Motion To Disqualify Attorney of RecordMotionCal. Super. - 4th Dist.March 13, 2017© 0 J a nm BA A W O N = N N N N N N N N N e m e m e m e m e m e m p m e m co NI AN Ln B R A W N = O OO N N N R E W I N D = O ELECTRONICALLY FILED Superior Court of California, County of Orange 0615/2018 at 08:00:00 A Clerk of the Superior Court APERTURE LAW FIRM By Olga Lopez, Deputy Clerk Robert B. Salgado SBN: 297391 robert@aperturelaw.com 5755 Oberlin Dr. STE 301 San Diego, CA 92121 Telephone: 858-333-4103 Facsimile: 858-223-6557 Attorney for PLAINTIFF Iraj Khosroabadi SUPERIOR COURT FOR THE STATE OF CALIFORNIA COUNTY OF ORANGE IRAJ KHOSROABADI, an Individual Case No. 30-2017-00908101-CU-RI-CXC Plaintiff, NOTICE OF MOTION AND MOTION TO DISQUALIFY FELTON NEWELL, ESQUIRE FROM FURTHER REPRESENTATION OF THE DEFENDANTS IN THIS ACTION; MEMORANDUM OF POINTS AND AUTHORITIES, DECLARATION OF ROBERT B. SALGADO, ESQUIRE; VS. MAZGANI SOCIAL SERVICES, INC, a California Corporation, MAHVASH MAZGANIL NEYAZ MAZGANI, MAHNAZ MOGHADDAM, SHOHREH EXHIBITS SHARIFZADEH, and DOES 1 through 25, Date: July 6, 2018 elusive, Time: 8:30 am, Place: Dept. CX102 Defendants. Reservation #72832459 Action Filed: 3/13/2017 Trial Date: Not set Hon. William D. Claster Dept. CX102 Civil Complex Center, Dept. CX-102, 751 West Santa Ana Blvd., Santa Ana, CA 92701. N r N r ’ N r ’ N r a r r N a a e w PLEASE TAKE NOTICE THAT on July 6, 2018 at 8:30 AM at the place and time above, counsel for plaintiff’s class will move the Court for an order barring Mr. Felton Newell from further MOTION TO DISQUALIFY FELTON NEWELL - i © 0 J a nm BA A W O N = N N N N N N N N N e m e m e m e m e m e m p m e m co NI AN Ln B R A W N = O OO N N N R E W I N D = O participating in this case as counsel for any party. This Motion is based on the fact that Mr. Felton Newell who, in concert with the named defendants, corruptly and obstructively and in derogation of Rules of Professional Conduct (RPC) Rule 2-100, orchestrated, planned and participated in the scheme of the Defendants to obstruct the orderly administration of justice by clandestinely and surreptitiously contacting (if not threatening) former class representative, Mr. Iraj Khosroabadi, and paying him $20,000 for him to sign a settlement agreement expressly crafted and drafted by Mr. Newell so that the class representative would lose his standing to further the cause of the defrauded class members. Mr. Newell doubled down on his obstructionist conduct by not only paying off the class representative, but in court, both in State and in federal venues, championing motions to dismiss the entirety of the actions to the detriment of all of the class members. Mr. Newell has lost his objectivity as counsel and has ignored his solemn oath that he took to become a member of the BAR to act in accordance with the Rules of Professional Conduct. Furthermore, the conduct of Mr. Newell has caused significant prejudice to the orderly administration of] justice and to the cause of the plaintiff’s. The conduct of Mr. Newell was knowing and voluntary. When requested by class counsel to confirm or deny whether he was the one who had drafted the settlement agreement that had ultimately been communicated and executed by the former class representative, Mr. Newell stayed silent which clearly exhibited consciousness of guilt and only when ordered to by this Court, did he reveal that he was the architect of the scheme to deprive this class of a suitable class representative and thus causing an unjust dismissal of the case. This Motion is made pursuant to this Notice, the attached Memorandum of Points and Authority, the attached Declaration of Robert B. Salgado, Esq., Exhibits, and any and all other matters that the court may feel just and proper for its consideration at the time of the hearing Respectfully submitted, al id Robert B. Salgado, Esq. MOTION TO DISQUALIFY FELTON NEWELL - ii © 0 J a nm BA A W O N = N N N N N N N N N e m e m e m e m e m e m p m e m co NI AN Ln B R A W N = O OO N N N R E W I N D = O STATEMENT OF FACTS On March 13, 2017, Plaintiff Iraj Khosroabadi filed this class action in Orange County Superior Court, which was removed to the Central District Court of California on April 7, 2017, and subsequentlyj accepted by that court as a class action. Between March 13, 2017, to March 30, 2018, on numerous occasions before this Court and before the United States District Court, the defendants’ conduct in this case so troubled the plaintiff that he, through counsel, moved for a variety of restraining and injunctive orders barring contact between the Defendants and the Plaintiff. On March 1, 2018, the United States District Court ordered the Social Security Administration to produce all of the files that contained privilege data of all Social Security recipients that had been the clients of the Mazgani Social Services produced to plaintiff’s counsel. See Ex. A attached hereto and incorporated herein by reference. On March 2, 2018, United Street states District Court Judge, Carmack Carney, delayed remand of this Action back to the state court based on the following holding: “On March 1, 2018, Judge Scott granted Plaintiff’s motions to compel, and requested that this Court retain jurisdiction over the action ‘until the SSA’s production is complete, so that this Court may resolve any further disputes connected with the subpoenas.’ (Dkt. 95 at 13.) Judge Scott ordered the SSA to produce the information responsive to Plaintiff’s subpoenas within 45 days of March 1, 2018, by April 15, 2018. (Id.) In light of Judge Scott’s request, the Court will further delay remand until April 20, 2018, unless Judge Scott recommends a later date, to ensure that Plaintiff can enforce his subpoenas should any disputes arise.” See Ex. B attached hereto and incorporated herein by reference. Based on information and belief it is hereby alleged that during the course of a March 19, 2018, in chambers hearing in a different case, the Defendants learned of ongoing investigations by the Office of the Inspector General of the Social Security Administration. It is unknown to the undersigned, who set the wheels of the obstruction in motion, but on March 29, 2018, Mr. Newell spent 211 minutes drafting the settlement agreement that was ultimately surreptitiously communicated with the former class representative in violation of RPC 2 - 100. MOTION TO DISQUALIFY FELTON NEWELL - 1 © 0 J a nm BA A W O N = N N N N N N N N N e m e m e m e m e m e m p m e m co NI AN Ln B R A W N = O OO N N N R E W I N D = O No later than March 30, 2018, the defendants had interfered with the attorney-client relationship and corruptly threatened, and thereafter paid the plaintiff directly for release of his personal claims against them so that the ongoing investigation and this case would be derailed. On March 30, 2018, at 5:49 PM, Mr. Newell wrote Mr. Salgado the following: “Robert, I understand from my client Mahvash Mazgani that she and Mr. Khosroabadi have agreed to a settlement. The fully executed settlement agreement with Mr. Khosroabadi’s notarized signature is attached. Also attached is a draft Stipulation for Dismissal. Please let me know if you have any comments regarding the Stipulation. If you do not have any comments, please execute it and return it to me. Thanks Felton” See Ex. C, attached hereto and incorporated herein by reference The undersigned immediately requested of Mr. Newell to reveal who had come up with the scheme that had resulted in the settlement agreement, for copies of the payments reference in the settlement agreement and lastly, if Mr. Newell was the one who had drafted the settlement agreement. Mr. Newell did not respond and instead filed a motion with the United States District Court for a dismissal of the action with prejudice. Hon. Cormac Carney, ruled on the application of the Defendants whose cause was championed by Mr. Newell and DENIED the application for termination of the case and instead remanded the matter back to state court on April 11, 2018. See Ex. D, attached hereto and incorporated herein by reference. Due to the early remand, the Social Security Administration has refused to comply with the orders of the United States District Court, as that court no longer has jurisdiction over the matter; the conduct of Mr. Newell has borne fruit for the defendants, all the while causing irreparable harm to the orderly administration of justice and the case of the class. Instead of backing off the corruptly obtained settlement, the Defendants again being represented by Mr. Newell, presented this Court with an application for termination of the case and it was at the hearing on the application that the Court ordered Mr. Newell to reveal who had been the person who had drafted the settlement agreement and thereafter demanded that the evidence of payments be also provided. MOTION TO DISQUALIFY FELTON NEWELL - 2 © 0 J a nm BA A W O N = N N N N N N N N N e m e m e m e m e m e m p m e m co NI AN Ln B R A W N = O OO N N N R E W I N D = O Mr. Newell, counsel of record for the Defendants, admitted to this Court during the course of the ex parte hearing on April 26, 2018 that he drafted the confidential settlement agreement signed by Mr. Khosroabadi with full knowledge that Mr. Khosroabadi was represented by an attorney and with full knowledge of the fact that Mr. Khosroabadi would be signing the confidential settlement agreement without the knowledge or advice of his retained counsel. In fact, Mr. Newell admitted that he made more than one draft of this confidential settlement