TUMI Entertainment, Inc. v. Gao et al

Filing 24

ORDER granting 20 Motion to Compel. See Order for details. Show cause responses due May 11, 2016. Signed by Chief Judge Christina Reiss on 4/27/2016. (ADM)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
TUMI ENTERTAINMENT, INC.,
a Florida corporation,
Plaintiff,
v.

CASE NO. 3:15-cv-559-J-32MCR

KAREN RU GAO a/k/a Chao Ru Gao,
MAN HEUNG LO a/k/a Alex Lo,
JIN MIN CHEN, and MAN HONG LO
a/k/a Jason Lo,
Defendants.
________________________________
MAN HONG LO a/k/a Jason Lo and
JIN MIN CHEN,
Third Party Plaintiffs,
v.
CHANGLONG ZENG a/k/a Benny Zeng
and CHANG DONG ZENG a/k/a Chang
Hui Zeng a/k/a Evan Zeng,
Third Party Defendants.
________________________________/
ORDER
THIS CAUSE is before the Court on Plaintiff’s Motion and Memorandum to
Compel Answers to Deposition Questions (“Motion”) (Doc. 20).1 For the reasons

1

On April 14, 2016, the Court directed any party opposing the Motion to file a
response no later than April 25, 2016. (Doc. 21.) T o date, no response has been filed.
Therefore, the Motion will be deemed unopposed.

stated herein, the Motion is due to be GRANTED.
I.

Introduction

This is a copyright infringement action. Presently, Plaintiff seeks an order
compelling Defendants Karen Gao and her husband Alex Lo and Third Party
Defendant Benny Zeng2 to answer the deposition questions concerning who was
paying the attorneys’ fees for the defense of Karen Gao and Alex Lo, which the
witnesses were instructed not to answer based on the attorney client privilege.
During the depositions, Plaintiff sought to establish that the person paying, or at
least obligated to pay, the attorneys’ fees is Benny Zeng and possibly his brother
Evan Zeng.
In support, Plaintiff states:
The premise of the questions therefore is that Benny Zeng and his
brother Evan, are still in control of Plaintiff’s software and various
persons who have access to it, and are paying for the defense of
Defendants Karen Gao and Alex Lo to preserve their continuing grip
on illegal copies of Tumi software and to control the flow of
information to Plaintiff in this case.
(Doc. 20 at 5.) Plaintiff explains:
The instructions [not to answer] in the . . . deposition testimony
go to the heart of whether there is a conspiracy between Mr. Benny
Zeng, his brother Evan on the one hand, and Alex and Karen Lo on
the other, all of whom are represented by the same lawyer, to
suppress their involvement in the server recently produced by the
other Defendants in this lawsuit, which has been forensically
examined and found to embody the entire object code of the TNT
2

All these parties are represented by Robert P. Butts of Warner, Sechrest &
Butts, P.A.
2

copyrighted work, as is shown in Attachment 1. If Jason and Jai told
the truth in their depositions, Mr. Zeng is the one responsible for this
server and the server was deliberately hidden to avoid its detection,
even in the face of the permanent injunction issued against Mr. Zeng
in the Ocala case. While this fact would not spare Jason and Jai
from their own liability for copyright infringement, it certainly is a large
factor in understanding the extent of Mr. Benny Zeng’s and his
brother’s liability in this case. Under these circumstances, Mr. Zeng,
keenly aware of his exposure under the Ocala permanent injunction
issued by Judge Hodges, has every motivation to conceal and
fabricate the facts, and having the same attorney certainly facilitates
Mr. Zeng’s control over Karen and Alex Lo. Again this argument is in
no way an effort to disparage Mr. Butts, but only to point out the
obvious fact that if Mr. Zeng is paying the bills for the defense, Benny
Zeng is in a good position to control and influence the testimony by
his colleagues and Co-Defendants.
(Id. at 10-11.)
Plaintiff contends that “[t]here is no attorney-client privilege associated with
the identity of the person paying the fees for the common defense of these
witnesses, whether it is Mr. Benny Zeng, Evan Zeng, or some entity or a third
party confederating with them.” (Id. at 11.) Plaintiff points out that “no
communications between an attorney and his or her client made for purpose of
securing or receiving legal advice, have been sought in any of the [deposition]
questions.” (Id. at 12.) Citing to In re Grand Jury Proceedings in the Matter of
Freeman, 708 F.2d 1571, 1575 (11th Cir. 1983), Plaintiff states that it has long
been established in the Eleventh Circuit that “information ‘regarding a fee
arrangement and the identity of the person paying the fee falls outside the
protection of the attorney-client privilege.’” (Doc. 20 at 12.) Further, “[t]he party

3

invoking the privilege has the burden of establishing the existence of the attorneyclient relationship and the confidential nature of the communication.” In re Grand
Jury Proceedings, 708 F.2d at 1575.
II.

