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

Filing 565

ORDER by Magistrate Judge Virginia K. DeMarchi granting 554 Ningbo Sunny's Motion to Quash Order to Appear for Judgment Debtor Examination. 1/28/2020 hearing vacated. (vkdlc2S, COURT STAFF) (Filed on 1/27/2020)

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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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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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Defendants.

ORDER GRANTING NINGBO
SUNNY’S MOTION TO QUASH
ORDER TO APPEAR FOR
JUDGMENT DEBTOR EXAMINATION
Re: Dkt. No. 554

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Ningbo Sunny Electronic Co. (“Ningbo Sunny”) moves to quash an order to appear for a

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judgment debtor examination sought by Optronic Technologies, Inc. (“Orion”). At Ningbo

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Sunny’s request, this Court set a shortened briefing and hearing schedule on that motion, and held

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in abeyance the order setting the examination, pending resolution of the motion to quash. Dkt.

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No. 560. Upon consideration of the moving and responding papers, this Court finds the matter

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suitable for determination without oral argument, and the January 28, 2020 hearing is vacated.

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Civ. L.R. 7-1(b). For the reasons discussed below, the Court grants Ningbo Sunny’s motion to

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quash.

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Orion previously sought a January 28, 2020 judgment debtor examination of Ningbo

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Sunny, with the examination to occur at this courthouse, and specifically requesting that Mr.

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Wenjun “Peter” Ni appear and testify on Ningbo Sunny’s behalf. The application was brought

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“[p]ursuant to California Code of Civil Procedure Section 708.110, made applicable to this action

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by Federal Rule of Civil Procedure 69(a)(2)” (Dkt. No. 551), and stated that “[t]he person to be

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examined resides or has a place of business in this county or within 150 miles of the place of

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examination” (Dkt. No. 551-1).

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After this Court granted Orion’s application (Dkt. No. 552), Ningbo Sunny filed the

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present motion to quash, challenging the location and date of the debtor exam. First, Ningbo

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Sunny argues that Orion failed to comply with California Code of Civil Procedure sections

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708.110 and 708.160 because Mr. Ni and Ningbo Sunny reside in China and have no place of

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business within the same county as this Court or within 150 miles of this courthouse.

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Additionally, Ningbo Sunny requests that the examination be re-set for a date after February 4,

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2020 due to Mr. Ni’s unavailability from January 25 through February 1, 2020 for the Chinese

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New Year holiday. Dkt. No. 554-1 ¶ 2. Here, Ningbo Sunny says that it does not seek to avoid a

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judgment debtor exam, but it would like the exam to take place on a mutually agreeable date that

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United States District Court
Northern District of California

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does not fall during the Chinese New Year. Dkt. No. 563 at ECF 2.
With respect to the venue of the requested debtor exam, California Code of Civil
Procedure section 708.160(b) provides:
A person sought to be examined may not be required to attend an
examination before a court located outside the county in which the
person resides or has a place of business unless the distance from the
person’s place of residence or place of business to the place of
examination is less than 150 miles.

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Cal. C.C.P. § 708.160(b). As demonstrated by the parties’ briefing, the point of contention is

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whether section 708.160(b) applies to Ningbo Sunny at all.

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On this issue, although the parties have accurately described the particular cases they cite,

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neither side has provided this Court with a complete statement of the applicable law. Here,

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Ningbo Sunny’s opening brief relies primarily on Langer v. Gorial, No. 14-cv-2304-BAS (MDD),

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2015 WL 4873074 (S.D. Cal. Aug. 13, 2015), in which the district court concluded that an

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application for a judgment debtor examination could not be granted where the applicant failed to

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say where the judgment debtor resided, among other required information. Langer, however,

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provides little, if any, guidance on the question whether section 708.160(b) applies to Ningbo

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Sunny, which indisputably is based in China. Citing to several district court decisions, Orion

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contends that section 708.160(b) does not apply to foreign-based defendants, such as Ningbo

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Sunny. See, e.g., Vedatech, Inc. v. St. Paul Fire & Marine Ins. Co., Nos. C04-1249 VRW, C04-

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1403 VRW, C04-1818 VRW, 2008 WL 2790200, at *2 (N.D. Cal. July 17, 2008); Kremen v.
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Cohen, No. C98-20718 JW, 2008 WL 11455081, at *2 (N.D. Cal. Mar. 28, 2008); United States v.

