Haggarty et al v. Wells Fargo Bank, N.A.

Filing 115

ORDER DENYING DEFENDANTS MOTION FOR A PROTECTIVE ORDER RE: FRANKLIN CODEL AND ALLOWING DEFENDANT TO DEPOSE JAMES HAGGARTY(Dkt. Nos. 103, 109) signed by Magistrate Judge Jacqueline Scott Corley on 8/24/2012 (ahm, COURT STAFF) (Filed on 8/24/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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Northern District of California

United States District Court

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CHARLES P. HAGGARTY and GINA M.
HAGGARTY, on behalf of themselves and
all others similarly situated,

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Plaintiffs,

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v.

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Case No.: 10-2416 CRB (JSC)
ORDER DENYING DEFENDANT’S MOTION
FOR A PROTECTIVE ORDER RE: FRANKLIN
CODEL AND ALLOWING DEFENDANT TO
DEPOSE JAMES HAGGARTY
(Dkt. Nos. 103, 109)

WELLS FARGO BANK, N.A.,
Defendant.

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Now pending before the Court are Defendant’s motion for a protective order to prevent

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Plaintiffs from deposing Franklin Codel, executive vice president and CFO of national consumer

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lending for Defendant, and a joint letter from the parties regarding the deposition of James

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Haggarty (“James”), the brother of Plaintiff Charles Haggarty. (Dkt. Nos. 103, 109.) Plaintiffs

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wish to depose Mr. Codel about the COFI index. Defendant seeks to depose James about a

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conversation regarding Plaintiffs’ COFI note that Plaintiff cannot fully recall. After reviewing

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the pleadings submitted by the parties, and with the benefit of oral argument on August 24,

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2012, the Court shall allow Plaintiffs to depose Mr. Codel and Defendant to depose James as

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outlined below.
DISCUSSION

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Federal Rule of Civil Procedure 26 “states that, in general, any matter relevant to a claim

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or defense is discoverable.” Rivera v. NIBCO, Inc., 364 F.3d 1057, 1063 (9th Cir. 2004). Under

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Federal Rule of Civil Procedure 26(c)(1),“[t]he court may, for good cause, issue an order to

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protect a party or person from annoyance, embarrassment, oppression, or undue burden or

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expense.” The party seeking the protective order must show that “harm or prejudice . . . will

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result from the discovery.” Rivera, 364 F.3d at 1063. This burden is not met by “relying on

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conclusory statements;” instead, the party must articulate “a particular and specific need for a

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protective order.” Koh v. S.C. Johnson & Son, Inc., 2011 WL 940227 *2 (N.D. Cal. Feb. 18, 2011).

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Even when good cause for a protective order is demonstrated, “a court should balance the

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interests in allowing discovery against the relative burdens that would be imposed.” Id.

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“Absent extraordinary circumstances, it is very unusual for a court to prohibit the taking of a

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deposition.” In re Google Litigation, 2011 WL 4985279 *2 (N.D. Cal. Oct. 19, 2011).

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A. Franklin Codel
Plaintiffs seek to depose Mr. Codel regarding his knowledge and decision-making (or

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lack thereof) regarding the COFI index. In particular, Plaintiffs contend that Defendant’s

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document production and privilege log demonstrate that Mr. Codel “was actively involved in

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the review and monitoring of the COFI index,” and as a result should have testimony regarding

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Defendant’s “knowledge of the impact on COFI when it decided to withdraw Wachovia from

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the 11th district” and “the impact on COFI” due to the withdrawal. (Dkt. No. 100 at 6.)

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Defendant claims that Mr. Codel is an “apex employee” and thus should not be deposed. (Dkt.

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No. 100 at 5.)

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When a party seeks to depose “a high-level executive (a so-called ‘apex’ deposition),”

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the court can limit the discovery after considering “(1) whether the deponent has unique first-

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hand, non-repetitive knowledge of the facts at issue in the case and (2) whether the party

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seeking the deposition has exhausted other less intrusive discovery methods.” In re Google

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Litigation, 2011 WL 4985279 at *2. A proposed deponent’s status as “a busy, high-ranking

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executive” is not itself sufficient to justify a protective order. Hardin v. Wal-Mart Stores, Inc.,

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2011 WL 6758857 *2 (E.D. Cal. Dec. 22, 2011).

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The Court finds that an order precluding the deposition of Mr. Codel is not warranted

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here. First, Mr. Codel has potentially unique relevant knowledge. Defendant does not deny that

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Mr. Codel was actively involved in monitoring the COFI index and was involved in COFI

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discussions around the time it increased 66 percent; instead, it relies on the testimony of other

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lower-level employees to the effect that Mr. Codel had “broad responsibilities.” Significantly,

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one of these employees actually testified that he does not know what Mr. Codel was

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responsible for. (Dkt. No. 103-1, Ex. B at 24:4-5.)

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Defendant’s reliance on a protective order in this case issued by the Western District of

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Texas demonstrates why such an order is not warranted here. The court issued the protective

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order because the proposed deponent, William Stipek, provided “a sworn declaration, subject

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to the penalties of perjury,” that “he has no connection to the issue or information about the

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issue of Cost of Funds Index (COFI).” (Dkt. No. 108, Ex. A.) Here, in contrast, Defendant does

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not provide a declaration from Mr. Codel at all, let alone a declaration that he does not have

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any information about the topics about which Plaintiffs seek to depose him. (Dkt. No. 107 at 4.)

