Layer2 Communications, Inc. v. Flexera Software, LLC

Filing 121

Order by Magistrate Judge Donna M. Ryu denying 96 Discovery Letter Brief.(dmrlc2, COURT STAFF) (Filed on 8/1/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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For the Northern District of California

United States District Court

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LAYER2 COMMUNICATIONS INC,

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No. C-13-02131 DMR

Plaintiff(s),
ORDER RE: DISCOVERY LETTER
[DOCKET NO. 96]

v.

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FLEXERA SOFTWARE LLC,

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Defendant(s).
___________________________________/

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Before the court is a discovery letter filed by Plaintiff and Counterclaim Defendant Layer2

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Communications, Inc. (“Layer2”) and third party CenturyTel Long Distance, LLC (“CTLD”)

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[Docket No. 96]. The court finds the letter appropriate for resolution without oral argument

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pursuant to Civil L.R. 7-1(b). The motion is denied, as discussed below.

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I. BACKGROUND
A. Factual Background
The background of this case has been summarized elsewhere. See, e.g., Docket No. 67. In

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brief, from 2010 until 2013, Layer2 provided internet and VPLS services to Flexera pursuant to a

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contract between the parties. Their contract permitted Flexera to receive service credits for service

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outages of certain types and durations, and to terminate the contract early if Flexera acquired a

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certain amount of service credits. Flexera terminated the contract early, but Layer2 contends that

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Flexera had not acquired the required amount of service credits to do so. Each party brings a breach

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of contract claim against the other.

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B. Procedural History

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The original cutoff date for fact discovery was March 11, 2014. [Docket No. 19.] The court

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later extended this date to May 13, 2014, and stated that “[n]o further continuances will be

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granted by the Court absent extraordinary circumstances.” [Docket No. 44, emphasis in

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original.]

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On April 17, 2014, Flexera filed a motion to disqualify Layer2’s counsel. The motion to
disqualify was set for a hearing on May 22, 2014. On May 14, 2014, the parties filed separate case
management conference statements noting that the parties had stipulated (without the court’s

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For the Northern District of California

United States District Court

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approval or intervention) that all depositions noticed by May 14, 2014 would be stayed and

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rescheduled for a date after hearing on the motion to disqualify, and that Flexera’s amended

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responses to Layer2’s interrogatories, requests for admissions (“RFAs”), and request for production

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of documents (“RFPs”), and any accompanying privilege logs, would be due within seven days of

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the hearing on the motion to disqualify. See Layer2’s Case Management Statement [Docket No. 63],

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Flexera’s Case Management Statement [Docket No. 64].

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The parties also noted that “a dispute has also arisen between Layer2 and third-party

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Centurylink with respect to a subpoena for documents pertaining to Centurylink’s service contract(s)

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with Flexera. Layer2 has demanded a voice-to-voice teleconference on or before May 15, 2014 to

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discuss Centurylink’s failure to comply with the subpoena. In the event that a mutually acceptable

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compromise cannot be reached, judicial intervention may be required.” Id.

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The parties also requested that at the hearing on May 22, 2014, they discuss with the court

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dates for compliance with outstanding discovery between the parties and third-parties, and for

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briefing and hearing discovery motions. Id.

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On May 22, 2014, the court held a hearing on the motion to disqualify as well as a case

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management conference. At the hearing, the court noted that fact discovery had ended and that the

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court would not extend the fact discovery deadline, with the exception of the outstanding discovery

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which the parties stipulated to complete. The court also stated that if discovery disputes were to

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arise out of that discovery, the party moving for discovery would have to make a showing of good

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cause for the court’s consideration of the matter.

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The court denied the motion to disqualify at the May 22 hearing, see Docket No. 65, and on

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June 5, 2014 issued an order further explaining its decision to deny the motion to disqualify. Docket

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No. 67.

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II. DISCUSSION
On April 11, 2014, Layer2 served (1) CTLD with a subpoena for the production of

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documents, (2) CenturyTel of Eastern Oregon, Inc. (“CTEO”) with a subpoena for the deposition of

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its person most knowledgeable, and (3) Larry Kampwirth, apparently an account manager with
either CTEO or CTLD, with a deposition subpoena.

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For the Northern District of California

United States District Court

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On April 23, 2014, Layer2 agreed to extend the time for production of documents to April

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29, 2014, and the deposition dates to May 5, 2014. On May 1, 2014, Layer2 agreed to reschedule

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the depositions for May 12, 2014. On May 6, 2014, CTLD provided objections to the documents

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subpoena and did not produce documents, so Layer2 decided not to proceed with either deposition.

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Layer2 and CTLD met and conferred about the documents subpoena on May 16 and June 17, 2014,

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and the deposition subpoenas on May 27, June 10, and June 17, 2014. On June 24, 2014, Layer2

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and CTLD filed the joint discovery letter currently before the court. The deposition subpoenas are

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the subject of a motion to quash currently before the Northern District of Illinois.

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The fundamental problem with this discovery letter is that it was filed 42 days after the fact

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discovery cutoff. Under Civil Local Rule 37-3, “no motions to compel fact discovery may be filed

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more than 7 days after the fact discovery is cut-off.” Furthermore, “[d]iscovery requests that call for

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responses or depositions after the applicable discovery cut-off are not enforceable, except by order

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of the Court for good cause show.” Civ. L.R. 37-3. See also Fed. R. Civ. P. 16(b) (“A [case]

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schedule may be modified only for good cause and with the judge’s consent.”); Johnson v.

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Mammoth Recreations, Inc., 975 F.2d 604, 608 (9th Cir. 1992) (a party who requests leave to amend

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after the date specified in the initial scheduling order must demonstrate that there is some “good

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cause” why the court should not adhere to the dates specified in the scheduling order) (citing Fed. R.

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Civ. P. 16(b)). The “good cause” inquiry focuses on the diligence of the party seeking amendment.

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Johnson, 975 F.2d at 609.

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Here, the parties noted in their May 14, 2014 case management statements that a discovery

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dispute between Layer2 and CTLD was brewing, and could require judicial intervention. This

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dispute was not part of the parties’ agreement to stay discovery. That stipulation related only to

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Layer2’s previously-scheduled depositions of Flexera’s witnesses, and Flexera’s responses to

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Layer2’s written discovery requests. Thus, under the local rules, Layer2 was required to move to

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compel the discovery responses from CTLD within 7 days of May 13, 2014. It failed to do so, and

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thus is required to show good cause for the court’s intervention at this time.
Layer2 contends that good cause exists because “[CTLD] led Layer2 to believe that it would

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produce the subpoenaed witnesses and documents after the hearing on Flexera’s motion to disqualify

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without judicial intervention,” but refused to do so after the court’s statements at the May 22, 2014

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hearing that fact discovery was closed. Letter at 4. Even so, this does not explain the 33 days

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between the May 22 hearing and the date this letter was filed. Layer2 has failed to demonstrate its

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diligence in bringing this letter, and thus has failed to show good cause for the court to consider the

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letter.
For the foregoing reasons, the letter is denied.

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United States Magistrate Judge

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. Ryu

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DONNA M. RYU

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Dated: August 1, 2014

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IT IS SO ORDERED.

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