Alexander SINIOUGUINE v. MEDIACHASE LTD., et al. Case No. CV 11–06113–JFW (AGRx) United States District Court, C.D. California Filed April 26, 2012 Counsel Michael D. Anderson, Anderson and Associates, Pasadena, CA, for Alexander Siniouguine. Adrianne E. Marshack, Manatt Phelps and Phillips LLP, Costa Mesa, CA, Michael D. Anderson, Anderson and Associates, Pasadena, CA, Zaher Lopez, Shari Mulrooney Wollman, Manatt Phelps & Phillips LLP, Los Angeles, CA, for Mediachase Ltd., et al. Rosenberg, Alicia G., United States Magistrate Judge DEFENDANT'S MOTION TO COMPEL *1 Case is called. Counsel state their appearances. On April 12, 2012, defendant Mediachase, Ltd. filed a motion to compel discovery responses and production of documents by Plaintiff/Counterdefendant Alexandre Siniouguine and Counterdefendant Virtosoftware.[1] (Dkt. Nos. 52–53.) On April 24, 2012, Mediachase filed a supplemental memorandum. (Dkt. No. 78.) The matter came on for hearing on April 26, 2012. Existence of Counsel of Record for VirtoSoftware Many of the discovery requests at issue were directed to VirtoSoftware. At oral argument, counsel stated that his client is Siniouguine, and indicated to the court, for the first time, that he did not represent VirtoSoftware. On November 3, 2011, Anderson & Associates filed an Answer on behalf of Counterdefendants Siniouguine and VirtoSoftware. (Dkt. No. 29.) The docket lists Anderson & Associates as counsel of record for VirtoSoftware. In the Answer, “Counter–Defendants admit that Counter–Defendant VirtoSoftware is the d.b.a of Counter–Defendant Siniouguine....” (Answer ¶ 5.) At oral argument, counsel stated for the first time that this admission is not true. However, Counter–Defendants have not filed any motion to amend the Answer and withdraw the admission. In connection with Mediachase's motion to compel, the parties filed a Joint Stipulation that was 233 pages long. The Joint Stipulation contains sections of argument by Siniouguine and VirtoSoftware. Nowhere in the Joint Stipulation does counsel indicate to the court that he does not represent VirtoSoftware. On the contrary, counsel's declaration states that Anderson & Associates are “attorneys of record for ... Counter–Defendant VirtoSoftware.” (Hnatiuk Decl. ¶ 1.) Most recently, on April 17, 2012, Counterdefendants Siniouguine and VirtoSoftware filed a motion to compel discovery from Mediachase. (Dkt. No. 63.) Counsel's declaration in support of that motion states that Anderson & Associates are “attorneys of record for ... Counter–Defendant VirtoSoftware.” (Anderson Decl. ¶ 1, Dkt. No. 65.) Accordingly, Anderson & Associates remains counsel for VirtoSoftware for purposes of Mediachase's motion to compel, and this court will rule on the motion. To the extent counsel seeks to change that status, counsel must comply with the local rules and seek relief from the District Judge. Motion to Compel The parties have grouped the discovery requests at issue in 13 categories for ease of discussion. Mediachase contends that Siniouguine worked for it as a software developer from 1999 to 2011, and helped develop two computer programs—a calendar program and ECF program—that were released to the market in 2003 and 2004, respectively. After Siniouguine left Mediachase on March 9, 2011, he asserted ownership of the copyright in the calendar and ECF programs. Mediachase alleges Siniouguine is affiliated with VirtoSoftware and that VirtoSoftware develops and/or sells similar calendar and ECF programs. (JS at 1.) Mediachase has asserted counterclaims for declaratory relief, copyright infringement, misappropriation of trade secrets, breach of contracts, fraud, conversion and unfair competition. *2 Siniouguine contends that he began working for Mediachase as an independent contractor in 2002. As an independent contractor, Siniouguine states that he authored, created and developed a calendar program and ECF program in 2003 and 2004, respectively. Siniouguine asserts claims for copyright infringement, accounting and declaratory relief. (JS at 4.) Federal Rule of Civil Procedure 1 states that the rules “should be construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding.” “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense.” Fed. R. Civ. P. 26(b)(1). “For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Id. “District courts have broad discretion in determining relevance for discovery purposes.” Surfvivor Media, Inc. v. Survivor Productions, 406 F.3d 625, 635 (9th Cir. 2005). 