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•10855712*
NANCY E. O'MALLEYDistrict Attorney of Alameda CountyMATTHEW BELTRAMO, SBN 184796Deputy District Attorney7677 Oakport Drive, Suite 650Oakland, California 94621-1934Telephone: (510) 383-8600Facsimile: (510) 383-8615e-mail: Matthew. l>eltratno(a),acgov. org
JEFF F. ROSENDistrict Attorney of Santa Clara CountyTINA NUNES OBER, SBN 162750Deputy District Attorney70 West Hedding Street, West WingSan Jose, California 95110Telephone: (408) 792-2598Facsimile: (408) 299-8440e-mail: [email protected]
Attorneys for Plaintiff,The People of the State of California
F I L E DALAMEDA COUNTY
O C T 1 9 2012CLERK OF THE SUPERIOR COURT
PEOPLE OF THE STATE OF CALIFORNIA,
Plaintiff,
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF ALAMEDA
) CaseNo.:RG10-546833
vs.
OVERSTOCK..COM, INC. et al.
Defendants.
ASSIGNED FOR ALL PURPOSES TO THEHONORABLE JUDGE WYNNE CARV1LLDEPARTMENT 21
PLAINTIFF'S OPPOSITION TODEFENDANT'S MOTION FOR PROTECTIVEORDER; MEMORANDUM OF POINTS ANDAUTHORITIES; DECLARATION INSUPPORT
Hearing Date:Time:Dept.:ReservationTrial Date:Date of First Fi l ing:
November 1, 20128:30 a.m.21No. 1324313September 9, 2013November 17, 2010
People's Response to Dercndant's Motion for Protcclivc Order, H RGIO-54'5833-
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I. INTRODUCTION
Throughout this litigation, Defendant Overstock.com, Inc., ("Defendant" or "Overstock") has
belittled the People's case on the grounds that it is allegedly based on "one consumer complaint" (regarding
the comparison pricing of a patio set sold to a consumer in Shasta County). Now, in a stunning reversal,
Overstock acknowledges that there are apparently a multitude of other consumers who voiced the same or
similar complaints, while simultaneously attempting to keep these witnesses1 contact information a secret
on the grounds that revealing their identities would lead to a "parade of customers as witnesses" or
otherwise result in a privacy rights violation. Overstock's attempt to have its cake and eat it too, should be
rejected.
Moreover, this is now the second time in this case that Overstock has tried to prevent the People
from obtaining basic contact information for potential witnesses. The first involved former employees and
implicated virtually the same set of issues involved in thin motion. This Court rejected Overstock's efforts
to withhold identifying information then, and it should do so again. The disclosure of contact information
of complaining consumers- like the contact information of former employees - "is a routine and essential
pan of pretrial discovery" (Crab Addison, Inc. v. Superior Court (2008) 169 Cal. App. 4th 958, 966) that
should be upheld in this case.'
II. STATEMENT OF FACTS
This is a law enforcement action brought by the People of the State of California under Business
and Professions Code sections 17200 and 17500. Defendant is an internet retailer. For many of the
products advertised on its web site, Defendant includes a comparison price that purportedly represents the
price at which the item in question can be purchased from other merchants.
The Complaint alleges, among other things, tlmt Defendant routinely and systematically made
untrue and misleading advertising claims regarding these comparison prices. More specifically, it alleges
that Defendant set misleading comparison prices by, for example: fai l ing to ascertain the prices at which
1 In addition, this is actually the second Motion for a Protective Order brought by Overstock with respect to the Third Set ofInterrogatories. In the first, it sought to l imit the number ofinlcrrogatoiies to which it was required to respond. The Court effective!}denied this Motion on January 31, 2012, rejecting Overstock's refusal to answer all the interrogatories and criticizing Overstock'smethod of voluntarily selecting those interrogatories which it had answered to that point. See Declaration of Tina Nunes Ober 1)4,Ex. A (People v. Overstock (Docket #10546833) January 31, 2012 Order).
i of nPeople's Response to Defendant's Motion for Protective Order, ft RGIO-5-((i833-
other merchants were actually selling the items in question; adopting the highest sales price at which other1
merchants were selling the items in question; and when: no comparable items were being sold by other2
merchants, creating a fictitious comparison price through the use of mathematical pricing formulas. As a
result of this conduct, California consumers were misled into believing that purchasing a product from
Overstock would result in an inflated amount of savings.
