ARIANNA ROSALES, et al., Plaintiff, v. FITFLOP USA, LLC, Defendant CASE NO. 11cv0973-W(KSC) United States District Court, S.D. California Filed January 04, 2013 Counsel Karen Marie Leser-Grenon, Shepherd Finkelman Miller & Shah LLP, Marisa C. Livesay, Betsy Carol Manifold, Rachele R. Rickert, Wolf Haldenstein Adler Freeman & Herz LLP, Thomas Joseph O'Reardon, II, Timothy Gordon Blood, Blood Hurst & O'Reardon LLP, San Diego, CA, Janine L. Pollack, Pro Hac Vice, Wolf, Haldenstein, Adler, Freeman & Herz, LLP, Joshua Keller, Pro Hac Vice, Milberg LLP, New York, NY, James C. Shah, Shepherd, Finkelman, Miller & Shah, LLP, Media, PA, Patricia N. Syverson, Bonnett, Fairbourn, Friedman & Balint, PC, Phoenix, AZ, for Plaintiff. Laura J. McKay, Boies Schiller and Flexner, Oakland, CA, Brooke A. Alexander, Pro Hac Vice, William S. Ohlemeyer, Pro Hac Vice, Boies, Schiller & Flexner LLP, Armonk, NY, for Defendant Crawford, Karen S., United States Magistrate Judge ORDER RE JOINT MOTION FOR DETERMINATION OF DISCOVERY DISPUTE *1 Before the Court is a Joint Motion for Determination of Discovery Dispute, as well as supporting and opposing points and authorities, declarations, and exhibits. [Doc. Nos. 46, 47.] In the Joint Motion, plaintiffs seek an order compelling defendant to: (1) supplement its discovery responses by producing documents created after the original Complaint was filed in this action up to and including the present; (2) complete production of Electronically Stored Information (ESI), including responsive documents located in personal e-mail accounts of three former employees; and (3) produce its current chief executive officer for deposition. For the reasons outlined below, the Court finds that plaintiffs' request for an order compelling defendant to provide more complete responses to discovery must be GRANTED in part and DENIED in part. Background Plaintiffs are consumers who purchased FitFlop Footwear which was marketed through various retailers in the United States by defendant FitFlop USA LLC (“FitFlop”). According to the First Amended Class Action Complaint (“Complaint”), FitFlop has marketed its footwear in the United States since 2007. Generally, plaintiffs allege that FitFlop engaged in deceptive and wrongful business practices, because its footwear does not provide the benefits claimed in its extensive advertising campaign. Plaintiffs allege that FitFlop has warranted and represented that its products will provide wearers with a variety of health benefits, but in reality FitFlop's footwear does not provide the promised benefits and may actually cause or exacerbate the type of problems it claims to protect against. [Doc. No. 10, at pp. 1-4, 18-22.] Plaintiffs' Complaint includes the following three causes of action: (1) violations of California's Unfair Competition Law (Cal. Bus. & Prof. Code § 17200, et seq.); (2) violations of the California Consumers Legal Remedies Act (“CLRA”) (Cal. Civ. Code § 1750, et seq.); and (3) breach of express warranty. [Doc. No. 10, at pp. 18-22.] Discussion The scope of discovery under Rule 26(b) is broad: “[p]arties may obtain discovery regarding any matter, not privileged, which is relevant to the claim or defense of any party involved in the pending action. Relevant information need not be admissible at trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Fed.R.Civ.P. 26(b). However, a court may limit discovery of relevant material if it determines that the discovery sought is unreasonably cumulative or duplicative, or obtainable from some other source that is more convenient, less burdensome, or less expensive, or the burden or expense of the proposed discovery outweighs the likely benefit. The party resisting discovery generally bears the burden to show that the discovery requested is irrelevant to the issues in the case or is overly broad, unduly burdensome, unreasonable, or oppressive. If the resisting party meets its burden, the burden shifts to the moving party to show the information is relevant and necessary. Henderson v. Holiday CVS, L.L.C., 269 F.R.D. 682, 686 (2010). I. Relevant Time Period for Discovery *2 Defendant FitFlop has represented that it has agreed to provide plaintiffs with all responsive discovery through and including July 15, 2011, the date the operative Complaint was filed. However, in response to plaintiffs' Interrogatory Nos. 5 through 23, FitFlop provided summary sales and expense information from June 2007 through the end of 2011. [Doc. Nos. 46, 47, at p. 2, 18.] With respect to all other discovery, FitFlop believes that it has appropriately limited its responses to documents and information as of July 15, 2011 for several reasons. First, the claims of the named plaintiffs obviously arose before the Complaint was filed, and plaintiffs have not yet requested or obtained certification of a class whose claims might have arisen after the Complaint was