Martinez v. Optimus Props., LLC
Martinez v. Optimus Props., LLC
2018 WL 11323387 (C.D. Cal. 2018)
March 20, 2018

Wilner, Michael R.,  United States District Judge

Attorney-Client Privilege
Privilege Log
Redaction
Privacy
Manner of Production
Proportionality
Failure to Produce
Protective Order
Form of Production
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Summary
The court ordered the defense to produce the Yardi reports to Plaintiffs in an electronically accessible Excel spreadsheet format, as the defense had taken advantage of loose language on the formatting issue in correspondence with Plaintiffs' attorneys to produce the Yardi reports in the PDF format. The court also ordered the defense to provide Plaintiffs with sufficient information about their privilege assertions to alert other parties to documents that had been withheld or redacted.
Additional Decisions
Martinez
v.
Optimus Properties, LLC and related actions
Case No. CV 17-3581
United States District Court, C.D. California
Filed March 20, 2018

Counsel

Anne K. Richardson, Lucas H. Oppenheim, Public Counsel, D. Scott Chang, Housing Rights Center, Emily Aviad, Matthew Eric Sloan, Rachael Tara Schiffman, Skadden Arps Slate Meagher and Flom LLP, Azadeh M. Hosseinian, Department of Fair Employment and Housing, Richard Adam Schwartz, Browne George Ross LLP, Los Angeles, CA, Christopher Brancart, Brancart and Brancart, Loma Mar, CA, Liza Cristol-Deman, Brancart and Brancart, Pescadero, CA, Alyssa Janiece Clover, The Walt Disney Company, Burbank, CA, for Cornelia Martinez.
Barry J. Reagan, Gabriele Mezger Lashly, Jeffrey Joseph Halfen, Slaughter Reagan and Cole LLP, Ventura, CA, Katherine A. Tatikian, Thomas H. Citron, Citron and Citron, Los Angeles, CA, for Roxbury Ventures, LLC, Magnolia Avenue Properties, LLC.
Wilner, Michael R., United States District Judge

Proceedings: ORDER RE: DISCOVERY MOTION

*1 The discovery process in theory should be cooperative and largely unsupervised by the district court. But when required disclosures aren't made or cooperation breaks down, Federal Rule of Civil Procedure 37 allows a party to move for an order compelling disclosures or discovery.
Sali v. Corona Reg'l Med. Ctr., __ F.3d __, 2018 WL 1371564 at *1 (9th Cir. March 19, 2018) (emphasis ruefully added).
* * *
1. That's where we are in this case. In late 2017, Plaintiffs moved to compel discovery from the defense in these housing rights cases. After extensive briefing and several lengthy hearings, the Court issued a detailed order in December 2017. That order reined in some of Plaintiff's overbroad requests, and required the defense to provide materials responsive to other, more reasonable requests. (Docket # 64.)
 
2. But, by February 2018, things broke down again. Plaintiffs moved to compel Defendants' compliance with the Court's order requiring the production of documents. Plaintiffs identified problems with Defendants' production. The defense's response (the Court gave the parties an expedited briefing schedule to accommodate Judge Wilson's case deadlines) included a supplemental production of items. (Docket # 76, 78.)
 
3. However, three additional hearings / conferences failed to resolve the issues. Neither has the entry of a stipulated protective order limiting the use of the materials and addressing the privacy interests of those affected by discovery in this case. Instead, the parties continue to be far apart on basic issues regarding the manner and scope of production.
 
4. So, based on the Court's familiarity with the discovery disputes, the parties' submissions, the principles under Rules 26 and 37 (laid out in the Court's previous substantive order) governing proportionality in civil discovery, and the Court's exercise of its discretion, the Court ORDERS the following regarding the motion to compel compliance.
 
Yardi Reports
5. The Court previously ordered the defense to produce the “Yardi” reports to Plaintiffs. Yardi is a computerized database system used in the real estate industry to generate a variety of reports. Plaintiffs originally requested that the reports and data be produced in an electronically accessible Excel spreadsheet format. The defense resisted this, and produced the information in (a) hard copy format (b) that was manually redacted for a variety of reasons and (c) scanned into OCR-readable PDFs. (Docket # 78 at 12.)
 
6. Plaintiffs complain that they didn't agree to this production format of electronic evidence. The defense says that Plaintiffs did. Moreover, Defendants contend that they don't use Yardi to generate items in Excel, so the print-and-scan method conforms to their own use of the underlying data.
 
7. Based on the parties' submissions, the Court stands by its previous observation – it sure looks like the defense took advantage of loose language on the formatting issue in correspondence with Plaintiffs' attorneys to produce the Yardi reports in the PDF format. (Docket # 78-11 (the ill-fated Schwartz letter regarding ESI).) And, notwithstanding Plaintiffs' original preference (or demand) for a specific manner of production under Rule 34(b)(1)(C), the Court could be sympathetic to an argument from the defense that Plaintiffs' proposal that Defendants convert the information to a new format was burdensome or unnecessary.
 
*2 8. But not if the defense's own approach to the document production was itself problematic. The sheer clunkiness of the print-scan method is pretty obvious. And the Court is aware of the potential significance of the statistical data that may be derived from the Yardi reports in Plaintiffs' attempts to demonstrate improper housing discrimination here. Pac. Shores Properties v. City of Newport Beach, 730 F.3d 114, 1159 (9th Cir. 2013). But the topper is Plaintiffs' complaints about the haphazard production of the actual PDFs (cells cut off, data spilling onto other pages, etc.) that have unreasonably restricted their meaningful use of the data. (Docket # 76 at 9-10.)[1] The Court can easily see how this negatively impacts the parties' preparation for trial.
 
