The Regents of the University of California et al v. Affymetrix, Inc. et al

Filing 311

ORDER denying Defendants' 299 Motion to Stay Production of Privileged Material Pending Appellate Review. Signed by Judge Marilyn L. Huff on 10/26/2018. (jah)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA; and BECTON,
DICKINSON and COMPANY,

Case No.: 17-cv-01394-H-NLS

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v.

ORDER DENYING DEFENDANTS’
MOTION TO STAY PRODUCTION
OF DOCUMENTS PENDING
APPEAL

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AFFYMETRIX, INC.; and LIFE
TECHNOLOGIES CORP.,

[Doc. No. 299.]

Plaintiffs,

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Defendants.

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On October 3, 2018, the parties filed a one-page joint motion for determination of a

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discovery dispute. (Doc. No. 292.) On October 9, 2018, the Court issued an order on the

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parties’ discovery dispute, rejecting Defendants Affymetrix, Inc. and Life Technologies

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Corp.’s assertion of the common interest privilege as to the documents at issue and granting

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Plaintiffs the Regents of the University of California, Becton, Dickinson and Company,

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Sirigen, Inc., and Sirigen II Limited’s motion to compel production of the documents.

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(Doc. No. 297.) In the order, the Court ordered Defendants to produce the documents at

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issue within 14 days from the date the order was filed. (Id. at 9.)

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On October 10, 2018, Defendants filed a motion to stay production of the documents

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at issue pending appellate review. (Doc. No. 299.) On October 11, 2018, the Court took

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Defendants’ motion to stay under submission, and the Court granted Defendants an

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extension of the deadline to produce the documents at issue, extending the deadline to

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November 6, 2018. (Doc. No. 302.) On October 24, 2018, Plaintiffs filed a response in

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opposition to Defendants’ motion to stay. (Doc. No. 308.) For the reasons below, the

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Court denies Defendants’ motion to stay pending appellate review.
Background

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In the present action, Plaintiffs assert claims of patent infringement against
Defendants, alleging infringement of U.S. Patent No. 9,085,799, U.S. Patent No.
8,110,673, U.S. Patent No. 8,835,113, U.S. Patent No. 8,455,613, U.S. Patent No.
8,575,303, U.S. Patent No. 9,139,869, and U.S. Patent No. 9,547,008. (Doc. No. 101, FAC
¶¶ 52-115.) The Court has previously granted Defendants’ motion for summary judgment
of non-infringement of the ’799 patent. (Doc. No. 170.)
On November 15, 2017, in response to a subpoena, third-party AAT BioQuest
produced to Plaintiffs an email dated July 15, 2013 that was sent from Travis Jennings, an
Affymetrix scientist, to Steven Yee, Affymetrix’s in-house IP counsel, and Ryan Simon,
Affymetrix’s general counsel. (Doc. No. 212-1, Jennings Decl. ¶ 6.) The email was also
sent to Dr. Jack Diwu, lead scientist and principal for third-party AAT BioQuest, Inc., as a
carbon copy recipient.

(Id. ¶ 7.)

It is undisputed that at the time of that email

communication, AAT was not represented by its own counsel. (Doc. No. 212 at 1, 5.)
Further, Defendants do not assert that AAT was represented by Affymetrix’s in-house
counsel. (Doc. No. 197 at 7 n.2.)
On March 7, 2018, Defendants asserted a claim of privilege as to the July 15, 2013
email in their privilege log and clawed the document back under the terms of the protective
order in this case. (Doc. No. 198-1, Ex. C.) Plaintiffs disputed Defendants’ claim of
privilege as to the document but complied with Defendants’ request to destroy the
document. (Id.)

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On April 20, 2018, the parties filed a one-page joint motion for determination of a

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discovery dispute. (Doc. No. 165.) In the joint letter, Plaintiffs challenged Defendants’

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assertion of common interest privilege as to the July 15, 2013 email. (Id.) On April 25,

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2018, the Court referred the parties’ discovery dispute to the Magistrate Judge. (Doc. No.

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166.) On May 23, 2018, the parties filed a joint motion for the determination of a discovery

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dispute before the Magistrate Judge. (Doc. No. 186.)