1. Creation of ECF and Calendar Programs Discovery Requests to Siniouguine Document Request Nos. 19–20: These requests seek documents and communications relating to “the creation of the Virto Calendar Program.” These requests are directly relevant to Mediachase's claims, and Siniouguine does not argue to the contrary. The motion to compel is granted. Discovery Requests to VirtoSoftware Interrogatory Nos. 10, 12: Interrogatory No. 10 asks VirtoSoftware to identify the time frame in which it wrote or developed the Virto Calendar Program. (JS at 13.) Interrogatory No. 12 asks VirtoSoftware to identify the persons it employed who wrote or contributed source code for the Virto Calendar Program. (JS at 15.) VirtoSoftware's supplemental response states that “has not created, sold or licensed” the Virto Calendar Program.[2] (JS at 14.) VirtoSoftware also stated that there is no one to identify in response to Interrogatory No. 12. (JS at 17.) Mediachase argues that VirtoSoftware's discovery responses cannot be true. (Supp. Mem. at 3.) Mediachase cites screen shots of VirtoSoftware's website on which VirtoSoftware offers for sale the Virto Ajax Calendar, which a customer may license online at various prices by clicking “Buy Now”. (See Exh. QQ at 4, 6 to Marshack Supp. Decl., Dkt. No. 71). The screen shot contains “client testimonials” of satisfied customers. (Id. at 1–2, 4, 6.) At oral argument, counsel did not dispute that VirtoSoftware has a website or that it licensed its calendar programs to customers online. Counsel did not challenge the authenticity of the screen shots attached by Mediachase. These discovery requests are directly relevant at a minimum to Mediachase's claims of copyright infringement and misappropriation of trade secrets. Mediachase's motion to compel is granted. *3 Interrogatory No. 9: This interrogatory asks VirtoSoftware to identify the time frame in which it “wrote or developed any ECF program(s) created, sold or licensed by” VirtoSoftware.[3] (JS at 12.) VirtoSoftware's supplemental response states that it “has not sold or licensed any ECF programs” but does not disclose whether it created an ECF program. (JS at 13.) Mediachase cites screen shots from VirtoSoftware's website. (Supp. Mem. at 3; see Exh. PP to Marshack Supp. Decl., Dkt. No. 71.) The screen shot states that “Virto's ecommerce solution provides all the tools you need to run a successful ecommerce web site” and that “Virto Commerce provides the customer-specific process, catalog, pricing, marketing and billing capabilities.” (Id. at 1.) The screen shot also contains an undated news item that states VirtoSoftware “has started working on a new ecommerce project—Virto Commerce” and refers to an upcoming presentation and demo session at the Microsoft Sharepoint Conference in Anaheim, California. (Id. at 3–4.) This request is directly relevant at a minimum to Mediachase's copyright infringement and misappropriation of trade secrets claims. Mediachase's motion to compel is granted. Document Request Nos. 1–2 & Interrogatory No. 11: The document requests are directed to the creation and development of any ECF program sold, licensed or used by VirtoSoftware. VirtoSoftware states that it does not have any responsive documents because it “does not sell, license, or use any ECF programs.” (JS at 10, 12–13.) Interrogatory No. 11 seeks the identity of person VirtoSoftware employed who wrote or contributed source code for any ECF program that it owned, sold or licensed. (JS at 14.) In response, VirtoSoftware states that there is no one to identify. (JS at 15.) However, Interrogatory No. 11 covers ECF programs “owned” by VirtoSoftware and is not limited to ECF programs sold, licensed or used. Moreover, the website screen shots indicate VirtoSoftware planned demo sessions for its ecommerce program at a trade show. (Exh. QQ to Marshack Supp. Decl., Dkt. No. 71.) That would be a “use.” Mediachase's motion to compel is granted. Siniouguine and VirtoSoftware object that, including subparts, Mediachase has in fact served more than 25 interrogatories. “Unless otherwise stipulated or ordered by the court, a party may serve on any other party no more than 25 written interrogatories, including all discrete subparts. Leave to serve additional interrogatories may be granted to the extent consistent with Rule 26(b)(2).” Fed. R. Civ. P. 33(a)(1). “By order, the court may alter the limits in these rules on the number of ... interrogatories.” Fed. R. Civ. P. 26(b)(2)(A). This court has carefully reviewed the interrogatories at issue in Mediachase's motion to compel. The court has granted Mediachase's motion to compel only as to those interrogatories that are material to the