*1 Defendant Swisher International, Inc. (“Swisher”) has filed a motion to compel Plaintiffs Trendsettah USA, Inc. and Trend Settah International, Inc. (together, “TSI”) to produce documents and information responsive to Swisher's Third Set of Requests for Production and Third Set of Interrogatories. See Dkt. 528, Joint Stipulation (“JS”). Both parties filed a supplemental memorandum. See Dkts. 546, 550. Swisher also filed a motion to compel Salah Kureh to produce documents and information responsive to Swisher's Subpoenas to Produce Documents, Information, or Objections in a Civil Action. See Dkt. 531 (“Kureh JS”). Both parties filed a supplemental memorandum. See Dkts. 549, 551. The Court issued a tentative ruling and held a telephonic hearing with the parties. The Court now rules as follows. The parties are encouraged to read the order carefully as the final version may differ from the tentative rulings.

The parties are manufacturers of cigars and other related products who entered into multiple supply agreements between 2011 and 2014. See Dkt. 262 at 1-2. In 2016, a jury found Swisher liable on TSI's antitrust and contract claims. See Dkt. 207 at 2-3. TSI claimed that it suffered $9,062,679 in lost profits between 2012 and 2015, and $5,752,815 in future sales from 2016 and beyond, totaling $14,815,494, thereby securing a trebled damages award of $44.4 million. See Dkt. 216.

On July 22, 2019, Swisher filed a motion for relief from judgment on the ground that TSI and its CEO and founder, Akrum Alrahib (“Alrahib”), concealed critical facts during discovery and presented false information to the court and jury, namely, that Alrahib was engaged in a criminal tax evasion scheme. See Dkt. 377. Swisher learned of the scheme when a grand jury indictment in Alrahib's criminal case became publicly available in April 2019. According to the indictment, TSI fraudulently avoided paying federal excise taxes (“FET”) on cigarillos it imported from the Dominican Republic through Tony Bryant (“Bryant”) of Havana 59, for a period between 2013 and 2015.[1] The indictment lists a number of allegedly falsified invoices which marked down the price TSI was actually paying for cigars to avoid FET. The indictment further alleges that TSI did not purchase cigarillos from Havana 59; instead, it purchased them from Productos del Tobacco (“Productos”) at prices approximately 3 to 4 times the sales price reported to the government by wiring money from TSI's bank account in California to Productos' bank account. TSI received over $700,000 from Havana 59 as kickbacks in the form of payroll checks for TSI's employees and free cigar manufacturing equipment that TSI sent to Productos.

On August 17, 2019, Judge Selna granted Swisher's motion, concluding that “TSI presented to the jury and the Court a theory of ‘lost profits’ premised on inaccurate data which was a product of a fraudulent tax evasion scheme. Therefore, TSI's conduct tainted the integrity of the trial and interfered with the judicial process.” Dkt. 426 (“Order”) at 14. After the ruling, Swisher added illegality and fraudulent inducement as new defenses to TSI's contract claims.

*2 Judge Selna subsequently ordered a new trial. See Dkt. 427. At the November 12, 2019 status conference, Judge Selna reiterated that he had ordered “a complete retrial” and planned to be “rather liberal in allowing discovery to be done.” See Dkt. 464 at 7:6-11. At the May 4, 2020 status conference, Judge Selna explained, “in terms of discovery, I'm not going to limit discovery at this point other than to say further fact discovery will be limited to the excise tax issues. I expect you to be focused. It's a fairly narrow topic, and I expect you to cover it in an expeditious manner with depositions and requests for production.” Dkt. 504 at 4:23-5:3. Judge Selna permitted twenty-five interrogatories and no limit to the number of depositions but guided the parties to be “direct and efficient.” Id. at 6:7-12.

Swisher argues that TSI should supplement its previously produced inaccurate financial data as well as produce documents reflecting TSI's profits after November 2015. See JS at 22. TSI contends, as it does for virtually every RFP, that the Request does not fall within the scope of discovery that Judge Selna circumscribed. See id. at 25-26.