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Instead, Defendant attaches correspondence between the parties regarding Mr. Codel’s

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deposition and excerpts of deposition testimony from other witnesses, some who do not

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believe that Mr. Codel would have information on COFI. Since other people cannot testify about

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what Mr. Codel knows, these materials do not justify shielding Mr. Codel from a deposition.

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Second, Plaintiffs have exhausted other less intrusive means to obtain the sought-after

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information. They have deposed the three lower-level employees Defendant identified as

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having identical information as Mr. Codel (Dkt. No. 100 at 4 ) and have persuaded the Court

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that these deponents did not definitively answer Plaintiffs’ questions as to the COFI, including

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the issue as to higher-level decisions (or non-decisions) regarding the COFI index.

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Finally, Defendant has not established any “harm or prejudice” that would result from Mr.

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Codel’s deposition, other than inconvenience. Rivera, 364 F.3d at 1063. Plaintiffs are willing to

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minimize this inconvenience by deposing Mr. Codel in Des Moines, Iowa, where he resides. In

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addition, Plaintiffs assert that the deposition would only last “two to three hours.” (Dkt. No.

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107 at 5.)

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Accordingly, the Court finds that Plaintiffs have a good faith basis for seeking Mr. Codel’s

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deposition and that he will not suffer “any annoyance, embarrassment, oppression, or undue

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burden or expense” by being deposed for a couple of hours in his hometown. Defendant’s

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motion for a protective order is therefore DENIED. Mr. Codel’s deposition, however, shall take

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place in Des Moines, Iowa (unless Mr. Codel agrees otherwise) and shall not exceed two hours.

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Defendant shall provide Plaintiffs with available dates for Mr. Codel’s deposition during the

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month of September.

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B. Mr. Haggarty

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Defendant seeks to depose James, the brother of Plaintiff Charles Haggarty, regarding

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communications he had or may have had with Plaintiffs. James has been hired by Plaintiffs as a

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litigation consultant in this action. Defendant represents that prior to Plaintiffs’ retention of

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James as a litigation consultant, James had a conversation with Plaintiff Charles Haggarty about

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“why the COFI increased in the key time frame” involved in this case. (Dkt. No. 109 at 3.) Since

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Charles testified in his deposition that he “could not recall the exact details of his conversations

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with James Haggarty,” Defendant maintains that it is “entitled [to] James Haggarty’s

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recollection as to these pre-retention conversations.” (Id. at 3.) Defendant also seeks “any pre-

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retention [as a litigation consultant] materials and documents that informed James Haggarty’s

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understanding, which he shared with Plaintiff in those conversations.” (Id. at 3.)

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Plaintiffs respond that they will provide a declaration from Mr. Haggarty on these

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issues but that his deposition would violate “the work-product privilege” and “will not likely

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lead to the discovery of admissible evidence” such that “the burden far outweighs the benefit

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of the deposition.” (Id. at 3.) Since Defendant limits the scope of this deposition to Mr.

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Haggarty’s role as “a percipient witness . . . before [he] was retained as a consultant by

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Plaintiffs,” no information protected as work product is implicated. (Id. at 3.) Further, Plaintiffs

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do not deny that Defendant has a good-faith basis to believe that a conversation about a COFI

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issue relevant to this case took place between Plaintiff Charles and James. Since James “has

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already attended 2 nearly all-day depositions” as Plaintiffs’ consultant (Dkt. No. 109 at 9), it

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would not be overly burdensome for James himself to be deposed. The Court will therefore

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permit this deposition, limited in scope to the pre-retention communications between James

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and Plaintiffs regarding COFI and not to exceed one hour.

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The Court disagrees, however, that James should be required to produce any “materials

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and documents” that “informed” his understanding of COFI. Federal Rule of Civil Procedure

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45(a) provides that a non-party may be subpoenaed “to produce documents, electronically

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stored information, or tangible things,” but these requests are still subject to relevancy

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requirements outlined in Federal Rule of Civil Procedure 26. Namely, such content must be

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“relevant to the claim or defense of any party.” Fed. R. Civ. P. 26(b)(1). While the content of the

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conversation between Plaintiff Charles and James regarding COFI may be relevant, information

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accessed by a non-party prior to engaging in a conversation about a relevant topic is not

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relevant. What one reads about a topic and what one conveys to other people about that topic

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are often completely unrelated. Thus, Defendant’s request to subpoena these documents and

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materials from James is DENIED. However, as discussed at oral argument, if James did in fact

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share such documents with Plaintiffs, he shall bring them to his deposition.
CONCLUSION

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Defendant’s motion to preclude the deposition of Franklin Codel is DENIED. Plaintiffs

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are permitted to depose Mr. Codel in Des Moines, Iowa (unless Mr. Codel agrees to a different

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location) for up to two hours. Defendant shall provide Plaintiffs with available dates for Mr.

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Codel’s deposition in September.

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Plaintiffs’ motion to preclude the deposition of James Haggarty is DENIED. Defendant is

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allowed to depose James for up to one hour regarding communications he may have had with

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Plaintiffs regarding COFI prior to his retention as Plaintiffs’ litigation consultant. James shall

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also produce to Defendant COFI documents, if any, that he shared with Plaintiffs prior to his

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retention as a litigation consultant.

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This Order disposes of Docket Nos. 103 and 109.

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IT IS SO ORDERED.

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Dated: August 24, 2012
_________________________________
JACQUELINE SCOTT CORLEY
UNITED STATES MAGISTRATE JUDGE

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Northern District of California

United States District Court

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