Nelson v. Millennium Laboratories, Inc., etal.

Filing 28

ORDER ON RECONSIDERATION OF COMPELLED DEPOSITION QUESTIONS 23 26 signed by District Judge Lawrence J. O'Neill on July 19, 2013. (Munoz, I)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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IN RE RYAN UEHLING,

CASE NO. MC F 13-0022 LJO BAM

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ORDER ON RECONSIDERATION OF
COMPELLED DEPOSITION QUESTIONS
(Docs. 23, 26.)

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KELLY NELSON,

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Plaintiff,
vs.
MILLENNIUM LABORARTIES,
INC., et al.,
Defendants.
______________________________/
PRELIMINARY STATEMENT TO PARTIES AND COUNSEL

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Judges in the Eastern District of California carry the heaviest caseload in the nation,

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and this Court is unable to devote inordinate time and resources to individual cases and

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matters. This Court cannot address all arguments, evidence and matters raised by parties and

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addresses only the arguments, evidence and matters necessary to reach the decision in this

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order given the shortage of district judges and staff. The parties and counsel are encouraged to

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contact United States Senators Diane Feinstein and Barbara Boxer to address this Court’s

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inability to accommodate the parties and this action.

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INTRODUCTION

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Non-party deponent Ryan Uehling ("Mr. Uehling") seeks reconsideration of U.S.

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Magistrate Judge Barbara McAuliffe's June 27, 2013 order ("June 27 order") to overrule Mr.
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Uehling's objections and to compel his answers to defendant Millennium Laboratories, Inc.'s

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("Millennium's") deposition questions. Millennium contends that Mr. Uehling points to no

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legal error with the June 27 order and provides neither facts nor legal authority to warrant

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reconsideration. This Court considered Mr. Uehling's reconsideration motion on the record,

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and for the reasons discussed below, DENIES reconsideration.

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BACKGROUND

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Millennium Laboratories, Inc.'s Motion To Compel

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Mr. Uehling is a non-party deponent in an Arizona district court action brought by

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plaintiff Kelly Nelson ("Ms. Nelson") against Millennium to pursue employment related

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claims. Mr. Uehling is a former Millennium regional director and supervised Ms. Nelson prior

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to his termination. Mr. Uehling resides in this Court's district.

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At his April 2, 2013 deposition, Mr. Uehling asserted a "statutory" privilege based on

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statutory obligations not to reveal information and the attorney-client privilege to object to

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questions regarding: (1) Mr. Uehling's actions as to Millennium property after his termination;

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(2) whether attorneys instructed Mr. Uehling to take certain action with Millennium's property;

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(3) information and directives provided by United States attorneys; and (4) meetings among

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Mr. Uehling and attorneys representing Ameritox, Millennium's competitor. The statutory

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privilege appears to arise from confidentiality mandated by the False Claims Act ("FCA"), 31

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U.S.C. §§ 3729, et seq., for qui tam actions.

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Millennium pursued a motion to compel Mr. Uehling's deposition testimony over his
objections.
The June 27 Order

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The June 27 order effectively overruled Mr. Uehling's objections based on a statutory

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privilege. The June 27 order explained that relators "providing testimony as a non-party

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witness in cases unrelated to the qui tam action do not publicly disclose the nature and

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existence of the qui tam action if the deposition testimony is not filed with the court." The

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June 27 order reasoned that "requiring Uehling to answer questions to which he asserted this

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statutory privilege in a sealed deposition does not jeopardize any 'statutory privilege'" to entitle
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Millennium "to explore Uehling's potential bias and credibility" on the condition that Mr.

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Uehling's answers "shall be taken under seal" and "not made part of a court's public record."
The June 27 order further overruled Mr. Uehling's attorney-client privilege objections

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as to:
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"[A]ctions he took with Millennium property" in that the questions addressed

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"periods of time prior to Uehling's contact with [an] attorney to represent him" and the

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attorney-client privilege "does not shield underlying facts" subject to the questions;
2.

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Whether attorneys instructed Mr. Uehling to take action regarding Millennium's

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property in that the crime-fraud exception applies to such communications given the

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"reasonable relationship between the crime or fraud and the attorney-client communication" to

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render such communication unprivileged;
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Whether U.S. government representatives or attorneys instructed Mr. Uehling to

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assert the statutory privilege and the identity of such representative or attorney given Mr.

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Uehling's failure "to demonstrate the existence of an attorney client relationship"; and
4.

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Whether Ameritox attorneys represent or communicated with Mr. Uehling in

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that Mr. Uehling "failed to demonstrate the existence of an attorney-client relationship" and no

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Millennium question "inquired into the substance of any potential communications."
The June 27 order required Mr. Uehling's deposition to proceed under seal within 20

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days.

