Asia Economic Institute et al v. Xcentric Ventures LLC et al

Filing 91

REPLY Support EX PARTE APPLICATION to Continue the determination of, or denying, Defendants' Motion for Summary Judgment from July 12, 2010 to At the Court's discretion Re: MOTION for Summary Judgment as to Entire Case 40 EX PARTE APPLICATION to Enforce Order to Compel Continued Deposition of Defendant Edward Magedson EX PARTE APPLICATION for Sanctions Local Rule 83.7, Local Rule 37-4, and this Court's inherent authority EX PARTE APPLICATION to Continue the determination of, or denying, Defendants' Motion for Summary Judgment from July 12, 2010 to At the Court's discretion Re: MOTION for Summary Judgment as to Entire Case 40 EX PARTE APPLICATION to Continue the determination of, or denying, Defendants' Motion for Summary Judgment from July 12, 2010 to At the Court's discretion Re: MOTION for Summary Judgment as to Entire Case 40 EX PARTE APPLICATION to Continue the determination of, or denying, Defendants' Motion for Summary Judgment from July 12, 2010 to At the Court's discretion Re: MOTION for Summary Judgment as to Entire Case 40 EX PARTE APPLICATION to Continue the determination of, or denying, Defendants' Motion for Summary Judgment from July 12, 2010 to At the Court's discretion Re: MOTION for Summary Judgment as to Entire Case 40 EX PARTE APPLICATION to Continue the determination of, or denying, Defendants' Motion for Summary Judgment from July 12, 2010 to At the Court's discretion Re: MOTION for Summary Judgment as to Entire Case 40 EX PARTE APPLICATION to Continue the determination of, or denying, Defendants' Motion for Summary Judgment from July 12, 2010 to At the Court's discretion Re: MOTION for Summary Judgment as to Entire Case 40 EX PARTE APPLICATION to Continue the determination of, or denying, Defendants' Motion for Summary Judgment from July 12, 2010 to At the Court's discretion Re: MOTION for Summary Judgment as to Entire Case 40 EX PARTE APPLICATION to Continue the determination of, or denying, Defendants' Motion for Summary Judgment from July 12, 2010 to At the Court's discretion Re: MOTION for Summary Judgment as to Entire Case 40 EX PARTE APPLICATION to Continue the determination of, or denying, Defendants' Motion for Summary Judgment from July 12, 2010 to At the Court's discretion Re: MOTION for Summary Judgment as to Entire Case 40 EX PARTE APPLICATION to Continue the determination of, or denying, Defendants' Motion for Summary Judgment from July 12, 2010 to At the Court's discretion Re: MOTION for Summary Judgment as to Entire Case 40 87 filed by Plaintiffs Asia Economic Institute, Iliana Llaneras, Raymond Mobrez. (Attachments: # 1 Exhibit 38 to Supplemental Declaration of Lisa J. Borodkin, # 2 Exhibit 39 to Supplemental Declaration of Lisa J. Borodkin, # 3 Exhibit 40 to Supplemental Declaration of Lisa J. Borodkin, # 4 Exhibit 41 to Supplemental Declaration of Lisa J. Borodkin, # 5 Exhibit 42 to Supplemental Declaration of Lisa J. Borodkin, # 6 Exhibit 43 to Supplemental Declaration of Lisa J. Borodkin, # 7 Exhibit 44 to Supplemental Declaration of Lisa J. Borodkin, # 8 Exhibit 45 to Supplemental Declaration of Lisa J. Borodkin, # 9 Exhibit 46 to Supplemental Declaration of Lisa J. Borodkin, # 10 Exhibit 47 to Supplemental Declaration of Lisa J. Borodkin, # 11 Exhibit 48 to Supplemental Declaration of Lisa J. Borodkin)(Borodkin, Lisa)

