United States District Court, S.D. California
December 15, 2014
HM ELECTRONICS, INC., a California corporation, Plaintiff,
R.F. TECHNOLOGIES, INC., an Illinois corporation, Defendant.
ORDER RE: (1) DEFENDANT'S MOTIONS FOR AN ORDER TO SHOW CAUSE WHY PLAINTIFF AND THIRD PARTY
COMMERCIAL ELECTRONICS, INC. SHOULD NOT BE HELD IN CONTEMPT, (2) JOINT
MOTION RE DISCOVERY OF PLAINTIFF'S FINANCIAL RECORDS, (3) PLAINTIFF'S MOTION RE
VIOLATION OF PROTECTIVE ORDER AND MOTIONS FOR LEAVE TO FILE DOCUMENTS UNDER SEAL
IN SUPPORT AND IN OPPOSITION, and (4) DEFENDANT'S MOTION TO EXCLUDE PLAINTIFF'S
SUPPLEMENTAL DISCLOSURES AND MOTION FOR LEAVE TO FILE DOCUMENTS UNDER SEAL [ECF Nos. 203, 204, 209, 217, 219, 222, 224, 225]
MITCHELL D. DEMBIN, Magistrate Judge.
Discovery in this case has been contentious. The parties seem to have forgotten or have chosen to ignore that discovery should be self-executing under the Federal Rules of Civil Procedure, requiring little court intervention. The magistrate judges assigned to this case collectively have held at least seven discovery conferences in vain attempts to resolve disputes. The court has reminded the parties of their mutual obligations to act professionally under Local Rules 83.4(1)(e), 83.4(1)(g), and 83.4(2)(d), without any apparent improvement in their conduct. In the last three months, the parties have filed fourteen motions arising from discovery disputes.
Even more alarming, motions for contempt or sanctions for violating a court order-a rarity on most court dockets-have become routine in this action. The frequency of contempt and sanctions motions are a sure sign that the parties are demanding a disproportionate share of the court's time compared to litigants in other cases, but are less willing to comply with the orders the court has issued at the parties' urging.
In an effort to move this case beyond gamesmanship and bickering and towards the most "just, speedy, and inexpensive determination" that is possible in this case, the Court resolves in this order all of the pending motions that have been referred to this Court. Specifically, the Court rules upon Defendant's motions for contempt and sanctions against Plaintiff and Plaintiff's third party subsidiary (ECF Nos. 203, 204), a joint motion re discovery of Plaintiff's documents (ECF No. 209), Plaintiff's motion re Defendants' alleged violation of the Protective Order (ECF No. 219), Defendants' motion to exclude Plaintiff's supplemental disclosures (ECF No. 224), and a series of related motions to seal (ECF Nos. 217, 222, 225).
A. Nature of the Case
This action involves Plaintiff HM Electronic's claim of damages arising from Defendant's alleged trademark and trade dress infringement of certain "drive-thru headset systems." (ECF No. 1). Plaintiff's First Amended Complaint ("FAC") asserts claims for trademark infringement, false designation of origin, trade dress infringement, trade libel, unfair competition and interference with prospective economic advantage. (ECF No. 156). Plaintiff alleges that Defendant has violated the Lanham Act by using Plaintiff's trademarks and trade dress in advertising and promotional materials, falsely suggesting an association with or sponsorship by Plaintiff in connection with its marketing campaigns, and re-branding Plaintiff's products as Defendant's products and attempting to pass those products off as its own. The FAC further alleges that Defendant has published false information regarding the quality, durability and reliability of Plaintiff's products, and unsubstantiated claims that Plaintiff's products that have been repaired and refurbished by Defendant are stronger and more durable than Plaintiff's OEM (Original Equipment Manufacturer) products. Defendant repairs drive-thru headset products manufactured by Plaintiff and by others (most notably, 3M and Panasonic).
By the time this Court inherited this case, the docket-now spanning over 240 entries-was riddled with discovery disputes. Magistrate Judge McCurine, then assigned to this case, held telephonic discovery conferences on November 25, 2013 and December 12, 2013, and subsequently ordered Defendant's attorney to serve an affidavit that explained his client's process of collecting and storing repair requests. (ECF Nos. 56, 61, 60). Judge McCurine held two more telephonic conferences, one on December 19, 2013, and another on January 10, 2014. (ECF Nos. 62, 65). On January 13, 2014, Judge McCurine issued an order essentially regulating the meet and confer discussions between the parties about the Defendants' inadequate document production. (ECF No. 64). Judge McCurine held another telephonic status conference on January 23, 2014. (ECF No. 76). Judge McCurine held yet another telephonic discovery conference the following Monday. (ECF Nos. 71, 77). After that conference, Judge McCurine issued an order requiring Defendant to complete the production and privilege log by dates specified in the order. (ECF No. 71).
In the meantime, Plaintiff filed a Motion for an Order to Show Cause Why Defendant R.F. Technologies, Inc. Should Not Be Held In Contempt for violating a preliminary injunction imposed by the assigned District Judge. (ECF No. 72).
On January 31, 2014, upon the retirement of Judge McCurine, the case was reassigned to Magistrate Judge Brooks. (ECF No. 80). On February 25, 2014, Judge Brooks ordered the parties to meet and confer in person before February 28, 2014, and set an attorneys' only discovery conference for March 10, 2014. (ECF Nos. 83, 84).
On March 4, 2014, Plaintiff filed an ex parte motion to continue third party depositions. (ECF No. 88). Judge Brooks granted the motion to stay, but admonished "[t]he parties are reminded of the mutual obligations pursuant to Local Rules 83.4(1)(e), (g) and 84.4(2)(d)." (ECF No. 89). Those Local Rules pertain to professionalism and civility in the meet and confer process. Civ. L. R. 83.4(1)(e), (g), and (2)(d).
The next day, Defendants filed a motion to quash Plaintiff's third party subpoenas. (ECF No. 90). Judge Brooks determined that the motions to quash were not properly filed in this District, because they required compliance outside of the Southern District. (ECF No. 93).
Shortly after that, District Judge Anello issued a tentative ruling on Plaintiff's Motion for Contempt and Sanctions against Defendant regarding Defendant's alleged violation of the preliminary injunction issued by District Judge Anello. (ECF No. 94). Judge Anello held a hearing on the contempt motion on March 10, 2014. (ECF No. 97). During the hearing, Judge Anello determined that Defendant had not complied with a preliminary injunction order, but set a continued hearing and requested additional evidence regarding Defendant's ability to comply and what the impact of coercive sanctions would be on Defendant. (ECF Nos. 99, 100).
On the same day, Judge Brooks held a discovery conference. (ECF No. 98). Judge Brooks issued an order concluding that the discovery disputes could not be resolved at the conference, and permitting the parties to file motions regarding those disputes. ( Id. ). Accordingly, Plaintiff filed a motion for sanctions against Defendant for failure to comply with Judge McCurine's discovery order, and Defendant filed motions to compel Plaintiff and third party Commercial Electronics, Inc. to produce documents. (ECF Nos. 101, 105, 106). Meanwhile, the case was reassigned from Judge Brooks to Magistrate Judge Burkhardt, who replaced Judge McCurine. (ECF No. 109).