agreement, and also admitted that he intentionally failed to notify Mr. Khosroabadi’s counsel of record in violation of the California Rules of Professional Conduct Rule 2-100 until after Mr. Khosroabadi had signed the Confidential Settlement Agreement. In May 2018, this Court dismissed the personal claims of Mr. Khosroabadi, and disqualified him from further participation in this case as a class representative, but graciously permitted counsel for the class to obtain suitable class representative, no later than June 4, 2018. An alternative class representative was found in an elderly man in northern California who has had dealings with Mazgani Social Services, and Mahvash Mazgani some years prior, and that person agreed to champion the cause of the class. Sometime between May 19 to May 22, 2018, Mahvash Mazgani somehow discovered the agreement between the 82-year-old man and class counsel and instructed the man to falsely claim that he had suffered a heart attack and could not proceed in representing the class. Class counsel discovered the unavailability of the newly discovered class representative on May 22, 2018, and thereafter scrambled to find alternative class representation and had} to move the Court on June 7, 2018 for a continuation of the due date for filing of the 2"! amended class action complaint which the Court granted to July 13, 2018. Plaintiff Class now moves the Court for an order that will remove Mr. Newell from further participation in this case as attorney for the defendants. ARGUMENT THIS COURT HAS POWER TO GRANT THE RELIEF SOUGHT BY THE PLAINTIFFS “It is well established that courts have fundamental inherent equity, supervisory, and administrative powers, as well as inherent power to control litigation before them. ( Cottle v. Superior Court (1992) 3 MOTION TO DISQUALIFY FELTON NEWELL - 3 © 0 J a nm BA A W O N = N N N N N N N N N e m e m e m e m e m e m p m e m co NI AN Ln B R A W N = O OO N N N R E W I N D = O Cal. App. 4th 1367, 1377 [5 Cal. Rptr. 2d 882].) In addition to their inherent equitable power derived from the historic power of equity courts, all courts have inherent supervisory or administrative powers which enable them to carry out their duties, and which exist apart from any statutory authority. ( Bauguess v. Paine (1978) 22 Cal. 3d 626, 636-637 [150 Cal. Rptr. 461, 586 P.2d 942]; Peat, Marwick, Mitchell & Co. v. Superior Court (1988) 200 Cal. App. 3d 272, 287-288 [245 Cal. Rptr. 873].) it is beyond dispute that ‘Courts have inherent power to adopt any suitable method of practice, both in ordinary actions and special proceedings, if the procedure is not specified by statute or by rules adopted by the Judicial Council.’ [Citation.]' ( Citizens Utilities Co. v. Superior Court (1963) 59 Cal. 2d 805, 812-813 [31 Cal. Rptr. 316, 382 P.2d 356], fn. omitted.) That inherent power entitles trial courts to exercise reasonable control over all proceedings connected with pending litigation in order to insure the orderly administration of justice. (See Hays v. Superior Court (1940) 16 Cal. 2d 260, 264-265 [105 P.2d 975].) 'Courts are not powerless to formulate rules of procedure where justice demands it.' ( Adamson v. Superior Court (1980) 113 Cal. App. 3d 505, 509 [169 Cal. Rptr. 866], citing Addison v. State of California (1978) 21 Cal. 3d 313, 318-319 [146 Cal. Rptr. 224, 578 P.2d 941].) The Legislature has also recognized the authority of courts to manage their proceedings and to adopt suitable methods of practice. (See Code Civ. Proc., § 128, 187.)’ ( Asbestos Claims Facility v. Berry & Berry, 219 Cal. App. 3d at p. 19.) Rutherford v. Owens-Illinois, Inc., (1997) 16 Cal. 4th 953, 967 The authority to disqualify an attorney stems from the trial court's inherent power "[t]o control in furtherance of justice, the conduct of its ministerial officers, and of all other persons in any manner connected with a judicial proceeding before it... (Code Civ. Proc., § 128)." Zador Corp. v. Kwan, 31 Cal, App. 4th 1285, 1292, 37 Cal. Rptr. 2d 754 (6th Dist. 1995). THE COURT MUST ORDER THE DISQUALIFICATION OF MR. NEWELL BASED ON HIS ETHICAL TRANSGRESSIONS WHICH HAVE RESULTED IN THE OBSTRUCTION OF ORDERLY ADMINISTRATION OF JUSTICE Any party to a litigation has standing to move to disqualify opposing counsel based upon an ethical transgression other than a breach of duty. Cal Pak Delivery, Inc. v. United Parcel Service, Inc., 52 Cal. App. 4th 1 (1997) (where a disqualification was sought by a non-client when counsel for a class allegedly took a position that was in favor of his own personal interests and detrimental to the class that MOTION TO DISQUALIFY FELTON NEWELL - 4 © 0 J a nm BA A W O N = N N N N N N N N N e m e m e m e m e m e m p m e m co NI AN Ln B R A W N = O OO N N N R E W I N D = O he represented). Mr. Newell has engaged in conduct that is clearly prohibited by the RPC and Mr. Newell undertook conduct with an eye towards the disruption of the orderly administration of justice through direct and indirect acts and omissions, all of this without a moment’s hesitation or reservation. Rule 2-100 prohibits communication with a represented party: “(A) While representing a client, a member shall not communicate directly or indirectly about the subject of the representation with a party the member knows to be represented by another lawyer in the matter, unless the member has the consent of the other lawyer.” At the very least, Mr. Newell prepared a settlement agreement that he knew was intended and prepared for the sole purposes of being communicated to the represented parties so that the represented party could be corruptly influenced in causing the dismissal of the case and letting the Mafia like family of Mazgani Social Services off the proverbial hook for the crimes that they have committed in the transgressions that they have made against the weak, the poor, elderly and our system of government as a whole for personal profit and gain. A party’s contacts with an opposing party violate Cal. Rules Prof. Conduct, Rule 2-100, if the contacts were wrongfully orchestrated by the party’s attorney. San Francisco Unified School Dist. ex rel. Contreras v. First Student, Inc. (2013) 213 Cal. App. 4th 1212, 1233-1236, 153 Cal. Rptr. 3d 583. It is undeniable here that after Mr. Newell prepared the settlement agreement, he directed the defendants on the best way to legitimize the settlement agreement, even having Mr. Khosroabadi’s signature notarized. Unlike other RPC violations, a violation of Rule 2 - 100 requires the recusal of the offending attorney from the case but not the attorneys’ firm. Trial court has authority to order disqualification of the attorney for violation of Rule 2-100 but is not authorized to disqualify attorney’s entire law firm. Mills Land & Water Co. v. Golden West Refining Co. (1986) 186 Cal. App. 3d 116, 131-133, 230 Cal. Rptr. 461; Chronometrics, Inc. v. Sysgen, Inc. (1980) 110 Cal. App. 3d 597, 607-608, 168 Cal. Rptr. 196 “Chronometrics is helpful. There, a cross-complainant's attorney (also president of Chronometrics) communicated without the consent of counsel with a cross-defendant on a subject of the litigation. The MOTION TO DISQUALIFY FELTON NEWELL - 5 © 0 J a nm BA A W O N = N N N N N N N N N e m e m e m e m e m e m p m e m co NI AN Ln B R A W N = O OO N N N R E W I N D = O trial court disqualified the attorney and his law firm. The Court of Appeal affirmed the disqualification of the attorney but reinstated his law firm.” Mills Land & Water Co. v. Golden W. Ref. Co., 186 Cal. App. 3d 116, 132. Though the Defendants can still be represented by Glaser Weil, they should not be permitted to be represented by Mr. Newell of that Firm. Mr. Newell has clearly demonstrated that he has abandoned the ethical rules that govern California attorneys in favor of a plan and practice designed to disrupt and usurp this Court’s orderly administration of justice. As such, there is no undue hardship by permitting another attorney at glacial wheel to take over the representation of the defendants in this action. Conversely, this case will suffer if] left exposed to the unethical and near criminal conduct that has been exhibited by Mr. Newell when it comes to this action. Mr. Newell’s conduct is much more reminiscent of Tom Hagan’s character in the Godfather rather than that of Jack McCoy in the Law and Order. Mr. Newell has abandoned his oath to conduct himself pursuant to the rules of professional conduct and has lost objectivity, displaying a less than stellar character when he orchestrated a mechanism not only to destroy the orderly administration of justice in the prosecution of the complaint in this case, but also aimed at taking advantage of the hard work put into this case by the undersigned when he also worked in a waiver of attorney’s fees and cost into what he had hoped to be a binding settlement that would have caused the entire case to implode. Mr. Newell must be disqualified from further representation in this case. THE COURT MUST ORDER THE DISQUALIFICATION OF MR. NEWELL BASED ON THE FACT THAT HIS CONDUCT ON BEHALF OF THE DEFENDANTS IS EVIDENCE OF CONSCIOUSNESS OF GUILT Disqualification is proper when attorney would act as both advocate and witness in the same case. Kennedy v. Eldridge (2011) 201 Cal. App. 4th 1197, 1208-1211, 135 Cal. Rptr. 3d 545 “The “advocate-witness rule,” which prohibits an attorney from acting both as an advocate and a witness in the same proceeding, has long been a tenet of ethics in the American legal system, and traces its roots back to Roman