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Asia Economic Institute et al v. Xcentric Ventures LLC et al Doc. 91 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DANIEL F. BLACKERT, ESQ., CSB No. 255021 LISA J. BORODKIN, ESQ., CSB No. 196412 Asia Economic Institute 11766 Wilshire Blvd., Suite 260 Los Angeles, CA 90025 Telephone (310) 806-3000 Facsimile (310) 826-4448 Daniel@asiaecon.org Blackertesq@yahoo.com lisa_borodkin@post.harvard.edu Attorneys for Plaintiffs, Asia Economic Institute, LLC Raymond Mobrez, and Iliana Llaneras UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ) ) ) ) ) ) Plaintiffs, ) ) vs. ) ) XCENTRIC VENTURES, LLC, an Arizona LLC, d/b/a as BADBUSINESS ) ) BUREAU and/or ) BADBUSINESSBUREAU.COM ) and/or RIP OFF REPORT and/or ) RIPOFFREPORT.COM; BAD ) BUSINESS BUREAU, LLC, organized ) ) and existing under the laws of St. ) Kitts/Nevis, West Indies; EDWARD MAGEDSON an individual, and DOES ) ) 1 through 100, inclusive, ) ) Defendants. ) ) ) ) ) ) ) ) ) ASIA ECONOMIC INSTITUTE, a California LLC; RAYMOND MOBREZ an individual; and ILIANA LLANERAS, an individual, Case No.: 2:10-cv-01360-SVW-PJW PLAINTIFFS' REPLY MEMORANDUM AND SUPPLEMENTAL DECLARATION OF LISA J. BORODKIN IN FURTHER SUPPORT OF EX PARTE MOTION (1) UNDER RULE 56(f) TO DENY OR CONTINUE DEFENDANTS' MOTION FOR SUMMARY JUDGMENT TO CONDUCT FURTHER DISCOVERY AND (2) COMPELLING DEFENDANT ED MAGEDSON TO APPEAR FOR DEPOSITION WITH DOCUMENTS AND (3) FOR SANCTIONS UNDER LOCAL CIVIL RULES 37-4 AND 83-7 Judge: The Hon. Stephen V. Wilson Date: Place: July 9, 2010 or t.b.a. 312 North Spring Street Los Angeles, California 90012 Courtroom: 6 Summary Judgment Hearing Date: July 12, 2010 Pretrial Conference: August 2, 2010 Trial Date: August 3, 2010 Plaintiffs' Reply Re: Ex Parte Rule 56(f) and for Sanctions -1- 10-cv-1360-SVW-PJW Dockets.Justia.com 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 REPLY MEMORANDUM OF POINTS AND AUTHORITIES Plaintiffs are seeking to continue the deposition of Defendant Edward Magedson, as Ordered by this Court on June 24, 2010. DN-82: "Plaintiffs may continue the deposition of Defendant Magedson, as discussed at the hearing." DN82 (emphasis added), to have the pending Motion for Summary Judgment denied in order to take that further discovery, and sanctions, if appropriate. Such a continuation is necessary both because the Court ordered it [DN-82], and because Defendant Xcentric Ventures, LLC ("Xcentric") previously failed to produce a prepared witness on certain topics in the Rule 30(b)(6) Notice of Deposition. See Supplemental Declaration of Lisa J. Borodkin ("Borodkin Dec.") at 3, Ex. 38. 1. Plaintiffs Have Diligently Pursued Narrow, Relevant, Focused Discovery. Defendants argue in their Opposition that Plaintiffs have failed to pursue discovery diligently. Plaintiffs have been diligent, but narrowly focused on the issues for trial. On May 28, 2010, Plaintiffs served a Deposition Notice to Xcentric under Rule 30(b)(6) solely on the trial topics. See Borodkin Dec. 3, Ex. 38. One June 4, 2010, two days after the Rule 30(b)(6) deposition on June 2, 2010, Plaintiffs served a deposition document subpoena. Borodkin Dec. 5, Ex. 40. After the June 8, 2010 Deposition of Defendant Magedson, Plaintiffs served Requests for Admission tailored to the testimony. Borodkin Dec. Ex. 44. On June 4, 2010, Plaintiffs moved to compel the deposition of Defendant Magedson. DN-52. Since June 24, 2010, Plaintiffs have been attempting to obtain cooperation with this Court's Order permitting continuation of that deposition. DN-82. To the extent that Defendants present CAP as a legitimate business, as in the April 19, 2010 hearing before this Court, see Borodkin Dec. Ex. 1, none of Plaintiffs' Reply Re: Ex Parte Rule 56(f) and for Sanctions -210-cv-1360-SVW-PJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 this should be necessary. Defendants should have produced such materials in their Initial Rule 26(a) Disclosures or supplements thereto. However, Defendants have been fighting those obligations and trying to keep deadlines vague since the beginning, even telling Plaintiffs not to meet and confer on Initial Rule 26(a) Disclosures, notwithstanding this Court's Order. See Borodkin Dec. 3-5, Exs. 1, 2. Defendants did not identify relevant material (such as the recordings) in their Initial Disclosures, have never supplemented them, and instead have waged this war on two