Vizio, Inc. v. LeEco V. Ltd.
Vizio, Inc. v. LeEco V. Ltd.
2018 WL 10742584 (C.D. Cal. 2020)
November 2, 2018
Early, John D., United States Magistrate Judge
Summary
The Court found that ESI was relevant to the case and ordered Defendants to provide further responses to Plaintiff's Requests for Production (Set One) Nos. 35 to 65 relating to alter ego, without objection. The Court also noted that any ESI must be produced in a form that is reasonably usable and must be described with reasonable particularity.
Vizio, Inc.
v.
LeEco V. Ltd., et al.
v.
LeEco V. Ltd., et al.
Case No. SACV 17-01175-DOC (JDEx)
United States District Court, C.D. California
Filed November 02, 2018
Counsel
David N. Tarlow, Robert M. Waxman, Jason L. Haas, Ervin Cohen and Jessup LLP, Beverly Hills, CA, for Vizio, Inc.Daniel J. Tyukody, Jr., Jeffrey K. Joyner, Greenberg Traurig LLP, Los Angeles, CA, for LeEco V. Ltd., et al.
leEco V. Ltd., pro se.
Early, John D., United States Magistrate Judge
Proceedings: (In Chambers) Order re Motion for Protective Order, Motions to Compel Discovery and Evidentiary Objections (Dkts. 115, 116, 117, 119)
I. BACKGROUND
*1 On October 11, 2018, Defendants LeEco V. Ltd. (“LeEco”), Lele Holding, Ltd. (“LeLe”), and Yueting Jia (“Jia”) (collectively, “Defendants”) filed a Motion for a Protective Order to Bifurcate Alter Ego Allegations and Stay Related Discovery, or in the alternative, to Limit Discovery concerning the first sets of Requests for Production of Documents propounded by Plaintiff Vizio, Inc. (“Plaintiff”) to LeLe and LeEco.[1] Dkt. 115-1 (“MPO”).
Also on October 11, 2018, Defendant LeEco filed a Motion to Compel Responses to Requests for Admissions and Responses to Requests for Production of Documents from Plaintiff. Dkt. 116-1 (“Defendants' Motion to Compel”). Both the MPO and Defendants' Motion to Compel were set for a hearing on November 15, 2018, supported by Local Rule 37 Joint Stipulations. Dkts. 115-1 (“Jt. Stip. 1” or “Joint Stipulation One”) and 116-1 (“Jt. Stip. 2” or “Joint Stipulation Two”).
In addition, also on October 11, 2018, Plaintiff filed a Motion to Compel Document Production from Defendants. Dkt. 115-1 (“Plaintiff's Motion to Compel”). Plaintiff's Motion to Compel was also supported by Joint Stipulation One. On October 12, 2018, Plaintiff filed Evidentiary Objections to the Declaration of Bob Ye in Support of Defendants' MPO. Dkt. 119.
In support of and/or opposition to the Motions are Declarations and, in some instances, exhibits, of Jeff K. Joyner (two declarations, Dkt. 115-2 and 116-2), Bob Ye (Dkt. 115-3), Jerry Huang (Dkt. 116-4), and David N. Tarlow (Dkt. 116-5).
The MPO, Defendants' Motion to Compel, and Plaintiff's Motion to Compel (collectively, “Motions”) were all initially set for hearing on November 15, 2018. One week after filing the Motions, on October 18, 2018, Plaintiff filed an unopposed ex parte application to advance the hearing on the three Motions by two weeks, to November 1, 2018. Dkt. 122. The Court granted the application to advance the hearing date and found further briefing on the Motions was unnecessary in light of the more than 800 pages of briefing already filed. Dkt. 123.
The underlying dispute in this case involves, among other things, claims by Plaintiff, a consumer electronics corporation, that Defendants and others, breached and fraudulently induced Plaintiff to enter into two agreements: a Merger Agreement related to a potential acquisition of Plaintiff by LeEco, dated July 6, 2016, and a subsequent Framework Agreement, dated April 5, 2017, intended to resolve disputes that had arisen under the merger agreement. Jt. Stip. 1 at 4-5; 14-18; Ye Decl. ¶ 4. Defendants deny all of Plaintiff's relevant substantive allegations. Id. at 14-17.
*2 The MPO and Plaintiff's Motion to Compel are largely cross-motions. Defendants seek an order either: (1) “bifurcate[ing] [Plaintiff's] alter ego allegations and stay[ing] related discovery” or (2) “strik[ing] discovery that [Plaintiff] propounded to support its alter ego allegations.” Joint Stip. 1 at 1. Plaintiff seeks an order compelling Defendants to provide further responses to Plaintiff's Requests for Production (Set One) Nos. 35 to 65 relating to alter ego, without objection. Id. at 102. In Defendants' Motion to Compel, Defendants seek an order compelling Plaintiff to respond to Defendants' Request for Admission Nos. 1 and 3 with “yes” or “no” answers and an order compelling Plaintiff to supplement its responses and produce documents responsive to Defendant's Request for Production No. 10. Jt. Stip. 2 at 35.