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On June 19, 2018, the Magistrate Judge issued an order on the parties’ joint motion,

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rejecting Defendants’ assertion of common interest privilege as to the July 15, 2013 email

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and granting Plaintiffs’ motion to compel production of the document. (Doc. No. 197 at

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1, 10.) On July 3, 2018, Defendants filed objections pursuant to Federal Rule of Civil

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Procedure 72(a) to the Magistrate Judge’s June 19, 2018 order. (Doc. No. 205.) On August

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6, 2018, the Court held that Defendants failed to establish applicability of the common

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interest privilege and denied Defendants’ Rule 72(a) objections.

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Specifically, the Court held that Defendants had failed to show that the communication at

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issue was made in pursuit of a joint strategy in accordance with some form of agreement.

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(Id. at 7-9.) In addition, the Court held that the Magistrate Judge did not err in denying

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Defendants’ assertion of common interest privilege on the basis that AAT was not

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represented by counsel of its own during the relevant time. (Id. at 9-11.)

(Doc. No. 259.)

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On October 3, 2018, the parties filed an additional one-page joint motion for

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determination of a discovery dispute in which Plaintiffs again challenged Defendants’

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assertion of the common interest privilege as to certain documents. (Doc. No. 292.)

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Specifically, the parties disputed whether Defendants could invoke the common interest

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privilege with respect to attorney-client communications Affymetrix shared with third-

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party AAT after the effective date of a supply and license agreement that Affymetrix and

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AAT signed in 2014. (Id.) On October 9, 2018, the Court issued an order on the parties’

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discovery dispute, rejecting Defendants’ assertion of the common interest privilege as to

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the documents at issue and granting Plaintiffs motion to compel production of the

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documents. (Doc. No. 297.) In the order, the Court determined that Defendants had failed
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to meet their burden of establishing applicability of the common interest privilege in light

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of the fact that business entity AAT was not represented by counsel during the relevant

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time period. (Id. at 5-9.) By the present motion, Defendants move for a stay of the Court’s

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October 9, 2018 order requiring production of these documents pending resolution of a

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mandamus petition that Defendants will file with the Federal Circuit. 1 (Doc. No. 299-1 at

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1-2.)

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Discussion
I.

Legal Standards Governing a Motion to Stay Pending Appellate Review

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“A stay is not a matter of right . . . . It is instead an exercise of judicial discretion . .

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. [that] is dependent upon the circumstances of the particular case.” Lair v. Bullock, 697

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F.3d 1200, 1203 (9th Cir. 2012) (quoting Nken v. Holder, 556 U.S. 418, 433 (2009))

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(internal quotation marks omitted). In deciding whether to grant a stay pending appeal, a

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court considers the following four factors: “‘(1) whether the stay applicant has made a

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strong showing that he is likely to succeed on the merits; (2) whether the applicant will be

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irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure

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the other parties interested in the proceeding; and (4) where the public interest lies.’” Nken,

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556 U.S. at 426 (quoting Hilton v. Braunskill, 481 U.S. 770, 776 (1987)); accord Lair, 697

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F.3d at 1203. “‘The first two factors . . . are the most critical,’ and the last two steps are

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reached ‘[o]nce an applicant satisfies the first two factors.” Washington v. Trump, 847

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F.3d 1151, 1164 (9th Cir. 2017) (quoting Nken, 556 U.S. at 434, 435). “The party

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requesting a stay bears the burden of showing that the circumstances justify an exercise of

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that discretion.” Nken, 556 U.S. at 433–34.

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II.

Analysis

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A.

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In order to satisfy the first factor, the movant “must make a strong showing that

Likelihood of Success on the Merits

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The Court notes that although Defendants state in their motion to stay that they will expeditiously
file a petition for mandamus review with the Federal Circuit, to date, Defendants have not filed a petition
with the Federal Circuit. (Doc. No. 299-1 at 2.)
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success on the merits is likely.” Lair, 697 F.3d at 1204. The Supreme Court has explained

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that “[i]t is not enough that the chance of success on the merits be ‘better than negligible.’”