Law. (Luna, Avoiding a “Carnival Atmosphere”: Trial Court Discretion and the MOTION TO DISQUALIFY FELTON NEWELL - 6 © 0 J a nm BA A W O N = N N N N N N N N N e m e m e m e m e m e m p m e m co NI AN Ln B R A W N = O OO N N N R E W I N D = O Advocate-witness Rule (1997) 18 Whittier L.Rev. 447, 452-453 (hereafter Luna).)” Kennedy v. Eldridge, 201 Cal. App. 4th 1197, 1208. “Defendant argues that the trial court erred by instructing the jury with CALJIC No. 2.06 regarding the suppression of evidence. The instruction provided as follows: ‘If you find that a defendant attempted to suppress evidence against him in any manner, such as by the intimidation of a witness or by destroying evidence, such attempt may be considered by you as a circumstance tending to show a consciousness of guilt. However, such conduct is not sufficient by itself to prove guilt, and its weight and significance, if any, are matters for your consideration.” People v. Wilson, (2005) 36 Cal. 4th 309, 330 “Efforts of the defendant to suppress or fabricate evidence or to wrongfully influence or intimidate witnesses may be given in evidence as tending to prove a consciousness of guilt.” People v. Blau, 140 Cal. App. 2d 193, 213-214 If it wasn’t Mr. Newell who initiated this tragic idea of either intimidating or paying off Mr. Khosroabadi to cause a dismissal of the case, it was certainly done by his clients at his direction and with his guidance. Someone attempted to corruptly influence these proceedings and that corruption is consciousness of guilt and Mr. Newell is certainly a witness to the conduct. If the defendants were not guilty as alleged in the complaint, they were free to bring a Motion for Summary Judgment or proceed through trial and let the trier of fact decide that guilt. But when they took matters in their own hands in a corrupt fashion and tried to influence the Plaintiff (without assistance of his counsel), tried to have this case dismissed, then that conduct is Mafia to its core. Though they may feel immune to laws that govern members of society, the Mazgani Family and their cohorts are not above the law. The trier of fact will be presented with evidence of the method with which they tried to get this case dismissed as consciousness of guilt; a prime witness of this obstructionist conduct is Mr. Newell who has testified in these proceedings that he is the one who drafted the corrupt and abusive settlement agreement. Even if this Court finds that Mr. Newell had no direct part in the tampering and manipulation of witnesses in this case, the pleading history of this case certainly demonstrates that it was done at Mr. Newell’s direction and with his guidance. These actions were taken to deliberately and corruptly damage these proceedings in order to not only harm the Plaintiff directly, but also the social security system as a whole. MOTION TO DISQUALIFY FELTON NEWELL - 7 © 0 J a nm BA A W O N = N N N N N N N N N e m e m e m e m e m e m p m e m co NI AN Ln B R A W N = O OO N N N R E W I N D = O Mr. Newell cannot be a trial witness and advocate all at once. Mr. Newell must be disqualified from further representation of the defendants in this action. CONCLUSION Mr. Newell’s violation of no less than RPC, Rule 2-100 damaged this case and prejudiced the plaintiff’s class and his continued involvement in this case is prohibited due to the fact that Mr. Newell has not exhibited any sort of contrition for the conduct that damaged the class. Chances are that given his disavowalment of any restraint on his part to conduct himself within the applicable rules of professional conduct endangers this case from further professional sabotage at the hands of Mr. Newell. Furthermore, Mr. Newell is now a witness against his own clients and he cannot proceed as a witness and an advocate in the same case. The defendants do not have anyone other than themselves to blame for the court ordered that is sought here. The Defendants took it upon themselves to corruptly influenced these proceedings, much like they have in corruption of the Social Security Administration rules and procedures and all the while victimizing the elderly and the poor as well. Mr. Newell must be ordered disqualified from further participation in this case as an advocate. Respectfully submitted, Dated: June 15, 2018 APERTURE LAW FIRM 7 Robert B. Salgado Attorney for Plaintiff Class MOTION TO DISQUALIFY FELTON NEWELL - 8 DECLARATION © 0 J a nm BA A W O N = N N N N N N N N N e m e m e m e m e m e m p m e m co NI AN Ln B R A W N = O OO N N N R E W I N D = O DECLARATION OF ROBERT B. SALGADO ESQ. I, ROBERT SALGADO declare under penalty of perjury that the foregoing is true and correct: I. My name is Robert Salgado and I am a duly licensed attorney in the state of California. 2. I have first-hand knowledge of the events described in this Declaration and as to the facts alleged herein, I believe them to be true. 3s I am an attorney duly licensed to practice law in the State of California and am the attorney of record for Plaintiff Iraj Khosroabadi. This declaration is based on facts known to me upon personal knowledge and, if called as a witness, I could and would testify competently thereto. 4. On March 13, 2017, Plaintiff Iraj Khosroabadi filed this class action in Orange County Superior Court, which was removed to the Central District Court of California on April 7, 2017, and subsequently accepted by that court as a class action. 5. Between March 13, 2017, to March 30, 2018, on numerous occasions before this Court and before the United States District Court, conduct of the defendants in this case so troubled the plaintiff that he through counsel, moved for a variety of restraining and injunctive orders barring contact between the Defendants (who have contacted and victimized the prior class representative without the aid of their counsel, Mr. Newell) and the Plaintiff. 6. On March 1, 2018, the United States District Court ordered the Social Security Administration to produce all of the files that contained significant privilege data of all Social Security recipients that had been the clients of the Mazgani Social Services produced to plaintiff's counsel. See Ex. A attached hereto and incorporated herein by reference. 7. On March 2, 2018, United Street states District Court Judge, Carmack Carney, delayed remand of this Action back to the state court based on the following holding: “On March 1, 2018, Judge Scott granted Plaintiff’s motions to compel, and requested that this Court retain jurisdiction over the action ‘until the SSA’s production is complete, so that this Court may resolve any further disputes connected with the subpoenas.” (Dkt. 95 at 13.) Judge Scott ordered the SSA to produce the information responsive to Plaintiff’s subpoenas within 45 days of March 1, 2018, by April 15, 2018. MOTION TO DISQUALIFY FELTON NEWELL - 9 © 0 J a nm BA A W O N = N N N N N N N N N e m e m e m e m e m e m p m e m co NI AN Ln B R A W N = O OO N N N R E W I N D = O (Id.) In light of Judge Scott’s request, the Court will further delay remand until April 20, 2018, unless Judge Scott recommends a later date, to ensure that Plaintiff can enforce his subpoenas should any disputes arise.” See Ex. B attached hereto and incorporated herein by reference. 8. Based on information and belief it is hereby alleged that during the course of a March 19, 2018, in chambers hearing in a different case, the Defendants learned of ongoing investigations by the Office of the Inspector General of the Social Security Administration. 9. It is unknown to the undersigned, who set the wheels of the obstruction in motion, but on March 29, 2018, Mr. Newell spent 211 minutes drafting the settlement agreement that was ultimately surreptitiously communicated with the former class representative in violation of RPC 2 - 100. 10. No later than March 30, 2018, the defendants had interfered with the attorney-client relationship and corruptly threatened, and thereafter paid the plaintiff directly for release of his personal claims against them so that the ongoing investigation and this case would be derailed. 11. On March 30, 2018, at 5:49 PM, Mr. Newell wrote Mr. Salgado the following: “Robert, I understand from my client Mahvash Mazgani that she and Mr. Khosroabadi have agreed to a settlement. The fully executed settlement agreement with Mr. Khosroabadi’s notarized signature is attached. Also attached is a draft Stipulation for Dismissal. Please let me know if you have any comments regarding the Stipulation. If you do not have any comments, please execute it and return it to me. Thanks Felton” See Ex. C, attached hereto and incorporated herein by reference 12. The undersigned immediately requested of Mr. Newell to reveal who had come up with the scheme that had resulted in the settlement agreement, for copies of the payments reference in the settlement agreement and lastly, if Mr. Newell was the one who had drafted the settlement agreement. 13. Mr. Newell did not respond and instead filed a motion with the United States District Court for a dismissal of the action with prejudice. Hon. Cormac Carney, ruled on the application of the Defendants whose cause was championed by Mr. Newell and DENIED the application for termination of the case and instead remanded the matter back to state court on April 11, 2018. See Ex. D, attached hereto and incorporated herein by reference. MOTION TO DISQUALIFY FELTON NEWELL - 10 © 0 J a nm BA A W O N = N N N N N N N N N e m e m e m e m e m e m p m e m co NI AN Ln B R A W N = O OO N N N R E W I N D = O 14. Due to the early remand, the Social Security Administration has refused to comply with the orders of the United States District Court, as that court no longer has jurisdiction over the matter; the conduct of Mr. Newell has borne fruit for the defendants, all the while causing irreparable harm to the orderly administration of justice and the case of the class. 