On November 1, 2018, a hearing was held regarding the Motion. The Court advised the parties of certain tentative rulings, and counsel were heard and argued. After more than two and one half hours of argument, the Court took the Motions under submission.
After having carefully reviewed the materials set forth above in support of and in opposition to the Motions, and the arguments of counsel at the hearing, as set forth below, the Court hereby grants in part and denies in part each Motion
II. DEFENDANTS' REQUEST FOR BIFURCATION IN THE MPO
A. Relevant Law
Pursuant to Rule 26(c) of the Federal Rules of Civil Procedure (hereinafter “Rules” or singularly, “Rule”), a court “may for good cause issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense ... including forbidding ... or limiting the scope of ... discovery to certain matter.” Rule 26(c)(1)(D). “On motion or on its own, the court must limit the frequency or extent of discovery otherwise allowed by these rules or by local rule if it determines that: (1) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive; (2) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or (3) the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.” Rule 26(b)(2)(C). Courts have “wide discretion in controlling discovery.” Little v. City of Seattle, 863 F.2d 681, 685 (9th Cir. 1988).
District Courts have the discretion “in furtherance of convenience or to avoid prejudice when separate trials will be conductive to expedition and economy, to order a separate trial of any claim, cross-claim, counterclaim or third-party claims, or issues.” Rule 42(b); see also Jinro Am. Inc. v. Secure Invs., Inc., 266 F.3d 993, 998 (9th Cir. 2001) (“Under Rule 42(b), the district court has broad discretion to bifurcate a trial to permit deferral of costly and possibly unnecessary proceedings pending resolution of potentially dispositive preliminary issues.”). Under Local Rule 16-14, any application to modify a scheduling order entered pursuant to Rule 16 “shall be made the judicial officer who entered the order.” In determining whether a party has shown good cause to modify a pretrial schedule, “[t]he focus of the inquiry is upon the moving party's reasons for seeking bifurcation. If that party was not diligent, the inquiry should end.” Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992).
B. Analysis
Plaintiff filed the operative First Amended Complaint (“FAC”) on November 6, 2017—asserting alter ego liability against all Defendants. Dkt. 35. Plaintiff served its Request for Production of Documents (Set One) (“RFPs”) Nos. 35 to 65, which seek alter ego related information, on January 12, 2018. Joyner Decl., ¶ 3, Exhs. A-B. On April 3, 2018, Judge Carter mandated that all discovery be completed by December 14, 2018—stating a continuance of the discovery cut-off was unlikely. Dkt. 82 at 1-2. On April 11, 2018, Defendants LeLe and LeEco served their responses to the alter ego related RFPs. Dkt. 115-2 at 148, 276. On July 27, 2018, in ruling on a motion to dismiss for lack of personal jurisdiction, Judge Carter found that LeEco and Jia “plausibly are alter-egos of LeLe.” Dkt. 99 at 35.
*3 As an initial matter, the general bifurcation of alter ego issues requested by Defendant in the MPO would result in a de facto alteration of the District Court's Scheduling Order--something that the undersigned lacks the authority to do under the referral limited to discovery-related motions and the request is denied on that basis. Dkt. 6. Further, the request, coming nearly one year after the alter ego allegations were raised, ten months after the alter ego discovery was first propounded, more than seven months after the District Court issued its Scheduling Order, and roughly two months before the fact discovery cut-off, is untimely. See Onyx Pharm., Inc. v. Bayer Corp., 2011 WL 4527402, at *2 (N.D. Cal. Sept. 21, 2011) (finding the moving party's failure to offer a reason as to why its “motion to bifurcate could not have been timely filed consistent with the [court's] scheduling orders” was “alone ... sufficient grounds for denying the motion.”).
Accordingly, the Court denies Defendants' MPO to the extent it seeks a bifurcation of issues or a stay of discovery. The ruling is without prejudice to Defendants seeking relief from the District Judge.
III. DEFENDANTS' MOTION TO COMPEL
A. Relevant Law
“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.” Rule 26(b)(1). “Information within this scope of discovery need not be admissible in evidence to be discoverable.” Id.
A party may serve on any other party requests, within the scope of Rule 26(b), to produce “the following items in the responding party's possession, custody or control: (A) any designated documents or electronically stored information – including ... data or data compilations – stored in any medium from which information can be obtained, directly or indirectly or, if necessary, after translation by the responding party into a reasonably usable form; or (B) any designated tangible things.” Rule 34(a)(1). The request “must describe with reasonable particularity each item or category of items to be inspected ... [and] may specify the form or forms in which electronically stored information is to be produced.” Rule 34(b)(1)(A), (C).
