Motion to Compel Production of Documents (Judge Lon Hurwitz)


Defendant’s “supplemental” responses contain nothing more than additional objections that could have been asserted in Defendant’s original response. The Code of Civil Procedure does not provide for “further objections” or “supplemental objections.” The Code only allows for a further or supplemental response. (CCP §§ 2031.310 as to Demands for Production; see also CCP §§ 2030,230, 2030.270, 2030.290, 2030.310, Cal. Rules of Court, rules 3.1000, 3.1345.) The meet and confer letter from Plaintiff does not contain an agreement allowing Defendant to supplement its objections—it requested that Defendant supplement its responses and provide documents. (ROA 27, Green Decl. Ex. 3, p. 6.)

Instead of substantively responding to the meet and confer or supplementing responses, Defendant supplemented its objections. This is improper. (See County of L.A. v. Superior Court (1990) 219 Cal.App.3d 1605, 1608 [“The court again agreed with Uhley that the County had waived its right to assert this objection by not raising it in a timely fashion when Uhley first propounded her requests for production.”].) Were this not the case, parties would continually agree to supplement or provide further responses and only add more objections, thereby dragging on the discovery process. This cannot be the intent of the discovery statutes. Therefore, the only objections to be considered are the objections asserted in Defendant’s timely and original response to Plaintiff’s Requests for Production: these are limited to objections on the grounds of harassment, seeking confidential information, privacy rights of members, and not reasonably calculated to the discovery of admissible evidence.

Discovery of Admissible Evidence

A “party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action . . . if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.” (CCP § 2017(a).) The documents are clearly reasonably calculated to lead to the discovery of admissible evidence in a wage/hour and PAGA class action.

The financial records are relevant to calculate Plaintiff’s damages, particularly a claim for lost profits. They are certainly relevant for disgorgement of Defendant’s profits for Plaintiff’s Trade Dress claim. This objection is completely and utterly without merit.

Harassment

On their face, the demands at issue are not duplicative of others. They are contained within a set with a reasonable number of demands. Further, they are reasonably calculated to lead to the discovery of admissible evidence. Therefore, they cannot be categorized as “harassing” to the Defendant.

Privacy

Defendant then objects as to “privacy” of its members. While it is true the members have a right to privacy, it is likely that the member names can be redacted, if the members do not already have a unique identification number. It is Defendant’s burden to demonstrate that redaction is burdensome and oppressive or that there are additional privacy concerns beyond the usual third-party privacy protections.

Confidentiality

The California Constitution’s right of privacy does not apply to corporations. (SCC Acquisitions, Inc. v. Superior Court (2015) 243 Cal.App.4th 741, 755.) While corporations do have a right to privacy, it is not a constitutional right. The corporate right to privacy is a lesser right than that held by human beings and is not considered a fundamental right. (Ameri-Medical Corp. v. Workers’ Comp. Appeals Bd., supra, at pp. 1287–1288.) Further, the state has enough of an interest in discovering the truth in legal proceedings, that it may compel disclosure of confidential material. (Jones v. Superior Court (1981) 119 Cal.App.534, 550.)

A balancing test is used to determine whether discovery infringes on a corporation’s limited right, with doubts of relevance resolved in favor of permitting discovery. (Hecht, Solberg, Robinson, Goldberg & Bagley LLP v. Superior Court (2006) 137 Cal.App.4th 579, 595.) The discovery’s relevance to the subject matter of the pending dispute and whether the discovery “‘appears reasonably calculated to lead to the discovery of admissible evidence’” is balanced against the corporate right of privacy.” Id.

Here, the calculation of damages outweighs Fusion’s right to privacy in its financial records. Further, if Fusion is concerned that there is proprietary information in the financial records, it can always move for or stipulate to a protective order. It has done neither. The objection is without merit.

Sanctions

Defendant did not respond to meet and confer efforts, did not produce any documents with its “supplemental” objections, and otherwise failed to justify its objections. Sanctions are warranted.

Plaintiff requests the amount of $4,642.00 in sanctions which consists of two billing rates of $575 for a partner’s oral argument and $490 for drafting the papers. Mr. Green is a fifth-year associate (ROA 27, Green Decl. ¶ 6), therefore his level of experience is mid-level to senior. While the billing rates are reasonable, the hours requested for drafting the motion and the reply—8.3 in total—are unreasonable. With two Requests for Production at issue, the motion should not take longer than two to three hours.

Further, “future” attorney’s fees are not available under the discovery sanction statutes.

