Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

LF Centennial Limited v. Z-Line Designs, Inc.

United States District Court, S.D. California

April 6, 2017

LF CENTENNIAL LIMITED, a British Virgin Islands corporation, Plaintiff,
v.
Z-LINE DESIGNS, INC., a Nevada corporation; and DOES 1-100, inclusive, Defendant.

         ORDER: (1) GRANTING PLAINTIFF'S EX PARTE MOTION FOR PROTECTIVE ORDER [DKT. NO. 46]; (2) DETERMINING JOINT MOTION FOR DETERMINATION OF DISCOVERY DISPUTE NO. 1 AND GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO COMPEL [DKT. NO. 57]; AND (3) DETERMINING JOINT MOTION FOR DETERMINATION OF DISCOVERY DISPUTE NO. 2 AND GRANTING PLAINTIFF'S MOTION TO COMPEL [DKT. NO. 56].

          Hon. Nita L. Stormes, United States Magistrate Judge

         The parties recently filed multiple discovery motions. First, plaintiff LF Centennial, LTD (LFCL) filed a motion for protective order to preclude the deposition of one of its in-house counsel, Bonita Leung. Defendant Z-Line Designs then filed a competing ex parte motion to extend the discovery cutoff, and in it included substantive arguments regarding a distinct discovery issue regarding requests for production (RFPs) that Z-Line served on LFCL. The court ruled on the discovery extension, ordered further briefing for the protective order, and ordered that Z-Line's RFP issue be briefed separately as “Joint Motion for Determination of Discovery Dispute No. 1.”

         Meanwhile, before Joint Motion No. 1 was actually briefed, LFCL filed another joint discovery motion regarding its own RFPs, which the court construes as “Joint Motion for Determination of Discovery Dispute No. 2.”

         I. Procedural History Relevant to All Motions.

         This is an action for breach of a licensing agreement that resulted from patent litigation between the predecessor of LFCL and Z-Line. After a year of litigation the parties entered into a licensing agreement (Agreement) dated July 26, 2013, where LFCL's predecessor Whalen Furniture Manufacturing, Inc. (WFM), along with LFCL, granted a worldwide license to Z-Line to manufacture and sell TV stands covered by the patents. Z-Line agreed to pay a 5% royalty on U.S. sales in return. Both LFCL and WFM are named as parties to the Agreement because at the time it was entered into, LFCL was in the process of purchasing WFM's assets, including the subject patents. Once that purchase was completed, LFCL asserted that the outstanding royalties were owed exclusively to LFCL. LFCL now believes that Z-Line is not paying all royalties and filed this action for breach of contract, breach of covenant of good faith and fair dealing, and for an accounting.

         Z-Line filed a motion to dismiss this action for lack of jurisdiction. It argued that WFM is an indispensable third party under Rule 19 because WFM and LFCL are both parties to the Agreement. Dkt. No. 35-1, p.7. Z-Line noted that WFM's joinder would destroy diversity, which would require a remand of this action to state court based on lack of diversity jurisdiction. LFCL countered that although WFM was initially a party to the Agreement, WFM's rights terminated when LFCL purchased its assets, including the patents at issue.

         The district judge found that LFCL made an evidentiary showing of a valid transfer of all assets from WFM to LFCL:

In response to Z-Line's challenge to the validity of the WFM assignments, LFCL comes forward with the declaration of Bonita Leung, Sr. Legal Counsel for LFCL, who submits a copy of the U.S. Patent and Trademark Office's January 30, 2014 Notice of Recordation of Assignment, showing that assignor WFM assigned Patent Nos. ‘311 and ‘485 to assignee LFCL. The declaration also establishes that, in May 2013, LFCL purchased all other assets of WFM.

Nov. 30, 2016 Order, Dkt. No. 41, p.3. The court found that Z-Line failed to overcome LFCL's evidentiary showing and noted that a valid assignment would negate Z-Line's Rule 19 arguments. Id. at pp.3-4. It denied the motion to dismiss without prejudice to Z-Line refiling it, if Z-Line ever discovered a valid basis to challenge the assignment of the patents. Id. at p.4.

         II. Legal Standard.

         Parties can obtain discovery of non-privileged information so long as it

is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.

Fed. R. Civ. P. 26(b)(1). Discoverable information need not be admissible. Id. Once the propounding party establishes that the request seeks relevant information, “[t]he party who resists discovery has the burden to show discovery should not be allowed, and has the burden of clarifying, explaining, and supporting its objections.” Superior Commc'ns v. Earhugger, Inc., 257 F.R.D. 215, 217 (C.D.Cal.2009); see Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir.1975) (requiring defendants “to carry heavy burden of showing why discovery was denied”).

         III. Plaintiff's Motion for Protective Order.

         A. Discovery at Issue.

         In discovery Z-Line noticed a Rule 30(b)(6) deposition to depose LFCL's person most knowledgeable (PMK). Z-Line thought that Bonita Leung, the in-house counsel who supported LFCL's opposition to the motion to dismiss with a declaration, would be the Rule 30(b)(6) witness. When Z-Line learned that the PMK witness would not be Ms. Leung, Z-Line noticed Leung's personal deposition. Both the PMK and Leung deposition notices contain 22 identical categories of documents that each witness must produce at deposition. In the notice for the PMK deposition, Z-Line explains that it ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.