Caldwell et al v. Facet Retiree Medical Plan et al

Filing 73

ORDER by Judge Elizabeth D Laporte denying 49 Motion to Compel and Motion to Modify Litigation Schedule. (knm, COURT STAFF) (Filed on 2/13/2014)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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PATRICK CALDWELL, et al.,
Plaintiffs,

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United States District Court
For the Northern District of California

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No. C -13-00385 WHA (EDL)
ORDER DENYING DEFENDANTS’
MOTION TO COMPEL AND MOTION
TO MODIFY LITIGATION SCHEDULE

v.
FACET RETIREE MEDICAL PLAN, et al.,
Defendants.

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In this ERISA action, Plaintiffs seek payment of retirement benefits after their benefits were

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denied by Defendant Facet Retiree Medical Plan. Defendants have filed two discovery motions

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focused on compelling Plaintiffs to appear for their depositions. At the January 21, 2014 hearing on

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Defendants’ motions, the Court ordered further briefing on the issue of whether Plaintiffs had

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introduced new facts in their dispositive motion that would justify compelling their depositions. The

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parties filed supplemental briefs on January 29 and February 4, 2014. For the reasons stated at the

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hearing and in this Order, Defendants’ Motion to Compel and Motion to Modify Litigation Schedule

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are denied.

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Facts

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Defendant Facet Retiree Health Plan provides post-retirement health care benefits to a small

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group of former officers of a company called Protein Design Labs. Compl. ¶¶ 4-12. Protein Design

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Labs (PDL) was the original sponsor of the Plan and Plaintiffs all retired from PDL. Id. In 2008,

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PDL spun off a company called Facet Biotech Corp., which assumed the Plan. Compl. ¶ 17. In

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2009, Facet announced that it would eliminate the company’s payment of any portion of the

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premiums, and it purported to amend the Plan to reflect that change. Compl. ¶ 18. Plaintiffs
protested the change, but it was implemented in 2010. Compl. ¶¶ 20-21. Plaintiffs made an

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administrative claim for reinstatement of the company’s payment of a portion of the premiums and

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requested review of the denial of that claim. Compl. ¶ 36. In this case, Plaintiffs have asserted that

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the amendment to the Plan was invalid not only because of its substance but also because of

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procedural failures. Hasselman Decl. ¶ 13.

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Defendants’ counsel contacted Plaintiffs’ counsel on August 1, 2013 about setting dates for

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Plaintiffs’ depositions. Torres Decl. ¶ 2; Ex. 1. Defendants sought these depositions at least in part

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because Plaintiffs’ initial disclosures in this case had stated that Plaintiffs were “likely to have

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information regarding Plaintiffs’ claim and appeal, premium contributions paid by participants in the

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Facet Retiree Medical Plan and Protein Design Labs Inc.’s intent in establishing the PDL Retiree

United States District Court
For the Northern District of California

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Medical Plan.” Mot. to Compel Ex. 1 at 2. Plaintiffs’ counsel responded that she would obtain

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dates from her clients for their depositions. Torres Decl. ¶ 2; Ex. 1. Plaintiffs’ counsel did not raise

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any substantive objections to the depositions, and only objected as to timing because Plaintiffs took

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the position that either all depositions should occur prior to the October 23, 2013 ADR session or all

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depositions should occur after that session. Torres Decl. ¶ 3; Ex. 2. The parties had already agreed

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to take the deposition requested by Plaintiffs after the ADR session, so Defendants postponed

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seeking Plaintiffs’ deposition until that time as well. Torres Decl. ¶ 4.

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Defendants’ counsel contacted Plaintiffs’ counsel prior to the October 23, 2013 ADR session

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regarding deposition dates for Plaintiffs. Torres Decl. ¶ 5. Plaintiffs’ counsel responded on October

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19, 2013 that she would secure dates for the depositions. Torres Decl. Ex. 3. Again, Plaintiffs did

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not raise any substantive objections to their depositions. Id.

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On October 21, 2013, however, Plaintiffs counsel objected for the first time to producing

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Plaintiffs for their depositions. Torres Decl. ¶ 6; Ex. 4. Plaintiffs do not dispute that they initially

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did not intend to object to their depositions, but state that they had a “change of heart.” Opp. at 3.

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Defendants did not initially respond to the October 21, 2013 email about the objection to the

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depositions because the ADR session was being conducted on October 23, 2013 during which the

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case could settle thereby obviating any need for the depositions. Torres Decl. ¶ 7. The case did not

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settle at the ADR session, and on October 28, 2013, Plaintiffs’ counsel contacted Defendants’

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counsel about further settlement negotiations. Id. ¶ 8. The settlement discussions concluded in the
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week of November 4 without a settlement. Id. ¶ 9.
On November 8, 2013, Defendants’ counsel sent a letter to Plaintiffs’ counsel regarding the

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objections to Plaintiffs’ depositions. Torres Decl. ¶ 9; Ex. 5. Defendants also advised Plaintiffs that

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Defendants would file a motion seeking additional time to conduct Plaintiffs’ depositions and related

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follow up discovery. Id. Plaintiffs did not respond to the November 8, 2013 letter. Torres Dec.. ¶

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10. On November 11, 2013, Defendants filed their Motion to Modify Litigation Schedule.

