Ubiquiti Networks, Inc. v. Kozumi USA Corp. et al

Filing 144

ORDER RE: JOINT STATEMENT REGARDING DANIEL HSU DEPOSITION (Dkt. No. 141-1). Signed by Magistrate Judge Jacqueline Scott Corley (ahm, COURT STAFF) (Filed on 4/15/2013)

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1 2 3 4 5 6 7 8 IN THE UNITED STATES DISTRICT COURT 9 FOR THE NORTHERN DISTRICT OF CALIFORNIA 10 Northern District of California United States District Court 11 12 UBIQUITI NETWORKS, INC., 13 14 Plaintiff, v. Case No.: 12-cv-2582 CW (JSC) ORDER RE: JOINT STATEMENT REGARDING DANIEL HSU DEPOSITION (Dkt. No. 141-1) 15 16 17 KOZUMI USA CORP., et al., Defendants. 18 19 20 21 22 23 24 25 26 27 28 Now pending before the Court is a Joint Statement regarding a discovery dispute wherein Plaintiff seeks to compel certain discovery regarding non-party Daniel Hsu. (Dkt. No. 141-1.) After carefully considering the arguments and briefing submitted, the Court concludes that oral argument is unnecessary, see Civ. L.R. 7-1(b), and DENIES Plaintiff’s request without prejudice to Plaintiff seeking sanctions for spoliation of evidence. DISCUSSON Plaintiff seeks an order compelling Defendants to take all reasonable steps to have Daniel Hsu produce documents and appear for a deposition. Daniel Hsu, a resident of Taiwan, is a non-party and the brother of Defendant William Hsu. Plaintiff alleges that 1 Daniel Hsu worked on Kozumi matters under William Hsu’s direction and was involved in 2 the counterfeiting activities that are alleged in this action. 3 Pursuant to Federal Rule of Civil Procedure 34(a)(1), a party must produce items in control is not required; rather, “control is defined as the legal right to obtain documents upon 6 demand.” United States v. Int’l Union of Petrol. & Indus. Workers, AFL–CIO, 870 F.2d 7 1450, 1452 (9th Cir. 1989). “Thus, [a] party responding to a Rule 34 production request ... is 8 under an affirmative duty to seek that information reasonably available to [it] from [its] 9 employees, agents, or others subject to [its] control.” Hill v. Eddie Bauer, 242 F.R.D. 556, 10 560 (C.D.Cal.2007) (internal quotation marks omitted). “The party seeking the documents 11 Northern District of California “the responding party’s possession, custody, or control.” Actual possession, custody or 5 United States District Court 4 bears the burden of demonstrating that the responding party exercises such control.” Doe v. 12 AT & T W. Disability Benefits Program, No. 11-4603, 2012 WL 1669882, at *2 (N.D. Cal. 13 May 14, 2012) (internal citation omitted). 14 Plaintiff seeks emails from Daniel Hsu’s Kozumi email address and his gmail address. 15 Defendants represent that they have produced all of Daniel Hsu’s emails from the Kozumi 16 email address. Plaintiff questions the veracity of this representation given that William Hsu 17 testified that he did not collect emails from Daniel Hsu’s Kozumi email account because he 18 did not have access to Daniel’s account. (Dkt. No. 141-5, Ex. A, 179:10-14.) William Hsu 19 testified that instead, Defendants have produced all emails from Defendant William Hsu’s 20 email account which they contend basically covers everything because William Hsu 21 instructed Daniel Hsu and other individuals using a Kozumi email address to copy him on all 22 emails about Kozumi orders and shipments. (Id. at 179:23-181:6.) 23 Defendants are obligated to produce responsive documents in their custody or control. 24 The key question here is what level of control Defendants have over non-party Daniel Hsu. 25 Defendants contend that Daniel Hsu was not an employee of Kozumi and he was only given 26 a Kozumi email address because William Hsu gave one to everyone who was helping him. 27 According to William Hsu’s deposition testimony Daniel Hsu did web design for Kozumi as 28 well as inspections and follow up on orders placed by Kozumi. (Dkt. No. 141-1, Ex. A, 2 1 146:8-177:10.) Defendants also contend that Daniel Hsu was not on Kozumi’s payroll and 2 was instead paid by Netcom—a company wholly owned by William Hsu; however, Daniel 3 Hsu’s salary is listed on a spreadsheet regarding “Kozumi Monthly Expenses.” (Dkt. No. 4 141-1, Ex. B.) This evidence suggests, at a minimum, that Daniel Hsu was a consultant for 5 Kozumi. According to documents in the record Daniel Hsu was continuing to use his 6 Kozumi email address for Kozumi related business after the date on which the document 7 requests at issue were served. (Dkt. Nos. 141-5, Exs. R & S.) Thus, at the time the 8 document request was served he was still acting as a consultant. 9 The problem here is that unless William Hsu was copied on the email, Kozumi no Northern District of California longer has a copy because Kozumi’s document retention “policy” was only to retain emails 11 United States District Court 10 from William Hsu’s email account on the Kozumi server. (Dkt. No. 141-3 ¶ 7.) Although 12 Plaintiff argues that Defendants therefore “failed to preserve evidence,” Plaintiff does not 13 actually challenge Kozumi’s document retention practice at this time; instead, Plaintiff asks 14 the Court to order Defendants “to take all reasonable steps” to have Daniel Hsu produce 15 documents. William Hsu responds that he asked Daniel Hsu to produce the documents and 16 appear for deposition, but Daniel has not provided him any documents and has declined to 17 appear for a deposition. (Dkt. No. 141-3 ¶ 5.) At bottom, then, Plaintiff wants the Court to 18 order Defendants to obtain documents from Daniel Hsu and force him to appear for 19 deposition. Plaintiff, however, has not cited any authority for the proposition that the Court 20 can order Defendants to do more than it has in the absence of a showing that the emails in 21 Daniel Hsu’s possession are within Defendants’ legal control. 