Millennium Laboratories, Inc. v. Allied World Assurance Company (U.S.), Inc.

Filing 135

ORDER Determining Discovery Dispute. AWAC's request to conduct depositions in excess of ten is Granted. Signed by Magistrate Judge Karen S. Crawford on 1/15/2014.(rlu)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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MILLENNIUM LABORATORIES, INC.,
Plaintiff,

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vs.
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ALLIED WORLD ASSURANCE
COMPANY (U.S.), INC.,

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CASE NO. 12cv2280-H(KSC)
ORDER DETERMINING
DISCOVERY DISPUTE
[Doc. No. 125 (sealed)]

Defendant.

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Currently pending before the Court is the parties' Joint Motion Regarding

18 AWAC's Request for Leave to Take More Than Ten Depositions. [Doc. No. 125
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(sealed)] The Joint Motion constitutes the eighth discovery-related dispute brought to

20 the Court by the parties in this action. The eight disputes, including exhibits, have
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totaled in excess ofl,400 pages of motion practice. [Doc. Nos. 33, 35, 83, 87,102,107,

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108, 114, 120, 125] For purposes of judicial economy and to streamline the discovery

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process, the Court ORDERS as follows:

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1.

As to proposed depositions of: (1) Kelly Nelson; (2) Edward Zicar; (3)

25 Lori Martin; (4) Barney & Barney; (5) Skadden Arps; (6) Ryan Uehling; (7) Martin
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Price; (8) Charles Root; (9) Joel Bramer, and, (1O) Ameritox, A WAC's request to

27 conduct depositions in excess of ten is GRANTED. Based upon the arguments
28 contained in the moving papers, the representations made in the Declarations attached
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12cv22BO-H(KSC)

1 thereto, and the case law cited, good cause exists for A WAC to depose the individuals
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listed above, to the extent that these depositions can be concluded by the close of

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discovery, January 31, 2014.

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The Federal Rules of Civil Procedure generally allow for broad discovery,

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authorizing parties to obtain discovery regarding "any nonprivileged matter that is

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relevantto any party's claim or defense." FED.R.CIV.P.26(b)(1). Relevant information

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for discovery purposes includes any information "reasonably calculated to lead to the

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discovery of admissible evidence," and need not be admissible at trial to be

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discoverable. Id. There is no requirement that the information sought relate directly

10 to a particular issue in the case. Rather, relevance encompasses any matter "that bears
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on, or that reasonably could lead to other matter that could bear on, any issue that is or

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may be [presented] in the case." Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340,

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350 (1978)(citingHickman v. Taylor, 329 U.S. 495, 501 (1947)). District courts have

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broad discretion to determine relevancy for discovery purposes. See Hallettv. Morgan,

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296 F.3d 732, 751 (9th Cir. 2002). Similarly, district courts have broad discretion to

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limit discovery where the discovery sought is "unreasonably cumulative, duplicative,

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or can be obtained from some other source that is more convenient, less burdensome,

18 or less expensive." FED.R.CIV.P.26(b)(2)(C).
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Federal Rule of Civil Procedure 30(a)(2) requires leave of court when "parties

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have not stipulated to [a] deposition," and "the deposition would result in more than

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10 depositions" taken by a party. In considering requests to take in excess of 10

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depositions, a "court must grant leave to the extent consistent with Rule 26(a)(2)," as

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outlined above. Specifically, Rule 26(b )(2) provides that a court must limit discovery

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where, e.g., "the discovery sought is unreasonably cumulative or duplicative," "the

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party seeking discovery has had ample opportunity to obtain the information by

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discovery in the action," or "the burden or expense of the proposed discovery

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outweighs its likely benefit, considering the needs of the case, the amount in

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controversy, the parties' resources, the importance of the issues at stake in the action,
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12cv2280-H(KSC)

1 and the importance ofthe discovery in resolving the issues." FED.R.ClV.P.26(b )(2)(C).
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As of the date of filing the Joint Motion [Doc. No. 125 (sealed), p. 7], December

3 20, 2013, A WAC has noticed and taken 5 depositions. This Court has no knowledge
4 regarding whether A WAC has taken 5 additional depositions as of the date of this
5 Order, as permitted under Rule 30 ofthe Federal Rules of Civil Procedure. As the fact
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discovery cut-off date ofJanuary 31, 2014 has not yet passed [Doc. No. 129 (Second

7 Amended Scheduling Order)], A WAC may conduct 5 of the depositions listed above
8 prior to January 31, 2014 without leave of court. See FED.R.ClV.P.30(a)(2)(A).
9 However, given that AWAC's total requested depositions would exceed the
10 presumptive limit of 10, the Court will address below whether good cause exists for
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A W AC to notice and take in excess of ten depositions in this case.

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This Court is satisfied that the putative deponents listed above, namely (1)

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Nelson, (2) Zicar, (3) Martin, (4) Barney & Barney, (5) Skadden Arps, (6) Uehling, (7)

14 Price, (8) Root, (9) Bramer, and (10) Ameritox all contain sufficiently unique and
15 relevant information to warrant the taking of additional depositions. This finding is
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premised on the complexity of this lawsuit, and the Rule 26 factors outlined above.

