United States District Court, N.D. California
ORDER RE: JOINT DISCOVERY LETTER Re: Dkt. No. 183
DONNA M. RYU, Magistrate Judge.
Before the court is a joint discovery letter filed by Plaintiffs True Health Chiropractic, Inc. and McLaughlin Chiropractic Associates, Inc. and Defendants McKesson Corporation and McKesson Technologies, Inc. ("MTI"). [Docket No. 183.] In the joint letter, Plaintiffs move to compel Defendants to produce certain documents from McKesson entities other than those for which Defendants have already produced documents. The court held a hearing on this matter on May 21, 2015. For the reasons stated below and at the hearing, Plaintiffs' motion is denied.
The factual background of this case has been summarized elsewhere. See, e.g., Docket Nos. 127, 143, 157, 178. In brief, this putative class action challenges Defendants' alleged practice of sending unsolicited facsimile advertisements, or so-called "junk faxes, " in violation of the Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005, 47 U.S.C. § 227 ("TCPA"). The faxes attached to the Second Amended Complaint are all advertisements for medical software.
On June 23, 2014, Plaintiffs filed their first motion to compel Defendants to produce "all facsimile advertisements that it transmitted during the four-year period prior to the filing of the Complaint." [Docket No. 79.] After delays due to Defendants' motion stay the case, the court held a hearing on the discovery letter and ordered the parties to further meet and confer. The parties were unable to resolve their dispute without judicial intervention. They filed another joint discovery letter, in which Plaintiffs, among other things, moved the court to compel Defendants to produce faxes falling within the following description:
Any document that was: (1) created, in whole or in part, by one or more employees of the marketing department of McKesson Corporation, McKesson Technologies, Inc., McKesson Provider Technologies, or other McKesson entity; (2) transmitted to one or more fax numbers via server, computer, or other automated function; (3) that advertised the commercial availability or quality of any property, good, or service or McKesson; (4) after June 20, 2009.
Docket No. 143 (order dated December 5, 2014) at 3 (emphasis added). Defendants generally objected to this proposal as being too burdensome, but did not specifically note a problem with discovery requests that targeted McKesson entities other than the named Defendants. Neither party educated the court about the corporate structure of the various McKesson entities and their relationship to each other. The court ordered production as requested by Plaintiffs, but the court was not called upon at that time to consider whether a search for documents from "the marketing department of McKesson Corporation, McKesson Technologies, Inc., McKesson Provider Technologies, or other McKesson entity" was appropriate.
Subsequently, Defendants produced only four exemplar faxes, limiting their production to faxes that were "similar in substance" to the faxes attached to the pleadings. Plaintiffs brought a motion for sanctions against Defendants alleging that Defendants had failed to produce the discovery ordered by the court. [Docket No. 162.] At the sanctions hearing, new counsel appeared for Defendants, and represented for the first time that production of responsive documents would be impossible' by April 2, 2015, and could include irrelevant documents. The court thus ordered Defendants to produce responsive documents only from the marketing departments of McKesson Corporation or McKesson Technologies by April 2, 2015. The court stated that it was "not excusing Defendants from producing documents from "McKesson Provider Technologies or other McKesson entities, " as delineated in its December 5, 2014 order. However, based on defense counsel's representation about the potential burden and overbreadth of such a production, the court ordered the parties to meet and confer further. Id.
Defendants subsequently investigated its documents and learned that all of the faxes attached to the operative complaint "were created by or at the direction of one or more former employees of Physician Practice Solutions ("PPS"), a business unit under McKesson Technologies Inc." Cheung Decl. [Docket No. 179] at ¶ 4. Defendants searched for marketing documents created by PPS that were transmitted to fax numbers during the relevant time period. Id. As a result of this search, Defendants produced 37 previously-unproduced exemplar faxes to Plaintiffs, raising the total number of unique faxes known to Plaintiffs to 45. Letter at 1. According to Defendants, they "have already produced every fax that reasonably comes within the scope of the allegations in Plaintiff's Second Amended Complaint." Letter at 2.
Plaintiffs now request that Defendants expand their search for exemplar faxes to other McKesson entities, departments, business units, and/or affiliates. The parties met and conferred and were unable to resolve their dispute without judicial intervention. This letter followed.
II. CORPORATE STRUCTURE OF DEFENDANT MCKESSON CORPORATION
The two Defendants named in this action are McKesson Corporation and MTI, and the putative class is defined as "[a]ll persons who... were sent [faxes]... advertising the commercial availability of any property, goods, or services by or on behalf of Defendants" from whom Defendants did not obtain permission to send faxes. Sec. Am. Compl. ["SAC, " Docket No. 90] at ¶ 21.
Defendants have provided a declaration explaining some aspects of the corporate structure and organization of McKesson Corporation. See Shuford Decl. [Docket No. 192]. McKesson Corporation has over 600 subsidiaries or affiliated companies that are separate legal entities. McKesson Corporation and its subsidiaries employ 70, 400 full-time employees as of March 31, 2015. Id. at ¶ 4. More than 400 of McKesson Corporation's subsidiaries or affiliated companies are non-United States legal entities acquired through McKesson Corporation's acquisition of Celesio AG. Id. at ¶ 2.
Many of the approximately 200 subsidiaries or affiliated companies in the United States have multiple business units. Id. at ¶ 3. These business units are "constantly changing." For example, Plaintiffs' original discovery request sought documents from "the marketing department of... McKesson Provider Technologies, " which no longer exists as a business unit. The different business units have different leadership personnel, and generally operate independently from one another. Id. The subsidiaries and business units affiliated with McKesson Corporation offer different services and products. Id. at ¶ 5. Those that sell software offer different types of software (e.g., software for ...