Judge: Edward B. Moreton, Jr, Case: 23SMCV01823, Date: 2025-02-20 Tentative Ruling

Case Number: 23SMCV01823    Hearing Date: February 20, 2025    Dept: 205

Superior Court of California

County of Los Angeles – West District

Beverly Hills Courthouse / Department 205

BACKGROUND

Plaintiff Stealth Sweets Inc. dba TiDBiTS Candy (hereinafter “Plaintiff”) is a family-owned candy company. Plaintiff hired Defendants Mercenary Consulting, LLC, Mercenary Holdings, Inc., Mercenary Strikepoint, LLC, Mercenary Ventures, LLC, The Mercenary Collective, LLC, Semper Industries, LLC, Adam Louras, Austin Murray, and Jacob Timony (collectively, “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, that Defendants failed to develop the gummy candies in accordance with Plaintiff’s specifications, ant that Defendants 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.

On November 14, 2024, Plaintiff served non-party Drink Barcode, Inc. (hereinafter, “Barcode”) with a subpoena for personal appearance and for production of business records.  (Motion at pg. 6; Newman Decl., Exh. A.) Plaintiff also personally served substantially similar subpoenas on Barcode’s founder and CEO Mubarak Malik on November 22, 2024. (Id., Exh. B.) Thereafter, on December 2, 2024 and December 4, 2024, Barcode served objections to the subpoenas. (Id., Exh. C-E.) Mr. Malik also served objections to the subpoenas served on him on December 13, 2024 and December 17, 2024.  (Id., Exh. F-G.) The subpoenas seek documents and testimony regarding Barcode’s business relationship with the Defendants.   

This hearing is on Plaintiff’s motion to compel Barcode to comply with the Subpoenas.  Plaintiff argues that the subpoenas seek relevant evidence that will support its claims that Defendants “committed fraud in the production of food products for Plaintiff by misrepresenting information about the ingredients in those products and providing false ingredient statements.” (Motion at pg. 4.)

LEGAL STANDARD

The California Code of Civil Procedure permits discovery from a nonparty through a subpoena for the production of business records.  (Cal. Civ. Proc. Code, §§ 2020.010, 2020.020.)  Section 19871.1 authorizes a party seeking discovery from a third-party through a subpoena to bring a motion to compel compliance with that subpoena. (Cal. Civ. Proc. Code, § 1987.1.) The moving party is only required to show that the “production sought is subject to discovery.”  (Cal. Civ. Proc. Code, § 2025.480(i).)  There is no requirement that the moving party show good cause to compel either testimony or document production from a third party.  (Cal. Civ. Proc. Code, at §§ 1987.1, 2020.240, 2025.480.)

“[A] civil litigant’s right to discovery is broad.”  (Yelp Inc. v. Superior Court (2017) 17 Cal. App. 5th 1, 15.)  “[A]ny party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action ... if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.”  (Id.) “[S]tatutes governing discovery ‘must be construed liberally in favor of disclosure unless the request is clearly improper by virtue of well-established causes for denial.”’ (Id.)  “This means that ‘disclosure is a matter of right unless statutory or public policy considerations clearly prohibit it.”’ (Id.) 

The opposing party bears the burden of justifying its refusal to comply with the subpoena.  (See Williams v. Superior Court (2017) 3 Cal. 5th 531, 541 {while a propounding party has the burden “of filing a motion to compel if it finds the answers it receives unsatisfactory, the burden of justifying any objection and failure to respond remains at all times with the party resisting” discovery]; see also Vasquez v. California Sch. of Culinary Arts, Inc. (2014) 230 Cal. App. 4th 35, 42 [holding that the “subpoenaed person bears the burden of establishing … inaccessibility” when opposing production of electronically stored information on burden grounds].)

DISCUSSION

As a preliminary matter, the Court finds that the instant motion is untimely. Pursuant to Code of Civil Procedure § 2024.020, “any party shall be entitled as a matter of right to complete discovery proceedings on or before the 30th day, and to have motions concerning discovery heard on or before the 15th day, before the date initially set for the trial of the action.” In this instance, trial was initially set for March 3, 2025. While trial was continued to May 19, 2025 pursuant to a stipulation amongst the parties, that stipulation expressly declined to also continue the statutory discovery deadlines. (See September 19, 2024 Stipulation.) Even though Plaintiff filed the instant motion more than thirty days before the initially scheduled trial date, the hearing was ultimately set beyond the 15-day deadline. In order for the instant motion to be considered timely in accordance with Code of Civil Procedure § 2024.020, the hearing should have been held on February 18, 2025, not February 20, 2025.[1]