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Nken, 556 U.S. at 434. “‘[M]ore than a mere ‘possibility’ of relief is required.’” Id. Thus,

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“‘at a minimum,’ a petitioner must show that there is a “substantial case for relief on the

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merits.” Lair, 697 F.3d at 1204.

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Defendants have failed to make a strong showing of likelihood of success on the

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merits on appeal. In order for Defendants to obtain immediate appellate review of the

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Court’s privilege determination, Defendants need to show entitlement to a writ of

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mandamus. (See Doc. No. 299-1 at 2 (stating that Defendants plan on filing a petition for

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mandamus review with the Federal Circuit)) The Supreme Court has explained that “[t]he

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writ of mandamus is an extraordinary remedy[ ] to be reserved for extraordinary

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situations.” Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 289 (1988).

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In order to establish entitlement to mandamus relief, Defendants, among other

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requirements, must show that they “‘have no other adequate means to attain the relief he

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desires—a condition designed to ensure that the writ will not be used as a substitute for the

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regular appeals process.’” Waymo LLC v. Uber Techs., Inc., 870 F.3d 1350, 1357 (Fed.

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Cir. 2017) (quoting Cheney v. U.S. Dist. Court for D.C., 542 U.S. 367, 380-81 (2004)).

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The Federal Circuit has noted that “[a]ppellate courts generally den[y] review of pretrial

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discovery orders because postjudgment appeals generally suffice to protect the rights of

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litigants and ensure the vitality of the attorney-client privilege . . . by vacating an adverse

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judgment and remanding for a new trial in which the protected material and its fruits are

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excluded from evidence.” Id. at 1357–58 (citations and internal quotation marks omitted).

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Thus, it is highly unlikely that Defendants will be able to satisfy the “no other adequate

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means for relief” requirement for obtaining mandamus relief from the Court’s October 9,

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2018 pretrial discovery order.

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Defendants argue that immediate relief through mandamus is appropriate for a

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“particularly injurious or novel privilege ruling.” (Doc. No. 239 at 1.) But in Waymo LLC

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v. Uber Technologies, Inc., the Federal Circuit recently denied a petition for writ of
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mandamus and found that the appellant had failed to satisfy the “no other adequate means

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for relief” requirement for obtaining mandamus relief even though the appellant argued

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that the lower court’s privilege ruling was particularly injurious or novel. See 870 F.3d at

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1357-59 (noting that “even if a privilege ruling is particularly injurious or novel, a petition

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for writ of mandamus is one of ‘several potential avenues of review’”). Thus, Defendants

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are unlikely to obtain mandamus relief even if they characterize the Court’s order as a

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“particularly injurious or novel privilege ruling.” 2

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Moreover, even if the Federal Circuit were to reach the merits of the privilege issue

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in Defendants’ appeal, the Court notes that, as explained in the October 9, 2018 order, the

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bulk of the case law supports Plaintiffs’ position that the common interest privilege does

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not apply in these circumstances because AAT was not represented by counsel during the

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relevant time period. (Doc. No. 297 at 6-7 (citing In re Pac. Pictures Corp., 679 F.3d 1121,

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1129 (9th Cir. 2012); United States v. Gonzalez, 669 F.3d 974, 978 (9th Cir. 2012); Sec.

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& Exch. Comm’n v. Aequitas Mgmt., LLC, No. 3:16-CV-438-PK, 2017 WL 6329716, at

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*3 (D. Or. July 7, 2017), objections overruled sub nom. Sec. & Exch. Comission v.

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Aequitas Mgmt., LLC, No. 3:16-CV-00438-PK, 2017 WL 6328150 (D. Or. Dec. 11, 2017);

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Swortwood v. Tenedora de Empresas, S.A. de C.V., No. 13CV362-BTM (BLM), 2014 WL

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895456, at *4 (S.D. Cal. Mar. 6, 2014); Finisar Corp. v. U.S. Bank Tr. Nat. Ass’n, No. C

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07-04052 JF (PVT), 2008 WL 2622864, at *4 (N.D. Cal. June 30, 2008); OTR Wheel

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Eng’g, Inc. v. W. Worldwide Servs., Inc., No. CV-14-085-LRS, 2015 WL 11117150, at *2

