Bakhtiari Corporation et al v. Register Tapes Unlimited, Inc. et al

Filing 30

ORDER GRANTING-IN-PART MOTION TO COMPEL FURTHER RESPONSES TO FIRST REQUEST FOR PRODUCTION OF DOCUMENTS by Judge Paul S. Grewal granting in part and denying in part 15 Motion to Compel (psglc1, COURT STAFF) (Filed on 5/22/2013)

1
2
3
4
5
6
7
UNITED STATES DISTRICT COURT

9

NORTHERN DISTRICT OF CALIFORNIA

10
United States District Court
For the Northern District of California

8

SAN JOSE DIVISION

11

BAKHTIARI CORPORATION, et. al.,

12

Plaintiffs,
v.

13
14

REGISTER TAPES UNLIMITED INC., et. al.
Defendants.

15

)
)
)
)
)
)
)
)
)

Case No.: 12-5183 LHK (PSG)
ORDER GRANTING-IN-PART
MOTION TO COMPEL FURTHER
RESPONSES TO REQUEST FOR
PRODUCTION OF DOCUMENTS,
SET NO. ONE
(Re: Docket No. 15)

16

Plaintiff Bakhtiari Corporation, et. al. (“Bakhtiari”) moves to compel further responses to

17

their first set of requests for productions (“RFPs”). Defendant Register Tapes Unlimited, Inc., et.

18

al. (“RTU”) opposes. On May 7, 2013, the parties appeared for hearing. Having considered the

19
20
21

arguments of counsel, the court GRANTS-IN-PART Bakhtiari’s motion to compel. The court sets
forth its specific rulings and reasoning below.
The parties are familiar with the factual background, and so the court provides only a brief

22
23

account of the facts relevant to the instant motion.

24
25

A division of RTU known as “Cartvertising” contracts with grocery store chains in
California to place advertisements on their grocery carts. Cartvertising then sells the advertising to

26
local businesses. Cartvertising often uses third-party contractors to install the advertisements in
27
28

stores.
1
Case No.: C 12-5183 LHK (PSG)
ORDER

Bakhtiari is an automobile dealership sales group. RTU approached Bakhtiari to purchase

1
2

grocery store shopping cart advertising through Cartvertising. RTU allegedly represented to

3

Bakhtiari that it would have exclusive advertising in any store chosen, and that shopping cart

4

advertising generally increased average sales of the marketed product by 12.6%. Bakhtiari agreed

5

to purchase advertising from RTU in a number of stores in the general geographic area of the

6

automobile dealerships.

7
Bakhtiari eventually became dissatisfied with the results, alleging RTU did not install

8
9

purchased advertising in a reasonable and timely fashion, did not actually install advertising in the

United States District Court
For the Northern District of California

10

stores chosen by Bakhtiari, and did not provide exclusive coverage in the stores where advertising

11

was placed. Bakhtiari sued RTU for breach of contract, fraud, negligent misrepresentation, and

12

restitution based on unjust enrichment.1

13
14

On September 24, 2012, Bakhtiari served its first set of RFPs. On November 26, 2012,
RTU served its responses. The parties met and conferred regarding the adequacy of the responses

15
16

well into December 2012. Bakhtiari then decided to try to obtain certain requested documents by

17

subpoenaing the installers hired by RTU instead. Of the four installers, only one has forwarded

18

documents through RTU, one has passed away, one stated he lost his computer records associated

19

with the proceeding, and one has not responded at all. Bakhtiari now seeks to compel further

20

responses to the first set of RFPs.

21

As a preliminary matter, the court notes that RTU asserted attorney-client privilege and the

22
work-product doctrine in response to several RFPs, including several that do not appear to be
23
24

related to documents or communications involving an attorney. Although RTU has since

25

acknowledged that the attorney-client privilege only applies to communications between an

26

attorney and his client, RTU should take care not to overclaim these privileges and adhere to

27
1

28

See Docket No. 1.
2

Case No.: C 12-5183 LHK (PSG)
ORDER

1

Federal Rules of Evidence 502, which defines “attorney-client privilege” as pertaining to

2

“confidential attorney-client communications,” and “work-product” as “tangible material (or its

3

intangible equivalent) prepared in anticipation of litigation for trial.” If RTU claims privilege, it

4

must provide a privilege log documenting which documents are withheld and describing “the

5

nature of the documents, communications, or tangible things not produced or disclosed—and do so

6
7

in a manner that, without revealing information itself privileged or protected, will enable other
parties to assess the claim.”2

8
In general, Bakhtiari argues that relevant documents have not yet been produced, while

9

United States District Court
For the Northern District of California

10

RTU counters that it has provided all responsive documents in its possession, excluding certain

11

privileged or irrelevant documents. The court cannot compel documents that RTU does not have.

12

However, if RTU maintains that it does not have further responsive documents for any of the

13
14

categories of documents, it shall verify that it has conducted a diligent search and is unable to
locate further responsive documents as defined in this order. The court further elaborates on each

15
16

category of documents below.3
A. RFPs 5-8: Attachments and exhibits to the contract between RTU and Plaintiffs

17

RTU maintains that all responsive documents have been produced, so it shall verify that

18
19

this is true.

20
21
22
23
24
2

25
3

26
27
28

Fed. Civ. R. P. 26(b)(5)(A)(ii).

