Caldwell et al v. Facet Retiree Medical Plan et al

Filing 86

ORDER DENYING DEFENDANTS MOTION FOR RELIEF FROM A DISCOVERY ORDER OF MAGISTRATE JUDGE by Hon. William Alsup denying 80 Motion.(whalc3, COURT STAFF) (Filed on 3/31/2014)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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For the Northern District of California

United States District Court

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PATRICK CALDWELL, FRAN
CHARLSON, DOUGLAS EBERSOLE,
and CARY QUEEN,

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Plaintiffs,

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No. C 13-00385 WHA

v.

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FACET RETIREE MEDICAL PLAN and
TIMOTHY RICHMOND AS PLAN
ADMINISTRATOR OF THE FACET
RETIREE MEDICAL PLAN,

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ORDER RE DEFENDANTS’
MOTION FOR RELIEF FROM A
DISCOVERY ORDER OF
MAGISTRATE JUDGE

Defendants.

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/

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In this ERISA action inherited from a colleague, defendants move for relief from a non-

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dispositive discovery order by Magistrate Judge Elizabeth Laporte. For the reasons stated

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below, defendants’ motion is DENIED.

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The background is set forth in Judge Laporte’s order (Dkt. No. 73). In brief, defendants

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moved to compel plaintiffs to appear for their depositions and to modify the litigation schedule

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in November 2011 in order to complete the depositions (Dkts. No. 38, 42). After several rounds

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of briefing, Judge Laporte denied defendants’ motions. Defendants now move for relief from

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Judge Laporte’s discovery order.

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A district court must defer to a non-dispositive order entered by a magistrate judge unless
its factual determinations are clearly erroneous or its legal conclusions are contrary to law.
Grimes v. City & County of San Francisco, 951 F.2d 236, 241 (9th Cir. 1991); Rule 72(a). In

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reviewing for clear error, the district judge may not simply substitute his or her judgment for that

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of the magistrate judge. Ibid. Rather, a finding of fact is clearly erroneous only when the district

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court is left with a "definite and firm conviction that a mistake has been committed." Burdick v.

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Comm'r Internal Rev. Serv., 979 F.2d 1369, 1370 (9th Cir. 1992). Moreover, while it is true that

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Rule 26 should be liberally construed, discovery in ERISA actions should generally be limited to

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information relevant to "the nature, extent, and effect on the decision-making process of any

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conflict of interest that may appear in the record." Abatie v. Alta Health & Life Ins. Co., 458

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F.3d 955, 970 (9th Cir. 2006) (en banc).

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Defendants raise three arguments in support of their claim that Judge Laporte’s discovery
order was clearly erroneous or contrary to law. First, defendants argue that the discovery order

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For the Northern District of California

United States District Court

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treated defendants’ motion as a Rule 56(d) motion, rather than motion to compel under the

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general rules of allowable discovery under Rule 26 (Br. at 2). The discovery order, however,

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considered defendants’ discovery motion under Rule 26 and stated that Rule 26 generally allows

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for broad discovery, but our court of appeals in Abatie has significantly limited the scope of

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discovery in ERISA cases to instances where a conflict of interest may exist (Dkt. No. 73 at 3).

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Moreover, Rule 26's authorization of broad discovery is tempered by a court’s determination that

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“the burden or expense of the proposed discovery outweighs its likely benefit, considering the

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needs of the case, the amount in controversy, the parties' resources, the importance of the issues

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at stake in the action, and the importance of the discovery in resolving the issues.” Rule

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26(b)(2)(C)(iii). Here, the discovery order properly found that the burden and expense of the

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proposed depositions outweighed any proposed benefit given that ERISA actions are generally

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restricted to the administrative record. Second, defendants argue that the discovery order erred

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in finding that they were not entitled to depose plaintiffs based on the allegedly new facts that

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plaintiffs raised for the first time in their dispositive motion. The discovery order, however,

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found that the “new facts” identified by defendants in supplemental briefing were facts from the

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administrative record submitted by defendants themselves, inferences, or new theories that may

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or may not be supported by the administrative record (Dkt. No. 73 at 4). The discovery order

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struck two inferences and found that the other seven items did not provide a basis for plaintiffs’
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depositions on substantive issues. After reviewing the allegedly “new facts,” this order is not

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convinced that defendants have met their burden to show that the discovery order’s factual

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determinations are clearly erroneous. Moreover, defendants cite no binding authority to

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demonstrate that the discovery order’s denial of their motion is contrary to law. Courts have

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broad discretion in determining whether evidence is relevant for discovery purposes. Surfvivor

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Media, Inc. v. Survivor Prods., 406 F.3d 625, 635 (9th Cir. 2005).

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Third, defendants object to the discovery order’s ruling that “Plaintiffs may have

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discoverable information as to their damages, and Defendants may be entitled to depose them on

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that issue. However, any depositions regarding damages would only be appropriate after a ruling
on the pending dispositive motions finding liability by Defendants” (Dkt. No. 73). Defendants

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For the Northern District of California

United States District Court

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argue that the Court has not issued an order bifurcating discovery in this action and therefore

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they should be entitled to depose plaintiffs now. Had this issue been before the assigned judge

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ab initio, he would have allowed the depositions to go forward. That, however, is not the

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standard of review. Defendants have simply not met their burden to prove that the discovery

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order was clearly erroneous or contrary to law. Here, the discovery order squares with Rule 26's

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recognition that a court may limit discovery when “the burden or expense of the proposed

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discovery outweighs its likely benefit.” Rule 26(b)(2)(C)(iii). Defendants may return to Judge

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Laporte and seek to compel plaintiffs’ depositions after the Court rules on the pending cross-

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motions for summary judgment.

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Magistrate Judge Laporte's February 13 discovery order is not clearly erroneous or

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contrary to law. Accordingly, defendants’ motion for relief from the discovery order is DENIED.

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The hearing on this motion is VACATED.

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IT IS SO ORDERED.

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Dated: March 31, 2014.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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