VIA Technologies, Inc. (a California corporation) et al v. ASUS Computer International et al

Filing 184

Order by Magistrate Judge Howard R. Lloyd re: Dkt. No. 183 , Discovery Dispute Joint Report #3. (hrllc3S, COURT STAFF) (Filed on 11/10/2016)

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E-filed 11/10/2016

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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VIA TECHNOLOGIES, INC. (A
CALIFORNIA CORPORATION), et al.,

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United States District Court
Northern District of California

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ORDER RE: DISCOVERY DISPUTE
JOINT REPORT NUMBER 3

Plaintiffs,
v.

Re: Dkt. No. 183
ASUS COMPUTER INTERNATIONAL, et
al.,
Defendants.

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Case No.14-cv-03586-BLF (HRL)

In their third discovery dispute joint report, the parties dispute whether the court should

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compel the plaintiffs, VIA Technologies, Inc. (California), Via Technologies, Inc. (Taiwan), and

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Via Labs, Inc. (together, “VIA”), to produce Wen-Chi Chen, the President and CEO of VIA, for a

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deposition. For the reasons described below, the court compels the deposition of Wen-Chi Chen.
BACKGROUND

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VIA sues defendants Asus Computer International, Asustek Computer, Inc., and ASMedia

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Technology, Inc. (“Defendants”) for patent infringement and misappropriation of trade secrets.

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Dkt. No. 70. VIA alleges that dozens of VIA employees left to work for Defendants in 2007, id.

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at ¶ 36, and that they improperly acquired and used VIA’s trade secret information, id. at ¶ 81.

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One of the employees who left VIA in 2007 was Chewei Lin (“Lin”), who became the

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President of defendant ASMedia. Prior to his departure, Lin met with VIA’s President and CEO,

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Wen-Chi Chen. Dkt. No. 183, at 1. Nobody else attended this meeting. Id. As a result of the

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meeting, Chewei Lin signed a Letter of Commitment stating that he would not “poach” any VIA

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employees, with the exception of 18 specific employees named in an attachment to the letter. Dkt.

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No. 183, Ex. B.

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In the present Discovery Dispute Joint Report, Defendants seek to depose Wen-Chi Chen

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to discover his “unique knowledge concerning this meeting and the circumstances leading to the

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ultimate written agreement,” and they are willing to limit the scope of the deposition to these

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subjects. Dkt. No. 183, at 1. Defendants assert that the Letter of Commitment demonstrates that

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Lin and 18 other employees left with VIA’s knowledge and consent, and that “[t]he information

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known by VIA at the time of the alleged employee exodus from VIA to ASMedia is highly

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relevant to several affirmative defenses in this case, such as waiver.” Dkt. No. 183, at 2.

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Further, Defendants assert that they first requested Wen-Chi Chen’s deposition in May

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2016 (with discovery at that time set to close in June). Defendants, after the parties re-negotiated

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the schedule and pushed the fact discovery deadline to November 18, again requested the
deposition of Wen-Chi Chen at meetings in August, September, and October. Only in early

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United States District Court
Northern District of California

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October, Defendants assert, did VIA “definitively” refuse to produce Wen-Chi Chen for a

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deposition.

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VIA responds that it is not claiming a violation of non-compete agreements and that the

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circumstances surrounding the Chen/Lin meeting are thus not relevant to any claim or defense.

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Next, VIA questions whether Wen-Chi Chen has unique, non-repetitive knowledge of the meeting,

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given that (1) the meeting resulted in a written document, the Letter of Commitment, and (2) Lin

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e-mailed two lower-level VIA employees a list of the 18 employees specified in the Letter. Dkt.

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No. 138, at 7-8. Further, VIA asserts that an “apex deposition” of its highest-ranking official is

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inappropriate given that defendants have not exhausted less intrusive methods of discovery: they

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have not, VIA states, “served a single interrogatory on the subject matter” or noticed a single

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deposition of a lower-ranking employee. Id.