15. Instead of backing off the corruptly obtained settlement, the Defendants again being represented by Mr. Newell, presented this Court with an application for termination of the case and it was at the hearing on the application that the Court ordered Mr. Newell to reveal who had been the person who had drafted the settlement agreement and thereafter demanded that the evidence of payments be also provided. 16. Mr. Newell, counsel of record for the Defendants, admitted to this Court during the course of the ex parte hearing on April 26, 2018 that he drafted the confidential settlement agreement signed by Mr. Khosroabadi with full knowledge that Mr. Khosroabadi was represented by an attorney and with full knowledge of the fact that Mr. Khosroabadi would be signing the confidential settlement agreement without the knowledge or advice of his retained counsel. 17. In fact, Mr. Newell admitted that he made more than one draft of this confidential settlement agreement, and also admitted that he intentionally failed to notify Mr. Khosroabadi’s counsel of record in violation of the California Rules of Professional Conduct Rule 2-100 until after Mr. Khosroabadi had signed the Confidential Settlement Agreement. 18. In May 2018, this Court dismissed the personal claims of Mr. Khosroabadi, and disqualified him from further participation in this case as a class representative, but graciously permitted counsel for the class to obtain suitable class representative, no later than June 4, 2018. 19. Alternative class representative was found in an elderly man in northern California who has had dealings with Mazgani Social Services, and Mahvash Mazgani some years prior, and that person agreed to champion the cause of the class. Sometime between May 19 to May 22, 2018, Mahvash Mazgani somehow discovered the agreement between the 82-year-old man and class counsel and instructed the man to falsely claim that he had suffered a heart attack and could not proceed in representing the class. Class counsel discovered the unavailability of the newly discovered class representative on May 30, 2018, and thereafter scrambled to find alternative class representation and MOTION TO DISQUALIFY FELTON NEWELL - 11 © 0 J a nm BA A W O N = N N N N N N N N N e m e m e m e m e m e m p m e m co NI AN Ln B R A W N = O OO N N N R E W I N D = O had to move the Court on June 7, 2018 for a continuation of the due date for filing of the 2"! amended class action complaint which the Court granted to July 13, 2018. I declare under penalty of perjury that the foregoing is true and correct. Executed in San Diego, California on June 15, 2018. Dated: June 15, 2018 UF Robert B. Salgado, Esquire Attorney for Plaintiff Class MOTION TO DISQUALIFY FELTON NEWELL - 12 EXHIBIT “A” Case 8:17-cv-00644-CJC-KES Document 95 Filed 03/01/18 Page 1 of 13 Page ID #:2412 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. 8:17-cv-00644-CJC-KESx Date: March 1, 2018 Title: IRAJ KHOSROABADI v. MAZGANI SOCIAL SERVICES, INC,, et al. PRESENT: THE HONORABLE KAREN E. SCOTT, U.S. MAGISTRATE JUDGE Jazmin Dorado Not Present Courtroom Clerk Court Reporter ATTORNEYS PRESENT FOR ATTORNEYS PRESENT FOR PLAINTIFF: DEFENDANT: None Present None Present PROCEEDINGS (IN CHAMBERS): Order Granting Plaintiff’s Motion to Compel the Social Security Administration to Respond to Subpoenas (Dkt. 83, 85) IL. BACKGROUND A. Plaintiff’s Allegations. Plaintiff’s operative First Amended Complaint (“FAC” at Dkt. 15) asserted claims including violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), fraud, unfair business practices, and false advertising against Defendants Nazanin Mazgani (an attorney), Mahvash Mazgani (Nazanin’s mother), Neyaz Mazgani (Nazanin’s sister), Mahnaz Moghaddam (Nazanin’s aunt), Mazgani Social Services, Inc. (“MSSI”), and Shohreh Sharifzadeh (a secretary at MSSI). The Mazgani family members are the officers and directors of MSSI. (FAC {29.) Plaintiff alleges that MSSI “provides aid to Americans (mostly of Iranian descent) in applying for and receiving Social Security, Disability and other benefits provided by the State of California and the United States Federal Government.” (FAC { 2.) Plaintiff further alleges that Defendants “illegally charge for their services above and beyond the fees allowed by State and Federal Agencies and engage in systematic and harassing billing practices long after their services have been provided.” (FAC { 3.) “To avoid getting caught for charging their illegal fees through a potential SSA [Social Security Administration] audit, the Defendants have Case 8:17-cv-00644-CJC-KES Document 95 Filed 03/01/18 Page 2 of 13 Page ID #:2413 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. 8:17-cv-00644-CJC-KESx Date: March 1, 2018 Page 2 devised various money laundering techniques in order to conceal the source of the money,” Plaintiffs allege. (FAC 18.) According to Plaintiffs, Defendants ask clients for five unsigned checks each for $500 with the payee blank, then cash the checks and deposit them in their personal accounts so as not to leave a paper trail for an SSA audit of MSSI. (FAC q{ 18-19, 45)! Plaintiff is a former client of Mazgani and MSSI, and he seeks to pursue this action on behalf of a class of similarly situated individuals. (FAC |] 1, 34-61.) B. The Subpoenas at Issue. On November 16, 2017, Plaintiff served two subpoenas on the SSA, a third party. The first subpoena seeks all documents from 2005 (1) evidencing payments from the SSA to Mahvash Mazgani, and (2) “relating to Mahvash Mazgani’s status as a ‘non-attorney representative’ and/or as an ‘attorney representative.” (Dkt. 85-3 at 5.) The second seeks the same documents, but as to MSSI. (Id. at 11.) Both were served on November 16, 2017, on Sandra Rayon, identified as a “manager” at an SSA office in San Diego. (Id. at 6, 12.) Both sought the production of records by December 15,2017. (Id. at 2, 8.) When the deadline passed with no response, Plaintiff’s counsel left voicemail messages for Ms. Rayon, but never received a return call. (Dkt. 83-2 7.) After those calls, the SSA sent Plaintiff’s counsel two letters: (1) dated January 4, 2018 and postmarked January 5, 2018 (Dkt. 85-3 at 14) and (2) dated January 11, 2018 (id. at 18). Both letters erroneously stated that the subpoenas sought records pertaining to Plaintiff, and stated that privacy laws forbid their disclosure absent Plaintiff’s consent. (I1d.) Plaintiff’s counsel called the SSA’s Office of the Regional Chief Counsel on January 30, 2018. (Dkt. 83-2 10.) He was told the SSA would not respond unless Defendants Mahvash Mazgani and MSSI consented to the release of the requested records. (1d.) C. The Instant Motion to Compel. On January 25, 2018, the District Judge denied Plaintiff’s pending motion for class certification without prejudice. (Dkt. 82.) The District Judge noted that Defendants had I A claimant seeking Social Security benefits may appoint an attorney or non-attorney to be the claimant’s representative before the SSA. See 20 C.F.R. § 404.1705. The representative may only charge fees that are specifically authorized and approved by the SSA. See 20 C.F.R. § 1720. The representative must file a written request with the SSA to charge or receive a fee, and the SSA then decides the amount of the fee. See 20 C.F.R. § 404.1720(b)(1)-(2). SSA generally pays the authorized fee directly to the representative out of any award of past-due benefits to the claimant. See 20 C.F.R. § 404.1720(b)(4). Case 8:17-cv-00644-CJC-KES Document 95 Filed 03/01/18 Page 3 of 13 Page ID #:2414 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. 8:17-cv-00644-CJC-KESx Date: March 1, 2018 Page 3 removed this action on the basis of federal question jurisdiction, based solely on Plaintiffs RICO claim, and that the District Judge had “serious concerns about whether Plaintiff can present sufficient evidence to support his RICO claim.” (Id.) The District Judge ordered Defendants to move for partial summary judgment on the RICO claim by February 8, 2018, setting summary judgment hearing for March 12, 2018. (Id.) On February 1, 2018, Plaintiff filed a motion to compel the SSA to produce documents in response to the two subpoenas. (Dkt. 83, 85.)