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Karoun Dairies, Inc. v. Karoun Dairies, Inc.

United States District Court, S.D. California

October 24, 2014

KAROUN DAIRIES, INC., et al., Defendants.


WILLIAM V. GALLO, Magistrate Judge.

Before the Court are Defendant/Counterclaimants' Request to be Relieved from a Portion of the Order Granting Plaintiff's Motion to De-Designate Documents for Use in Foreign Proceedings[1] ("Motion for Reconsideration") and Plaintiff's opposition ("Plain-tiff's Response").[2] In the Motion for Reconsideration, Defendants ask the Court to revise its order granting the Plaintiff's request for the de-designation of three materials origi-nally marked as "Confidential" or "Highly Confidential" by Defendants ("De-Designa-tion Order"):[3] (1) a 2010 Financial Statement detailing Defendants' operations ("State-ment"), (2) the deposition of Karoun Canada ("Karoun Deposition"), and (3) the deposi-tion of Ara Baghdassarian ("Ara Deposition"), one of the named Defendants and a natural person alleged to be Karoun Canada's alter ego, Doc. No. 1. Doc. No. 354, at 2, 12-13. For reasons more fully explained below, the Court DENIES the Motion for Reconsideration.


On May 7, 2010, the Parties submitted the Joint Motion. (Doc. No. 62.) The motion governed "materials to be exchanged throughout the course of litigation between the parties... [that] may contain trade secret or other confidential research, technical, cost, price, marketing or other commercial information"; its purpose was to protect these materials by having them labeled "Confidential" or "Highly Confidential" by either party. ( Id. at 2, 3.) Disclosure was governed by, among other provisions, paragraph seven, which forbade either party from disclosing materials so denominated "to anyone other than those persons within this order" for "any purpose other than in connection with this litigation." ( Id. at 5.) Such designation could be removed by either the Parties' own agreement or this Court's order. (Id.) Paragraph twenty-one reiterated this reservation: "Nothing within this order will be construed to prevent disclosure of Confidential Information if such disclosure is required by law or by order of the Court." ( Id. at 8.) On May 10, 2010, this Court granted the Joint Motion ("Protective Order"). (Doc. No. 63.)

On September 5, 2014, Plaintiff filed a Motion to De-Designate Documents for Use in Foreign Proceedings. (Doc. No. 335.) Defendants answered with a Response in Opposition on September 12, 2014. (Doc. No. 341.) On September 15, 2014, Plaintiff countered with its own reply. (Doc. No. 342). On October 14, 2014, this Court issued the De-Designation Order. (Doc. No. 354.) The Order effectively unsealed the Statement and the Karoun and Ara Depositions.[4] ( Id. at 2, 12-13.) The data to be released, the Court noted in its detailed order, related to "Karoun Canada's cash assets, long-term debt, shareholder's equity, including share capital and retained earnings, expenses, and net income." ( Id. at 10-11.) In so doing, the Court specifically found that "the information that Plaintiff seeks to be de-designated would not in any way be prejudicial" to Defen-dants. ( Id. at 11.) In fact, the Court emphasized its rejection of the Defendants' claim that "disclosure of information could be potentially prejudicial to... [Defendant's] business or operations." (Id.) Additionally, having carefully read the contested material, the Court determined that the disclosures contained no "trade secret information that would harm... [Defendants] should it ever resume operations." (Id.) " Protectable trade secrets" were simply not involved, whether because the information was already generally known or because it was readily ascertainable through other proper means. ( Id. at 11-12 (emphasis added) (citations omitted).) The Court ordered de-designation to occur by October 17, 2014. ( Id. at 13.)

Prior to the October 17, 2014, deadline, [5] Defendants submitted the Motion for Reconsideration in missive form, contesting only the de-designation of the Statement. The letter propounds four discrete reasons for why this document should retain its confidential status.[6] First, its de-designation would be highly prejudicial to the Defen-dants and minimally probative for Plaintiff, as the statement contains information regarding Defendants' "cash assets, long-term debt, shareholder's equity, including share capital and retained earnings, expenses, and net income." Second, if Defendants must release this purportedly sensitive data, Plaintiff should also be compelled to de-designate "all of his company's financial information, including annual financial statements." To order any less would be unfair, a disparate application of the Protective Order's specific strictures. Third, the Statement's de-designation is unnecessary because the already de-designated Karoun and Ara Depositions will divulge what the Statement will confirm. The value is too minuscule, the dangers too high, in Defendants' view. Finally, the Statement contains data not yet made public. Consequently, the unredacted Statement's unfettered release will expose reams of financial information, otherwise kept secret and potentially crucial to Defendants' future business endeavors, to the world entire.

Plaintiff's Response offered several counterpoints. In it, Plaintiff not only con-tended that Defendants were rehashing arguments "already considered and rejected" by the Court but also described Defendants' arguments as "diversionary" and "irrelevant." Necessity, Plaintiff notes, is not a requirement for de-designation, and public access to the contested information was not the exclusive basis for the De-Designation Order. In Plaintiff's telling, "Defendants have failed completely to satisfy the requirements for reconsideration."


