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Real Action Paintball, Inc. v. Advanced Tactical Ordnance Sys., LLC

United States District Court, N.D. California

November 10, 2014

REAL ACTION PAINTBALL, INC., Plaintiff,
v.
ADVANCED TACTICAL ORDNANCE SYSTEMS, LLC, et al., Defendants

For Real Action Paintball, Inc., Plaintiff: Paul B. Overhauser, OVERHAUSER LAW OFFICES LLC, Greenfield, IN; B. Douglas Robbins, Wood Robbins LLP, San Francisco, CA.

For Advanced Tactical Ordnance Systems, LLC, An Indiana Company, Perfect Circle Projectiles, LLC, Gary Gibson, A resident of Illinois, Tiberius Arms, LLC, An Indiana Company, Tyler Tiberius, A resident of Indiana, Defendants: John Christopher Kirke, LEAD ATTORNEY, Donahue Fitzgerald LLP, Oakland, CA.

For Michael L. Blumenthal, A Resident of Illinois, David Piell, A Resident of Illinois, Defendants: John Christopher Kirke, LEAD ATTORNEY, Sophia Elena Contreras Schwartz, Donahue Fitzgerald LLP, Oakland, CA.

ORDER RE DEFENDANTS' MOTION FOR RELIEF FROM NONDISPOSITIVE DISCOVERY ORDER; ORDER RE: JOINT LETTER DISPUTES Re: Dkt. Nos. 112, 117-19

MARIA-ELENA JAMES, United States Magistrate Judge.

I. INTRODUCTION

Pending before the Court is Defendants' motion for relief from Magistrate Judge Nandor Vadas' October 21, 2014 Discovery Order. Dkt. No. 112 (" Mot."). Additionally, the parties recently submitted three letter briefs outlining a number of disputes largely involving the same issues as discussed here. See Dkt. Nos. 117-19. After carefully reviewing the parties' positions, relevant legal authority, and the record in this case, for the reasons described below, the Court GRANTS IN PART and DENIES IN PART Defendants' motion for relief. The Court also DENIES WITHOUT PREJUDICE the parties' three letter briefs, Dkt. Nos. 117-19, and orders the parties to further meet and confer on those disputes in light of this order.

II. BACKGROUND

On May 27, 2014, Plaintiff Real Action Paintball, Inc. (" RAP4") filed the present Complaint against Advanced Tactical Ordnance Systems, LLC (" ATO"), Perfect Circle Projectiles LLC (" Perfect Circle"), Tiberius Arms LLC (" Tiberius Arms"), and individual Defendants Gary Gibson (an owner of Perfect Circle), Tyler Tiberius (an owner of Tiberius Arms), Michael Blumenthal, and David Piell (attorneys to ATO) (collectively " Defendants").[1] Compl., Dkt. No. 1.[2] The Complaint alleges 17 claims, including inter alia allegations that Defendants tortuously interfered with RAP4's California contracts, formed a civil conspiracy, and restrained trade in violation of California and Federal antitrust laws by forming agreements with California residents to refrain from doing business with RAP4, which is a California resident. Compl. ¶ ¶ 13, 16, 29, 30, 65-73, 100-112. Subsequently, four Defendants--Gibson, Perfect Circle, Blumenthal, and Piell--filed motions to dismiss for lack of personal jurisdiction. Dkt. Nos. 13, 39.

On August 28, 2014, the Court ordered that, pending resolution of these Defendants' motions to dismiss, all discovery in this case would be limited to that which aids in determining whether the Court has jurisdiction. Dkt. No. 80 (" Aug. 28 Order"). Not long after, pursuant to the Court's Discovery Standing Order, the parties filed two letter briefs addressing the disputes that are the underlying subjects of this order. See Dkt. Nos. 87-88. The Court referred resolution of these letter briefs to Magistrate Judge Nandor Vadas, who held a hearing on the disputes on October 10. Dkt. No. 105. At the hearing, Judge Vadas advised the parties that he would allow the discovery to go forward under a protective order and ordered counsel to submit proposed orders. Id. The parties submitted their proposed discovery orders on October 14. Dkt. No. 97. Judge Vadas issued an order adopting Plaintiffs' proposed discovery order on October 21. Dkt. No. 110 (" Oct. 21 Order"). The following day, Defendants filed a motion to stay and for relief from the Oct. 21 Order. Dkt. No. 112 (" Mot."). The Court granted the objecting Defendants' motion to stay and ordered RAP4 to respond. Dkt. No. 114. RAP4 filed its response on October 30. Dkt. No. 116 (" Opp'n").

