Judge: Christopher K. Lui, Case: 21STCV28812, Date: 2023-05-02 Tentative Ruling
Case Number: 21STCV28812 Hearing Date: May 2, 2023 Dept: 76
Pursuant to California Rule of Court
3.1308(a)(1), the Court does not desire oral argument on the motion addressed
herein. Counsel must contact the staff
in Department 76 to inform the Court whether they wish to submit on the
tentative, or to argue the matter. As
required by Rule 3.1308(a)(2), any party seeking oral argument must notify ALL
OTHER PARTIES and the staff of Department 76 of their intent to appear and
argue.
Notice to Department 76 may be sent by email to
smcdept76@lacourt.org or telephonically at 213-830-0776.
Per Rule of Court 3.1308, if notice of intention
to appear is not given, the Court may adopt the tentative ruling as the final
ruling.
Plaintiffs allege that Defendants misclassified Plaintiffs as independent contractors and violated wage and hour laws. Defendants allegedly fraudulently induced Plaintiffs into signing contracts Defendants never intended to fulfill. When Plaintiffs complained about the wage and hour laws and unfulfilled employment terms, Defendants wrongfully terminated every one of its non-Caucasian Plaintiffs.
Defendants Sonaphi LLC, Resonant Technologies Group, LLC and Mark Hinds move for a protective order limiting the scope of two deposition subpoenas for production of business records served on Sonaphi and RTS’ Bank, First Republic Bank. Defendants also move for an order requiring Plaintiffs to post undertakings to secure an award of costs and/or attorneys’ fees which may be awarded in this action.
TENTATIVE RULING
Defendants Sonaphi LLC, Resonant Technologies Group, LLC and Mark Hinds’ motion for a protective order is GRANTED on the terms as requested by Defendants.
The hearing on Defendant’s motion for an undertaking is CONTINUED to May 17, 2023 at 8:30 a.m., to be heard with the demurrer and motion to strike as to the First Amended Complaint.
ANALYSIS
Motion For Protective Order
Defendants Sonaphi LLC, Resonant
Technologies Group, LLC and Mark Hinds move pursuant to Civ. Proc. Code, §
2031.060 for a protective order limiting the scope of two deposition subpoenas
for production of business records served on Sonaphi and RTS’ Bank, First
Republic Bank, seeking (1) all documents held by the Bank concerning or related
to Sonaphi’s entire file with the Bank from June 1, 2020, to the present, and
(2) all documents concerning or relating to RTG’s entire file with the Bank
from January 1, 2020, to the present.
Defendants seek a Protective
Order, (1) That all or some of the items
or categories of items in the demand need not be produced or made available at
all, and (2) That the inspection, copying, testing, or sampling be made only on
specified terms and conditions, as set forth below, and (3) That a trade secret
or other confidential research, development, or commercial information not be
disclosed, or be disclosed only to specified persons or only in a specified
way.
As to the Sonaphi subpoena,
Defendants request an Order limiting the scope of Sonaphi
subpoena (attached hereto as EXHIBIT 2) to only those
records which:
1. Evidence financial transactions
between Sonaphi and the Plaintiffs;
2. Evidence financial transactions
between Sonaphi and its majority member RTG;
and
3. Evidence financial transactions
between Sonaphi and any non-corporate individual
consultant or vendor which
Plaintiffs could possibly contend to have been a mis-
classified employee.
Sonaphi requests the Court permit
the redaction of any Sonaphi bank records which evidence transactions with its
corporate vendors like materials suppliers, research and development partners,
and professionals like attorneys and accountants.
As to the RTG subpoena (attached
hereto as EXHIBIT 3), Defendants request an Order
limiting the scope of RTG subpoena to only those records
which:
1. Evidence financial transactions
between RTG and Plaintiffs1; and
2. Evidence financial transactions
between RTG and Sonaphi.