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VIA notes that defendants did serve a 30(b)(6) deposition notice seeking testimony from

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VIA on the facts and circumstances related to the Letter of Commitment. Dkt. No. 183, Exs. C, D.

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In response to this request, VIA has offered to make Miller Chen, its Vice President and CFO,

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available for deposition on November 16. Dkt. No. 183, at 8. If, after this deposition, defendants

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can show that Wen-Chi Chen has unique knowledge, VIA says it will make him available for a

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deposition. Id.

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DISCUSSION
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Parties seeking to prevent a deposition carry “a heavy burden to show why discovery

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should be denied.” In re Google Litig., No. C 08-03172 RMW (PSG), 2011 WL 4985279, at *2

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(N.D. Cal., Oct. 19, 2011) (quoting Websidestory, Inc. v. Netratings, Inc., C06-408, 2007 WL

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1120567, at *2 (S.D. Cal., Apr. 6, 2007)). “Absent extraordinary circumstances, it is very unusual

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for a court to prohibit the taking of a deposition.” Id. At the same time, so-called “apex”

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depositions of high-level corporate or government officials present a “tremendous potential for

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abuse or harassment,” and courts have been willing to limit discovery in some instances. Celerity,

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Inc. v. Ultra Clean Holdings, Inc., No. C 05-4374 MMC (JL), 2007 U.S. Dist. LEXIS 8295 (N.D.

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Cal. Jan. 25, 2007). In determining whether to allow an apex deposition, courts consider “(1)
whether the deponent has unique first-hand, non-repetitive knowledge of the facts at issue in the

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Northern District of California

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case and (2) whether the party seeking the deposition has exhausted other less intrusive discovery

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methods.” In re Google Litig., 2011 WL 4985279, at *2. The apex witness’s busy schedule or

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claimed lack of knowledge will not, alone, preclude a deposition. Id. “When a witness has

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personal knowledge of facts relevant to the lawsuit, even a corporate president or CEO is subject

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to deposition.” Id.

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Before analyzing Wen-Chi Chen’s knowledge of the facts and whether Defendants have

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exhausted less intrusive methods of discovery, the court first addresses VIA’s objection that the

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deposition seeks information that is not material or relevant to any claim or defense. VIA argues

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that it is not alleging a violation of a non-compete agreement, and that its knowledge of its former

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employees’ departure is not relevant to its claim for trade secret misappropriation or any of

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Defendants’ asserted defenses. Dkt. No. 183, at 6, 7-8. Defendants respond that VIA’s Second

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Amended Complaint accuses Defendants of “inducing the mass theft of trade secret information

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and of inducing employee defection[,]” and that VIA’s knowledge of the circumstances

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surrounding its former employees’ departure is relevant to Defendants’ waiver defense. Id. at 4.

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Predicting what Defendants will learn from a deposition is a tricky business. The court

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knows even less than the parties about what a deposition is likely to uncover. Fortunately, the

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court need not predict whether relevant information will emerge; it needs only determine whether

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relevant information could emerge. Based on the parties’ submissions and the liberal standard for
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permitting discovery, the court is persuaded that the circumstances surrounding the departure of

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VIA employees may contain or lead to information relevant to either the trade secret

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misappropriation claim or the waiver defense. And Defendants’ proposed limits on the scope and

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duration of the deposition keep the request within the realm of proportionality.

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Whether Wen-Chi Chen Has Unique, First-Hand, Non-Repetitive Knowledge.
Courts have declined to permit the depositions of apex officials when those officials lacked

unique, non-repetitive, first-hand knowledge of the facts at issue. Celerity, Inc. v. Ultra Clean

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Holding, Inc., No. C 05-4374 MMC (JL), 2007 U.S. Dist. LEXIS 8295, at *3 (N.D. Cal., Jan. 25,

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2007). Wen-Chi Chen was one of two participants in the in-person meeting discussed in the joint

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report (the other was Lin). From this, it is logical to conclude that he may have unique, first-hand,

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United States District Court
Northern District of California

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non-repetitive information regarding the conversation and other circumstances occurring at and

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prior to that meeting that others—who were not there—would not possess.