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Nos. 159, 192, and 226), the term "IDENTIFY" being defined to require Overstock to "provide the name,
Overstock to "IDENTIFY" the customers who made such complaints (see, e.g., id (Special Interrogatory
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The People's Third Set of Interrogatories was served on August 18, 2011. (See Declaration of
Dane Reinstedt in Support of Overstock's Motion (hereinafter "Rcinstedt Dec.")K3.) Among other things,
the Third Set requests information relating to customer complaints and inquiries regarding Overstock's
comparison pricing practices in general (see, e.g., Reinstedt Dec. ^]3, Ex. 1 (Special Interrogatory Nos. 159-
168)) and specifically its use of the terms "List Price" (;re<? id. (Special Interrogatory Nos. 192-201)) and
"Compare at." (See id (Special Interrogatory Nos. 226-235).) These interrogatories specifically call upon
14and the last known mai l ing address, e-mail address, and phone number of the PERSON in question." (Id.)
15Approximately one month later, the People served their First Request for Production of Documents
16and Things ("RFP") on Defendant. See Reinstedt Dec. ^Jl.O, Ex. 5. The RFP includes a number of requests
17that require Defendant to produce documents regarding the consumer complaints it received with respect
18to: comparison pricing, the use of the terms "List Price" and "Compare at", the use of certain related
19hyperlinks and the patio set that is at the center of this action. See Reinstedt Dec., Ex. 5 (RFP 34-35, 40-41,
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46-47, 77, and 102-103).21
Judging from Overstock's current filing and previous communications between the parties, a
number of such complaints apparently exist in Overstock's databases. Overstock has agreed to provide the
People with the substance of each complaint in spreadsheet format and any accompanying email
correspondence, but has refused to provide the People with the identifying information of the complaining
witnesses themselves. (See Reinstedt Dec. HI 6, Ex. 10 at 2 (email from counsel for Overstock: "We're not
inclined to provide identifying information.")) Following this refusal, the People sent Overstock's
Page 2 of 10People's Response to Defendant's Motion for Proiective OrJcr, tl RG10-546833-
attorneys a two-page, single-spaced meet and confer email, detailing the legal reasons that supported theI
discovery request. (See id., at 1-2.) Overstock has steadfastly refused to provide this information.2
This is not the first time Overstock has refused to comply with basic discovery requests seeking
contact information of potential witnesses. In a previous set of discovery of interrogatories, the People had
requested contact information regarding former Overstock employees who had a role in setting comparison
prices or who worked as Overstock buyers. (See Declaration of Tina Nunes Ober ("Nunes Ober Dec.") ^|5,
Ex. B (People v. Overstock (Docket #RG10546833), May 17, 2011, Order Granting People's Motion to
Compel.)) Overstock refused to supply current contacl information for these individuals, asserting the
same privacy rights arguments it now raises. (See id) Following a hearing, the Court granted the People's
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the privacy interests that these persons have in this information." (Id.) (emphasis added.)
former employees, all of whom may be fairly characterized as potential witnesses in this case, outweighs
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Motion to Compel, finding that "the importance to Plaintiff of obtaining contact information of Defendant's
The issue now facing the court is virtually identical to the one it was forced to decide last year.
14The consumers who complained to Overstock - l ike Overstock's former employees - are potential
15witnesses to the deceptiveness of its comparison pricing practices. These individuals likely have first-hand
16knowledge of specific instances when Overstock's comparison prices were misleading or simply incorrect,
17as well as the methods used by Overstock to redress these: errors. This information is relevant and material
18to prove disputed facts of consequence to the determination of this action and, at the very least, is
19calculated to lead to other admissible evidence. This Court should (again) compel Overstock to supply the
20requested information.
III. MEMORANDUM OF POINTS AND AUTHORITIES
A. Identifying Information re: Potential Percipient Witnesses is Discoverable
24 Under Code of Civil Procedure section 2017.010, the People are statutorily entitled to witness
contact information.3 Section 2017.010 provides that "Discovery may be obtained of the identity and
location of persons having knowledge of any discoverable matter..."