RTG requests the Court permit the
redaction of any RTG bank records which evidence
transactions with the other non-Sonaphi operating companies
in which it has invested, including its vendors, materials suppliers, research
and development partners, and professionals like
attorneys and accountants.
Civ. Proc. Code § 2031.060 provides:
(a) When an inspection, copying,
testing, or sampling of documents, tangible things, places, or electronically
stored information has been demanded, the party to whom the demand has been
directed, and any other party or affected person, may promptly move for a
protective order. This motion shall be accompanied by a meet and confer
declaration under Section 2016.040.
(b) The court, for good cause
shown, may make any order that justice requires to protect any party or other
person from unwarranted annoyance, embarrassment, or oppression, or undue
burden and expense. This protective order may include, but is not limited to,
one or more of the following directions:
(1) That all or some of the items
or categories of items in the demand need not be produced or made available at
all.
. . .
(5) That a trade secret or other
confidential research, development, or commercial information not be disclosed,
or be disclosed only to specified persons or only in a specified way.
. . .
(g) If the motion for a protective
order is denied in whole or in part, the court may order that the party to whom
the demand was directed provide or permit the discovery against which
protection was sought on terms and conditions that are just.
(h) Except as provided in
subdivision (i), the court shall impose a monetary sanction under Chapter 7
(commencing with Section 2023.010) against any party, person, or attorney
who unsuccessfully makes or opposes a motion for a protective order, unless it
finds that the one subject to the sanction acted with substantial justification
or that other circumstances make the imposition of the sanction unjust.
(i)
(1) Notwithstanding subdivision
(h), absent exceptional circumstances, the court shall not impose sanctions on
a party or any attorney of a party for failure to provide electronically stored
information that has been lost, damaged, altered, or overwritten as the result
of the routine, good faith operation of an electronic information system.
(2) This subdivision shall not be
construed to alter any obligation to preserve discoverable information.
(Civ.
Proc. Code § 2031.060.)
Case law has imposed the “good cause” requirement for
subpoena document requests propounded upon non-parties, that is, the
propounding party must articulate specific facts relating to each category of
materials sought to justify production:
In the course of the litigation, Thiem
served a subpoena under section 2020 on Calcor's custodian of records demanding
Calcor, a nonparty and Thiem's competitor, to, in effect, produce all materials
in its possession relating to gun mounts, going back nearly 10 years. The
subpoena fails to identify any specific document but merely describes broad
categories of documents and other materials.
(Calcor Space Facility v. Superior Court
(1997) 53 Cal.App.4th 216, 219.)
Although the scope of civil discovery
is broad, it is not limitless. . . .
[Former] Section 2031, subdivision (l), which applies to document
production requests served on a party, requires a [*224] party
seeking to compel such production to "set forth specific facts showing good cause justifying the
discovery sought by the inspection demand . . . ." (Italics in original.)
Section 2020, the statute at issue, contains no such specific requirement.
However, since both sections are part of a single statutory scheme, and since
it is unlikely the Legislature intended to place greater burdens on a nonparty
than on a party to the litigation, we read a similar requirement into the
latter section.
(Calcor Space Facility, supra, 53 Cal.App.4th at 223-24.)
Even were we to ignore that the statements
purporting to justify an order compelling Calcor to produce its documents and
other materials are unverified, they still fail. There is an absence of specific facts relating to each category of
materials sought to be produced; the justifications offered for the
production are mere generalities. The very vice of the subpoena's
promiscuity is well illustrated by Thiem's inability
to provide focused, fact-specific justifications for its demands. The noted
generality of the subpoena's definitions, instructions and categories which
merely add up to a demand Calcor produce everything in its possession having
anything to do with gun mounts, precludes Thiem from demonstrating any
particular item or category in fact constitutes or contains matter which
"is itself admissible in evidence or appears reasonably calculated to lead
to the discovery of admissible evidence." (§ 2017, subd. (a).) The
purported justification for imposing this great burden on Calcor necessarily
suffers from the same generality as the subpoena itself.
