Gramercy Group Inc. v. D.A. Builders, LLC
ORDER DENYING PLAINTIFF'S MOTION FOR PROTECTIVE ORDER re 124 - Signed by MAGISTRATE JUDGE KEVIN S.C. CHANG on 11/9/2017. (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic not ifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
D.A. BUILDERS, LLC aka D.A.
BUILDERS; DAVID A. ALCOS III; )
JOHN DOES 1-20; JANE DOES 1- )
10; DOE CORPORATIONS 1-10;
DOE PARTNERSHIPS 1-10; OTHER )
GRAMERCY GROUP, INC.,
CIVIL NO. 16-00114 JMS-KSC
ORDER DENYING PLAINTIFF’S
MOTION FOR PROTECTIVE ORDER
ORDER DENYING PLAINTIFF’S MOTION FOR PROTECTIVE ORDER
Before the Court is Plaintiff’s Motion for Protective
Order, filed September 28, 2017, which seeks to preclude the
deposition of its counsel Marie Ann Hoenings.
consideration of the parties’ submissions, counsel’s arguments,
and the applicable law, the Court HEREBY DENIES the Motion for
the reasons set forth below.
As the Court and the parties are well acquainted with
the factual history of this case, the Court includes only those
facts relevant to the disposition of the instant Motion.
On February 19, 2016, prior to the commencement of this
action, Plaintiff proposed an Amendment to Subcontract and
General Release (“Proposed Amendment”) to Defendant D.A.
In support of Plaintiff’s pending motions for summary
judgment (“MSJs”), both Vincent Parziale, Plaintiff’s
President/CEO, and Hoenings submitted multiple declarations that
include representations about the Proposed Amendment.
On September 8, 2017, defense counsel informed
Plaintiff’s counsel that they intended to notice Hoenings’
Plaintiff responded that it would not produce her
for a deposition.
Defendants noticed Hoenings’ deposition, but
following the conferral process, they continued the deposition
date pending the adjudication of this Motion.
Federal Rule of Civil Procedure (“FRCP”) 26 provides:
Parties may obtain discovery regarding any
nonprivileged matter that is relevant to any
party’s claim or defense and proportional to the
needs of the case, considering the importance of
the issues at stake in the action, the amount in
controversy, the parties’ relative access to
relevant information, the parties’ resources, the
importance of the discovery in resolving the
issues, and whether the burden or expense of the
proposed discovery outweighs its likely benefit.
Information within this scope of discovery need
not be admissible in evidence to be discoverable.
Fed. R. Civ. P. 26(b)(1).
Relevance “has been construed broadly
to encompass any matter that bears on, or that reasonably could
lead to other matter 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).
At the same time, it has its “ultimate and
“District courts have broad
discretion in determining relevancy for discovery purposes.”
Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d 625, 635 (9th
Cir. 2005) (citing Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir.
The 2015 amendment to FRCP 26 added proportionality as
a requirement for obtaining discovery.
Thus, “relevancy alone is
no longer sufficient to obtain discovery, the discovery requested
must also be proportional to the needs of the case.”
City of Fresno, Case No. 1:16-cv-00653-DAD-SAB, 2016 WL 7491634,
at *4 (E.D. Cal. Dec. 29, 2016) (citing In re Bard IVC Filters
Prod. Liab. Litig., 317 F.R.D. 562, 564 (D. Ariz. 2016)).
Addressing all proportionality considerations does not rest
solely with the party seeking discovery.
Fed. R. Civ. P.
26(b)(1) advisory committee’s note to 2015 amendment.
“[t]he parties and the court have a collective responsibility to
consider the proportionality of all discovery and consider it in
resolving discovery disputes.”
Courts may terminate or limit the manner and scope of a
deposition, for good cause, “to protect a party or person from
annoyance, embarrassment, oppression, or undue burden or
Fed. R. Civ. P. 26(c)(1).
If the Court denies the
motion for protective order in whole or in part, “the court may,
on just terms, order that any party or person provide or permit
Fed. R. Civ. P. 26(c)(2).
Generally, the party seeking the protective order has
the heavy burden of demonstrating that “good cause” exists for
the protection of the materials.
Rivera v. NIBCO, Inc., 384 F.3d
822, 827 (9th Cir. 2004) (citation omitted).
“‘Good cause’ is
established where it is specifically demonstrated that disclosure
will cause a ‘specific prejudice or harm.’”
Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d
1206, 1211-12 (9th Cir. 2002)).
This standard is not satisfied
by “[b]road allegations of harm, unsubstantiated by specific
examples or articulated reasoning.”
F.3d at 1211-12).
Id. (citing Phillips, 307
Rather, a party seeking to obtain a protective
order must make a “particularized showing of good cause.”
