Rockwell Automation, Inc. et al v. Kontron Modular Computers

Filing 39

ORDER: (1) Denying Plaintiff's Motion To Enforce Out Of District Subpoena And (2) Denying Defendant's Motion To Strike (Re Docs. 1 , 24 ). Signed by Magistrate Judge William McCurine, Jr on 10/19/2012. (All non-registered users served via U.S. Mail Service; ECF registration requirement notices also were mailed to Atty Paul Tanck and Atty Michael Davi.) (mdc)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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ROCKWELL AUTOMATION, INC. AND
11 II ROCKWELL AUTOMATION
TECHNOLOGIES, INC.,
12 II
Plaintiffs,

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v.
1411
15 II KONTRON MODULAR COMPUTERS,
16 "
17 ..

Defendant.

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Case No. 12cv566-WQH (WMc)

ORDER: (1) DENYING PLAINTIFF'S
MOTION TO ENFORCE OUT OF
DISTRICT SUBPOENA AND (2)
DENYING DEFENDANT'S MOTION
TO STRIKE
(ECF Nos. 1,24)

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19 II INTRODUCTION AND PROCEDURAL HISTORY
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Plaintiff, Rockwell Automation ("Rockwell"), sued the W AGO Corporation ("WAGO")

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for patent intnngement of industrial programmable controllers in the United States District Court

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for the Western District of Wisconsin. Rockwell alleges W A GO markets and sells infringing

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controllers and Kontron Modular is responsible for the design, development and manufacture of

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the accused products. However, Rockwell has not sued Kontron Modular in Wisconsin,

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California, or any other jurisdiction.

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Rockwell and W AGO are engaged in discovery. To supplement its discovery efforts in

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Wisconsin, Rockwell seeks to compel Kontron Modular, a German company, to produce

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documents pursuant to a Subpoena Duces Tecum from the United States District Court for the

12cv566·WQH (WMc)

Southern District of California and purportedly served on Kontron Modular by delivery to a

211 receptionist at the offices of Kontron America, Inc. ("Kontron America") in Poway, California.

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The subpoena seeks documents from Kontron Modular relating to Rockwell's claims against

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W AGO even though Rockwell successfully moved the district court in Wisconsin to compel

5 II W AGO to produce the same documents it now seeks here.
6 II

Presently before the Court is Rockwell's original motion to enforce the subpoena,

7 II Kontron Modular's opposition and Rockwell's reply. The Court heard oral argument and granted
8 II Kontron Modular's motion for leave to file a sur-reply. Also, the Court permitted Rockwell to
9 II file a sur-sur reply, but stated no further briefing would be accepted. After Rockwell filed its sur10 II sur reply, Kontron Modular filed supplemental briefing to address what it considered new
11 II arguments and evidence impermissibly presented in Rockwell's sur-sur reply. The Court struck
12 II Kontron Modular's supplemental briefing because Kontron Modular did not seek leave to file the
13 II supplemental briefing. However, the Court permitted Kontron Modular to file a motion to strike
14 II portions of the sur-sur reply. Accordingly, Kontron Modular filed a motion to strike to which
15 II Rockwell filed an opposition.
16 II

In addition to filings supplementing the original motion, counsel for Kontron Modular

17 II filed a motion to quash the subpoena purportedly served by Rockwell on Thomas Sparrvik.
18 II Kontron Modular alleges Rockwell served Mr. Sparrvik with a subpoena to testify at a
1911 deposition. Also, Kontron Modular filed an objection to Rockwell's four additional subpoenas20 II two directed at Kontron Modular and two directed at Kontron AG (one each for documents, one
21 II each for documents and testimony) - purportedly served on Thomas Sparrvik. Rockwell
2211 responded with an opposition to Kontron Modular's motion to quash and a cross-motion to
23 II enforce the additional subpoenas. Kontron Modular filed a reply/opposition to Rockwell's
24 II opposition and cross-motion.
25 II

In sum, the following motions are now pending before the Court:

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1) Rockwell's Motion to Enforce Subpoena Duces Tecum (ECF No.1)

27 II

2) Kontron Modular's Motion to Quash Subpoena by Thomas Sparrvik (ECF No. 17)

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3) Rockwell's Cross-Motion to Enforce Subpoena Duces Tecum and Ad Testificandum
(ECF No. 21) (additional subpoenas)
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12cv566-WQH (WMc)

