NexGen HBM v. ListReports
NexGen HBM v. ListReports
2018 WL 6438572 (C.D. Cal. 2018)
September 6, 2018

Kim, Steve,  United States Magistrate Judge

Protective Order
Special Master
Privilege Log
Failure to Produce
Sanctions
Cooperation of counsel
General Objections
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Summary
The court denied the motion for an extension of the discovery cut-off date and the motion to override another court's protective order in a parallel proceeding. The court ordered Defendants to produce responsive documents being withheld on certain grounds, to review responsive documents being withheld on the grounds that numerous terms are vague or ambiguous, and to identify by bates range(s) those documents among the “17,000” already produced that are responsive to certain requests.
NEXGEN HBM, INC., et al.
v.
LISTREPORTS, INC., et al.
Case No. 2:17-cv-06522-AB (SK)
United States District Court, C.D. California
Filed September 06, 2018

Counsel

Matthew K.Wegner, Brown Wegner LLP, Irvine, CA, Michael M.Lafeber, Pro Hac Vice, Mira Vats-Fournier, Pro Hac Vice, Scott M.Flaherty, Pro Hac Vice, Briggs and Morgan PA, Minneapolis, MN, for NexGen HBM, Inc., et al.
Kathryn Louise McCann, Liner LLP, Keith J.Wesley, Browne George Ross LLP, Los Angeles, CA, Alberto J.Campain, Lawrence C.Ecoff, Ecoff Campain and Tilles LLP, Beverly Hills, CA, Lauren W.Linderman, Pro Hac Vice, Matthew B.Kilby, Pro Hac Vice, Randall E.Kahnke, Faegre Baker Daniels LLP, Minneapolis, MN, for ListReports, Inc., et al.
Kim, Steve, United States Magistrate Judge

Proceedings: (IN CHAMBERS) ORDER PARTIALLY GRANTING PLAINTIFFS' MOTION TO COMPEL (ECF No. 198)