filed. Therefore, FitFlop does not believe documents or information that originated after the Complaint was filed would be relevant to the claims currently included in the Complaint. Second, advertisements disseminated by FitFlop to the public before the Complaint was filed are significantly different from those presented to the public after the Complaint was filed and would therefore not be relevant to plaintiffs' claims. Third, FitFlop has already produced 65,000 documents in response to plaintiffs' document production requests. FitFlop argues it would be overly burdensome for it to review and produce additional documents and information from the date the Complaint was filed until the present time, particularly because this would require the preparation of an extensive privilege log of all e-mails and other communications with counsel since the litigation commenced. [Doc. Nos. 46, 47, at pp. 14-15, 18.] Plaintiffs argue that responsive documents and information that originated after the Complaint was filed are relevant because FitFlop's misconduct is ongoing and extends beyond July 2011. Plaintiffs believe FitFlop is arbitrarily and inappropriately refusing to produce responsive discovery that originated after the Complaint was filed. Plaintiffs believe they are entitled to this discovery because the class definition includes consumers through the present date and it is not necessary for them to obtain class certification before seeking discovery up to and including the present. [Doc. Nos. 46, 47, at pp. 3-7, 10-11.] The Federal Rules of Civil Procedure require a “just, speedy and inexpensive determination of every action.” Fed.R.Civ.P. 1. Courts have wide discretion in limiting discovery prior to a hearing on class certification rules under Federal Rules of Civil Procedure 23. In re Rail Freight Fuel Surcharge Anti-Trust Litigation, 258 F.R.D. 167, 169, 172 (2009). Under Rule 23, the Court must determine whether to certify a class “[a]t an early practicable time after a person sues or is sued as a class representative....” Fed.R.Civ.P. 23(c)(1)(A). “Simultaneous class discovery and merits discovery may generate ‘extraordinary and unnecessary expense and burden' in that the parties may waste resources on merits discovery that turns out to be unnecessary either because the class is defined more narrowly than expected or the plaintiffs decide to discontinue the case after a denial of certification.” In re Rail Freight Fuel Surcharge Anti-Trust Litigation, 258 F.R.D. at 170. In resolving discovery disputes prior to class certification, the Court must “balance the need to promote effective case management, the need to prevent potential abuse, and the need to protect the rights of all parties.” Id. at 172. *3 The Joint Motion does not comply with Chamber's Rules which require the parties to set forth the exact wording of the discovery requests in dispute. Other than mentioning Interrogatory Nos. 5 through 23, which apparently requested production of summary sales and expense information by FitFlop, the Joint Motion does not clearly indicate what discovery requests are included in the parties' dispute about the relevant time period. It appears plaintiffs are arguing that FitFlop must supplement its responses to all of plaintiffs' discovery requests by producing all responsive documents and information with no limitation as to time and date. However, the Court cannot determine the relevance of the documents and information plaintiffs are seeking without the exact wording of the discovery requests in dispute and the parties corresponding arguments as to each request. Without more, it appears plaintiffs are seeking documents and information that could be voluminous and may turn out to be unnecessary depending on the outcome of a determination by the District Court on the issue of class certification. Therefore, the Court declines to enter a blanket order requiring FitFlop to supplement its responses to all of plaintiffs' discovery requests by producing all documents and information with no time limitation. With respect to plaintiffs' Interrogatory Nos. 5 through 23, the Court specifically finds that FitFlop appropriately limited the production of summary sales and expense information to the period June 2007 through the end of 2011 because a class has not yet been certified. On the other hand, plaintiffs do specifically argue that they are entitled to discovery concerning continued discussions by FitFlop about marketing strategy and advertising substantiation up to and including the present because this information is relevant to key issues in the litigation. Plaintiffs are particularly interested in a research study on the alleged benefits of FitFlop Footwear that was scheduled to be completed in July 2011. [Doc. No. 46, 47, at p. 7. This appears to be a continuation of arguments made in a prior Joint Motion [Doc. Nos. 38-39] which