On April 11, 2014, Judge Anello issued a new tentative ruling granting the Plaintiff's motion for contempt against Defendant relating to the preliminary injunction. (ECF No. 122). Judge Anello held the continued hearing on April 14, 2014, and issued the final ruling finding Defendant in contempt for violating the preliminary injunction. (ECF Nos. 126, 127, 132). Judge Anello's Order imposed a daily fine of $2, 500 against Defendant to compel compliance with the preliminary injunction. (ECF No. 127). Only then did Defendant purge itself of contempt. (ECF Nos. 133, 134). Afterwards, the case was reassigned from Judge Anello to District Judge Bashant. (ECF No. 42). Plaintiff then filed motions for attorneys' fees incurred in the contempt proceedings, and to disgorge the profits Defendant earned by flouting the preliminary injunction. (ECF Nos. 144, 147).
On July 3, 2014, Judge Burkhardt issued three orders, an order granting in part and denying in part Plaintiff's motion for sanctions against Defendant for violating Judge McCurine's discovery order (ECF No. 185), an order granting in part and denying in part Defendant's motion to compel Plaintiff to produce documents (ECF No. 186), and an order granting in part and denying in part Defendant's motion to compel third party Commercial Electronics, Inc. ("CE") to produce documents (ECF No. 187). Judge Burkhardt's Orders requiring Plaintiff and CE to produce documents (ECF Nos. 186, 187) govern several of the disputes decided in this Order. After Judge Burkhardt issued those Orders, the case was reassigned to this Court. (ECF No. 188).
On September 5, 2014, Defendant filed the instant motions for sanctions and contempt against Plaintiff and CE for failing to comply with Judge Burkhardt's July 3, 2014 Orders to produce financial documents. (ECF Nos. 203, 204). Less than a month later, the parties filed the instant joint motion in which Defendant seeks to compel Plaintiff to produce additional documents. (ECF No. 209).
On the eve of the discovery and motion cutoff, the parties each fired their last volleys of discovery-related motions. Plaintiff filed the instant ex parte motion to set a conference to address Defendant's alleged violation of the Protective Order, along with a motion to seal. (ECF Nos. 217-219). Defendant filed two ex parte motions to strike or exclude Plaintiff's "Belated Supplemental Disclosures, " along with a motion to seal, and a later motion to strike the first incorrectly filed motion. (ECF Nos. 220-224). Plaintiff also filed a motion to exclude Defendant's expert's testimony, which motion is before the District Judge, and a motion for sanctions and an adverse inference instruction against Defendants for spoliating evidence, which was stricken by the District Judge. (ECF Nos. 233, 235-237).
Having reviewed the motions and related papers, the Court finds the aforementioned motions pending before this Court suitable for resolution on the papers without oral argument, in accordance with Local Rule 7.1.d.1.
A. Defendant's Motions for Contempt and Sanctions Against Plaintiff and CE [ECF Nos. 203, 204]
I. Procedural History for Motions for Contempt and Sanctions
On September 8, 2014, Defendant moved the Court for orders finding Plaintiff and third party CE in violation of discovery orders issued by Judge Burkhardt on July 3, 2014 as ECF Nos. 186 and 187. (ECF Nos. 203, 204). On September 21, 2014, this Court issued an order requiring Defendant to serve third party CE with proper notice of this motion. (ECF No. 205). Defendant did so, and filed a certificate of service with the Court. (ECF No. 206). Plaintiff and CE each filed their oppositions on September 29, 2014. (ECF Nos. 207, 208). On October 6, 2014, Defendant filed a combined reply. (ECF No. 212).
Defendant asserts that Plaintiff and CE both violated Judge Burkhardt's July 3, 2014 Orders requiring Plaintiff and CE to produce financial documents by August 4, 2014. (ECF Nos. 203, 204). Judge Burkhardt's Orders explain that "the Court must consider Plaintiff's operative pleading - the FAC, " and note:
Plaintiff alleges in its FAC that "Defendants' unauthorized use of the HME marks is causing irreparable harm to [Plaintiff] by... diverting sales away from [Plaintiff] and its authorized dealers and distributors." (ECF No. 156 at ¶ 16.) Further, Plaintiff alleges, "Defendants' unauthorized use of the HME marks is causing irreparable harm to [Plaintiff] by diverting service revenues away from [Plaintiff] and its authorized repair centers." (ECF No. 156 at ¶ 19.) Additionally, Plaintiff's FAC contains a cause of action for Intentional Interference with Prospective Economic Advantage (Sixth Cause of Action), as part of which Plaintiff alleges, "Defendants did disrupt existing and prospective business relationships between [Plaintiff] and its customers and contacts in the quick service restaurant industry [and]... [Plaintiff] has been damaged in an amount to be established according to proof at trial." (ECF No. 156 at ¶ 71.)
(ECF No. 186 at 15-16; ECF No. 187 at 16-17 (varies slightly)). Judge Burkhardt ordered:
So long as Plaintiff's operative pleading contains causes of action and allegations that put Plaintiff's finances at issue, and so long as Plaintiff has not, in any binding way, limited its measure of damages to the disgorgement of Defendant's profits, Plaintiff's and CE's financial documents are relevant to an extent. The Court is sensitive to the fact that CE is a third party. However, CE is responsible for the large majority, if not all, of the repair and maintenance work for Plaintiff's headset products. And again, the Court notes that there is a Protective Order already in place. (ECF No. 58.) If the Parties feel that the Protective Order is inadequate, they are free to seek amendment. Accordingly, Defendant's Motion to Compel to GRANTED as to Request Nos. 35-37 and 39.
(ECF No. 187 at 16:27-28, 17:9-17). The Orders require Plaintiff and CE to produce the documents by August 4, 2014. (ECF Nos. 186 at 17:13-14, 187 at 18:11-12).
According to Defendant, Plaintiff has not produced the documents responsive to requests 119 and 120, and CE has not produced the financial records responsive to requests 35, 36, and 37. (ECF No. 204-1 at 7:18-27). Defendant requests that Plaintiff and CE be found in contempt of court, each be ordered to pay a per diem fine of $1, 000 payable immediately to the Court for each day Plaintiff and CE fail to comply with Judge Burkhardt's Orders, and that Defendant be awarded its fees and costs in bringing these motions in the amount of $11, 350 ($8, 875 for motion against Plaintiff, $2, 475 for motion against CE). (ECF No. 212 at 11).