In response to a request for production, the responding party must, for each item or category, “either state that inspection and related activities will be permitted as requested or state with specificity the grounds for objecting to the request, including the reasons. The responding party may state that it will produce copies of electronically stored information instead of permitting inspection.” Rule 34(b)(2)(B). Further, an “objection must state whether any responsive materials are being withheld on the basis of that objection. An “objection to part of a request must specify the part and permit inspection of the rest.” Rule 34(b)(2)(C). “The party who resists discovery has the burden to show that discovery should not be allowed, and has the burden of clarifying, explaining, and supporting its objections.” DIRECTV, Inc. v. Trone, 209 F.R.D. 455, 458 (C.D. Cal. 2002); Oakes v. Halvorsen Marine Ltd., 179 F.R.D. 281, 283 (C.D. Cal. 1998).
Rule 36 provides that 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.” Rule 36(a)(1). “If a matter is not admitted, the answer must specifically deny it or state in detail why the answering party cannot truthfully admit or deny it.” Rule 36(a)(4). A denial “must fairly respond to the substance of the matter; and when good faith requires that a party qualify an answer or deny only part of a matter, the answer must specify the part admitted and qualify or deny the rest.” Id.
B. Analysis
1. Request for Admission (“RFA”) No. 1
*4 The first disputed RFA, RFA No. 1, demands, “Admit that You drafted Section 1.1 of the Framework Agreement.”[2] Jt. Stip. 2 at 11. The disputed Response to RFA No. 1 provides:
[V]IZIO objects to RFA No. 1 on the ground that it is vague, ambiguous, and unintelligible as presently framed in that VIZIO is presently unable to ascertain from this Request, or from any other portion or portions of the RFAs, whether the propounding party is asking if Section 1.1 of the Framework Agreement was drafted by VIZIO, exclusively, as opposed to being the joint work product of VIZIO and one or more of the Defendants, i.e., was their joint work product. Without waving the foregoing objection, but for the additional information of the propounding party, the Framework Agreement and the terms therein were drafted by VIZIO and one or more of the Defendants.
Id. Defendants assert that Plaintiff's response to RFA No. 1 is improperly nonresponsive because Plaintiff provided “an evasive, self-serving, non-responsive answer” instead of admitting or denying the RFA as required. Id. at 12-13. Plaintiff counters that RFA No. 1 is vague and ambiguous on its face, and the language used in the text of the RFA renders it impossible to tell whether the request is seeking Plaintiff admit that it solely drafted the language in Section 1.1 of the Framework Agreement, or if it jointly drafted Section 1.1 with the Defendants. Id. at 17-18. Plaintiff also argues it made a good faith effort in providing a qualified admission to RFA No. 1. Id. at 18.
The Court finds that Plaintiff fairly responded that the Framework Agreement, which includes Section 1.1, was the result of joint drafting with Defendants, meaning a “yes” or “no” answer would not convey the whole truth. The Court recognizes Defendants' argument and assertion that during the drafting process, Plaintiff forwarded the language that eventually became Section 1.1 of the Framework Agreement. However, RFA No. 1 refers to Section 1.1 of the final Framework Agreement, and the Court agrees with Plaintiff that a particular provision, in the context of a contract with many interrelated provisions, cannot be considered in a vacuum as to the issue of “drafting” a portion of a final contract. Had the RFA attached the redlined-addition and asked if Plaintiff had drafted the redlined-addition, Plaintiff could fairly be required to answer yes or no. But the Court agrees that any part of a jointly drafted holistic contract is jointly drafted in the final version, regarding who added or deleted various provisions in the drafting process. Plaintiff properly stated in detail why it could not truthfully admit or deny RFA No. 1 as stated, and appropriately admitted that portion to which it could admit. See Sanchez Y Martin, S.A. De C.V. v. Dos Amigos, Inc., 2018 WL 3020192, at *3 (S.D. Cal. June 15, 2018) (finding qualifications are permitted under Rule 36 if the statement, although containing some truth, standing alone out of context of the whole truth conveys unwarranted and unfair inferences). Plaintiff's response to RFA No. 1 is sufficient, and Defendant's Motion to Compel as to RFA No. 1 is DENIED.
2. RFA No. 3
*5 The second disputed RFA, RFA No. 3, demands, “Admit that, as of at least June 9, 2017 when You sent the Demand for Immediate Payment to LeEco Global Group, You no longer had any interest in entering into the China JV.” Jt. Stip. 2 at 20. The disputed Response to RFA No. 3 provides:
[V]IZIO objects to this Request on the ground that it is an incomplete hypothetical inquiry which calls for speculation and in any event does not seek an admission that is relevant to the claims or defenses in the within action. VIZIO further objects to Request No. 3 on the ground that it is vague, ambiguous and unintelligible as presently framed in that Plaintiff is presently unable to ascertain from this Request, or from any other portion or portions of the RFAs, the precise meaning which the propounding party ascribes to the words “no longer had any interest in entering into the China JV”, as that verbiage is used therein; i.e., without further explanation as to what the precise terms of the China JV were at that time, particularly in light of the utter failure and refusal of the Defendants to negotiate the substantive terms of the China JV in failure and refusal of the Defendants to negotiate the substantive terms of the China JV in failure and refusal of the Defendants to negotiate the substantive terms of the China JV in good faith—let alone execute the China JV Agreement—within the forty five day period of time mandated by the Framework Agreement. Accordingly, VIZIO cannot determine the precise nature or scope of the inquiry that is the subject of this Request.