specifically involved Request Nos. 7, 8, 11,15, 18, 19, 20, and 22 of plaintiffs' First Set of Requests for Production of Documents and Interrogatory No. 4 of plaintiff's First Set of Interrogatories. Based on the information provided in connection with this prior Joint Motion and the arguments made in the current Joint Motion, the Court is able to determine the appropriate scope of discovery as to these particular requests. All of the above-cited discovery requests involve the production of documents and information related to FitFlop's advertising campaign in the United States. The Court agrees with plaintiffs that they are entitled to discover up-to-date information about FitFlop's marketing strategies and advertising substantiation in the United States market and what, if any, modifications FitFlop has made to its marketing and advertising campaign in the United States since the plaintiffs purchased FitFlop Footwear. This discovery is relevant to the central issues raised in the operative Complaint. Therefore, for the sake of judicial efficiency, the Court will order FitFlop to provide up-to-date responses to these particular discovery requests. This ruling is without prejudice to plaintiffs renewing their request for up-to-date discovery responses related to other specific discovery requests if the requested information is necessary in order to seek certification of a class. Although discovery is not bifurcated, the Court is mindful at this time of placing too great a burden on FitFlop in producing discovery that may or may not be relevant, depending on the outcome of any motions related to class certification. This Order is also without prejudice to plaintiffs renewing their request for an order compelling up-to-date discovery responses as to particular discovery requests if FitFlop refuses to supplement its responses once there is a ruling on class certification. Of course, the parties must meaningfully meet and confer before filing any further joint motions on these issues. In addition, the Court intends to set a deadline for the parties to file any motions related to class certification. Confidentiality Designations On May 22, 2012, the Court granted the parties' joint request by approving a Protective Order Regarding Confidential and Trade Secret Information. [Doc. No. 34] This Protective Order provides both a definition for “confidential” documents and information and a procedure for either party to follow to challenge an improper designation. Plaintiffs complain that FitFlop has violated the Protective Order by designating all documents produced thus far as “confidential,” including all advertisements and newspaper articles which do not fit the definition of “confidential” because they were disseminated to the public. Plaintiffs therefore seek an order compelling FitFlop to comply with the terms of the Protective Order. *4 In the Protective Order, “confidential information” is defined as “all non-public material, including responses to discovery requests and interrogatories and testimony adduced at deposition, personal financial information or other personally sensitive information and all material that is Confidential pursuant to applicable law.” [Doc. No. 34, at p. 1.] The Protective Order sets forth a procedure for marking documents “confidential” and states that any material so designated “shall constitute the verification of the Designating Party and its counsel that the material constitutes Confidential Information...” as defined in the Protective Order. [Doc. No. 34, at p. 2.] By entering into the Protective Order, the parties agreed “to limit their designation of Confidential Information solely to information which they, in good faith, believe qualifies for such designation” based on the definition of “Confidential Information” set forth in the Protective Order and under applicable law.[1] [Doc. No. 34, at p. 4.] The Protective Order includes a specific process for challenging an opposing party's designation of documents as “Confidential Information.” [Doc. No. 34, at p. 5.] However, it does not appear from the parties' Joint Motion and supporting documentation that plaintiffs have followed this agreed-upon procedure. It is also unclear from the parties' papers which documents plaintiffs specifically believe were improperly designated and why. Based on the foregoing, plaintiffs request for an order compelling FitFlop to comply with the Protective Order filed May 22, 2012 must be denied without prejudice. To the extent plaintiffs believe FitFlop has improperly designated documents as “Confidential Information,” they must challenge those designations by following the procedure set forth in paragraph 13 of the Protective Order. If FitFlop's “Confidential Information” designations remain in dispute after plaintiffs have followed the procedure in paragraph 13 and have engaged in a meaningful meet and