A. Legal Standard

The Federal Rules of Civil Procedure[7] do not formally recognize the existence of motions for reconsideration. Van Skiver v. United States, 952 F.2d 1241, 1243 (10th Cir. 1991), cert. denied, 506 U.S. 828, 113 S.Ct. 89, 121 L.Ed.2d 51 (1992); Lavespere v. Niagra Mach. & Tool Works, Inc., 910 F.2d 167, 173 (5th Cir. 1990), cert. denied, 510 U.S. 859, 114 S.Ct. 171, 126 L.Ed.2d 131 (1993). Nonetheless, as a matter of standard practice, courts consider such motions under either Rule 60(b) or Rule 59(e). Computerized Thermal Imaging, Inc. v. Bloomberg, L.P., 312 F.3d 1292, 1296 n.3 (10th Cir. 2002). If filed within ten days of the order's entry, it is treated as a motion to alter or amend the judgment under Rule 59(e). Am. Ironworks & Erectors, Inc. v. N. Am. Constr. Corp., 248 F.3d 892, 898-99 (9th Cir. 2001) (partly relying on United States v. Nutri-Cology, Inc., 892 F.2d 394, 397 (9th Cir. 1992)); see also, e.g., Perez-Perez v. Popular Leasing Rental, Inc., 993 F.2d 281, 284 (1st Cir. 1992); Feather v. Chevron U.S.A., 141 F.3d 264, 268 (6th Cir. 1998). Because Defendants submitted the Motion for Reconsideration on October 16, 2014, and thus within ten days of the De-Designation Order's issuance, the Court must apply the standard set forth in Rule 59(e).[8]

Per binding precedent, a motion for reconsideration shall be granted if at least one of four circumstances is shown. A court (1) is presented with newly discovered evidence or (2) has committed clear error. Circuit City Stores, Inc. v. Mantor, 417 F.3d 1060, 1064 n.1 (9th Cir. 2005) (quoting Sch. Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993), cert. denied, 512 U.S. 1236, 114 S.Ct. 2742, 129 L.Ed.2d 861 (1994)). Additionally, (3) if the initial decision was manifestly unjust, reconsideration is merited. United Nat'l Ins. Co. v. Spectrum Worldwide, Inc., 555 F.3d 772, 780 (9th Cir. 2009) (quoting Zimmerman v. City of Oakland, 255 F.3d 734, 740 (9th Cir. 2001)). Lastly, (4) change in controlling law also justifies reconsideration. 39 Orange St. Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999). Other "highly unusual circumstances" may also justify reconsideration.[9] Sch. Dist. No. 1J, 5 F.3d at 1263; Lemley v. Colvin, No. 2:13-CV-0299, 2014 U.S. Dist. LEXIS 72097, at *3-4, 2014 WL 2196663, at *1 (E.D. Wash. May 27, 2014) (summarizing Ninth Circuit case law). Any such further inquiry must account for the fact that "a motion for reconsideration is an extraordinary remedy, to be used sparingly in the interest of finality and conservation of judicial resources." Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 1993) (internal quotation marks and citation omitted); cf. Messenger v. Anderson, 225 U.S. 436, 444, 32 S.Ct. 739, 740, 56 L.Ed. 1152 (1912) ("[T]he practice of courts [is] generally to refuse to reopen what has been decided....").

With equal clarity, the courts have recognized as invalid a number of different grounds often propounded by litigants in reconsideration motions. Such motions may not be used "to raise arguments or present evidence for the first time when they could reasonably have been raised earlier in the litigation." Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000); see also, e.g., Waltman v. Int'l Paper Co., 875 F.2d 468, 473-75 (5th Cir. 1989). More simply stated, old arguments should not be rehashed, Resolution Trust Corp. v. Holmes, 846 F.Supp. 1310, 1316 & n.18 (S.D. Tex. 1994) (collecting cases), and an "unhappy litigant" cannot enjoy "one additional chance to sway the judge, " Durkin v. Taylor, 444 F.Supp. 879, 889 (E.D. Va. 1977). Rule 59(e) requires something new and decisive, some blatant injustice, or an obvious error, not substantively identical assertions repeated and repackaged. Backlund v. Barnhart, 778 F.2d 1386, 1388 (9th Cir. 1985); accord, e.g., Frasure v. United States, 256 F.Supp.2d 1180, 1183 (D. Nev. 2003); Fogel v. Chestnutt, 668 F.2d 100, 109 (2d Cir. 1981), cert. denied, 459 U.S. 828, 103 S.Ct. 65, 74 L.Ed.2d 66 (1982).

B. Analysis

Generally, with one exception, the Motion for Reconsideration enumerates reasons untenable based on this ...

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