Judge: Edward B. Moreton, Jr., Case: 23SMCV01823, Date: 2023-09-06 Tentative Ruling

Case Number: 23SMCV01823    Hearing Date: October 6, 2023    Dept: 205

Superior Court of California

County of Los Angeles

Beverly Hills Courthouse | Department 205

Background

            Plaintiff is a family-owned candy company.  Plaintiff hired Defendants to develop a line of gummy candies in accordance with certain specifications: (1) formulation of three flavors of the products working with food scientists to ensure that the products met Plaintiff’s strict requirements and expectations; (2) finding the right co-packer/co-manufacturer(s) and product blenders who would manufacture the products and then to work with those companies to ensure production met Plaintiff’s specifications; (3) finding and sourcing all ingredients for the products through multiple non-exclusive vendors who would supply those ingredients that had been approved by Plaintiff for use in the products; (4) ensuring that the products were produced according to FDA food safety rules and in compliance with Good Manufacturing Practices; and (v) ensuring that the packaging and labeling of the products including the Nutrition Facts Panels and ingredient statements on the products complied with applicable FDA regulations.

            Plaintiff alleges it hired Defendants based on Defendants’ fraudulent misrepresentations regarding their experience and abilities in product development.  Plaintiff alleges Defendants failed to develop the gummy candies in accordance with Plaintiff’s specifications.  Plaintiff alleges Defendants also charged them for services that were never done. 

            On April 26, 2023, Plaintiff filed a complaint against Defendants alleging: (1) fraud in the inducement; (2) fraud-intentional misrepresentation; (3) unfair business practices (B&PC §17200); (4) breach of contract; (5) breach of the implied covenant of good faith and fair dealing; (6) intentional interference with contractual relations; (7) intentional interference with prospective economic advantage; (8) negligent interference with economic advantage; (9) commercial disparagement; (10) money had and received; (11) unjust enrichment; (12) conspiracy to defraud.

            The hearing is on Plaintiff Stealth Sweets, Inc.’s and Cross-Defendants David and Kristi Vartanian’s (collectively “Plaintiffs”) Motion to Seal Portions of Motion for Issuance of Letters Rogatory and Motion to Seal Portions of Reply in Support of Protective Order.  In response to Plaintiffs’ Motions to Seal, Defendants and Cross-Complainants filed separate statements of agreement with Plaintiffs’ Motions to Seal.               

Legal Standard

            Unless confidentiality is required by law, court records are presumed to be open to the public pursuant to CRC 2.550(c).  However, as stated in Mercury, CRC Rules 2.550 and 2.551 “create a presumption of public access to some, but not all, court-filed documents. The sealed records rules ‘do not apply to discovery motions and records filed or lodged in connection with discovery motions or proceedings. However, the rules do apply to discovery materials that are used at trial or submitted as a basis for adjudication of matters other than discovery motions or proceedings.’” Mercury, supra, 158 Cal.App.4^th 60, 68 (quoting CRC Rule 2.550(a)(3).

            As such, the restrictions (1) that “a record must not be filed under seal without court order,” (CRC 2.551(a)); (2) that “a court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties” (CRC 2.551(a)); and (3) that a court may only order a record be sealed if it expressly makes the NBC findings of fact required under CRC Rule 2.550(d) do not apply to “discovery motions and records filed or lodged in connection with discovery motions or proceedings.” 

Analysis

            Plaintiffs move to seal portions of their Amended Motion for Issuance of Letters Rogatory, the Declaration of Daniell K. Newman ISO Amended Motion for Issuance of Letters Rogatory and the attached exhibits in support of the Letters Rogatory.  The Amended Motion for Issuance of Letters Rogatory is a discovery motion pursuant to CCP §2027.010.  Newman’s declaration in support of the Amended Motion for Issuance of Letters Rogatory and attached exhibits are records filed in connection with a discovery motion. 

            As such, CRC Rules 2.550 and 2.551 do not apply to this Motion to Seal.  The Court need not make express factual findings under CRC Rule 2.550(d), and the Court may issue an order sealing the subject documents based solely on the parties’ agreement. 

            Plaintiffs argue the documents they move to seal contain confidential and proprietary business and trade information involving key ingredients and formulations for Plaintiffs’ gummy candy products.  Newman Dec., ¶2.  Cross-complainants also filed a statement of agreement with Plaintiffs’ motions to seal. 

