may not be filed
10 || under seal. Kamakana, 447 F.3d at 1180 (“[A] ‘good cause’ showing under Rule 26(c)
11 || will suffice to keep sealed records attached to non-dispositive motions”). Tauler Smith’s
12 || motion to file under seal that was conditionally granted pending further briefing (ECF
13 is now DENIED without prejudice. Tauler Smith may file the Settlement
14 || Agreement without sealing.
15
16 IT IS SO ORDERED.
17 || Dated: March 22, 2021 D / /
18 on. Bernard G. Skomal
19 United States Magistrate Judge
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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10083418. Public record. Not legal advice.