confer process, they may file another Joint Motion renewing their request for an order compelling FitFlop to comply with the terms of the Protective Order. However, plaintiffs are forewarned that the Court will deny the request if they fail to show meaningful meet and confer efforts as to each document or category of documents at issue. Any further Joint Motion on this issue must include a specific description of the document or documents at issue, why plaintiffs believe the “confidential information” designation does not comply with the terms of the Protective Order, and why FitFlop believes the designation is appropriate. II. Deposition of Defendant's Current Chief Executive Officer (“CEO”) In the parties' Joint Motion, plaintiffs seek an order compelling the deposition of Suzie Rohan Willner, who is the current CEO of FitFlop and its parent company, FitFlop, Ltd. [Doc. No. 46, 47, at pp. 7-8, 16-18.] Citing the apex doctrine, FitFlop seeks an order protecting Ms. Rohan Willner from being deposed at this time for several reasons, which this Court will construe as a request for a protective order. First, FitFlop believes Ms. Rohan Willner is not the most knowledgeable witness on any of the relevant issues, so it would by premature to depose her before deposing other executives or employees with more direct knowledge over a broader time period. According to FitFlop, Ms. Rohan Willner was only appointed as FitFlop's CEO about six months before the Complaint in this action was filed. As a result, FitFlop contends she only had limited involvement in FitFlop's decision-making processes for a relatively short time during the relevant claims period. According to FitFlop, plaintiffs have not yet deposed any of FitFlop's executives or employees with more complete and probative knowledge than Ms. Rohan Willner even though FitFlop has attempted to assist plaintiffs in doing so. Second, FitFlop claims Ms. Rohan Willner has no specialized or unique knowledge about FitFlop's research or advertising efforts in the United States during the relevant time period, and it is therefore unlikely she possesses any relevant, non-duplicative information. [Doc. Nos. 46, 47, at pp. 16-18.] *5 Plaintiffs argue that Ms. Rohan Willner's relatively recent 2011 hire date is not determinative, because they believe the class period will extend all the way through her tenure at FitFlop. Citing internal memoranda produced by FitFlop, plaintiffs contend Ms. Rohan Willner has unique, first-hand knowledge as to how customer complaints about FitFlop Footwear were handled during the class period. Plaintiffs also believe it is significant that Ms. Rohan Willner appears to be the only one who works for both FitFlop in the United States and its parent company in the United Kingdom. Because she is the CEO of both entities, plaintiffs credit Ms. Rohan Willner with unique knowledge about marketing strategies that were created in the United Kingdom and then implemented in the United States. [Doc. Nos. 46, 47, at pp. 2, 7-9.] Under the circumstances, plaintiffs argue that the apex doctrine does not apply. According to plaintiffs, FitFlop has described itself as a very small company in which all meaningful decisions are made by the highest level employees. Citing a letter from FitFlop's counsel, plaintiffs claim FitFlop has taken the position that discovery of communications among junior or lower-level employees is not relevant, because they do not represent the beliefs or intent of the company. [Doc. No. 47-2, at p. 73.] As a result of her high-level position, plaintiffs contend Ms. Rohan Willner undoubtedly has a key decision-making role and unique first-hand knowledge of facts at issue in the case. Therefore, plaintiffs argue that FitFlop cannot shield her from being deposed under the apex doctrine. [Doc. Nos. 46-47, at pp. 8-10.] “The burden is upon the party seeking [a protective order] to ‘show good cause’ by demonstrating harm or prejudice that will result from the discovery.” Rivera v. NIBCO, Inc., 364 F.3d 1057, 1063 (9th Cir. 2004). “When a party seeks the deposition of a high-level executive (a so-called ‘apex’ deposition), courts have ‘observed that such discovery creates a tremendous potential for abuse or harassment.’ The court therefore has discretion to limit discovery where the discovery sought ‘can be obtained from some other source that is more convenient, less burdensome, or less expensive.’ ” Apple Inc. v. Samsung Electronics Co., Ltd, 282 F.R.D. 259, 263 (N.D.Cal. 2012). ‘ “In determining whether to allow an apex deposition, courts consider (1) whether the deponent has unique first-hand, non-repetitive knowledge of the facts at issue in the case and (2) whether the party seeking the deposition has exhausted other less intrusive discovery methods.’ However, ‘a party seeking to prevent a deposition carries a heavy burden to show why discovery should be denied.’ Thus, it is very unusual ‘ for a court to prohibit the taking of a deposition altogether absent extraordinary circumstances.’ ‘ When a witness has personal knowledge of facts relevant to the lawsuit, even a corporate president or CEO is subject to deposition’ ‘A claimed lack of knowledge, by itself is insufficient to preclude a deposition.’ ” Id. FitFlop has not met its burden of demonstrating there is good cause to either preclude the deposition of Ms. Rohan Willner or to require that her deposition be taken only after plaintiffs exhaust other discovery methods, such as deposing lower level or more knowledgeable executives or employees first. In the absence of such a showing, plaintiffs may conduct discovery in any order they choose. Particularly given the admittedly small size of the company with decision-making authority delegated only to high-level executives, there does not appear to be a viable reason why plaintiffs should be required to take the depositions of lower level executives or employees first. In addition, it is apparent that Ms. Rohan Willner is in a unique position because she works in an executive capacity for FitFlop in the United States, as well as for the parent company in the United Kingdom. Therefore, the Court finds that plaintiffs are entitled to an order compelling the deposition of Suzie Rohan Willner, the current CEO of FitFlop and its parent company, FitFlop, Ltd.[2] III. Production of Electronically Stored Information (“ESI”) *6 Without citing any particular discovery requests, plaintiffs complain that FitFlop agreed to search for and produce responsive ESI from certain individual custodians. FitFlop has represented that its e-mail production is complete. However, plaintiffs claim there is an obvious gap in the production, because the earliest e-mails are dated April 2006 and the next e-mails are dated April 2007, one year later. Apparently, plaintiffs believe this gap may be filled by searching the personal e-mail accounts of certain individual custodians who are no longer employed by FitFlop. Plaintiffs argue they are entitled to an order requiring FitFlop to produce e-mails from the individual custodians' personal e-mail accounts because employers have control over employees and can be required to produce documents in the possession of their employees even if they no longer work for the employer. There is support for plaintiffs' position in case law. “As set forth in Rule 34 of the Federal Rules of Civil Procedure, parties are entitled to documents in the ‘possession, custody or control’ of other parties. If the party from whom production is sought does not actually have the document in hand, courts look to see whether the party has control of it, construing the word ‘control’ broadly. ‘A party controls documents that it has the right, authority, or ability to obtain upon demand.’ ” Export-Import Bank of U.S. v. Asia Pulp & Paper Co., Ltd., 233 F.R.D. 338, 341-342 (S.D.N.Y. 2005). Businesses are generally deemed to have control over documents whether they are actually possessed or controlled by a parent corporation or subsidiary. See, e.g., U.S. v. International Union of Petroleum and Indus. Workers, AFL-CIO, 870 F.2d 1450, 1452 (9th Cir. 1989). “Analyzing the practical ability of corporations to obtain work-related documents from former employees, courts insist that corporations, at the very least, ask their former employees to cooperate before asserting that they have no control over documents in the former employees’ possession.” Export-Import Bank of U.S. v. Asia Pulp & Paper Co., Lt.d, 233 F.R.D. at 342. Based on the foregoing, FitFlop must use its best efforts to determine whether the key former employees named in the parties' Joint Motion used their personal e-mail accounts for business purposes while they were employed by FitFlop. If so, FitFlop must also use its best efforts to obtain the cooperation of these former employees in producing responsive discovery from their personal e-mail accounts. If they are unable to obtain cooperation or produce responsive documents from their former employees' personal e-mail accounts, FitFlop must provide plaintiffs with a detailed explanation of their efforts in the form of a certification or declaration under penalty of perjury pursuant to Federal Rule of Civil Procedure 26(g)(1).