Bluestone Innovations, LLC v. LG Electronics, Inc. et al

Filing 153

ORDER by Judge Elizabeth D. Laporte granting in part and denying in part 135 Motion to Compel (lrc, COURT STAFF) (Filed on 12/5/2013)

Download PDF
1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 BLUESTONE INNOVATIONS LLC, 9 Plaintiff, United States District Court For the Northern District of California ORDER GRANTING IN PART AND DENYING IN PART LGE’s MOTION TO COMPEL AND GRANTING LGE’S MOTION TO SEAL v. 10 11 No. C -13-01770 SI (EDL) LG ELECTRONICS INC, et al., Defendants. 12 / 13 Defendants LG Electronics, Inc., and LG Electronics USA, Inc., (collectively, “LGE”) , 14 15 moved for an order compelling Plaintiff Bluestone Innovations, LLC and certain of its members to 16 produce documents responsive to LGE’s document requests and subpoenas. For the reasons set 17 forth below, and in accord with Plaintiff’s agreement at the hearing, the Court orders Plaintiff to 18 produce documents responsive to Requests for Production (“RFPs”) 4, 5, 8 and 10, with respect to 19 Jonathan Crocker’s representation of LG Electronics, Inc., and LG Electronics USA, Inc., by 20 December 24, 2013. The Court also orders Jonathan Crocker to produce documents responsive to 21 LGE’s subpoena with respect to his representation of LG Electronics, Inc. and LG Electronics USA, 22 Inc., by December 24, 2013. LGE’s motion is in all other respects denied without prejudice. The Court grants LGE’s motion to seal. (Dkt. 142.) The Court finds good cause to seal 23 24 Exhibits C, D, and E to the Declaration of Ashish Nagdev in support of LGE’s reply brief and to 25 redact LGE’s reply brief at page 4, lines 5 through 10. 26 I. 27 28 Background Plaintiff Bluestone is a Virginia limited liability company and the assignee of U.S. Patent No. 6,163,557, which relates to light emitting diode (“LED”) technology. (Complaint (“Compl.”) ¶¶ 1, 7.) According to LGE, Plaintiff was founded by patent attorney Jon Park, and its current 1 president is attorney Jonathan Crocker. At the hearing, Plaintiff’s counsel represented that Crocker 2 recently left Bluestone, but Plaintiff’s counsel continues to represent him. 3 Defendant LGE Electronics, Inc. is a South Korean corporation with a principal place of 4 business in Seoul. Defendant LG Electronics U.S.A., Inc. is a Delaware corporation with a 5 principal place of business in New Jersey and is a subsidiary of LG Electronics, Inc. LG Display, 6 which is not a party to this litigation, supplies LGE with LED back panels that incorporate the 7 allegedly infringing semiconductor. LG Innotek, also not a party, supplies the semiconductor to LG 8 Display. LG Innotek developed and manufactured the allegedly infringing semiconductors using 9 technology supplied by QMC, similarly not a party. LG Innotek and QMC are South Korean United States District Court For the Northern District of California 10 corporations. LGE acknowledges that these suppliers are separate entities and does not claim any 11 kind of party affiliation. 12 Prior to Plaintiff’s founding, Jonathan Crocker represented LGE and LG Display in patent 13 and trademark cases in multiple federal courts. Crocker also represented LG Innotek as its United 14 States outside counsel with respect to accusations that LG Innotek’s LED semiconductor 15 components infringed certain patents not at issue in this case. Plaintiff’s founder, Jon Park, was 16 counsel for QMC when it supplied technology to LG Innotek that was used to develop and 17 manufacture allegedly infringing components incorporated into LGE’s televisions. Park, as QMC 18 counsel, also served as indemnitor counsel for LG Innotek with respect to accusations of patent 19 infringement. At the hearing on its motion to compel, LGE’s counsel represented that Park was co- 20 inventor on a patent that was assigned to both LGE and LG Innotek. 21 On September 11, 2012, Plaintiff sued LGE for infringing the ‘557 patent by selling LED 22 backlit televisions. LGE answered and raised affirmative defenses of failure to state a claim, 23 noninfringement, invalidity, prosecution history estoppel, equitable doctrines of estoppel, laches 24 and/or waiver, failure to mark, lack of standing, implied or express license, and patent exhaustion. 25 On July 26, 2013, LGE served document requests on Bluestone relating to “LGE’s inquiry into 26 whether certain Bluestone members violated California Rules of Professional Conduct by previously 27 acting as attorneys for LGE, LG Display, and LG Innotek and now bringing this suit.” (LGE’s Mot. 28 at 3, Ex. A.) On August 26, 2013, Bluestone objected to these requests, particularly RFPs 4, 5, 8, 2 1 and 10, on several grounds, including relevancy. On September 23, 2013, LGE served subpoenas 2 from the District Court for the Eastern District of Virginia on Jonathan Crocker, Jon Park, Bruce 3 Bernstein, and Brendan Squire. The subpoenas were aimed at obtaining information about the 4 members’ prior involvement with LGE, LG Display, and LG Innotek. On October 9, 2013, the 5 subpoenaed members objected to the subpoenas on relevancy. After meeting and conferring regarding the discovery requests and subpoenas, Plaintiff, its 7 members, and LGE agreed to bring the relevancy objections to this Court. On November 6, 2013, 8 LGE moved to compel Plaintiff and its members to produce documents responsive to LGE’s 9 document requests and third-party subpoenas. (Dkt. 135.) In conjunction with its reply brief, LGE 10 United States District Court For the Northern District of California 6 filed a motion to file a redacted version of its reply brief and file Exhibits C, D, and E, under seal. 11 The Court held a hearing on the motion to compel on December 3, 2013. 