1 II
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4) Kontron Modular's Motion to Strike Portions of Rockwell's Sur-Sur Reply (ECF No.
24)
5) Rockwells Motion to File Documents Under Seal (ECF No. 31)

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4 II
5 II

KONTRON MODULAR'S MOTION TO STRIKE

As an initial matter, the Court denies Kontron Modular's motion to strike portions of

611 Rockwell's sur-reply for the following reasons. First, the Court permitted both sides to submit
7 II supplemental briefing to address areas of concern for the Court. Second, the Court does not find

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the argument or evidence presented in Rockwell's sur-reply prejudicial because: (1) the new

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arguments raised are sufficiently related to the arguments initially presented, (2) the evidence

10 II presented was mostly Kontron's own material, (3) Kontron Modular had sufficient opportunity to
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present its arguments. Accordingly, the Court denies Kontron Modular's motion to strike.

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ROCKWELL'S MOTION TO ENFORCE THE SUBPOENA DUCES TECUM

13 II

Rockwell's Argument!

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Rockwell moves the Court to compel Kontron Modular to produce "its data sheets, user

15 II manuals, technical specification documentation, electronic information (correspondence, Word
16 II documents, PowerPoints, etc.) and sales numbers for the IPCs it manufactures and supplies to
1711 WAGO." (Rockwell's Motion; ECF No.1, pg. 3). Rockwell contends the documents are
18 II relevant and discoverable, its subpoena is lawful and reasonable, and it has been prejudiced by

1911 Kontron Modular's refusal to comply with its requests.
20 II

Rockwell argues the documents it seeks are relevant because the documents include

21 II technical data and specifications of the allegedly infringing products. Id. at 5. Rockwell suggests
22 II the non-technical data, i.e., e-mail correspondence, may include evidence or lead to evidence of
23 II "Kontron's2 motivation to develop the infringing product" which "is an important factor in
24 II determining the knowledge and willfulness of the parties involved." Id. Also, Rockwell contends
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This section includes all of Rockwell's arguments as those arguments developed over the
course of the briefing. However, the Court has omitted the parties' arguments regarding
27 II production in New York, New York, liability under German law, and compliance with the Hague
Convention because those issues are superfluous to the Court's analysis.

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The Court will presume plaintiff's use of "Kontron" refers to Kontron Modular.
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12cv566-WQH (WMc)

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sales data regarding the allegedly infringing products is relevant to Rockwell's damages

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calculation. !d. at 5-6.

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Additionally, Rockwell contends it properly served the subpoena under California law

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because it served Kontron Modular's "general manager." !d. at 7. Rockwell cites Khachatryan v.

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Toyota Motor Sale, Us., Inc., 578 F. Supp. 2d 1224 (C.D. Cal. 2008), among other cases, to

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support its argument that it properly served the subpoena on Kontron Modular via service on

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Kontron America, Kontron Modular's U.S. subsidiary. (Rockwell's Motion; ECF No.1, pg. 7).

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Following Kontron Modular's opposition and assertion that Kontron America is not Kontron

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Modular's subsidiary, Rockwell argued service was still proper because Kontron Modular and

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Kontron America are sister entities, there is serious ambiguity regarding the manner and capacity

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of their relationship, and they should not be permitted to avoid personal jurisdiction through such

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a "transparent corporate shield." (Rockwell's Reply; ECF No.8, pg. 5-6) (citing Sigros v. Walt

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Disney World Co., 129 F. Supp 2d 56, 64 (D. Mass. 2001)).

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Rockwell also addresses the issue of the Court's jurisdiction over Kontron Modular in its

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reply to Kontron Modular's opposition. (Rockwell Reply; ECF No.8). Rockwell contends

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Kontron Modular purposely avails itself ofthe California marketplace because it engineers the

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computers and/or components of the accused products and ships these products to consumers or

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vendors in California. Rockwell relies on WAGO's subjective belief that it purchased the

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accused products from Kontron America, or at least, from Kontron Modular located in

20 II California, and the fact that "Kontron AG [the alleged parent company of all Kontrons] does not
21 II delineate which products are being sold by which Kontron entity and instead provides contact
22 II information for both Kontron Modular in Germany and Kontron America in California in
23 II connection with the same product." !d. at 4. Rockwell contends Kontron Modular designed
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products it knew Kontron AG would distribute through its "sophisticated distribution channel,"

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presumably including its U.S. subsidiary, Kontron America, located in California. Rockwell

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concludes Kontron Modular could therefore reasonably expect to be brought into court in

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California.

