Property Solutions International v. Yardi Systems

Filing 424

MEMORANDUM DECISION AND ORDER-denying 381 Motion for Protective Order. See Order for details. Signed by Magistrate Judge Brooke C. Wells on 11/26/18. (jmr)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
Entrata, Inc. a Delaware Corporation,
Plaintiff,
v.
Yardi Systems, Inc., a California Corporation,
Defendant.

MEMORANDUM DECISION AND
ORDER DENYING DEFENDANT YARDI
SYSTEMS INC.’S SHORT FORM
MOTION FOR PROTECTIVE ORDER RE
ENTRATA’S SECOND DEPOSITION
DISCOVERY OF YARDI’S WITNESSES
Case No. 2:15-cv-102 CW
District Judge Clark Waddoups
Magistrate Judge Brooke Wells

This matter is referred to the undersigned in accordance with 28 U.S.C. § 636 (b)(1)(A). 1
Pending before the court is Defendant Yardi Systems, Inc.’s Short Form Motion for Protective
Order re Entrata’s Second Deposition Discovery of Yardi’s Witnesses. 2 The court will deny the
motion finding much of it moot via the parties’ cooperation.
I.
This case involves a dispute between two software and technology companies, Entrata,
Inc. (Entrata) and Yardi Systems, Inc. (Yardi). Each “sells various competing property
management software products.” 3 These software products allow “owners and managers of
multiple rental and lease units to better manage their rental properties by offering functionality to
perform accounting and management tasks ….” 4 Entrata claims Yardi has engaged in a pattern
of unfair, unlawful and anti-competitive actions against it and other competitors.

1

ECF No. 324.

2

ECF No. 381.

3

Amended Complaint ¶ 6, ECF No. 55.

4

Id.

The instant dispute centers on Entrata’s October 8, 2018, notices of second depositions
for ten Yardi witnesses. Entrata seeks to reopen, or redepose, certain individuals following the
production of a very large number of documents. 5 On September 11, 2018, the court entered an
Order Appointing Matthew L. Lalli as Special Master to “review in camera all documents Yardi
continues to withhold or redact as privileged (the “Yardi Documents”) to determine whether
each document is privileged and properly withheld or redacted.” 6 The production to the Special
Master has been so voluminous that the court recently extended the Special Master deadline from
November 13, 2018 to November 30, 2018. 7
II.
Federal Rule of Civil Procedure 30 provides that a party must obtain leave of court to
reopen a deposition “if the parties have not stipulated to the deposition and: (ii) the deponent has
already been deposed in the case.” 8 Yardi argues Entrata failed to seek leave of court to reopen
the sought after depositions. Further, Entrata’s claim that good cause exists “simply because
Yardi recently has produced approximately 3,500 documents as part of the Special Master’s
work” does not warrant reopening the depositions. 9 In response, Entrata points to the history of
this case, including the discovery issues, and the alleged agreement to produce witnesses during
the first two weeks in November reneged on by Yardi. Entrata further notes it agreed to limit the
“scope and time of the depositions, to no more than half day each regarding newly-produced
documents.”

5

The parties dispute the number of documents that were produced. The exact number is immaterial to the court’s
decision because whether it is 3500 documents or 8700 documents, either amount presents a substantial production.

6

ECF No. 364 at 2.

7

ECF No. 384 at 2.

8

Fed. R. Civ. P. 30(a)(2)(A)(ii).

9

ECF No. 381 at 3.