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DISCUSSION

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Reconsideration Standards

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Mr. Uehling characterizes the June 27 order as "clearly erroneous and contrary to law"
by allowing the "continued harassment and deposition of Mr. Uehling."

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Reconsideration motions are committed to the discretion of the trial court. Rodgers v.

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Watt, 722 F.2d 456, 460 (9th Cir. 1983) (en banc); Combs v. Nick Garin Trucking, 825 F.2d

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437, 441 (D.C. Cir. 1987).

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strongly convincing nature to induce the court to reverse a prior decision. See, e.g., Kern-

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Tulare Water Dist. v. City of Bakersfield, 634 F.Supp. 656, 665 (E.D. Cal. 1986), aff’d in part

A party seeking reconsideration must set forth facts or law of a

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and rev’d in part on other grounds, 828 F.2d 514 (9th Cir. 1987).

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This Court reviews a motion to reconsider a Magistrate Judge’s ruling under the

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“clearly erroneous or contrary to law” standard set forth in 28 U.S.C. § 636(b)(1)(A) and

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F.R.Civ.P. 72(a). As such, the court may only set aside those portions of a Magistrate Judge’s

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order that are either clearly erroneous or contrary to law. F.R.Civ.P. 72(a); see also Grimes v.

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City and County of San Francisco, 951 F.2d 236, 240 (9th Cir.1991) (discovery sanctions are

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non-dispositive pretrial matters that are reviewed for clear error under F.R.Civ.P. 72(a)).

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A magistrate judge’s factual findings are “clearly erroneous” when the district court is

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left with the definite and firm conviction that a mistake has been committed. Security Farms v.

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International Bhd. of Teamsters, 124 F.3d 999, 1014 (9th Cir. 1997); Green v. Baca, 219

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F.R.D. 485, 489 (C.D. Cal. 2003).

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deferential." Concrete Pipe and Products of California, Inc. v. Construction Laborers Pension

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Trust for Southern California, 508 U.S. 602, 623, 113 S.Ct. 2264 (1993).

The “'clearly erroneous' standard is significantly

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The “contrary to law” standard allows independent, plenary review of purely legal

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determinations by the magistrate judge. See Haines v. Liggett Group, Inc., 975 F.2d 81, 91

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(3rd Cir.1992); Green, 219 F.R.D. at 489; see also Osband v. Woodford, 290 F.3d 1036, 1041

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(9th Cir. 2002). “An order is contrary to law when it fails to apply or misapplies relevant

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statutes, case law, or rules of procedure.” Knutson v. Blue Cross & Blue Shield of Minn., 254

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F.R.D. 553, 556 (D. Minn. 2008); Rathgaber v. Town of Oyster Bay, 492 F.Supp.2d 130, 137

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(E.D.N.Y.2007); Surles v. Air France, 210 F.Supp.2d 501, 502 (S.D.N.Y. 2001); see Adolph

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Coors Co. v. Wallace, 570 F.Supp. 202, 205 (N.D. Cal. 1983).

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“Pretrial orders of a magistrate under § 636(b)(1)(A) . . . are not subject to a de novo

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determination . . .” Merritt v. International Bro. of Boilermakers, 649 F.2d 1013, 1017 (5th Cir.

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1981). “The reviewing court may not simply substitute its judgment for that of the deciding

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court.” Grimes, 951 F.2d at 241; see Phoenix Engineering & Supply v. Universal Elec., 104

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F.3d 1137, 1141 (9th Cir. 1997) (“the clearly erroneous standard allows [for] great deference”).

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A district court is able to overturn a magistrate judge’s ruling “‘only if the district court is left

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with the definite and firm conviction that a mistake has been made.’” Computer Economics,
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Inc. v. Gartner Group, Inc., 50 F.Supp.2d 980, 983 (S.D. Cal. 1999) (quoting Weeks v.

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Samsung Heavy Indus. Co., Ltd., 126 F.3d 926, 943 (7th Cir. 1997)). Nonetheless, "[m]otions

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for reconsideration are disfavored, however, and are not the place for parties to make new

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arguments not raised in their original briefs." Hendon v. Baroya, 2012 WL 995757, at *1 (E.D.

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Cal. 2012) (citing Zimmerman v. City of Oakland, 255 F.3d 734, 740 (9th Cir.2001); Northwest

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Acceptance Corp. v. Lynnwood Equip., Inc., 841 F.2d 918, 925–26 (9th Cir.1988)).
With these standards in mind, this Court turns to Mr. Uehling's criticisms of the June 27

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order.
Statutory Privilege

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Mr. Uehling asserts that "he is under a legal obligation not to reveal either the nature of,

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or the factual basis for, the privilege he is asserting." Mr. Uehling contends that "[a]llowing

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Millennium to ask detailed questions regarding their [sic] belief that a qui tam exists . . .