The underlying subjects of this dispute concern four subpoenas issued by RAP4 to non-parties Krasnow Saunders (" Krasnow"), Conrad Sun (" Sun"), Hoover Hull LLP (" Hoover"), and FedBid, Inc. (collectively, the " Subpoenas"). See Declaration of John K. Kirke (" Kirke Decl."), Dkt. No. 113, Ex. A. None of the subpoenaed parties objected to the Subpoenas or moved to quash them, but Defendants contended that the Subpoenas sought documents unrelated to jurisdiction and went beyond the scope of discovery established by the Court's August 28 Order. Dkt. Nos. 87-88. RAP4 disagreed, asserting that the documents sought are relevant to the Court's jurisdiction determination. Id. The October 21 Order found the subpoenaed documents relevant to the issue of personal jurisdiction and ordered Krasnow, Sun, Hoover, and FedBid to respond to the Subpoenas within 14 days of that Order. Defendants now challenge the October 21 Order, arguing that it conflicts with this Court's August 28 Order by permitting discovery unrelated to jurisdiction.

III. STANDARD OF REVIEW

A district court may modify or set aside a magistrate judge's nondispositive order " where it has been shown that the magistrate judge's order is clearly erroneous or contrary to law." 28 U.S.C. § 636(b)(1)(A); see also Fed.R.Civ.P. 72(a); Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1414 (9th Cir. 1991). A magistrate judge's resolution of a discovery dispute is " entitled to great deference." Doubt v. NCR Corp., 2011 WL 5914284, at *2 (N.D. Cal. Nov. 28, 2011). " A finding of fact is clearly erroneous" if the court is left with the " definite and firm conviction that a mistake has been committed." Burdick v. C.I.R., 979 F.2d 1369, 1370 (9th Cir. 1992). " A decision is 'contrary to law' if it applies an incorrect legal standard or fails to consider an element of the applicable standard." Conant v. McCoffey, 1998 WL 164946, *2 (N.D. Cal. Mar. 16, 1998) (citing Hunt v. Nat'l Broadcasting Co., 872 F.2d 289, 292 (9th Cir. 1989)). Further, as a matter of logic, where the district court has issued an order limiting the scope of discovery for a particular matter, the district court may clarify its prior order in modifying the magistrate's nondispositive order.

IV. LEGAL STANDARD

A district court's decision whether to permit jurisdictional discovery is a discretionary one. See Boschetto v. Hansing, 539 F.3d 1011, 1020 (9th Cir. 2008); Wells Fargo & Co. v. Wells Fargo Express Co., 556 F.2d 406, 430 n.24 (9th Cir. 1977). Such discovery " should ordinarily be granted where pertinent facts bearing on the question of jurisdiction are controverted or where a more satisfactory showing of the facts is necessary." Laub v. U.S. Dep't of the Interior, 342 F.3d 1080, 1093 (9th Cir. 2003) (quoting Butcher's Union Local No. 498 v. SDC Inv., Inc., 788 F.2d 535, 540 (9th Cir. 1986)); see also Am. W. Airlines, Inc. v. GPA Grp., Ltd., 877 F.2d 793, 801 (9th Cir. 1989) (noting it is not an abuse of discretion to deny jurisdictional discovery " when it is clear that further discovery would not demonstrate facts sufficient to constitute a basis for jurisdiction") (quoting Wells Fargo, 556 F.2d at 431 n.24). A court may grant jurisdictional discovery if the request is based on more than a " hunch that it might yield jurisdictionally relevant facts, " see Boschetto, 539 F.3d at 1020, or more than " bare allegations in the face of specific denials." See Terracom v. Valley Nat'l Bank, 49 F.3d 555, 562 (9th Cir. 1995) (citation omitted). A court may abuse its discretion by denying jurisdictional discovery where such discovery " might well demonstrate" jurisdictionally relevant facts and the plaintiff is denied the opportunity to develop the jurisdictional record. See Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, ...


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