Judge: Mel Red Recana, Case: 23STCV21994, Date: 2024-08-13 Tentative Ruling
Case Number: 23STCV21994 Hearing Date: August 13, 2024 Dept: 45
Hearing
date: August
13, 2024
Moving
Party: Plaintiffs
Realtek Semiconduct Corp. and Steven Baik
Responding
Party: Defendants
Winston & Strawn LLP and David P. Enzminger
Motion
for Leave to Propound Discovery
The Court
considered the moving papers, opposition, and reply.
The
motion is GRANTED.
Background
Plaintiffs
Realtek Semiconductor Corp. (“Realtek”) and Steven Baik (“Baik”) (collectively,
“Plaintiffs”) initiated this legal malpractice claim on September 12, 2023
against Defendants Winston & Strawn LLP (“Winston”) and David Paul
Enzminger (“Enzminger”) (collectively, “Defendants”). The operative Second
Amended Complaint (“SAC”), filed on March 11, 2024, alleges the following
causes of action against Defendants: (1) breach of fiduciary duty (Realtek v.
Defendants); (2) breach of fiduciary duty (Baik v. Defendants) ; (3) legal
malpractice (Baik v. Defendants); and (4) breach of contract (Realtek v.
Winston).
As
alleged in the SAC, Defendants had breached their duties to former client
Realtek and then-current client Biak. Baik served as outside litigation counsel
for Realtek in 2014, and in March 2014, Baik requested Winston to serve as
counsel for Realtek in relation to patent infringement investigations. However,
Defendants had and continue to represent Advanced Micro Devices (“AMD”) in an
adverse relation to Plaintiff even though they represented Baik and had
represented Realtek in a substantially related matter.
On
March 25, 2024, Defendants filed their anti-SLAPP motion directed at the SAC,
which is scheduled to be heard on January 21, 2025.
On
May 14, 2024, Plaintiffs filed the instant motion to propound discovery
pursuant to Code of Civil Procedure § 425.16(g). Defendants oppose.
Legal
Standard
Code of Civil
Procedure section 425.16(g), provides that “[a]ll discovery proceedings in [an]
action shall be stayed upon the filing of a notice of motion made pursuant to”
Code of Civil Procedure section 425.16. Such stay “shall remain in effect until
notice of entry of the order ruling on the motion,” but the Court, “on noticed
motion and for good cause shown, may order that specified discovery be
conducted notwithstanding this subdivision.” (Code Civ. Proc., §
425.16(g).)
“Good cause”
means only discovery relevant to the plaintiff/cross-complainant’s burden of
establishing a “reasonable probability of prevailing on the claim.” (CCP
§ 425.16(b)(3).) Discovery that is not relevant to a legal defense being
asserted by the defendant/cross-defendant in the anti-SLAPP motion is not
permitted. (Blanchard v. DIRECTV, Inc. (2004) 123 Cal.App.4th 903,
922.) The moving party must demonstrate the facts they expect to uncover
in their discovery. (Id.)¿
“If the
plaintiff makes a timely and proper showing in response to the motion to
strike, that a defendant or witness possesses evidence needed by plaintiff to
establish a prima facie case, the plaintiff must be given the reasonable
opportunity to obtain that evidence through discovery before the motion to
strike is adjudicated.” (Lafayette Morehouse, Inc. v. Chronicle Publishing
Co. (1995) 37 Cal.App.4th 855, 868.) For that reason, the Court “must
liberally exercise its discretion by authorizing reasonable and specified
discovery timely petitioned for by a plaintiff . . . when evidence to establish
a prima facie case is reasonably shown to be held, or known, by defendant or
its agents and employees.” (Ibid.)
Discussion
Plaintiffs seeks to propound the
following discovery in anticipation of Defendants’ anti-SLAPP motion: (1) one
set of requests for production; (2) one set of requests for admissions; (3) one
set of form interrogatories; (4) the deposition of Ensminger; and (5) subpoenas
duces tecum to Reed Smith LLP and Sidley & Austin LLP.