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28 Though interestingly, Overstock has provided the People with the names and contact information for California consumers \vhopurchased the same palio set that was the subject of the Shasta County complaint. (See Declaration of Tina Nunes Ober 1J 3.)
Page 3 of 10
People's Response to Defendant's Motion for Protective Order, U RG10-54>S833-
discovery. [Citation.} ... Indeed, our discovery system is founded on the understanding thatparties use discovery to obtain names and contact information for possible witnesses as the
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In Crab Addison, Inc. v. Superior Court (2008) 169 Cal. App. 4th 958, 966, a class action suit in
which a dispute arose concerning disclosure of employees' contact information, the court stated:
Central to the discovery process is the identification of potential witnesses. The disclosure ofthe names and addresses of potential witnesses is a routine and essential part of pretrial
starting point for further investigations.
(Id; citing Puerto v. Superior Court (2008) 158 Cal.App.4th 1242, 1249-1250.)
"One glance at the form interrogatories approved by the Judicial Council, particularly the
interrogatories in the 12.0 series, demonstrates how fundamentally routine the discovery of witness contact
information is." (Puerto, supra, at 1250.) Address and telephone information, while personal, "is not
particularly sensitive, as it is merely contact information, not medical or financial details, political
affiliations, sexual relationships, or personnel information. [Citations.] This is basic c iv i l discovery."
(Puerto, supra, at 1253-1254.) Likewise, date of birth information is considered "demographic." As such,
"...[w]hile demographic data is personal information, it is hardly sensitive information." (Cecile Alch el al
14v. The Superior Court of Los Angeles County (2008) \6t> Cal,App.4n 1412, 1435, citing Puerto, .supra, at
151253.)
16Now, Overstock argues that all i nd iv idua l complaints are irrelevant since Business and
17Professions Code section 17500 deals with an objective standard and posits a "parade" of consumer
18witnesses who might be called to testify at trial. Setting aside the stark contrast between this
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argument and Overstock's previous (and oft-repeated) assertion that this case is based on a "single20
consumer" complaint (see Reinstedt Dec., Par. 17, Ex. 1 I , at 4), the argument itself is misleading.21
Although evidence of individual deception is not necessary in a public prosecution under this
section, this is a far cry from saying such evidence is irrelevant. More importantly, given that the
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3 As a procedural matter. Defendant failed to object on privacy grounds to the specific interrogatories at issue in this motion. SeeReinstedt Dec. U9, Ex. 4 at 70-82, 88-100, and 104-116. Despite Overstock's claim to the contrary, the Code of Civil Procedurerequires that "[e]ach objection must be stated separately (no objection;: to entire set), and must bear the same number or letter as iheinterrogatory to which it is directed. [CCP § 2030.210{a)(3)] Objections must be specific. A motion to compel lies where objectionsare'too general.'" Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Ruttcr Group 2012)^ 8:1071. Tellingly,although Overstock did specifically include a privacy rights objection 10 other interrogatories (see, e.g., Reinstedt Dec. ^9, Ex. 4, at44-45 (Interrogatory #126), it did not voice such an objection with rested to the interrogatories al issue here. This omissionconstitutes a waiver and provides a separate basis for denying this mot on, at least wilh respect to the interrogatories.
Pugc4of 10
People's Response to Defendant's Motion for Protective Order, # RG10-5-16833-
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parties are at the discovery phase of this case, it cannot reasonably be said that discovery of these
witnesses' contact information is not reasonably calculated to lead to other potentially admissible
and relevant evidence. The quantity and consistency of the comparison pricing complaints is
extremely probative as to whether a reasonable consumer would be misled. Furthermore, if there
are consumers who have actually been mislead or deceived by Overstock's comparison pricing, it
would tend to prove that the reasonable consumer would likely be deceived as well. These
determinations require investigation, which requires Overstock to provide the People with personal
contact information.
9 B . Overstock Fails To Meet Three Part Test Necessary To Establish PrivacyI n te resist he C ourt Is Not Required To Undergo Balancing Test
10While Article I, Section 1, of the California Constitution recognizes an individual 's right to privacy,
11that right is not absolute. The interplay between privacy rights and discovery rights was examined by the
California Supreme Court in Pioneer Electronics (USA). Inc. v. Superior Court (2007) 40 Cal.4th 360, 370.