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Alternatively, assuming this Court does not find it has personal jurisdiction of Kontron

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12cv566-WQH (WMc)

1 II Modular, Rockwell requests the Court permit Rockwell to take limited jurisdictional discovery of
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Kontron Modular.
Finally, Rockwell contends Kontron Modular's refusal to comply with its discovery

4 II requests is prejudicial because it may inhibit Rockwell's ability to use the documents to oppose
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summary judgment in the underlying Wisconsin federal action.

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Kontron Modular's Opposition

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Kontron Modular argues Rockwell improperly served the subpoena because Rockwell

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failed to effect valid service under California law. Kontron Modular's argument is twofold. First,

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Rockwell failed to serve Kontron Modular's "general manager" when it delivered the subpoena

10 II to Kontron America because Kontron America, the entity, is not Kontron Modular's "general
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manager" within the meaning of California Code of Civil Procedure ("CCP") section 416.1 O(b).

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Second, Rockwell's delivery of the subpoena to Ms. Prvulov, a Human Resources Assistant for

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Kontron America, does not constitute service of the subpoena on a "general manager" of Kontron

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Modular. Regarding the several cases cited by Rockwell which impute service on a foreign entity

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via service on its domestic counterpart ("general manager"), Kontron Modular notes the

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distinction between the close foreign-domestic business relationships in the cited cases, and the

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distant (or non-existent) foreign-domestic business relationship in the instant case. Kontron

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Modular contends tenuous relations between the Kontrons provide tenuous grounds for imputing

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proper service. Further attenuated, Kontron Modular notes, is the relationship between Kontron

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America's Human Resources Assistant, the individual that received the service, and Kontron

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Modular.

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Even if the Court finds Kontron America is Kontron Modular's "general manager,"

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Kontron Modular argues, this Court still lacks personal jurisdiction over Kontron Modular

24 because Rockwell failed to demonstrate sufficient minimum contacts. Kontron Modular argues
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Rockwell failed to establish the necessary minimum contacts between Kontron Modular and the

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forum because (1) Kontron Modular does not conduct any business in California, (2) Kontron

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America is not the alter ego or general agent of Kontron Modular, and (3) Kontron America's

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activities in the forum did not give rise to Rockwell's claims in the underlying action.

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12cv566-WQH (WMc)

1 II

Kontron Modular further contends Kontron America could not possibly comply with the

2 II production request because Kontron America does not have custody or control over the
3 " documents requested. Moreover, Kontron Modular alleges the documents sought include highly
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valuable and sensitive trade secret information.
Kontron Modular points out the proprietary information sought by Rockwell in the instant

6 II motion is the very same information Rockwell sought, and is in the process of securing, from
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WAGO in the underlying Wisconsin federal action. Kontron Modular contends this Court should

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deny Rockwell's motion because Rockwell will obtain the same information from WAGO

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party in the underlying action and under that court's jurisdiction

10 II Modular
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as opposed to Kontron

a non-party to either action and not under either court's jurisdiction. Kontron Modular

concludes such production would create an undue hardship and burden on Kontron Modular.
Finally, Kontron Modular contends Rockwell's request for limited jurisdictional

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discovery is unwarranted and unsupported by relevant legal authority.

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DISCUSSION

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It is undisputed that Rockwell seeks relevant information. The issues here are whether

Rockwell seeks that information from the proper entity, via the proper vehicle, following the

17 II proper protocols and within the proper jurisdiction. After reviewing the moving papers and
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arguments of counsel, the Court denies Rockwell's motion to enforce the subpoena.

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Rockwell Failed to Follow the Protocols for Proper Service

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California Code of Civil Procedure Section 416.10, made applicable to the parties by

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Federal Rule of Civil Procedure 4(h)(l )(A), requires a party, like Rockwell here, to serve either

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an agent designated for service or an appropriate employee or entity, such as a president, chief

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executive officer, vice president, secretary or assistant secretary, treasurer or assistant treasurer,

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controller or chief financial officer, general manager, or any employee authorized by the

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corporation to receive service of process. See Khachatryan v. Toyota Motor Sales, U.S.A., Inc.,

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578 F.Supp.2d 1226 (C.D. Cal. 2008) (noting an organization can be a general manager). General

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3 The Court notes Kontron Modular challenges jurisdiction and service which are similar but
distinct concepts and which therefore require similar but distinct analysis.