> Plaintiff argued that (1) the SSA and Defendants waived any objections by failing to raise them before December 15, 2017, the response date of the subpoenas; (2) Defendants do not have any privacy interest in the requested records; and (3) the requested documents were relevant to Defendants’ forthcoming motion for summary judgment on Plaintiff’s RICO claim. (Dkt. 85-1 [memorandum of law].) Plaintiff seeks an order compelling the SSA to comply with the subpoenas, or an order compelling Defendants Mahvash Mazgani and MSSI to consent to release of the information. (Id. at 7.) Plaintiff also seeks $1,056 in sanctions, representing costs and expenses Plaintiff incurred in bringing the motion to compel. (Id. at 8.) The SSA opposed the motion and moved to quash the subpoenas. (Dkt. 87.) The SSA argues that the disclosure of the requested records is prohibited by the federal Privacy Act and SSA regulations. (Id. at 2.) The SSA argues that its failure to respond is not a waiver of the privacy interests involved because the applicable statute and regulations do not provide for such a waiver. (Id. at4n.2,7.) The SSA also argues that responding to the subpoenas would be overly burdensome because: (1) Plaintiff can obtain the same information from Defendants; and (2) there is no way to identify responsive records short of “a special individualized search because representative fee payment information is stored under individual claimant files.” (Id. at 6.) Defendants also filed an opposition to Plaintiffs motion to compel, arguing that the Court should not take the “drastic step” of compelling them to consent to the release of information from the SSA. (Dkt. 89.) Defendants also argue that Plaintiff “fails to address why he cannot seek to recover all relevant information in discovery directly from [Defendants] Ms. Mazgani and MSSL.” (Id. at 2.) On February 8, 2018, while briefing on Plaintiff’s motion to compel was underway, Defendants moved for summary judgment on all of Plaintiff’s claims. (Dkt. 88.) Plaintiff responded by seeking to voluntarily dismiss the RICO claim with prejudice (Dkt. 92) and moving to strike the summary judgment motion to the extent it was directed at Plaintiff’s non- RICO claims, contending this was contrary to the District Judge's order (Dkt. 91). Plaintiff asked the Court not to remand the case back to state court until there had been a ruling on the motion to compel the SSA, arguing: “[O]nly the United States Courts have jurisdiction over the 2 Plaintiff filed an initial motion at Dkt. 83 and a corrected motion with exhibits at Dkt. 85. Case 8:17-cv-00644-CJC-KES Document 95 Filed 03/01/18 Page 4 of 13 Page ID #:2415 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. 8:17-cv-00644-CJC-KESx Date: March 1, 2018 Page 4 SSA and without that Order, the Plaintiff would have to reapply to the US District Court under a separate action for an order compelling a federal agency to comply with a state subpoena.” (Dkt. 91 at 5.) On February 14, 2018, the District Judge granted summary judgment for Defendants on Plaintiff’s RICO claim and struck the request for summary judgment on Plaintiffs other claims. (Dkt. 93.) The District Judge declined to exercise supplemental jurisdiction over the remaining state law claims under 28 U.S.C. § 1367(a) but retained jurisdiction for purposes of resolving Plaintiff’s motion to compel, noting: “Plaintiff correctly observes that after this action is remanded to state court, the state court will not have the authority to enforce compliance with Plaintiff’s subpoenas to the SSA. For this reason, the Court will not remand this action until March 2, 2018, unless [Magistrate] Judge Scott recommends a later date. The Court will issue an order remanding the case at that time.” (Id. at 2.) See 20 C.F.R. § 401.180(c), (d) (explaining that the SSA will not honor state court orders for disclosure because the federal government has not waived sovereign immunity). The Court subsequently held a hearing on Plaintiff’s motion to compel on February 20, 2018, which was attended by counsel for Plaintiff, Defendants, and the SSA. II. DISCUSSION A. Failure of the SSA and Defendants to Timely Object to the Subpoenas. Federal Rule of Civil Procedure 45(d)(2)(B) provides that a non-party must serve objections to a subpoena “before the earlier of the time specified for compliance or 14 days after the subpoena is served.” “A nonparty’s failure to timely make objections to a Rule 45 subpoena duces tecum generally requires the court to find that any objections have been waived.” Moon v. SCP Pool Corp., 232 F.R.D. 633, 636 (C.D. Cal. 2005). “Nonetheless, in unusual circumstances and for good cause, the failure to act timely will not bar consideration of objections to a Rule 45 subpoena.” Id. (citation omitted). “Courts have found unusual circumstances where, for instance, the subpoena is overbroad on its face and exceeds the bounds of fair discovery and the subpoenaed witness is a non-party acting in good faith.” Id. Additionally, under Federal Rule of Civil Procedure 26(c) and the general discretion granted to courts to manage discovery, a Court may sua sponte grant a protective order for good cause shown. McCoy v. Southwest Airlines Co., 211 F.R.D. 381, 385 (C.D. Cal. 2002); see also Fed. R. Civ. P. 26(c) (“The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense....”). “A party cannot object to a subpoena duces tecum served on a nonparty, but rather, must seek a protective order or make a motion to quash.” Moon, 232 F.R.D. at 636; see also Fed. R. Civ. P. 26(c). Where a party fails to file a motion to quash or a motion for protective order before the deadline for the non-party to respond to the subpoena, the party generally waives its Case 8:17-cv-00644-CJC-KES Document 95 Filed 03/01/18 Page 5 of 13 Page ID #:2416 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. 8:17-cv-00644-CJC-KESx Date: March 1, 2018 Page 5 right to object. See, e.g., LR. v. City of Fresno, No. 12-558, 2014 WL 1419305 at *2, 2014 U.S. Dist. LEXIS 52094 at *7-9 (E.D. Cal. Apr. 11, 2014); Dornell v. City of San Mateo, No. 12- 06065, 2013 WL 5443036 at *3, 2013 U.S. Dist. LEXIS 142335 at *8 (N.D. Cal. Sept. 30, 2013) (“While there may be a split on the definition of ‘timely,’ Plaintiff did not act before the time for compliance to prevent the production of records.”). 1. Defendants have waived any objections to the subpoenas by virtue of their failure to timely object. Notices of the subpoenas were sent to Defendants’ counsel on November 14, 2017. (Dkt. 85-1 at 3.) As of the December 15, 2017 deadline for compliance with the subpoenas, Defendants had not informally objected to the subpoenas, moved to quash them, or moved for a protective order. Defendants’ written opposition to Plaintiff’s motion to compel did not explain this failure to respond. (Dkt. 89.) At the February 20 hearing, Defendants explained the failure was due to the “posture of the case,” i.e., because Defendants were still in the process of responding to Plaintiff’s discovery requests and Plaintiff had not moved to compel Defendants to provide such responses. Defendants also mentioned that the posture of the case had changed “dramatically” since then; because Plaintiff’s motion for class certification was denied, Defendants believe that the information sought in the subpoenas is no longer relevant. Because both of these latter events occurred after the subpoenas’ compliance deadline (See Dkt. 82 [January 25, 2018 order denying class cert without prejudice], Dkt. 93 [February 14, 2018 order dismissing RICO claim]), they have little bearing on Defendants’ failure to timely respond to the subpoenas. Moreover, the motion for class certification was denied without prejudice; Plaintiff may still seek class certification in the state court following remand. Because Defendants have not adequately explained their failure to timely challenge the subpoenas, the Court finds Defendants have waived any objections to them. To the extent Defendants argue that this Court lacks the authority to compel them to execute authorizations for the release of SSA records, the Court disagrees. See, e.g., Santillan v. City of Reedley, No. 07- 00391, 2008 WL 62180 at *2, 2008 U.S. Dist. LEXIS 109431 at *7 (E.D. Cal. Jan. 4, 2008) (ordering plaintiff to sign SSA authorization to release records); see also Atl. Sounding Co. v. Townsend, No. 05-649, 2010 WL 11508297 at *2, 2010 U.S. Dist. LEXIS 149395 at *3(M.D. Fla. Feb. 25, 2010) (collecting cases “supporting the proposition that Rules 34 and 37, read in conjunction, give courts the authority to compel a party to execute authorizations for the release of records that are in the party's ‘control’”); Rodriguez v. IBP, Inc., 243 F.3d 1221, 1230 (10th Cir. 2001) (finding the district court “had the authority to order Rodriguez to provide this consent,” noting that 20 C.F.R. § 401.180 did not apply because the district court “directed Rodriguez to sign a release” rather than “order[ing] the [SSA] directly to release the records”). Defendants will therefore authorize the SSA to release pertinent records, having waived any objections to such release. Case 8:17-cv-00644-CJC-KES Document 95 Filed 03/01/18 Page 6 of 13 Page ID #:2417 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. 8:17-cv-00644-CJC-KESx Date: March 1, 2018 Page 6 At the February 20 hearing, the SSA’s counsel explained that SSA’s records are organized into two types of files: a “representative file” and a “claimant file.” For purposes of the relevant privacy laws, it appears that Defendants can consent to release of the information in the representative file only; consent for release of information in the claimant file would need to be obtained from the claimants. See 20 C.F.R. § 401.100(b)-(c) (records may be disclosed with the written consent of the “subject” of the record); 20 C.F.R. § 401.25 (defining a “subject individual” as “the person to whom a record pertains”). The SSA explained at the February 20 hearing that information about payments it made to Defendants as SSA representatives would not be contained within the representative files. Rather, because such payments are made out of benefits awarded to individual claimants, that information is contained within the claimant files. The Court will therefore consider whether Plaintiff is entitled to information in the claimant files. 