There, the Court applied the following three-part test to determine whether a cognizable privacy right hasI ̂
been asserted: (1) the party on whose behalf a privacy claim is asserted must have a legally recognized
privacy interest; (2) the expectation of privacy must be reasonable under the particular circumstances; and
(3) "the invasion of privacy complained of must be 'serious' in nature, scope, and actual or potential impact
to constitute an 'egregious' breach of social norms, for tr ivial invasions afford no cause of action."
(Pioneer, supra, at 370-371, quoting Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, at 37.)
If the three-part test is satisfied, the asserted privacy interest must then be measured against other
competing or countervailing interests in a "balancing test." (Pioneer, supra, at 371, quoting Hill, supra, at
22 37.)
23 1. Disclosure of Witness Contact Information Docs Not Implicate Privacy Rights
24Under Puerto, supra, and Cecils Alch, supra, while information such as addresses and telephone
25numbers might be "personal" and dates of birth "demographic," such information is "hardly sensitive."
26Rather, it is "basic civil discovery." (Puerto, supra, at 1253-1254; Cecils Alch, supra, at 1435.)
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Page 5 of I'D
People's Response to Defendant's Motion for Protective Order, tt RG 10-5<lli833-
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Overstock cannot meet the first element of the three-part test, since no legally protected privacy interest
exists with respect to witness contact information.
Overstock attempts to distinguish this case from every other privacy rights case on the grounds that
its customers have a right to keep the government from learning about their individual buying habits.
Citing Amazon.com LLC v. Lay (W.D. Wash. 2010) 758 F.Supp.2d 1154, Overstock asserts that the
protections of the First Amendment extend to the disclosure of purchasing decisions being turned over to
the government. In Amazon.com, the North Carolina Department of Revenue sought customer contact and
purchase information to calculate Amazon's potential tax liability. (Id. at 1169.) Amazon had already
provided all of the data necessary to determining its tax liability, and the Department of Revenue conceded
that it had no legitimate need or use for having details as to North Carolina Amazon customers' literary,
music, and film purchases. (Id.} Under these circumstances, the court held that the Department of
12 Revenue's request was overbroad in violation of the First Amendment. (Id.} The government received
identifying information and product purchase history for every Amazon customer residing in North
14 - ,.Carolina.
15In this case, by contrast, the People do not seek Defendant's entire California customer list nor
16their entire product purchase history. The People are seeking specific and limited information for a subset
17of Overstock customers who made specific complaints. Moreover, it is inconsistent at best that Overstock
18seeks to protect the identity of these complaining customers while it previously revealed the contact
19information of California customers who purchased the patio set at issue in this case. It defies reason that
20the customers who made no complaints do not deserve privacy protection while those who took the
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affirmative steps to complain are deserving of protection.
Here, the People's discovery requests are not simply to learn about consumers' buying habits for
some unauthorized reason or "big brother" impulse; instead, the People are seeking to learn about
consumers who have complained about the very things (hat are at the center of this lawsuit, comparison
pricing and the use of comparison pricing terminology. The Amazon.com customers merely completed an
online purchase. In contrast, the Overstock customers whose contact information the People seek have
self-identified as potential witnesses by lodging complaints about Overstock's comparison pricing policy.
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People's Response to Defendant's Motion for Protective Order, # RG 10-54(1833-
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As discussed below, if anything, these consumers could reasonably expect that their grievances would be
heard and addressed by Overstock and the consumer protection agencies to which it is responsible.