*1 Plaintiffs seek a four-month extension of discovery, an order requiring the production of documents from a parallel proceeding, compelled production of documents in response to 25 requests for production (“RFPs”), disclosure of a privilege log, and monetary sanctions. (ECF No. 198). Plaintiffs' motion is granted in part and denied in part.
Discovery Cut-Off Date
The Court has no authority to amend the district judge's scheduling order, including its discovery cut-off date. (ECF No. 175). Plaintiffs' motion for an extension of that date is thus denied without prejudice to seek that relief from the assigned district judge. That said, the parties may not use anything in this order as authorization or justification to extend the discovery cut-off date. The parties must show—independent of anything ordered here—that they are entitled to an extension of discovery under the district judge's scheduling order.
Documents from Parallel Proceeding
Plaintiffs request that this Court override another court's protective order in a parallel proceeding by ordering disclosure of documents from that proceeding for use in this matter. (Joint Stipulation (“JS”) at 8, ECF No. 199). But Plaintiffs present no authority for that relief, nor is the Court aware of any. Their proper recourse is first to seek relief from the court in the parallel proceeding. This request is therefore denied.
RFPs with Overlapping Disputes
1. Trade Secret and Privacy Objections
Defendants are withholding responsive documents on the claim that they contain “proprietary, confidential and trade secret information” or “invade” the “privacy” rights[1] of Defendants and others. (JS at 5). Defendants argue that this information may give Plaintiffs an unfair advantage in the marketplace. But the protective order in this case allows designation of documents as “HIGHLY CONFIDENTIAL – ATTORNEYS' EYES ONLY,” which would address Defendants' concerns. (ECF No. 179 at 9–10). Defendants are therefore ordered to produce responsive documents being withheld on these grounds, subject to the protective order. See Nutratech, Inc. v. Syntech (SSPF) Int'l, Inc., 242 F.R.D. 552, 555 (C.D. Cal. 2007).
2. “Special Master” Objections
Defendants are withholding responsive documents on the contention that a special master should be appointed to referee discovery disputes between competitors in the marketplace. (JS at 16). But Defendants have not moved for the appointment of a special master, apparently “have no intention” of doing so, and offer no reason why the protective order is inadequate to the task. (JS at 18). Defendants are therefore ordered to produce responsive documents being withheld on this basis.
3. Date-Restriction Objection
Defendants are withholding responsive documents that postdate the filing of the Complaint. (JS at 13). In trade secret cases, “it may be appropriate to allow post-complaint discovery where documents requested are relevant to the claims and defenses in the case, especially where the complaint alleges continuing violations.” Deluxe Fin. Servs., LLC v. Shaw, 2017 WL 7369890, at *5 (D. Minn. Feb. 13, 2017); see Jamison v. Olin Corp., 2004 WL 1098940, at *6 (D. Or. May 14, 2004) (post-complaint conduct in patent infringement and trade secret case is not per se irrelevant). On the other hand, discovery must be proportional to the needs of the case and is not unlimited. See Fed. R. Civ. P. 26(b); Weber v. TMG Logistics, Inc., 2017 WL 5665847, at *2 (E.D. Cal. Nov. 27, 2017). Defendants may not categorically withhold responsive documents that happen to postdate the complaint's filing date, but Plaintiffs may not rest on the mere allegation in the complaint that Defendants continue to use the relevant trade secrets. (First Amended Complaint (“FAC”), ECF No. 180 at 7, 11). As a result, unless otherwise agreed to by the parties, Defendants are ordered to produce responsive documents that postdate the complaint's filing date up until the latest date of Defendants' production of those documents.
4. “No Responsive Materials” Response
*2 For some RFPs, Defendants assert that they found no responsive materials after undertaking a “diligent search and reasonable inquiry.” (JS at 7). Plaintiffs contend that Defendants are lying, evidently based on documents produced in the parallel proceeding. (JS at 8). But without more information, the Court has no basis to second-guess Defendants' responses. Thus, Plaintiffs' motion to compel on this ground is denied without prejudice. Nothing in this order forecloses Plaintiffs' use of other discovery tools to pursue this line of inquiry.
5. Vague and Ambiguous Objections
In response to RFP Nos. 5, 6, 7, 8, 9, 10, 11, 12, 21, 22, 24, 25, and 26, Defendants object that numerous terms are vague or ambiguous. (JS at 19–43). But Defendants offer no argument to support the objection. See Jones v. Cooper, 2010 WL 2816323, at *4 (E.D. Cal. July 16, 2010) (“To the extent that Plaintiff objects to the request on the ground that it is vague, ambiguous, or overbroad, Plaintiff must explain how the request is vague, ambiguous, or overbroad.”). Defendants are therefore ordered to review responsive documents being withheld on these grounds; to meet and confer with Plaintiffs in person or by telephone to clarify or reach a compromise on any material defined terms that are allegedly unclear; and to produce responsive documents based on that clarification or compromise (or otherwise to produce responsive documents based on Defendants' interpretation of those terms with amended responses of how Defendants defined those terms for purposes of the production).
6. Alleged Bad Faith in Document Production