2 Insofar as the subpoenas seek information in the claimant files, the Court will consider the SSA’s objections to the subpoenas, notwithstanding the SSA’s failure to timely object. It is undisputed that, as of the December 15, 2017 deadline for compliance with Plaintiff’s subpoenas, the SSA failed to serve objections to the subpoenas. In early January, the SSA sent Plaintiff’s counsel two letters stating that it would not produce the documents sought without the consent of the Plaintiff. In a later informal discussion, the SSA’s counsel indicated that Plaintiff needed to obtain Defendants’ consent. At the hearing, the SSA’s counsel explained that SSA did not timely respond to the subpoenas because staff in the SSA regional office that drafted the initial response letter typically receives hundreds or a thousand subpoenas per year. Although the SSA failed to timely respond to the subpoenas, it responded only a few weeks late and did attempt in good faith to inform Plaintiff what was needed to comply with the applicable privacy laws (unlike Defendants, who did not respond to the subpoenas at all until after Plaintiff filed the present motion to compel). Additionally, Plaintiff has not cited and this Court has not found any authority supporting the proposition that the SSA can waive the privacy rights of non-party SSA claimants under the applicable statutory and regulatory scheme by virtue of its failure to timely respond to a subpoena (unlike Defendants, who can waive their own privacy rights). Thus, the Court will consider the arguments raised in the SSA’s motion to quash, notwithstanding the SSA’s failure to timely object to the subpoenas. B. Privacy Concerns. 1. The Privacy Act and SSA Regulations. The federal Privacy Act provides, “No agency shall disclose any record which is contained in a system of records by any means of communication to any person ... except pursuant to a written request by, or with the prior written consent of, the individual to whom the record pertains....” 5 U.S.C. § 552a(b). The statute enumerates exceptions to this general rule, including: “pursuant to the order of a court of competent jurisdiction.” 5 U.S.C. § 552a(b)(11). Case 8:17-cv-00644-CJC-KES Document 95 Filed 03/01/18 Page 7 of 13 Page ID #:2418 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. 8:17-cv-00644-CJC-KESx Date: March 1, 2018 Page 7 Disclosure of SSA records pursuant to court order is governed by SSA regulation 20 C.F.R. § 401.180, which states that the SSA will disclose information in compliance with such an order in three circumstances: (1) another section of this part specifically allows such disclosure, or (2) SSA, the Commissioner of Social Security, or any officer or employee of SSA in his or her official capacity is properly a party in the proceeding, or (3) disclosure of the information is necessary to ensure that an individual who is accused of criminal activity receives due process of law in a criminal proceeding under the jurisdiction of the judicial branch of the Federal government. 20 C.F.R. § 401.180(e) (emphasis added). Courts have interpreted this regulation as “creating a presumption against disclosure in circumstances other than those enumerated.” Mason v. S. Bend Cmty. Sch. Corp., 990 F. Supp. 1096, 1098 (N.D. Ind. 1997); see also Wheeler v. City of Orlando, No. 07-1287, 2008 WL 5111244 at *2, 2008 U.S. Dist. LEXIS 101462 at *7 (M.D. Fla. Dec. 3, 2008) (same). Thus, “the burden is on [the party requesting the records] to show that in the absence of the consent of [the subject party] to release the information, it is entitled to the information.” Phoenix Ins. Co. v. Phillips, No. 99-1945, 2000 WL 680334 at *2, 2000 U.S. Dist. LEXIS 7621 at *6 (E.D. La. May 24, 2000); see also Gonzalez v. City of Bakersfield, No. 16-107, 2017 WL 6344322 at *2, 2017 U.S. Dist. LEXIS 205139 at *7 (E.D. Cal. Dec. 12, 2017) (“Defendants fail to identify any section under the applicable SSA regulations under which the requested records are permitted to be disclosed.”). Plaintiff argues that 20 C.F.R. § 401.180(e)(1) is satisfied-i.e., another section of Part 401 specifically allows disclosure of the records-because Plaintiff’s request “is not barred by the Freedom of Information Act” (“FOIA”). (Dkt. 90 at 6.) Certain SSA regulations discuss the interaction between the Privacy Act and the FOIA. 20 C.F.R. § 402.15(c) provides, “[I]f you request records that are about an individual (other than yourself) and that are in a system of records, we will handle your request under the FOIA and the rules in this part [Part 402].” Additionally, 20 C.F.R. § 401.115 provides in relevant part: ... We disclose information in the program records only when a legitimate need exists. ... We also must consider the laws identified below in the respective order when we disclose program information: (a) Some laws require us to disclose information (§ 401.120); some laws require us to withhold information (§ 401.125). These laws control whenever they apply. (b) If no law of this type applies in a given case, then we must look to FOIA principles. See § 401.130. Case 8:17-cv-00644-CJC-KES Document 95 Filed 03/01/18 Page 8 of 13 Page ID #:2419 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. 8:17-cv-00644-CJC-KESx Date: March 1, 2018 Page 8 (c) When FOIA principles do not require disclosure, we may disclose information if both the Privacy Act and section 1106 of the Social Security Act permit the disclosure. 20 C.F.R. § 401.115 (emphasis added). The FOIA generally requires the SSA to disclose any information in SSA’s records upon request from the public, unless one of several exemptions in the FOIA applies. See 20 C.F.R. § 401.130. “The FOIA principle which most often applies to SSA disclosure questions is whether the disclosure would result in a ‘clearly unwarranted invasion of personal privacy.” 20 C.F.R. § 401.140. This is usually referred to as FOIA Exemption Six. See, e.g., Los Angeles Times Commc’ns LLC v. U.S. Dep’t of Labor, 483 F. Supp. 2d 975, 981 (C.D. Cal. 2007). SSA regulations discuss Exemption Six as follows: To decide whether a disclosure would be a clearly unwarranted invasion of personal privacy [the SSA] considers- (a) The sensitivity of the information (e.g., whether individuals would suffer harm or embarrassment as a result of the disclosure); (b) The public interest in the disclosure; (c) The rights and expectations of individuals to have their personal information kept confidential; (d) The public’s interest in maintaining general standards of confidentiality of personal information; and (e) The existence of safeguards against unauthorized redisclosure or use. 20 C.F.R. § 401.140; see also 20 C.F.R. § 402.100(c) (“Some of the information that [the SSA] frequently withhold[s] under Exemption Six is: Home addresses, ages, and minority group status of our employees or former employees; social security numbers; medical information about individuals who have filed a claim for disability benefits; names and addresses of individual beneficiaries of our programs, or benefits such individuals receive; earnings records, claim files, and other personal information SSA maintains.”).? 3 Courts routinely order a party to authorize the SSA to produce the party’s own SSA records, where that party has put his future earning potential or medical condition at issue. See, e.g., Santillan, 2008 WL 62180 at *2, 2008 U.S. Dist. LEXIS 109431 at *6; compare Wheeler v. City of Orlando, No. 07-1287, 2008 WL 5111244 at *3, 2008 U.S. Dist. LEXIS 101462 at *8-9 (M.D. Fla. Dec. 3, 2008). These decisions do not involve any analysis of the FOIA or Case 8:17-cv-00644-CJC-KES Document 95 Filed 03/01/18 Page 9 of 13 Page ID #:2420 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. 8:17-cv-00644-CJC-KESx Date: March 1, 2018 Page 9 The factors listed in 20 C.F.R. § 401.140 are consistent with case law on Exemption Six. “Information need not be intimate or embarrassing to qualify for Exemption 6 protection. ... Generally, personal identifying information such as a person's name, address, phone number, date of birth, criminal history, medical history, and social security number may be protected under Exemption 6.” Citizens for Responsibility & Ethics in Washington v. U.S. Dep’t of Justice, 822 F. Supp. 2d 12, 20 (D.D.C. 2011). “To determine whether a FOIA request should be denied as an unwarranted invasion of privacy under Exemption 6, a court balances the public interest in disclosure against the privacy interest of the individual whose records are requested.” Los Angeles Times, 483 F. Supp. 2d at 981. “Courts weigh the public interest by considering the interest of the general public, not the private motives, interests, or needs of a litigant.” 1d. “The Supreme Court has repeatedly stated that ‘the only relevant public interest in the FOIA balancing analysis is the extent to which the disclosure of information sought would shed light on an agency’s performance of its statutory duties or otherwise let citizens know what their government is up to.” Id. (quoting Bibles v. Oregon Natural Desert Ass’n, 519 U.S. 355, 355- 56 (1997)). “[T]he government must prove that the invasion of privacy is ‘clearly unwarranted,” otherwise “the public interest in disclosure must prevail.” Id. (quoting U.S. Dep’t of State v. Ray, 502 U.S. 164, 177 (1991)). 