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Nucal Foods, Inc v. Quality Egg LLC

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA


May 11, 2012

NUCAL FOODS, INC., PLAINTIFF,
v.
QUALITY EGG LLC, ET AL., DEFENDANTS.

The opinion of the court was delivered by: Carolyn K. Delaney United States Magistrate Judge

ORDER

Defendant Quality Egg's motion for protective order regarding Rule 30(b)(6) deposition came on expedited hearing pursuant to the agreement of the parties. Jason Takenouchi appeared telephonically for plaintiff. Troy McMahan and James Mink appeared telephonically for defendants Quality Egg LLC, DeCoster Revocable Trust, and DeCoster Enterprises LLC. Kristin Eads and Steven Toeniskoetter appeared telephonically for the Hillandale defendants. No appearance was made for defendant Austin, a.k.a. "Jack," DeCoster. Upon review of the letter brief and other documents submitted by e-mail prior to the telephonic hearing, upon hearing the arguments of counsel, and good cause appearing therefor, THE COURT FINDS AS FOLLOWS:

The court previously granted a stay of discovery until November 21, 2012 as to defendant Austin "Jack" DeCoster because he is presently the target of a federal criminal investigation. Dkt. no. 121. Defendant Quality Egg now moves for a protective order regarding a 30(b)(6) notice served on the corporate defendant because the only persons qualified to be designated as deponents responsive to the notice are also under federal criminal investigation and have been directed by their criminal defense attorneys to invoke the Fifth Amendment privilege against self incrimination. The court finds that defendant Quality Egg has adduced sufficient evidence that the only persons who could competently testify with respect to the 30(b)(6) notice at issue are Jack DeCoster, Peter DeCoster, and CFO Patsy Larson. As all of the potential designees are currently the target of a federal criminal investigation and all of them intend to invoke the fifth amendment privilege, the court finds a protective order is warranted. See Admiral Ins. Co. v. U.S. Dist. Court for Dist. of Arizona, 881 F.2d 1486, 1495 n. 8 (9th Cir. 1989) (corporation may be unintended beneficiary of a corporate employee's personal invocation of the Fifth Amendment privilege); see also KLA-Tencor Corp. v. Murphy, 717 F.Supp.2d 895, 906-907 (N.D. Cal. 2010) (although corporation cannot validly claim protection under Fifth Amendment, protection may in effect be extended to corporate defendants where all the individual representatives may be implicated in alleged wrongdoing).

Defendants DeCoster Revocable Trust and DeCoster Enterprises LLC move for a protective order regarding 30(b)(6) depositions on matters of which these entities do not have, and have never had, knowledge. Defendants have agreed to provide a declaration or other pleading signed by counsel stating that these defendants have no knowledge on the designated topics. In light of the imminent discovery cut-off and the other circumstances presented in this case, such a response appears to be reasonable and appropriate.

Accordingly, IT IS HEREBY ORDERED that:

1. The motion for protective order is granted. Discovery is stayed as to Rule 30(b)(6) deposition of defendant Quality Egg LLC until November 21, 2012.

2. Defendants DeCoster Revocable Trust and DeCoster Enterprises LLC may meet their obligation in responding to a 30(b)(6) deposition notice by providing a declaration or other pleading stating defendants' lack of knowledge on designated topics. The parties are directed to meet and confer in good faith regarding the wording of such pleading or declaration.

20120511

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