In its reply, Plaintiff raises several arguments as to why the instant motion should be considered timely, but none are persuasive. First, Plaintiff relies on the Court’s January 23, 2025 minute order following an informal discovery conference wherein it was stated that Plaintiff could file its motion to compel if needed. (Reply at pg. 2; see also January 23, 2025 Minute Order.) However, this order does not absolve Plaintiff’s responsibility to abide by the pertinent discovery rules. In particular, the order that Plaintiff relies on is silent on the issue of whether the discovery deadlines have been extended. Thus, this order does not stand for the proposition that the Court deemed the instant motion timely.

Second, Plaintiff argues that Code of Civil Procedure § 2024.020(a) is based on the scheduled trial date, not the initial trial date. (Reply at pg. 3, relying on Kaplan v. Mamelak (2008) 162 Cal. App. 4th 637, 642 fn.4.) This interpretation is unpersuasive because it directly contradicts the express language of the statute, which anchors the discovery deadlines to the initially set trial date. In this action, March 3, 2025 was the initially set trial date. Therefore, it is immaterial that the trial date was later rescheduled to May 19, 2025.

Third, Plaintiff contends that it was unable to strictly abide by the 15-day discovery motion hearing deadline because Plaintiff was constricted by the 16-court-day notice period set forth in Code of Civil Procedure § 1005(b) and the Court’s own calendar. (Reply at pp. 3-4.) Thus, Plaintiff reasons that it should not be punished for scheduling the hearing on February 20, 2025 when it was the earliest available date on the Court’s calendar that complied with the statutory notice requirement. While the Court understands that Plaintiff’s counsel was seeking to comply with the statutory notice requirements and was initially limited by the Court’s own schedule, Plaintiff was not without recourse to ensure that its motion was heard before the discovery motion hearing cutoff deadline. Specifically, Plaintiff chose not to move ex parte to have the motion heard on an earlier date that would have complied with Code of Civil Procedure § 2024.020(a) and/or to have shortened the notice period requirement.  Therefore, it is a mischaracterization to suggest that Plaintiff is being punished.

Fourth, Plaintiff argues that Barcode is estopped from relying on an earlier discovery deadline pursuant to the doctrine of equitable estoppel. (Reply at pg. 4.) In particular, Plaintiff contends that it was lured by Barcode’s false assurances that it was reviewing its documents for production, and this prevented Plaintiff from filing its motion sooner. (Ibid., relying on Sears, Roebuck & Co. v. National Union Fire Ins. Co. of Pittsburgh (2005) 131 Cal. App. 4th 1342, 1351.)

In order for the doctrine of equitable estoppel to apply, Plaintiff must have been detrimentally affected by the other party’s conduct in order for it to apply. (Lusardi Construction Co. v. Aubry (1992) 1 Cal. 4th 976, 994.) Under the circumstances, the Court does not find that Barcode’s conduct is sufficient to invoke the doctrine of equitable estoppel. (Cuadros v. Superior Court (1992) 6 Cal.App.4th 671, 675 [“The determination of whether a defendant's conduct is sufficient to invoke the doctrine is a factual question entrusted to the trial court’s discretion.”].) Here, Plaintiff relies only on the meet and confer efforts that took place in December 2024 and suggests that because Barcode chose to wait until December 23, 2024 to inform Plaintiff of its intention to only provide a declaration in response to the subpoenas that Plaintiff was prevented from securing an earlier hearing date. However, as stated above, Plaintiff was not without recourse from ensuring that the instant motion was heard timely. As a result, the Court declines to find that Plaintiff was detrimentally effected by Barcode’s conduct.

Accordingly, because Plaintiff’s motion is untimely, the motion is denied. To the extent that Barcode seeks monetary sanctions against Plaintiff pursuant to Code of Civil Procedure §§  2025.480(j) or 1987.2(a), it is noted that Barcode has failed to set forth any evidence to show the amount in attorney fees it has incurred in opposing the instant motion. Thus, it would be unjust to award monetary sanctions without a determination of whether those fees are reasonable.

CONCLUSION

               For the foregoing reasons, the Court DENIES the motion to compel Drink Barcode, Inc. to comply with Plaintiff’s deposition subpoenas.     

DATED:  February 20, 2025                                               ___________________________

Edward B. Moreton, Jr.

Judge of the Superior Court