case. In making this determination, the court has taken into account that, as of the date of hearing, Siniouguine and VirtoSoftware have not produced any documents. In general, interrogatories may be unnecessary because the requested information is provided through other forms of discovery, particularly document production. In this case, however, there is no showing that the interrogatories seek information that has already been provided or that is not material to the claims and defenses in this case. As discussed above, it is also significant that Siniouguine and VirtoSoftware have indicated that they will change at least one admission and answers to certain interrogatories. Under the particular circumstances of this case, and assuming without deciding that Mediachase served more than 25 interrogatories, this court increases the limit on Mediachase's interrogatories and grants the motion to compel responses to additional interrogatories only to the extent set forth herein.[4] 2. VirtoSoftware and Siniouguine Discovery Requests to Siniouguine *4 Document Request Nos. 13: This request is directed to Siniouguine's affiliation with VirtoSoftware. This request is directly relevant to Mediachase's claims and defenses in this case, including misappropriation of trade secrets and breach of contract. Mediachase's motion to compel is granted. Document Request Nos. 14–18: These requests seek documents about VirtoSoftware's ownership, formation, business plans and products/services. (JS at 28–33.) These requests are relevant at a minimum to Mediachase's claims for misappropriation of trade secrets. In addition, the documents about VirtoSoftware's ownership and formation are particularly important given counsel's indication at oral argument that the admission in Counterdefendants' Answer that VirtoSoftware is a dba of Siniouguine is not true. Mediachase's motion to compel is granted with one modification. Document Request No. 18 is modified so that, to the extent it seeks documents about products other than ECF and calendar programs, Siniouguine shall produce only documents sufficient to show what other products and services VirtoSoftware offers for sale or license. With respect to ECF and calendar programs, however, Document Request No. 18 is not modified. Discovery Requests to VirtoSoftware Interrogatory No. 1: This interrogatory asks VirtoSoftware to identify what type of business entity it is, including sole proprietorship or fictitious business. (JS at 33.) VirtoSoftware's supplemental response states that it “is not a business entity.” (Exh. MM to Marshack Supp. Decl., Dkt. No. 71.)[5] As discussed above, in the Answer, Counter–Defendants admitted that “Counter–Defendant VirtoSoftware is the d.b.a of Counter–Defendant Siniouguine.” (Answer ¶ 5.) At oral argument, counsel stated for the first time that this admission is not true. VirtoSoftware's website indicates that it offers calendar programs for license to customers and planned to appear at a trade show. (Exh. PP–QQ to Marshack Supp. Decl., Dkt. No. 71.) VirtoSoftware stated in discovery responses that it made appearances for marketing purposes. (JS at 37.) All of these indicate business activity. For all of these reasons, Mediachase's motion to compel is granted. Interrogatory Nos. 2–5: VirtoSoftware states that it has no principal place of business, does not conduct business at any location, has no owners or investors, and has no organizational or management structure. For the same reasons discussed above, Mediachase's motion to compel is granted. Interrogatory Nos. 6–7: At oral argument, VirtoSoftware indicated it does not plan to change its responses. VirtoSoftware's supplemental responses are sufficient. Mediachase's motion to compel is denied. 3. Source Code Discovery Requests to Siniouguine Document Request Nos. 81–82: These requests are directly relevant to the copyright infringement and copyright ownership claims of both sides. The court cannot discern any basis for Siniouguine's objection. Mediachase's motion to compel is granted. RFA No. 82:[6] This RFA is directly relevant to an element of the claims in this case. Mediachase's motion to compel is granted.