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Wright v. Old Gringo, Inc.

United States District Court, S.D. California

October 7, 2019

OLD GRINGO, INC., et al., Defendants.


          Hon. Cynthia Bashant, United States District Judge

         On August 7, 2019, Plaintiff Marsha Wright filed a motion objecting to Magistrate Judge Michael S. Berg's discovery order on Plaintiff's six discovery motions. (ECF No. 159 (“Discovery Order”); ECF No. 162 (“Motion”).) For the reasons herein, the Court denies Plaintiff's Motion.


         On September 28, 2017, Plaintiff filed a Complaint stating common law claims related to Defendants' alleged breach of an oral contract wherein, according to Plaintiff, Defendants agreed to make Plaintiff a 5% equity owner in Old Gringo, Inc. (“OGI”) and Old Gringo, S.A. de C.V. (“OGS”). (ECF No. 1, Compl. ¶ 18.) The parties attended a discovery conference before Judge Berg on May 10, 2019, after which the Court permitted Plaintiff to “file the discussed discovery motions on or before June 26, 2016.” (ECF No. 112.) Thereafter, Plaintiff filed six discovery motions including, in relevant part: a motion for leave to reopen the depositions of OGI's principals Ernest Tarut and Yan Ferry and OGI's Accounting Manager, Patricia Simental (ECF No. 120); a motion to modify the protective order (ECF No. 128); and a motion to compel OGI's balance sheets and general ledgers (ECF No. 134 (“Balance Sheet Motion”)). Judge Berg held a hearing on July 19, 2019 regarding all six motions and issued a Discovery Order on July 24, 2019. (See generally Discovery Order; ECF No. 161 (“Hr'g Tr.”).)

         In the instant motion, Plaintiff objects only to the following four rulings in the Discovery Order: (1) the denial of Plaintiff's requests to reopen the deposition of Patricia Simental; (2) the denial of Plaintiff's request to modify the Protective Order; (3) the denial of Plaintiff's request for sanctions against Defendants and their counsel; and (4) the failure to address Plaintiff's request for an order compelling Defendants to disclose their tax returns.[1] (Mot. at 3.) The Court summarizes the arguments and rulings regarding each of these issues in Section III.


         A magistrate judge may issue a written order deciding any pretrial matter not dispositive of a party's claim or defense. Fed.R.Civ.P. 72(a). A party may appeal a magistrate judge's order on such matters by filing objections within 14 days of the order. Id. This Court requires objections to be filed as a noticed motion. See Standing Order of the Hon. Cynthia Bashant for Civil Cases ¶ 3.

         A district judge “must consider timely objections and modify or set aside any part of the order that is clearly erroneous or is contrary to law.” Fed.R.Civ.P. 72(a). Factual determinations are reviewed for clear error and legal conclusions are reviewed to determine whether they are contrary to law. United States v. McConney, 728 F.2d 1195, 1200-01 (9th Cir. 1984), overruled on other grounds by Estate of Merchant v. CIR, 947 F.2d 1390 (9th Cir 1991).

         “Review under the clearly erroneous standard is significantly deferential, requiring a definite and firm conviction that a mistake has been committed.” Concrete Pipe & Prods. v. Constr. Laborers Pension Tr., 508 U.S. 602, 623 (1993) (quotation omitted); Hernandez v. Tanninen, 604 F.3d 1095, 1100 (9th Cir. 2010) (same). On the other hand, the “contrary to law” standard permits independent review of purely legal determinations by a magistrate judge. See, e.g., Haines v. Liggett Group, Inc., 975 F.2d 81, 91 (3d Cir. 1992) (“[T]he phrase ‘contrary to law' indicates plenary review as to matters of law.”); Gandee v. Glaser, 785 F.Supp. 684, 686 (S.D. Ohio 1992), aff'd, 19 F.3d 1432 (6th Cir. 1994); 12 Charles A. Wright, et al., Federal Practice and Procedure § 3069 (2d ed., 2010 update). “Thus, [the district court] must exercise its independent judgment with respect to a magistrate judge's legal conclusions.” Gandee, 785 F.Supp. at 686. “A decision may be contrary to law if it fails to apply or misapplies relevant statutes, case law, or rules of procedure.” United States v. Cathcart, No. C 07-4762 PJH, 2009 WL 1764642, at *2 (N.D. Cal. June 18, 2009).

         III. ANALYSIS

         Judge Berg's findings are mixed questions of fact and law; thus, the Court reviews his legal determinations de novo and reviews the underlying factual findings for clear error. After reviewing the parties' briefings, the Court finds that the challenged rulings in the Discovery Order are neither clearly erroneous nor contrary to law for the reasons explained below.[2]

         A. Reopening of the Simental Deposition

         In her initial motion seeking to reopen depositions, Plaintiff argues that Simental's deposition should be reopened because Simental made inconsistent statements about her compensation and OGI's balance sheets. (ECF No. 120-1 at 5- 10.). Specifically, Plaintiff alleges that the 2014 payroll figures disclosed by OGI “do not correspond to Ms. Simental's description of how she was compensated” and that Simental testified that OGI maintained balance sheets during her deposition but later claimed that OGI did not do so in a written declaration to the court. (Id. at 8, 10.) Plaintiff also argues that because Judge Berg had overruled Defendants' “financial privacy” objections raised during the deposition in response to questions about OGI's profits, Plaintiff should be allowed to redepose Simental on those questions. (Id. at 11.) Finally, Plaintiff claims that because OGS formally appeared in the action after its motion challenging personal jurisdiction was denied by this Court, Plaintiff should be permitted to engage in discovery related to OGS personnel such as Simental. (Id. at 14-15.)

         Judge Berg denied Plaintiff's request to reopen the Simental deposition on two grounds. First, he expressly found that Simental's compensation was not relevant to Plaintiff's claims. (Hr'g Tr. 84:20-87:12; 88:23-89:24.) Second, Judge Berg found Simental's inconsistent statements about the balance sheets did not constitute good cause for reopening her deposition-noting that these “are certainly areas and questions that Counsel can investigate in cross-examination at ...

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