Although appellate courts have frequently stated "fishing
expeditions" are permissible in discovery, there is a limit. As noted in
Gonzalez v. Superior Court (1995) 33 Cal. App. 4th 1539 [39 Cal. Rptr. 2d 896],
"These rules are applied liberally in favor of discovery ( Colonial Life
& Accident Ins. Co. v. Superior Court (1982) 31 Cal. 3d 785, 790), and
(contrary to popular belief), fishing expeditions are permissible in some
cases." (Id. at p. 1546.) However, early in the development of our
discovery law our Supreme Court recognized the limits on such "fishing
expeditions." In [*225] Greyhound Corp. v. Superior Court
(1961) 56 Cal. 2d 355 [15 Cal. Rptr. 90, 364 P.2d 266], the seminal case in
California civil discovery, the court gave examples of improper
"fishing" WHICH CLEARLY APPLY HERE: "The method of 'fishing' may be, in a particular case,
entirely improper (i.e., insufficient identification of the requested
information to acquaint the other party with the nature of information desired,
attempt to place the burden and cost of supplying information equally available
to both solely upon the adversary, placing more burden upon the adversary than
the value of the information warrants, etc.). Such improper methods of
'fishing' may be (and should be) controlled by the trial court under the powers
granted to it by the statute." ( Id. at pp. 384-385.) The concerns for
avoiding undue burdens on the "adversary" in the litigation expressed
in Greyhound apply with even more weight to a nonparty.
Had the Greyhound court been able to anticipate the tremendous burdens
promiscuous discovery has placed on litigants and nonparties alike, it might
well have taken a stronger stand against such "fishing." Greyhound's
optimism in noting the then new discovery system would be "simple,
convenient and inexpensive," would "expedite litigation," and
"expedite and facilitate both preparation and trial," has certainly
proven to have been considerably off the mark. (56 Cal. 2d at p. 376.)
The issues in this litigation may essentially be reduced to the question
whether Thiem's work met Delco's specifications. This may be determined without
any reference to the contract between Delco and Calcor or the specifications
which are part of that contract. Another issue which may exist is whether Delco
may recover the excess of the cost of the gun mounts procured from Calcor as
damages for "cover" under California Uniform Commercial Code section
2712. (See Gerwin v. Southeastern Cal. Assn. of Seventh Day Adventists (1971)
14 Cal. App. 3d 209, 217-218 [92 Cal. Rptr. 111].) If so, differences in
specifications issued to Thiem and to Calcor may be relevant. However,
discovery by Thiem from Delco should normally provide it with this evidence. As
between parties to litigation and nonparties, the burden of discovery should be
placed on the latter only if the former do not possess the material sought to
be discovered. An exception to this may exist where a showing is made the
material obtained from the party is unreliable and may be subject to
impeachment by material in possession of the nonparty. Thiem has not even
attempted to demonstrate why it cannot obtain the needed materials from Delco
or why such materials might be unreliable.
(Calcor Space Facility, supra, 53 Cal.App.4th at 224-25 [bold
emphasis and underlining added].)
Because
Plaintiffs have not submitted any opposition demonstrating such good cause, the
Court will grant Defendants’ requested protective order.
Defendants’
motion for a protective order is GRANTED on the terms as requested by
Defendants.
Motion For An Undertaking
Defendants also move pursuant to Civ. Proc. Code, § 1030 for an order requiring Plaintiffs to post undertakings to secure an award of costs and/or attorneys’ fees which may be awarded in this action.
This motion was filed on March 16, 2023, before the First Amended Complaint was filed on March 24, 2023. A hearing on the demurrer and motion to strike as to the First Amended Complaint is set to be heard on May 17, 2023. The Court finds it appropriate to hear the motion for an undertaking at the same time as the demurrer and motion to strike. As such, the hearing on the motion for an undertaking is CONTINUED to May 17, 2023 at 8:30 a.m.