fronts. Instead of cooperating by identifying the recordings (which would have saved everyone time and mitigated their own purported damages), Defnedants propounded burdensome, overbroad discovery not relevant to the bifurcated trial, which took an Order from this Court to stay. See DN-82 at 1-2 (bifurcating discovery to match trial). The rest of Plaintiffs' efforts to obtain the bare essentials in evidence for the trial are set forth at length in the rest of this application. Plaintiffs have been diligent, but are prepared to go to trial on August 3, 2010 with the current state of the record nonetheless. 2. Plaintiffs Are Entitled to a Continued Deposition of Edward Magedson on Relevant Rule 30(b)(6)Topics Based on Xcentric's Failure to Produce a Prepared Rule 30(b)(6) Witness Alone. Federal Rule 30(b)(6) provides: (6) Notice or Subpoena Directed to an Organization. In its notice or subpoena, a party may name as the deponent a public or private corporation, a partnership, an association, a governmental agency, or other entity and must describe with reasonable particularity the matters for examination. The named organization must then designate one or more officers, directors, or managing agents, or designate other persons who consent to testify on its behalf; and it may set out the matters on which each person designated will testify. A subpoena must advise a nonparty organization of its duty to make this designation. The persons designated must testify about information Plaintiffs' Reply Re: Ex Parte Rule 56(f) and for Sanctions -3- 10-cv-1360-SVW-PJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 known or reasonably available to the organization. This paragraph (6) does not preclude a deposition by any other procedure allowed by these rules. Fed. R. Civ. Proc. 30(b)(6) (emphasis added). "When a corporation . . . designates a person to testify on its behalf [under Rule 30(b)(6)], the corporation appears vicariously through that agent." Resolution Trust Corp. v Southern Union Co., 985 F.2d 196 (5th Cir.), reh'g denied (5th Cir. 1993): "If that [Rule 30(b)(6) agent is not knowledgeable about relevant facts, the corporation has failed to designate an available, knowledgeable, and readily identifiable witness, then appearance is, for all practical purposes, no appearance at all." Id. See also Bd. of Trs. of the Leland Stanford Junior Univ. v. Tyco Int'l Ltd., 253 F.R.D. 524, 526 (C.D. Cal. 2008) (companies "have a duty to make a conscientious, good-faith effort to designate knowledgeable persons for Rule 30(b)(6) depositions and to prepare them to fully and unevasively answer questions about the designated subject matter") (emphasis added); Burdick v. Union Sec. Ins. Co., 2008 U.S. Dist. LEXIS 99994, 2008 WL 5102851 at * 2 (C.D. Cal. Dec. 3, 2008) ("The corporation then must not only produce such number of persons as will satisfy the request, but more importantly, must prepare them so that they may give complete, knowledgeable and binding answers on behalf of the corporation.") (citing Marker v. Union Fidelity Life Insur., 125 F.R.D. 121, 126 (M.D.N.C. 1989) On May 28, 2010, Plaintiffs served a Rule 30(b)(6) Notice of Deposition to Xcentric Ventures, LLC. Borodkin Dec. 3, Ex. 38. The Rule 30(b)(6) topics include: 2. 4. The operation and management of the Corporate Advocacy Program ("CAP") . . . . Xcentric's method of establishing the cost of CAP for its participants. . . . -410-cv-1360-SVW-PJW Plaintiffs' Reply Re: Ex Parte Rule 56(f) and for Sanctions 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6. Xcentric's methods of soliciting participants in CAP[.]" Borodkin Dec., Ex. 38. On June 2, 2010, Plaintiffs took the deposition of Defendant Xcentric in Phoenix, Arizona. Xcentric's designated witness was evasive and unprepared. As to Xcentric's methods of soliting participants in CAP, Xcentric's agent, Defendant Magedson testified in part: Q BY MR. BLACKERT: Okay. Walk me through how 14 it -- the steps -- how it gets from the rebuttal 15 e-mails to the business actually becoming enrolled in 16 the CAP. 17 A You would have to ask that again. 