Judge Holly J. Fujie, Case Number: 20STCP04290, Date: 2024-01-12 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

MOVING PARTY: Defendants Regency Outdoor Advertising, Inc. (“Regency”), Skyline Outdoor Media LLC, and Brian Kennedy (“Brian”) (collectively, “Moving Defendants”)[1]

The currently operative fifth amended complaint (the “5AC”) alleges: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) breach of fiduciary duty; (4) fraud; (5) intentional interference with contractual relations; and (6) aiding and abetting breach of fiduciary duty.

The cross-complaint (the “XC”) alleges: (1) breach of fiduciary duty; (2) breach of covenant of good faith and fair dealing; (3) misappropriation of trade secrets; (4) common law right of publicity; (5) statutory misappropriation of name and likeness; (6) trademark infringement; (7) intentional interference with prospective economic relations; (8) unfair business practices; and (9) unjust enrichment.

On December 15, 2023, Moving Defendants filed four motions to quash (collectively, the “Motions”) the deposition subpoenas (collectively, the “Subpoenas”) that Plaintiff served on non-parties BDO, USA, P.C. (“BDO”); FTI Consulting, Inc. (“FTI”); Macias, Gini & O’Connell, LLP (“MGO”); and Manatt, Phelps & Phillips, LLP (“Manatt”).

Moving Defendants’ and Plaintiff’s Requests for Judicial Notice are GRANTED as to the existence of the documents, but not to the truth of the matters stated therein. (Dominguez v. Bonta (2022) 87 Cal.App.5th 389, 400.)

Under California Code of Civil Procedure (“CCP”) section 1987.1, subdivision (a), if a subpoena requires the attendance of a witness or the production of books, documents, electronically stored information, or other things before a court, or at the trial of an issue therein, or at the taking of a deposition, the court, upon motion made by any person described in CCP section 1987.1, subdivision (b), or upon the court’s own motion after giving counsel notice and an opportunity to be heard, may make an order quashing the subpoena entirely, modifying it or directing compliance with it upon those terms or conditions as the court shall declare. (CCP § 1987.1, subd. (a).)

CCP section 1985.3, subdivision (b) provides: prior to the date called for in the subpoena duces tecum for the production of personal records, the subpoenaing party shall serve or cause to be served on the consumer whose records are being sought a copy of the subpoena duces tecum, of the affidavit supporting the issuance of the subpoena, if any, and of the notice described in subdivision (e), and proof of service as indicated in paragraph (1) of subdivision (c). This service shall be made as follows:

(1) To the consumer personally, or at his or her last known address, or in accordance with Chapter 5 (commencing with Section 1010) of Title 14 of Part 3, or, if he or she is a party, to his or her attorney of record. If the consumer is a minor, service shall be made on the minor's parent, guardian, conservator, or similar fiduciary, or if one of them cannot be located with reasonable diligence, then service shall be made on any person having the care or control of the minor or with whom the minor resides or by whom the minor is employed, and on the minor if the minor is at least 12 years of age;

(2) Not less than 10 days prior to the date for production specified in the subpoena duces tecum, plus the additional time provided by Section 1013 if service is by mail; and

(3) At least five days prior to service upon the custodian of the records, plus the additional time provided by Section 1013 if service is by mail.

CCP section 1985.3, subdivision (c) provides: prior to the production of the records, the subpoenaing party shall do either of the following: (1) serve or cause to be served upon the witness a proof of personal service or of service by mail attesting to compliance with subdivision (b); or (2) furnish the witness a written authorization to release the records signed by the consumer or by his or her attorney of record. (CCP § 1985.3, subd. (c).)

The Manatt and FTI subpoenas were served on August 22, 2023. (See Declarations of Sarah A. Swanson (“Swanson Decl.”) ¶7, Exhibit 1.) The FTI and BDO subpoenas were served on October 27, 2023. (See Swanson Decl. ¶¶ 12-13, Exhibits 6-7.)

Between 2017 and 2019, Drake, Brian, and Regency retained Manatt to represent them as counsel to oversee the sale of Regency’s assets. (Swanson Decl. ¶ 2.) In 2018, Manatt retained BDO on Regency’s behalf to perform financial analysis related to a settlement agreement. (Swanson Decl. ¶ 3.) During this time, BDO provided unrelated services to Regency. (Id.) FTI was retained by a court-appointed receiver in another matter to perform forensic accounting, and in 2020, FTI created a Virtual Data Room (“VDR”) that is subject to a nondisclosure agreement. (Swanson Decl. ¶ 5.) MGO was responsible for preparing taxes for Moving Defendants individually. (Swanson Decl. ¶ 2.)

As a preliminary matter, the Subpoenas cited in the Motions seek consumer records because they request documents relating to Brian and Drake generally, and do not limit the requests to documents concerning their capacities as Regency’s representatives. It is undisputed that Plaintiff did not provide consumer notices as required under CCP section 1985.3, subdivision (b). Furthermore, Plaintiff’s oppositions (collectively, the “Oppositions”) do not address Moving Defendants’ argument that the information sought in the current subpoenas is duplicative of the information Plaintiff has obtained pursuant to a separate subpoena to another third party. (See Swanson Decl. ¶¶ 7, 14.) The Court therefore GRANTS the Motions.

In connection with each Motion, Moving Defendants request $10,000 in monetary sanctions. (Swanson Decl. ¶ 14.) This amount represents: eight hours preparing each Motion at a rate of $398 per hour; five hours preparing each Motion at a rate of $300 per hour; an anticipated three hours preparing reply papers at a rate of $398 per hour; an anticipated three hours preparing reply papers at a rate of $300 per hour; and an anticipated five hours reviewing each Motion and preparing for the hearing at a rate of $687 per hour. (See id.)

The Court exercises its discretion and awards Moving Defendants monetary sanctions in the total reasonable amount of $3,184, which represents eight hours preparing the Motions collectively at a rate of $398 per hour. (Moran v. Oso Valley Greenbelt Assn. (2004) 117 Cal.App.4th 1029, 1034.) Plaintiff and counsel are responsible for paying this amount within 20 days of the date of this order.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

[1] Defendant Drake (“Drake”) Kennedy filed a joinder on January 3, 2024. The Court uses first names to distinguish persons with the same last name and intends no disrespect in so doing.