Phillips, 307 F.3d at 1211 (quoting San Jose Mercury News, Inc.
v. U.S. Dist. Court--Northern Dist. (San Jose), 187 F.3d 1096,
1103 (9th Cir. 1999)).
Plaintiff argues that Defendants should not be
permitted to depose Hoenings because they are unable to satisfy
the three-part test enunciated in Shelton v. American Motors
Corp., 805 F.2d 1323 (8th Cir. 1987).
Plaintiff proffers that
the Shelton test is applicable because Hoenings is Plaintiff’s
litigation counsel and any questioning is likely to focus on
Plaintiff’s litigation strategy, which in turn implicates the
attorney-client privilege and work product doctrine.
Although Defendants contest the applicability of the
Shelton test, which has yet to be adopted by the Ninth Circuit,
they submit that the requisite elements of the Shelton test are
satisfied under the circumstances of this case.
Deposing a Party’s Attorney
FRCP 30(a)(1) authorizes a party to depose any person.
Fed. R. Civ. P. 30(a)(1) (“A party may, by oral questions, depose
any person, including a party.”).
With respect to deposing a
party’s attorney, courts have required the party seeking
discovery to establish that:
“(1) No other means exist to obtain
the information than to depose opposing counsel; (2) The
information sought is relevant and nonprivileged; and (3) The
information is crucial to the preparation of the case.”
Co. of Reading, Pa. v. Krieger, 160 F.R.D. 582, 589 (S.D. Cal.
1995) (quoting Shelton, 805 F.2d at 1327); Marine Lumber Co. v.
Precision Moving & Storage, No. CV 16-00365 LEK-RLP, 2016 WL
9488599, at *2 (D. Haw. Dec. 23, 2016).
Defendants have met this
Because Defendants easily satisfy this test, the Court
declines to engage in a discussion about whether a preliminary
test must be considered before applying the Shelton factors. The
Shelton test is not mandatory in this circuit, but it provides a
framework for evaluating the present discovery issue and many
district courts have applied it.
Hoenings’ Deposition is the Only Means of Obtaining the
First, no other means exist to obtain the information
than to depose Hoenings.
Plaintiff insists that Hoenings’s
deposition is unnecessary because Parziale’s declarations verify
her statements and he has already testified as to every fact at
issue in Hoenings’ declarations.
However, any contention that
Parziale’s testimony has provided the requested information is
During Parziale’s deposition, Plaintiff’s counsel
invoked the attorney-client privilege and FRE 408 and directed
Parziale not to answer questions about: the Proposed Amendment,
statements in Parziale’s declarations, and any settlement
To date, Defendants have been unable to procure
complete testimony from Parziale.
Thus, Plaintiff has prevented
Defendants from obtaining by other means the information they
seek from Hoenings.
Moreover, notwithstanding the Court’s recent
ruling that neither FRE 408 nor the attorney-client privilege
preclude Defendants from obtaining Parziale’s testimony about his
statements related to the Proposed Amendment,2 it is impossible
to predict what testimony Parziale will provide at his continued
See Order Granting in Part and Denying in Part
Defendants’ (1) Motion to Compel Deposition Testimony of Vincent
Parziale and (2) Motion to Compel Deposition Testimony of Gregg
Jenkinson and Craig Lebel (“Order Compelling Depositions”), Doc.
Even if Parziale provided sufficient information,
Defendants would nevertheless be entitled to depose Hoenings
because she submitted her own declarations.
provided declarations with similar statements should not deprive
Defendants of the opportunity to depose Hoenings to elicit her
personal knowledge about her attestations, which may differ from
Parziale’s personal knowledge.
Parziale’s testimony is not an
adequate substitute, as he is unable to testify about Hoenings’
Hence, the Court finds that deposing Hoenings is the
only means of obtaining the requested information.
Plaintiff has advanced contradictory positions during
the course of discovery motions practice.
Notably, to support
its previous effort to prohibit discovery based on the attorneyclient privilege, Plaintiff argued that Parziale acquired
knowledge regarding the Proposed Amendment and other issues from
If that were true, it is unclear how Parziale could
verify Hoenings’ attestations.
Indeed, assuming Parziale’s
statements were informed by Hoenings, she would arguably be a
more suitable deponent than Parziale for the requested
The Court concluded that the attorney-client privilege
did not preclude discovery about the Proposed Amendment merely
because some knowledge may have been acquired from counsel.
The Requested Information is Relevant and Nonprivileged
Second, the requested information is relevant,
nonprivileged, and proportional to the needs of the case.
Plaintiff elected to submit Hoenings’ declarations in connection
with its MSJs, but now characterizes her statements as “minimal
facts limited to those required to show that the Settlement
Agreement is protected under [Federal Rule of Evidence (“]FRE[”)]
Mem. in Supp. of Mot. at 4.