Standard

Motions to compel discovery under Rule 37(a) are committed to the sound
discretion of the trial court. Commercial Union Ins. Co. v. Westrope, 730 F.2d
729, 731 (11th Cir. 1984). The trial court’s exercise of discretion regarding
discovery orders will be sustained absent a finding of abuse of that discretion to
the prejudice of a party. See id.
“Parties may obtain discovery regarding any nonprivileged matter that is
relevant to any party’s claim or defense[.]” Fed.R.Civ.P. 26(b)(1). The overall
purpose of discovery under the Federal Rules is to require the disclosure of all
relevant information so that the ultimate resolution of disputed issues in any civil
action may be based on a full and accurate understanding of the true facts. See
United States v. Proctor & Gamble Co., 356 U.S. 677, 682 (1958). Courts
construe relevancy “broadly to encompass any matter that bears on, or that
reasonably could lead to other matter[s] that could bear on, any issue that is or
may be in the case.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351
(1978).
When the Court is called upon to analyze questions of privilege in a federal
question case, such as this one, the Court must analyze them under federal
4

common law. See, e.g., Universal City Dev. Partners, Ltd. v. Ride & Show
Engineering, Inc., 230 F.R.D. 688, 690 (M.D. Fla. 2005) (“In federal question
cases, privileges are determined under federal common law.”); see also Hancock
v. Hobbs, 967 F.2d 462, 466 (11th Cir. 1992) (“Courts that have confronted this
issue in the context of the discoverability of evidence have uniformly held that
federal law of privilege governs even where the evidence sought might be
relevant to a pendent state claim.”) “The party asserting the privilege has the
burden of proving the existence of the privilege.” Id. (citing United States v.
Schaltenbrand, 930 F.2d 1554, 1562 (11th Cir. 1991)).
To satisfy this burden, the party asserting the privilege must make an
“evidentiary showing based on competent evidence,” rather than “mere
conclusory or ipse dixit assertions.” CSX Transp., Inc. v. Admiral Ins. Co., 1995
WL 855421, at *1 (M.D. Fla. July 20, 1995) (internal quotations and citations
omitted). The party asserting the privilege must provide the court with underlying
facts demonstrating the existence of the privilege, which may be accomplished by
an affidavit. United States v. Osborn, 561 F.2d 1334, 1339 (9th Cir. 1977).
“Unless the affidavit is precise to bring the document within the rule, the Court
has no basis on which to weigh the applicability of the claim of privilege. An
improperly asserted claim of privilege is no claim of privilege at all.” Int’l Paper
Co. v. Fibreboard Corp., 63 F.R.D. 88, 94 (D. Del. 1974).

5

To invoke the attorney-client privilege, a party must prove that “an attorneyclient relationship existed and that the particular communications were
confidential.” Schaltenbrand, 930 F.2d at 1562. “In order to show that
communications made to an attorney are within the privilege, it must be shown
that ‘the communication was made to him confidentially, in his professional
capacity, for the purpose of securing legal advice or assistance.” Id.
III.

Discussion

By failing to respond to the present Motion, Karen Gao, Alex Lo, and Benny
Zeng have not even attempted to show the applicability of the attorney-client
privilege to the information sought by Plaintiff. Further, Plaintiff correctly points
out that “information regarding a fee arrangement and the identity of the person
paying the fee falls outside the protection of the attorney-client privilege.” In re
Grand Jury Proceedings, 708 F.2d at 1575. Therefore, Karen Gao, Alex Lo, and
Benny Zeng will be directed to answer the deposition questions at issue.
Because the Motion is due to be granted, the Court must consider the
issue of expenses pursuant to Fed.R.Civ.P. 37.3 Rule 37 provides in relevant
part:
If the motion [to compel] is granted—or if the disclosure or requested
discovery is provided after the motion was filed—the court must,

3

Plaintiff has requested attorneys’ fees and costs against Mr. Zeng incurred in
filing this Motion under Rule 37(a)(5) of the Federal Rules of Civil Procedure.
6

after giving an opportunity to be heard, require the party or deponent
whose conduct necessitated the motion, the party or attorney
advising that conduct, or both to pay the movant’s reasonable
expenses incurred in making the motion, including attorney’s fees.
But the court must not order this payment if:
(i)

the movant filed the motion before attempting in good faith to
obtain the disclosure or discovery without court action;

(ii)

the opposing party’s nondisclosure, response, or objection
was substantially justified; or

(iii)

other circumstances make an award of expenses unjust.

Fed. R. Civ. P. 37(a)(5)(A).
In light of the circumstances surrounding the Motion, an award of expenses
to Plaintiff is likely appropriate. However, in accordance with Rule 37(a)(5)(A),
Defendants and Third Party Defendant will have “an opportunity to be heard” on
this issue.
Accordingly, it is ORDERED:
1.

The Motion (Doc. 20) is GRANTED. Within ten (10) days of the

date of this Order, Defendants Karen Gao and Alex Lo and Third Party Defendant
Benny Zeng shall answer the deposition questions that they were instructed not
to answer based on the attorney-client privilege.
2.

On or before May 11, 2016, Defendants Karen Gao and Alex Lo

and Third Party Defendant Benny Zeng shall SHOW CAUSE in writing why they
and/or their counsel should not be ordered to pay Plaintiff’s reasonable expenses,
including attorney’s fees, incurred in bringing this Motion.

7

DONE AND ORDERED at Jacksonville, Florida, on April 27, 2016.

Copies to:
Counsel of Record

8