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creates a chilling effect on potential whistleblowers." Mr. Uehling argues that the June 27

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order "has directly affected (and potentially fatally so) litigation that may be pending in another

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jurisdiction."

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Mr. Uehling offers no meaningful challenge to the June 27 order's handling of the

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statutory privilege. The June 27 order avoids public disclosure of a potential qui tam action by

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requiring Mr. Uehling's deposition to remain under seal. The June 27 order properly balances

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the competing interests of FCA secrecy and Millennium's interests in Ms. Nelson's action

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against Millennium.

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wholesale bar to inquiry into underlying facts of a potential qui tam action which overlap with

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ongoing litigation. See American Civil Liberties Union v. Holder, 673 F.3d 245, 254 (4th Cir.

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2011) ("the seal provisions limit the relator only from publicly discussing the filing of the qui

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tam complaint. Nothing in the FCA prevents the qui tam relator from disclosing the existence

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of the fraud"). Mr. Uehling offers no support for his hyperbolic claims of stifling whistle

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blowing or thwarting potential FCA litigation. Nothing indicates that potential FCA claims

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will be damaged or dismissed by Mr. Uehling's continued deposition under seal, especially

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considering that the June 27 order and this Court compel his deposition answers.

Mr. Uehling fails to demonstrate that FCA confidentiality grants a

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Attorney-Client Privilege

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Mr. Uehling faults the June 27 order's application of the crime-fraud exception in the

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absence of "evidence or reasonable inference that Mr. Uehling sought an attorney's services to

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enable him to obtain Millennium documents." Mr. Uehling overlooks the June 27 order's

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reasoning that questions addressed time periods "prior to Uehling's contact with attorneys to

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represent him" and the absence of an attorney-client privilege as to "underlying facts." As

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such, contrary to Mr. Uehling's claim, the June 27 order recognized "the nature of the questions

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being asked" and ruled properly to invoke the crime-fraud exception. The June 27 order

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recognizes and properly applied the "very limited" scope of the crime-fraud exception given

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Mr. Uehling's admissions that he transported without authorization his Millennium laptop with

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Millennium's secrets across state lines. This Court is not in a position to reweigh the evidence

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whether "the services of the lawyer were sought or obtained to enable or aid anyone to commit

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or plan to commit a crime or a fraud." See Cal. Evid. Code, § 956. A "specific showing of the

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client's intent in consulting the attorney is not required." BP Alaska Exploration, Inc. v.

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Superior Court, 199 Cal.App.3d 1240, 1268, 245 Cal.Rptr. 682 (1988).

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overreaching points of Millennium's motives are unavailing.

Mr. Uehling's

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Mr. Uehling further challenges the June 27 order's handling of his contact with

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Armeritox which Mr. Uehling contends "reveals the scope of litigation given the nature of the

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relationships" among Millennium, Ameritox and their attorneys.

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demonstrate that the June 27 order erred to reject a common interest privilege within the

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context of the attorney-client privilege. Mr. Uehling points to nothing to establish his attorney-

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client relationship with Ameritox or its attorneys or that questions to him addressed the

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substance of communications subject to a joint interest and in turn the attorney-client privilege.

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Nothing suggests that communications with Ameritox furthered legal representation of Mr.

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Uehling or related goals. In addition, Mr. Uehling fails to support his overreaching claim that

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every objectionable question addressed communications with a well known qui tam firm,

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government attorneys and grand jury proceedings.

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Mr. Uehling fails to

Mr. Uehling's other criticisms of the June 27 order are unavailing and require no further
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comment by this Court.

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CONCLUSION AND ORDER

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For the reasons discussed above, this Court:

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DENIES Mr. Uehling reconsideration;

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ORDERS Mr. Uehling to appear no later than August 2, 2013 for a reopened

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deposition to be set practicably to best accommodate the parties;
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LIMITS Mr. Uehling's deposition to four hours and its scope to the objected to

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questions with limited follow up reasonably necessary to clarify or explain Mr. Uehling's

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answers;

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DECLINES to impose sanctions on Mr. Uehling and/or his counsel but

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ADMONISHES all parties and counsel of their potential liability under 28 U.S.C. § 1927,

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F.R.Civ.P. 11, and other authorities; and
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ORDERS the parties to address future issues as to the Mr. Uehling's deposition

first with U.S. Magistrate Judge McAuliffe.

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IT IS SO ORDERED.

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Dated:

/s/ Lawrence J. O’Neill

July 19, 2013

UNITED STATES DISTRICT JUDGE
DEAC_Signature-END:

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