22 “It is not enough that a party may have a practical ability to obtain the requested 23 documents from an affiliated organization, because the other entity could legally—and 24 without breaching any contract—continue to refuse to turn over such documents.” In re 25 Citric Acid Lit., 191 F.3d 1090, 1107 (9th Cir.1999) (internal quotations omitted). In In 26 Micron Technology, Inc. v. Tessera, Inc., No. C06-80096, 2006 WL 1646133, at *1 (N.D. 27 Cal. June 14, 2006), the court considered whether party SPIL, which wholly owned non- 28 party SUI, had legal control of documents in the control of SUI for purposes of Federal Rule 3 were separate legal entities and there was no evidence of any contract between the two 3 companies which would give SPIL the right to demand documents from SUI. Id; see also 4 United States v. Int’l Union of Petroleum & Indus. Workers, AFL-CIO, 870 F.2d 1450 (9th 5 Cir. 1989) (holding that the International Union of Petroleum and Industrial Workers did not 6 have control over the election records of local unions based in part on an examination of the 7 union contract); In re NCAA Student-Athlete Name & Likeness Litig., No. 09-CV-01967, 8 2012 WL 161240, at *2 (N.D. Cal. Jan. 17, 2012) (holding that the NCAA did not have a 9 “legal right to acquire the documents sought from its member institutions”). Here, Plaintiff 10 has not offered any evidence of a contract between Daniel Hsu and William Hsu or Kozumi 11 Northern District of California of Civil Procedure 34. The court concluded that SPIL did not because the two companies 2 United States District Court 1 which would give either Defendant legal control over emails within Daniel Hsu’s possession. 12 The evidence of Daniel Hsu’s consultant relationship with Kozumi is insufficient absent a 13 showing that either William Hsu or Kozumi could legally compel Daniel Hsu to produce the 14 documents. 15 Plaintiff’s request for emails from Daniel Hsu’s gmail address 16 (danhsu24@gmail.com) presents the same issue. Plaintiff contends that it is entitled to email 17 from this address because Daniel Hsu used this email address to do business for Kozumi. In 18 support of this contention, Plaintiff has submitted three emails which suggest that Daniel Hsu 19 used his danhsu24@gmail.com email address for Kozumi related communications. (Dkt. 20 No. 141-5, Exs. G, H & I.) The Court agrees that these emails suggest that Daniel Hsu used 21 both the Kozumi and gmail addresses for Kozumi related business; however, Plaintiff has not 22 cited any authority for the proposition that it can order Defendants to obtain access to Daniel 23 Hsu’s personal gmail account. 24 Accordingly, the Court finds that Plaintiff has failed to meet its burden of 25 demonstrating that Kozumi has control over the documents sought from these two email 26 accounts. See United States v. Int’l Union of Petroleum & Indus. Workers, AFL-CIO, 870 27 F.2d at 1452. “Ordering a party to produce documents that it does not have the legal right to 28 4 1 obtain will oftentimes be futile, precisely because the party has no certain way of getting 2 those documents.” In re Citric Acid Litig., 191 F.3d 1090, 1108 (9th Cir. 1999). 3 Plaintiff’s request that Defendant William Hsu compel Daniel Hsu to appear for a 4 deposition is similarly not supported by any authority and is therefore denied. The Federal 5 Rules of Civil Procedure and the Hague Convention provide for a mechanism by which a 6 party can obtain a non-party’s deposition in another country. See Symantec Corp. v. Acronis, 7 Inc., No. 11-CV-5310, 2013 WL 503612, at *1 (N.D. Cal. Feb. 8, 2013)(“If the person 8 sought to be deposed is not an officer, director or managing agent, the person’s deposition 9 must be sought by third-party subpoena. And, if the witness is located overseas, “the Northern District of California procedures of the Hague Convention or other applicable treaty must be utilized”). It does not 11 United States District Court 10 appear that Plaintiff has attempted to obtain his deposition through these mechanisms; the 12 request is therefore premature. 13 The Court’s ruling does not mean that Defendants should not be sanctioned for their 14 destruction of relevant documents upon a proper showing. Sanctions may similarly be 15 appropriate if Plaintiff is legally required to have Daniel Hsu appear for deposition and fails 16 to do so. See Acronis, 2013 WL 503612 at *1. By the present motion, however, Plaintiff 17 does not seek such sanctions. Defendants could certainly alleviate the need for a sanctions 18 motion by persuading Daniel Hsu to cooperate as Plaintiff requests, but they have either 19 failed to or chose not to do so. CONCLUSION 20 21 22 23 Based on the foregoing, Plaintiff’s request to compel discovery related to non-party Daniel Hsu is DENIED without prejudice to a motion for sanctions. Plaintiff’s Administrative Motion to Seal particular exhibits to the Joint Discovery 24 Dispute is GRANTED. Plaintiff shall electronically file those exhibits under seal within 25 three days. 26 This Order disposes of Docket No. 141-1. 27 28 IT IS SO ORDERED. 5 1 2 Dated: April 15, 2013 _________________________________ JACQUELINE SCOTT CORLEY UNITED STATES MAGISTRATE JUDGE 3 4 5 6 7 8 9 10 Northern District of California United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6

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