[7] Discovery Requests to VirtoSoftware *5 Document Request Nos. 28–29: These requests seek source code for ECF programs and Virto calendar programs, and are directly relevant at a minimum to the copyright infringement claims in this case. VirtoSoftware states it does not sell or license any ECF programs, and does not have the source code for its calendar programs in its possession, custody or control. (JS at 60.) Based on the discussion above in connection with Interrogatory Nos. 9–12 to VirtoSoftware, Mediachase's motion to compel is granted. To the extent VirtoSoftware takes the position that it does not have possession, custody or control of the source code for its own calendar programs, VirtoSoftware shall disclose to Mediachase the person or entity that has the source code, and the person or entity from whom VirtoSoftware obtains the calendar programs. 4. Ownership of the Copyrights in the ECF and Calendar Programs Discovery Requests to VirtoSoftware Document Request Nos. 5–6: These requests seek documents relating to ownership of the copyrights in any ECF program sold, licensed or used by VirtoSoftware. VirtoSoftware's supplemental responses state that it does not sell, license or use any ECF programs. (JS at 74–75.) At oral argument, counsel confirmed that there are no responsive documents about VirtoSoftware ownership of copyrights in such ECF programs. Accordingly, Mediachase's motion to compel is denied as moot. 5. Siniouguine's and VirtoSoftware's Sales/Licenses of ECF and Calendar Programs Discovery Requests to Siniouguine Document Request Nos. 22, 24–26 & Interrogatory Nos. 5–8, 23–24: These document requests and interrogatories seek information relating to sales or licensing of ECF and calendar programs. This discovery is directly relevant to the claims and defenses of both sides in this case. Mediachase's motion to compel is granted except that Document Request No. 22 is limited to ECF and calendar programs. Discovery Requests to VirtoSoftware Document Request Nos. 14–16 & Interrogatory Nos. 13–18: These document requests and interrogatories seek information relating to the sales and licensing of ECF and calendar programs. This discovery is directly relevant to the claims and defenses of both sides in this case. VirtoSoftware states that it “does not offer any products for sale or licensing.” (JS at 93.) However, as discussed above, there appears to be no dispute that VirtoSoftware offers its calendar programs for license to customers online. In addition, VirtoSoftware's supplemental responses as to documents regarding ECF programs deny any sales but do not address licenses, transfers or use of ECF programs. Mediachase's motion to compel is granted as to Document Request Nos. 14–16 except that Document Request No. 14 is limited to sales or licenses of ECF programs and calendar programs. MediaChase's motion to compel is granted as to Interrogatory Nos. 14, 16, 18. At oral argument, VirtoSoftware stood by its responses that it did not sell or license ECF programs. Therefore, Mediachase's motion to compel further responses to Interrogatory Nos. 13, 15 and 17 is denied. 6. Siniouguine's and VirtoSoftware's Communications with Mediachase Discovery Requests to Siniouguine Interrogatory Nos. 12–20: These interrogatories ask Siniouguine to disclose “all facts” to which a specified witness “will testify” as stated in Siniouguine's initial disclosure. There is no indication in the record before the court that these witnesses are affiliated with Siniouguine or VirtoSoftware. Under these circumstances, the interrogatories ask Siniouguine to state what unrelated third parties “will testify.” Mediachase's motion to compel is denied. 7. Communications Between Siniouguine and VirtoSoftware Discovery Requests to Siniouguine Document Request No. 36: This request seeks Siniouguine's communications with VirtoSoftware regarding the allegations in the Complaint, Counterclaim, and Answer to Counterclaims. Mediachase states that it seeks information about Siniouguine's relationship with VirtoSoftware, the timing of the communications, Siniouguine's role in the company, and transfer of information for purposes of its breach of contract and misappropriation of trade secrets claims. (JS at 133.) This request is particularly important given counsel's statements at the hearing that the admissions in its Answer are not true. At oral argument, Mediachase confirmed that it does not seek information protected by the attorney client privilege or work product doctrine. *6 Based on the discussion at the hearing, Document Request No. 36 is modified as follows: “Any and all Communications between You and VirtoSoftware, except for communications regarding this actual or potential lawsuit.” No limitation as to time frame is necessary given the timing and nature of the relationship between Siniouguine and VirtoSoftware. 