Plaintiff and CE each assert that they are in full compliance with Judge Burkhardt's Orders. (ECF No. 208 at 6:6-16, 10:16-12:7). Plaintiff and CE have not produced the financial documents. ( Id. ). Instead, Plaintiff and CE argue that they were excused from producing the financial documents by Plaintiff's proposal of a Second Amended Complaint ("SAC") and Plaintiff's election of disgorgement of Defendant's profits as a remedy. ( Id. ). Plaintiff and CE claim that Judge Burkhardt's Orders were conditional, and excused them from producing financial documents "if HME amended its operative pleading to remove the causes of action and allegations identified by Judge Burkhardt as placing HME's and CE's finances at issue, and unequivocally elected Defendants' profits as HME's exclusive measure of damages." ( Id. at 11:2-6). Plaintiff and CE contend that Plaintiff followed both directives (amend complaint, and damages election). (ECF No. 207 at 12-13; ECF No. 208 at 6, 8-9; ECF No. 203-7 at 3). Plaintiff and CE argue in the alternative that even if they violated the Orders, they cannot be held in contempt because their interpretations of the Orders are reasonable, and they took all reasonable steps within their power to comply. ( Id. at 6:6-16, 10:16-12:7).
Defendant counters that the FAC remains the operative complaint, and that Plaintiff and CE were not excused from their duties to produce documents by the mere proposal of the SAC. (ECF No. 204-1 at 9-10). Defendant also contends that Plaintiff and CE would still be violating Judge Burkhardt's Orders even if Plaintiff had filed the proposed SAC, because the SAC still includes causes of action and allegations that put Plaintiff's and CE's finances at issue. ( Id. at 10-14). Defendant asserts that it is prejudiced by every passing day of Plaintiff's and CE's failure to comply, because the documents are crucial to Defendant's defense and trial is fast approaching. ( Id. at 15:1-6).
A magistrate judge has authority to impose discovery sanctions. See Grimes v. City & Cnty. of San Francisco, 951 F.2d 236, 241 (9th Cir. 1991). Rules 37 and 45 authorize the court to impose a wide range of sanctions when a party or nonparty fails to comply with the rules of discovery or with court orders enforcing those rules. Wyle v. R.J. Reynolds Indus., Inc., 709 F.2d 585, 589 (9th Cir. 1983) (citing Nat'l Hockey League v. Metro. Hockey Club, Inc., 427 U.S. 639, 643 (1976) and U.S. v. Sumitomo Marine & Fire Ins. Co., 617 F.2d 1365, 1369 (9th Cir. 1980)).
Rule 37(b)(2)(D) provides for civil contempt instead of, or in addition to, other sanctions. Fed.R.Civ.P. 37(b)(2)(D). Magistrate judges themselves do not have authority to make any findings of contempt, so must certify their findings to the district judge. 28 U.S.C. § 636(e); Bingman v. Ward, 100 F.3d 653, 656-657 (9th Cir. 1996).
Plaintiff and CE
"interpreted Judge Burkhardt's order as providing [Plaintiff and] CE with two options, depending on what HME elected to with its operative pleading: (1) if HME chose not to amend its operative pleading, the First Amended Complaint, [Plaintiff and] CE would be required to produce documents..., (2) if HME amended its operative pleading to remove the cause of action and allegations identified by Judge Burkhardt as placing HME's and CE's finances at issue, and unequivocally elected Defendants' profits as HME's exclusive measure of damages, [Plaintiff and] CE would not be required to produce documents...."
(ECF Nos. 207 at 12:13-20, 208 at 10:26-11:6) (emphasis omitted). Accepting, for the moment, Plaintiff's and CE's interpretation of Judge Burkhardt's Orders as correct, the Court nevertheless finds that Plaintiff and CE have not taken "all reasonable steps" to comply with the Orders.
Plaintiff and CE have not performed either option. Plaintiff and CE readily admit they did not produce the documents (option 1). (ECF Nos. 207 at 9:19, 208 at 8:1-2). And Plaintiff did not amend its operative complaint as necessary to excuse it and CE from producing the financial documents (option 2). Plaintiff prepared the SAC removing the causes of action and allegations, and sought and obtained Defendants' agreement to file the SAC. But Plaintiff has not filed the SAC. As a result, the FAC is still the operative complaint, and Plaintiff has not "amended its operative pleading to remove the cause of action and allegations identified by Judge Burkhardt as placing HME's and CE's finances at issue."
The importance of actually amending the complaint (as opposed to merely proposing to do so) is revealed by a statement Plaintiff made to Defendant in meet and confer letter. Plaintiff wrote, "I do wish to point out that to the extent RFT is able to persuade Judge Dembin that HME and CE should produce the financial documents at issue, HME will no longer be willing to withdraw its interference claim and the request for punitive damages that goes with it." (ECF No. 203-8 at 2). Plaintiff has not irrevocably withdrawn the intentional interference cause of action.
As Judge Burkhardt alluded in her Orders, the interference cause of action puts Plaintiff's and CE's finances at issue because economic harm is an element of the interference claim. Youst v. Longo, 43 Cal.3d 64, 71, n.6 (1987); (ECF Nos. 186 at 16:5-8; 187 at 17:5-8) (noting FAC allegation that "[Plaintiff] has been damaged in an amount to be established according to proof at trial."). In short, Plaintiff's operative pleading is the very same FAC that Judge Burkhardt considered, and still contains the very same causes of action and allegations that Judge Burkhardt found put Plaintiff's and CE's finances at issue. Accordingly, Plaintiff and CE have not made all reasonable efforts to comply with Judge Burkhardt's Orders even applying their interpretation. Even by their own standards, Plaintiff and CE are in violation of the Orders.
Further, the Court finds that Judge Burkhardt's Orders are not quite as limited as Plaintiff and CE contend. Plaintiff and CE assert that they only had to eliminate the allegations and cause of action specifically identified by Judge Burkhardt in her Orders. Judge Burkhardt's Orders more broadly state that Plaintiff's and CE's finances are relevant "[s]o long as the operative complaint contains causes of action and allegations that put Plaintiff's finances at issue." Judge Burkhardt's identification of allegations and the interference cause of action are set forth as examples-not as an exhaustive list.
Indeed, the FAC itself contains other causes of action not specified by Judge Burkhardt that put Plaintiff's financial documents at issue. Plaintiff's unfair competition claims both require Plaintiff to prove economic injury as an element of standing. Cal. Bus. & Prof. Code § 17204; Kwikset Corp. v. Superior Court, 51 Cal.4th 310, 323 (2011); Allergan, Inc. v. Athena Cosmetics, Inc., 640 F.3d 1377, 1382 (Fed. Cir. 2011) (applying Kwikset in federal action to find plaintiff adequately alleged standing for unfair competition claims by alleging "lost sales, revenue, market share, and asset value."). Judge Burkhardt's Orders unambiguously require Plaintiff and CE to produce the financial documents at issue if the operative complaint contains any causes of action or allegations that put the finances at issue, not just those listed in her Orders.
This Court also considered whether Plaintiff and CE complied with the spirit of the Orders by operation of Plaintiff's binding election of the disgorgement of Defendant's profits as the sole measure of Plaintiff's damages. The essence of Judge Burkhardt's Orders is that Plaintiff and CE must produce the financial documents if Plaintiff has put its finances at issue by alleging economic harm or seeking a remedy that requires a showing of economic harm. Even if the Court were to conclude that Plaintiff has irrevocably elected disgorgement of Defendant's profits as the only remedy for all of the causes of action in the operative complaint, Plaintiff still must prove economic harm to prevail on its interference and unfair competition claims.