Plaintiffs argue that there is good
cause to allow them to conduct the aforementioned discovery because the
information sought is intended to support their probability of prevailing on
the merits of each of the claim in the SAC. In particular, the discovery seeks
“the scope of Winston’s prior work for Realtek, the extent to which there is a
substantial relationship between the adversity to Realtek and the prior work
for Realtek, and the acquisition of confidential Realtek information.” (Motion
at pg. 17.) Plaintiffs further explain how each requested discovery would aid
in establishing a prima facie case for their claims against Defendants. For
instance, Plaintiffs assert that for Realtek’s breach of fiduciary duty claim,
it must show that Winston had breached his duty to his former client, Realtek,
by working for a current client on a matter substantially related to the prior
representation or had used confidential information in the current adverse
representation. (Id. at pg. 15.) Plaintiffs reason that evidence must be
produced to establish the scope of the former representation and Winston’s
access to confidential information. (Id. at pp. 16.) For this reason,
Plaintiffs point out that Requests for Admissions Nos. 5-12, 15, 22, Enzimger’s
deposition, and the subpoenas to Reed Smith and Sidley & Austin would aid
in establishing the scope of the former representation. (Id. at pp.
18-19.)
As to Realtek’s breach of contract
claim, Plaintiffs assert that Realtek must establish the terms of the contract
and Winston’s breach. In order to do so, Enzimger’s recollections and emails
would support a prima facie case that Winston had breached its contract with
Realtek. (Id. at pg. 16.) For this reason, Plaintiffs contend that Request
for Production Nos. 1-9, 11-16, 21-24, 26, 28-29 and 32 are vital in proving
the breach of contract claim. (Id. at pg. 17.)
Similarly, for Baik’s
claims for breach of fiduciary duty and legal malpractice, Plaintiffs assert
that they rest on the scope and timing of Winston’s representation. (Id. at pg. 16.) Thus,
Plaintiffs assert that Request Nos. 17-20, 23, 27 and 29, Request for
Admissions Nos. 1-4, 13, and Enzminger’s deposition are necessary to support
Baik’s claims.
In opposition, Defendants first
argue that the “good cause” standard for discovery pursuant to Code of Civil
Procedure § 425.16(g) is a much higher bar than what Plaintiffs articulate in
their motion. (Opposition at pp. 4-5.) Instead, Defendants contend that
Plaintiffs must show that the specific discovery is necessary for Plaintiffs to
oppose the anti-SLAPP motion. (Opposition at pg. 4, relying on Britts v.
Super. Ct. (2006) 145 Cal. App. 4th 1112, 1125 and Paterno v. Super. Ct.
(2008) 163 Cal. App. 4th 1342, 1348.) Consequently, Plaintiffs would need to
explain the facts that it expects to uncover in discovery. (Id., relying
on 1-800 Contacts, Inc. v. Steinberg (2003) 107 Cal. App. 4th 568, 593.)
In
light of this understanding, Defendants argue that Plaintiffs have failed to
establish good cause for the following reasons. First, Defendants argue that
their anti-SLAPP motion turns on the legal issue of whether the litigation
privilege under Civil Code § 47(b) applies. (Opposition at pp. 6-7.) However,
this argument is not persuasive because, as Plaintiffs point out in reply,
Defendants’ anti-SLAPP motion raises factual questions of whether their prior
representation of Realtek is substantially related to their representation of
AMD against Realtek. (See Anti-SLAPP Motion at pp. 14-15.) Additionally, the
issue of the scope of the engagement agreement would be a factual issue.
Moreover, the litigation previously does not apply to legal malpractice or breach
of fiduciary duty claims by a client against their former counsel. (Kolar v.
Donahue, McIntosh & Hammerton
(2006)145 Cal.App.4th 1532, 1541; Fremont Reorganizing Corp. v. Faigin (2011)
198 Cal.App.4th 1153, 1173–1174.)
Second,
Defendants contend that Plaintiffs have not shown that the requested discovery
is necessary to oppose the anti-SLAPP motion because they do not identify what
types of facts they are trying to uncover and are merely trying to develop a
full factual record of the case. (Opposition at pp. 7-8.) However, this
argument is also not persuasive. As stated above, the discovery that Plaintiffs
seek is necessary in order to establish the scope of the representation that
Winston had provided to Plaintiffs, and this information is necessary in
determining whether Defendants had breached their fiduciary duty or contract
with Plaintiffs.
