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The Eclipse Group LLP v. Target Corp.

United States District Court, S.D. California

June 29, 2017

THE ECLIPSE GROUP LLP, Plaintiff,
v.
TARGET CORPORATION, et al. Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTIONS TO COMPEL [ECF NOS. 111-112]

          Hon. Barbara L. Major, United States Magistrate Judge

         Currently before the Court are Defendants' April 17, 2017 motions to compel Intervenor to provide further responses to Defendants' Interrogatories [ECF No. 111-1 (“ROG MTC”)], and Requests for Admission [ECF No. 112-1 (“RFA MTC”)], Intervenor's April 24, 2017 oppositions to Defendants' motions [ECF No. 122 (“RFA Oppo.”) and ECF No. 123 (“ROG Oppo.”)], and Defendants' May 1, 2017 consolidated reply [ECF No. 126 (“Reply”)]. For the reasons set forth below, Defendants' motions are GRANTED IN PART AND DENIED IN PART.

         PROCEDURAL BACKGROUND

         Defendants served their First Set of Requests for Admissions (“RFAs”), and Interrogatories (“ROGs”) on Intervenor on February 27, 2017. RFA MTC at 2; see also ECF No. 112-2, Declaration of Jason Cirlin in Support of Defendants' Motion to Compel Intervenor to Provide Further Responses to Requests for Admissions (“RFA Cirlin Decl.”) at 2, Exhs. A-B, ROG MTC at 6, and ECF No. 111-2, Declaration of Jason Cirlin in Support of Defendants' Motion to Compel Intervenor to Provide Further Responses to Interrogatories (“ROG Cirlin Decl.”) at 2, Exhs. A-B. Intervenor served his responses on March 31, 2017 consisting of several objections. RFA MTC at 2; see also RFA Cirlin Decl. at 2, Exh. C, ROG MTC at 6, and ROG Cirlin Decl. at 2, Exh. C. On April 2, 2017, defense counsel wrote to Intervenor and requested that the parties meet and confer to resolve the discovery concerns. RFA MTC at 3; see also RFA Cirlin Decl. at 2, Exh. E, ROG MTC at 7, and ROG Cirlin Decl. at 2, Exh. E. Intervenor failed to respond to the request to meet and confer. Id.

         On April 11, 2017, the District Court denied Intervenor's motion for summary adjudication to allow time for the instant discovery motions to be considered before deciding Intervenor's motion on the merits. RFA MTC at 3; see also ROG MTC at 7, and ECF No. 102.

         LEGAL STANDARD

         The scope of discovery under the Federal Rules of Civil Procedure is defined as follows:

Parties may obtain discovery regarding any nonprivileged matter that 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. Information within this scope of discovery need not be admissible in evidence to be discoverable.

Fed. R. Civ. P. 26(b)(1).

         District courts have broad discretion to determine relevancy for discovery purposes. See Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002). District courts also have broad discretion to limit discovery to prevent its abuse. See Fed.R.Civ.P. 26(b)(2) (instructing that courts must limit discovery where the party seeking the discovery “has had ample opportunity to obtain the information by discovery in the action” or where the proposed discovery is “unreasonably cumulative or duplicative, ” “obtain[able] from some other source that is more convenient, less burdensome, or less expensive, ” or where it “is outside the scope permitted by Rule 26(b)(1)”).

         DEFENDANTS' POSITION

         Defendants request an order from the Court requiring Intervenor to further respond to (1) RFAs 7-18, 21, 23, 24, 28, and 35 and the corresponding RFAs of Defendant Toys “R” Us, Inc. [RFA MTC at 18] and (2) interrogatories 1-15 (Kmart) and the corresponding interrogatories of Toys “R” Us, Inc. ROG MTC at 30. Defendants argue that the requests are relevant since they are arguing that Intervenor may not pursue equitable claims for compensation since the work he performed was as an agent for Plaintiff and that the requests directly relate to the express agreements that control the payment of compensation and the intent of the parties. RFA MTC at 4-5; see also ROG MTC at 8-9. Defendants further argue that the requests relate to their position that Intervenor and Plaintiff violated their ethical duties and to their claim of equitable estoppel. RFA MTC at 6-7; see also ROG MTC at 9-10. Finally, Defendants argue that the requests are relevant because Plaintiff and Intervenor's billing practices are directly at issue in this litigation. RFA MTC at 7; see also ROG MTC at 10. Defendants note that Plaintiff has the burden of proof to demonstrate that their requests are unwarranted. RFA MTC at 7-8; see also ROG MTC at 10-11.