2. There is No Reasonable Expectation of Privacy of Witness Contact Information
In Pioneer, supra, California Supreme Court addressed the extent to which California's right to
privacy provision (Cal. Const., art. I, § 1) protects purchasers from having their identifying information
disclosed to the plaintiff during civil discovery proceedings in a consumers' rights class action against the
seller. (Id. at p. 363.) In Pioneer^ purchasers of possibly defective DVD players communicated with
Pioneer, expressing their discontent and relating their identifying information (names, addresses, etc.). The
named plaintiff in the class action requested this contact information from the seller to facilitate
communication with potential class members. Pioneer produced redacted documents relating to complaints
it received from approximately 700 to 800 consumers regarding the DVD players. The Plaintiff moved to
12 compel Pioneer to provide unredacted copies of any consumer complaints it had received about the
allegedly defective DVD players. The motion also as'ted Pioneer to disclose the names and contact
14information (addresses and telephone numbers) of each complainant. Pioneer refused to comply, citing
15Cal. Const., art. I, § 1, and asserting a right of privacy on behalf of these purchasers. The Court found that
16customers who file complaints against a company have no expectation that those complaints will be kept
17confidential, noting:
18it seems unl ikely that these customers, having already voluntarily disclosed theiridentifying information to that company in the hope of obtaining some form of relief,would have a reasonable expectation that such information would be kept private andwithheld from a class action plaintiff who possibly seeks similar relief... If anything, thesecomplainants might reasonably expect, and even hope, that their names and addresseswould be given to any such class action plaintiff.
22 (Id. at p. 372 (emphasis added).)
23 The same rationale applies here. Consumers who complained about Overstock's comparison
24pricing practices have no reasonable expectation of privscy under the circumstances of the present case.
25There is no reason to believe that Overstock customers would object to disclosure of their contact
26information, especially under these circumstances, where they have specifically taken issue with
27Overstock's practices. These customers have some interest that their grievances be addressed, or else they
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Page 7 of 10I'eoplc'i Response lo Defendant's Motion for Protective Order, tt RG10-546833-
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would not have bothered complaining in the first place. They took the positive action in filing a complaint
with Overstock because they sensed some unfairness or had some concern about Overstock's comparison
pricing. It is expected that most complaining customers would strongly support this action and be willing
to assist by providing relevant evidence.
Additionally, as members of the public, the complaining consumers stand to benefit from the
People's enforcement of statutes, laws and regulations designed to protect online shoppers. (See Puerto,
supra, 1253) Many of the consumers whose information we seek are likely repeat customers of online
retailers, if not Overstock itself. These individuals have a demonstrated interest in accurate comparison
prices (by complaining in the first place), and likely continue to rely on Overstock's price comparison
tools. This litigation does not involve a dispute between private litigants; it is a law enforcement action
brought by public prosecutors on behalf of the People of the State of California. These consumers have an
I 9expectation that their grievances wi l l be redressed, if not by Overstock, then by the regulators who oversee
internet advertising. Overstock's customers, like the publ ic at large, stand to benefit from the People's
enforcement action.
15Overstock's attempts to distinguish this case from those cited above on the basis of its
16"privacy policy" is misguided, at best. First, establishing a "privacy policy" cannot shield a private
17litigant from basic discovery obligations. Indeed, it would be absurd to allow the terms of private
18litigant's "privacy policy" to override the People's right to obtain relevant evidence that is solely in
19that litigant's possession. This is especially true in this case, given that Overstock has already
20provided the People some customers' contact information. (See Tina Nunes Ober Declaration
21("Nunes Ober Dec.") ^|3.) Overstock cannot be allowed to selectively withhold evidence that may
not be favorable to their defense while turning over similar information in the context of other
discovery requests.
Moreover, even if the Court were to give some credence to Overstock's privacy policy, the policy
actually put its customers on notice that their personal contact information may be revealed in order to
comply with the law. (Reinstedt Dec. Par. 20, Ex. 12) Thus, a complaining customer who did, in fact, read
Page 8 of! 0
People's Response to Defendant's Motion for Protective Order, tt RG10-54C833-
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the proposed disclosure was not "particularly sensitive," as it involved disclosing neitherone's personal medical history or current medical condition nor details regarding one'spersonal finances or other financial information, but merely called for disclosure of contact
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and rely upon Overstock's privacy policy would recognize that, under the very terms of that policy, his or
her complaint would be revealed in the context of court proceedings.
3. No Serious, Egregious Breach of Social Norms Will Occur
The limited discovery the People seek does not, as a matter of law, constitute a "serious" invasion
of privacy rights much less an "egregious breach of social norms," Pioneer, supra, at 371. Thus, Overstock
is unable to satisfy the third prong of the Pioneer test.