18 Q Okay. Walk me through the steps after the 19 rebuttal e-mail that the business gets enrolled into 20 the CAP program. 21 MR. GINGRAS: Objection. I don't think 22 this accurately reflects his testimony. 23 THE WITNESS: I'm not even understanding 24 your question. 25 Q BY MR. BLACKERT: Okay. Fine. I will 0123 1 rephrase it. * * * 6 Q BY MR. BLACKERT: You testified earlier that you -- strike that. You testified earlier that you send an e-mail after -- you send an e-mail suggesting that an individual file a rebuttal, correct, an individual at a 1 business? A Correct. Q What happens next? A I can't speculate on what happens next. I don't know what you mean. What do you mean what happens next? Q If the individual or business wants to go forward with the CAP program --510-cv-1360-SVW-PJW 7 8 9 10 11 12 13 14 15 16 17 18 Plaintiffs' Reply Re: Ex Parte Rule 56(f) and for Sanctions 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19 20 21 22 23 24 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 A Okay. Q -- what's your next contact with them? A They want to go next? Q Yes. A If they say they want to join the program, I send them a more detailed questionnaire about the company. Q Is that questionnaire different from the questionnaire on your website, on Ripoff Report's website? A Yes. Q It is different. Okay. And you said it's more detailed? A Yes. Q How is it more detailed? A It gets into -- and this is still -- they haven't been approved yet. Q Right. A So it depends on how they answer the questions to these -- to this e-mail, but there is questions like, why did you get complaints? What was the cause of the complaints? What improvements? I want -- I want information right now, you know. How are you going to make -- what improvements have you made? What was -- what were the problems and what are you doing to avoid those problems in the future? The name of the person who will be signing the agreement. What's the name of the company that the agreement's gonna be in? Why do you feel -- I think it's, why do you feel -- I forget. I can't. Q That's fine. A I can't remember. I can't remember." Borodkin Dec., Ex. 39 (June 2, 2010 Transcript) at 122:14-124:25 (emphasis added). Plaintiffs' Reply Re: Ex Parte Rule 56(f) and for Sanctions -6- 10-cv-1360-SVW-PJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3. Plaintiffs Are Entitled to Sanctions Based on Xcentric's Failure to Produce a Prepared Rule 30(b)(6) Witness Alone. "Rule 30(b)(6) implicitly requires such persons to review all matters known or reasonably available to [the organization] in preparation for the Rule 30(b)(6) deposition. This interpretation is necessary in order to make the deposition a meaningful one and to prevent the "sandbagging" of an opponent by conducting a halfhearted inquiry before the deposition but a thorough and vigorous one before the trial. This would totally defeat the purpose of the discovery process." See Beauperthuy v. 24 Hour Fitness United States, Inc., 2009 U.S. Dist. LEXIS 104906 (N.D. Cal. Nov. 10, 2009) Defendant Xcentric Venture LLC's failure to designate a knowledgeable or prepared designeee in response to specific and understandable requests would, standing alone, justify an Order from this Court requiring it to produce a knowledgeable person and to pay plaintiff's attorneys' expenses. Plaintiffs have, and hereby do, request that this take place in the form of a Court-supervised deposition of Defendant Magedson both as an Xcentric 30(b)(6) witness and in his own right, on July 14, 2010 the date of the mandatory Settlement Conference before the Honorable Patrick J. Walsh -- and any costs, fees or other remedies this Court deems appropriate. For the foregoing