Although Judge Selna referred to the excise tax issue as a “fairly narrow topic,” it is clear that obtaining an accurate picture of TSI's financial operations was the primary reason for re-opening discovery. As Judge Selna explained in granting Swisher's motion for relief from judgment, documents produced by TSI did not reflect the true cost of manufacturing and importing TSI's cigarillos, “even though they were presented to Swisher as an accurate reflection of TSI's costs and profits.” Motion at 12. These misleading financial records were relied on by TSI's economic expert, who, based on inaccurate profit margins, opined that TSI suffered $9,062,679 in lost profits between 2012 and 2015, and $5,752,8156 in future sales, totaling $14,815,494 in damages. See id. at 14. At trial, the jury awarded the exact amounts that TSI's expert computed based on TSI's misleading financial records. See id. Later, in denying TSI's motion for reconsideration, Judge Selna explained, “Because Mr. Alharib's criminal conduct distorted [TSI's] costs, prices, demand and profitability, there is no competent, non-speculative evidence to show that there was any injury or the extent of the damages caused by Swisher's conduct.” Dkt. 483 at 9-10.

Given this background, the Court finds that Swisher is entitled to any updated financial information of TSI's. Certainly, these records would allow Swisher to piece together the FET paid or evaded on TSI's cigarillos, figures that are central to calculating TSI's true profits and losses, among other things. The Court also rejects TSI's objections based on the time period, given that TSI's damages model sought both past and future damages. Accordingly, Swisher's motion is GRANTED as to RFP No. 1; TSI is ORDERED to produce any documents responsive to RFP No. 1 within fourteen (14) days.

Swisher argues that documents showing TSI's receipt of off-the-book remunerations are likely to be evidence of an illegal tax evasion scheme, and that undocumented transactions distort TSI's financial records, rendering them unreliable. See JS at 28-29. TSI responds that this Request does not relate to excise taxes. See id. at 31-32.

These Requests are appropriately tethered to the excise tax issue. As Swisher points out, this is how the scheme was carried out: Bryant would invoice TSI for a falsified amount of excise taxes, TSI would pay that amount, and Bryant would then kickback a portion to Alrahib, some of which was received in the form of free machines and payroll checks for TSI's employees. Accordingly, Swisher's motion is GRANTED as to RFP Nos. 2 and 3; TSI is ORDERED to produce any documents responsive to RFP Nos. 2 and 3 within fourteen (14) days.

Although TSI has agreed to produce responsive documents, the parties disagree as to the scope of the Request. The Court agrees with Swisher that TSI must produce all FET payments paid for TSI's imported cigarillos, not just payments made by Havana 59 to the government. If TSI does not possess those documents, it should say so in a verified supplemental response. Accordingly, Swisher's motion is GRANTED as to RFP No. 4 and TSI is ORDERED to produce any documents responsive to RFP No. 4 or provide a supplemental response within fourteen (14) days.

TSI has agreed to produce responsive documents, except for documents relating to its other cigarillo product, “Extendos by Splitarillos.” Swisher contends TSI's failure in this market “is relevant to rebut claims that Splitarillos failed due to Swisher.” JS at 38. That may be true, but documents relating to Extendos are not limited in scope to the excise tax issue. Accordingly, Swisher's motion is GRANTED IN PART as to RFP No. 5 and TSI is ORDERED to produce all documents responsive to RFP No. 5 except for documents related to Extendos within fourteen (14) days.

Swisher argues that these Requests are relevant to the excise tax issue, Alrahib's credibility, and its new defenses of illegality and fraudulent inducement. TSI responds that the Requests are “hopelessly overbroad” and generally irrelevant to the central question of “whether Swisher is a monopolist that engaged in anticompetitive acts.” JS at 47-48.