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12cv566-WQH (WMc)

managers must be of sufficient character and rank, or have sufficient duties and responsibilities,
2 II as to put them on par with the other service-appropriate executives listed in the statute. See
3 /I General Motors Corp. v. Superior Court, 15 Ca1.App.3d 81, 86 (1971). Thus, general managers
4 II may be domestic distributors, salesmen or advertisers, or customer service liaisons of foreign
5 II manufacturers

even if the foreign-domestic relationship is "casual" or "non-exclusive" - so

6 II long as the domestic entity provides the foreign entity an open channel for the regular flow of
7 II business from the foreign entity into California. See Khachatryan, 578 F.Supp.2d at 1226; Halo
8 II Electronics, Inc. v. Bel Fuse Inc., 2010 WL 2605195 (N.D. CaL June 28, 2010); Gray v. Mazda
911 Motor ofAmerica, Inc., 560 F.Supp.2d 928 (C.D. Cal. 2008); Cosper v. Smith & Wesson Arms

10
11

Co., 53 Ca1.2d 77 (1959).

In determining whether service was delivered to the proper individual, the Ninth Circuit

12 II favors the service-recipient's practical function within the organization over the rigid formality of

13 II the service-recipient's rank. See Direct Mail Specialists Inc. v. Eclat Computerized Techs., Inc.,
1411 840 F.2d 685, 688 (9th Cif. 1988). Indeed, the purpose of service is to provide "the means by
15 II which a court asserts jurisdiction over the person" and to give the defendant adequate notice of
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the pendency of an action. Troll Busters LLC, v. Roche Diagnostics GmbH, 2011 WL 3859721,

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*8-9 (S.D. CaL Aug. 31,2011) (concluding service upon domestic sister-subsidiary's general

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counsel was reasonably calculated to give notice to its foreign sister-subsidiary).

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The Court finds the facts and analysis in Troll Busters informative. In Troll Busters,

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German defendant Roche Diagnostics GmbH ("RDG") challenged Troll Busters' attempted

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service on RDG by serving the general counsel of its domestic sister-subsidiary, Roche

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Diagnostics Corporation ("RDC"). !d. at *8-10. Like Kontron Modular and Kontron America,

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RDG and RDC are sister-subsidiary companies respectively located in Germany and the United

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States and acting under the umbrella of a holding company (Roche Holding AG). !d.

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Furthermore, like Kontron Modular and Kontron America, the Roche companies do business

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under the same name and share the same website. !d. at *9. Based on these facts, the Troll

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Busters' court found a "close relationship between RDC and RDG" and described RDC as

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"RDG's domestic operating arm." Id. at *9. The court then found Troll Busters' service on

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12cv566-WQH (WMc)

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RDC's general counsel was reasonably calculated to give notice to RDG because of the close

2 relationship between the subsidiaries and because RDC's general counsel: (1) would know what
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to do with the summons and complaint directed at RDG, (2) gave notice to RDG, and (3) stands

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in such a position as to render it fair, reasonable and just to imply the authority on his part to

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receive service. Id.

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Similarly, the Court here finds ample evidence to conclude proper service upon Kontron

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America can impute service upon Kontron Modular. Indeed, the following evidence establishes

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Kontron Modular and Kontron America share a closer relationship than RDG and RDC.