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Feldman, 324 F. Supp. 2d 1112, 1117-18 (C.D. Cal. 2004). These decisions, however, provide

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little or no analytical support for the conclusion that section 708.160(b) exempts foreign-based

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defendants. In its reply, Ningbo Sunny counters that, for purposes of section 708.160(b), Ningbo

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Sunny is not a foreign defendant because its wholly-owned subsidiary, Meade Instruments Corp.,

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is located in Irvine, California. Ningbo Sunny contends that its judgment debtor examination

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therefore should proceed in Orange County, California. Here, Ningbo Sunny relies on the plain

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language of section 708.160(b) and cites no authority on point.

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In a decision not cited by either side, a district court confronted with this issue rejected the
proposition that section 708.160(b) absolutely exempts foreign defendants from its application.

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United States District Court
Northern District of California

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Pabban Dev., Inc. v. Kyphon Sarl, No. CV 10-00533 BRO (RNBx), 2015 WL 12731928 (C.D.

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Cal. Mar. 10, 2015) (concluding that the magistrate judge did not err in granting a motion to quash

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on the ground that there is no exception for “foreign-based” judgment debtors in section 708.160).

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Noting that courts have interpreted Rule 69(a)(1) as relating to the judgment execution procedures

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available to judgment creditors and Rule 69(a)(2) as relating to post-judgment discovery in aid of

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execution, Pabban concluded:

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Section 708.160 does not result in a substantive abridgment of the
Court's jurisdiction, remove the Court’s ability to enforce its
judgments, or limit a judgment debtor’s ability to conduct alternative
discovery under the Federal Rules. Rather, section 708.160 merely
requires that, when a judgment creditor elects to utilize a debtor’s
examination under California law, the district court exercise “the
same authority to aid judgment creditors as that provided to state
courts under local law.” Duchek, 646 F.2d at 417. As a result, the
Court is not convinced by the reasoning of either Bates, Feldman, or
Vedatech that section 708.160 flatly does not apply to foreign
defendants. This is particularly true given that there is no basis for
this conclusion in the text of the statute itself. Section 708.160 states
that a court may not require attendance at an examination located
outside the county in which a person resides if the distance is greater
than 150 miles. Cal. Civ. Proc. Code § 708.160. There is nothing in
the text of the statue, or even its legislative history, which suggests an
exception for foreign defendants.

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2015 WL 12731928 at *4. Here, as in Pabban, Orion’s application for a judgment debtor exam

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demonstrated that Orion elected to proceed with judgment execution procedures available under

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California law.
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This Court agrees with Pabban that section 708.160(b) does not clearly provide an

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exception for foreign-based judgment debtors. Id. at *5. Accordingly, Ningbo Sunny’s motion to

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quash is granted insofar as the Court’s prior order required Mr. Ni/Ningbo Sunny to appear for a

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judgment debtor examination at this courthouse.

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Nevertheless, Rule 69 does not foreclose Orion’s ability to depose Ningbo Sunny under the
Federal Rules, and section 708.160 does not limit Orion’s ability to conduct alternative discovery

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under the Federal Rules. See id. at *4-*5; see also Legal Additions, LLC v. Kowalski, No. C08-

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2754 EMC, 2011 WL 3156724, at *4 (N.D. Cal. July 26, 2011) (stating the “under [Rule]

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69(a)(2), a judgment creditor may obtain discovery as provided either by the procedure of the state

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where the court is located or by the Federal Rules of Civil Procedure.”). And “[u]nder the Federal

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United States District Court
Northern District of California

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Rules the Court has substantial discretion to designate the site of a deposition.” Legal Additions,

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2011 WL 3156724, at *4 (internal quotations and citation omitted). Accordingly, to the extent

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Orion chooses to proceed with an examination under the Federal Rules, it shall take the necessary

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steps to do so. Unless the parties agree to another date or location, this Court expects that any

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such examination will occur in San Jose, California during the week of February 3, 2020 in order

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to accommodate Mr. Ni’s unavailability during the Chinese New Year celebrations.

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As for Orion’s request that this Court issue an order to “preserv[e] the status quo and

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prevent[] Ningbo Sunny from accepting payments prior to the examination in its overseas

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accounts” (Dkt. No. 561 at ECF 6), this Court has no authority to order such relief. Orion’s

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request therefore is denied, without prejudice to Orion’s option to raise the matter with the

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presiding judge.

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IT IS SO ORDERED.
Dated: January 27, 2020

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VIRGINIA K. DEMARCHI
United States Magistrate Judge

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