Jt. Stip. 2 at 20. Defendants assert that Plaintiff's response to RFA No. 3 is improperly nonresponsive because Plaintiff's response to the RFA consists entirely of argument and does not admit or deny the RFA as required. Id. at 24. Plaintiff contends that: (1) RFA No. 3 seeks information that is “totally irrelevant” and an incomplete hypothetical that calls for speculation and (2) RFA No. 3 is “hopelessly vague, ambiguous, and unintelligible.” Id. at 26.
The Court finds RFA No. 3 to be sufficiently clear and relates to a relevant matter. Plaintiff's objections as to incomplete hypothetical, vagueness, ambiguity, and relevance are overruled. The RFA asks Plaintiff to admit it did not have a particular intent as of a particular date regarding a particular matter defined by the RFAs that is relevant to this action. See United States ex rel. Englund v. Los Angeles Cty., 235 F.R.D. 675, 684 (E.D. Cal. 2006) (“When the purpose and significance of a request are reasonably clear, courts do not permit denials based on an overly-technical reading of the request.”). Defendants' Motion to Compel RFA No. 3 is GRANTED; Plaintiff must respond to RFA No. 3, without objection.
3. Request for Production (“RFP”) No. 10
The only disputed RFP in Defendants' Motion to Compel, RFP No. 10, demands for, “All Documents and Communications concerning the aftermath of the decision to terminate the Framework Agreement, Including communications between and among VIZIO's Board, its management, its shareholders, and the public. Jt. Stip. 2 at 26. The disputed Response to RFP No. 10 provides:
[V]IZIO objects to Request No. 10 on the ground that it is vague, ambiguous, unintelligible, and hopelessly incomprehensible as presently framed in that VIZIO is unable to ascertain from this Request, or from any other portion of portions of the Document Requests, the precise documents to which LeEco is referring. This Request sought all documents concerning “the aftermath of the decision to terminate the Framework Agreement”, but without specification as to any particular document or categories of documents, let alone stating the identity of the authors, recipients, and/or the dates/subject matter thereof. As such, VIZIO will not produce any documents that may somehow be the subject of this Request. VIZIO further objects to Request No. 10 on the ground that it indiscriminately calls for the production of documents within the attorney-client privilege and/or the work product doctrine. VIZIO has such privileged and/or work product documents that contain indiscriminately calls for the production of privileged tax related documents that contain confidential financial information protected, by inter alia, its constitutional right of privacy. VIZIO has such privileged tax related documents that contain confidential information protected by, among other things, its constitutional right of privacy in its possession, custody or control, but will not produce same on the basis of this objection. VIZIO further objects to Request No. 10 on the ground that it arguably and indiscriminately calls for the production of confidential information and privileged trade secret documents in its possession, custody or control, but will not produce same on the basis of this objection. VIZIO further objects to Request No. 10 on the ground that it calls for the production of documents that are not relevant to the claims or defenses in the within action. VIZIO will not produce any documents that may somehow be the subject of this Request on the basis of that objection. VIZIO further objects to Request No. 10 on the ground that it is unreasonably overbroad in scope since it is unlimited as to any period of time that is germane to the within action. VIZIO will not produce any documents that may somehow be the subject of this Request on the basis of that objection.
*6 Jt. Stip. 2 at 27-28. Defendants argue that: (1) any alleged ambiguity with the words “aftermath” and “communications” was resolved during the meet and confer process; (2) Plaintiff has provided no support for any claim of privilege; (3) discovering how Plaintiff was affected by the decision to terminate the Framework Agreement is directly relevant to the claims at issue; and (4) Plaintiff's objection that RFP No. 10 is overbroad as to time is incorrect and inconsistent with Plaintiff's own positions in the discovery dispute. Id. at 28-31. Plaintiff counters that RFP No. 10 is: (1) incomprehensible and not limited to documents that may be relevant; (2) unreasonably overbroad on its face since it is unlimited as to time and scope; and (3) improper because it seeks confidential documents. Further, Plaintiff maintains that the parties did not resolve any ambiguities related to RFP No. 10 during the meet and confer process because LeEco never specified “which documents actually it sought.” Id. at 32-34.
The Court finds that RFP No. 10 is vague, ambiguous, and in this particular context, unintelligible. Defendants did not define the term “aftermath,” much less “concerning the aftermath,” and did not identify with reasonably particularity which document or categories of documents were sought. As written, Plaintiff would be required to speculate as to the meaning of “aftermath” in the context of terminated business transaction. See Hoffman v. Jones, 2017 WL 5900086, *3 (E.D. Cal. Nov. 30, 2017) (“Generally, a party is not required to speculate when responding to discovery requests.”). Further, as the parties dispute whether any agreement was reached to narrow the meaning of “aftermath” as part of the meet and confer process, the Court is left solely with the language of the Request. The language is vague, ambiguous, and unintelligible; those objections are sustained and Defendants' Motion to Compel RFP No. 10 is DENIED.