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On November 18, 2013, Defendants’ counsel sent a follow up letter to Plaintiffs’ counsel

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addressing the issues raised in Defendants’ motion to modify the litigation schedule. Torres Decl. ¶

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11; Ex. 6. Plaintiffs’ counsel responded on November 18, 2013. Id. ¶ 12; Ex. 7. Defendants’

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For the Northern District of California

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counsel also spoke to Plaintiffs’ counsel by phone on November 19, 2013 to attempt to resolve the

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issue of Plaintiffs’ depositions. Torres Decl. ¶ 13. On November 19, 2013, Defendants filed their

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Motion to Compel.

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Discussion

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Defendants argue that they are entitled to Plaintiffs’ depositions based on the general rules of

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allowable discovery under Rule 26. See Fed. R. Civ. P. 26. Defendants note that Plaintiffs stated in

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their initial disclosures that they have discoverable information, and that Plaintiffs did not object to

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their depositions for two months after Defendants initially sought the depositions.

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Plaintiffs strenuously oppose the motion to compel their depositions. Plaintiffs point out that

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Defendants have never served deposition notices so there is nothing for the Court to compel. See

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Nuskey v. Lambright, 251 F.R.D. 3, 12 (D. D.C. 2008). However, Civil Local Rule 30-1 requires

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the parties to meet and confer about deposition dates prior to issuing deposition notices. Here,

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Plaintiffs led Defendants to believe for two months that they would appear for their depositions, and

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then three weeks before the discovery cutoff, informed Defendants that they had a “change of heart.”

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Under those circumstances, Defendants’ failure to serve deposition notices does not preclude them

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from taking Plaintiffs’ depositions provided they do so before any depositions are taken.

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Plaintiffs also argue that discovery in ERISA actions is much more limited than in routine

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civil cases and Defendants have not shown that Plaintiffs’ depositions are likely to lead to the

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discovery of admissible evidence. See Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 969-70
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(9th Cir. 2006). Defendants argue, however, that Plaintiffs have conceded that they discoverable

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knowledge about their claims and their claimed damages or injury. As discussed at the hearing,

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Plaintiffs may have discoverable information as to their damages, and Defendants may be entitled to

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depose them on that issue. However, any depositions regarding damages would only be appropriate

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after a ruling on the pending dispositive motions finding liability by Defendants. Further, the parties

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have not addressed the general rule that compensatory damages are not available under ERISA. See

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Bast v. Prudential Ins. Co., 150 F.3d 1003, 1009 (9th Cir. 1998). Therefore, Defendants’ motion to

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compel Plaintiffs’ depositions as to damages is denied without prejudice.

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The parties’ supplemental briefs addressed whether Defendants were entitled to Plaintiffs’

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For the Northern District of California

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depositions on substantive issues. In their supplemental brief, Defendants listed nine statements

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from Plaintiffs’ dispositive motion that Defendants believe constitute new evidence justifying

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Plaintiffs’ depositions. After a careful review of the supplemental briefs, the Court concludes that

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none of the nine items warrant deposing Plaintiffs on substantive issues. For example, items one and

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two do not constitute evidentiary facts justifying Plaintiffs’ depositions, and instead are inferences

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that Plaintiffs propose in their dispositive motion. Moreover, Plaintiffs do not oppose striking these

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statements from Plaintiffs’ brief, so these statements are stricken.

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Item three does not cite to any evidence, and information about Plaintiffs’ intent to re-enroll

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in the Plan is not directly relevant to the merits. Item four relates to a matter identified in Plaintiffs’

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initial disclosures as a topic on which Plaintiffs have knowledge, but exhibit 16 on which item four

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relies is in the administrative record and is cited and contained in declarations from both parties in

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the briefing on the dispositive motion. See Hasselman Decl. in Supp. of Dispositive Mot. at ¶ 17;

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Ex. 16; Torres Decl. in Supp. of Opp. to Dispositive Mot. at 8; Ex. 6 at 84-89. Plaintiffs did not

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provide any new evidence in making the statement in item four and citing exhibit 16. Therefore,

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item four does not provide a basis for Plaintiffs’ depositions on substantive issues.

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Items five, six and eight are statements describing a document and do not cite extra-record

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evidence. In addition, Plaintiffs do not cite any extra-record evidence in support of items seven and

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nine. Therefore, these items do not support permitting Defendants to take Plaintiffs’ depositions on

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substantive issues.
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Conclusion
Defendants’ Motion to Compel and Motion to Modify Litigation Schedule are denied

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without prejudice. In their opposition to the motion to compel, Plaintiffs seek a fee award.

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Plaintiffs’ request for fees, which was not made by separate motion, is denied. See Local Rules 7-

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8(a), 37-4(a).

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IT IS SO ORDERED.

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Dated: February 13, 2014
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ELIZABETH D. LAPORTE
United States Chief Magistrate Judge

United States District Court
For the Northern District of California

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