Newport et al v. Burger King Corporation

Filing 175

ORDER re #171 Letter filed by Roy D. Newport. Signed by Magistrate Judge Donna M. Ryu on 9/12/2011. (dmrlc2, COURT STAFF) (Filed on 9/12/2011)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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For the Northern District of California

United States District Court

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ROY D NEWPORT, et al.,

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No. C-10-04511-WHA (DMR)
ORDER RE JOINT DISCOVERY
LETTER OF SEPTEMBER 7, 2011
[DOC. NO. 171]

Plaintiffs,
v.

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BURGER KING CORP.,

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Defendant.
___________________________________/

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Before the court is the parties’ September 7, 2011 joint letter [Docket No. 171] in which

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Plaintiffs move to compel Defendant Burger King Corporation (“BKC”) to produce documents and

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information regarding BKC’s demands for indemnification in a related case entitled Vallabhapurapu

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v. Burger King Corp, No. 11-00667 WHA (N.D. Cal. filed Oct. 5, 2010). This matter is suitable for

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determination without oral argument. N.D. Cal. Civ. R. 7-1(b).

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Background

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Plaintiffs in this action (“Newport Plaintiffs”) are franchisees of ninety-six Burger

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King restaurants located in California. The Newport Plaintiffs seek declaratory relief establishing

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that they do not have a duty to indemnify BKC for any part of the multi-million dollar settlement of

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ten subclasses of disabled restaurant patrons for BKC’s violations of the Americans with Disabilities

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Act ("ADA") in Castaneda v. Burger King Corp., No. 08-4262 WHA, 2010 WL 2735091 (N.D. Cal.

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July 12, 2010). BKC has counterclaimed for indemnification by the Newport Plaintiffs as well as

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additional franchisees and franchisee guarantors.

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The ten Castaneda subclasses are organized around ten particular Burger King restaurants

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now referred to as the "Focus 10." Although the July 2010 class settlements in Castaneda cover

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only the Focus 10 stores, BKC seeks indemnification from all ninety-six franchises originally

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named by the Castaneda Plaintiffs, including the eighty-six stores that ultimately were not certified

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as subclasses in Castaneda.

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In February 2011, the Vallabhapurapu Plaintiffs filed a lawsuit seeking relief under the ADA
regarding the remaining eighty-six franchises for which class certification was sought but not
granted in Castaneda. BKC has filed third-party claims for indemnification in Vallabhapurapu.

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For the Northern District of California

United States District Court

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The affected franchisees have filed a motion to sever the third party indemnification claims in

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Vallabhapurapu and to consolidate them with the counterclaims pending in Newport; the motion is

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scheduled for hearing on October 27, 2011.

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The Newport Plaintiffs seek an order to compel responses to Requests for Production

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(“RFP”) Nos. 1, 2, 3, 20, and 21, and Interrogatory No. 1.1 These discovery requests call for

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documents and information related to BKC’s indemnity demands in Vallabhapurapu. BKC objects

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on the basis that the Vallabhapurapu lawsuit is not mentioned anywhere in the Newport Plaintiffs’

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complaint or in BKC’s counter-claims, and the information sought is therefore irrelevant.

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Analysis
Rule 26(b)(1) of the Federal Rules of Civil Procedure define the normal scope of discovery
as “any nonprivileged matter that is relevant to any party’s claim or defense.”
BKC argues that information regarding demands for indemnification made in the
Vallabhapurapu case is irrelevant to the indemnification questions raised in Newport. BKC points

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The Newport Plaintiffs specifically note that they are not asking the court to rule on whether BKC
must respond to RFP No. 5, which calls for “invoices and billing entries for attorneys fees and costs incurred
by BKC in connection with the Castaneda Suit and the Vallabhapurapu Suit for which BKC asserts it is
entitled to indemnification from the Franchisees...” [Joint Letter, Docket No. 171 at 3; Exhibit A, Docket No.
171-1 at 4]. In the Joint Letter, BKC asserts that such documents are protected from discovery by the
attorney-client privilege. Plaintiffs note that the parties have not yet met and conferred on this issue. The
matter is therefore not ripe for adjudication.

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out that the Newport pleadings do not reference the Vallabhapurapu lawsuit, and the court has not

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yet ruled on the motion to sever the indemnification claims in Vallabhapurapu and consolidate them

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with the Newport counter-claims. These statements, while technically true, do not lead to the

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conclusion that the discovery sought is irrelevant. It is clear that the indemnification issues in

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Newport and Vallabhapurapu are intertwined. BKC seeks indemnification in Newport from all

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ninety-six franchisees for the Castaneda settlement proceeds and attorneys fees, including the

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eighty-six franchises which were not certified in Castaneda but are now subject to possible class

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certification (as well as additional indemnification claims) in Vallabhapurapu. This renders the

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Vallabhapurapu indemnification information relevant to the Newport lawsuit for purposes of

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discovery.
Therefore, BKC is ordered to respond to the discovery requests at issue relating to
indemnification claims made by BKC in Vallabhapurapu.

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Conclusion
Plaintiffs’ motion to compel responses to Requests for Production Nos. 1, 2, 3, 20, and 21
and Interrogatory No. 1 is GRANTED.
Plaintiffs’ motion to compel a response to RFP No. 5 is denied without prejudice. The
parties shall meet and confer regarding RFP No. 5, and shall follow the Court’s standing order on

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discovery matters if any dispute remains.

Judge D
ER

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. Ryu
onna M

R NIA

Dated: September 12, 2011

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IT IS SO ORDERED.

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NO

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S DISTRICT
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UNIT
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For the Northern District of California

United States District Court

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D IS T IC T O
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DONNA M. RYU
United States Magistrate Judge

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