(Tucker v. Pacific Bell Mobile Services (2010) 186 Cal.App.4th 1548, 1564. [“A trial court does not have the authority to award the costs of a future deposition as a discovery sanction where the individual has not yet ‘incurred’ those costs.”].) Therefore, the Court may not award sanctions for drafting the reply or attending the hearing. Even if it could, this is not a complicated legal issue that requires a partner to handle oral argument. Therefore, sanctions in the amount of $1,225 for 2.5 hours by a fifth-year associate is recommended.

RULING:

Before the Court is the motion of Plaintiff MD Hydration Inc. dba The Hydration Room (“MD”) to compel further responses to Demand for Production, Set One, Nos. 23 and 24. These demands generally seek the financial records of Defendant Fusion Hydration, LLC. (“Fusion”). The Court is inclined to grant the motions on the merits and award sanctions to Plaintiff pursuant to CCP § 2023.030 for Defendant’s misuse of the discovery process, but it does not do so now.

A balancing test is used to determine whether discovery infringes on a corporation’s limited right, with doubts of relevance resolved in favor of permitting discovery. (Hecht, Solberg, Robinson, Goldberg & Bagley LLP v. Superior Court (2006) 137 Cal.App.4th 579, 595.) The discovery’s relevance to the subject matter of the pending dispute and whether the discovery “‘appears reasonably calculated to lead to the discovery of admissible evidence’” is balanced against the corporate right of privacy.” Id. The court finds that the demands are reasonably calculated to lead to the discovery of admissible evidence, particularly with regards to Plaintiff’s damages. This outweighs Fusion’s limited right to privacy.

Defendant’s initial objections are boilerplate and unjustified. Further, Defendant’s attempt to “supplement” its objections is improper. (See County of L.A. v. Superior Court (1990) 219 Cal.App.3d 1605, 1608 [“The court again agreed with Uhley that the County had waived its right to assert this objection by not raising it in a timely fashion when Uhley first propounded her requests for production.”].) Therefore, the Court did not consider Defendant’s untimely objections.

Defendant arguments are completely unavailing. Defendant argues that at the time the motion was filed, there were different causes of action at issue. Defendant cites no authority for the proposition that a discovery motion is improper if the motion as filed prior to an amendment of the complaint. The discovery remains reasonably calculated to lead to the discovery of admissible evidence to issues arising from both the complaint and the amended complaint.

Defendant then seems to argue this information could only be used to discovery its financial discovery for purposes of punitive damages. When reviewing the operative complaint including the prayer for damages, this is not the only purpose for which the financial records may be used. Defendant states Plaintiff’s goals could be achieved through far less invasive means, but fails to suggest any such alternatives.

Sanctions are warranted as Fusion did not respond to meet and confer efforts, did not produce any documents with its “supplemental” objections, and otherwise failed to justify any of its objections. It is completely unclear how any of these boilerplate objections in this matter could possibly be asserted in “good faith” to any but the greenest of attorneys. Plaintiff requests the amount of $4,642.00 in sanctions. The Court notes Mr. Green is a fifth-year associate (ROA 27, Green Decl. ¶ 6), therefore his level of experience is mid-level to senior and the billing rate of $490 is reasonable. However, 6.3 hours for drafting the motion is unreasonable with only two Requests for Production at issue and given his level of experience. Further, “future” attorney’s fees are not available under the discovery sanction statutes. (Tucker v. Pacific Bell Mobile Services (2010) 186 Cal.App.4th 1548, 1564. [“A trial court does not have the authority to award the costs of a future deposition as a discovery sanction where the individual has not yet ‘incurred’ those costs.”].) The Court may not award sanctions for drafting the reply or attending the hearing. Even if it could, this is not a complicated legal issue that requires a partner to handle oral argument. Therefore, sanctions in the amount of $1,225 are reasonable, which represents 2.5 hours of work at $490 per hour.

The Court notes that in its Opposition, Defendant argues it “intends” to file a motion for a protective order. The Court sees no evidence that Defendant has taken any steps towards that goal, whether proposing a stipulation for a protective order or moving for the order itself. Instead, Defendant chose to rest on its objections without attempting to move this case forward—whether by proposing a protective order or negotiating proposing some other “less invasive” means of discovery, or by filing a motion for a protective order.

The Motion is Granted. Defendant Fusion Hydration, Inc., is ordered to serve Supplemental Responses, without objection, within 30 days of 1/06/23. Defendant is ordered to pay sanctions to Plaintiff’s Counsel in the sum of $1,225.00 within 30 days of 1/06/23.

Plaintiff’s Counsel is ordered to give notice of the Court’s ruling.