2

Based on the record to date, Entrata has failed to seek leave of court to reopen the
depositions. However, it appears the parties either reached or were attempting to reach some type
of an agreement to take depositions during the first two weeks of November when Yardi filed its
motion. So, the court finds Entrata’s failure does not warrant quashing the deposition notices
under these circumstances. Further, the court is encouraged by Yardi’s response that it “believes
that Entrata can show good cause to re-depose Arnie Brier, Brady Bustany, Gordon Morell and
Anant Yardi.” 10 Yardi offered to make these individuals available for depositions to be set in
January 2019. 11 The court agrees with Yardi’s position and will order these depositions to occur.
The question remaining before the undersigned is the fate of the depositions for the other six
individuals: T. Down, B. Sanvictores, J. Shoebe, T. Berndt, P. Hill and M. Tuer. Should these
depositions proceed or should they be cancelled?
Although the Federal Rules of Civil Procedure require leave of court for the reopening of
a deposition, the rules do not set forth the standard. Rather, Rule 30(a)(2) provides that the court
must grant leave to reopen a deposition “to the extent consistent with Rule 26(b)(1) and (2).” 12
Rules 26(b)(1) and (2) set forth parameters for discovery. These rules require that discovery must
be relevant and proportional. 13 They also direct the court to restrict discovery in certain
instances. For example, if the discovery is “unreasonably cumulative or duplicative” 14 or if the
party “seeking discovery has had ample opportunity to obtain the information by discovery in the
action.” 15

10

ECF No. 407 at 2.

11

Id.

12

Fed. R. Civ. P. 30(a)(2).

13

Fed. R. Civ. P. 26(b)(1).

14

Fed. R. Civ. P. 26(b)(2)(C)(i).

15

Id. at (C)(ii).

3

Some courts have also considered whether good cause was shown before allowing the
reopening of a deposition. As noted by a sister court in this circuit, “[s]ome courts require parties
to show good cause before they can conduct a second deposition. 16 Other courts require a
showing of good cause to prevent—rather than allow—the second deposition.” 17 Considering
only whether good cause is shown, however, appears to disregard Rule 30’s framework for when
leave must be given to take a second deposition. 18
Here, the court finds under Rule 30, that Entrata could take the second depositions unless
they run awry of the restrictions on discovery. Based on the large number of newly produced
documents where the witness is the custodian, sender, or recipient, 19 the court finds the
deposition of T. Down should also occur. Mr. Down is the Senior Vice President of Sales and
there are 1024 newly produced unique documents pertaining to him. The other individuals have
under a 1000 unique documents at this time and the court is not persuaded that the discovery
from those individuals would not be “unreasonably cumulative or duplicative” 20 of the reopened
depositions. The court, therefore, will postpone the remaining five depositions 21 until the work of
the Special Master is completed and the second depositions as ordered occur. Once those items
are completed, the parties are to update the court on the need to have these remaining

16

See, e.g., Kleppinger v. Texas Department of Transportation, 283 F.R.D. 330, 335 n.7 (S.D.Tex.2012) (“other
district courts have utilized a ‘good cause’ standard” when determining whether to allow a second deposition under
Rule 30(a)(2)(A)(ii) (other citations omitted)).
17

Clark v. Penn Square Mall Ltd. P'ship, 2013 WL 139778, at *1 (W.D. Okla. Jan. 10, 2013) (citing Jade Trading,
LLC v. United States, 64 Fed. Cl. 85, 86–87 (2005) (“Some courts have opined that leave to conduct a second
deposition should ordinarily be granted, and that the party opposing the second deposition must demonstrate good
cause why the second deposition should not be taken.” (other citations omitted)).
18

See id.

19

See ECF No. 407 at 6.

20

Fed. R. Civ. P. 26(b)(2)(C)(i).

21

These individuals are B. Sanvictores, J. Shoebe, T. Berndt, P. Hill and M. Tuer.

4

depositions. Once again, the parties are encouraged to cooperate with each other if it becomes
evident that the remaining depositions need to occur.
Finally, the court notes the importance of the timing of the reopened depositions. If they
are scheduled before the work of the Special Master is finished, the possibility remains that there
will be additional newly produced documents. The court is not inclined to open them again a
third time because of the costs and time to the parties and the court. Therefore, the reopened
depositions are to occur after the work of the Special Master is complete, or Entrata is to agree
that it will not seek to reopen them a third time.
ORDER
Accordingly, Yardi’s Short Form Motion for Protective Order is DENIED. The
depositions are to proceed as set forth above and in accordance with Entrata’s proposed
limitations as to scope and time, and in accordance with Yardi’s offer as to timing presuming the
work of the Special Master is complete by then. No party is awarded costs and fees.
IT IS SO ORDERED.
DATED this 26 November 2018.

Brooke C. Wells
United States Magistrate Judge

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