In addition, Plaintiff's election to disgorge Defendant's profits cannot be extended to the unfair competition claims, because "[n]onrestitutionary disgorgement of profits is not an available remedy in an individual action under the UCL." AngioScore, Inc. v. TriReme Medical, LLC, ___ F.Supp. 3d ___, No. 12-CV-3393 YGR, 2014 WL 4438082 *8 and n.6 (N.D. Cal. Sept. 9, 2014) (quoting Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134, 1152 (2003)). A subset of disgorgement of profits known as "restitutionary disgorgement of profits" is available on the unfair competition claims. Korea Supply Co., 29 Cal.4th at 1150-1152. But restitutionary disgorgement puts Plaintiff's and CE's finances at issue because that remedy requires a showing that the disgorged profits came from the Plaintiff's money or property in the first place. Id. Defendant intends to defend on the basis that Defendant's profits cannot be traced back to Plaintiff, but to CE, which Defendant claims handles repairs of Plaintiff's products. Although Defendant may not be able to prove this point at trial, Defendant is entitled to discovery relating to it.
In sum, Plaintiff's election of damages does not eliminate the need for Plaintiff to show economic harm as an element of the interference and unfair competition claims. Moreover, to the extent it can be applied as a damages election on the unfair competition claims, the election actually puts Plaintiff's and CE's finances at issue. If Plaintiff intended, through the damages election, to remove all of the parts of the operative complaint that put its finances at issue, it has not done so. Plaintiff and CE have not complied with the letter nor the spirit of Judge Burkhardt's Orders, and their intent is irrelevant. Plaintiff's damages election does not absolve Plaintiff and CE of the duty to produce documents.
Since Plaintiff has not eliminated the allegations that render the financial information relevant, Plaintiff and CE were required to produce the financial documents by August 4, 2014. Consequently, Plaintiff violated the Order at ECF No. 186, and CE violated the Order at ECF No. 187.
This Court declines the parties' invitation to rule prospectively on the issue of whether Plaintiff and CE will still be in violation of Judge Burkhardt's Orders if Plaintiff eventually files the proposed SAC. That issue is not before this Court because Plaintiff has not filed the proposed SAC. For the same reason, the Court declines to render a finding as to whether Plaintiff's and CE's finances were placed at issue by circumstances not addressed in Judge Burkhardt's Orders (e.g., Plaintiff's marketing expert's report).
Sanctions are warranted here, because Plaintiff and CE failed to comply with Judge Burkhardt's Orders without substantial justification or exceptional circumstances. Fed.R.Civ.P. 37(b)(2)(A)(vii) and (B). In addition to any other sanctions imposed, a magistrate judge "must order the disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust." Fed.R.Civ.P. 37(b)(2)(C).
Defendants' motions are GRANTED. It is this Court's opinion that prospective, coercive fines should be imposed against Plaintiff and CE until they are in compliance with the Orders at issue. Accordingly, by separate order this Court is submitting a Report and Recommendation to the District Judge certifying facts re civil contempt. In addition, Plaintiff and its attorneys, jointly and severally, are ORDERED to pay Defendant's reasonably incurred fees necessitated by bringing the motion against Plaintiff in the amount of $8, 875. Likewise, CE and its attorneys, jointly and severally, are also ORDERED to pay Defendant's reasonably incurred fees necessitated by bringing the motion against CE in the amount of $2, 475.
B. Joint Motion re Discovery of Plaintiff's Records [ECF No. 209]
I. Procedural History
In the Joint Motion for Determination of Discovery Dispute, Defendant R.F. Technologies, Inc. seeks to compel Plaintiff to produce (1) financial documents, (2) documents that support anticipated expert testimony of Plaintiff's employee Karen Robinson, (3) communications between Plaintiff and third parties regarding "the reliability, durability, comfort, safety or quality" of Plaintiff's headset products, and (4) documents concerning failures or perceived failures of Plaintiff's product. (ECF No. 209). The Court addresses each category of documents separately.
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). In addition, "[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 generally no requirement that the information sought by a party 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 present 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. 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 also be imposed where the burden or expense outweighs the likely benefits. Id.
a. Financial Documents (Requests 133-135)
Requests Nos. 133-135 seek Plaintiff's general ledger from January 1, 2008 to the present, Plaintiff's sales register for repair and refurbishment of its headsets for the same time period, and documents showing Plaintiff's revenue derived from repair and refurbishment of its headsets, also from January 1, 2008 to the present. (ECF No. 209 at 2-22). Plaintiff objects that the financial documents are not relevant, that the requests are vague, ambiguous, overbroad as to time and scope, and contain confidential trade secret information.
Defendant contends that Plaintiff's confidential trade secret objection is boilerplate and not supported by a privilege log. Defendant also contends that the vague, ambiguous, and overbroad objections are improper boilerplate objections that are "tantamount to not making any objection at all." Defendant acknowledges that Plaintiff is seeking damages in the form of Defendant's lost profits instead of seeking Plaintiff's own lost profits for one of its claims, but nevertheless contends the financial documents are relevant to determine Plaintiff's damages.
Absent from the parties' briefs is any substantive discussion about the impact of Judge Burkhardt's July 3, 2014 Order (finding relevant and discoverable other requests for Plaintiff's financial documents). Even though the FAC is still the operative complaint, the parties seem to agree that Plaintiff has elected disgorgement of Defendant's profits in some unspecified binding manner. The joint motion inexplicably assumes that, as a result of Plaintiff's damages election, the FAC and Judge Burkhardt's Order have no bearing on these requests for financial documents. The Court disagrees with that assumption.
The Court has compared the requests at issue here (Requests Nos. 133-135) with the requests for financial documents at issue in Judge Burkhardt's July 3, 2014 Order (Requests Nos. 119 and 120, seeking income statements and balance sheets from January 1, 2008 to the present). At least for the purpose of determining the relevancy of the requests to this action, there are no material differences between Requests 119 and 120 and Requests 133-135.
The Court has also reviewed the briefs the parties filed with respect to the motion to compel Requests 119 and 120. Although the parties have developed more nuanced and interesting arguments this time around, the thrust of Plaintiff's argument now is the same as in the previous motion. In both motions, Plaintiff's relevancy objection is grounded on the premise that because Plaintiff is not seeking its own lost profits as damages, its financial information is irrelevant and not discoverable. In both motions, Plaintiff's relevancy objection fails to account for the fact that the FAC is the operative complaint.
