Id. at 106-07. Request 145 seeks “All DOCUMENTS containing any report or presentation from 2010 to present, from any person or entity employed by [STATE FARM], or any person or entity retained by [STATE FARM], relating in whole or in part to [STATE FARM'S] INVESTIGATION and/or ADJUSTING of water losses.” Id. at 110. And Request 146 seeks “All DOCUMENTS containing any report or presentation from MCKINSEY & COMPANY from 2010 to present relating in whole or in part to [STATE FARM'S] INVESTIGATION and/or ADJUSTING of water losses.” Id. at 111. The magistrate judge denied Plaintiffs' motion as to the requests regarding presentations created before 2016 but granted the remainder of Plaintiffs' motion. Order at 18-19.

State Farm also objects to the magistrate judge's order granting Requests for Inspection 80 and 81. Mot. at 5. Request 80 seeks “Inspection of State Farm's intranet or SFNET for the purpose of discovering its structure and all training and guidelines resources available to the claims adjusters and managers involved in INVESTIGATING or ADJUSTING PLAINTIFFS' CLAIM.” Joint Stip. at 140. Request 81 seeks “Inspection of State Farm's Electronic Claim System or ECS for the purpose of discovering its structure and all training and guidelines resources available to the claims adjusters and managers involved in INVESTIGATING or ADJUSTING PLAINTIFFS' CLAIM.” Id. at 142.

The magistrate judge granted Plaintiffs' motion as to these requests but ordered the parties “to meet and confer ‘to attempt to agree on a protocol for the [inspection], analysis, and subsequent production of responsive documents,’ that ‘minimize[s] the burden and inconvenience to [State Farm].’ ” Order at 23 (citation omitted). The magistrate judge also stated that “[a]ny documents found during the inspection ‘should all be produced first to counsel for [State Farm] for its review as to relevance, responsiveness, and privilege, prior to any disclosure to [Plaintiffs].’ ” Id. (citation omitted). Finally, the magistrate judge ordered the parties to “clearly define the temporal scope of the inspection, as well as any other limits to ensure Plaintiffs' inspection focuses solely on the information described in the [Requests for Inspection] and does not become an unbounded review of [State Farm's] electronic systems,” and encouraged the parties “to modify the protective order as necessary to ensure any information learned during the inspection is not disclosed to third parties.” Id. at 24.

Magistrate judges have the authority to issue non-dispositive orders, including discovery orders and pretrial scheduling orders where pretrial proceedings have been referred to the magistrate judge. Grimes v. City and Cnty. of S.F., 951 F.2d 236, 240 (9th Cir. 1991) (stating Rule 72 and 28 U.S.C. § 636(b)(1)(A) govern the authority of magistrate judges to enter non-dispositive discovery orders and the review of those orders). If timely objections to a magistrate judge's non-dispositive order are filed, the district judge must consider such objections and “modify or set aside any part of the order that is clearly erroneous or is contrary to law.” Fed. R. Civ. P. 72(a).

*3 “The ‘clearly erroneous’ standard applies to the magistrate judge's factual determinations and discretionary decisions ....” Davis v. Chase Bank U.S.A., N.A., No. CV 06-04804 DDP (PJWX), 2010 WL 1531410, at *1 (C.D. Cal. Apr. 14, 2010) (citation omitted). “Under this standard, the district court can overturn the magistrate judge's ruling only if the district court is left with the definite and firm conviction that a mistake has been made.” Id. (citation omitted). “The ‘contrary to law’ standard, on the other hand, ‘applies to the magistrate judge's legal conclusions, which are reviewed de novo.’ ” Id. (quoting China Nat'l Metal Prods. Imp./Exp. Co. v. Apex Digit., Inc., 155 F. Supp. 2d 1174, 1177 (C.D. Cal. 2001)).

A. Requests 92-94, 126, and 145-46

State Farm argues the magistrate judge's ruling is erroneous because it accepted “Plaintiffs' counsel's mischaracterization of State Farm's document productions in other, unrelated cases.” Mot. at 12, 14. State Farm contends that, unlike the claim handlers in the prior cases, Acosta and Moratto had handled claims for State Farm only since 2023. Id. at 14. It argues that documents regarding the “water initiative” would therefore be relevant only if they were in place in 2023 and “if either Acosta or Moratto were trained on, relied on, or were otherwise aware of any such documents or initiative.” Id. at 14-15. State Farm asserts that there is no evidence Acosta or Moratto knew about a water initiative and no evidence to support compelling documents outside the scope of Acosta or Moratto's involvement. Id. at 15. In fact, State Farm argues the magistrate judge “ignore[d] that on September 26, 2024, during the meet-and-confer process, Plaintiffs ‘agreed as to all requests to limit the scope to ... a reasonable time period reflective of the short work histories of [Acosta and Moratto] and the period of the [Plaintiffs'] claim itself.’ ” Id. at 14 (quoting Dkt. 40-1 at 2-3). Because State Farm contends that the magistrate judge based her ruling entirely on Plaintiffs' counsel's suppositions and not actual evidence, it argues the ruling constitutes an abuse of discretion. Dkt. 53 at 7-9. Therefore, State Farm argues “[t]he Court should modify the Order to require State Farm to produce only materials regarding quality claim handling of water loss claims like Plaintiffs' claim that were available and in use as of March 3, 2022.” Mot. at 16.