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Accordingly, the burden and expense of taking additional depositions is justified. As

18 stated in this Court's December 23, 2013 Second Amended Scheduling Order,
19 however, no further extensions to the pretrial dates will be granted absent new and

20 good cause. [Doc. No. 129, pp. 7-8] Accordingly, these depositions must be noticed
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and taken prior to the January 31, 2014 fact discovery cut-off. Given the age of this

22 case, the multiple continuances granted to date, and A WAC's questionable diligence
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in scheduling and conducting the depositions to date, this deadline will not be moved

24 again without such showing.! Therefore, unless it can notice and conclude these
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I Should the parties encounter scheduling issues regarding these depositions and
be unable to resolve them after proper meet ana confer efforts, they are encouraged to
27 immediately contact the Court by' te1ephone for assistance in resolvmg such scheduling
issues. Under Rule 30(b)(1), Rarties noticing depositions must~ive "reasonable written
28 notice to every other party. 'FED.R.ClV.P. -:30(b)(I). Given tlie continuances granted
to date and the January 31) 2014 fact discovery deadline, this Court construes
reasonable notice to be 5 busmess days.

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!2cv2280-H(KSC)

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requested depositions by the close of discovery, and in the absence of any new and

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good cause, AWAC is precluded from conducting any of the aforementioned

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depositions after January 31, 2014.

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2.

This Court has grounds to question A WAC's diligence in pursuing fact

5 discovery in this action. The Court finds A WAC's pursuit of Ameritox discovery as
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a source ofinformation to be instructive in this regard. A WAC argues that Millennium

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has publicly alleged that Ameritox, a competitor, instigated the DOJ Investigation at

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issue in this coverage action and made a presentation to the DOJ regarding Millennium.

9 [Doc. No. 125 (sealed), p. 10] AWAC further explains that it delayed in immediately
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pursuing this information regarding Ameritox's role in the DOJ investigation as an

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effort to "avoid duplicative discovery." Id. Rather, A WAC states that it first sought

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the information regarding Ameritox through depositions of Millennium and

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Millennium's outside counsel (Hogan Lovells and Collora). !d. at 10-11. Further,

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A WAC contends it was not in a position to conduct an effective deposition of

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Ameritox because Ameritox refused to produce any documents in response to A WAC's

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document subpoenas, issued in Maryland. Id. at 11. Lastly, A WAC argues that it has

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diligently pursued this information from Ameritox, culminating in AWAC's filing of

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a Motion to Compel Ameritox's compliance with the subpoenas that is currently

19 pending before the Maryland District Court. Id.
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Millennium contends that A WAC's arguments are unsupported by the timeline

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of events in this action. As asserted, A WAC served document subpoenas on Ameritox

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in August and September 2013, but then waited months - until December 2, 2013 - to

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file a motion to compel Ameritox's compliance with the subpoenas in Maryland. !d.

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at 23. Further, Millennium argues that AWAC failed to schedule the depositions of

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Millennium's outside counsel until the last two weeks of discovery under the earlier

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discovery schedule, and noticed the Millennium deposition (through stipulation) for

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a date following the close of the prior discovery cut-off. Id. In sum, Millennium

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1 argues that A WAC gave itself no time to conduct the follow-up discovery it now
2 contends it needs from Ameritox_ Id_ Further, Millennium cites to the potential
3 prejudice if the deposition is permitted to proceed in this action. 2 Id. at fn 10.
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With respect to the Ameritox issue specifically, considering the Rule 26 factors

5 outlined above, this Court questions whether A WAC, as "the party seeking discovery[,]
6 ... had ample opportunity to obtain the information by discovery in the action," but
7 failed to pursue it in a timely fashion. FED.R.C1V.P.26(b)(2)(C).

While the Court

8 finds the Ameritox deposition to be relevant, given the questions raised about A WAC's
9 diligence in noticing depositions of Ameritox and the other 9 putative deponents listed
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above, the fact discovery deadline will remain in place absent new and good cause.

CONCLUSION

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As stated in greater detail above, the Court ORDERS as follows:

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1.

AWAC's request for leave to conduct the depositions of: (1) Nelson;

14 (2) Zicar; (3) Martin; (4) Barney & Barney; (5) Skadden Arps; (6) Uehling; (7)
15 Price; (8) Root; (9) Bramer; and, (10) Ameritox is GRANTED. Any such
16 depositions must be concluded by the close of discovery, January 31, 2014.
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2.

The January 31, 2014 fact discovery cut-off date established in this

18 Court's Second Amended Scheduling Order [Doc. No. 129] will not be further
19 extended absent a showing of new and good cause. Should the parties have a
20 dispute regarding the scheduling ofthese depositions, and be unable to resolve it
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after meaningful meet and confer efforts, they are to promptly contact the Court by

22 telephone.
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IT IS SO ORDERED.

24 DATE: January

IS

,2014

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United States Magistrate Judge

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2 At this time, the Court will not accept any additional briefing or argument on
the issue ofthe Rule 30(b)(6) deposition oCAmeritox.

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12cv2280-H(KSC)