I. MVI's Motion to Redact IDC Transcript (Dkt. 347).

*1 On February 9, 2023, the Court held a telephonic informal discovery conference (“IDC”) to address, in part, Defendant Balt USA, LLC's (“Balt”) motion to compel production of Plaintiff MicroVention Inc.'s (“MVI”) documents relating to the valuation of intangible assets. (Dkt. 306 (notice of motion).) Balt's motion concerned certain documents identified at the deposition of MVI's Rule 30(b)(6) witness, Ryan Hanson, Director of Financial Planning and Analysis, and Mr. Hanson's testimony about those documents. (Dkt. 312 (letter brief).)

On February 10, 2023, the court reporter posted the transcript with limited access and instructed that “Notice of Intent to Redact” was due by March 3, 2023. (Dkt. 317.) On March 3, MVI moved to redact portions of the transcript. (Dkt. 347-1 at 4 (identifying page and line numbers).) The court reporter understood this to be a “Notice of Intent to Redact,” the unredacted transcript (while viewable by the Court) remains “restricted” on CM/ECF. (Dkt. 317.)

After the parties discussed this motion at a hearing on a different discovery dispute (see Dkt. 363 (minutes) and Dkt. 368 (transcript)), Balt filed a statement of non-opposition. (Dkt. 366.)

MVI contends that the identified portions should be redacted from the publicly filed transcript, because MVI designated Mr. Hanson's deposition transcript Confidential – Attorneys' Eyes Only (“AEO”). (Dkt. 347-1 at 2.) Also, the Court earlier found “good cause” to seal Balt's letter brief on this topic because it “revealed MVI's confidential, proprietary and commercially sensitive information identified in Mr. Hanson's deposition.” (Id.)

Indeed, Balt's letter brief (Dkt. 311 (already partially redacted)) was the subject of a sealing application filed by Balt at MVI's request because MVI asserted that some of the unredacted text revealed deposition testimony designated AEO. (Dkt. 319.) The Court ordered Dkt. 311 sealed based on a finding of good cause supported by MVI's counsel's declaration at Dkt. 323. (Dkt. 327.)

The identified portions of the IDC hearing transcript describe certain record-keeping practices by MVI, the content of what is (or is not) included in certain records relevant to asset valuation, and why. While the identified portions of the transcript do not contain any numbers, the description of MVI's practices, the underlying reasons for those practices, and the general content of the records do meet the “good cause” standard for sealing materials filed in connection with a non-dispositive discovery motion. See Herron v. Best Buy Stores, LP, No. 12-02103, 2015 U.S. Dist. LEXIS 120865, at *6-7, 2015 WL 5330271, at *2 (E.D. Cal. Sept. 10, 2015) (sealing a defendant's internal valuations of products and brands, developed after expenditure of “great amounts of time and money” which were unavailable to competitors and at the heart of the defendant's business).

For these reasons, MVI's motion to redact (Dkt. 347) is GRANTED. The un-redacted version of the transcript (Dkt. 317) will be SEALED, and MVI will file the redacted transcript publicly WITHIN FIVE DAYS. The hearing noticed for April 4, 2023, is ordered OFF CALENDAR.

II. Balt's Motion to Compel ESI Discovery (Dkt. 207).

*2 Back in September 2022, Balt noticed an IDC to compel MVI to produce electronically stored information (“ESI”) responsive to Balt's search terms. (Dkt. 207.)

On September 23, 2022, the Court held an IDC. (Dkt. 215 (transcript).) The Court directed MVI to “run a new hit count using the limitations that were proposed in Exhibit C” and share the hit count with Balt. (Id. at 21.) Balt was directed to craft “two or three subject-matter limitations,” which MVI would apply to “see how that affects the hit count.” (Id. at 21-22.) The parties were directed to meet and confer the week of October 3. (Id. at 24.) The Court took the motion under submission, waiting to hear if the parties were “able to reach some agreement on the reasonable and appropriate way to go about getting the ESI from MicroVention.” (Id. at 25.) If they could not, then they were instructed to “reserve another date” for an IDC. (Id.)

The Court understands that this dispute has now been resolved by the parties' agreement and/or rulings made during subsequent IDCs. The Court, therefore, DENIES Dkt. 207 as moot.

III. MVI's Request for an OSC re Discovery Sanctions (Dkt. 358).

On March 7, 2023, MVI asked the Court to issue a sua sponte order to show cause (“OSC”) why Balt should not be sanctioned for abusing the discovery process. Balt's alleged abuses involved six IDCs: one noticed by Balt (Dkt. 337) and five topics noticed by MVI (Dkt. 338). MVI complains:

(Dkt. 358 at 2.) The parties were heard on this issue at the March 9, 2023, hearing. (Dkt. 363.)

Under Federal Rule of Civil Procedure 37(a)(5)(A), if a discovery disclosure is provided only after a motion to compel is filed, the Court “must” require the party whose conduct necessitated the motion and/or the attorney advising that conduct to pay the moving party's reasonable attorneys' fees unless (1) the moving party filed the motion before meeting and conferring in good faith or (2) the opposing party's position was substantially justified. The “policies and purposes” underlying this role are to “motivate[e] the parties to cooperate in the discovery process, to act reasonably, and to minimize court intervention.” In re Gilman, No. CC-18-1101-STaL, 2019 Bankr. LEXIS 2097, at *30 (B.A.P. 9th Cir. July 12, 2019).

In an effort to make discovery motions less expensive for litigants, Judge Scott offers an IDC procedure that allows parties, after thoroughly meeting and conferring, to file two-page letter briefs at least twenty-four hours before a noticed hearing. See http://www.cacd. uscourts.gov/honorable-karen-e-scott, ¶ 3. The Court understands MVI's motion as seeking to extend Rule 37(a)(5)(A) to Balt's conduct surrounding the March 2023 IDCs.

The Court is not persuaded that Balt abused the discovery process. The procedure for a “regular” discovery motion under Local Rule 37-1 et seq. contemplates a ten-day meet and confer period, about a week to draft the joint stipulation, and a twenty-one-day notice period. L.R. 37-2.2, 37-3. A party who forces an opponent to complete this expensive process, only to capitulate at the last moment, is presumed to be creating delay and needlessly increasing his opponent's costs substantially.

*3 That same presumption does not apply to Balt's conduct surrounding the March 2023 IDCs. While parties are required to meet and confer in good faith before noticing an IDC, here, the parties were working within tight time frames to raise all their discovery disputes prior to the expiration of the discovery motion deadline. Given these tight time frames and the fact that IDC briefing is due only twenty-four hours in advance, it does not indicate bad faith that Balt would decide not to fight over certain issues only after MVI had completed its briefing, particularly since MVI chose to work on its briefing so promptly. When operating in such short time frames, the Court cannot fault a party for continuing to consider the pros and cons of its position and ultimately deciding to withdraw a motion that it has noticed or not to oppose a motion noticed by the other side less than forty-eight hours (but still more than twenty-four hours) before the noticed IDCs. Furthermore, given that the briefing for IDCs consists of two-page letter briefs, the costs are much lower than they would be for a “normal” discovery motion.

For these reasons, the Court declines MVI's request to issue a sua sponte OSC why Balt should not be sanctioned for withdrawing Dkt. 337 and acceding to MVI's discovery requests in Dkt. 338.