12 II. Discussion 13 A. Legal Standard 14 Under Federal Rule of Civil Procedure 26(b), “[p]arties may obtain discovery regarding any 15 nonprivileged matter that is relevant to any party’s claim or defense -- including the existence, 16 description, nature, custody, condition, and location of any documents or other tangible things and 17 the identity and location of persons who know of any discoverable matter.” Further, upon a showing 18 of good cause, “the court may order discovery of any matter relevant to the subject matter involved 19 in the action.” Fed. R. Civ. P. 26(b). “The requirement of relevancy should be construed liberally 20 and with common sense, rather than in terms of narrow legalisms.” Miller v. Pancucci, 141 F.R.D. 21 292, 296 (C.D. Cal. 1992). 22 “Discovery of information that has no conceivable bearing on the case should not, however, 23 be allowed.” Id. Courts need not allow “fishing expeditions,” Rivera v. NIBCO, Inc., 364 F.3d 24 1057, 1072 (9th Cir. 2004), and the liberal discovery standard is not so liberal as to allow a party 25 explore matter which “does not presently appear germane on the theory that it might conceivably 26 become so.” Food Lion v. United Food & Commr. Workers Int’l Union, 103 F.3d 1007, 1012-13 27 (D.C. Cir. 1997) (quoting In re Fontaine, 402 F. Supp. 1219, 1221 (E.D.N.Y. 1975)). The party 28 moving to compel bears the burden of demonstrating why the information sought is relevant and 3 1 why the responding party’s objections lack merit. Fields v. Banuelos, Case No. 9-1868 SKO PC, 2 2012 U.S. Dist. LEXIS 97701, at *4-*5 (E.D. Cal. July 13, 2012). 3 B. Analysis 4 LGE argues that discovery of Plaintiff’s members’ representation of LGE, LGE Display, and 5 LGE Innotek, including use in this litigation of any confidential information obtained in the course 6 of that prior representation, is relevant to a potential motion raising ethical violations, such as a 7 possible motion for disqualification. Plaintiff counters that such discovery is not relevant to any 8 claim or defense and that LGE lacks standing to raise issues about any ethical violations related to 9 Plaintiff’s members’ involvement with LG Display and LG Innotek. United States District Court For the Northern District of California 10 LGE has not shown how Crocker’s or Park’s involvement with LG Innotek or QMC has any 11 bearing on any claim or defense in this case, nor has LGE explained how any potential ethical 12 violations vis-a-vis third parties could serve as a basis for a motion to disqualify Plaintiff’s separate 13 outside counsel. To the extent that Crocker or Park learned confidential information about LG 14 Innotek technology, any subsequent misuse of that information would be LG Innotek’s concern. 15 LGE’s reliance on Concat LP v. Unilever, PLC, 350 F. Supp. 2d 796, 818 (N.D. Cal. 2004) is 16 unpersuasive. There, the court found that a plaintiff had standing to move to disqualify the 17 defendant’s counsel because counsel previously represented the plaintiff’s former managing partner 18 and major shareholder. Id. at 819. Here, however, the relationship is far more attenuated; LGE has 19 not shown that by representing LG Innotek or LG Display or QMC that Crocker or Park was 20 somehow representing LGE. Nor is there a showing of good cause to allow discovery relevant to 21 the subject matter of this action, as LGE only speculates that Crocker and Park may have violated 22 their ethical obligations to third parties, without pointing to any evidence suggesting misuse of any 23 confidential information obtained in representing those third parties, much less misuse of such 24 information in this lawsuit. The Court therefore denies LGE’s motion to compel with respect to 25 Plaintiff’s members representation of or other involvement with LG Display and LG Innotek, and 26 denies the motion to compel with respect to Plaintiff’s members’ Park, Bernstein, and Squire. 27 At the same time, the Court is troubled by the notion of an attorney defending a client against 28 patent infringement allegations and then turning around and forming an entity that sues his former 4 1 client for infringing a patent involving technology that the attorney is familiar with from that 2 defense. Further, it is undisputed that Crocker represented LGE in several other cases, making 3 LGE’s concerns about the knowledge he obtained and his potential ethical issues less attenuated 4 than its concerns regarding third parties. In light of this concern, at the hearing Plaintiff’s counsel, 5 who also represents Crocker, agreed that Plaintiff and Crocker would provide discovery into 6 Crocker’s representation of LGE. The Court therefore orders Plaintiff to produce documents 7 responsive to RFPs 4, 5, 8 and 10, with respect to Jonathan Crocker’s representation of LG 8 Electronics, Inc., and LG Electronics USA, Inc., by December 24, 2013. The Court also orders 9 Jonathan Crocker to produce documents responsive to LGE’s subpoena with respect to his United States District Court For the Northern District of California 10 representation of LG Electronics, Inc. and LG Electronics USA, Inc., by December 24, 2013. 11 III. Conclusion 12 The Court grants in part and denies in part LGE’s motion to compel. 13 IT IS SO ORDERED. 14 Dated: 12/4/13 ELIZABETH D. LAPORTE United States Magistrate Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?