*1 Before the Court is Plaintiffs COR Securities Holding, Inc. (“CORSHI”) and COR Clearing LLC's (“COR Clearing”) (collectively, “Plaintiffs”) Motion for Review and Objection Pursuant to Fed. R. Civ. P. 72(a) and Local Rule 72-21 (Dkt. 79). Plaintiff asks the Court to reverse Judge Scott's November 13, 2018 Order (Dkt. 78) Denying Plaintiff's Motion to Compel Compliance with Subpoena (Dkt. 76), The Court finds the Motion appropriate for resolution without oral argument. Fed. R. Civ. P. 78; L.R. 7-15. Having reviewed the moving papers and considered the parties' arguments, the Court DENIES Plaintiff's Motion for Review and Objection to Judge Scott's Order.

I. Background

A. Facts and Procedural History

Plaintiffs are: (1) COR Clearing, a securities clearing firm that services retail and online broker deals and registered investment advisers; and (2) CORSHI, which is COR Clearing's sole member. Complaint (“Compl.”) (Dkt. 1) ¶ 5. Defendant Banc is a nationally chartered banking institution. Id. ¶¶ 6, 10. Defendant Boyle was previously Banc's Chief Risk Officer and at some point became acting CEO. Id. ¶ 7. Steven Sugarman is and was at all relevant times CORSHI's Chairman and CEO. Id. ¶ 10. Furthermore, from 2013 until January 2017, Sugarman was also the Chairman, President, and Chief Executive Officer of Defendant Banc, a nationally chartered banking institution. Id. ¶¶ 6, 10

The instant litigation arises from a dispute regarding ownership of, and access to, electronic files saved in workspaces hosted by OneHub, a third-party cloud-based storage provider. Id. ¶¶ 15–16. Plaintiffs allege that in early 2012, Sugarman—acting as the Managing Member of COR Advisors, LLC (a management company with which Plaintiffs contracted for COR Advisors, LLC to perform certain management and administrative services)—opened an account (the “Account”) on behalf of Plaintiffs with OneHub. Id. ¶¶ 11, 15, 17, 29. Plaintiffs paid for the Account as a part of a monthly management fee paid to COR Advisors, LLC. Id. ¶ 30. Plantiffs allege that Sugarman opened and administered several workspaces for Plaintiffs, who used the OneHub Account to store documents about their businesses and clients and privileged, proprietary, and confidential communications. Id. ¶¶ 32–33. Some workspaces included confidential information about attorneys providing legal services for Plaintiffs. Id. For instance, one of Plaintiffs' workspaces was named “A/C Priv.” Id. Sugarman granted selective workspace access permissions to Plaintiffs' personnel, based on whether personnel were entitled to view the information in any given workspace. Id.

Plaintiffs contend that Defendant Banc improperly gained access to Plaintiff's files in the OneHub Account workspaces. Joint Stipulation Regarding Plaintiff's Motion to Compel Compliance with Subpoena (“Mot. to Compel Compliance with Subpoena”) (Dkt. 76-1) at 2. Specifically, Plaintiffs allege that Banc directed their counsel at Morrison and Foerster, LLP (“MoFo”), Mark R. McDonald, to send OneHub a letter falsely claiming that Banc was the sole owner of the entire OneHub account. Id. OneHub relied on McDonald's letter, and granted Defendants access to documents stored in Plaintiffs' OneHub workspaces. Id. After Plaintiffs confronted Defendants about the breach, McDonald allegedly informed OneHub and Plaintiffs that “any material that was downloaded and then determined not to be a [Banc] document was destroyed, with no copies retained.” Compl. ¶ 69.

B. Procedural History

*2 On August 15, 2017, Plaintiffs filed the Complaint. Plaintiffs bring five claims: (1) violation of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030(g), against Banc; (2) violation of the California Comprehensive Computer Data Access and Fraud Act (“CDAFA”), California Penal Code § 502, against Banc; (3) violation of CDAFA, against Boyle; (4) aiding and abetting violations of CFAA and CDAFA, against Boyle; and (5) a common law fraud claim, against Boyle. Compl. ¶¶ 73–107. On October 2, 2017, Defendants filed a Motion to Dismiss the instant action (Dkt. 27). On February 21, 2018, the Court granted in part Defendant's Motion to Dismiss (Dkt. 35).

On September 29, 2017, Plaintiffs filed a Motion to Disqualify Counsel Mark R. McDonald, David F. McDowell, and Morrison & Foester (“Motion to Disqualify”) (Dkt. 22). On February 23, 2018, the Court held a hearing on Plaintiff's Motion to Disqualify, and disqualified Mark McDonald as counsel for Defendants, finding that McDonald is a necessary witness in the matter (Dkt. 38, Dkt. 43). The Court declined to disqualify Morrison & Foerster. Id.

