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Brecher v. Citigroup Global Markets, Inc.

United States District Court, Ninth Circuit

October 7, 2013

DANIEL BRECHER, individually and on behalf of all others similarly situated, et al., Plaintiffs,


MITCHELL D. DEMBIN, Magistrate Judge.

Before the Court is the joint motion for determination of a discovery dispute filed on September 27, 2013. (ECF No. 106). The dispute involves responses to six requests for production and eight interrogatories propounded by Plaintiffs upon Defendants.

Procedurally, the case is on its Third Amended Complaint ("TAC") which has withstood a motion to dismiss. (ECF No. 89). On behalf of a class, Plaintiffs allege violations of law stemming from the creation of Morgan Stanley Smith Barney. Plaintiffs claim that the merger adversely impacted the stock incentive plan they were provided by their former employer, Smith Barney. Plaintiffs also allege that beginning in 2008, they were not reimbursed by their employer for business expenses - portions of their commission checks paid to their sales assistants.[1]

No class has been certified. The operative Case Management Order requires that all fact and expert discovery necessary to support or oppose class certification be completed by February 3, 2014. (ECF No. 101).

Legal Standard

The Federal Rules of Civil Procedure generally allow for broad discovery, authorizing parties to obtain discovery regarding "any nonprivileged matter that is relevant to any party's claim or defense." Fed.R.Civ.P. 26(b)(1). Also, "[f]or good cause, the court may order discovery of any matter relevant to the subject matter involved in the action." Id . Relevant information for discovery purposes includes any information "reasonably calculated to lead to the discovery of admissible evidence, " and need not be admissible at trial to be discoverable. Id . There is no requirement that the information sought directly relate to a particular issue in the case. Rather, relevance encompasses any matter that "bears on" or could reasonably lead to a matter that could bear on, any issue that is or may be presented in the case. Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 354 (1978). District courts have broad discretion to determine relevancy for discovery purposes. See Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002). Similarly, district courts have broad discretion to limit discovery where the discovery sought is "unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive." Fed.R.Civ.P. 26(b)(2)(C). Limits also should be imposed where the burden or expense outweighs the likely benefits. Id.

"An interrogatory may relate to any matter that may be inquired under Rule 26(b)." Fed.R.Civ.P. 33(a)(2). The responding party must answer each interrogatory by stating the appropriate objection(s) with specificity or by "answer[ing] separately and fully in writing under oath." Id. at 33(b). The responding party has the option in certain circumstances to answer an interrogatory by specifying responsive records and making those records available to the interrogating party. Id. at 33(d).

Similarly, a party may request the production of any document within the scope of Rule 26(b). Fed.R.Civ.P. 34(a). "For each item or category, the response must either state that inspection and related activities will be permitted as requested or state an objection to the request, including the reasons." Id. at 34(b). The responding party is responsible for all items in "the responding party's possession, custody, or control." Id. at 34(a)(1). Actual possession, custody or control is not required. Rather, "[a] party may be ordered to produce a document in the possession of a non-party entity if that party has a legal right to obtain the document or has control over the entity who is in possession of the document. Soto v. City of Concord, 162 F.R.D. 603, 620 (N.D.Cal.1995).

Prior to certification of a class, some discovery regarding the class may be appropriate. See Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 942 (9th Cir. 2009) ("Our cases stand for the unremarkable proposition that often the pleadings alone will not resolve the question of class certification and that some discovery will be warranted."). Discovery likely is warranted where the requested discovery will resolve factual issues necessary for the determination of whether the action may be maintained as a class action. Kamm v. California City Development Co., 509 F.2d 205, 210 (9th Cir. 1975). Plaintiff carries the burden of making either a prima facie showing that the requirements of Fed.R.Civ.P. 23(a) to maintain a class action have been met or "that discovery is likely to produce substantiation of the class allegations." Mantolete v. Bolger, 767 F.2d 1416, 1424 (9th Cir. 1985).


Each of the disputed items will be addressed below in groups or individually as may be appropriate.

RFP #7

This RFP relates to the unreimbursed business expense claims. As modified by agreement of the parties, Plaintiffs seek production of the Smith Barney Financial Advisor Compensation Plans for 2005-2007. Defendants have produced the plans for 2008-2009. The TAC only asserts violations beginning on January 1, 2008. Plaintiffs assert that the earlier plans may contain statements or admissions of Defendants relevant to the pending claims. Defendants assert that they have settled a class action regarding claims related to the earlier plans and state that there is no basis to reopen that discovery. Further, Defendants assert that since the challenged unreimbursed payments were made pursuant to the 2008 and 2009 plans, the earlier plans are not relevant to any claim or defense in this action.

Plaintiffs have not convinced the Court that the 2005-2007 plans may have information relevant to a claim or defense in this action. The motion to compel production of the ...

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