Judge: Richard Y. Lee, Case: 30-2022-01246272, Date: 2022-10-20 Tentative Ruling
Defendants MBR MEDICAL BEAUTY RESEARCH NORTH AMERICA LLC, AUTEUR, LLC, and ERIN MIHOK (collectively, “Defendants”) and non-parties MBR Beauty Research Corp. and Northwest Asset Management Trust and Auteur Trust will and hereby do move the Court for an order quashing the May 17, 2022 Deposition Subpoenas for Production of Business Records served by Plaintiff MBR COSMETICS USA, LLC (“Plaintiff”) on: (1) First Republic Bank; (2) Wells Fargo Bank; (3) US Bank, (4) Elavon, Inc.; (5) City National Bank; (6) Citibank N.A.; (7) J.P. Morgan Chase; and (8) Bank of America (“Subpoenas”). In the alternative, Defendants seek a protective order denying the production of business records requested by Plaintiff in the Subpoenas. Defendants also will move and hereby do move this Court for an order compelling Plaintiff and its counsel of record, BROWN & CHARBONNEAU, LLP, to pay sanctions, jointly and severally, to Defendants in the amount of $7,285 representing reasonable attorneys’ fees and expenses incurred in bringing this Motion pursuant to California Code of Civil Procedure section 2031.300.
Here, on May 17, 2022, Plaintiff MBR COSMETICS USA, LLC served Deposition Subpoenas for Production of Business Records on eight (8) entities: (a) First Republic Bank, (b) Wells Fargo Bank; (c) US Bank; (d) Elavon, Inc.; (e) City National Bank; (f) Citibank N.A.; (g) J.P. Morgan Chase; and (h) Bank of America. (Decl. of Berman ¶ 2, Ex. A.)
As to each subpoena, Plaintiff sought account information as to the following:
1. MBR Medical Beauty Research North America, LLC. Potential address information: 8484 Wilshire Blvd., Suite 540, Beverly Hills, CA 90211 1785 E. Sahara Ave., Suite 490-1305, Las Vegas, NV 89104
2. MBR Medical Beauty Research Corp.
3. Auteur LLC
4. Erin Mihok Potential address information: 1130 N. Wetherly Dr., West Hollywood, CA 90069
As to the seven bank entities, Plaintiffs served eighteen (18) requests for production of documents.
As to Elavon, Inc, Plaintiff served ten (10) requests for production of documents.
The relevant time period for requested documents was: May 17, 2015 - present
By way of example, RPD No. 1 seeks, “Any and all bank records, bank statements, cancelled checks (front and back), deposit slips, cashed checks, passbook statements, and other DOCUMENTS showing all credits (monies deposited into), all debits (monies withdrawn from) and all interest earned on any accounts associated with MBR NA.”
(Decl. of Berman, Ex. A.)
On June 2nd and 3rd, Defendants served objections. (Id. ¶5).
Counsel met and conferred, and Plaintiff’s counsel agreed to limit some parts of the subpoenas, by writing to the Banks to advise: (a) they were withdrawing requests for documents from Northwest Asset Management Trust and Auteur Trust; and (b) that the scope of the Subpoenas was to be limited from June 1, 2020 to the present. (Id.¶6.) However, Plaintiff would not withdraw the subpoenas entirely; and as such, this motion followed.
As such, although neither side makes a specific representation as to what precisely has been withdrawn, it appears to the Court that as to the Banks, RPDS nos. 3,5, 6, 9,11, 12, 15,17, and 18 are withdrawn. As to Elavon, Inc. it appears RPDS Nos. 3, 7, and 8 are withdrawn.
RELEVANCY:
Defendants argue that the financial information sought is not relevant because the information would not have a tendency to show sales to Plaintiff’s clientele. However, the identity of the clientele is not the issue. Rather, the issue is the amount of money Defendants made in the alleged act of setting up a website selling MBR products.
Plaintiff alleges in the First Amended Complaint (“FAC”) the following:
“16. Through its use of the Website, MBR N.A. has managed unlawfully sell a significant volume of MBR Products bearing the MBR Mark. Further, MBR N.A. has also on numerous occasions accepted payment for MBR Products through the Website then failed or refused to supply such products to MBR COSMETICS’ customers, resulting in customer “charge-backs” and hurting the MBR brand.
“17. MBR N.A. and MIHOK contracted with a company called Elavon, Inc. to process payments made by MBR customers through the Website. Elavon, Inc.’s records show that numerous purchases made by MBR COSMETICS’ prospective customers through the Website resulted in no products being shipped to them, which, in turn, resulted in numerous disputed credit card transactions or “charge-backs”. These prospective customers in turn complained to MBR COSMETICS that they had not received the products they paid for, causing harm to MBR COSMETICS’ business and brand. Some of these prospective customers include individuals by the names of Kate Dwyer, Mario Enriquez, Garret Telaroli, Kate Gershenson, and Danelle Gorayeb, all of whom contacted MBR COSMETICS regarding purchases made through the fraudulent Website.”
Therefore, it would appear that payments made by clientele through the website processed by Elavon is at issue here, and not every check, deposit, cancelled check, etc. from every bank account relating to three entities and one individual. At most, deposits to the bank accounts via the website (if possible) would be relevant—but not the entire banking history of three separate entities and one individual for a period of seven years.
PRIVACY:
Furthermore, the Requests implicate privacy issues. Pursuant to Fortunato v. Superior Court (2003) 114 Cal.App.4th 475, 480–481, “…confidential financial information given to a bank by its customers is protected by the right to privacy that became a part of the California Constitution after the judicial formulation of the tax-return privilege. (citation omitted) Thus, there is a right to privacy in confidential customer information whatever form it takes, whether that form be tax returns, checks, statements, or other account information.”
Plaintiffs argue that relevancy of the monies derived from Defendants through their use of the MBR Mark and Sale of MBR products outweighs any privacy issues.
However, as established above, the broad spectrum of information sought relating to the bank accounts is not relevant to the monies derived.
As such, the Motion to Quash the subpoenas directed to the seven (7) Banking entities (i.e., First Republic Bank; Wells Fargo Bank; US Bank.; City National Bank; Citibank N.A.; J.P. Morgan Chase; and Bank of America) is GRANTED.
However, as to the subpoena directed to Elavon, Inc., it is unclear whether this is a “banking institution”; and therefore, upon what basis moving parties bring the motion as to the subpoena directed to it. It appears, pursuant to FAC ¶17 set forth above, that Elavon, Inc.’s involvement in processing the website purchases of product is directly at issue. However, neither side adequately addresses the subpoena directed to Elavon, Inc. Moreover, the separate statement is insufficient because it addresses the eighteen (18) RPDS directed to the banking entities and not the ten (10) RPDS directed to Elavon, Inc. (See CRC, Rule 3.1345(a)(5),(c)(1).)
Therefore, the Motion to Quash the Subpoena directed to Elavon, Inc. is DENIED in its entirety, without prejudice.
SANCTIONS
In this instance, it does not appear the opposition was made in bad faith or without substantial justification. Rather, the motion was made only after counsel for the parties met and conferred and attempted to resolve the dispute as suggested above.
Furthermore, sanctions in the amount of $7,285 for one motion to quash appears to be excessive.
Finally, as to the eight (8) subpoenas, moving party wholly fails to address one, the subpoena directed to Elavon, Inc.
Accordingly, the Court DENIES sanctions.
Defendants to give notice.