Conde et al v. 2020 Companies LLC et al

Filing 261

ORDER re #256 #257 Discovery Letter Briefs. Parties' supplemental joint discovery letter due by February 5, 2018. Discovery Hearing set for 2/15/2018 at 11:00 AM in Oakland, Courtroom 4, 3rd Floor before Magistrate Judge Kandis A. Westmore. Signed by Judge Kandis A. Westmore on 1/24/2018. (kawlc2, COURT STAFF) (Filed on 1/24/2018)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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CARLOS CONDE, et al.,
Plaintiffs,

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ORDER RE JOINT DISCOVERY
LETTERS

v.

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OPEN DOOR MARKETING, LLC, et al.,

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United States District Court
Northern District of California

Case No. 15-cv-04080-KAW

Defendants.

Re: Dkt. Nos. 256, 257

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Plaintiffs Shikwana Jennings and Lisa Drake filed this putative class and collective action

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against Defendants 20/20 Communications, Inc. ("20/20"), Open Door Marketing, LLC ("Open

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Door"), Larry Clark, and Jerrimy Farris, alleging violations of the Fair Labor Standards Act

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("FLSA") and various California labor laws. (Fourth Amended Compl. ("FAC") ¶¶ 1-2, Dkt. No.

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195.) On December 21, 2017, the parties filed two discovery letters regarding the named

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Plaintiffs’ responses to Defendant 20/20's Request for Productions ("RFPs") and interrogatories.

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(Dkt. Nos. 256. 257.)

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The parties' dispute concerns settlement communications between Plaintiffs' counsel and

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Defendants Clark and Farris, in which those parties sought to settle the claims against Defendants

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OPM, Clark, and Farris in exchange for relevant testimony and documents. (See Dkt. No. 256 at

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1; Dkt. No. 257 at 2.) Plaintiffs have since produced documents setting forth the terms of an

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agreement, as well as approximately 44,500 pages of documents Plaintiffs received from

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Defendants Clark and Farris. (Id.) Plaintiffs have not, however, produced "communications

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between Mr. Clark, Mr. Farris, or their attorney with Plaintiffs regarding settlement." (Id.) These

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communications appear to be the heart of the parties' dispute.

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Having reviewed the parties' joint discovery letters, the Court requires supplemental

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briefing. Accordingly, the parties are ORDERED to meet and confer, and to file a joint discovery

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letter, by February 5, 2018, addressing the following topics:

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First, Plaintiffs do not appear to substantively respond to Defendant 20/20's line of cases

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concerning whether the Ninth Circuit recognizes a broad settlement privilege under Federal Rule

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of Evidence 408. (See Dkt. No. 256 at 3; Dkt. No. 257 at 3.) For example, the Ninth Circuit has

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stated that "Rule 408 is designed to ensure that parties may make offers during settlement

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negotiations without fear that those same offers will be used to establish liability should settlement

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efforts fail," but that "[w]hen statements made during settlement are introduced for a purpose

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unrelated to liability, the policy underlying the Rule is not injured." Rhoades v. Avon Prods., 504
F.3d 1151, 1161-62 (9th Cir. 2007). While Plaintiffs point to cases such as Lobatz v. U.S. West

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United States District Court
Northern District of California

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Cellular of California, Inc., 222 F.3d 1142 (9th Cir. 2000), which found that settlement

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communications were not discoverable absent evidence of collusion, this line of cases appears to

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apply in the limited situation where an objector challenges a class or shareholder settlement.

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Plaintiffs do not identify any cases in which evidence of collusion is required outside of this

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context, or otherwise address cases such as Rhoades.

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Second, Defendant 20/20 asserts that discovery of the settlement communications is

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necessary because it "[o]bviously . . . places the credibility and bias of Plaintiffs, Clark, Ferris [sic]

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and ODM witnesses at issue." (Dkt. No. 256 at 3; Dkt. No. 257 at 3.) The Court disagrees that

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this connection is "obvious" and requires a fuller explanation of why discovery of the settlement

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communications is relevant to bias and credibility. Otherwise, if the Court finds that this

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discovery is harassing or disproportionate to the needs of the case, the Court may exercise its

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discretion not to permit this discovery even if such settlement communications fall outside the

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scope of Rule 408.

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Finally, the parties should address whether Defendant 20/20's stated use for the settlement

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communications might be prohibited. For example, in Elia v. Roberts, in which the defendants

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sought to introduce settlement communications to demonstrate bad faith, the district court

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acknowledged that, "[i]n other circumstances, courts have found that the question of bad faith can

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be so intertwined with the underlying issue of liability that the general prohibition should apply."
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Case No. 1:16-cv-557 AWI EPG, 2017 WL 4844296, at *9 (E.D. Cal. Oct. 25, 2017); see also

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Weems v. Tyson Foods, Inc., 665 F.3d 958, 967 (8th Cir. 2011) ("Because Weems’ issue of

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Tyson’s bad faith is inseparable from the issue of liability, Rule 408(a) prohibits admission of the

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agreement in this case").

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The Court SETS a hearing on the parties' discovery dispute for February 15, 2018 at
11:00 a.m.
IT IS SO ORDERED.
Dated: January 24, 2018
__________________________________
KANDIS A. WESTMORE
United States Magistrate Judge

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United States District Court
Northern District of California

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