United States District Court, S.D. California
FRANCESCA GONZALES, et al. Plaintiffs,
T-MOBILE, USA, Inc., et al. Defendants.
DENYING DEFENDANT'S MOTION FOR A PROTECTIVE ORDER [ECF NO. 28]
BARBARA L. MAJOR, Magistrate Judge.
On June 23, 2014, the counsel for all parties jointly contacted the Court regarding a discovery dispute, for which the Court set a briefing schedule. ECF No. 27. In accordance with the Court's Order, Defendant T-Mobile USA, Inc. ("Defendant" or "T-Mobile") filed a motion for a protective order on June 24, 2014. ECF No. 28. Plaintiffs timely filed an opposition on June 27, 2014. ECF No. 29. Defendant filed a reply in support of its motion for a protective order on July 2, 2014. ECF No. 32.
The parties advised the Court that a ruling on the motion was needed as soon as possible since Plaintiffs' motion for class certification had to be filed by July 14, 2014. ECF Nos. 28-1 at 2; 29 at 5-6, 15-16. To accommodate the parties' request, on July 3, 2014, the Court issued an order denying Defendant's motion for a protective order and granting in part Plaintiffs' motion to continue the class certification deadline. ECF No. 33. In the order, the Court stated that it was issuing the order to address the timing concerns of the parties and that it would issue a supplemental order providing additional analysis. Id. at 4 n.1. This order provides the supplemental analysis for the order denying Defendant's motion for a protective order.
Plaintiffs brought this class action suit on behalf of "[a]ll employees who worked for Defendants in California within four years prior to the filing of this complaint until the date of certification, and who earned and/or received commissions and/or bonuses and/or incentives as part of their regularly-scheduled compensation on service contracts, renewals and/or merchandise sales." ECF No. 1-3 at 5. Plaintiffs assert that T-Mobile's automated commission accounting system did not accurately reflect all commissions earned by the members of the purported class, resulting in a systemic underpayment of commissions and bonuses. Id. at 3-4.
Plaintiffs state that on October 14, 2013, they served discovery requests on Defendant which were "designed to find and detect alleged errors in T-Mobile's commissioning system." ECF No. 29-2, Declaration of Janine R. Menhennet ("Menhennet Decl.") at 3. Plaintiffs maintain that while their discovery requests were pending,  the parties jointly agreed in December 2013, "that staying the formal discovery requests made sense, while they pursued [a] smaller, narrower data request...." ECF No. 29 at 6; see also Menhennet Decl. at 3. Defendant alleges that in December 2013 and January 2014, the parties entered into an agreement to stay general discovery (or written discovery) and to focus on discovery required for mediation. See ECF No. 28-2, Declaration of Fred M. Plevin ("Plevin Decl.") at 2; ECF Nos. 28-1 at 2-3; 32 at 5-6, 8. Defendant further claims that in response to Plaintiffs' requests, and based upon the parties' agreements, it conducted specific computer searches, gathered, compiled, and produced to Plaintiffs relevant data. ECF Nos. 28-1 at 2-3; 32 at 2-3.
Citing delays in data production and analysis, the parties jointly moved the Court on three separate occasions (on November 8, 2013, January 31, 2014, and May 29, 2014) to continue expert disclosure and class certification filing deadlines. See ECF Nos. 16, 21 & 23. After granting the parties' first two motions and extending the deadlines by five months [ECF Nos. 17 & 22], the Court declined the parties' request to extend the class certification deadline for three more months [ECF Nos. 23 at 6; 22 at 2], and extended the deadline until July 14, 2014. ECF Nos. 24 & 26. The new deadline for class certification was thus set before the parties' scheduled mediation date of July 31, 2014. ECF Nos. 26 at 3; 29 at 8. Plaintiffs subsequently advised Defendant's counsel about their intention to use some of the data produced by Defendant after January 14, 2014, to support their motion for class certification. ECF No. 28-1 at 4; Plevin Decl. at 4-5. Defendant asked Plaintiffs to "enter into a stipulated protective order prohibiting the use of any information produced by T-Mobile after January 14, 2014, for any purpose other than mediation." Id .; see also ECF No. 28-3 at 1. Plaintiffs did not agree to the proposed stipulation, and Defendant subsequently refused to produce the last set of data, which was scheduled to occur by June 13, 2014. See Plevin Decl. at 5; see also ECF Nos. 28 at 9 n.3; 29 at 16.