reasons, this motion should be granted in its entirety. DATED: July 9, 2010 By: Respectfully submitted, /s/ Lisa J. Borodkin DANIEL F. BLACKERT LISA J. BORODKIN Attorneys for Plaintiffs, Asia Economic Institute LLC, Raymond Mobrez, and Iliana Llaneras -710-cv-1360-SVW-PJW Plaintiffs' Reply Re: Ex Parte Rule 56(f) and for Sanctions 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUPPLEMENTAL DECLARATION OF LISA J. BORODKIN I, Lisa J. Borodkin, declare: 1. I am an attorney at law, duly admitted to practice before all the courts of the State of California and this Honorable Court. I am co-counsel of record for Plaintiffs Asia Economic Institute LLC ("AEI"), Raymond Mobrez and Iliana Llaneras ("Plaintiffs") in this action. I have first-hand, personal knowledge of the facts set forth below and, if called as a witness, I could and would testify competently thereto. 2. This Declaration is made in further support of Plaintiffs' Ex Parte Motion (1) Under Rule 56(f) To Deny Or To Continue Defendants' Motion For Summary Judgment To Conduct Further Discovery, (2) Compelling Defendant Ed Magedson To Appear For Deposition With Documents and (3) For Sanctions. 3. Attached hereto as Exhibit "38" is a true and correct copy of Plaintiff AEI's Notice of Deposition to Defendant Xcentric Ventures, LLC under F.R.C.P. 30(b)(6) dated May 28, 2010. 4. Attached hereto as "Exhibit "39" are true and correct pages from the June 2, 2008 Deposition oF Xcentric's 30(b)(6) witness where Plaintiffs call for production of documents relevant to the RICO extortion trial, including emails in which Xcentric quotes prices for CAP (35:8-10), the CAP rate sheet and Second Questionnaire, and the CAP Agreement (149:10-11) and the rate sheet for CAP (150:15-16). Defendants' counsel states on the record: "Just to be clear, if you are making verbal requests for production of documents, I don't recognize that as being a legitimate request into the rules. If you want to make a written request we'll happily look at those when and if you do that." Ex. 39 (150:17-21) (emphasis added). 5. Attached hereto as "Exhibit 40" is a true and correct copy of Plaintiff AEI's Subpoena to Defendant Edward Magedson to Produce Documents, Information, or Objects or to Permit Inspection of Premises in a Civil Action dated Plaintiffs' Reply Re: Ex Parte Rule 56(f) and for Sanctions -810-cv-1360-SVW-PJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 June 4, 2010 ("June 4, 2010 Deposition Document Subpoena"), seeking, among other things, the Second Questionnaire and CAP Agreement. 6. 2010. 7. Attached hereto as "Exhibit 42" is a true and correct copy of Defendants' email objections to the June 4, 2010 Deposition Document Subpoena, dated June 8, 2010. 8. Attached hereto as "Exhibit 43" are true and correct copies of relevant pages from the transcript of the June 8, 2010 deposition of Edward Magedson, in which Plaintiffs' counsel states: "MS. BORODKIN: That's okay. I'm still saying, even though we may conclude today's deposition, I'm not closing it in the sense that plaintiffs reserve the right to seek to re-depose Mr. Magedson, probably following the hearing on the motion to compel that has been set for June 5th, to pick up answers that he's not providing if there is no protective order, unless Mr. Gingras would like to stipulate that we can do that." Ex. 43 at 169:13-21 (emphasis added). 9. Attached hereto as "Exhibit 44" is a true and correct copy of Plaintiffs' First Set of Requests for Admissions to Defendant Xcentric Ventures, LLC dated June 4, 2010 ("June 4, 2010 RFAs"). 10. July 6, 2010. 11. Attached hereto as "Exhibit 46" are true and correct copies of relevant pages from the transcript of the June 24, 2010 hearing on discovery matters before the Honorable Patrick J. Walsh, in which the Court states in part: "THE COURT: I want him to have his dep

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