United States District Court, S.D. Florida
BRANDON LEIDEL, individually and on behalf of All Others Similarly Situated, Plaintiff,
COINBASE, INC., a Delaware corporation d/b/a Global Digital Asset Exchange GDAX, Defendant.
ORDER DENYING WITHOUT PREJUDICE PLAINTIFF'S
MOTION FOR PROTECTIVE ORDER [DE 791]
WILLIAM MATTHEWMAN UNITED STATES MAGISTRATE JUDGE
CAUSE is before the Court upon Plaintiff, Brandon
Leidel's ("Plaintiff) Motion for Protective Order to
Prohibit Defendant from Communicating with or Seeking
Discovery from Absent Class Members ("Motion") [DE
79]. This matter was referred to the undersigned by United
States District Judge Kenneth A. Marra. See DE 26.
Defendant, Coinbase, Inc. ("Defendant"), filed a
response [DE 80], Plaintiff filed a reply [DE 82], and the
parties filed a Joint Notice [DE 85] as required by the
Court. The Court held a hearing on the Motion on June 14,
2019. The Court also provided the parties with an opportunity
to provide supplemental authority after the hearing.
Defendant made no submission. Plaintiff filed a Notice of
Filing Supplemental Authority [DE 94], which contained
quotations from or summaries of five different cases. The
Court has carefully reviewed the entire docket in this case,
and the matter is now ripe for review.
Motion, Plaintiff argues that Federal Rule of Civil Procedure
23 provides the Court with broad authority to regulate
communications between defendants and class members prior to
class certification. [DE 79, p. 3');">p. 3]. Plaintiff specifically
seeks a protective order prohibiting Defendant from
communicating with absent class members without first
conferring with Plaintiff about the content of such
communications, and, if the parties cannot agree on such
communications, seeking leave of the Court to initiate such
communications upon approval of the proposed communications.
Id. at p. 6.
response, Defendant cites Gulf Oil v. Bernard, 452
U.S. 89 (1981), and asserts that the law on pre-certification
contact with members of the putative class is that "when
there is evidence in the record that would support a finding
of actual or threatened abusive or misleading communication
by any party...the Court may prohibit or impose conditions on
future contact." [DE 80, p. 3');">p. 3]. According to Defendant,
Plaintiff has not made the requisite evidentiary showing.
Id. Defendant asserts that there is no basis to
grant Plaintiffs requests that Defendant be required to
produce copies of all communications to and from absent class
members or that Defendant be prohibited from using any
information it has or will obtain from absent class members.
Id. at p. 6.
points out that Defendant waited until the end of the
discovery period to request discovery from Plaintiff about
the identity of absent class members, "which effectively
precludes Plaintiff from then seeking any communications sent
by Defendant to class members and remedying any potential
harm that might occur." [DE 82, p. 2');">p. 2]. According to
Plaintiff, he could not have requested through written
discovery information about Defendant's prior or intended
future communications with the absent class since the
deadline for propounding written discovery elapsed on April
19, 2019. Id. at p. 3');">p. 3. Plaintiff contends that,
because it cannot seek additional discovery, and because
Defendant will not agree to share its communications with
absent class members, Plaintiff cannot determine if Defendant
has or will engage in a misleading or otherwise inappropriate
communication with absent class members. Id.
Plaintiff maintains that discovery upon an absent class is
only authorized in exceptional circumstances. Id. at
p. 4. Finally, Plaintiff contends that the Court should
"reject Defendant's suggestion that an order from
this Court prohibiting or limiting Defendant's
communication with absent class members should apply equally
to Plaintiff." Id. at p. 5.
parties' Joint Notice, Defendant disclosed that it has
had contact with four putative class members. [DE 85, p. 2');">p. 2].
According to Defendant, those four individuals consist of
three former Cryptsy employees and one former employee of
Defendant, and Defendant only communicated with them
regarding their depositions. Id. Additionally, in
the Joint Notice, Defendant agreed not to use information
produced by Plaintiff to communicate with or seek discovery
from putative class members. Id. at p. 1.
Supreme Court has considered protective orders in the context
of class actions and has ruled as follows:
An order limiting communications between parties and
potential class members should be based on a clear record and
specific findings that reflect a weighing of the need for a
limitation and the potential interference with the rights of
the parties. Only such a determination can ensure that the
court is furthering, rather than hindering, the policies
embodied in the Federal Rules of Civil Procedure, especially
Rule 23. In addition, such a weighing-identifying the
potential abuses being addressed-should result in a carefully
drawn order that limits speech as little as possible,
consistent with the rights of the parties under the
Gulf Oil Co. v. Bernard, 452 U.S. 89, 101-02 (1981).
The Supreme Court further explained
But the mere possibility of abuses does not justify routine
adoption of a communications ban that interferes with the
formation of a class or the prosecution of a class action in
accordance with the Rules. There certainly is no
justification for adopting verbatim the form of order
recommended by the Manual for Complex Litigation, in the
absence of a clear record and specific findings of need.
Other, less burdensome remedies may be appropriate. Indeed,
in many cases there will be no problem requiring remedies at
Gulf Oil Co., 452 at 104.
Jones v. Jeld-Wen, Inc.,
250 F.R.D. 554 (S.D. Fla.
2008), a case from the Southern District of Florida, is
particularly instructive in applying the above law. In
Jones, the plaintiff sought court supervision of
communications between the defendant and the putative class
members. Id. at 558. The court explained that
"a two-pronged test must be met before a court may
restrict communication. First, a communication must have
occurred or be threatened to occur. Next, the form of
communication at issue must be abusive in that 'it
threatens the proper functioning of the
litigation.'" Id. at 561 ...