The court considers only the RFPs specifically discussed in the briefs. Although Bakhtiari asserts
that RTU promised to produce the remaining RFPs, and should be held to that promise, the court
does not have the necessary information to determine if RTU has complied or if the RFPs are
proper. These RFPs therefore will not be considered in the instant motion. Nevertheless, RTU
should respond to these RFPs with diligence and the parties are encouraged to cooperate in
coordinating the production.
3
Case No.: C 12-5183 LHK (PSG)
ORDER

1
2

B. RFPs 29-36: Reports from agents charged with installing advertising on behalf of
Plaintiffs; RFPs 76-79: Any signed installation reports showing where advertising was
placed and percentages installed

3

RTU states it has produced spreadsheets, installation photographs, and billing information

4

in its possession related to the installation of advertising. RTU argues it has no further reports or

5

documentation from the installation agents, and that Bakhtiari should obtain any additional

6

documents from the third parties themselves. Although Bakhtiari has previously attempted to

7
8
9

subpoena the third party agents, the subpoenas were less than successful, and in any event
Bakhtiari is entitled to obtain the same documentation from RTU if available. RTU therefore shall

United States District Court
For the Northern District of California

10

produce any documents in its possession of the installation agents documenting their installation of

11

advertising related to this dispute. If RTU has produced all documents received from the agents

12

relating to the installations in question, it shall verify as much.

13
14
15

C. RFPs 49: Any advertising to prospective third-party customers between June 2010
and February 2011
As RTU points out, this request is overbroad as RTU runs a nation-wide business with other

16

forms of advertising, including its main business of selling print advertising on the back of grocery

17

store register tapes. Accordingly, RTU’s production in response to this request may be limited to

18
advertisements for grocery cart advertising in California only.
19
20
21

D. RFPs 50-51: Michael Rush’s personnel file, and any and all emails, letters,
correspondence, or materials between RTU and Rush
The parties agree that Michael Rush (“Rush”) was the salesman who actually conducted

22
negotiations with Bakhtiari and closed the sales transactions on the advertising contract at issue
23
24

here. Bakhtiari argues that this information may be used to show RTU’s ratification of Rush’s acts

25

and behavior. The court agrees, but only in part. Although RTU objects that it has no personnel

26

file for Rush because he is not an employee, it shall produce documents whether in such a file or

27

not evidencing the relationship, or verify that no such documents exist.

28
4
Case No.: C 12-5183 LHK (PSG)
ORDER

1
2
3

E. RFPs 52-54, 59: Employee handbooks, training manuals, or instructional material
provided to employees charged with advertising sales, installation of advertising, or
Order and Entry and Deal Processing Procedures
These documents are relevant because they are direct evidence of the instructions given to

4

installing agents and the practice of those agents. RTU argues the request is overbroad because

5

there are no limitations as to scope. RTU is correct. Therefore, the scope shall be limited to

6

grocery cart advertising in California only.

7
8
9

United States District Court
For the Northern District of California

10

F. RFP 80: Contracts, reports, correspondence, installation reports, and documents
between RTU and any other third-party car dealership relating to grocery cart
advertising services sold between September 2010 and February 2011
Documents of this nature relating to the stores that Bakhtiari contracted for would certainly

11

be relevant, but documents regarding other stores would not. The court finds it appropriate to

12

limit this request to the stores covered by the contract between Bakhtiari and RTU only.

13
14

G. RFPs 82-83: Better Business Bureau rating and communications between RTU and
Better Business Bureau; RFP 84: All emails or correspondence with third parties
regarding RTU’s failure to comply with contracts for grocery cart advertising

15
16

This information is relevant to the issue of RTU’s knowledge of complaints regarding

17

similar claims of not adhering to contracts for grocery cart advertising, which Bakhtiari plans to

18

use to rebut RTU’s claim of a “good faith mistake.” The documents shall be produced.

19
20

H. RFPs 85-86: Profits and loss and supporting documents of Cartvertising for fiscal year
2010

21

This is relevant to the issue of punitive damages, which Bakhtiari seeks in its complaint, so

22

it must be produced. The attorney-client privilege and work-product doctrine claimed by RTU do

23

not apply.

24
25
26
27

I. RFPs 87-90: Any documents establishing advertising was sold to other third parties at
the same time and location as for Plaintiffs
These documents are relevant to the issue of RTU’s alleged breach of contract. The
attorney-client privilege and work-product doctrine claimed by RTU do not apply.

28
5
Case No.: C 12-5183 LHK (PSG)
ORDER

1
2
3

J. RFP 92: Document Retention Policy for 2011
There is good cause to compel production of RTU’s 2011 document retention policy

4

because of RTU’s alleged failure to locate several sets of documents, which is the subject of the

5

instant motion to compel. The attorney-client privilege and/or work-product doctrine claimed by

6

RTU do not apply.

7
8
9

United States District Court
For the Northern District of California

10

K. RFPs 104-106: Documents showing all ownership interests in RTU, Avenue
Advertising, and Cartvertising
Bakhtiari has sued RTU, a corporation, and Avenue Advertising dba Cartvertising, which it
alleges is a wholly-owned subsidiary of RTU. No individuals have been named. The fact that

11
12

RTU is sued as a corporation ordinarily shields its shareholders from liability, and so the ownership

13

interests are ordinarily irrelevant. Bakhtiari alleges no theory in its complaint as to why individual

14

owners would be liable. Although Bakhtiari now argues that the owners may have acted

15

fraudulently on behalf of the corporation, Bakhtiari’s unsupported speculation that shareholders not

16

named in the suit may also be individually liable as agents is not enough to expose the identity of

17

all shareholders of the corporation.

18
RTU shall comply with this order no later than June 7, 2013.
19
20

IT IS SO ORDERED.

21

Dated: May 22, 2013

_________________________________
PAUL S. GREWAL
United States Magistrate Judge

22
23
24
25
26
27
28
6
Case No.: C 12-5183 LHK (PSG)
ORDER