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Brave Law Firm, LLC v. Truck Accident Lawyers Group, Inc.

United States District Court, D. Kansas

August 8, 2019

BRAVE LAW FIRM, LLC, Plaintiff,
v.
TRUCK ACCIDENT LAWYERS GROUP, INC., et al., Defendants.

          ORDER

          JAMES P. O.'HARA U.S. MAGISTRATE JUDGE

         This case involves a bitter fight between two competing plaintiffs' personal-injury lawyers in Wichita. Plaintiff Brave Law Firm, LLC (“Brave”), owned and operated by Stephen L. Brave, sued defendants Truck Accident Lawyers Group, Inc. (“TALG”), Brad Pistotnik Law, P.A. (“BPL”), and attorney Bradley A. Pistotnik (“Pistotnik”), asserting claims under the Lanham Act and Kansas state law based on allegations of false and deceptive advertising. Specifically, Brave alleges defendants advertised achieving gross recoveries for past clients that never actually happened. Stephen L. Brave represents his law firm in this case; defendants are represented by independent counsel.

         A dispute has arisen between the parties over whether Brave may discover documents related to a confidential settlement agreement defendants advertised as having obtained for a client. The parties have filed a joint motion (ECF No. 80) asking the court to resolve the dispute, with Brave moving to compel production of the documents and defendants moving for a protective order allowing them to withhold the documents. For the reasons discussed below, Brave's motion to compel is granted in part and denied in part, and defendants' motion for a protective order allowing complete withholding is denied. The court does, however, enter a more limited protective order governing disclosure of the documents.

         Background

         Brave is a law firm located in Wichita, Kansas, that offers legal services in the nature of personal-injury work. Pistotnik is an attorney who offers competing legal services in the same geographic area. Pistotnik previously practiced law with his brother Brian until they parted ways in 2014 and Pistotnik opened the law firm BPL. TALG is the marketing and advertising arm of BPL and is wholly owned and operated by Pistotnik.

         Brave alleges that from 2007 to at least 2017, defendants created and disseminated false and misleading advertisements regarding the amount of money Pistotnik obtained in settlements and jury verdicts for clients. At issue in the current dispute is an advertisement run by defendants stating Pistotnik obtained a settlement of $9 million for a past client.[1]Brave alleges in this lawsuit that Pistotnik did not actually obtained the $9 million recovery because he was fired by the client before the settlement was reached (by new counsel).[2]Defendants answer that, in fact, Pistotnik and his co-counsel, David Hart, did obtain the settlement.[3]

         On May 31, 2019, Brave served its first request for production of documents, [4] to which defendants responded with objections on July 1, 2019.[5] Brave now moves the court to compel defendants' full responses to seven of the requests. Defendants make a cross-motion for a protective order allowing responsive documents to be withheld. The court will address the requests in turn.

         The Settlement Agreement (Request Nos. 6 and 7)

         Brave first seeks a complete copy of the release or other settlement document that defendants allegedly obtained. Defendants respond that they are ethically bound not to produce the document of their former client and that the agreement itself prohibits its disclosure. Defendants assert a protective order should issue because the settlement involved the confidential information of nonparties and Brave should not be permitted to invade the attorney-client relationship of Pistotnik, a competitor.

         No one seriously disputes that the settlement agreement exists, that the settlement amount was either $9 million or $9.5 million, [6] and that the settlement agreement contains a confidentiality and nondisclosure clause prohibiting disclosure of the terms of settlement.[7] The only fact in dispute is whether Pistotnik was significantly involved in obtaining the settlement. The settlement agreement could shed light on this question. If, for example, the agreement allocates proceeds to various attorneys or includes attorney signatures, such information would be relevant to the question at hand. Similarly, the settlement agreement almost surely identifies Pistotnik's former client who likely can provide information about Pistotnik's participation in negotiating the settlement and the conspiracy alleged in this case.

         Relevant information is discoverable unless it is privileged, not proportional to the needs of the case, or the court enters a protective order under the standards of Fed.R.Civ.P. 26(c).[8] Defendants did not assert relevance, proportionality, or privilege objections in their responses to Request Nos. 6 and 7. Thus, the court finds the settlement agreement is discoverable unless the standards for a protective order are satisfied here.