[3] IV. Completion of Document Production In the parties' Joint Motion, plaintiffs complain that FitFlop has not committed to a date for completion of its production of responsive documents. Plaintiffs fear they will be prejudiced in conducting depositions if FitFlop does not complete its document production in a timely manner. FitFlop represents that it will ensure that plaintiffs have all relevant documents at least two weeks prior to the scheduled depositions. To the extent plaintiffs believe they have been prejudiced in their ability to take scheduled depositions because FitFlop has not produced documents in a timely manner, plaintiffs may seek appropriate relief from the Court. Conclusion Based on the foregoing, IT IS HEREBY ORDERED THAT plaintiffs' request for an order compelling FitFlop to provide more complete responses to discovery must be GRANTED in part and DENIED in part. *7 1. Plaintiffs' request for a blanket order requiring FitFlop to provide documents and information from July 15, 2011 through the present in response to all of plaintiffs' discovery requests is DENIED without prejudice. In compliance with Chambers' Rules, which require the parties to set forth the exact wording of all of the discovery requests and responses in dispute, and after satisfying meet and confer requirements, plaintiffs make seek additional assistance from the Court to the extent discovery is needed on class certification issues. After class certification issues are resolved, plaintiff may, if necessary, seek additional relief as to specific discovery requests after satisfying meet and confer requirements. 2. Plaintiffs' request for an order compelling FitFlop to produce summary sales and expense information in response to Interrogatory Nos. 5 through 23 from the end of 2011 through the present is DENIED without prejudice. FitFlop must supplement its responses to these Interrogatories after the class determination is made, if relevant. If FitFlop does not update this information as appropriate after class certification issues are resolved and after the parties satisfy meet and confer requirements, plaintiffs make seek the Court's assistance in obtaining up-to-date information in response to these Interrogatories. 3. Plaintiffs' request for an order compelling FitFlop to provide up-to-date responses to Request Nos. 7, 8, 11, 15, 18, 19, 20, and 22 of plaintiffs' First Set of Requests for Production of Documents and Interrogatory No. 4 of plaintiff's First Set of Interrogatories is GRANTED. FitFlop shall provide up-to-date responses to these discovery requests no later than January 18, 2013. 4. Plaintiffs' request for an order compelling FitFlop to comply with the Protective Order filed May 22, 2012 is DENIED without prejudice. Plaintiffs failed to show they complied with paragraph 13 of the Protective Order before filing the Joint Motion. If necessary, plaintiffs may seek relief from the Court on a document by document basis after taking the steps outlined more fully above. 5. Plaintiffs' request for an order compelling the deposition of Ms. Rohan Willner is GRANTED. Plaintiffs may take Ms. Rohan Willner's deposition either before or after taking the depositions of other executives or employees of FitFlop. FitFlop's request for an order precluding Ms. Rohan Willner's deposition is DENIED without prejudice. FitFlop may seek a protective order as appropriate if plaintiffs want to take a second deposition of Ms. Rohan Willner. 6. Plaintiffs' request for an order compelling FitFlop to produce documents and information from the personal e-mail accounts of the former employees named in the parties' Joint Motion is GRANTED to the extent these accounts were used for business purposes. FitFlop is ordered to use its best efforts to determine whether the named key former employees used their personal e-mail accounts for business purposes while they were employed by FitFlop. If so, FitFlop must also use its best efforts to obtain the cooperation of these former employees in producing responsive discovery from their personal e-mail accounts. If they are unable to obtain cooperation or produce responsive documents from their former employees' personal e-mail accounts, FitFlop must provide plaintiffs with a detailed explanation of their efforts in the form of a certification or declaration under penalty of perjury pursuant to Federal Rule of Civil Procedure 26(g)(1). IT IS SO ORDERED. Footnotes [1] The Court disagrees with FitFlop's assertion in the parties' Joint Motion that “FitFlop need only show that its counsel has so designated a given document Confidential to satisfy its good faith discovery obligations.” [Doc. No. 46, 47, at p. 19.] FitFlop's assertion conflicts with the “Good Faith Belief” section of the Protective Order which states that: “The designation of any material as “Confidential” pursuant to this Order shall constitute the verification of the Designating Party and its counsel that the material constitutes Confidential Information as defined above.” [Doc. No. 34, at p. 3.] (Emphasis added.) [2] To the extent plaintiffs later seek to re-depose Ms. Rohan Willner after a class determination, this Court will be receptive to a motion to restrict her testimony to non-duplicative issues. [3] Under Rule 26(g)(1)(A), discovery responses must be accompanied by a certification “after a reasonable inquiry” indicating that the disclosure is “complete and correct as of the time it is made....”