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Rockwell attached (as an exhibit) what appears to be a print-out of a press release on Kontron's
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lO

website. (ECF No. 8-2, Exh. 8). The article details Kontron's announcement during the

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Embedded Systems Conference in Silicon Valley, California regarding the latest model in its

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ThinkIO-Duo fan-less PC range. The article only refers to Kontron generally, except in one

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instance in which it directs readers to contact its "sales team to learn more about this product

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family and about product customization by contacting us at: Kontron America Sales Phone: 888­

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294-4558." The article also describes Kontron as a designer and manufacturer of technology

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products in "a variety of markets" with engineering and manufacturing facilities throughout

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Europe, North America, and Asia-Pacific that "work together with streamlined global sales and

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support services to help customers reduce their time-to-market and gain a competitive

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advantage." The article further directs readers to contact Richard Pugnier or David Pursely for

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questions regarding the article itself or for technical or product information. Both men appear to

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have U.S. telephone numbers and e-mail addresses. Id. Importantly, Kontron (generally)

22 describes Use?!- in a Cal~fornia press-release and providing what appears to be a San Diego
as having "streamlinecf' global sales and support services connecting its

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based area code (858)

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engineering and manufacturing products with consumers in order to provide its consumers with a

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competitive advantage. If the reader (most likely a consumer) is interested, the page directs the

26 reader to contact Kontron America Sales located in Poway, California. Not surprisingly, WAGO,
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4 Kontron America, Kontron Modular, and all other Kontron-affiliated entities appear to utillize
one website: www.kontron.com

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12cv566-WQH (WMc)

1 II a Kontron Modular customer, believes Kontron Modular is located in Poway, California. (ECF

211 No. 1-4, Exh. 3 p. 6). Finally, Kontron's website lists Thomas Sparrvik as the Chief Operating

3 II Officer and Vice Chairman of Kontron AG, a member of Kontron's Managing Board of

411 Directors, and the Chief Executive Officer ofKontron America and Asia-Pacific. (ECF No. 15-2,

5 II pg. 18). Thomas Sparrvik resides in San Diego, California. (ECF No. 15-1, pg. 3).

6 II

Thus, Kontron America specifically (and perhaps Kontron generally) opens itselfto the

7 II U.S. and California marketplace in five notable ways. First, Kontron America is physically

8 II located in Poway, California. Second, consumers with questions regarding sales or product

9 II customization are directed to Kontron America. Third, consumers seeking product and technical

10 II information about any Kontron entity are directed to contact an "Applications Engineer" with a
11 II U.S. phone number. Fourth, Kontron touts its "streamlined" (read: interconnected) structure for
] 2 II consumers globally. Fifth, Thomas Sparrvik (Kontron AG's COO and Kontron America's CEO)
13 II resides in San Diego and is responsible for the sales, marketing, production and supply chain for
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Kontron worldwide.
Despite this evidence, Kontron Modular argues proper service on Kontron American

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cannot impute service on Kontron Modular because there is no flow of business between the two

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entities. s Indeed, according to the declaration of Thomas Sabisch, Kontron Modular's Managing

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Director, Kontron Modular does not "sell, supply or distribute the [accused product] to or

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through Kontron Ameriea, or in the United States or California at all" nor is Kontron Modular

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"involvcd in the engineering or development ofthese products." (Decl. Thomas Sabisch; ECF

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No. 4-1 p. 4). Kontron Modular concludes this fact distinguishes the instant case from the cases

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upon which Rockwell relies. Here, unlikc Halo, Khachatryan, Cosper, and Gray, the factual

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nexus between the foreign and domestic entities is missing; there is no flow of business.

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Kontron Modular's distinction is appealing but not compelling because the dispositive

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5 Rockwell did not directly counter Kontron Modular's distinction but instead relied on Sigros v.
26 II Walt Disney World Co. for the proposition that confusion or ambiguity alone can be sufficient to find an
agency relationship. Sigros v. Walt Disney World Co., 129 F.Supp.2d 56 (D. Mass. 2001). However,
2711 Rockwell's reliance on Sigros in this regard is unavailing because the Sigros court contemplated and
relied on the presenee of a co-dt!fendant relationship in which one co-defendant purposefully accessed
28 II consumers in a foreign state for the benefit of the other co-defendant. !d. at 64. These specific facts are
not present here.

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12cv566-WQH (WMc)

1

fact is the presence oja channel for the regular flow of business and not the actual flow of

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business. See Halo Electronics, Inc. v. Bel Fuse Inc., 2010 WL 2605195 (N.D. Cal. June 28,

3

2010) (focusing on the "opportunity for regular contact" between the foreign and domestic

4

entities). Therefore, although Thomas Sabisch's declaration indicates there is no flow of business

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between Kontron Modular and Kontron America, the overwhelming evidence of

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interconnectedness between the Kontron entities (mostly from Kontron's own materials)

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establishes the presence of an existing, available channel for the regular flow of business between

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the entities.