2; The information Plaintiff seeks in the subpoenas is discoverable under the Privacy Act and the SSA’s regulations. Here, as clarified by Plaintiff’s counsel at the hearing, Plaintiff is seeking (1) the names of SSA claimants from 2005 to present who were represented by Defendants in SSA proceedings, and (2) the amount of money the SSA paid to Defendants in connection with their representation of these SSA claimants, correlated by claimant. (See Dkt. 90 at 4 [reply].) Plaintiff argues this “would not require providing any personal information about a claimant to the Plaintiff aside from the first, middle and last name of the claimant, something that is already a matter of public record.” (Id. at 5.) The Court finds that this information does not fall within Exemption Six, considering the factors laid out in 20 C.F.R. § 401.140 and balancing the public and privacy interests at stake. First, there is a public interest in the disclosure of the information, which (according to Plaintiff) may reveal that public benefits are being transferred to Defendants even though Defendants are also charging illegal fees for the same services. The information would shed light on how the SSA is performing its statutory duty to monitor and approve the fees collected by SSA representatives. Second, although the claimants have a privacy interest in the information sought by Plaintiff, that information is only minimally sensitive. Plaintiff is not seeking the claimants’ social security numbers, addresses, phone numbers, or medical records. The information sought Exemption Six because the logic is that the party has impliedly consented to the disclosure of his own records. Case 8:17-cv-00644-CJC-KES Document 95 Filed 03/01/18 Page 10 of 13 Page ID #:2421 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. 8:17-cv-00644-CJC-KESx Date: March 1, 2018 Page 10 will reveal only that these claimant successfully applied for SSA benefits, that one of the Defendants acted as the claimant’s representative in the SSA proceedings, and the amount of money paid to Defendants out of the claimant’s benefits in connection with that representation. In Martinez v. SSA, No. 07-1156, 2007 WL 4573749 (D. Colo. Dec. 21, 2007), a Colorado district court considered a similar FOIA request and reasoned: [D]isclosure of this information ... implicates the privacy interests of 11,282 people whose social security numbers are listed. Each of them has a privacy interest both in the confidential nature of their social security numbers and in information about their disability claims, awards and payments. It is beyond cavil that an individual's social security number is considered to be private identifying information. Public disclosure of social security numbers can create a risk of identity theft. In addition, the fact that an individual holding a particular social security number has applied for and been awarded disability benefits and attorney fees of a particular amount is personal information. Revelation of this information without the consent of the applicant destroys the practical obscurity and protections inherent in the process of determining Social Security applications. Proceedings before the Social Security Administration and in the United States District Court are public proceedings, but each case is independent. Public knowledge of a particular case requires research of records or attendance at hearings. As a general rule, there is no publication of the award in a particular case or a summary of awards in multiple cases. Thus applicants can practically rely upon the inconvenience in obtaining information about their application and award to help protect their identity and payment stream. Although a member of the public might know of a particular application and award of benefits, it is unlikely that, absent substantial effort, such person would have access to a summary of the applications and awards of more than 11,000 applicants. Similar to the risk of identity theft, public revelation of such personal information could create a risk of interception or diversion of social security benefit payments. Interestingly, both this risk and the risk associated with release of the social security number can be reduced or eliminated if the holder of an identified social security number requests and obtains their own information. 2007 WL 4573749 at *4 (emphasis added and footnote omitted). Here, unlike Martinez, Plaintiff is not seeking the social security numbers of the claimants, which reduces the sensitivity of the information and the risk of identity theft. To the extent Martinez reasoned that information about whether SSA claimants have applied for and received benefits is effectively private because it is difficult to obtain in the aggregate, this Court disagrees; such information is in fact a matter of public record. Moreover, the claimants themselves have an interest in the disclosure of this information. In Lepelletier v. FDIC, 164 F.3d 37 (D.C. Cir. 1999), the D.C. Circuit held: Case 8:17-cv-00644-CJC-KES Document 95 Filed 03/01/18 Page 11 of 13 Page ID #:2422 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. 8:17-cv-00644-CJC-KESx Date: March 1, 2018 Page 11 [T]he FOIA analysis under Exemption 6 must include consideration of any interest the individual might have in the release of the information, particularly when the individuals who are “protected” under this exemption are likely unaware of the information that could benefit them. In this case, a number of the depositors have a significant pecuniary interest at stake, and disclosure of their names will greatly increase the probability that they (or their heirs) will be reunited with their funds. Thus, it is overly paternalistic to insist upon protecting an individuals privacy interest when there is good reason to believe that he or she would rather have both the publicity and the money than have neither. Accordingly, the list-of-names information sought by Lepelletier may be released under FOIA. Id. at 48 (but finding that, because there was no discernible public interest in the disclosure, the “unclaimed deposits should not be matched with the amount owed to that individual” and there should be a “dollar amount below which an individual's privacy interest should be deemed to outweigh his or her interest in discovery his or her money, such that the names of depositors with lesser amounts may be redacted”); see also Hodes v. U.S. Dep’t of Hous. & Urban Dev., 532 F. Supp. 2d 108, 120 (D.D.C. 2008) (“The D.C. Circuit’s analysis is equally applicable in the present matter, where there is no evidence to suggest that security holders would prefer to remain anonymous instead of receiving monies that are indisputably owed to them.”). Additionally, the protective order entered in this case provides a safeguard against unauthorized re-disclosure or use of the information produced by the SSA in response to the subpoenas. (See Dkt. 73.) Pursuant to that order, documents that are designated “confidential” by a non-party such as the SSA may be used “only for prosecuting, defending, or attempting to settle this Action” and “may be disclosed only to the categories of persons and under the conditions described in” the order. (Id. at 7.1) Given the privacy interests involved, it would be appropriate for the SSA to designate the documents responsive to the subpoenas as “confidential.” C. Burden on the SSA of Compliance with the Subpoenas. 1. Plaintiff has been unable to obtain the information sought in the subpoenas from the Defendants through normal discovery methods. Federal Rule of Civil Procedure 45(c)(3)(A)(iv) protects subpoenaed third parties from “undue burden” and Rule 26(b)(2)(C) requires the Court to limit the frequency or extent of discovery if it “can be obtained from some other source that is more convenient, less burdensome, or less expensive.” Relying on these principles, courts generally hold that information that can be obtained from a party should not be sought from third parties. See, e.g., Nidec v. Victor Co. of Japan, 249 F.R.D. 575, 577 (N.D. Cal. 2007) (“There is simply no reason to burden nonparties when the documents sought are in possession of the party defendant.”). Case 8:17-cv-00644-CJC-KES Document 95 Filed 03/01/18 Page 12 of 13 Page ID #:2423 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. 8:17-cv-00644-CJC-KESx Date: March 1, 2018 Page 12 The SSA and Defendants argue that Plaintiff can obtain the information sought in the subpoenas from the Defendants using normal discovery methods. (Dkt. 87 at 6-7; Dkt. 89 at 2.) In Plaintiff’s reply, he responded that “[i]t would be literally impossible for the Plaintiff to use the normal discovery procedures at this point ... before the hearing on the Defendants’ Motion for Summary Judgement [sic],” which was then set for March 12, 2018, less than a month away. (Dkt. 90 at 2.) As noted above, that motion for summary judgment was subsequently granted as to Plaintiff’s RICO claim and this case is set to be transferred to state court. (Dkt. 93.) Plaintiff has not explained why the information sought in the subpoenas could not be obtained through normal discovery methods in the state court. At the February 20 hearing, Plaintiff’s counsel explained that he has tried to obtain similar information from Defendants through requests for production. Counsel were in negotiations over Defendants’ objections to those requests when the District Judge denied Plaintiff’s motion for class certification without prejudice and ordered Defendants to move for summary judgment on Plaintiff’s RICO claim. (See Dkt. 82.) Defendants then decided to stand on their objections. Defendants have not described the nature of those objections to the Court or explained why, notwithstanding those objections, Defendants apparently believe Plaintiff will ultimately be able to obtain this information from them. Because the Court cannot say that Plaintiff can obtain the same information from Defendants, the Court declines to deny Plaintiff’s motion to compel the SSA on this basis. 