Plaintiffs agree with State Farm that the proper scope of production for Requests 92 and 93 should be March 2022 to present. Opp'n at 18. Regarding Requests 94 and 126, which relate to the water initiative, Plaintiffs assert that the magistrate judge exercised her discretion to limit the requests to 2016 to present based on when the water initiative appears to have begun. Id. at 18-19. Despite State Farm's contention, Plaintiffs argue that documents about which Acosta and Moratto did not know are nonetheless relevant to this action. Id. 19-20. For example, Plaintiffs contend that “the fact of the change in how State Farm applies its policy exclusions, along with related circumstances like its failure to reveal the change to its customers and the regulator, is powerfully relevant to [Plaintiffs'] bad faith cause of action and punitive damages claim.” Id. at 21-22.[2]

“When the court reviews the magistrate's determination of relevance in a discovery order, ‘the Court must review the magistrate's order with an eye toward the broad standard of relevance in the discovery context. Thus, the standard of review in most instances is not the explicit statutory [standard], but the clearly implicit standard of abuse of discretion.’ ” Perry v. Schwarzenegger, 268 F.R.D. 344, 348 (N.D. Cal. 2010) (quoting Geophysical Sys. Corp. v. Raytheon Co., 117 F.R.D. 646, 647 (C.D. Cal. 1987)); see also Astorga v. Cnty. of L.A., No. 2:20-cv-09805-AB (AGRx), 2021 WL 4434353, at *1 (C.D. Cal. Aug. 12, 2021). “Under the abuse of discretion standard, the court should not disturb the magistrate judge's relevancy determinations unless ‘based on an erroneous conclusion of law’ or ‘the record contains no evidence on which [s]he rationally could have based that decision.’ ” United States v. Dalton, No. 8:21-cv-00140-JVS (JDE), 2022 WL 4596660, at *2 (C.D. Cal. Aug. 26, 2022) (quoting Wolpin v. Philip Morris Inc., 189 F.R.D. 418, 422 (C.D. Cal. 1999)) (citation omitted).

*4 As an initial matter, the parties agree that the proper scope of production for Requests 92 and 93 is March 2022 to present. The Court grants State Farm's motion as to Requests 92 and 93.

Regarding Plaintiffs' other requests, the magistrate judge determined the requests “appear directly relevant to [Plaintiffs'] allegations that their claim was wrongly denied as part of Defendant's ‘years-long scheme to reduce its water loss exposure.’ ” Order at 18-19 (citing Joint Stip. at 10). She reasoned that information regarding State Farm's policies and guidelines, even if Acosta and Moratto did not rely on it, is relevant to prove Plaintiffs' bad faith claim and to rebut State Farm's “defenses that the Water Initiative did not exist, and that Plaintiffs' claim was simply mishandled.” Id. at 18. However, because the magistrate judge agreed with State Farm that Requests 145 and 146 are temporally overbroad based on the fact that the alleged water initiative began in 2017, she limited the scope of production to 2016 to present. Id. at 18-19.

The magistrate judge did not abuse her discretion in granting Plaintiffs' motion. She explained why she found Plaintiffs' requests to be relevant to this action and why she limited the scope of production as to the presentations. She also carefully considered State Farm's objections before finding them unpersuasive. The Court denies State Farm's motion as to Requests 94, 126, 145, and 146.

B. Requests 80 and 81

State Farm argues that the Court should modify the magistrate judge's order to deny Plaintiffs direct access to State Farm's systems. Mot. at 27. First, State Farm contends that the magistrate judge's ruling was based on a flawed understanding of its systems because ECS stores claim information, not training information, and SFNet would provide “Plaintiffs with additional access to State Farm systems and repositories, well beyond training materials and guidelines contained within and linked to [it].” Id. at 21-22. Second, State Farm argues that Plaintiffs have not shown it “has engaged in the type of discovery misconduct that warrants provision of such access,” such as concealing evidence or defaulting on discovery obligations in this case. Id. at 22; Dkt. 53 at 10. State Farm argues the magistrate judge relied on allegations from other litigation involving State Farm without citing “any case law indicating that purported discovery misconduct in other cases supports a remedy of direct access in this completely unrelated matter.” Mot. at 22-23. Third, State Farm asserts that it will require significant resources to enable Plaintiffs' access to its systems, to educate Plaintiffs on how to use the systems, and to monitor Plaintiffs' activity. Id. at 24-25. Although the magistrate judge stated that State Farm can take steps to protect its confidential and proprietary information, State Farm argues “permitting ‘restricted’ direct access to [its] systems is an infeasible technological undertaking.” Dkt. 53 at 10.