9

The distinction between channel and flow is further supported by the underlying principle

10 II behind appropriate service of process: to notify a defendant of a pending action. See Direct Mail
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Specialists, 840 F.2d at 688 (noting actual receipt of process by the correct person may be a

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factor in finding process valid when there are other factors that make process fair); Cf Summers

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v. McClanahan, 140 Cal. App. 4th 403, 408 (2006) (noting actual notice is not a substitute for

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proper service despite California's liberal, practical approach to service of process issues). Here,

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Kontron Modular did in fact receive notice of the action.

16

Accordingly, the Court need not resolve the apparent conflict between what the Kontron

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website and press release purport and what Mr. Sabisch declared because the bottom line is

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sufficiently clear: Kontron America can facilitate the sale and customization of Kontron Modular

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products, thus Kontron America can facilitate service of process on Kontron Modular as its

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general manager. In this regard, the Court finds service on Kontron Modular through Kontron

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America is reasonably calculated to provide notice of the service of process on Kontron Modular.

22

See Troll Busters, 2011 WL 3859721, *8-9.

23

Nevertheless, Rockwell's actual attempt to serve Kontron Modular failed in two ways.

24 1\ First, Rockwell's service upon Ms. Prvulov - a receptionist at Kontron America

fails to satisfy

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the requirements for service upon Kontron Modular because Ms. Prvulov is not a "general

26

manager" of Kontron Modular. Second, service upon Ms. Prvulov fails because Ms. Prvulov is

27

not an appropriate officer or agent of Kontron America.

28

Here, Ms. Prvulov

a Human Resources Assistant temporarily filling-in as a receptionist

10

12cv566-WQH (WMc)

1

during the lunch hour - is not a general manager of Kontron Modular. Not only is Ms. Prvulov

2 employed in a non-executive, non-officer capacity of a different company headquartered in a
3

d!fferent country, she had never heard of Kontron Modular before receiving the service and was

4

only temporarily covering the reception desk. (See Decl. of Tanja Prvulov; ECF No. 4-12 p. 2.)

5

Not surprisingly, Ms. Prvulov almost immediately "became concerned that [she] made a mistake

6

for signing for the documents" and "asked if [the process server] was sure these documents were

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for [Kontron America]." ld. Based on these facts, the Court concludes Ms. Prvulov is not a

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general manager for Kontron Modular under California law.

9

Additionally, Rockwell's service would have failed even if Rockwell had intended to

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serve Kontron America. Kontron Modular did not specifically address this scenario and

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Rockwell contends the argument is waived. However, the Court finds a purported service on

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Kontron America similarly defective. Service upon Ms. Prvulov is not sufficient because she is

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not an agent or officer of Kontron America, nor did Kontron America authorize Ms. Prvulov to

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receive service on its behalf. Rather, Kontron America's designated agent for service of process

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is the CT Corporation System located in Los Angeles, California. Because Kontron America's

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designated agent is presumably accessible, and because Rockwell fails to demonstrate any

17

evidence to support the contention that Ms. Prvulov "stands in" the position of an officer "as to

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render [service] fair, reasonable and just ... ," this Court further concludes service on Ms.

19

Prvulov was invalid as to both Kontron America and Kontron Modular. See Direct Mail, 840

20

F.2d at 688; Troll Busters, 2011 WL 3859721 at *8-9 (concluding service upon domestic sister­

21

subsidiary'S general counsel reasonably calculated to give notice to its foreign sister-subsidiary).

22

Accordingly, the Court finds Rockwell's service of the subpoena invalid.

23

This Court Does Not Have Jurisdiction Over Kontron Modular

24

The Court cannot compel Kontron Modular to respond to Rockwell's subpoena unless

25

the Court has jurisdiction over Kontron Modular. The Court's ruling on the validity of service,

26

though related, does not pre-determine the jurisdictional question. See Halo, 20 I 0 WL 2605195

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at *2, *6 (finding facts sufficient for valid service offoreign company through service on its

28

domestic counter-part yet finding the same facts insufficient for exercising jurisdiction over a

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12cv566-WQH (WMc)

1
2

foreign company).
Rockwell and Kontron Modular agree on the applicable standard for determining personal