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The court is not persuaded that the e-mail from Lin to two other VIA employees listing the

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names of the 18 employees makes Wen-Chi Chen’s knowledge repetitive, as the meeting may

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have had a broader scope than those 18 names. The Letter of Commitment itself also does not

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necessarily render Wen-Chi Chen’s knowledge redundant. The conversation and circumstances

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surrounding the in-person meeting may have differed from the contents of the Letter, and it is

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entirely plausible that only a direct participant in the meeting would know the substance of the

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differences. It is, of course, also possible that the Letter is a perfect reflection of the meeting; but

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the purpose of discovery is to uncover such details. See In re Nat’l W. Life Ins. And Deferred

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Annuities Litig., No. 05-cv-1018-AJB (WVG), 2011 U.S. Dist. LEXIS 37746 (S.D. Cal., Apr. 6,

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2011) (permitting the deposition of apex witnesses even though the plaintiff’s assertion that they

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had unique information may have been wrong).

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2. Whether Defendants Have Exhausted Less Intrusive Methods of Discovery.
Courts may prevent or defer apex depositions where the party seeking the deposition has

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not exhausted less intrusive methods of discovery. Celerity, Inc. v. Ultra Clean Holdings, Inc.,

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No. C 05-4374 MMC (JL), 2007 US Dist. LEXIS 8295 (N.D. Cal., Jan. 25, 2007). Here, the court

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finds the case WebsideStory, Inc. v. Netratings, Inc. instructive. No. 06-cv-408 WQH (AJB), 2007
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WL 1120567 (S.D. Cal., Apr. 6, 2007). In that case, the party seeking an apex deposition served a

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Rule 30(b)(6) deposition notice on the resisting party several months prior to the court’s order, and

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both parties delayed taking depositions. Id. at *4. In light of these self-inflicted delays, the court

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found the resisting party’s argument that the requesting party should be required to exhaust other

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forms of discovery disingenuous. Id.

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In the present case, Defendants assert that they first requested Wen-Chi Chen’s deposition
in May 2016, shortly before discovery was set to close in June. After the close of discovery was

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pushed back to November, Defendants renewed their request in August, September, and October.

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But only in early October did VIA “definitively” refuse to produce Wen-Chi Chen, leading to the

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filing of this discovery dispute joint report several weeks before the new close of discovery. VIA

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United States District Court
Northern District of California

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admits that Defendants requested the individual deposition of Wen-Chi Chen in May, but asserts

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that they did not “detail[] their intent to depose” him until September. Dkt. No. 183, at 8. VIA

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also notes that it has offered to make its Vice President and CFO available for a deposition on

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November 16, two days prior to the close of discovery, in response to defendants’ 30(b)(6)

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deposition notices related to these issues.

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Considering how both parties have delayed and left matters to the last minute, the court

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finds VIA's argument that Defendants have not exhausted other options unpersuasive. Had this

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dispute been resolved in June or July, there would have been ample opportunity for Defendants to

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try less intrusive methods first. Now, the clock is ticking. Additionally, in light of the fact that

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Wen-Chi Chen and Lin were the only participants in the in-person meeting at issue, suggesting

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that Chen’s knowledge of the meeting may be unique, the court doubts that depositions of lower-

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ranking VIA officials would provide Defendants with the information they seek in any case.

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CONCLUSIONS
Via has not shown that Wen-Chi Chen lacks unique, non-repetitive, first-hand knowledge

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of the circumstances leading up to and during the meeting at issue, and it has not shown that

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Defendants have failed to exhaust less intrusive methods of discovery. As such, the court hereby

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compels the deposition of Wen-Chi Chen. The deposition shall be limited in scope and duration

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as described in the Discovery Dispute Joint Report, and it shall occur no later than December 16,
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2016.
IT IS SO ORDERED.
Dated: 11/10/2016

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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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