The Court agrees with the reasoning of Judge Burkhardt's July 3, 2014 Order, and declines to issue an inconsistent ruling on these similar requests. Accordingly, the Court adopts Judge Burkhardt's Order, and tailors it to these requests:
As to Requests Nos. 133-135, although Plaintiff objects on relevance grounds based upon Plaintiff's position that it is not seeking damages in the form of lost profits, the Court must consider Plaintiff's operative pleading - the FAC. Plaintiff alleges in its FAC that "Defendants' unauthorized use of the HME marks is causing irreparable harm to [Plaintiff] by... diverting sales away from [Plaintiff] and its authorized dealers and distributors." (ECF No. 156 at ¶ 16). Further, Plaintiff alleges, "Defendants' unauthorized use of the HME marks is causing irreparable harm to [Plaintiff] by diverting service revenues away from [Plaintiff] and its authorized repair centers." (ECF No. 156 at ¶ 19). Additionally, Plaintiff's FAC contains a cause of action for Intentional Interference with Prospective Economic Advantage (Sixth Cause of Action), which requires Plaintiff to prove economic harm. (ECF No. 156 at ¶ 71); CACI 2202; Youst v. Longo, 43 Cal.3d 64, 71, n.6 (1987). Plaintiff's FAC also includes unfair competition claims (Fourth and Seventh Causes of Action), both of which require Plaintiff to prove economic injury as an element of standing. (ECF NO. 156 at ¶¶ 59-61, 74-76).
Thus, Plaintiff's financial documents are relevant. Furthermore, there is a Protective Order already in place. (ECF No. 58). If the Parties feel that the Protective Order is inadequate, they are free to seek amendment. The Court declines to offer an advisory opinion as to whether these financial documents would be relevant if the disgorgement of Defendant's profits were the only issue in the case. Accordingly, the Joint Motion for Discovery Dispute is GRANTED as to Defendant's motion to compel Plaintiff to produce documents responsive to Requests Nos. 133-135. Plaintiff shall produce these documents within 10 business days of the issuance of this Order.
b. Documents re Karen Robinson Testimony
i. Nos. 136-138, 142-44, 151-152
Requests 136-138, 142-144, and 151-152 seek documents that support (or "may establish") Plaintiff's opinion that Defendant's redesigned components for use on Plaintiff's headsets and belt-pac are inferior to Plaintiff's original components. ( See e.g., ECF No. 209 at 31). In their briefs, the parties clarify that these requests are directed towards documents relied upon by Plaintiff's employee and expert, Karen Robinson. ( Id. at 33; ECF No. 209-1 at 5:5-6). Plaintiff asserts boilerplate objections and then responds that it will produce any such nonprivileged documents as part of Ms. Robinson's expert file in connection with her deposition. (ECF No. 209 at 31:21-25). In the motion, Plaintiff supplements this objection by explaining that Plaintiff served responsive documents relied on by Ms. Robinson on September 23, 2014, and produced a privilege log identifying any withheld documents. ( Id. at 34:7).
If indeed Plaintiff produced all of the responsive documents, the dispute about this request was moot before it was filed. Even though Defendant filed this motion after the production of the documents and privilege log, Defendant does not acknowledge the production or log in its papers. While Defendant's decision to file the motion after receiving these suggests Defendant disputes the adequacy of Plaintiff's production, Defendant provides no explanation for the continued dispute. It is not the Court's duty to sort through discovery demands to find potential inadequacies. To the extent the Defendant is challenging the adequacy of the production on the grounds that Plaintiff should have produced documents that undermine Ms. Robinson's opinions in addition to those that support her opinions, the Court disagrees. These requests, as worded, plainly call for documents that "support" or "may establish" Plaintiff's position. Additionally, Defendant makes no showing that Plaintiff improperly withheld any responsive documents from its September 23, 2014 production. Accordingly, the Joint Motion is DENIED to the extent it calls for further production of documents to Request Nos. 136-138, 142-144, and 151-152.
ii. Nos. 141, 148-150
Request 141 calls for documents concerning Plaintiff's inspection of headsets that were repaired by Defendant and returned to Plaintiff in 2013 and 2014. (ECF No. 209 at 42). Requests 148 and 149 call for documents concerning Plaintiff's testing of Plaintiff's products repaired by Defendants in 2011, including serial numbers of the products. ( Id. at 57, 60). Request 150 seeks documents showing Plaintiff's standard qualification procedures, which Plaintiff used to test products repaired by Defendants. ( Id. at 63).
Plaintiff asserts the same objections and the same explanation (that it will produce responsive documents relied on by Karen Robinson in her expert report in connection with her deposition) as it asserts in response to Requests 136-138, 142-144, and 151-152. Defendant offers the same rebuttal. And, as before, Plaintiff supplements the objections by explaining that it produced "responsive documents relied on by Mrs. Robinson in connection with her anticipated testimony" and provided a privilege log. ( Id. at 44:28-45:6). Defendant also does not acknowledge the document and privilege log production with respect to these requests.
As before, the Court can only infer what remains of the dispute after Plaintiff's production, given Defendant's failure to explain how the production allegedly remains inadequate. It appears the issue may be that Plaintiff produced only responsive documents that Ms. Robinson relied on. ( Id. at 63:18-19; ECF No. 209-2 at 7). Because the requests in this instance were not limited to documents that support Plaintiff, these requests require Plaintiff to produce documents that undermine Plaintiff, as well as those that support Plaintiff. To avoid undue burden to Plaintiff, and because the parties seem to agree that these requests are limited to documents pertaining to Mrs. Robinson, Plaintiff's obligation to produce responsive documents that are not supportive of its position extends only to those documents reviewed or readily available to Mrs. Robinson in her duties as an employee or that she reviewed in connection with her expert report.
Plaintiff also argues that producing any documents besides those already produced is overbroad and unduly burdensome, because Plaintiff inspects and reviews every product that it repairs. In support of this argument, Plaintiff points to Judge Burkhardt's July 3, 2014 Order. (ECF No. 186). Plaintiff's reliance on Judge Burkhardt's Order as a shield to producing these documents is misplaced. Judge Burkhardt found the prior requests overbroad and burdensome because they sought all documents relating to Plaintiff's repairs and inspections for a six year period. ( Id. at 10:19-12:13). Unlike those requests, the ones at issue here are limited to shorter time periods and to products that passed through Defendant's hands. Judge Burkhardt's Order contemplates that Defendant could make new, more tailored demands. ( See ECF No. 186 at 11:7-12:13). Judge Burkhardt's Order does not preclude the requests at issue here.
Although Defendant does not dispute that Plaintiff provided responsive documents, it is not clear from the record whether Plaintiff provided all responsive documents or only those that supported Plaintiff's or its experts opinions. These requests, unlike the earlier ones, are not limited to documents that support Plaintiff's position. The requests seek the documents regardless of whether Plaintiff or its expert relied on them. The Joint Motion is hereby GRANTED IN PART to the extent it seeks to compel production as to Requests Nos. 141, 148-150. To the extent that Plaintiff withheld documents because they did not support Mrs. Robinson's opinions, it must now do so within 10 business days of the issuance of this Order.
c. Documents re Product Communications (Requests 155-156)
Requests 155 and 156 seek all communications between Plaintiff "and any third party regarding the reliability, durability, comfort, safety or quality" of Plaintiff's HS6000 and COM6000 headsets from January 1, 2008 to the present. (ECF No. 209 at 74, 78). Plaintiff objects on the following grounds: relevancy, vague, ambiguous, overbroad as to time and scope, confidential and proprietary trade secret information, attorney-client privilege, and work product doctrine. With respect to the COM6000 headsets, Plaintiff explains that this type of headset is wired, and thus not at issue in this lawsuit. ( Id. at 78). With respect to both requests, Plaintiff emphasizes that this request calls for "virtually every communication HME has with its customer or potential customers." ( Id. at 74, 78).