9. The countervailing argument in favor of the defense's hard-copy-based production – redacting information about investors and other tenants (Docket #78 at 21) – carries little weight with the Court. The Court overruled the defense's privacy and proprietary-information objections several months ago. (Docket # 64 at 1.) Additionally, as noted above, there is a federal court protective order in place (as negotiated by the parties) to protect against misuse of the information.[2] There was no reason to spend the time, trouble, or money to redact this data; any burden incurred by this method was self-inflicted by the defense.
 
10. The Court was never fully comfortable in concluding that Plaintiffs knowingly, willingly, or voluntarily gave up on the Excel format, or that they agreed with the defense to receive this information in a sub-optimal format. From this, Plaintiffs' articulation of the problems they've encountered from the alleged compromise is meaningful. In contrast, the Court is not convinced that the defense adequately demonstrated a legitimate burden (beyond the cost of producing the material again in a workable format) that alters the proportionality analysis here. To the contrary, electronic materials are required to be produced in a form that is “reasonably useful.”[3] That hasn't occurred here. Defendants are ordered to produce the Yardi reports to Plaintiffs in Excel format within two weeks from the date of this order.
 
11. The exception: the Court's order does not reach those reports (believed to be Nos. 33, 34, 35, and 37) for which the defense asserted attorney-client privilege concerns. The defense need not produce those materials electronically. The Court accepts Mr. Citron's previous explanation of the difficulty of screening out privileged materials for these specific reports.
 
*3 12. The defense also need not incur the burden of preparing a detailed privilege log as Plaintiffs demand. Rather, Defendants may provide Plaintiffs with sufficient information about their privilege assertions to “alert other parties to the fact that documents have been withheld [or, as here, redacted] and thereby facilitate an informed discussion of the objection.” Fed. R. Civ. P. 34, 2015 comm.
 
E-mail Production
13. Plaintiffs request that the defense redo their e-mail search and production. That request is denied. Unlike the data involved in the Yardi reports, the Court is far from convinced about the centrality of the defense e-mail in this action. Moreover, Plaintiffs' fears about whether the production is complete are entirely speculative at present. Plaintiffs appear to have been somewhat able to address the “Frankenstein” nature (Mr. Cuff's term, not mine) of the materials by actually reviewing the production and conferring with the defense. That's a far better solution that continued litigation and Court intervention.
 
14. At bottom, the Court is reasonably convinced that: (a) the defense conducted a search in response to the Court's previous order; and (b) Plaintiffs are able to use these items to develop their case. The denial of this aspect of the motion is without prejudice to any later, evidence-based presentation that may establish actual deficiencies with the defense e-mail production (as floated during Monday's call).
 
Marketing Materials
15. Mr. Citron explained the basis of the production of advertising and apartment listings during our most recent call. That was essentially the “certification” that Plaintiffs requested regarding the completeness of the defense discovery response. This aspect of the motion to compel compliance is moot.
 
Communications with Investors
16. Defendants have not produced communications they sent to “passive” investors involved with the Koreatown properties. The Court overruled their objections last year and ordered those materials produced. (Docket # 64 at 2-3.) In doing so, the Court expressly invited Defendants to “avail themselves (with proper justification) of the confidentiality designation process in the Court's protective order for these materials.” Id.
 
17. Do it. The defense is ordered to fully produce responsive, unredacted materials within two weeks.
 
18. And, as discussed on the conference call, Plaintiffs will exercise real care and caution in determining what use (if any) to make of these items, particularly with the non-active investors. Based on its discussions with the parties, the Court foresees little legitimate, relevant purpose for Plaintiffs to seek information from non-resident investors in the buildings in this housing discrimination case. Yet, the potential harm to Defendants' business relations feels real (even if it was overstated and speculative in Mr. Shabani's declaration (Docket # 91-7)).
 
19. Therefore, in further consideration of the defense's concerns, the Court exercises its discretion under Rules 26(b)(1), (b)(2), and (d)(3) to order Plaintiffs to confer with the defense before seeking any discovery (formal or informal) or engaging in any other pretrial contact with Defendants' passive investors. If Defendants challenge the propriety of Plaintiffs' planned discovery or contact, they may request a protective order or other relief on an expedited basis.
 
Net Worth Information
*4 20. Plaintiffs request for additional net worth information or specific formats of production is denied. Plaintiffs do not convincingly demonstrate that the defense failed to produce information sufficient to establish the net worth of the relevant parties. However, the defense will promptly comply with its undertaking to provide similar information for the newly-added Optimus party in these actions.
 
Footnotes
Plaintiffs are directed to file their informal March 16 e-mail submission to the Court (in, ironically enough, a spreadsheet format) that provided additional information on this topic upon receipt of this order.
The stipulated protective order was entered in the original, multi-building action (CV 16-8598 SVW (MRWx) (C.D. Cal.)). The order contains detailed procedures regarding the security and use of data that the parties designated as confidential or highly confidential. (Prot. Order at 11-12.)
Fed. R. Civ. P. 34, 2006 comm (“Rule 34(a) requires that, if necessary, a responding party ‘translate’ information it produces into a ‘reasonably useful’ form[.] If the responding party ordinarily maintains the information it is producing in a way that makes it searchable by electronic means, the information should not be produced in a form that removes or significantly degrades this feature.”). The Court accepts the defense's assertion that it does not use the Excel format in its regular business. But that is different from whether it maintains the data in a format for which Excel or other computer programs allow access. The Court flat-out doesn't understand (nor does it possess competent evidence explaining) the alleged data conversion difficulties that the defense describes.