As the Court understands it, the Alrahib Tax Evasion Case charged Alharib with conspiring with Bryant to evade FET on TSI's cigarillos. Even assuming documents related to that case are irrelevant to whether Swisher acted anti-competitively, they are undoubtably relevant to damages. As the Court noted earlier, TSI's damages model was premised on inaccurate data which was the product of a tax evasion scheme. The Alrahib Witness Tampering case, by contrast, charges Alrahib with continuing acts of tax evasion on Splitarillos through a newly formed entity called IST Brands, Inc. (“IST”). Although Swisher is entitled to discovery in order to get an accurate picture of TSI's finances, Alrahib's conduct with respect to IST, a separate entity formed in 2018, is too far removed from this case. Accordingly, Swisher's motion is GRANTED IN PART as to RFP Nos. 6-9 and TSI is ORDERED to produce all documents responsive to RFP Nos. 6-9 except for documents related to the Alrahib Witness Tampering Case within fourteen (14) days.

TSI has agreed to make its ESI available for search, but only at Swisher's expense. The responding party generally bears the expense of complying with discovery requests. When considering cost shifting, courts generally rely on the seven Zubulake factors:

Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 324 (S.D.N.Y. 2003). Here, TSI has not established a case for cost sharing. TSI states that Swisher “doesn't know anything about the debt burden” that TSI is carrying. JS at 62. Maybe not, but neither does the Court, given the absence of any details regarding TSI's supposed financial peril. Nor is there any factual basis for TSI's assertion that the ESI process will cost $600,000. Accordingly, Swisher's motion is GRANTED as to RFP Nos. 10-12 and TSI is ORDERED to produce all documents responsive to RFP Nos. 10-12 within fourteen (14) days.

Swisher contends that documents relating to financial transactions between Havana 59/Bryant and TSI are relevant in light of Alrahib's confession. TSI disagrees, and notes that Swisher has received TSI's Quickbooks file, which evidences all of its payments to Bryant and Havana 59.

*6 The Court has concerns that these Requests stray beyond Judge Selna's directive to “focused” discovery on the “narrow topic” of excise tax issues. Nevertheless, Swisher is correct to point out that the Requests track the scheme, as admitted by Alrahib: TSI would make excise tax payments to Havana 59, which in turn kicked back a portion of that amount to Alrahib, some of which he received in the form of free machines that TSI sent to Productos and assistance with TSI's employee compensation. Accordingly, the scheme's proceeds, in the forms of machines and employee compensation, could have influenced TSI's overall profitability and may bear on the accuracy and completeness of its financial records. Accordingly, Swisher's motion is GRANTED as to RFP Nos. 13-14 and TSI is ORDERED to produce all documents responsive to RFP Nos. 13-14 within fourteen (14) days.

This Request seeks documents relating to seven topics that surfaced in certain excerpts of Alrahib's May 2017 interview with federal agents. TSI primarily objects on the grounds that it would be “completely infeasible” to conduct an ESI searched focused on Alrahib's “amorphous” statements. JS at 74. The Court agrees with TSI. It is hard to fathom how TSI would come up with appropriate search terms to find documents “related to” many of these statements. Additionally, the relevance of the subparts of RFP No. 16 are dubious and far more appropriate as matters for deposition testimony than as document requests. Accordingly, Swisher's motion to compel is DENIED as to RFP No. 16.

Without saying too much as to not reveal confidential information, the Court agrees with TSI that this Request is overbroad, as it delves into the full historical genesis of Alrahib's excise tax issues. It goes far beyond the scope of discovery that Judge Selna intended. At the hearing, Swisher suggested a more targeted RFP, but the Court can only rule on the request in front of it. Swisher's motion is DENIED as to RFP No. 17.

For RFP No. 22, TSI contends that it has already produced all the documents and information that Dr. McDuff considered in formatting his opinions, except for emails between him and TSI's attorneys, which are protected work-product. For RFP Nos. 23-24, TSI represents that no non-privileged responsive documents exist in response to these Requests, as neither Bryant nor Havana 59 provided any documents to TSI or Dr. McDruff in connection with this case. See JS at 86. Indeed, Dr. McDuff declares that he had no knowledge or awareness of any arrangement between Alrahib and Bryant. TSI also points out that the only information Dr. McDuff obtained from Bryant related to the “barriers to entry” in the cigarillo market. Id. at 90.