            There being no opposition to the Motion to Seal the Amended Motion for Issuance of Letters Rogatory, Plaintiffs’ Motion is granted.

Conclusion

            Based on the foregoing, Plaintiffs’ Amended Motion to Seal the Amended Motion for Issuance of Letters Rogatory is GRANTED. 

Dated:

__________________________________________

Edward B. Moreton, Jr.

Judge of the Superior Court

Superior Court of California

County of Los Angeles

Beverly Hills Courthouse | Department 205

Background

            Plaintiff is a family-owned candy company.  Plaintiff hired Defendants to develop a line of gummy candies in accordance with certain specifications: (1) formulation of three flavors of the products working with food scientists to ensure that the products met Plaintiff’s strict requirements and expectations; (2) finding the right co-packer/co-manufacturer(s) and product blenders who would manufacture the products and then to work with those companies to ensure production met Plaintiff’s specifications; (3) finding and sourcing all ingredients for the products through multiple non-exclusive vendors who would supply those ingredients that had been approved by Plaintiff for use in the products; (4) ensuring that the products were produced according to FDA food safety rules and in compliance with Good Manufacturing Practices; and (v) ensuring that the packaging and labeling of the products including the Nutrition Facts Panels and ingredient statements on the products complied with applicable FDA regulations.

            Plaintiff alleges it hired Defendants based on Defendants’ fraudulent misrepresentations regarding their experience and abilities in product development.  Plaintiff alleges Defendants failed to develop the gummy candies in accordance with Plaintiff’s specifications.  Plaintiff alleges Defendants also charged them for services that were never done. 

            On April 26, 2023, Plaintiff filed a complaint against Defendants alleging: (1) fraud in the inducement; (2) fraud-intentional misrepresentation; (3) unfair business practices (B&PC §17200); (4) breach of contract; (5) breach of the implied covenant of good faith and fair dealing; (6) intentional interference with contractual relations; (7) intentional interference with prospective economic advantage; (8) negligent interference with economic advantage; (9) commercial disparagement; (10) money had and received; (11) unjust enrichment; (12) conspiracy to defraud.

            The hearing is on Plaintiff Stealth Sweets, Inc.’s and Cross-Defendants David and Kristi Vartanian’s (collectively “Plaintiffs”) Amended Motion for Issuance of Letters Rogatory filed on September 20, 2023.  Plaintiffs move for an order pursuant to CCP §2027.010 directing issuance of letters rogatory addressed to the appropriate courts of judicial authority located in Ontario, Canada requesting the appointment of a person to receive the production of documents from Miski Organics, 70 Ellis Drive, Unit 4, Barrie, ON L4N 8Z3, Canada. 

            Defendants and Cross-Complainants (collectively “Cross-Complainants”) filed a statement of non-opposition on September 26, 2023. 

Legal Standard

CCP §2017.010

Unless otherwise limited by order of the court in accordance with this title, any party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action or to the determination of any motion made in that action, if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence. Discovery may relate to the claim or defense of the party seeking discovery or of any other party to the action. Discovery may be obtained of the identity and location of persons having knowledge of any discoverable matter, as well as of the existence, description, nature, custody, condition, and location of any document, electronically stored information, tangible thing, or land or other property.

CCP §2027.010                     

      (a) Any party may obtain discovery by taking an oral deposition, as described in Section 2025.010, in a foreign nation. Except as modified in this section, the procedures for taking oral depositions in California set forth in Chapter 9 (commencing with Section 2025.010) apply to an oral deposition taken in a foreign nation.

      (b) If a deponent is a party to the action or an officer, director, managing agent, or employee of a party, the service of the deposition notice is effective to compel the deponent to attend and to testify, as well as to produce any document, electronically stored information, or tangible thing for inspection, copying, testing, or sampling.

      (c) If a deponent is not a party to the action or an officer, director, managing agent or employee of a party, a party serving a deposition notice under this section shall use any process and procedures required and available under the laws of the foreign nation where the deposition is to be taken to compel the deponent to attend and to testify, as well as to produce any document, electronically stored information, or tangible thing for inspection, copying, testing, sampling, and any related activity.

      (d) A deposition taken under this section shall be conducted under the supervision of any of the following:

(1) A person who is authorized to administer oaths or their equivalent by the laws of the United States or of the foreign nation, and who is not otherwise disqualified under Section 2025.320 and subdivisions (b) to (f), inclusive, of Section 2025.340.