         Rule 26(c) provides that upon a showing of good cause, a court may “issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” The court has broad discretion to decide when a protective order is appropriate and what degree of protection is required.[9] The party seeking a protective order has the burden to demonstrate good cause.[10] In determining whether good cause exists, “the initial inquiry is whether the moving party has shown that disclosure of the information will result in a ‘clearly defined and serious injury.'”[11] The moving party must show “a particular and specific demonstration of fact, as distinguished from stereotyped and conclusory statements.”[12]

         Defendants' first argument for the entry of a protective order forbidding discovery of the settlement agreement is that the terms of the agreement itself require confidentiality and nondisclosure. Tellingly, defendants cite no Tenth Circuit or District of Kansas caselaw in support of their position. “The caselaw in this District is well settled that confidentiality does not act as a bar to discovery and is not grounds to withhold documents or information from discovery.”[13] In addressing an argument that a party was contractually barred from disclosing a settlement agreement, this court in Sonnino v. Univ. of Kan. Hosp. Auth. ruled, “Although a settlement agreement contains a confidentiality provision, litigants cannot shield otherwise discoverable information from disclosure to others by agreeing to maintain its confidentiality, and cannot modify the Federal Rules of Civil Procedure by agreement.”[14] To be sure, judges in this district do protect confidential settlement agreements of nonparties by entering protective orders prohibiting their disclosure outside of the litigation, but they refuse to accept confidentiality as a basis for completely withholding discovery.[15] Thus, the court rejects confidentiality as a basis to protect the settlement agreements from production to Brave. However, as mentioned above and as set out further below, the court does address defendants' confidentiality concerns by enter a protective order limiting disclosure of documents.

         Defendants next assert “the strong public policy in favor of settling claims will be impaired if confidential settlements cannot remain confidential.”[16] They contend further that the open and frank communication between attorneys and clients will be impaired if the court finds the settlement agreement discoverable. Again, defendants cite no Tenth Circuit or District of Kansas law to support their argument. Our court has ruled, “production of completed settlement or separation agreements does not so impact public policy issues as to justify their nonproduction. . . .”[17] Defendants have not addressed this ruling. Moreover, the court again notes the attorney-client privilege is not at issue here, as defendants did not assert such privilege in their discovery responses or in the briefs to the instant motion. Finally, a protective order limiting disclosure of information in the settlement agreement outside this lawsuit should alleviate defendants' confidentiality concerns.

         Third, defendants vaguely suggest the settling plaintiffs, Pistotnik's clients, could be subject to a breach-of-contract claim if defendants produce the settlement agreement. A similar argument was rejected in Gifford v. Precision Pallet, Inc., in which the court found that if the settlement agreement did in fact have a provision that would penalize a party for disclosing information in accordance with a validly obtained court order, such provision likely would be unenforceable.[18] The undersigned agrees with this reasoning and finds it highly unlikely the clients would be harmed if the settlement agreement is produced as a result of this order.[19]

         Fourth, defendants assert Pistotnik will be “damaged” if he is forced to produce the settlement agreement because a false signal would be sent “to the public and potential clients that [he] is incapable of confidentially settling a personal injury lawsuit.”[20] This general fear, unsupported by any specific information or facts, is insufficient to meet the “good cause” standard for the entry of a protective order.[21] Defendants' statement in a section heading that Pistotnik and his former client “will suffer serious injury, ”[22] without elaboration of the unnamed injury, suffers from the same defect.[23] In any event, the court is unpersuaded that a protective order limiting use and disclosure of the settlement agreement to this lawsuit would not sufficiently protect Pistotnik and his former client from all injury. It's true that defendants have presented evidence indicating Brave admitted to disclosing Pistotnik's deposition transcript to persons outside the protective order entered in a related state case, [24] but the court has witnessed no misconduct in this federal case. Should Brave (or anyone else) violate an order of this court, rest assured the court will act swiftly and mercilessly in holding that party in contempt.