Accordingly, the Court denies Defendants' Motion with respect to RFP No. 10 and RFA No. 1, and the Court grants the Motion with respect to RFA No. 3.
IV. PLAINTIFF'S MOTION TO COMPEL AND DEFENDANTS' ALTERNATIVE MPO REGARDING PLAINTIFF'S ALTER EGO RFPs
Plaintiff contends Defendants should be ordered to provide further responses and produce documents responsive to Plaintiff's RFPs (Set One) Nos. 35 to 65 because “every request seeks documents or information that are vital to an alter ego analysis,” and “each and every such request is relevant and proportional to VIZIO's claims.” Jt. Stip. 1 at 6-7. Defendants counter, asking the Court to deny Plaintiff's motion with respect to the alter ego RFPs in their entirety, and object in particular to the requests, including those seeking financial information and responses from “affiliates,” on the grounds that the RFPs are: (1) overbroad in scope, (2) impose undue burdens grossly disproportionate to the needs of the case, (3) violate the “Limited Guarantee,”[3] and (4) violate Jia's and third-party employees' rights to privacy. Jt. Stip. 1 at 40.
A. The Limited Guarantee
1. Relevant Law
With respect to each request for production, the response by a party asserting an objection must “state with specificity the grounds for objecting to the request, including the reasons.” Rule 34(b)(2)(B).
In the absence of an extension of time or good cause, the failure to object to interrogatories within the time fixed by Federal Rule of Civil Procedure 33 constitutes as a waiver of any objection. Davis v. Fendler, 650 F.2d 1154, 1160 (9th Cir. 1981); Richmark Corp. v. Timber Falling Consultants, 959 F.2d 1468, 1473 (9th Cir. 1992) (“It is well established that a failure to object to discovery requests within the time required constitutes a waiver of any objection.”). “In determining whether a party has good cause, the court will consider factors such as the length of delay, the reason for the delay, bad faith, prejudice to the propounding party, the appropriateness of the requests, and whether waiver would result in an ‘excessively harsh result.’ ” Landon v. Ernst & Young LLP, 2009 WL 4723708, *1 (N.D. Cal. Dec. 2, 2009).
2. Analysis
*7 On November 6, 2017, Plaintiff filed its FAC—asserting alter ego liability against all Defendants. Dkt. 35. On January 12, 2018, Plaintiff served its RFP Nos. 35 to 65 on LeEco and LeLe. Joyner Decl., ¶ 3, Exhs. A-B. LeEco and LeLe served their responses to the FRPs on April 11, 2018. Id. at ¶ 4, Exhs. C-D. Defendants appear to concede that on August 7, 2018, during the meet and confer process, Defendants expressly raised their Limited Guarantee objections as such to the RFPs for the first time. Jt. Stip. 1 at 53. On August 24, 2018, LeLe and Jia filed Counterclaims for breach of the Limited Guarantee. Id.
Plaintiff contends Defendants have waived any objection that alter ego discovery is barred by the Limited Guarantee because of their failure to assert that objection in the Responses of LeLe and LeEco. Id. at 65. Plaintiff argues good cause does not exist to excuse Defendants' waiver since they made a tactical decision not to interpose objections based upon the Limited Guarantee. Id. at 67. Defendants contend they did not waive their objection that the alter ego requests violate Plaintiff's obligations under the Limited Guarantee because they raised the argument, albeit in a different form, in their objections to the RFPs and good cause exists to excuse any defect in the objections. Id. at 52. Defendants argue that their objections to RFP Nos. 36-47 preserved their Limited Guarantee argument. Id. Defendants' objections state, “the Requests directed at Unrelated Third Parties are calculated merely to harass and are overbroad, irrelevant, and not proportional to the needs of the case. If the case is limited to a breach of the Framework Agreement, the dispute is limited to LeEco's (not the unrelated Third Parties) payment to Vizio of $40 million and another $10 million in escrow that is disputed.” Dkt. 115-2 at 59-60, 57-69, 151, 220-42 (CM/ECF pagination).
The Court finds Defendants LeEco and LeLe have waived the objection that alter ego discovery is barred by the Limited Guarantee by failing to specifically assert that objection in their responses to the RFPs on April 11, 2018. Defendants did not raise their specific Limited Guarantee objections as a contractual bar to the RFPs until August 2018—four months after Defendants served their Responses to the RFPs. Defendants’ more general objections that the RFPs were beyond the scope of permissible discovery, targeted “unrelated third parties,” or were “overbroad, irrelevant, and not proportional to the needs of the case,” did not assert an objection that the RFPs were barred by the Limited Guarantee. Nor did the hypothetical objection that “if the case is limited to a breach of the Framework Agreement” purport to raise an alleged bar to discovery by the Limited Guarantee.
