La Jolla Spa MD, Inc. et al v. Avidas Pharmaceuticals, LLC et al

Filing 60

ORDER Following Telephonic Discovery Conference re Doc. Nos. #57 & #58 . The parties shall submit a proposed protective order to this Court no later than 2/13/2019. Signed by Magistrate Judge William V. Gallo on 2/8/2019.(rmc)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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Case No.: 17-CV-1124-MMA(WVG)

LA JOLLA SPA MD, INC.,
Plaintiff,

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v.

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ORDER FOLLOWING
TELEPHONIC DISCOVERY
CONFERENCE

AVIDAS PHARMACEUTICALS, LLC,
Defendant.

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[Doc. Nos. 57 & 58.]

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The Court held a telephonic discovery conference on February 7, 2019, and

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entertained argument regarding Defendant’s responses to Plaintiff’s special interrogatory

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(“ROG”) 16 and requests for production of documents (“RFP”) 7, 8, and 11-16. Having

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considered the parties’ briefing (Doc. Nos. 57 & 58), arguments, the Second Amended

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Complaint, and the Answer thereto, the Court rules as follows:

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1.

With respect to SROG 16, Defendant shall supplement its responses no later

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than February 21, 2019. By this date, Defendant shall have completed a review of at least

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50% of the documents related to this case.

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Defendant shall then continue its review and complete a review of 100% of the

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documents by March 7, 2019. Another supplemental response shall then be made by this

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date. Of course, Defendant may—and is encouraged to—respond sooner than these

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deadlines.
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2.

accordingly respond to this RFP by February 14, 2019.
3.

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The parties shall submit a proposed protective order to this Court no

later than February 13, 2019.
b.

Within 7 days of the date the protective order issues, Defendant shall

produce all non-privileged responsive documents.

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With respect to RFPs 8 and 11-16:
a.

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With respect to RFP 7, Defendant withdrew its objection and shall

c.

Defendant shall provide Plaintiff a privilege log for withheld

documents no later than February 14, 2019.
4.

The parties dispute whether the scope of discovery—as prescribed by the

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allegations in the Second Amended Complaint and Answer thereto—is properly limited to

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the time period after July 11, 2014, the termination date of the contract at issue in this case.

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Based on the Court’s review, the Court limits the scope of discovery to the time period

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after May 8, 2014—the date of Defendant’s letter providing notice of termination of the

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contract.

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The plain language of the Second Amended Complaint demonstrates a singular

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focus on the breach of royalty payment obligations after May 8, 2014. There is no language

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from which the Court could find that the time period before this date is at issue. The SAC

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first alleges that “[p]ursuant to the Contract, Avidas paid royalties until around mid-2014.”

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(SAC ¶ 8.) In other words, Plaintiff alleges that Defendant paid—in accordance with the

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terms of the contract—the royalty payments it owed Plaintiff. Thus, this allegation simply

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states that Defendant complied with its contractual obligations until around mid-2014. If

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Defendant complied with its obligations during this period, it logically did not breach the

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contract and does not owe unpaid royalty during a time period when Plaintiff alleges

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Defendant complied with its contractual obligations.

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After explaining that Defendant paid its royalties, the SAC continues: Defendant’s

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May 8, 2014 contract termination letter conveyed Defendant’s “election to sell the

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remaining stock [of product] on hand and pay appropriate royalties.” (Id.) However,
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“[t]hereafter[—i.e., after the May 8, 2014 contract termination letter—], additional product

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was sold, but the royalties were not paid.” (Id.)

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The sum of the above allegations is that Defendant had complied with the contract

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up to May 8, 2014. On that date, Defendant told Plaintiff it would sell the remaining

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product it had on hand and would pay the royalty it owed Plaintiff. However, after May 8,

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2014, Defendant sold more product and failed to pay the royalty it owed Plaintiff. Thus,

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the Second Amended Complaint itself sets the scope of Defendant’s alleged violative

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conduct to the time period after May 8, 2014.1 Accordingly, the discovery in this case shall

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be limited to this time period.2,3

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IT IS SO ORDERED.
DATED: February 8, 2019

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The Court’s review of the Answer does not change this result. Although the thirteenth
affirmative defense claims full contractual performance, this was in response to the
allegations that Defendant failed to pay royalties after May 8, 2014. Because Plaintiff
alleges that royalties were paid before that date, it would make little sense to interpret the
thirteenth affirmative defense as applying to a period when Plaintiff itself contends
contractual obligations were met.
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Plaintiff convincingly noted that to determine the amount of unpaid royalties after May
8, 2014, it is necessary to know how many units of product Defendant had on hand on that
date. However, this data is within the scope of discovery herein limited to May 8, 2014
and beyond and does not necessitate discovery prior to that date.

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To be clear, Court does not make any rulings on the merits of Plaintiff’s case, but simply
limits discovery based on a fair reading of the four corners of the SAC, which is consistent
with Rule 26. See Fed. R. Civ. P. 26(b)(1) (parties may obtain discovery “that is relevant
to any party’s claim or defense”—complaints contain claims).
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