*7 A court cannot order a party to produce documents that do not exist. Swisher has not provided any evidence suggesting that TSI is wrongfully withholding documents. Accordingly, Swisher's motion is DENIED as to RFP Nos. 22-24.

TSI argues that Swisher cannot indicate that this investigation concerns either (A) cigarillos, (B) Splitarillos, or (C) Trendsettah. See JS at 97. But Swisher has offered evidence that the investigation may concern one or more of these categories, and, at the hearing, TSI acknowledged it may have some responsive documents. Accordingly, Swisher's motion is GRANTED as to RFP No. 27; the parties are ORDERED to meet and confer about the production of documents responsive to this Request within fourteen (14) days of this order and TSI is ORDERED to produce responsive documents within twenty-eight (28) days.

TSI has agreed to “amend to respond to this interrogatory,” with the caveat that “no one at [TSI] other than Mr. Alrahabi had any knowledge about” the arrangement between Alrahib and Bryant. JS at 100. This is not a competent objection. Swisher's motion is GRANTED as to Interrogatory No. 1 and TSI is ORDERED to serve a supplemental response within fourteen (14) days.

For the reasons discussed above in connection with RFP No. 27, Swisher's motion is GRANTED as to Interrogatory No. 3 and TSI is ORDERED to serve a supplemental response within fourteen (14) days.

*8 For the reasons discussed above in connection with RFP Nos. 16 and 17, Swisher's motion is DENIED as to Interrogatory Nos. 4-6.

For the reasons discussed above in connection RFP Nos. 2, 3, 13, and 14, Swisher's motion is GRANTED as to Interrogatory No. 12 and TSI is ORDERED to serve a supplemental response within fourteen (14) days.

Swisher's ambitious request for all TSI's banking information goes beyond the excise tax issue. Swisher's motion is DENIED as to Interrogatory No. 16.

Swisher requests that the Court compel Kureh, TSI's former CFO, to undertake a reasonably diligent search for documents responsive to RFPs 5, 7-8, 12, 18, 21-23, 27-29, 31-32, 35, and 37. Specifically, Swisher wants Kureh to search (1) his personal email account; (2) TSI email accounts in his possession for documents post-dating the December 2015 document collection from that repository; and (3) any other electronic or physical files that are reasonably accessible to him. See Kureh JS at 7-9. Kureh contends that should the Court grant Swisher's motion on any Request, it should order the parties to meet-and-confer to identify an agreed set of search terms that Kureh can bump up against his Gmail account. That is a reasonable request, which the Court includes in its orders below.

At the hearing, Kureh's counsel suggested that Swisher should reimburse any expenses. “[W]hen discovery is ordered against a non-party, the only question before the court in considering whether to shift costs is whether the subpoena imposes significant expense on the non-party. If so, the district court must order the party seeking discovery to bear at least enough of the cost of compliance to render the remainder ‘non-significant.’ ” Legal Voice v. Stormans Inc., 738 F.3d 1178, 1184 (9th Cir. 2013) (citing Fed. R. Civ. P. 45(d)(2)(B)(ii)). Kureh has so far not made a showing that compliance would result in a significant expense. Indeed, Kureh's counsel acknowledges that he may be able to comply by simply entering agreed-on search terms into the search bar of his Gmail account. Additionally, Swisher persuasively points out that TSI's counsel also represents Kureh.

*9 Kureh has withdrawn his relevance objections, but stands on his objection that these Requests should be directed to TSI itself. See id. at 14-15. But Swisher has propounded such discovery on TSI, and there is no indication that TSI has access to Kureh's personal email or devices, which he admits have not been searched. Accordingly, Swisher's motion to compel as to RFP Nos. 5 and 7 is GRANTED; the parties are ORDERED to meet and confer about search terms within fourteen (14) days of this order and Kureh is ORDERED to search for and produce responsive documents within twenty-eight (28) days of the date of this order or, in the alternative, submit a declaration if he contends that he is unable to locate documents responsive to these Requests.

