Tessera, Inc. v. UTAC (Taiwan) Corporaiton

Filing 378

Order by Magistrate Judge Howard R. Lloyd denying 356 Motion for Sanctions. (hrllc1S, COURT STAFF) (Filed on 11/18/2015)

E-Filed 11/18/15

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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TESSERA, INC.,

Case No. 10-cv-04435-EJD (HRL)

Plaintiff,
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v.

ORDER DENYING MOTION FOR
SANCTIONS

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UTAC (TAIWAN) CORPORATION,

Re: Dkt. No. 356

Defendant.

United States District Court
Northern District of California

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Tessera, Inc. (“Tessera”) sues UTAC (Taiwan) Corporation (“UTC”) for breach of contract
Tessera served a subpoena on UGS America Sales Inc. (“UGS

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and patent infringement.

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America”) in February of 2015. UTC disputed the relevance of the subpoenaed information and

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the parties filed discovery dispute joint report (“DDJR”) 12. Dkt. No. 325. The court agreed the

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subpoena sought some irrelevant information and therefore, in late May, limited the subpoena “to

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the topic of actual sale of UTC products by UGS America” and also “narrowed [the subpoena] to

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seek only documents in the possession of UGS America (and not its corporate affiliates).” Id. at 5.

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The court ordered UTC to produce all responsive documents within 14 days and also ordered UGS

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America “to designate a witness to testify to [certain topics], as narrowed, at a mutually agreeable

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date shortly following the document production.” Id.

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A few days later UTC represented to Tessera that no information responsive to the limited

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scope of the subpoena exists. Dkt. No. 356-4 at 4. UTC also argued that Tessera had already

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taken more than ten depositions and therefore, under Federal Rule of Civil Procedure (“FRCP”)

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30, Tessera needed leave of court before it could depose a witness pursuant to the court’s order on

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DDJR 12. Tessera disagreed and insisted the court’s order justified a prompt deposition. Id. at 2.

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The parties continued to discuss their dispute and ultimately they resolved it without court

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intervention. UTC and UGS America designated a witness, and Tessera deposed that witness on

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July 21, 2015. Dkt. No. 356-7 at 3.
Tessera now moves for an evidentiary sanction—a jury instruction that the jurors may

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assume UGS America refused to provide ordered discovery because that discovery would have

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been harmful to UTC and helpful to Tessera—as well as an award of costs under FRCP

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37(b)(2)(C). Dkt. No. 356 at 29-30. Tessera argues that responsive documents exist but have not

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been produced and, likewise, that UGS America failed to adequately prepare the deposition

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witness to answer questions within the scope of the subpoena. Tessera also argues that during the

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deposition UTC and UGS’s lawyers coached the witness and frequently interrupted Tessera’s

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lawyer. Tessera’s lawyer also accuses one of UTC and UGS’s lawyers of trying to attack him.

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Dkt. No. 356 at 24-25. Tessera claims the acts of UTC, UGS, and their lawyers have prejudiced

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United States District Court
Northern District of California

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Tessera by depriving it of relevant discoverable information.

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UTC argues that no responsive documents exist, that UGS and UTC’s lawyers did nothing

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improper during the deposition, and that Tessera’s lawyer deliberately generated a misleading

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written record during the deposition in order to support this pre-planned sanctions motion.

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The court read the parties’ briefs and watched the relevant portions of the deposition video

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recording, including the moment at which one lawyer purportedly threatens to attack another. The

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motion for sanctions is denied.

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Discussion

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The court rejects Tessera’s argument that UTC and UGS America have failed to search for

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responsive documents, provide those documents, and prepare their witness to discuss information

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responsive to the subpoena. That argument relies on a series of quotes that show UGS America

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knew about UTC’s sales to a company called Everspin, but that the witness did not know very

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much about those sales. Dkt. No. 356 at 14-15. UTC responds that those statements relate to

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direct sales between UTC and Everspin, not to sales between UGS America and Everspin, and

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therefore that information is beyond the narrowed scope of the subpoena. Dkt. No. 360 at 4-5.

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The court agrees with UTC. The subpoena requires only the production of information related to

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sales by UGS America of UTC products, and the witness clearly stated no such sales had been

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made: “Q. Did UGS America ever sell any UTC products from 2001 through the present day? A.
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No. Q. And how did you determine that in preparing for this deposition today? A. The sale – the

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sale occurs between UTC and the customer. UGS America doesn’t sell anything.” Dkt. No. 356-7

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at 13. The quotes relied on by Tessera do not contradict that testimony and do not raise any

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inference that responsive documents exist. UTC and UGS America were not required to prepare

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the witness to answer the questions Tessera asked that went beyond the narrowed scope of the

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subpoena.
Relatedly, the court is convinced Tessera has not been prejudiced by a lack of information

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about the Everspin sales. UTC asserts discovery materials about the direct sales from UTC to

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Everspin were already produced to Tessera. Dkt. No. 360 at 7. Tessera does not dispute that

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point—it merely speculates that UGS America also sold UTC products to Everspin, and the court

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United States District Court
Northern District of California

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rejects that speculation for the reasons discussed above.

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The court also rejects the argument that UTC and UGS America’s lawyers violated the

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court’s order on DDJR 12 when they disputed whether it was necessary to hold a deposition

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pursuant to that order. It is correct that the court ordered the parties to promptly hold a deposition,

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but UTC and UGS America’s lawyers raised a good-faith dispute about whether it had become

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necessary for Tessera to seek leave of court under FRCP 30. The parties, in accord with the

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undersigned’s standing order re: civil discovery disputes, discussed that dispute for a few weeks

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and then resolved the dispute to the satisfaction of both parties.

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sanctionable behavior—that is precisely what the parties must attempt to do when they dispute

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how to apply the court’s discovery orders.

That is not improper or

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The court finds Tessera’s final argument—that opposing counsel objected frivolously,

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harassed Tessera’s lawyer, and threatened to attack him during the deposition—to be overblown.

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The court read the cited portions of the transcript, watched the relevant portion of the deposition

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video, and listened to the audio that corresponds to Tessera’s citations. The court also read the

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declarations of the neutral third-party videographer. The court is convinced that UTC and UGS

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America’s lawyers conducted themselves with professionalism.

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Tessera has failed to persuade the court sanctions or costs are warranted for any reason.

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Conclusion

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UTC and UGS America’s lawyers did not violate the court’s order on DDJR 12. The court

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is persuaded that no materials responsive to the narrowed subpoena exist. The court is also

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persuaded that UTC has already produced its relevant sales information to Tessera. UTC and

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UGS America’s lawyers behaved with professionalism during the deposition. The motion for

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evidentiary sanctions is denied. The request for costs is denied.

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IT IS SO ORDERED.
Dated: 11/18/15

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________________________
HOWARD R. LLOYD
United States Magistrate Judge

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United States District Court
Northern District of California

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