8. VirtoSoftware Employees Discovery Requests to VirtoSoftware Interrogatory No. 8: This interrogatory asks VirtoSoftware to identify the persons it employs or has employed. VirtoSoftware's supplemental response states that there are no such persons. (JS at 143.) However, at oral argument, counsel discussed VirtoSoftware's website, which refers to persons affiliated with VirtoSoftware. Counsel will investigate further. Mediachase's motion to compel is granted. 9. Advertising and Marketing of VirtoSoftware ECF and Calendar Programs Discovery Requests to Siniouguine Document Request Nos. 60–61: The requested documents are directly relevant at a minimum to the claims of copyright infringement, misappropriation of trade secrets, and breach of contract, including damages. Mediachase's motion to compel is granted. 10. Siniouguine's Damages Discovery Requests to Siniouguine Document Request Nos. 75–77: These requests seek documents relating to Siniouguine's claimed damages, including lost profits, royalties, lost actual or potential customers, and injury to professional reputation. Mediachase's motion to compel is granted. Interrogatory No. 21: This interrogatory seeks information about Siniouguine's sources of income and is directly relevant to the dispute about whether Siniouguine was an employee or independent contractor of Mediachase. However, Interrogatory 21 will be limited to the time period January 1, 1999 through March 31, 2011. Mediachase's motion to compel is granted. 11. Siniouguine's Responses to Requests for Admission Discovery Requests to Siniouguine Document Request No. 78: This request seeks the documents that support Siniouguine's responses to the interrogatories and RFAs. These documents are obviously relevant and Mediachase's motion to compel is granted. Interrogatory Nos. 4, 22: Mediachase's motion to compel is denied without prejudice. The court cannot determine whether the potential benefit of this discovery outweighs the burden on Siniouguine without examining the underlying RFAs. The motion is denied without prejudice to Mediachase's ability to return to court with a specification of the important, material RFAs and a showing that requiring a response to Interrogatory Nos. 4 or 22 as to those RFAs would not be duplicative of other discovery compelled by the court. 12. Material Deposited With Copyright Office Discovery Requests to Siniouguine Document Request Nos. 79–80: These requests go to the heart of Siniouguine's claims. At oral argument, Siniouguine agreed to produce the responsive documents. Mediachase's motion to compel is granted. 13. Facts on Which Siniouguine Bases Allegations and Defenses Discovery Requests to Siniouguine Interrogatory Nos. 9–11: Mediachase's motion to compel responses to Interrogatory Nos. 9–10 is granted, but its motion as to Interrogatory No. 11 is denied. Interrogatory No. 11 states: “Identify any and all facts on which you base your affirmative defenses in your answers to counterclaims.” (JS at 206.) Requiring a response to such an interrogatory would be unduly burdensome. See Roberts v. Heim, 130 F.R.D. 424, 427 (N.D. Cal. 1989)(finding that an interrogatory which asks plaintiff to state all facts upon which you base your contention that defendant is liable in this action is unreasonable, and distinguishing similar interrogatory directed to specific, narrow contentions). Miscellaneous *7 Mediachase states that Siniouguine agreed to produce “responsive, non-privileged documents in its possession, custody or control” in response to Document Request Nos. 1–12, 21, 23, 27–35, 37–59 and 62–74. (JS at 216.) Nevertheless, at the hearing, Siniouguine and VirtoSoftware did not dispute that they had not produced any documents as of the date of the hearing. This court previously ordered the parties to produce by April 30, 2012, all documents they had agreed to produce. (Dkt. No. 72.) Within 5 days after the date of this order, Mediachase shall identify the interrogatories (including duplicative interrogatories) served by Lutz and Magbojos that are withdrawn in light of this court's ruling today. (Exhs. S–T to Hnatiuk Decl.) Sanctions Mediachase seeks its reasonable expenses incurred in making its motion to compel pursuant to Fed. R. Civ. P. 37(a)(5). Siniouguine also seeks its reasonable expenses. For purposes of Rule 37(a), “an evasive or incomplete disclosure, answer, or response must be treated as a failure to disclose, answer or respond.” Fed. R. Civ. P. 37(a)(4). Rule 37(a)(5) provides that if a motion to compel is granted, “the court must, after giving an opportunity to be heard, require the party ... whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees.” However, “the court must not order this payment if: (i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other circumstances make an award of expenses unjust.” Fed. R. Civ. P. 37(a)(5)(A). Rule 37(a)(5)(B) provides that, if a motion is denied, the court “must, after giving an opportunity to be heard, require the movant, the attorney filing the motion, or both to pay the party or deponent who opposed the motion its reasonable expenses incurred in opposing the motion, including attorney's fees.” However, “the court must not order this payment if the motion was substantially justified or other circumstances make an award of expenses unjust.” Fed. R. Civ. P. 37(a)(5)(B). If the motion to compel is granted in part and denied in part, the court “may, after giving an opportunity to be heard, apportion the reasonable expenses for the motion.” Siniouguine's motion for sanctions is denied. To the extent any portion of Mediachase's motion is denied, Mediachase's motion was clearly substantially justified and an award of expenses would be unjust. The court takes Mediachase's request for sanctions under submission and a separate order will issue shortly. Due to the short time remaining before the discovery cut-off date, the rulings on the motion to compel take priority. IT IS HEREBY ORDERED that Mediachase's motion to compel is GRANTED as follows: 1. On or before May 3, 2012, at noon, Siniouguine shall deliver nonprivileged, documents responsive to Document Request Nos. 13–17, 18 (as modified above), 19–20, 22 (as modified above), 24–26, 36 (as modified above), 60–61 and 75–82. 2. On or before May 7, 2012, at noon, Siniouguine shall deliver supplemental responses to Interrogatory Nos. 5–10, 21 (as modified above), and 23–24, and Request for Admission No. 82. 3. On or before May 3, 2012, at noon, VirtoSoftware shall deliver nonprivileged documents responsive to Document Request Nos. 1–2, 14 (as modified above), 15–16 and 28–29. *8 4. On or before May 7, 2012, at noon, VirtoSoftware shall deliver supplemental responses to Interrogatory Nos. 1–5, 8–12, 14, 16 and 18. 5. Within 5 days after the date of this order, Mediachase shall identify the interrogatories served by Lutz and Magbojos that are withdrawn. 6. The request for sanctions by Siniouguine and VirtoSoftware is denied. 7. Mediachase's request for sanctions is taken under submission. A separate minute order will issue shortly. 8. Mediachase's motion to compel further responses to Interrogatory Nos. 4 and 22 to Siniouguine is denied without prejudice. In all other respects, Mediachase's motion to compel is denied. Footnotes [1] The motion to compel included a motion for protective order. The motion for protective order was heard separately on the court's own motion, and the court issued its rulings. The court does not list the filed documents associated with the protective order, but will cite the documents as needed in this order. [2] To the extent VirtoSoftware argues that its supplemental responses to the discovery requests at issue may not be considered in Mediachase's motion to compel, its argument would lead to an absurd, wasteful result and is rejected. For example, if VirtoSoftware's supplemental responses were not considered, this court would be left with VirtoSoftware's original responses and would likely compel VirtoSoftware to answer discovery requests that it may already have answered. The court refers the parties to Fed. R. Civ. P. 1. [3] The parties define ECF as eCommerce framework programs. [4] Given Siniouguine and VirtoSoftware's position on the number of interrogatories Mediachase may serve, other defendants have served the same interrogatories as part of their allotment of 25. This order renders that exercise unnecessary. As set forth below, defendants will be ordered to identify those interrogatories that are withdrawn in light of this order. [5] The Joint Stipulation contains a typographical error. (JS at 35.) Therefore, the court cites and relies upon the actual supplemental response. [6] Mediachase acknowledges that RFA No. 82 was the subject of a typographical error. (JS at 70 n.5.) For the reasons stated in that footnote, Siniouguine's argument that RFA No. 82 is not at issue in Mediachase's motion is rejected. [7] The parties indicated they are working on a factual stipulation regarding the ECF program. It is possible such a stipulation may obviate the need for a response to RFA No. 82. Because no stipulation has been reached as of the hearing on this motion, the court grants the motion to compel. Mediachase may elect to forego RFA No. 82 if a stipulation is reached before the due date for Siniouguine's response.