At the hearing on the Motions, counsel for Defendants argued that it was not until the District Judge's July, 27, 2018 ruling on various motions to dismiss that Defendants believed they could assert a claim, and presumably assert an objection to discovery requests, based upon the Limited Guarantee. However, Defendants Jia and LeLe have each, as of August 24, 2018, asserted Counterclaims for breach of the Limited Guarantee by Plaintiff in this action, claiming the initial breach of the Limited Guarantee took place upon the filing of the FAC, that is, on November 6, 2017--five months prior to service of the RFP responses at issue. See Dkt. 107 ¶¶ 32, 43, 44; Dkt. 108 ¶¶ 32, 43, 44. Defendants were certainly aware of the fact of Plaintiff's filing of the FAC at the time they served their responses to the RFPs at issue. A change in Defendants' view of the legal significance of the facts does not justify a failure to assert an objection--particularly when Defendants now seek to recover damages based upon the same facts, all of which were known at the time the responses to the RFAs were served.
*8 Having found a waiver, the Court finds good cause does not exist to excuse the waiver. The delay here was substantial--four months. Plaintiff would suffer prejudice were Defendants permitted to assert new objections, four months after serving Responses and four months prior to the discovery cut-off. In addition, waiver would not result in an “excessively harsh result” as Defendants have still asserted multiple other objections in each disputed Response, and the Court, at the hearing and below, has considered each of those other objections with respect to each disputed RFP and has sustained a number of those other objections. See Landon, 2009 WL 4723708 at *1-2 (finding good cause did not exist after a five-month delay to raise objections to discovery responses and a consideration of the good cause factors did “not tip the balance” in the responding party's favor).
The Court finds that by not specifically asserting objections based upon the Limited Guarantee at the time of their responses to the RFPs at issue, Defendants cannot raise such objections for the first time more than four months later. The Court's ruling with respect to the waiver of the Limited Guarantee objections is limited to LeEco's and LeLe's RFP Responses and does not affect Jia's ability to timely raise the objections in his own RFP Responses. However, Jia's responses are not currently before the Court and the Court makes no ruling with respect to responses which are not before it, and perhaps have not even been served.
B. Overbreadth and Disproportionality
Defendants argue the Requests are overbroad because, among other reasons, the Requests “ensnare at least 80 entities with no connection” to the case and seek documents reaching back years before the Framework Agreement was negotiated. Jt. Stip. 1 at 41-47, 49-52. Plaintiff responds that alter ego and agency discovery is necessarily broad in scope, and a two-year look back period at the financial condition of Defendants and their affiliates is “plainly required” to determine whether representations made were true or false when made. Id. at 87, 98.
1. Timeframe
The Court finds many of the RFPs are overbroad in scope with respect to time, resulting in undue burdens disproportionate to the needs of the case. The Court sustains Defendants' objections in that regard, in part, as set forth below.
Except as set forth with respect to specific RFPs in Section(IV)(B)(3), below, the Court finds the timeframe for RFP Nos. 36-37 and 39-52 must be narrowed to a period from January 1, 2015 to January 12, 2018, which runs from roughly a year and a half before the execution of the Merger Agreement, to the date the RFPs were propounded, roughly nine months after the execution of the Framework Agreement. Additionally, the Court orders the timeframe for RFP Nos. 35, 55-57, 60, and 62 be narrowed from July 1, 2016 (the date in the RFPs) to January 12, 2018, the dates the RFPs were propounded. The Court has carefully considered the importance of this issue, the amount in controversy, the parties' respective access to information and resources, the importance of the discovery and the burden of expense compared to the likely benefit of the discovery, and finds these timeframes, and the other limitations set forth below are reasonable and proportional to the needs of the case. See Gusman v. Comcast Corp., 298 F.R.D. 592, 595 (S.D. Cal. 2014) (finding courts have “broad discretion” to limit discovery); Ricotta v. Allstate Ins. Co., F.R.D. 622, 624 (S.D. Cal. 2002) (finding a “court may limit discovery if it determines that the burden or expense of the proposed discovery outweighs its likely benefit.”).
2. “Affiliates”
RFP Nos. 36-39, 43-49, 53-56, 58, 60, and 62-65 are overbroad regarding the number of entities purportedly covered by the RFPs, and Defendants' objection to the term “affiliates” is sustained. Defendants have submitted sufficient evidence to demonstrate that the RFPs, as they relate to “affiliates,” are overly broad, unduly burdensome, and disproportional to the needs of the case. See Ye Decl. (Dkt. 115-3) ¶¶ 14-18. Defendants assert the RFPs would encompass at least eighty entities; require the production of 1,600 document sets; require translation into English; require analysis of dozens of countries blocking statutes, state secrecy laws, privacy laws, intellectually property laws, employment laws, and other laws governing the dissemination of documents located in foreign jurisdictions; and require costs of over $500,00 for translation alone. Id. ¶¶ 16-18. Defendants claim they have spent approximately $100,000 in translating costs to date related to other RFPs. Id. at ¶18. As the Vice President of LeEco from 2016 to 2018, Bob Ye has the sufficient personal knowledge, combined with his background, to make the minimal showing of foundation and personal knowledge, not based upon hearsay, required to attest to the RFP's burden on Defendants and provide background regarding the agreements at issue.[4] Defendants are not required to respond to RFP Nos. 36-39, 43-49, 55-56, 60, and 62-65 relating to “affiliates.”