3 II jurisdiction: Rockwell must demonstrate either (a) the Court has general jurisdiction over
4 II Kontron Modular because Kontron Modular has "continuous and systematic general business
5 II contacts in the forum" and should expect to be haled into court here; or, (b) the Court has
6 II specific jurisdiction over Kontron Modular because Kontron Modular (1) purposefully directs or
7 II avails itself of conducting business in the forum and (2) the claim arises out of Kontron
8 II Modular's forum-related activities. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d
9 II 797,800-02 (9th Cir.2004) If Rockwell satisfies the specific jurisdiction prongs, the burden
10 II shifts to Kontron Modular to "present a compelling case" that the Court's exercise ofjurisdiction
11 II would be unreasonable. See Id. at 802 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462,

12

476-78, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)).

13

To support its argument for general jurisdiction, Rockwell relies on Cosper and Sigros.

14

Rockwell argues Kontron America is more intimately connected to Kontron Modular than the

15

Cosper defendant's non-exclusive domestic salesman was connected to its co-defendant, a

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Massachusetts gun manufacturer. See Cosper, 53 CaL 2d at 82-83 (concluding the exercise of

17

jurisdiction over a foreign manufacturer proper and not a denial of due process because its sales

18

representative regularly did business in California). Rockwell attempts to buttress its reliance on

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Cosper with the proposition from Sigros that a court should not permit a foreign entity to hide

20

behind the nebulous nature of its relationship with its domestic counterpart in order to avoid

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personal jurisdiction. See Sigros, 129 F. Supp. 2d at 64.

22

However, the alleged nebulous nature of Kontron America and Kontron Modular's

23

relationship is not the focus of the Court's jurisdictional inquiry. A close inspection of the

24

Cosper defendants' relationship reveals two important jurisdictional facts not present here: (1) a

25

California consumer (the Cosper plaintiff) and (2) evidence of regularly conducted business.

26

Here, unlike Cosper, there is no evidence that Kontron Modular or Kontron America ever sold to

27

a California consumer, or injured (infringed the product of) a California resident. Rather it

28

appears Rockwell purchased the accused product from WAGO, an entity not affiliated with any

12

12cv566-WQH (WMc)

1 II Kontron entity. Kontron Modular's only connection is that it allegedly engineered and
2 II manufactured the accused product in Germany, then sold it to WAGO. Rockwell contends this
3 II sale was facilitated by Kontron America on behalf of Kontron Modular in California. Rockwell
4 II bases this contention on WAGO's belief that Kontron America is Kontron Modular. However,
5 II this assumption is not evidence. Further, if it was, it would not be enough to demonstrate that
6 " Kontron Modular regularly conducts business in California. Accordingly, the Court declines to
7
8

exercise general jurisdiction over Kontron Modular.
Likewise, there is no evidence to support a finding of spec{jic jurisdiction. Kontron

9 II Modular contends Kontron America has nothing to do with the sale, design, engineering, or
10 II manufacture of the accused products; thus, there are no jurisdictionally-relevant ties between
11 II Kontron Modular and California. Rockwell argues Kontron Modular ships the accused products
12 " to California to be purchased by WAGO in California. However, Rockwell does not provide any
13

evidence to support its contention. Nor does Rockwell provide significant evidence of a stream

14

of commerce through which Kontron Modular knows, or should know, the accused product

15

reaches California. Indeed, according to the declaration of Thomas Sabisch, Kontron Modular is

16

not even "involved in the engineering or development of these products." (Decl. Thomas

17

Sabisch; ECF No. 4-1 p. 4). Thus, even if Kontron Modular purposefully availed itself of the

18

California marketplace through its relationship with Kontron America, there is no evidence that

19

Rockwell's claims arise out of Kontron Modular's forum-related activities.

20

Finally, even if Rockwell could establish the necessary minimum contacts for personal

21

jurisdiction, the Court is compelled to find the exercise of personal jurisdiction over Kontron

22

Modular is unreasonable and unfair. Electronicsfor Imaging, Inc., v. Coyle, 340 F.3d 1344,

23

1351-52 (Fed. Cir. 2003). Courts consider the following factors in determining whether the

24

exercise ofjurisdiction would be unreasonable: (1) the burden on the defendant, (2) the interests

25

of the forum state, (3) the plaintiffs interest in obtaining relief, (4) the interstate judicial interest

26

in obtaining the most efficient resolution of controversies, and (5) the shared interest of the

27

several states in furthering fundamental social policies. !d.