         INTERVENOR'S POSITION

         Intervenor contends that Defendants' motions should be denied because Intervenor provided substantive responses to Defendants' RFAs and ROGs and that “there is no deficiency in the substance of Intervenor's responses, particularly given the many defects in Defendants' interrogatories [and RFAs] (including addressing issues Defendants never pled which are therefore not at issue).” ROG Oppo. at 2; see also RFA Oppo. at 3. Intervenor also contends that Defendants' motions should be stricken because Defendants failed to meet and confer with Intervenor prior to filing their motion with the Court. Id. Intervenor notes that defense counsel emailed him to set a date to meet and confer on a Sunday when they knew he was on vacation and contacted the Court less than twenty-four hours later for a briefing schedule. Id. Intervenor contends that this violates the Court's Chambers Rules and that Defendants' motion should be treated in the same way Intervenor's previous motion was treated, and “promptly stricke[n].” Id.

         INTERVENOR'S REQUEST TO STRIKE DEFENDANTS' MOTION

         In his opposition, Intervenor requests that Defendants' motion be stricken “on the same basis as this Court struck” Intervenor's prior motion, a failure to meet and confer. ROG Oppo. at 2.

         On March 2, 2017, Intervenor Plaintiff, Mr. Stephen M. Lobbin, who is representing himself, contacted the Court regarding a discovery dispute. ECF No. 78. After being informed by Intervenor that defense counsel was unable to meet and confer in a timely fashion, the Court instructed Intervenor to file his motion to compel on March 7, 2017. See ECF No. 73. Intervenor filed his motion on March 7, 2017 and the Court issued a briefing schedule for the opposition and reply. ECF Nos. 72-73. That same afternoon, defense counsel, Messrs. Jason Cirlin and Robert Goldberg, contacted the Court and stated that, as they had previously communicated to Intervenor Plaintiff, they were ready and willing to meet and confer on the issues raised in Intervenor Plaintiff's motion to compel. ECF No. 78. That evening, Messrs. Jason Cirlin and Robert Goldberg filed a “MOTION OF TARGET CORPORATION AND KMART CORPORATION TO STRIKE INTERVENOR'S MOTION TO COMPEL” to permit the parties to meet and confer in an effort to resolve the discovery dispute. ECF No. 74. On March 8, 2017, the Court granted Defendants' motion and ordered “the parties to meet and confer regarding the discovery issues addressed in Intervenor Plaintiff's Motion to Compel” and to file a Joint Status Report detailing the efforts. ECF No. 78. After reviewing the Joint Status Report, the Court permitted Intervenor to file his motion to compel. ECF No. 82.

         Intervenor argues that Defendants emailed him on April 2, 2017, a Sunday, when they knew he was on vacation to request a meet and confer and then contacted the Court on April 3, 2017 for a briefing schedule. ROG Oppo. at 2; see also RFA Oppo. at 2 (citing ECF No. 90). Defendants contend that this situation is distinguishable because unlike their response to Intervenor which was made six minutes after Intervenor emailed them requesting to meet and confer, Intervenor “has never responded to defense counsel's request to meet and confer regarding Lobbin's deficient responses to Defendants Kmart Corporation (“Kmart”) and Toys “R” Us, Inc.'s (“TRU”) (collectively “Defendants”) Requests for Admission (“RFAs”) and Interrogatories (“ROGs”).” Reply at 2. Additionally, while defense counsel did email Intervenor during his vacation, Intervenor had been exchanging emails with defense counsel during his vacation. Id.; see also ECF No. 126-1, Supplemental Declaration of Jason N. Cirlin (“Supp. Cirlin Decl.”) at Exh. A.

         The instant dispute is procedurally different than the prior dispute as Defendants' motion was not filed until approximately two weeks after defense counsel contacted the Court, Intervenor's motion to strike was not filed until three weeks after the initial Court contact, and Intervenor apparently failed to meet and confer with Defendants during that extended time period. Accordingly Intervenor's request to strike Defendants' motions is DENIED.