According to Defendants, the requested documents are relevant to its defense against Plaintiff's trade libel claim. ( Id. at 75). Defendant intends to defend on the basis that their products are more durable that Plaintiff's, and therefore they did not engage in trade libel. Defendant explains, "[t]here could be communications whereby HME disparages RFT's products for the purposes of convincing a customer to use HME rather than RFT-indicating that HME is also guilty of trade libel and unfair competition." ( Id. ). Defendant further explains that "the communications may reveal that there is no confusion in the relevant market as to the differences between HME and RFT, " such as an email that may reveal a customer was not confused. ( Id. ). Defendant contends that since it is unclear what exists in the communications, they all must be produced. ( Id. ).
In response, Plaintiff argues that "He did it too" is not a proper defense to a trade libel claim, so it is irrelevant if Plaintiff libeled Defendant's products. (ECF No. 209 at 76). Plaintiff concedes that Defendants may be attempting to state an unclean hands equitable defense. But, Plaintiff asserts, the unclean hands defense is only available where the alleged misconduct by the plaintiff relates directly to the defendant's alleged misconduct. Hendricks v. AT&T Mobility, LLC, 823 F.Supp.2d 1015 (N.D. Cal. 2011). Indeed, Defendant fails to show that the speculated trade libel by Plaintiff is directly related to Plaintiff's allegations of trade libel by Defendant. Defendant has not met its burden to show relevancy on this theory.
Plaintiff also counters Defendant's assertion that the documents are relevant to a "lack of confusion" defense. ( Id. 77). Rather than insisting that this subset of the documents are irrelevant, Plaintiff argues that this subset of documents have already been produced in response to another request, which demanded all communications by Plaintiff with third parties regarding Defendant. ( Id. ). Defendant does not attempt to distinguish the scope of the prior request or argue that the prior production is insufficient. To the extent this request seeks an email or other communication where a third party shows they know the difference between Plaintiff and Defendant, the Court finds this request is cumulative of the earlier request. ( Id. ).
In short, Defendant has failed to meet its relevancy burden. Defendant has not filed a counterclaim for trade libel, and Defendant has not shown that Plaintiff's hypothetical trade libel of Defendant's products is relevant to any of Defendant's defenses. And, to the extent the request seeks documents showing lack of confusion, the request is cumulative of the earlier request for documents between Plaintiff and third parties about Defendant.
Furthermore, the Court agrees that these requests are facially overbroad. Requiring Plaintiff to produce all documents responsive to these requests would only result in Plaintiff dumping a massive, partially cumulative, and largely irrelevant document production on Defendant's doorstep. A dispute about being sandbagged, or about the inadequacy of the production, is likely to follow any such "document dump." Requiring production would also drive up the costs of document review for both parties. Accordingly, the Joint Motion is DENIED to the extent it seeks to compel production as to Requests 155 and 156.
d. Documents re Product Failures (Request 158)
Request 158 seeks documents "concerning any failures or perceived failures of the ION IQ product that is the subject of" Plaintiff's trade libel claim. (ECF No. 209 at 80). Plaintiff objects to the request as duplicative of requests 18, 19, 21, and 23, which have already been satisfied. ( Id. at 81). Plaintiff also objects on the following grounds: relevancy, vague, ambiguous, overbroad as to time and scope, confidential trade secrets, attorney-client privilege, and work product doctrine. ( Id. ).
Defendant argues that Judge Burkhardt's Order does not apply to this request because it is more narrowly tailored than the requests she rejected as overbroad. ( Id. at 82). Defendant also argues that another document Plaintiff produced shows Plaintiff tracks the information sought in this request, so it is not overbroad or unduly burdensome for Plaintiff to produce the requested documents. ( Id. ). Defendant also rebuts Plaintiff's boilerplate objections. ( Id. ). Plaintiff responds that the terms "failures" and "perceived failures" are incurably vague, but reports that it has now produced responsive documents and "HME has no further reports that document ION IQ failures.'" ( Id. at 84). Defendant does not identify, and the Court is not able to discern, how the production is allegedly deficient. As a result, the Court DENIES the Joint Motion to the extent Defendant seeks to compel further production to Request No. 158.
C. Plaintiff's Motion re Violation of Protective Order [ECF Nos. 217, 219, 225]
I. Procedural History
On December 6, 2013, the court entered the stipulated Protective Order in this matter. (ECF No. 58). On November 7, 2014, Plaintiff filed an Ex Parte Motion to Specially Set Conference to Address Defendants' Violation of Stipulated Protective Order. (ECF No. 219). Concurrently, Plaintiff filed a Motion to File Documents Under Seal. (ECF No. 217). Plaintiff electronically lodged the proposed sealed documents provisionally under seal. (ECF No. 218). On November 11, 2014, Defendants filed their opposition to Plaintiff's Ex Parte Motion. (ECF No. 227). Concurrently, Defendants filed their Motion to File Documents Under Seal. (ECF No. 225). Defendants electronically lodged the proposed sealed documents provisionally under seal. (ECF No. 226). Plaintiff filed its reply in support of its motion to address the alleged violation of the Protective Order on November 13, 2014. (ECF No. 230).
a. Plaintiff's Motion to Seal [ECF No. 217]
Plaintiff seeks to seal Defendants' Notice of Intent to Serve Subpoena on third party Gyro, an email from Defendants' attorney O'Leary to Gyro and the attachment to that email, which consists of portions of Plaintiff's expert's report that are designated as "Highly Confidential-Attorneys' Eyes Only" under the Protective Order, and Plaintiff's attorney's declaration discussing these documents. (ECF No. 225). After reviewing the documents in question, the Court concludes that good cause exists to seal the documents. Accordingly, Plaintiff's Motion to File Documents Under Seal is GRANTED.
b. Defendants' Motion to Seal [ECF No. 225]
Defendants seek to seal an email from Defendants' attorney O'Leary to Gyro and the attachment to that email, which consists of portions of Plaintiff's expert's report that are designated as "Highly Confidential-Attorneys Eyes Only" under the Protective Order. (ECF No. 225). After reviewing the documents in question, the Court concludes that good cause exists to seal the documents. Accordingly, Defendants' Motion to File Documents Under Seal is GRANTED.
c. Motion re Violation of Protective Order [ECF No. 219]
Plaintiff contends that Defendants violated the Protective Order by sending portions of the report prepared by Plaintiff's expert, Patrick Kennedy, Ph.D., to a third party known as Gyro. (ECF Nos. 219 at 2-4; 218 at Exhs. 2, 3). Plaintiff explains that it obtained an estimate for a corrective advertising campaign to mitigate the harm Defendants caused to Plaintiff, and that Dr. Kennedy incorporated Gyro's estimate into his expert report as an element of damages in this case. (ECF No. 219 at 3). Defendants then subpoenaed Gyro for a deposition relating to the corrective advertising campaign estimate. ( Id.; ECF No. 218 at Exh. 1). While arranging the logistics of Gyro's deposition, Defendants emailed Gyro a portion of the Kennedy Report after redacting information the Defendants had designated as confidential but not the information that Plaintiff had designated as confidential. (ECF No. 219 at 3). Plaintiff contends that the unredacted portions show not only Gyro's estimate, but also a separate damage calculation (the cost to reconvert products), which is based on highly confidential and proprietary financial and advertising information. ( Id. ). Plaintiff asks this Court to set a conference to address Defendants alleged violation of the Protective Order, and seeks an order directing Defendants and their counsel to provide declarations identifying all persons to whom they have shown confidential materials. (ECF No. 219).