Plaintiffs assert that the magistrate judge's order “started with the essential rule: courts may grant a request for inspection (RFI) of another party's electronic information system if a ‘responding party's discovery responses have been incomplete or inconsistent.’ ” Opp'n at 27 (citing Order at 19-20). And Plaintiffs argue the evidence shows that State Farm has failed to provide Rule-compliant responses to requests for discovery in water loss cases “for many years, across many cases.” Id. Plaintiffs contend that the magistrate judge carefully considered and rejected State Farm's arguments regarding its burden and costs, its proprietary interests, and its customers' privacy interests. Id. at 31-32. They note that the magistrate judge addressed State Farm's concerns and even ordered the documents to be produced to State Farm to review for relevance and privilege before their disclosure to Plaintiffs. Id. at 32-33. Finally, they argue that State Farm failed to present its arguments regarding the nature of its systems to the magistrate judge and “has forfeited review on that basis.”[3] Id. at 34.

*5 It appears to the Court that permitting Plaintiffs to access and search State Farm's ECS and SFNet may be disproportionate to the needs of this case where Plaintiffs assert only one claim for bad faith. However, the magistrate judge found that Plaintiffs had shown good cause to inspect State Farm's systems because “Plaintiffs' counsel's declaration shows that [State Farm] has ‘defaulted in its obligation to search its records,’ and that across numerous cases, its ‘discovery responses have been incomplete or inconsistent.’ ” Order at 22. She explained that Plaintiffs' requests appeared warranted “[g]iven that [State Farm] has inconsistently produced clearly responsive documents to similar discovery requests in cases involving nearly identical water loss claims and denials and has yet to certify in any case that it has diligently searched for and produced all responsive documents.” Id.

The magistrate judge provided a detailed and thorough explanation of the basis for her order. However, because the Court is concerned with State Farm's discovery conduct in this case, and there appear to be no previous judicial findings of discovery abuse by State Farm, the Court was inclined to give State Farm an opportunity to comply with its discovery obligations in light of the approval of the protective order. However, Plaintiffs have just filed a motion for enforcement of the magistrate judge's order and for sanctions. The Court will await the magistrate judge's ruling on the pending motion before making a determination on this issue. In addition, it appears the appeal of this issue is premature. The magistrate judge made clear that Plaintiffs are “not entitled to set the conditions of the inspection unilaterally nor to select the person who will perform it.” Order at 23 (quoting Brocade Commc'ns Sys., Inc. v. A10 Networks, Inc., No. 10-CV-03428-LHK, 2012 WL 70428, at *3 (N.D. Cal. Jan. 9, 2012) (citation omitted). Though the magistrate judge provided parameters for the anticipated inspection, and noted that the “protocols and procedures could include appointment of a neutral third party,” id., she ordered the parties “to meet and confer ‘to attempt to agree on a protocol for the [inspection], analysis, and subsequent production of responsive documents,’ that ‘minimize[s] the burden and inconvenience to [State Farm].’ ” Id. (quoting Brocade, 2012 WL 70428, at *3). An order such as the one made by the magistrate judge is appropriate in some circumstances and with appropriate protocols. See Advante Int'l Corp. v. Mintel Learning Tech., No. C 05-01022 JW (RS), 2006 WL 3371576, at *1 (N.D. Cal. Nov. 21, 2006) (finding the examination of the plaintiff's hard drives was warranted because the defendant had “shown that serious questions exist both as to the reliability and the completeness of materials produced in discovery by [the plaintiff]”). However, the Court concludes it cannot rule on this motion until those protocols have been agreed upon by the parties or established by the magistrate judge. See id. (finding the defendant “ha[d] not shown[ ] ... that it would be appropriate to allow its retained expert to conduct such an examination, until and unless the parties reach a stipulation as to the examination protocol” and ordering the parties to meet and confer “to attempt to agree on a protocol for the imaging and the subsequent production of responsive documents”).

The Court GRANTS IN PART and DENIES IN PART State Farm's motion as to Plaintiffs' Requests for Production 92-94, 126, and 145-46. The Court GRANTS State Farm's motion as to Requests 92 and 93 and DENIES State Farm's motion as to Requests 94, 126, 145, and 146.

The Court RESERVES JUDGMENT on State Farm's motion as to Plaintiffs' Requests 80 and 81.

IT IS SO ORDERED.