Cardsoft, Inc. et al v. Verifone Holdings, Inc. et al

Filing 19

ORDER GRANTING MOTION TO COMPEL COMPLIANCE WITH RULE 45 DEPOSITION SUBPOENA AND DOCUMENT REQUEST; DENYING CROSS-MOTION FOR PROTECTIVE ORDER AND TO QUASH (SI, COURT STAFF) (Filed on 9/12/2011)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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CARDSOFT, INC., ET AL.,

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No. MISC 11-80181 SI

Plaintiffs,

[Underlying Case No. 2:08-cv-00098-CE in
the U.S. District Court, Eastern District of
Texas, Marshall Division]

United States District Court
For the Northern District of California

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v.

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VERIFONE HOLDINGS, INC., ET AL.,

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Defendants.

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/

ORDER GRANTING MOTION TO
COMPEL COMPLIANCE WITH RULE
45 DEPOSITION SUBPOENA AND
DOCUMENT REQUEST; DENYING
CROSS-MOTION FOR PROTECTIVE
ORDER AND TO QUASH

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Currently before the Court is a motion by defendant Hypercom Corporation (“Hypercom”) to

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compel compliance with a Rule 45 deposition subpoena (Docket No. 1); and cross-motions by plaintiffs

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Cardsoft, Inc. and Cardsoft (Assignment for the Benefit of Creditors) LLC (“Cardsoft”) and third-party

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Donald E. Sweet for a protective order and to quash the subpoena. Pursuant to Civil Local Rule 7-1(b),

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the Court finds these matters appropriate for resolution without oral argument and hereby VACATES

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the September 16, 2011 hearing. Having considered the papers submitted, and for good cause shown,

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the Court hereby GRANTS Hypercom’s motion and DENIES Cardsoft’s cross-motion.

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In the underlying case, pending since 2008 in the Eastern District of Texas, plaintiff Cardsoft

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has sued Hypercom and other companies for patent infringement. The accused products are credit card

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electronic funds transfer/point of sale terminals. Hypercom’s subpoena seeks the deposition testimony

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and documents of Donald E. Sweet, a resident of this judicial district who was the former CEO and a

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director of Cardsoft. Hypercom argues that Sweet’s testimony is relevant to this case because Sweet

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was directly involved in attempts to sell the Cardsoft technologies/patents in 2005, and as part of that

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process, Sweet had discussions with a consultant hired by Cardsoft in order to identify technologies that

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infringed on Cardsoft’s patents. See Hypercom Motion to Compel at 5-9; Reply at 3.

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In their cross-motion, Cardsoft and Sweet seek a protective order and to quash the subpoena.

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The primary ground for opposing the deposition is undue burden: that Sweet’s medical condition

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prevents him from giving a deposition. Cardsoft does not dispute the relevance of Sweet’s testimony,

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but asserts that it would be duplicative of other individuals whose depositions have been offered

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(particularly Andrew Smyth and Anthony Rawlinson). Opposition at 11; Reply 5-6. Finally, Cardsoft

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has offered to turn over the responsive documents in Sweet’s possession. Opposition at 11; Reply at

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7.
The Court has reviewed the papers submitted, including the declarations regarding Mr. Sweet’s

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United States District Court
For the Northern District of California

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health. The Court finds that Hypercom’s motion should be GRANTED. While the declaration of Mr.

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Sweet and his doctor establish that Mr. Sweet had some significant operations in the past few years,

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including two in 2011 (back and cataract surgeries) and he is still on the narcotic prescription drug

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hydrocodone, there is no testimony about Sweet’s general physical or mental health. For example, there

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is no evidence that Mr. Sweet is not working, there is no evidence that Mr. Sweet is house-bound or that

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his activities are limited in any way, and there is no evidence that due to the hydrocodone Sweet cannot

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and has not functioned in a business or social environment. At most, Sweet and his doctor testify that

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he has experienced side effects from the hydrocodone, which range from drowsiness and lethargy to

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mental clouding and anxiety. Neither Sweet nor his physician declares which side effects Sweet has

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suffered from or the impact the unidentified side effects had or have on his general functioning.1

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The Court also finds that the testimony sought by Hypercom is not duplicative of testimony and

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evidence already in Hypercom’s possession. In particular, Hypercom has demonstrated that the

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testimony of prior witnesses has left gaps in the record that only Sweet may be able to fill.

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Therefore, the Court ORDERS Sweet to be produced for a deposition not to exceed four (4)

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hours at a location within 15 miles of his residence. Sweet shall be produced on or before September

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Plaintiffs’ counsel repeatedly asserts that Sweet’s treating physician declared that “Sweet’s
prescribed medication significantly impairs both his mental and physical faculties.” See, e.g.,
Opposition at 6:8-10. However, the declaration of Dr. Alamin states only that, “Sweet’s mental and
physical faculties are impaired while he is taking hydrocodone.” Ex. N to Hardee Decl., ¶ 10. The
doctor never explains the degree of impairment.
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30, 2011. Cardsoft shall also produce the documents provided by Sweet to Cardsoft on or before

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September 16, 2011.2

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IT IS SO ORDERED.

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Dated: September 12, 2011
SUSAN ILLSTON
United States District Judge

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United States District Court
For the Northern District of California

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Cardsoft filed a motion to strike evidence submitted by Hypercom in support of its reply.
[Docket No. 17]. The Court DENIES that motion. The evidence submitted responds directly to points
raised in Cardsoft’s cross-motion and, therefore, is not improper.
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