Defendants object that Plaintiff should not have filed this motion on an ex parte basis. (ECF No. 227). Defendants argue they are entitled to due process, including a fully-noticed motion and a hearing, before sanctions for violating the Protective Order may be imposed. ( Id. ). Defendants also claim that they redacted parts of the Kennedy report sent to Gyro and therefore no violation of the Protective Order occurred. ( Id. ). Defendants further contend that all of the information was already known to Gyro as a result of preparing the estimate for Plaintiff. ( Id. at 8). Finally, Defendants contend that Plaintiff is required to show that it suffered harm as a result of the disclosure, but has failed to do so. ( Id. ).
In its reply, Plaintiff clarifies that it is not asking for sanctions on an ex parte basis, but is instead asking to set a conference with the Court to discuss the issue and to implement measures to prevent further disclosures. (ECF No. 230 at 3:12-21). Plaintiff also emphasizes that the disclosed information about the cost to reconvert estimate was not known to Gyro. ( Id. at 2:14-21).
As Plaintiff clarified, it is not seeking to punish Defendants on an ex parte basis for disclosing the Kennedy Report to Gyro. Accordingly, the Court does not address the issue of, or impose, sanctions against Defendants for disclosing the unredacted portions of the Kennedy Report. In addition, the Court declines to host a conference to discuss this dispute with the parties, as the parties have made no showing that they made any attempt to resolve the matter through a good faith meet and confer effort, as required by Civil Chambers Rule V.A. Accordingly, Plaintiff's motion is DENIED IN PART to the extent Plaintiff seeks to specially set a conference.
The remaining issues to be determined are Plaintiff's requests for (1) declarations identifying all persons to whom Defendants have disclosed confidential material, and (2) an order directing Defendants and their counsel to comply with the protective order going forward. (ECF No. 219 at 7). Though Plaintiff did not characterize its requests as such, the Court construes them as a motion for the Court to modify the stipulated Protective Order for good cause, as permitted under ¶ 31. (ECF No. 58 at 11:27-12:1).
Plaintiff has shown good cause for modifying the Protective Order in a manner that will reveal any past violations and avoid future violations. Defendants are required to obey the stipulated Protective Order, unless and until the Order is reversed, vacated, or modified. See Maness v. Meyers, 419 U.S. 449, 459 (1975); Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015, 1034-1035 (9th Cir. 2012); United States v. National Med. Enterprises, Inc., 792 F.2d 906, 910 (9th Cir. 1986). Plaintiff demonstrated that Defendants may have violated the Protective Order in disclosing portions of the Kennedy Report to Gyro.
The Court disagrees with Defendants that Plaintiff's motion was confusing or internally inconsistent in explaining how the email to Gyro likely violated the Protective Order. The Plaintiff designated the entire report, as confirmed by the "HIGHLY-CONFIDENTIAL ATTORNEYS' EYES ONLY" footers on the exhibits submitted by both parties. (ECF No. 218 at 19, 20). Thus, it was incumbent upon Defendants to object to the designation of the materials following the procedure set forth in ¶ 16 of the Protective Order, and to treat the entire Kennedy Report as Confidential-Attorneys-Eyes-Only "until the Court has ruled on the objection or the matter has been otherwise resolved." (ECF No. 58 at 7-8). It appears Defendants ignored the requirements of ¶ 16, and disclosed the portions it deemed unprotected by the Protective Order. The Protective Order does not give Defendants the discretion to disclose the portions of designated materials that it unilaterally deems as non-confidential.
Plaintiff explains that it only learned of the disclosure to Gyro because of its business relationship with the third party recipient. Plaintiff expresses valid concerns that other designated material may have been or will be disclosed to other unauthorized recipients.
Good cause appearing, the Court hereby GRANTS IN PART Plaintiff's motion, and MODIFIES the Protective Order by adding the following paragraphs:
33. All parties and their attorneys must exchange declarations signed under penalty of perjury identifying all persons to whom they have shown any materials designated as "Confidential" or "Highly-Confidential-Attorneys' Eyes Only" or Confidential-Outside Counsel Only." This applies to Plaintiff and its attorneys as well as Defendants and their attorneys. To ensure full disclosure, the lists shall include all persons to whom such information has been disclosed, whether or not the disclosing party believes the person was authorized to receive the information under the terms of the Protective Order. Parties have a continuing duty to supplement their identification of recipients.
34. The parties shall also provide each other copies of each executed "Agreement to be Bound by Protective Order." ( See ECF No. 58 at 13).
D. Defendant's Motion to Strike Plaintiff's Supplemental Disclosures [ECF Nos. 222, 224]
I. Procedural History
On November 11, 2014, Defendant filed an Ex Parte Motion to Shorten Time to Bring a Noticed Motion to Strike/Exclude Plaintiff's Belated Supplemental Disclosures. (ECF No. 224). Concurrently, Defendant filed a Motion to File Documents Under Seal in support of the Ex Parte Motion to Shorten Time. (ECF No. 222). Along with the Motion to Seal, Defendant electronically lodged under seal the documents it proposes to file under seal. (ECF No. 223). The documents Defendant seeks to lodge under seal consist of Defendant's Motion to Strike/Exclude Plaintiff's Belated Supplemental Disclosures and the documents in support thereof. ( Id. ).
Defendant brought its motion to shorten time, because there was insufficient time to bring a regularly noticed motion before the November 21, 2014 discovery cutoff date. (ECF No. 224-1 at 4).
Defendant's motion to strike Plaintiff's supplemental disclosures complains that Plaintiff recently supplemented its initial disclosures by identifying 6 new witnesses. (ECF No. 223-1 at 7:1-5). Defendant contends that Plaintiff should have disclosed these witnesses earlier in discovery and is sandbagging Defendant at the end of discovery so that Defendant cannot conduct discovery relating to these witnesses. ( Id. ).