(2) A person or officer appointed by commission or under letters rogatory.

(3) Any person agreed to by all the parties.

            (e) On motion of the party seeking to take an oral deposition in a foreign nation, the court in which the action is pending shall issue a commission, letters rogatory, or a letter of request, if it determines that one is necessary or convenient. The commission, letters rogatory, or letter of request may include any terms and directions that are just and appropriate. The deposition officer may be designated by name or by descriptive title in the deposition notice and in the commission. Letters rogatory or a letter of request may be addressed: “To the Appropriate Judicial Authority in [name of foreign nation].”

            Letters rogatory are the usual and accepted method of taking depositions in a foreign country in a civil law nation.  Volkswagenwerk Aktiengesellschaft v. Superior Court (1973) 33 Cal.App.3d 503, 507.  Commissions or “letters rogatory” “are basically letters of request to the foreign government, asking it to appoint a deposition officer and to order the witness to appear and testify before such officer.”  Weil et al., Cal. Prac. Guide: Civil Procedure Before Trial (The Rutter Group 2020), ¶ 8:647.  As a discovery matter, whether letters rogatory for foreign deposition should be issued is generally a question resting in the discretion of the court.  M. Kennel, 23 Am. Jur. 2d Depositions and Discovery § 17 (May 2003); see generally Philippine Export & Foreign Loan Guarantee Corp. v. Chuidian (1990) 218 Cal.App.3d 1058, 1084 (management of discovery matters is within sound discretion of the court).  

            Although the cooperation of an unwilling foreign deponent is insured by local courts acting upon a letter rogatory, the execution of the letter in the first instance rests upon principles of international comity, and is in that sense discretionary with the issuing American court. Kennel, supra, 23 Am. Jur. 2d Depositions and Discovery § 17.  State courts have the power to issue letters rogatory directly to foreign governments.  Id. (citing 28 U.S.C.A. § 1781(b)).

            Courts asked to enforce a letter rogatory ordinarily presume that the request is proper.  Id.  There is nothing in the law requiring or suggesting that American courts should examine information requested by letter rogatory to determine whether that information comports with the discovery rules of the requesting nation.  Id.  “Thus, the enforcing court usually does not reach such technical questions as whether the foreign tribunal has jurisdiction over the case or whether the evidence sought would be admissible in that court; however, a United States court may determine if departures from American concepts of fundamental due process and fairness are involved.”  Id.         

Analysis

            Plaintiffs move for issuance of letters rogatory pursuant to CCP §2027.010.  Plaintiffs seek issuance of a letters rogatory for deposition of the custodian of record and receipt of production of documents from Miski Organics, 70 Ellis Drive, Unit 4, Barrie, ON L4N 8Z3, Canada.  Plaintiffs seek both deposition of the custodian of records and production of documents from Miski Organics.  Motion, Attachment 1.

            Plaintiff demonstrates that deposition of Miski Organics’ custodian of records and production of records are relevant pursuant to CCP §2017.010.  Defendant Mercenary Consulting, LLC listed Miski Organics as a vendor of ingredients for at least three different formulas of food products that were produced for Plaintiffs.  Newman Dec., ¶2, Ex. B.  Plaintiff’s complaint is based on Defendants’ failure to develop the product in conformity with Plaintiff’s specifications, including fraudulent misrepresentations regarding what ingredients were used in the product.  As one of the identified suppliers of ingredients used in the product, deposition of Miski Organics and production of documents will either be “itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.”  Code of Civ. P., §2017.010.

            Issuance of letters rogatory is also necessary and convenient per CCP §2027.010(e).  Miski Organics is allegedly located in Ontario, Canada.  Courts of Ontario recognize and enforce letters rogatory issued by courts of foreign jurisdictions pursuant to their rules of court.  Newman Dec., Ex. C.  Letters rogatory for a foreign deposition are necessary.  Volkswagenwerk Aktiengesellschaft v. Superior Court (1973) 33 Cal.App.3d 503, 507.  Defendants do not oppose issuance of letters rogatory for deposition of Miski Organics. 

Conclusion

            Based on the foregoing, Plaintiff’s Amended Motion for Issuance of Letters Rogatory is

 GRANTED.  Plaintiff is to submit a proposed order.

Dated:

__________________________________________

Edward B. Moreton, Jr.

Judge of the Superior Court