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(E.D. Wash. June 1, 2015); Carl Zeiss Vision Int’l Gmbh v. Signet Armorlite Inc., No. CIV

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07CV-0894DMS POR, 2009 WL 4642388, at *7 (S.D. Cal. Dec. 1, 2009); In re Teleglobe

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Defendants note that in Waymo, the Federal Circuit granted a stay of the district court’s order
pending mandamus review. (Doc. No. 299-1 at 3.) But in making this argument, Defendants misconstrue
the proper standard for determining whether to grant a stay pending appeal. The proper standard for
evaluating a motion for a stay pending review requires a district court to analyze the movant’s likelihood
of success on the merits, not the movant’s likelihood of obtaining a stay from the appellate court. See
Nken, 556 U.S. at 426. With respect to the merits of Defendants’ appeal, as explained above, Defendants
are unlikely to be successful in obtaining mandamus relief from the Federal Circuit, particularly in light
of the Waymo decision.
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Commc’ns Corp., 493 F.3d 345, 365 (3d Cir. 2007); Restatement (3d) of the Law

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Governing Lawyers § 76(1) cmt. d (2000)).) Further, notably, Defendants have failed to

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identify any decision where the Ninth Circuit or a district court within the Ninth Circuit

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found the common interest privilege applicable even though one of the parties to the

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agreement was not represented by counsel. In sum, Defendants have failed to make of

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strong showing of likelihood of success on the merits and, thus, have failed to satisfy the

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first factor of the four-part test.

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B.

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The Supreme Court has explained that “simply showing some ‘possibility of

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irreparable injury,’ fails to satisfy the second factor.” Nken, 556 U.S. at 434–35 (citation

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omitted). Rather the movant must “show under the second factor that there is a probability

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of irreparable injury if the stay is not granted.” Lair, 697 F.3d at 1214.

Irreparable Injury

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Defendants argue that they will be irreparably harmed if a stay is not granted because

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if the documents at issue are produced to Plaintiffs, there will be no way for Plaintiffs to

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unlearn the contents of the documents even if Defendants are successful on appeal. (Doc.

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No. 299-1 at 4.) This is insufficient to establish irreparable injury. The Supreme Court

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has explained that “postjudgment appeals generally suffice to protect the rights of litigants

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and ensure the vitality of the attorney-client privilege. Appellate courts can remedy the

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improper disclosure of privileged material in the same way they remedy a host of other

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erroneous evidentiary rulings: by vacating an adverse judgment and remanding for a new

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trial in which the protected material and its fruits are excluded from evidence.” Mohawk

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Indus., Inc. v. Carpenter, 558 U.S. 100, 109 (2009); accord Waymo, 870 F.3d at 1357-58.

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Defendants fail to adequately explain why any potential harm resulting from the production

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of the documents at issue could not be remedied by a later order excluding those documents

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from evidence if Defendants are successful on appeal. As a result, Defendants have failed

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to make a sufficient showing of irreparable injury absent a stay, and, thus, have failed to

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satisfy the second factor of the four-part test.

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///
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Conclusion

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In sum, Defendants have failed to satisfy the first factor and the second factor of the

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four-part test for obtaining a stay pending appellate review. As such, Defendants have

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failed to establish entitlement to a stay pending appellate review, and the Court, exercising

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its sound discretion, denies Defendants’ request for a stay. 3 See Nken, 556 U.S. at 434,

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435 (explaining that the first two factors of the four-part test “are the most critical” and that

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a court need not reach the last two factors if the movant has not satisfied the first two

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factors); Washington, 847 F.3d at 1164 (same).

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IT IS SO ORDERED.
DATED: October 26, 2018

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MARILYN L. HUFF, District Judge
UNITED STATES DISTRICT COURT

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In their motion, Defendants request, in the event that the Court denies their motion to stay, a 14day extension of the deadline to produce the documents at issue, moving the production deadline to
November 6, 2018. (Doc. No. 299-1 at 2.) On October 11, 2018, when the Court took the motion under
submission, the Court also granted Defendants an extension of time, moving the production deadline for
the documents at issue to November 6, 2018. (Doc. No. 302 at 2.) As a result, Defendants’ request for
an extension of time is now moot.
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