On November 13, 2014, Plaintiff filed an opposition to the Ex Parte Motion to Shorten Time on Defendant's motion to strike Plaintiff's disclosures. (ECF No. 231). Plaintiff urges the Court to deny Defendant's motion to shorten time on the grounds that Plaintiff "will not have sufficient time to prepare a meaningful opposition to the motion." (ECF No. 231 at 2:7-8). Plaintiff contends that Defendant's motion is meritless, in that Plaintiff was simply complying with its Rule 26 obligations to supplement disclosures. ( Id. at 2:9-17). Plaintiff further asserts that Defendant's motion to strike Plaintiff's disclosures is moot, because Defendant has noticed the depositions of all 6 newly-disclosed witnesses for November 21, 2014 and Plaintiff has agreed to produce all 6 witnesses as demanded. ( Id. at 2:21-3:11). In order to effect the most "just, speedy, and inexpensive" determination of this discovery dispute, the Court hereby construes Plaintiff's opposition to Defendant's Motion to Shorten Time as a combined brief also opposing the Motion to Strike/Exclude Disclosures.
a. Motion to Seal [ECF No. 222]
Defendant seeks to seal "Exhibit A" to its Ex Parte Motion to Shorten Time. (ECF No. 222). That Exhibit contains Defendant's proposed Motion to Strike/Exclude Plaintiff's Belated Supplemental Disclosures, Defendant's supporting declaration, and the exhibits in support thereof (which primarily consist of Plaintiff's disclosures and discovery responses that identify potential witnesses, but also include this Court's 10/9/2014 Order), and the proposed order granting Defendant's proposed motion. (ECF No. 223-1). Defendant requests permission to file these documents under seal, because Plaintiff has designated information in some of them as Attorneys' Eyes Only under the Protective Order. (ECF No. 222).
After reviewing Exhibit A, the Court concludes that most of the documents sought to be sealed do not contain information subject to the Protective Order. Only the Plaintiff's disclosures in Exhibit E are marked "HIGHLY CONFIDENTIAL-ATTORNEYS' EYES ONLY." (ECF No. 223-1 at 50-66). Although the Plaintiff's other disclosures are not marked as confidential, they may have been so designated by other means, and Defendant does not dispute their designation in its motion. The proposed Notice of Motion and Memorandum in support thereof, on the other hand, do not reveal information about the witnesses that is designated as confidential. The proof of service is not marked confidential. (ECF No. 223-1 at 67-68). One of the exhibits to the proposed motion is already a matter of public record-this Court's 10/9/14 Order. The proposed order on the Motion to Strike also does not include any information that could be subject to the Protective Order.
Accordingly, the Court hereby ORDERS that Exhibits A, C, D, E to the Motion to Strike (ECF No. 223-1 at 18-22, 27-41, 43-48, 50-68) be sealed, but ORDERS that the Notice of Motion and Motion, Declaration of Vikram Subramanian in support thereof, Exhibit B, and the proposed order (ECF No. 223-1 at 1-17, 23-26, 42, 49, 69-70) are not to be sealed. To effectuate this order, Defendant is ORDERED to file (not under seal) a new, redacted version of Exhibit A to the Ex Parte Motion, with Exhibits A, B, C, D, and E of the Motion to Strike (18-22, 27-41, 43-48, 50-68) redacted. The Notice of Motion and Motion are hereby deemed filed as of November 11, 2014; (the date they were lodged under seal). Defendant's Motion to File Documents Under Seal is GRANTED IN PART and DENIED IN PART without prejudice to the Court to modify this Order to seal.
b. Motion to Shorten Time [ECF No. 224]
The Court hereby GRANTS Defendant's Motion to Shorten Time on its Motion to Exclude Plaintiff's Supplemental Disclosures. Although Plaintiff objects to the Motion to Shorten Time on the basis that Plaintiff needs more time to file an adequate brief on the Motion to Strike, Plaintiff suffers no prejudice, given the Court's decision to deny the Motion to Strike (below). As set forth above, by this Order the Court is deeming Defendant's Motion to Exclude Plaintiff's Disclosures filed, and is construing Plaintiff's opposition to the motion to shorten time as its opposition to the motion to exclude disclosures.
c. Motion to Strike/Exclude Plaintiff's Disclosures
Rule 26(e)(1)(A) requires parties to supplement or correct disclosures "in a timely manner if the party learns that in some material respect the disclosure or response is incomplete or incorrect." Fed.R.Civ.P. 26(e)(1)(A). Neither the Federal Rules of Civil Procedure nor the case management order in this action sets a deadline by which all supplemental disclosures must be made. Defendant has made no showing that Plaintiff delayed disclosing the 6 newly disclosed witnesses for any significant amount of time. Plaintiff was simply complying with its Rule 26 obligations to supplement disclosures. Moreover, the Court agrees with Plaintiff that this motion is moot, because Defendant noticed the depositions of all 6 newly-disclosed witnesses for November 21, 2014 and Plaintiff agreed to produce all 6 witnesses as demanded. ( Id. at 2:21-3:11).
Finally, the cases Defendant relies on are inapposite. In each of them, the supplemental witness disclosures were made after the close of discovery. Bookhamer v. Sunbeam Products, Inc., 2012 WL 4513872 at *2 (N.D. Cal. 2012) ("Plaintiffs never identified either witness as having pertinent responsive information until after the close of discovery."); H.K. Wong v. Regents of the Univ. of Cal., 410 F.3d 1052, 1059 (9th Cir. 2005) (additional experts disclosed after expert disclosure deadline and discovery cutoff); Ollier v. Sweetwater Union High School Dist., 267 F.R.D. 339, 343 (S.D. Cal. 2010) (disclosure occurred in amended pretrial disclosures for final pretrial conference-not in discovery). Here, as Defendant acknowledges, Plaintiff disclosed the additional witnesses before the close of discovery.
Accordingly, Defendant's Motion to Strike or Exclude Plaintiff's Supplemental Disclosures is DENIED without prejudice to Defendant bringing a motion to amend the scheduling order to permit limited additional discovery, if necessary.
To summarize, the Court issues the following orders on the pending matters:
Defendant's motions for sanctions against Plaintiff and CE are GRANTED, and the undersigned Magistrate Judge certifies findings for the District Judge to consider whether contempt proceedings are appropriate. (ECF Nos. 203, 204).
The Joint Motion for Determination of Discovery Dispute in which Defendants seek to compel Plaintiff to produce additional documents is GRANTED IN PART and DENIED IN PART, as specified in more detail above. (ECF No. 209).
Plaintiff's Ex Parte Motion to Specially Set a Conference regarding Defendants' alleged violations of the Protective Order is DENIED IN PART to the extent it seeks to set a conference. The Court also construes the motion as a request to amend the Protective Order to require the parties to identify persons to whom designated materials have been disclosed. The motion to amend the Protective Order is GRANTED as specified in more detail above. Plaintiff's and Defendants' corollary motions to seal are GRANTED. (ECF Nos. 217, 219, 225).
Defendants' Ex Parte Motion to Shorten Time to Bring a Motion to Strike or Exclude Plaintiff's Supplemental Disclosures is GRANTED IN PART. The corollary Motion to Seal is GRANTED IN PART and DENIED IN PART, as specified in more detail above. The Motion to Strike or Exclude Plaintiff's Supplemental Disclosures is deemed filed as of November 11, 2014, and Plaintiff's opposition to the Motion to Shorten Time is also construed as its opposition to the Motion to Strike Supplemental Disclosures. Defendants' Motion to Strike Plaintiff's Supplemental Disclosures is DENIED. (ECF Nos. 222, 224).
IT IS SO ORDERED.