         REQUESTS FOR ADMISSION[1]

         Legal Standard

         “A party may serve on any other party a written request to admit, for purposes of the pending action only, the truth of any matters within the scope of Rule 26(b)(1) relating to: (A) facts, the application of law to fact, or opinions about either; and (B) the genuineness of any described documents.” Fed.R.Civ.P. 36(a)(1). “Each matter must be separately stated.” Fed.R.Civ.P. 36(a)(2). A responding party must admit a matter, specifically deny a matter, or state in detail why they cannot truthfully admit or deny it. Fed.R.Civ.P. 36(a)(4). If a matter is denied, the “denial must fairly respond to the substance of the matter; and when good faith requires that a party qualify an answer or deny only a part of a matter, the answer must specify the part admitted and qualify or deny the rest.” Id. A responding party may object to a request if they state the ground for the objection. Fed.R.Civ.P. 36(a)(5). The requesting party may then seek a decision from the court determining the sufficiency of an answer or objection. Fed.R.Civ.P. 36(a)(6). The court must order that an answer be served unless it finds an objection justified. Id. “On finding that an answer does not comply with this rule, the court may order either that the matter is admitted or that an amended answer be served.” Id.

         Analysis

         RFAs 7-11, 14, 16, 18, 21, 23, 24, and 28

         The first group of RFAs which Defendants seek to compel further response to include RFAs 7-11, 14, 16, 21, 23, 24, and 28. RFA MTC at 9-10. In support, Defendants argue that Intervenor's response is insufficient because lack of information is not a proper excuse for failing to admit or deny without stating that a reasonable inquiry has been made and “that the information known or readily obtainable by [Intervenor] is insufficient to enable [Intervenor] to admit or deny.” Id. at 10-11. Defendants further argue that given the facts of the case and Intervenor's role as a non-equity partner for Plaintiff who reviewed and approved “every invoice relating to the legal services at issue in this litigation, ” Intervenor's refusals to admit or deny so many RFAs is unsupportable.[2] Id. at 12. Intervenor responded to RFAs 7-11, 14, 16, 21, 23, 24, 28 by stating “Intervenor lacks knowledge or information sufficient to admit or deny” and to RFA 18 by stating “Intervenor objects to the vague reference to an "oral agreement, " and as such lacks knowledge or information sufficient to admit or deny.” RFA Cirlin Decl. at Exh. C.

         Intervenor contends that his response to RFAs 7, 10, 11, 14, 16, 18, 21, 23, 24, and 28 is reasonable because Intervenor is not Plaintiff and the requests are more appropriate for Plaintiff. RFA Oppo. at 3-9. Intervenor further contends that he is not able to request the files from Plaintiff that would allow him to admit or deny the requests with certainty. Id. at 3. With respect to interrogatory 7, Intervenor states that “he is not aware of any formal ‘invoice' ever sent from Eclipse to Kmart.” Id. at 3. With respect to interrogatory 10, Intervenor states that he “denies that Manley paid Eclipse's invoices, at least not in full, which is the reason this lawsuit was filed.” Id. at 5. With respect to interrogatory 11, Intervenor states that he “denies the request because Eclipse also invoiced Manley for legal services in the Adams litigation and, indirectly, for legal services in the Worldslide litigation. Id. With respect to interrogatory 14, Intervenor states that “the intention of the agreement was to have generally the ‘same terms.'” Id. at 6 (emphasis in original). With respect to interrogatory 16, Intervenor states that he “is not aware of any written agreement ever reached as between Eclipse and Kmart. Id. at 6-7. With respect to interrogatory 18, Intervenor states that he “believes there is a written agreement, not only an oral agreement.” Id. at 7. With respect to interrogatory 21, Intervenor states that he “believes there was such a write off, which only occurred under threat by Kmart (through Manley) to cease payment on all past-due invoices, amounting to hundreds of thousands of dollars.” Id. at 8. Intervenor does not state that he admits, denies, or believes anything additional with respect to interrogatory 23. Id. With respect to interrogatory 24, Intervenor states that he “is not aware of any formal ‘invoice' ever sent from Eclipse to Kmart. Id. at 9. Intervenor does not state that he admits, denies, or believes anything additional with respect to interrogatory 28. Id. Intervenor contends that his response to RFA 8 and 9 is reasonable because the request is not relevant or proportional as Defendants have not pled any claims relating to third-party beneficiaries and that requiring Intervenor to research the law of third-party beneficiaries so that he could respond to the request would not be proportional to the needs of the case. Id. at 4.