3. RFPs Substantively Overly Broad and Disproportional
*9 At the hearing, the Court, with the parties' input, reviewed each of the thirty-one RFPs at issue and the responses thereto. The Court incorporates the matters discussed at the hearing and does not restate all of its reasoning stated at the hearing herein, including the analysis of the propriety of including references to LeEco Real Estate Group (“LREG”) in certain RFPs. Pursuant to Rule 26(b)(1), the Court has carefully considered and weighed the importance of this issue, the amount in controversy, the parties' respective access to information and resources, the importance of the discovery and the burden of expense compared to the likely benefit of the discovery with respect to each individual RFP, and finds that the orders below are reasonable, appropriate and proportionate. With respect to the disputed RFPs, the Court rules as follows, with the qualification that each of these rulings is subject to the limitations set forth above regarding the timeframe and “affiliates” language in the application RFPs:
RFP No. 35: The words “RELATING TO” are stricken and replaced with the words “which reflect.” As modified, and subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 36: The word “LREG” is stricken. As modified, and subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 37: The words “DOCUMENTS sufficient to identify ALL” are replaced with “All non-duplicative lists of.” As modified, and subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 38: Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 39: The entire RFP is stricken and replaced with “DOCUMENTS that reflect any acquisition of interests in LeEco, Global, LELE, or LTI.” Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP. As modified, and subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 40: Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 41: Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 42: Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 43: Plaintiff's Motion to Compel is denied as to this RFP.
RFP No. 44: Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 45: The words “DOCUMENTS sufficient to identify the locations of the headquarters and all administrative, manufacturing and distribution facilities for” are stricken and replaced with “Non-duplicative DOCUMENTS identifying the headquarters of.” Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 46: Plaintiff's Motion to Compel is denied as to this RFP.
RFP No. 47: The words “DOCUMENTS sufficient to identify ALL” are stricken and replaced with “Lists of, policies relating to, and accountings of,” not including any confidential or private employee information or otherwise privileged information. Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 48: The word “non-duplicative” is inserted after “ALL” and before “DOCUMENTS.” Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 49: The word “non-duplicative” is inserted after “ALL” and before “DOCUMENTS.” Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
*10 RFP No. 50: Subject to the other limitations and requirements set forth in this Order, including the time limitation, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 51: The words “and analyses” and “for a) the use of JIA or other executives at LeECO, GLOBAL, LELE, or LTI, or b)” are stricken. Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 52: The words “ANY and ALL DOCUMENTS RELATING TO” are stricken, and the word “audits” is replaced with “audit reports.” Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 53: Plaintiff's Motion to Compel is denied as to this RFP.
RFP No. 54: Plaintiff's Motion to Compel is denied as to this RFP.
RFP No. 55: After the word “possessed,” the phrase “, the impact of which would have a material impact on the entity's ability to continue to operate as a going concern” is inserted. Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 56: Plaintiff's Motion to Compel is denied as to this RFP due to a failure to meet and confer as required under Local Rules 37-1.
RFP No. 57: Plaintiff's Motion to Compel is denied as to this RFP due to a failure to meet and confer as required under Local Rule 37-1.
RFP No. 58: The words “DOCUMENTS OR COMMUNICATIONS sufficient to identify” is replaced with “Non-duplicative lists identifying.” Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 59: Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 60: The words “to January 12, 2018” are inserted after “2016” and before “by ANY” and the words “LTI, LREG” are stricken. Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 61: Plaintiff's Motion to Compel is denied as to this RFP.
RFP No. 62: The words “at any point after January 1, 2016” are replaced with “from March 1, 2017 to June 30, 2017.” Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 63: Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 64: Subject to the other limitations and requirements set forth in this Order, Plaintiff's Motion to Compel is granted as to this RFP.
RFP No. 65: Plaintiff's Motion to Compel is denied as to this RFP.
C. Privacy Objections
1. Relevant Law
Under California privilege law, which Defendant asserts applies in this action and which Plaintiff does not appear to contest (see Jt. Stip. No. 1 at 47, 101), the right to privacy protects against the unwarranted, compelled disclosure of private or sensitive information including individuals' financial affairs, employment records, or income tax returns. Davis v. Leal, 43 F. Supp. 2d 1102, 1110 (E.D. Cal. 1999) (“Information and documents which implicated private financial information are the type that have been declared presumptively privileged.”); see Bowerman v. Field Asset Servs., Inc., 2013 WL 6057043, *1 (N.D. Cal. Nov. 14, 2013) (“Under California law, there is a privilege protecting against the forced disclosure of income tax returns.”); See also Williams v. Superior Court, 3 Cal. 5th 531, 554 (2017) (“employees have a bona fide interest in the confidentiality of their contact information. While less sensitive than one's medical history or financial data, home contact information is generally considered private.”).