Plaintiffs and Defendants squabble over whether Defendants have produced documents that they committed to produce. (JS at 6). It is surprising that the parties cannot cooperate and require court intervention on such a rote matter. Thus, absent a different agreement between the parties, Defendants are ordered to identify by bates range(s) those documents among the “17,000” already produced that are responsive to RFP Nos. 1, 3, 4, 5, 6, 7, 8, 9, 12, 14, 17, 18, 22, 24, and 25. Defendants also are ordered to provide dates certain for the production of any remaining responsive documents together with an identification of the bates ranges that are responsive to particular requests. See Fed. R. Civ. P. 34(b)(2)(B) & 2015 Adv. Comm. Note (“When it is necessary to make the production in stages the response should specify the beginning and end dates of the production.”); Fischer v. Forrest, 2017 WL 773694, at *3 (S.D.N.Y. Feb. 28, 2017) (“[R]esponses [that] do not indicate when documents and ESI that defendants are producing will be produced” violate amended Rule 34.). If Defendants possess no responsive documents to a specific request, Defendants must indicate as such to each specific request.
Discrete Disputed RFPs
1. Communications with Defendants' Customers
RFP No. 5 seeks “communications with actual or potential customers” of Defendants that “discuss or mention” the disputed real estate or MLS data used in Defendants' Nest.Me product and related services. (JS at 16). Among other objections, Defendants assert that these third-party communications are not relevant and proportional. (JS at 16). Defendants' objection is not well-taken. See MedCorp, Inc. v. Pinpoint Techs., Inc., 2009 U.S. Dist. LEXIS 38022, at *7 (D. Colo. Apr. 20, 2009) (overruling burden objection where objecting party failed to substantiate meaningfully it beyond boilerplate claims). If Defendants are misrepresenting the MLS data available through their Nest.Me product to their customers, the discovery is relevant and proportional.
2. Defendants' Financial Documents
*3 RFP Nos. 13–20 seek financial documents from Defendants that Plaintiffs claim contain “highly relevant damage information.” (JS at 36–37). But Plaintiffs do not explain why they are entitled to financial information about Defendants' products or services not at issue in this lawsuit. The FAC focuses on Defendants' alleged development of Nest.Me with information stolen from Plaintiffs—there is no allegation that other products or services are at issue. Seee.g., Pom Wonderful LLC v. Welch Foods, Inc., 2010 WL 11523709, at *1 (C.D. Cal. June 3, 2010) (party not entitled to discovery about product that is not at issue in case); In re Wells Fargo Residential Mortg. Lending Discrimination Litig., 2009 WL 1771368, at *5 (N.D. Cal. June 19, 2009) (denying motion to compel “broad swath of their financial information” unrelated to claims or defenses). Plaintiffs' motion to compel this financial information is therefore denied without prejudice.
3. Affirmative Defenses
Plaintiffs claim that Defendants have not produced documents that support or refute their affirmative defenses, as requested by RFP No. 22. (JS at 41–42). Defendants' amended response states that they have located no responsive documents but will produce any they do locate. (JS at 41–42). This equivocating response is inadequate, and Defendants must provide a date certain by which they will complete a reasonable document review and produce responsive documents or otherwise state that no responsive documents exist for RFP No. 22. It is one thing to recognize that parties remain under a continuing duty to comply with discovery obligations even after a reasonable document review has been completed. But it is quite another thing to equivocate so that no party, or court, can determine whether the required document review has even been done. Parties may be prohibited from relying on documents that have not been produced by the discovery cut-off date. See, e.g., Adams v. United States, 2011 WL 4499256, at *2 (D. Idaho Sept. 27, 2011).
4. Customer Complaints
RFP No. 26 seeks “complaints from users of Defendants' Nest.Me product or service.” (JS at 48). Defendants contend that such documents are not relevant and proportional. (JS at 48–49). But Plaintiffs allege that Defendants engaged in false advertising, among other unlawful activities, with their Nest.Me product by misrepresenting the quality of their MLS and real estate data. (Compl. at 21–22). Thus, customer complaints about that data (or the lack thereof) are relevant. Defendants are ordered to produce documents responsive to this request and amend their responses as needed. See MedCorp, Inc. v. Pinpoint Techs., Inc., 2009 U.S. Dist. LEXIS 38022, at *7 (D. Colo. Apr. 20, 2009).
Privilege Log
Based on Defendants' representation that they are not withholding documents based on privilege and this Court's ruling that Defendants' privacy and trade secret objections are overruled, Plaintiff's motion to compel Defendants to produce a privilege log is denied without prejudice. Of course, if Defendants withhold any responsive documents based on any alleged privilege or other legal ground, they must produce a corresponding privilege log.
Sanctions
Plaintiffs' motion for fees and costs as monetary sanctions is denied without prejudice to renew if Defendants violate this order.
* * * * *
The hearing set for September 12, 2018 is VACATED.


Footnotes

Although Plaintiffs characterize Defendants' “Privacy” and “Constitutionality” objections as separate objections, the Court views them to be the same essential objection.