C. Motion to Compel Compliance with Subpoena and Judge Scott's Order

On November 2, 2018, Plaintiffs filed a Motion to Compel Compliance with a Subpoena to Morrison & Foester (Dkt. 76). The Subpoena sought documents responsive to five categories (Dkt. 76-2). Four of the requests for production sought all communications between McDonald and Defendants or defense counsel concerning the instant action from February 23, 2018[1] to the present. Id. The fifth request for production sought McDonald's billing and time keeping records concerning work in connection with the instant action from February 23, 2018 to the present. Id.

On November 13, 2018, Magistrate Judge Karen E. Scott issued an Order Denying Plaintiff's Motion to Compel Compliance with Subpoena (Dkt. 78) (“Judge Scott Order”). In the Order, Judge Scott stated that this Court disqualified McDonald based on the witness-advocate rule, and not based on a finding that McDonald had received Plaintiffs' confidential information. Judge Scott Order 6–7. Judge Scott thus found Plaintiffs failed to carry their burden to demonstrate that the subpoena issued to Morrison & Foerster sought relevant information. Judge Scott Order at 7. Judge Scott also found “[s]ince MoFo's relevancy objection to every document category was well taken, MoFo was not required to serve a privilege log or explain whether responsive documents existed.” Id.

Plaintiffs filed the instant Motion on November 29, 2018 (Dkt. 79) (“Mot.”), requesting that the Court reverse Judge Scott's Order (Dkt. 78). Defendants opposed (“Opp'n”) on December 17, 2018 (Dkt. 80). Plaintiffs replied (“Reply”) on December 21, 2018 (Dkt. 84).

II. Legal Standard

A. Motion for Reversal of Magistrate Judge Order

A magistrate judge has the authority to hear matters that are not dispositive of a claim or defense. See Fed. R. Civ. P. 72. In the Central District of California, magistrate judges have the authority to hear discovery-related matters. General Order 05-07 at 2. A district court has the authority to modify or set aside a magistrate judge's order if it is “clearly erroneous or contrary to law.” Fed. R. Civ. P. 72(a). “The clearly erroneous standard, which applies to a magistrate judge's finding, is ‘significantly deferential, requiring a definite and firm conviction that a mistake has been committed.’ ” Crispin v. Christian Audigier, Inc., 717 F. Supp. 965, 971 (C.D. Cal., 2010 (quoting Concrete Pipe & Prods. v. Constr. Laborers Pension Trust, 508 U.S. 602, 623 (1993)). On the other hand, the “ ‘contrary to law’ standard... permits independent review of purely legal determinations by the magistrate judge.” Crispin, 717 F. Supp. at 971 (quoting F.D.I.C. v. Fidelity & Deposit Co. of Md., 196 F.R.D. 375, 378 (S.D. Cal. 2000)).

III. Discussion

*3 In the instant Motion, Plaintiffs argue Judge Scott's Order denying Plaintiffs Motion to Compel was contrary to law because this Court disqualified McDonald as counsel for Defendants at the commencement of this action. Mot at 7. Further, Defendants argue that the Subpoena requested relevant documents, and Plaintiffs should accordingly be allowed discovery as to McDonald's role in the instant action. Mot. at 8–9. Defendants contend that Judge Scott's Order was consistent with this Court's disqualification order, and that Plaintiffs cannot show the request documents, seeking McDonald's privilege communications, are relevant to action. Opp'n at 12–13.

Judge Scott's Order is consistent with the Court's February 23, 2018, and the Court finds that Judge Scott properly denied Plaintiffs' Motion to Compel. This Court's February 23, 2018 disqualification of McDonald was based on McDonald's potential improper dual role as a witness and as counsel on the case. See Dkt. 38 at 8–9. As Judge Scott's Order denying the Motion to Compel makes clear, the Court declined to make a finding that McDonald had improperly received Plaintiffs' confidential information, and did not grant the disqualification on that basis. Id. at 15–18. Accordingly, Judge Scott's Order denying the Motion to Compel rationally concluded that Plaintiffs did not carry their burden to demonstrate that the Subpoena (seeking communications between McDonald and Defendants as well as McDonald's time records) sought relevant information. The Court thus finds that Judge Scott's Order is not “clearly erroneous or contrary to law.” Fed. R. Civ. P. 72(a).

IV. Disposition

For the reasons set forth above, the Court DENIES Plaintiff's Motion for Review and Objection of Magistrate Judge Scott's Order.

The Clerk shall serve this minute order on the parties.

MINUTES FORM 11

CIVIL-GEN

The Court disqualified Mark McDonald as counsel for Defendants on February 23, 2018 (Dkt. 43).