2 The SSA has not shown that producing the requested information would be unduly burdensome. In addition to arguing that the same information can be obtained from Defendants, the SSA argues that “[s]earching and retrieving the payment information requested by Plaintiff based only on Defendants’ name and individual Social Security numbers” would be unduly burdensome “because representative fee payment information is stored under individual claimant files.” (Dkt. 87 at 6.) At the hearing, SSA’s counsel admitted that SSA records can be queried to identify all claimants represented by one of the Defendants in SSA proceedings. Although the SSA’s counsel stated this query would need to be conducted by an IT specialist in a separate, centralized office (the Center for Automation and Security) rather than by an employee at the regional office, no information was provided about how long such a search would take or why referring the query to an IT specialist would be burdensome. SSA’s counsel also indicated that, after a system update is completed in about a month, such a query could be conducted by a regional office employee. Thus, on the present record, the SSA has not shown that searching for the requested information would be unduly burdensome. * Additionally, Plaintiff may be responsible for some or all of the costs of complying with the subpoenas. See Fed. R. Civ. P. 45(d)(2)(B)(ii) (directing court to protect non-parties from “significant expense resulting from compliance”); 20 C.F.R. §§ 402.155, 402.160, 402.165 (setting forth fees to be charged for responding to FOIA requests); Case 8:17-cv-00644-CJC-KES Document 95 Filed 03/01/18 Page 13 of 13 Page ID #:2424 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. 8:17-cv-00644-CJC-KESx Date: March 1, 2018 Page 13 The Court leaves it to the discretion of the SSA whether to create a list reflecting the information sought or redact and produce the relevant documents reflecting the information. See Int’] Diatomite Producers Ass’n v. U.S. Soc. Sec. Admin., No. C-92-1634-CAL, 1993 WL 137286 at *2, 1993 U.S. Dist. LEXIS 21788 at *5 (N.D. Cal. Apr. 28, 1993) (party seeking FOIA records was not impermissibly seeking to have agency create non-existent documents where the party had identified the documents to be searched and the agency could respond either “by creating a list or by redacting and producing the [underlying documents] themselves”). If, in actually searching for the information responsive to the subpoenas, the SSA discovers that doing so would be significantly different and more burdensome than the process described above or would require a significant amount of employee time, the SSA may move for reconsideration of this Order on the grounds that complying with the subpoenas would represent an undue burden. Such motion should be made prior to the date for compliance with the subpoenas, which is set forth below. III. CONCLUSION Based on the foregoing, IT IS HEREBY ORDERED that, within one (1) week of the date of this Order, Defendants shall provide Plaintiff and the SSA with the appropriate authorization(s) to release information contained in the Defendants’ representative file(s). IT IS FURTHER ORDERED that, within forty-five (45) days of the date of this Order, the SSA shall produce the information responsive to the subpoenas to Plaintiff. Such information shall be designated “confidential” under the applicable protective order and treated as such by all parties to this action. IT IS RECOMMENDED that the District Judge retain jurisdiction over this discovery dispute until the SSA’s production is complete, so that this Court may resolve any further disputes connected with the subpoenas. Initials of Deputy Clerk JD EXHIBIT “B” Case 8:17-cv-00644-CJC-KES Document 96 Filed 03/02/18 Page 1 of 1 Page ID #:2425 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. SACV 17-00644-CJC(KESx) Date: March 2, 2018 Title: IRAJ KHOSROABADI V. MAZGANI SOCIAL SERVICES, INC., MAHVASH MAZGANI, NAZANIN MAZGANI, NEYAZ MAZGANI, SHOHREH SHARIFZADEH, AND MAHNAZ MOGHADDAM PRESENT: HONORABLE CORMAC J. CARNEY, UNITED STATES DISTRICT JUDGE Melissa Kunig N/A Deputy Clerk Court Reporter ATTORNEYS PRESENT FOR PLAINTIFF: ATTORNEYS PRESENT FOR DEFENDANT: None Present None Present PROCEEDINGS: (IN CHAMBERS) ORDER RETAINING JURISDICTION UNTIL APRIL 20, 2018 On February 14, 2018, the Court granted in part Defendants’ motion for summary judgment as to Plaintiff’s civil RICO cause of action, and declined to exercise supplemental jurisdiction over Plaintiff’s remaining causes of action. (Dkt. 93.) At the time, Plaintiffs motions to compel discovery from the Social Security Administration (“SSA”) were pending before Judge Scott. (Dkts. 83, 85.) In light of these motions, the Court delayed remand until March 2, 2018, or after if Judge Scott recommended a later date. (Id.) On March 1, 2018, Judge Scott granted Plaintiff’s motions to compel, and requested that this Court retain jurisdiction over the action “until the SSA’s production is complete, so that this Court may resolve any further disputes connected with the subpoenas.” (Dkt. 95 at 13.) Judge Scott ordered the SSA to produce the information responsive to Plaintiff’s subpoenas within 45 days of March 1, 2018, by April 15, 2018. (Id.) In light of Judge Scott’s request, the Court will further delay remand until April 20, 2018, unless Judge Scott recommends a later date, to ensure that Plaintiff can enforce his subpoenas should any disputes arise. aa MINUTES FORM 11 CIVIL-GEN Initials of Deputy Clerk MKU EXHIBIT “C” From: Felton Newell Sent: Friday, March 30, 2018 5:49 PM To: Robert B. Salgado, Esq. Subject: Stipulation of Settlement Robert, | understand from my client Mahvash Mazgani that she and Mr. Khosroabadi have agreed to a settlement. The fully executed settlement agreement with Mr. Khosroabadi’s notarized signature is attached. Also attached is a draft Stipulation for Dismissal. Please let me know if you have any comments regarding the Stipulation. If you do not have any comments, please execute it and return it to me. Thanks Felton Glaser Weill Felton T. Newell | Of Counsel 10250 Constellation Blvd., 19th Floor, Los Angeles, CA 90067 Main: 310.553.3000 | Direct: 310.556.7805 | Fax: 310.843-2605 E-Mail: fnewell@glaserweil.com | www.glaserweil.com This message and any attached documents may contain information from the law firm of Glaser Weil Fink Howard Avchen & Shapiro LLP that is confidential and/or privileged. If you are not the intended recipient, you may not read, copy, distribute or use this information. If you have received this transmission in error, please notify the sender immediately by reply e-mail and then delete this message. EXHIBIT “D” 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Hse 8:17-cv-00644-CJC-KES Document 103 Filed 04/11/18 Page 1 of 2 Page ID #:2498 5-6 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION Case No.: SACV 17-00644-CJC(KESx) IRAJ KHOSROABADI, CL ) Plaintiff, ) ORDER REMANDING CASE AND v ! DENYING DEFENDANTS’ EX PARTE : REQUEST MAZGANI SOCIAL SERVICES, INC., ) MAHVASH MAZGANI, NAZANIN MAZGANI, NEYAZ MAZGANI, ) MAHNAZ MOGHADDAM, and ) SHOHREH SHARIFZADEH, ) Defendants. ) ) On March 13, 2017, Plaintiff Iraj Khosroabadi filed this case in Orange County Superior Court, which was removed to this Court on April 7, 2017. (See Dkt. 1 Ex. 1; Dkt. 1.) On February 14, 2018, the Court granted in part Defendants’ motion for summary judgment as to Plaintiff’s civil RICO cause of action, and declined to exercise -1- OY 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Ise 8:17-cv-00644-CJC-KES Document 103 Filed 04/11/18 Page 2 of 2 Page ID #:2499 supplemental jurisdiction over Plaintiff’s remaining causes of action. (Dkt. 93.) The Court delayed remand in light of Plaintiff’s pending motions to compel discovery, and Magistrate Judge Scott’s request that the Court retain jurisdiction while the Social Security Administration produced information responsive to Plaintiff’s subpoenas. (Dkt. 96.) Before the Court is Defendants’ ex parte request for dismissal of the case or for an order to show cause why the cause should not be dismissed in light of the parties’ purported settlement. (Dkt. 102.) Defendants represent that the parties entered into a confidential settlement agreement on March 30, 2018, wherein Defendants agreed to pay Plaintiff and Plaintiff agree to execute a stipulation for dismissal of this action with prejudice. (Id. at 2-3.) Defendants did not attach the settlement to their request. (/d.) Defendants state they have paid Plaintiff the agreed upon amount, but Plaintiff’s counsel has refused to stipulate to dismissal of the action. (/d.) Defendants also request sanctions against Plaintiff’s counsel for failure to dismiss the action. (Id. at 3-4.) Given the parties’ dispute, there is no reason for the Court to retain jurisdiction over this matter any longer.! Accordingly, the Court REMANDS this action to Orange County Superior Court and DENIES Defendants’ ex parte request for dismissal and sanctions. DATED: April 11, 2018 FI NE / CORMAC J. CARNEY UNITED STATES DISTRICT JUDGE "The Court had previously determined that it would delay remand until April 20, 2018, unless Judge Scott recommended a later date. But, as evidenced by Defendants’ ex parte request, further litigation in federal court is not productive.
