Judge Lynne M. Hobbs, Case Number: 24STCP00168, Date: 2025-04-30 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 24STCP00168, Date: 2025-04-30 Tentative Ruling

Case Number: 24STCP00168 Hearing Date: April 30, 2025 Dept: 61

BRANDY QUEEN APPAREL ULC, A CANADIAN UNLIMITED LIABILITY COMPANY, et al. vs BASTIAT USA, INC., A NEVADA CORPORATION

Tentative

Petitioners Brandy Queen Apparel ULC, Brandy Yorkdale Apparel ULC, Brandy Ste. Catherine Apparel ULC, Brandy Newmarket Apparel ULC, Brandy Rideau Apparel ULC, Brandy Square One Apparel ULC, Brandy Calgary Apparel ULC, Brandy Edmonton Apparel ULC, Brandy Granville Apparel ULC, Brandy Canada Inc., Paolo Simeone, and Franco Sorgi’s Petitions to Compel Compliance of Biz Advisory Group, Inc. with Subpoenas is GRANTED. BAG is ordered to serve the compelled documents within 20 days of this Order. No sanctions are awarded.

Petitioners to give notice.

Analysis

I. MOTION TO QUASH/COMPEL COMPLIANCE WITH SUBPOENA

Code of Civil Procedure § 2029.300 authorizes the issuance of an enforceable California subpoena based on another subpoena issuing in litigation in another state. (Code Civ. Proc. § 2029.300, subd. (a).) “If a dispute arises relating to discovery under this article, any request for a protective order or to enforce, quash, or modify a subpoena, or for other relief may be filed in the superior court in the county in which discovery is to be conducted and, if so filed, shall comply with the applicable rules or statutes of this state.” (Code Civ. Proc. § 2029.600, subd. (a).)

Petitioners Brandy Queen Apparel ULC, Brandy Yorkdale Apparel ULC, Brandy Ste. Catherine Apparel ULC, Brandy Newmarket Apparel ULC, Brandy Rideau Apparel ULC, Brandy Square One Apparel ULC, Brandy Calgary Apparel ULC, Brandy Edmonton Apparel ULC, Brandy Granville Apparel ULC, Brandy Canada Inc., Paolo Simeone, and Franco Sorgi (collectively Petitioners) here seek to compel the compliance of third-party Biz Advisory Group, Inc. (BAG) with two subpoenas.

BAG is an accounting and business services firm formed by Michelle Fontanez in 2016 following her departure from Respondent Bastiat USA, Inc. (Fontanez Decl. ¶ 2.) BAG performed services for certain of Plaintiffs’ stores while they worked together with Respondent and YYGM, and after their split oversaw the transfer of certain stores to new entities, who are now BAG’s clients. (Fontanez Decl. ¶ 3.)

Petitioners here seek a further response to two subpoenas. The first seeks a response to Requests for Production No. 1–9, 20–24, 25, 27–31, 32, 34–38, 39, 67–71, 73–77 and 79–83, which Petitioners break down into the following three categories:

· Communications between BAG and Respondent, along with certain officers of Respondent, concerning three stores that were transitioned from Petitioners’ control to new entities;

· Communications between BAG, Respondent, YYGM, and certain officers thereof regarding the transition of these stores for the month following the transition; and

· Communications with Respondent, YYGM, and certain of their officers regarding merchandise sent to Petitioners’ stores.

Petitioners’ case for these requests is as follows. Among the allegations in their underlying Nevada litigation is the allegation that Respondent fraudulently or negligently induced them to transfer control of three stores to other entities with the promise of a $3 million payment, which Respondent has not paid and now denies promising. (Motion at pp. 10–11.) Petitioners contend that Respondent now denies not only making the promise, but having virtually any role in the transition, a defense that requests for communications related to the transition will test. (Motion at p. 11.) Requests related to communications regarding merchandise go toward allegations that Respondent misrepresented that certain merchandise shipped to Petitioners’ stores would qualify for certain preferential trade benefits under NAFTA, which proved untrue, forcing Petitioners to suffer penalties. (Motion at p. 7.)

BAG’s objections to this subpoena are unsupported. BAG contends that the subpoena was served without a notice to consumer. (Opposition at pp. 4–6.) Yet a notice to consumer is required only when seeking the “personal records” of a “consumer,” i.e. an “individual, partnership of five or fewer persons, association, or trust which has transacted business with, or has used the services of, the witness or for whom the witness has acted as agent or fiduciary.” (Code Civ. Proc. § 1985.3, subd. (a)(2).) There is no contention that BAG transacts business with the types of person described here, or that the requests implicate any such business. The subpoena here seeks communications between BAG, Respondent, YYGM, and certain of their employees.

BAG’s argument that the request for communications with individuals renders them subject to a consumer notice is unavailing, as the requests do not concern communications made in their personal capacity, and BAG does not contend that any of the individuals named ever transacted business with it except in connection with the entities for which they worked. To embrace BAG’s position would require a notice of consumer in every case in which communications with a company are at issue, since companies cannot do business except through the individuals they employ. Such a position is excluded by the definition of “consumer” established by the legislature in Code of Civil Procedure § 1985.3.

BAG contends that the requests invade the privacy of Respondent, YYMG, and its other clients. (Opposition at pp. 6–9.) But while the documents come within the realm of corporate privacy — “The corporate right to privacy is a lesser right than that held by human beings and is not considered a fundamental right” (SCC Acquisitions, Inc. v. Superior Court (2015) 243 Cal.App.4th 741, 756) — Petitioners’ requests are justified by the good cause shown for the documents sought. (See (Hooser v. Superior Court (2000) 84 Cal.App.4th 997, 1004 [describing balancing of interests required for weighing whether to disclose private information in discovery].) Here, BAG makes little showing as to the privacy or prejudice to be suffered by the disclosure of the materials sought, and supports its contention on this point only by a conclusory paragraph contained in the declaration of Michelle Fontanez. (Fontanez Decl. ¶ 9.) Whatever concerns that exist on this point are further vitiated by the existence of a protective order in the underlying Nevada litigation.

Respondent next argues that the requests are burdensome, in that it has already produced 600 pages of documents, and has already presented Fontanez for two sessions of deposition. But Respondent, as the party asserting an undue burden objection, “has an obligation to supply the basis for this determination,” and to provide evidence “showing the quantum of work required.” (Williams v. Superior Court (2017) 3 Cal.5th 531, 549.) No such showing is made here.

The second subpoena contains Requests No. 1–20, which generally seek financial records related to the stores formerly under Petitioners’ management, and which are now operated by other entities. (Separate Statement.) The basis for these requests is Petitioners’ allegation that Respondent illegally induced the termination of Petitioners’ contracts with YYGM in retaliation for opposing Respondent’s racist and unlawful business practices, and the subpoenaed information will prove Petitioners’ lost-profits damages resulting from the transfer of their businesses to others. (Motion at pp. 11–12.)

Respondent’s arguments in response to this subpoena echo their arguments with respect to its counterpart. Once more, given the straightforward good cause for the documents sought, the limited nature of the corporate privacy interests at issue, the absence of any showing that prejudice would result from the disclosure of the information, and the existence of a protective order, there is little reason to prevent enforcement of the subpoena here.

The motions are therefore GRANTED. BAG’s requests for sanctions are denied.

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