28

In evaluating these factors, the Court considers the context in which this case arises:

13

12cv566-WQH (WMc)

1 II Rockwell, a non-Cahfornia plaintiff, is seeking discovery of infonnation from a German non2 II party (Kontron Modular) to supplement the discovery of the same infonnation it has successfully
3 II compelled in a non-California forum. Under these circumstances, the Court is not inclined to
4 II exercise jurisdiction over a foreign non-party for the sole purpose of enforcing a subpoena which
5 II seeks duplicate infonnation already compelled by a Wisconsin district court. The burden is too
6 II great and it is unnecessary. In comparison, Rockwell's interest in obtaining relief is minor
7 II because it has already obtained relief in Wisconsin federal court, the proper forum. Additionally,
8 II this Court has no interest in a Wisconsin district court dispute between two non-Californian
9 II entities. Put simply, California has no dog in this fight. Nor is it likely the Wisconsin district
10 II court has any interest in a California district court interjecting discovery rulings on matters it has
11
12
13

already considered or should rightfully consider.

Thus, the only beneficiary of the exercise ofjurisdiction here is RockwelL Rockwell

benefits from access to Kontron Modular's highly proprietary and trade secret infonnation to

14 II prosecute its patent infringement action against W AGO. This puts Kontron Modular at a great
15

disadvantage because Rockwell's claims imply that either Kontron Modular manufactured a

16

product which violates, or has contributed to the violation of, a Rockwell patent. But, as a non-

17 II party, Kontron Modular does not have the full panoply of protection a party would rightfully
18

enjoy in opposing a patent infringement action or related discovery. For example, Kontron

19

Modular does not get the benefit of a Markman hearing, discovery, or expert reports. As a result,

20 II Kontron Modular is unable to adequately test or challenge the validity of Rockwell's contentions.
21

Nor can Kontron Modular protect its own intellectual property from inappropriate discovery.

22 II Likewise, Kontron Mondular cannot appropriately raise the affinnative defenses of invalidity or

23

prior art even though Rockwell accuses Kontron Modular of violating (or contributing to the

24 1/ violation of) Rockwell's patents and other intellectual property. In short, the discovery Rockwell
25

seeks in this Court is unfair. Therefore, the burden on Kontron Modular to produce its

26

intellectual property is too great to be justified in this context and will not be adequately

27

protected by a well-crafted protective order.

28

The same reasoning applies to Rockwell's request for jurisdictional discovery. This is not

14

12cv566-WQH (WMc)

1 " the typical case in which a plaintiff is seeking discovery to establish forum jurisdiction over a
2 II party to the action in response to that party's Fed. R. Civ. P. 12(b)(2} motion to dismiss.
3 II Rockwell has not provided any case-law to support its contention that jurisdictional discovery is
4 II warranted on the facts present here. Nor can Rockwell demonstrate it will be prejudiced by the
5 " Court's denial of its request for jurisdictional discovery because (1) it has no claims against

6 II Kontron Modular at risk of dismissal and (2) the discovery it seeks can be, and should be,
7 II adjudicated before the Wisconsin federal court, which also satisfies (a) the interstate judicial

8 II interest in obtaining the most efficient resolution of controversies and (b) the two jurisdictions'
9 II shared interest in furthering fundamental social policies, as, for example, the efficient use of
10 II limited judicial resources.
11

Kontron Modular Is Not Entitled to Attorneys ' Fees

12

Kontron moves for an award ofattomey's fees under Fed. R. Civ. P. 37(a)(5)(B).

13

However, the Court finds Rockwell was "substantially justified" in moving to enforce this

14

subpoena because Rockwell's jurisdiction and service arguments, though reasoned and well­

15

intentioned,

16

simply lacked the factual support necessary for this Court to rule in its favor. See Fed. R. Civ. P.

17

37(a)(5)(B).

18

CONCLUSION

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20

For all of the foregoing reasons, Rockwell's motion to enforce the subpoena is DENIED.
IT IS SO ORDERED.

~,

21 " DATED: October 19,2012
22

Hon. William McCurine, Jr.
U.S. Magistrate Judge, U.S. District Court

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12cv566-WQH (WMc)