As to this third prong, the Pioneer case is highly instructive. As discussed above, the California
Supreme Court held that California's right to privacy provision (Cal. Const., art. I, § 1) does not prevent
purchasers from having their identifying information disclosed to tlie plaintiff during c iv i l discovery
proceedings in a consumers' rights lawsuit. (Id. at p. 363.) Addressing whether disclosure of identification
information breached social norms, the California Supreme Court noted:
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information are requested likely have first-hand knowledge of errors in the comparison prices and
The holdings in Pioneer and Puerto control in this case. The individuals whose names and contact
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information already voluntarily disclosed to Pioneer.
(7J.atp.372.)
Similarly, in Puerto, supra, the California Court of Appeals noted:
Nothing could be more ordinary in discovery than finding out (he location of identifiedwitnesses so that they may be contacted and additional investigation performed.... As theSupreme Court pointed out in Pioneer, the information sought by the petitioners here-thelocation of witnesses-is generally discoverable, and it is neither unduly personal nor overlyintrusive....
(Id. at pp. 1253-1254, citations and internal quotations omitted; emphasis added.)
23Overstock's correction and response. Moreover, these witnesses specifically complained about
24Overstock's comparison pricing policy, so contacting them is not only socially acceptable but expected.
25They are percipient witnesses to the primary issue in this litigation, and as such, we must be allowed to
26contact them.
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Page 9 or 10
People's Response to Defendant's Motion for Protective Order, fl KG 10-5-1(833-
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C. A Balancing Test Also Favors Disclosure Of The Requested Information
As Overstock is unable to meet the Pioneer Court's three-part privacy test, it is not necessary for
this Court to engage in a balancing test. Were the Court to engage in such a test, however, it would only
reinforce the conclusion that the requested contact information should be provided. Like Pioneer, which
involved a consumer class action against defective products, this case involves the fundamental public
policy underlying California's consumer protection and false advertising laws. Evidence obtained from
potential percipient witnesses regarding the consumer violations committed by Overstock is material and
primary to this litigation and fairness demands disclosure of the identifying information the People are
requesting. While a protective order is not necessary, the parties have already entered into a protective
order sufficient to prevent any misuse of the consumers' information. (See Nunes Ober Dec. ^6, Ex. C.)
IV. CONCLUSION
For the reasons set forth above, the People respectfully request the Court deny Overstock's Motion
for Protective Order and order it to provide the People with the percipient witness contact information to
which they are entitled.
Dated: October 19,2012
Respectfully submitted,
JEFF F. ROSEN, DISTRICT ATTORNEYSANTA CLARA COUNTY
By:.TINANUNESOBERDeputy District Attorney
Page 10 of 10People's Response to Defendant's Motion for Protective Order, ft RG10-546833-
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PROOF OF SERVICE
The undersigned deposed and says:
That I am a citizen of the United States and an employed in the County of Alameda; that I am
over the age of eighteen years and not a party to within action; that my business address is the Office
of the District Attorney, 7677 Oakport Street, Suite 650, Oakland, CA 94621;
That I served a true copy of the following documents:
• PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR PROTECTIVEORDER (MEMORANDUM OF POINTS AND AUTHORITIES);
• DECLARATION OF TINA NUNES OBER, DEPUTY DISTRICT ATTORNEY, INSUPPORT OF THE PEOPLE'S OPPOSITION TO OVERSTOCK'S MOTION FORPROTECTIVE ORDER (with attachments)
on the interested parties in this action as follows:
Robert FeldmanDane ReinstedtQuinn Emanuel Urquhart & Sullivan LLP555 Twin Dolphins Drive, 5th FloorRedwood Shores, CA 94065-2139Telephone: (650) 801-5000Fax:(650)801-5100Email: [email protected]
iBY ELECTRONIC MAIL TRANSMISSION: By electronic mail transmission from
matt.beltramofg'.acgov.ore on October 19, 2012 (with consent of opposing counsel), by transmitting
a PDF format-copy of such document(s) to each such person at the email address(es) listed below
their address. The document was transmitted by electronic transmission and such transmission did
not result in an error message.
I declare under penalty of perjury that the foregoing is true and correct.
DATED: October 19, 2012, at Oakland, California.
Matthew Beltramo