Plaintiff even goes so far as
to argue that Hoenings’ statements are irrelevant to Defendants’
case4 because they were submitted solely to demonstrate that FRE
408 protects the Proposed Amendment.
This is a transparent
attempt to minimize the significance of Hoenings’ statements for
the purpose of avoiding discovery.
Plaintiff has engaged in a pattern of hiding behind FRE
408 throughout the discovery process.
As the Court determined in
Plaintiff misapprehends the relevance standard. In prior
briefing, and again here, Plaintiff employs a restrictive and
erroneous definition of relevance. Mem. in Supp. of Mot. at 13;
see also Doc. No. 127 at 9-13 (arguing that the settlement
agreement and related documents have nothing do with D.A.
Builders’ claims and defenses while simultaneously arguing that
the production of those documents would be severely prejudicial
because they are material to Plaintiff’s claims and defenses in
this litigation). Relevance encompasses nonprivileged discovery
related to “any party’s claim or defense”, not only the
requesting party’s case. Here, the Proposed Amendment, along
with Hoenings’ related statements, are relevant to the parties’
claims and defenses. It is axiomatic that if requested discovery
is relevant to Plaintiff’s claims, it is necessarily relevant to
Defendants’ defenses, and vice versa. But FRCP 26 does not
require even that. Discovery need only relate to a claim or
its Order Compelling Depositions, FRE 408 does not preclude
Nor does it render discovery irrelevant or per se
preclude the admissibility of settlement-related documents.
fact that Plaintiff might have provided Hoenings’ statements for
the limited above-described purpose does not protect those
statements from further inquiry via deposition or other discovery
Inasmuch as the Proposed Amendment is relevant to the
parties’ claims and defenses, so too are related statements,
regardless of who provided the statements.
present statements in an effort to prevail on its MSJs, then
prohibit any corresponding discovery.
The statements in
Hoenings’ declarations are nonprivileged5 and a specific line of
questioning about the factual circumstances surrounding the
Proposed Amendment would likewise include some nonprivileged
Defendants have therefore satisfied the second
The Requested Information is Crucial to the Preparation
of the Case
Lastly, the Court finds that the requested information
is crucial to the preparation of the case.
As discussed above,
Recognizing that inquiry of Hoenings potentially
implicates the attorney-client privilege, this determination
should not be interpreted to mean that any and all questions
related to the Proposed Amendment are proper. Hoenings should
not be asked to reveal privileged communications.
Plaintiff deemed it necessary to present Hoenings’ declarations
with its MSJs.
Depriving Defendants of the opportunity to
meaningfully respond would be patently unfair and would promote
Plaintiff is requesting the adjudication of claims
as a matter of law, yet it effectively seeks to prevent
Defendants from opposing its assertions.
Hoenings’ knowledge and
testimony about the statements in her declarations are crucial to
the preparation of the case.
For the reasons stated above,
Parziale’s testimony (past or future) does not obviate
Defendants’ need to obtain the requested information directly
The Court finds that Defendants have met their burden
to depose Hoenings.
By contrast, Plaintiff fails to meet its
heavy burden of establishing that good cause exists to prevent
Accordingly, Plaintiff’s request for a
protective order is DENIED.
Award of Expenses
Defendants request the fees and costs opposing this
FRCP 37(a)(5) applies to the award of expenses.
Civ. P. 26(c)(3).
When a motion is denied, courts
must, after giving an opportunity to be heard,
require the movant, the attorney filing the
motion, or both to pay the party or deponent who
opposed the motion its reasonable expenses
incurred in opposing the motion, including
attorney’s fees. But the court must not order
this payment if the motion was substantially
justified or other circumstances make an award of
Fed. R. Civ. P. 37(a)(5)(B).
There being no substantial
justification for the Motion,6 nor other circumstances that would
make an award of expenses unjust, the Court finds that Defendants
are entitled to the fees and costs reasonably incurred in
opposing this Motion.
Defense counsel shall submit a declaration
that conforms with Local Rules 54.2 and 54.3, setting forth its
request for expenses.
Based on the foregoing, Plaintiff’s Motion for
Protective Order (Doc. No. 124) is HEREBY DENIED.
IT IS SO ORDERED.
Honolulu, Hawaii, November 9, 2017.
Kevin S.C. Chang
United States Magistrate Judge
CV 16-00114 JMS-KSC; Gramercy Group, Inc. v. D.A. Builders, LLC, et al.; ORDER
DENYING PLAINTIFF’S MOTION FOR PROTECTIVE ORDER
The Court believes that the Motion lacks justification
because Plaintiff relies heavily upon the argument that the
requested information has been obtained from Parziale, but it
prevented Defendants from eliciting more comprehensive responses
during Parziale’s deposition.
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