2. Analysis
*11 Defendants contend the RFPs violate the privacy rights of third parties by requesting financial, employment, and tax-related documents “that are shielded from discovery by the individual right to privacy enshrined in California's Constitution.” Jt. Stip. 1 at 47. Plaintiff argues Defendants have waived any privilege objections, and if not, the objections are insufficient to prevent the production of documents that are critical to establishing the existence of alter ego liability. Jt. Stip. 1 at 100-01.
First, the Court finds Defendants did not waive privacy objections of third parties in their responses. LeEco and LeLe stated in their general objections that they object “to each and every Request to the extent that it seeks information that is protected from discovery or disclosure ... any [ ] constitutional, statutory, or judicially recognized privilege, immunity, right of confidentiality or other protection from discovery or disclosure.” Joyner Decl., ¶ 4, Exh. C at ¶ 3, Exh. D at ¶ 3. LeEco and LeLe also generally objected to “each and every Request to the extent that it seeks ... the confidential information of third-parties.” Joyner Decl., ¶4, Exh. C at ¶ 8, Exh. D at ¶ 8. The 2015 Amendment to Rule 34 requires objections be stated “with specificity” as to “each item or category” (Rule 34(b)(2)(B)), thereby “eliminating any doubt that less specific objections might be suitable under Rule 34.” Rule 34 advisory committee's note, 2015 Amendment. Although general objections are not preferred, because the rights at issue belong to third parties, the Court finds the privacy objection as to third parties, including Jia in LeEco's and LeLe's responses, has not been waived.
Second, Plaintiff asserts Defendants' privacy objections “will be adequately dealt with under the parties' proposed protective order.” Jt. Stip. No. 1 at 100 (capitalization altered). It does not appear that such a proposed protective order has been filed. This case has been pending for over a year; the parties are roughly seven weeks from the discovery cut-off; yet no “proposed protective order” has been filed. The objections based upon the privacy rights of third parties are sustained; no supplemental production ordered herein shall include information protected from disclosure by the rights of privacy of third parties.
Thus, the Court finds that to the extent any RFP calls for the production of the tax information, confidential employment records, or any other private information of third party individuals, Defendants' objections are sustained, and no such individual's private information, including home contact information, is ordered produced by this Order.
V. CONCLUSION
The Court therefore Orders as follows with respect to the Motions:
• Defendants' MPO (Dkt. 115) is granted in part and denied in part as follows:
o Defendants' request to bifurcate the alter ego allegations and stay related discovery is DENIED;
o Defendants' request for a protective order relating to the time period and use of the term “affiliates” in the RFPs is GRANTED, in part, as set forth above; and
o Defendants' request for a protective order against the production of private, confidential information of third party individuals and employees is GRANTED, subject to the parties' anticipated stipulated confidentiality protective order.
• Defendants' Motion to Compel (Dkt. 116) is granted in part and denied in part as follows:
○ The motion is GRANTED with respect to RFA No. 3, and Plaintiff is ORDERED to serve an Amended Response, without objections, to RFA No. 3 consistent with this Order within ten (10) days of the date of this Order; and
*12 ○ The motion is DENIED in all other respects.
• Plaintiff's Motion to Compel (Dkt. 117) is granted in part and denied in part as follows:
○ Defendants are ORDERED to produce all non-privileged documents responsive to RFP Nos. 35-42, 44, 45, 47-52, 55, 58-60, 62-64 as recast above, and subject to the limitations and requirements of this Order by no later than thirty (30) days from the date of this Order.
• Plaintiff's Evidentiary Objections to Bob Ye's Declaration (Dkt. 119) are overruled.
IT IS SO ORDERED.
Footnotes
Defendant Jia claims, on September 24, 2018, he was served with seventy-three Requests for the Production of Documents that were “almost identical” to the Requests served on LeLe and LeEco. Dkt. 115-2 ¶ 12, Declaration of Jeff Joyner in Support of Defendants' MPO (“Joyner Decl.”). However, those Requests do not appear to have been filed with the Court. For ease of reference, the Court nonetheless refers to the moving defendants as “Defendants”; in some instances, where the context indicates, “Defendants” refers only to LeEco and/or LeLe.
The Framework Agreement refers to the Framework, Termination, and Mutual General Release Agreement (Dkt. 47-2) dated as of April 5, 2017 and entered into by LeEco, Vizio, and Le V Merger Sub. Inc. Jt. Stip. 1 at 2 n.5.
The Limited Guarantee refers to a guarantee from Le Technology in favor of Plaintiff to the Buyer Termination Fee provision of the Merger Agreement. Dkt. 108-2. The Merger Agreement refers to the July 6, 2016 agreement and plan of merger (Dkt. 108-1) entered into by Vizio, LeEco, Le V Merger Sub. Inc., and Shareholder Representative Services LLC. Jt. Stip. 1 at 2 n.4.
As a result, Plaintiff's Objections to the Ye Declaration are all overruled. Dkt. 119.