Defendant alleges that it "informally" provided data compilations in response to Plaintiffs' January 14, 2014 letter "for the sole, purpose of allowing [Plaintiffs] to prepare for mediation." See ECF No. 28-1 at 2; see also Plevin Decl. at 3-4. Defendant disputes Plaintiffs' characterization of the produced data as "raw data." In support, Defendant alleges that it expended significant resources searching for, obtaining, and compiling the data, asserts that it did so in order to accommodate mediation, and claims the documents it produced were not business records. ECF Nos. 32 at 2-3, 8; 32-2. Defendant filed the instant motion requesting the Court to issue a protective order "precluding the use by Plaintiffs of any data produced by T-Mobile in response to Plaintiffs' counsel's letter of January 14, 2014, or any related requests, for any purpose other than mediation." ECF No. 28 at 1; see also ECF Nos. 28-1 at 10; 32 at 8.
Plaintiffs reply that Defendant "is using mediation shield... to protect raw data pulled entirely from contemporaneous business records which existed prior to, and independent of, the mediation process." ECF No. 29 at 8. Plaintiffs acknowledge that they agreed with Defendant to limit the scope of the discovery requested in October 2013, in order to comply with the Court's discovery order suggesting that Plaintiffs identify "systematic errors" relevant to the allegations in this case. Id. at 6-8; Markham Decl. at 3-4; Menhennet Decl. at 3. Plaintiffs further assert that the disputed computer data "is raw data, subject to discovery" that was maintained as business records, and, as such, is not protected by the mediation privilege and could be used by Plaintiffs for class certification purposes. ECF No. 29 at 8-11, 16. Plaintiffs thus assert that Defendant's motion for a protective order should be denied. Id. at 16.
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 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, 351 (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 should be imposed where the burden or expense outweighs the likely benefits. Id.
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)(2)(B). The responding party is responsible for all items in "the responding party's possession, custody, or control." Id. at 34(a)(1).
Upon a showing of good cause, the Court may "issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense." Fed.R.Civ.P. 26(c). "For good cause to exist, the party seeking protection bears the burden of showing specific prejudice or harm will result if no protective order is granted." Phillips ex rel. Estates of Byrd v. General Motors Corp., 307 F.3d 1206, 1210-11 (9th Cir. 2002), citing Beckman Indus., Inc. v. Int'l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992) ("Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning, do not satisfy the Rule 26(c) test"); see also Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975) (Under liberal discovery principles of the federal rules, those opposing discovery are required to carry a heavy burden of showing why discovery should be denied). The court has wide discretion to determine what constitutes a showing of good cause and to fashion a protective order that provides the appropriate degree of protection. Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984).
State law privilege rules apply in a federal proceeding based on diversity. See Fed.R.Evid. 501; In re California Pub. Utilities Com'n, 892 F.2d 778, 781 (9th Cir. 1989) ("In diversity actions, questions of privilege are controlled by state law."). In California, the mediation privilege is established by statute. See Cal. Evid. Code §§ 1115-1128. California Evidence Code § 1119(b) provides that "[n]o writing, as defined in Section 250, that is prepared for the purpose of, in the course of, or pursuant to, a mediation... is admissible or subject to discovery, and disclosure of the writing shall not be compelled...." Cal. Evid. Code 1119(b). A "writing" is defined to include "every other means of recording upon any tangible thing, any form of communication or representation, including letters, words, pictures, sounds, or symbols, or combinations thereof, and any record thereby created, regardless of the manner in which the record has been stored." Cal. Evid. Code § 250; see also Rojas v. Superior Court, 33 Cal.4th 407, 416-17 (2004) (California's mediation privilege for "writings" extends to analyses of raw data results, prepared for, in ...