Swisher seeks documents relating to Kureh's trial testimony. Kureh objects that these Requests fall outside the bounds of discovery. But as Judge Selna explained, TSI witnesses presented a materially false portrayal of TSI's financial records. For instance, Kureh testified that every item of revenue or expense was properly recorded in TSI's financial records and that TSI had higher profits on Productos-manufactured products compared to Swisher-manufactured products because Productos' costs were lower. See Order at 13. This testimony, we now know, was false. Based in part on Kureh's testimony, TSI presented a theory of lost profits “premised on inaccurate data which was a product of a fraudulent tax evasion scheme.” Id. at 14.

These Requests are thus relevant to Swisher's ability to develop an accurate picture of TSI's costs and profits. The Requests are also relevant to Swisher's ability to verify the veracity of the financial entries in TSI's books. Accordingly, Swisher's motion to compel as to RFP Nos. 8, 12, and 18 is GRANTED; the parties are ORDERED to meet and confer about search terms within fourteen (14) days of this order and Kureh is ORDERED to search for and produce responsive documents within twenty-eight (28) days of the date of this order or, in the alternative, submit a declaration if he contends that he is unable to locate documents responsive to these Requests.

Kureh has agreed to these Requests, except for issued related to “machinery” in RFP No. 23. As explained in Swisher-TSI RFP No. 14, although the Court has concerns regarding relevance, the scheme involved free machines that could have played a part in TSI's profits and losses. Accordingly, Swisher's motion to compel as to RFP Nos. 21-23 is GRANTED; the parties are ORDERED to meet and confer about search terms within fourteen (14) days of this order and Kureh is ORDERED to search for and produce responsive documents within twenty-eight (28) days of the date of this order or, in the alternative, submit a declaration if he contends that he is unable to locate documents responsive to these Requests.

As explained in Swisher-TSI RFP Nos. 6-9, the Alrahib Tax Evasion Case is relevant, but the Alrahib Witness Tampering case is not. The motion is GRANTED IN PART only as to the Alrahib Tax Evasion Case. As so limited, the parties are ORDERED to meet and confer about search terms within fourteen (14) days of this order and Kureh is ORDERED to search for and produce responsive documents within twenty-eight (28) days of the date of this order or, in the alternative, submit a declaration if he contends that he is unable to locate documents responsive to these Requests.

Kureh states that he has already attested under oath that he did not have any involvement in any arrangement to evade FET. See Kureh JS at 32. A court cannot order a party to produce documents that do not exist. Swisher has not provided any evidence suggesting that Kureh is wrongfully withholding documents. Swisher's motion as to RFP No. 28 is accordingly DENIED.

Kureh has generally agreed to search for and produce any such documents upon agreeing to an appropriate set of search terms that could reasonably be expected to capture any responsive documents from his personal Gmail account. Accordingly, Swisher's motion to compel as to RFP Nos. 29, 31, and 32 is GRANTED; the parties are ORDERED to meet and confer about search terms within fourteen (14) days of this order and Kureh is ORDERED to search for and produce responsive documents within twenty-eight (28) days of the date of this order or, in the alternative, submit a declaration if he contends that he is unable to locate documents responsive to these Requests.

Kureh's relevance objection is not well taken. The identity of individuals connected to the payment of excises taxes relating to imported cigarillos is clearly relevant to excise tax issue. Accordingly, Swisher's motion to compel as to RFP No. 35 is GRANTED; the parties are ORDERED to meet and confer about search terms within fourteen (14) days of this order and Kureh is ORDERED to search for and produce responsive documents within twenty-eight (28) days of the date of this order or, in the alternative, submit a declaration if he contends that he is unable to locate documents responsive to these Requests.

Kureh has agreed to search his personal Gmail account for potentially responsive documents upon agreement to an appropriate set of search terms to run against that ESI. Accordingly, Swisher's motion to compel as to RFP No. 37 is GRANTED; the parties are ORDERED to meet and confer about search terms within fourteen (14) days of this order and Kureh is ORDERED to search for and produce responsive documents within twenty-eight (28) days of the date of this order or, in the alternative, submit a declaration if he contends that he is unable to locate documents responsive to these Requests.

The FET on imported cigarillos during the relevant time period was 52.75%.