Third,
Defendants argue that the proposed discovery is not tailored to the anti-SLAPP
motion because it seeks discovery beyond the issues raised within that motion.
(Opposition at pp. 9-11.) For instance, Defendants object to Request for
Admission No. 7 that seeks the employment history of one of Winston’s former
attorneys. While the SAC does not refer to this attorney in particular, this is
not dispositive because Plaintiffs believe that he was involved in providing
legal services to Realtek. Second, Defendant objects to Form Interrogatory No.
15.1, but Plaintiffs are willing to withdraw this discovery request. (Reply at
pg. 11.)
Third,
Defendants contend that the documents relating to Baik’s potential employment
with Winston is not narrowly tailored to the issues raised in the anti-SLAPP
motion. (Opposition at pp. 9-10.) Plaintiffs maintain that these documents are
relevant because it is believed that the discussions were interconnected with
Winston’s representation of Realtek. (Reply at pg. 9.) As to this form of
discovery, the Court finds that it is narrowly tailored to the issues raised in
the anti-SLAPP motion because it concerns Defendants’ representation of
Realtek.
Fourth,
Defendants assert that Winston’s pre-billed hours is not relevant to the scope
of the representation because there is no indication that Winston did not
record all of its time when representing Realtek. (Opposition at pg. 10.) In
reply, Plaintiffs contend that these pre-billed hours are necessary to show
whether Defendants had marked down their bills, and if they were, then it would
show Winston’s representation was more expansive than they let on in their
anti-SLAPP motion. (Reply at pg. 9.) Considering this discovery request would
provide information on how substantial Defendants’ involvement was, the Court
finds that it is narrowly tailored for the purposes here.
Fifth,
Defendants argue that payments to Winston from other clients is not narrowly
tailored to the issues raised in their anti-SLAPP motion. (Opposition at pg.
10.) As to this discovery request, Plaintiffs are willing to withdraw this
discovery request on the condition that Defendants stipulate to the fact that
they were paid by AMD and by Krafton for their representation. (Reply at pg.
11.) Because the issue of whether Defendants were paid from other clients is
relevant to Plaintiffs’ disgorgement theory, the Court finds that the proposed
stipulation to be reasonable.
Sixth,
Defendants argue that the subpoenas to other law firms are not relevant and
reason that Plaintiffs likely have access to this information. (Opposition at
pp. 10-11.) However, as Plaintiffs have articulated, they lack access to
complete client files from those firms, and these documents would have
communications regarding the scope of Defendants’ representation. (Reply at pp.
9-10.) Thus, the Court finds that these documents are narrowly tailored to the
issues raised in the anti-SLAPP Motion.
Lastly,
Defendants contend that Enzminger’s deposition is not tailored to the
anti-SLAPP motion because it seeks to uncover facts that underlie all of
Plaintiffs’ claims. (Opposition at pg. 11.) In reply, Plaintiffs contend that
they seek to depose Enzminger to clarify issues that are not addressed in his
declaration, and these include the following: (1) “issues relating to the scope
of the representation as actually performed.” (2) “the work performed or the
subject matters of his communications with Plaintiffs, including whether they
involved either the domestic industry issue or the terms of the settlement with
LSI/Avago,” (3) “the confidential information he and Winston & Strawn
obtained through that representation,” and (4) his negotiations of the 2019 fee
agreement, which is at issue of the breach of contract claim. (Reply at pg.
10.) Presuming that Enzminger’s deposition is limited to these issues, the
Court finds that the deposition is narrowly tailored to the issues raised in
the anti-SLAPP motion because they relate to the substantial relationship
issues that has been raised in that motion.
Therefore,
the Court finds that Plaintiffs have established good cause for the requested
relief and the discovery sought, except as indicated within this order, is
narrowly tailored to the issues raised in Defendants’ anti-SLAPP motion.
Based
on the foregoing, Plaintiffs’ Motion for Leave to Propound Discovery is
GRANTED.
It
is so ordered.
Dated: August 13, 2024
_______________________
MEL RED RECANA
Judge of the
Superior Court