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Smith v. Bradley Pizza, Inc.

United States District Court, D. Minnesota

February 4, 2019

Scott Smith, Plaintiff,
Bradley Pizza, Inc., and Pamela M. Dahl, Defendants.


          Katherine Menendez United States Magistrate Judge

         This matter is before the Court on Plaintiff Scott Smith's Motion to Enforce the Court's Protective Order and For Sanctions Against Defendants and Best & Flanagan LLP for Violations of the Parties' Agreed Protective Order. [Pl.'s Mot., ECF No. 196.] Specifically, Mr. Smith asserts that defense counsel[1] violated the terms of the Protective Order [ECF No. 123] by filing “confidential” documents produced in this case in support of motions for summary judgment in two other cases pending in the District of Minnesota. The documents at issue are settlement agreements that this Court required Mr. Smith to produce to Bradley Pizza and Ms. Dahl in this litigation and information regarding the income he receives from ADA litigation. Mr. Smith is the plaintiff in the other two cases and defense counsel represents the defendants in both.

         Mr. Smith argues that defense counsel's violations of the Protective Order should result in the following sanctions: (1) defense counsel should reimburse him for the legal fees and costs incurred in addressing the violations of the protective order; (2) defense counsel should be required to revise the summary-judgment motions in the other cases to remove references to the settlement-agreement information; (3) defense counsel should be ordered to cease distributing the settlement-agreement information to their other clients and to ensure that any copies are destroyed; and (4) defense counsel should be required to pay a $20, 000 penalty to the Court.

         For the reasons that follow, the Court finds that the filing of the settlement agreements and related information in the other litigation violated the Protective Order. However, most of the sanctions Mr. Smith requests are inappropriate given the history and circumstances of this litigation. The Court requires defense counsel to pay a penalty of $500 for failure to comply with the Protective Order. Moreover, the Court modifies the Protective Order to allow the continued use of the settlement-agreement information in the other two cases at issue.

         I. Relevant Background

         Based on a stipulation filed by the parties, the Court entered a Protective Order on July 9, 2018. [ECF No. 123.] Under the Protective Order, each party in this case has the right to designate documents produced during discovery as “confidential.” [Id. ¶ 2(a).] A party can agree to remove a confidential designation from a document, but if no such agreement can be obtained, a party “may move the court for an order changing the designation.” [Id. ¶¶ 7(a), 7(c).] A document that has been marked confidential “may be used only in this action.” [Id. ¶ 3(a).] The Protective Order also limits the people to whom a confidential document may be revealed. [Id. ¶ 3(b).]

         Almost a month after the Protective Order was entered, on August 7, 2018, counsel for Bradley Pizza and Ms. Dahl asked the Court to allow them to take Mr. Smith's deposition in this case simultaneously with his deposition in two other cases: Smith v. R.W.'s Bierstube, Inc. (“Bierstube”), No. 17cv1866 (PJS/HB), Doc. No. 1 (D. Minn. June 2, 2017) (Compl.), and Smith v. Golden China (“Golden China”), No. 17cv1862 (JRT/HB), Doc. No. 1 (D. Minn. June 2, 2017) (Compl.).[2] In Bierstube and Golden China, Mr. Smith alleges that he encountered architectural barriers to access prohibited by the ADA in the parking lots of the defendants' businesses on the same day (May 25, 2017) that he encountered barriers to access at Bradley Pizza. Defense counsel in this case also represents the defendants in Bierstube and Golden China. The Court held a telephonic conference on August 8, 2018 to discuss Mr. Smith's deposition, among several other discovery issues raised by the parties. [Mins. of Tel. Conf. (Aug. 8, 2018), ECF No. 128.] On September 20, 2018, the Court amended the Pretrial Scheduling Order here based on the parties' subsequent agreement that Mr. Smith's deposition would cover testimony for this matter, Golden China, and Bierstube.

         The parties also coordinated other aspects of pretrial procedure and discovery among the three cases. In addition to having a single deposition of Mr. Smith, they also agreed that each side's expert depositions would be consolidated for all three cases. Additionally, site inspections for Bradley Pizza's location and for the defendants' businesses in Golden China and Bierstube were conducted jointly. [Jan. 7, 2019 Sheu Decl. (“1/7 Sheu Decl.”) ¶ 5, Ex. 2, ECF Nos. 204, 204-2.] And the defendants in all three cases sought to conduct a joint inspection at the apartment building where Mr. Smith lives. [See 1/7 Sheu Decl., Ex. 3.]

