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Colaco v. Asic Advantage Simplified Pension Plan

United States District Court, N.D. California, San Jose Division

July 18, 2014



PAUL S. GREWAL, Magistrate Judge.

Before the court are Defendants' motion to compel Plaintiffs to produce all documents responsive to Defendants' Request for Production of Documents and Defendants' motion for sanctions under Federal Rule of Civil Procedure 37.[1] Plaintiffs oppose.[2] Because the parties' papers squarely present the issues, the court finds the motion suitable for disposition without a hearing.[3] After considering the arguments, the court GRANTS Defendants' motion to compel and DENIES Defendants' request for sanctions.


Plaintiffs allege that in December 2010, ASIC and Microsemi Corporation began to discuss the possibility of Microsemi buying ASIC.[5] Plaintiffs also allege that ASIC's President and Chief Executive Officer promised that contributions to ASIC's Simplified Employee Pension Plan would be paid for 2010 and the first half of 2011.[6] Defendants see things differently, claiming that the alleged promises could not have been made because ASIC did not begin discussions with Microsemi until April 2011.[7]

In any event, on July 5, 2011, Microsemi acquired ASIC.[8] According to Plaintiffs, at the ASIC Board of Directors' final meeting before the acquisition, the Board represented that all contributions accrued through June 30, 2011 would be paid into the participant employees' accounts and that it also allocated funds for this purpose.[9] Defendants deny this[10] and contend that each of the thirteen Plaintiffs who were laid off following the merger signed releases of at least some of their asserted SEP claims.[11]

On March 4, 2013, Plaintiffs brought a myriad of claims against Defendants.[12] After the court subsequently dismissed a majority of these claims, [13] Plaintiffs filed amended claims.[14]

On February 4, 2014, Defendants served document requests on each of the Plaintiffs.[15] The 134 requests relate to specific allegations regarding the SEP Plain in Plaintiffs' First Amended Complaint, [16] and in particular (1) what promises were made by ASIC's executives[17] and (2) whether Plaintiffs signed the releases knowingly and voluntarily.[18] Plaintiffs objected to the document requests, claiming that (1) the discovery was not authorized under the Employee Retirement Income Security Act and (2) that the requests were unduly burdensome and harassing.[19] Despite meet and confer between the parties regarding these records, they have not been able to resolve the issue, and this motion to compel followed. Defendants also filed a motion for monetary discovery sanctions under Fed.R.Civ.P. 37, claiming that Plaintiffs' objections to the RFPs are not substantially justified by existing case law.[20]


The Federal Rules of Civil Procedure provide parties "may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense."[21] "Once the moving party establishes that the information requested is within the scope of permissible discovery, the burden shifts to the party opposing discovery."[22] "An opposing party can meet its burden by demonstrating that the information is being sought to delay bringing the case to trial, to embarrass or harass, is irrelevant or privileged, or that the person seeking discovery fails to show need for the information."[23]

If a motion to compel is granted or the requested discovery is provided after the motion was filed, Fed.R.Civ.P. 37(a)(5)(A) provides for "the movant's reasonable expenses incurred in making the motion, including attorney's fees." However, the court may not order sanctions if (1) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action, (2) the opposing party's nondisclosure, response, or objection was substantially justified or (3) other circumstances make an award of expenses unjust.[24]


A. The Discovery Is Permissible Under ERISA

The SEP plan in question is subject to the terms of the Employee Retirement Income Security Act.[25] Under ERISA, discovery may be limited in claims for plan benefits under Section 1132(a)(1)(B) because an administrative record exists for such claims, and allowing additional discovery beyond that record would frustrate ERISA's goal of "provid[ing] a method for workers and beneficiaries to resolve disputes over benefits inexpensively and expeditiously."[26] However, discovery beyond the administrative record may be appropriate for claims under Section 1132(a)(3) that do not arise from the written ERISA plan terms, as there may be no administrative record for such claims.[27]

Plaintiffs appear to acknowledge that discovery beyond the administrative record is permissible for 1132(a)(3) actions, but assert that discovery by plan administrator defendants should be limited because their cited cases only involved discovery by plaintiffs.[28] But Plaintiffs once again fail to provide any legal authority indicating that this is so.

As Defendants correctly point out, when the actions giving rise to 1132(a)(3) claims were carried out in conjunction with administrative determinations or otherwise not reflected in the record, the administrative record may not be properly relied upon to decide the claims.[29] In such a circumstance, additional discovery should be permitted in order to avoid prejudice to either party.[30] Here, Plaintiffs have alleged inequitable conduct and breach of fiduciary duty on the part of Defendants, yet they seek to preclude the Defendants from discovering information supporting or discrediting those allegations. Such a result would prohibit Defendants from preparing defenses and prevent a fair and full trial.

Plaintiffs further contend that because the plan administrator treated Plaintiffs' unsubstantiated facts with respect to the breach of fiduciary duty claim as true for purposes of administrative appeal, [31] Defendants are now precluded from conducting discovery on those facts.[32] However, this situation is not analogous to those in the cases cited by Plaintiffs, which limited discovery because the plan administrator let an appeal expire in order to later introduce new rationales for denial.[33] Here, the administrator provided a timely review in the light most favorable to Plaintiffs, which required assuming the truth of some of Plaintiffs' unsubstantiated allegations.[34] Consequently, the court declines to prohibit discovery of evidence relating to those allegations.

B. The Discovery Is Not Burdensome Or Harassing

Plaintiffs do not provide substantive arguments in support of their claim that the document requests are unduly burdensome and harassing.[35] The document requests are directed at specific allegations in the First Amended Complaint and concern relevant information that could reasonably lead to the discovery of probative evidence with respect to the Plaintiffs' claims. As such, the court finds that RFPs are not unduly burdensome and harassing.

C. Sanctions Are Not Appropriate

Defendants claim that Plaintiffs' opposition to the RFPs was not substantially justified by existing case law governing discovery in ERISA actions.[36] However, the case law on this issue is not fully delineated or settled, as shown by both parties' reliance on persuasive authority from other districts and the relative lack of cases wherein a plaintiff in an ERISA case, rather than a defendant, resists discovery. Plaintiffs thus were substantially justified in objecting to the RFPs.

All records requested in Defendants' RFPs shall be produced within fourteen days.


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