Optronic Technologies, Inc., v. Ningbo Sunny Electronic Co., Ltd. et al

Filing 250

ORDER by Magistrate Judge Virginia K. DeMarchi re 242 Discovery Dispute re Labor Cost Data. (vkdlc2S, COURT STAFF) (Filed on 6/5/2019)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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OPTRONIC TECHNOLOGIES, INC,
Plaintiff,

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ORDER RE DISCOVERY DISPUTE RE
LABOR COST DATA

v.

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United States District Court
Northern District of California

Case No.16-cv-06370-EJD (VKD)

NINGBO SUNNY ELECTRONIC CO.,
LTD., et al.,

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Re: Dkt. No. 242

Defendants.

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Plaintiff Optronic Technologies (“Orion”) moves for an order compelling defendants

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Ningbo Sunny Electronic Co., Ltd. (“Ningbo Sunny”) and Sunny Optics, Inc. (“Sunny Optics”) to

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produce labor cost data responsive to Orion’s Request for Production No. 4. The Court held a

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hearing on this dispute on May 28, 2019. As described below, the Court grants in part and denies

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in part Orion’s motion.

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This dispute relates to a prior dispute concerning labor costs that the Court addressed

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earlier this year. Dkt. No. 221. At that time, the Court directed the parties to do “confer, in good

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faith, about whether Ningbo Sunny and Sunny Optics have non-custodial sources of ‘labor cost

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data’ that have not yet been produced and that fall within the parties’ April 2018 agreement

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regarding the scope of production of financial information.” Id. at 3.

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Here, Orion argues that it requires additional detail about defendants’ labor costs to

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support its damages analysis and to rebut defendants’ contention that their price increases were

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caused by increased labor costs. Dkt. No. 242 at 2. Defendants do not maintain product- or

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transaction- specific labor cost information, but they have produced company-level information

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about their costs that include labor costs, although the labor costs are not broken out. Dkt. No.

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242 at 7-8. Given these circumstances, Orion says it requires the following additional

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information:

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1. Payroll data for all of defendants’ employees;

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2. More detailed income statements reflecting the labor cost components of the cost line
items included in the statements;

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3. Records reflecting the hours required to build each telescope;

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4. Data tying labor costs to specific products.
Id. at 2-5.
Defendants dispute Orion’s characterization of their contentions and opposes Orion’s
motion to compel on the ground that the information Orion seeks is not relevant to any issue in the

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United States District Court
Northern District of California

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case or does not exist. Id. at 5-7. Defendants say that they do not maintain any records of the

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hours required to build each telescope or data tying labor costs to specific products. While they do

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maintain payroll data, they estimate that collecting and compiling the payroll data for all of their

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600 employees would require at least several full days of work. Id. at 7. Defendants acknowledge

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that they do maintain and could produce additional detail reflecting the labor cost components of

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cost data included in the income statements that they have already produced. Id.

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In view of the parties’ prior agreement regarding the scope of production, the Court is

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persuaded that defendants should provide additional detail reflecting the labor cost components of

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any cost items included in the income statements, such as the detail reflected at page 3 of the

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parties’ joint submission, as that information falls within the scope of the parties’ 2018 agreement

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and appears to be relevant to the issues Orion identifies. The Court therefore grants Orion’s

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motion to compel the production of this information.

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The Court is not persuaded that the payroll data for all of defendants’ employees falls

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within the parties’ 2018 agreement or that it is relevant to any issue in the case. As noted above,

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defendants say they do not have any records reflecting the hours required to build each telescope

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or data tying labor costs to specific products. The Court denies Orion’s motion to compel the

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production of this information.

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Defendants shall produce the additional labor cost detail to Orion no later than June 12,
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2019.
IT IS SO ORDERED.
Dated: June 5, 2019

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VIRGINIA K. DEMARCHI
United States Magistrate Judge

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United States District Court
Northern District of California

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