         On September 17, 2018, defense counsel took Mr. Smith's deposition for this case, Golden China, and Bierstube. During the deposition, defense counsel asked Mr. Smith questions about settlement agreements he has reached in other ADA cases he filed as a plaintiff. Mr. Smith testified that he has received money through some of those settlements. On September 27, 2018, defense counsel sent Mr. Smith's counsel a letter regarding all three cases, noting that Mr. Smith, plaintiff's counsel, and plaintiff's expert “refused to provide information about Mr. Smith's settlements.” [1/7 Sheu Decl., Ex. 5.] In response, on October 12, 2018, plaintiff's counsel sent defense counsel an email, again in reference to all three cases, attaching a settlement agreement template. [1/7 Sheu Decl., Ex. 6.]

         Bradley Pizza and Ms. Dahl also served a request for production of documents related to Mr. Smith's past ADA settlements, but Mr. Smith did not agree to produce those documents.[3] [Oct. 13, 2018 Sheu Decl. (“10/13 Sheu Decl.”) ¶ 2, Ex. A, ECF Nos. 148, 148-1.] Mr. Smith raised several objections to the request, and Bradley Pizza and Ms. Dahl moved to compel production of the settlement agreements. [10/13 Sheu Decl. ¶ 3, Ex. B (Pl.'s Response); Defs.' Mot. to Compel, ECF No. 144.] In an Order dated November 13, 2018, the undersigned granted in part and denied in part Bradley Pizza's and Ms. Dahl's motion to compel production of settlement agreements. [Order (Nov. 13, 2018), ECF No. 159.] The Order required Mr. Smith “to produce any non-confidential settlement agreements that he has entered in similar ADA lawsuits in the two-year period preceding October 30, 2018.” [Id. at 18, ¶ 3a.] He was also required “to produce documents sufficient to show the total compensation he has received from settling ADA lawsuits in the two-year period preceding October 30, 2018.” [Id. at 18 ¶ 3c.] Mr. Smith was not required to produce settlement agreements that included a confidentiality provision. [Id. at 18 ¶ 3b.]

         To comply with the November 13, 2018 Order, Mr. Smith produced eleven settlement agreements that were not subject to a confidentiality provision. When he produced these documents, Mr. Smith marked them as “confidential” pursuant to the Protective Order. [See Pl.'s Mem. at 3, ECF No. 198.] On Friday, December 14, 2018, the defendants in Golden China filed a motion for summary judgment. [Golden China, 17cv1862, ECF No. 89.] In support of the Golden China summary-judgment motion, defense counsel filed Sealed Exhibit 14, which includes the eleven settlement agreements provided pursuant to the undersigned's November 13, 2018 Order in this case. [Golden China, 17cv1862, ECF Nos. 91, 94.] In their memorandum, the Golden China defendants also referenced these settlement agreements and information about the compensation Mr. Smith has received from ADA lawsuits. [Golden China, 17cv1682, ECF No. 99 at 2 n.1.]

         On the following Monday, December 17, 2018, plaintiff's counsel contacted defense counsel and asserted that the filing of the settlement agreements in the Golden China case violated the Protective Order in this action. [Dec. 29, 2018 Browne Decl. (“12/29 Browne Decl.”) ¶ 5, ECF No. 200.] Specifically, Mr. Smith asserted that defense counsel violated the Protective Order by disclosing the settlement-agreement information that was marked confidential to the defendants in Golden China, who were not among those authorized to receive such information. [12/29 Browne Decl., Ex. A (email string).] Defense counsel took the position that no violation had occurred because: (1) “Plaintiff waived objections about sharing his responses among discovery requests in [this case, Golden China, and Bierstube]”; and (2) the coordination of pretrial matters among the three cases operated as a “de facto modification of the protective orders, if not an actual agreement on the commonality of all plaintiff's discovery responses and documents.” [Id.] The parties were unable to resolve their disagreement about the propriety of defense counsel's use of the information in the other two cases.

         On December 29, 2018, Mr. Smith filed the pending motion to enforce the Protective Order and for sanctions against defense counsel for using the settlement agreements in Golden China. [Pl.'s Mot., ECF No. 196.] In his supporting memorandum, Mr. Smith noted:

Defendants' counsel has another summary judgment motion due in the near future in [Bierstube]. Smith is concerned that Defendants and Best & Flanagan will continue to violate the protective order by sharing Smith's confidential documents and information with Best & Flanagan's other clients, thus allowing the use of confidential information in other proceedings.

[Pl.'s Mem. at 2.] Three days later, the defendants in Bierstube filed a motion for summary judgment.[4] [Bierstube, 17cv1866, ECF No. 96.] The Bierstube motion also relies upon the settlement agreements that were produced pursuant to the undersigned's November 13, 2018 Order on the motions to compel. [Bierstube, 17cv1866, ECF No. 98 at 2 n.2, and ECF No. 104.]

         The undersigned held a hearing on the motion to enforce the Protective Order on January 24, 2019. [ECF No. 217.] Five days after the hearing, on January 29, 2019, Mr. Smith filed a Notice, asserting that in Golden China, defense counsel again referred to the settlement information in their own clients' ...

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