         Defendants reply that Intervenor should be compelled to further respond to the RFAs without objection or evasion. Reply at 6. Defendants argue that Intervenor's objections should be waived as the opposition is the first time they are being raised and, therefore, are untimely. Id. Defendants also argue that Intervenor is required to make an inquiry of Plaintiff for any required documentation. Id. Regarding RFAs 14, 16, and 18, Defendants state that Intervenor provided additional response to the RFAs, but should serve formal supplemental responses to the RFAs. Id. at 8.

         Defendants' motion to compel further response to 7-11, 14, 16, 21, 23, 24, and 28 is GRANTED. Intervenor's response that he “lacks knowledge or information sufficient to admit or deny” is insufficient. See Fed.R.Civ.P. 36(a)(4) (stating that “[t]he answering party may assert lack of knowledge or information as a reason for failing to admit or deny only if the party states that it has made reasonable inquiry and that the information it knows or can readily obtain is insufficient to enable it to admit or deny.) (emphasis added). While Defendants acknowledge that Intervenor has provided supplemental responses to RFAs 14, 16, and 18, Intervenor has not formally served the supplemental responses on Defendants. Also, the additional information and explanations offered by Intervenor in his opposition for the remaining RFAs, do not constitute properly served formal discovery responses. The Court overrules Intervenor's objections to RFAs 8 and 9 and finds that they are relevant and proportional under Fed.R.Civ.P. 26.

         RFAs 12, 13, and 15

         Defendants argue that Intervenor should be compelled to provide further responses to RFAs 12, 13, and 15 as his responses do not “fairly meet the substance of” RFAs 12, 13, and 15 and do not directly address if Intervenor obtained the informed written consent as provided under California Professional Rules of Conduct.[3] RFA MTC at 15-16. Intervenor's response to RFAs 12 and 13 was “Denied for at least the reasons that no such potential (or actual) conflict existed, and Kmart waived any written consent requirement” and to RFA 15 was “Denied, as Kmart indeed did consent to the arrangement, both orally and in writing.” RFA Cirlin Decl. at Exh. C.

         Intervenor fails to address RFAs 12, 13, and 15 in his opposition to Defendants' motion and the Court therefore GRANTS Defendants' motion to compel further response to RFAs 12, 13, and 15. See Bryant v. Armstrong, 285 F.R.D. 596, 610 (S.D. Cal. 2012) (finding that “Janda did not object to the document request initially or in opposition to the Motion to Compel and has therefore waived any objection”) (citing S.D. Cal. Civ. R. 7.1(f)(3)(c)). In addition, Intervenor's response to RFAs 12 and 13 is not responsive to the content of the RFAs and the response to RFA 15 is unclear as to whether the written consent complied with the cited Rule.

         RFAs 17 and 35

         Defendants argue that Intervenor should be compelled to provide further responses to RFA 17 because a RFA “may request an application of law to fact”[4] and to RFA 35 because his response is evasive since the RFA does not ask Intervenor about his legal status, but to admit that he was an attorney for Eclipse.[5] RFA MTC at 16. Intervenor fails to address RFAs 17 and 35 in his opposition to Defendants' motion. Despite Intervenor's failure to address these RFAs, the Court DENIES Defendants' motion as to RFA 35 since Intervenor provided a substantive response. The Court overrules Intervenor's objection to RFA 17 and GRANTS Defendants' motion to compel further response to RFA 17.

         INTERROGATORIES[6]

         Legal Standard

         An interrogatory may relate to any matter that may be inquired under Rule 26(b). Fed.R.Civ.P. 33(a)(2). “The grounds for objecting to an interrogatory must be stated with specificity, [and] [a]ny ground not stated in a timely objection is waived unless the court, for good cause, excuses the failure.” Fed.R.Civ.P. 33(b)(4). Any interrogatory not objected to must be answered fully in writing under oath. Fed.R.Civ.P. 33(b)(3). In answering interrogatories propounded to a corporation, partnership, association or governmental agency, the officer or agent responding on its behalf “must furnish the information available to the party.” Fed.R.Civ.P. 33(b)(1)(B); see also Cal. Prac. Guide Fed. Civ. Pro. Before Trial Ch. 11(IV)-B.

         Analysis

         Interrogatories 1-3

         Defendants argue that Intervenor's responses are “evasive, vague, incomplete and erroneous.” ROG MTC at 13. The interrogatories are as follows:

. “INTERROGATORY NO. 1: For each of Kmart Corporation's Requests for Admissions, Request Nos. 1, 2, and 3 served on YOU[7] concurrently with these Interrogatories for which YOUR response is anything but an unequivocal admission, state all facts that ...

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