         Finally, defendants ask the court to enter a protective order on the basis that Pistotnik would violate Rule 1.6 of the Kansas Rules of Professional Conduct (“KRPC”) if he produced the settlement agreement.[25] KRPC 1.6 generally prohibits a lawyer from revealing “information relating to representation of a client.” Significantly, however, the rule contains an exception that the lawyer “may reveal such information to the extent the lawyer reasonably believes it necessary . . . to comply with other law or a court order.”[26]Thus, Pistotnik will be protected from ethical concerns by this order requiring disclosure.[27]

         In the end, the parties agree that whether Pistotnik played a significant role in obtaining the settlement which defendants advertised lies at the heart of this case. Fairness requires allowing Brave access to information critical to this issue, and Brave's motion to compel is granted in this regard. Defendants' confidentiality concerns can be addressed by a protective order, discussed below, limiting the use and disclosure of the settlement agreement for the purposes of prosecuting or defending this lawsuit. Defendants have not met their burden of demonstrating good cause for the entry of a protective order that would allow them to completely withhold the settlement agreement from discovery; their motion for protective order is denied in this regard.

         Documents Related to Settlement Funds Received (Request No. 8)

         Brave also requested documents “proving” defendants “received and/or deposited funds received in connection with the alleged $9, 500, 000 settlement.”[28] The court finds this request relevant to the issue of how much involvement Pistotnik had in securing the settlement. The amount he was paid in connection with the settlement arguably could be an indicator of the level of work he provided. Defendants did not assert privilege objections. Rather, defendants withheld responsive documents on the same basis as the settlement agreement: that the confidentiality provision of the settlement agreement and KRPC 1.6 prohibit disclosure, and the privacy rights of nonparties would be invaded.[29]The objections are overruled for the same reasons set out above regarding production of the settlement agreement. The interests of nonparties will be protected by the protective order limiting disclosure. Brave's motion to compel is granted as to Request No. 8.

         Copy of Lien Asserted Against Client in the Case Settled (Request No. 9)

         Request No. 9 seeks copies of any lien defendants asserted against the client in the case that was settled. Defendants responded that they would be ethically prohibited from producing such a lien but, in any event, “no such lien was ever filed.”[30] The court cannot order produced something that does not exist. Brave's motion to compel therefore is denied as to this request. Of course, should Brave later obtain evidence to support his contention that defendants “are playing games” in their response and a lien does exist (i.e., was “asserted” in any way, even if not technically filed in some government office), Brave may seek sanctions at that time (which the court almost certainly would impose).

         Pistotnik's Communications with the Disciplinary Administrator (Request Nos. 2 and 3)

         In connection with Brave's contention that Pistotnik has falsely advertised the $9 million settlement, Brave filed an ethics complaint with the Kansas Office of Disciplinary Administration. Document Request Nos. 2 and 3 seek copies of all documents in defendants' possession that defendants received from or sent to any source regarding the ethics case. Defendants objected to providing any documents on the bases that the requests encompass documents subject to the attorney-client privilege and/or the work-product doctrine, and that the information sought was private and confidential and could not be disclosed under Kansas Supreme Court Rule 222. In his motion to compel, Brave does not challenge defendants' privilege assertions, [31] but states he is seeking non-privileged documents responsive to his requests. With respect to those documents, Brave asks the court to overrule defendants' Rule 222-based objection.

         Rule 222 states:

(a) Confidentiality. All complaints, investigations, reports, correspondence, proceedings, and records of the disciplinary administrator and the Kansas Board for Discipline of Attorneys are private and confidential and must not be divulged in whole or in part except as provided in subsections (d), (e), and (f) below or by order of the Supreme Court.
(b) Complainant and Respondent. This rule does not prohibit . . . the respondent from . . . disclosing any documents or correspondence filed by, served on, or provided to that person.

         Brave argues Rule 222(a), by its express terms, applies only to the disciplinary administrator and the Kansas Board for Discipline of Attorneys, not to defendants. The court agrees. The exceptions listed in Rule 222(a)-those included in subsections (d), (e), and (f)-all discuss when “the disciplinary administrator may disclose” information, thus indicating subsection (a) applies only to the state agencies. Rule 222(b) applies on its face to Pistotnik as the “respondent” to the ethics complaint and permits him to disclose the information Brave seeks in discovery. Accordingly, the court ...


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