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Bartech Systems International, Inc. v. Mobile Simple Solutions, Inc.

United States District Court, D. Nevada

February 12, 2018

BARTECH SYSTEMS INTERNATIONAL, INC., Plaintiffs,
v.
MOBILE SIMPLE SOLUTIONS, INC., et al., Defendants.

          ORDER (DOCKET NOS. 442, 446)

          NANCY J. KOPPE UNITED STATES MAGISTRATE JUDGE.

         Pending before the Court is the parties' joint statement regarding Plaintiff's motion to compel Defendant GEM SA's (“Defendant”) responses to discovery requests. Docket No. 442. For the reasons discussed more fully below, the Court GRANTS in part and DENIES in part Plaintiff's requests in the joint statement regarding Plaintiff's motion to compel. Docket No. 442.

         I. PROCEDURAL HISTORY

         On October 19, 2017, Plaintiff filed a motion to compel Defendant's responses to Plaintiff's requests for production and interrogatories. Docket No. 366. Defendant filed a response in opposition. Docket No. 382. Plaintiff filed a reply. Docket No. 397. On November 27, 2017, the Court denied without prejudice Plaintiff's motion to compel and ordered the parties to meet and confer and file a joint statement in accordance with a specific format. Docket No. 415. On January 12, 2018, the Court granted Defendant's motion to extend time to exchange arguments for the joint statement. Docket No. 438; see also Docket No. 437 (motion to extend time). The instant joint statement was filed on January 22, 2018. Docket No. 442.

         II. STANDARDS

         A. Discovery

         “[B]road discretion is vested in the trial court to permit or deny discovery.” Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002); see also Crawford-El v. Britton, 523 U.S. 574, 598 (1998). Parties are entitled to discover non-privileged information that is relevant to any party's claim or defense and is proportional to the needs of the case, including consideration of the importance of the issues at stake in the action, 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. Fed.R.Civ.P. 26(b)(1). The most recent amendments to the discovery rules are meant to curb the culture of scorched earth litigation tactics by emphasizing the importance of ensuring that the discovery process “provide[s] parties with efficient access to what is needed to prove a claim or defense, but eliminate unnecessary or wasteful discovery.” Roberts v. Clark Cty. School Dist., 312 F.R.D. 594, 603-04 (D. Nev. 2016).

         B. Motion to Compel

         When a party fails to provide requested discovery, the requesting party may move to compel that discovery. See Fed.R.Civ.P. 37(a). The burden is on “[t]he party resisting discovery” to show “why a discovery request should be denied” by specifying in detail, as opposed to general and boilerplate objections, why “each request is irrelevant.” FTC v. AMG Servs., 291 F.R.D. 544, 553 (D. Nev. 2013) (internal citation omitted) (emphasis added). This requires the party resisting discovery to show for each request, irregardless of numerosity, how each of its objections is appropriate, by providing the relevant standard for each objection and a meaningfully developed argument as to how the standard has been met.[1]See Green v. Baca, 226 F.R.D. 624, 653 (C.D. Cal. 2005) (rejecting blanket claims of privilege as insufficient to address the applicable standard); see also Kor Media Group, LLC v. Green, 294 F.R.D. 579, 582 n.3 (D. Nev. 2013) (courts only address arguments that are meaningfully developed).

         III. ANALYSIS

         A. Requests for Production of Documents

         i. Request for Production 7

         All documents concerning or relevant to your counterclaim for damages and the methods used to calculate such alleged damages.

Text of Initial Response:
Defendant objects to Request No. 7 on the grounds that it: (1) is vague with respect to the term “supporting” and “relevant” and the phrase “counterclaim for damages” and “methods used”; (2) is vague and ambiguous requiring Defendant to speculate as to its meaning; (3) calls for information and documents protected by the attorney-client privilege and the attorney work product doctrine; (4) seeks information and/or documents not in possession of Defendant; (5) fails to identify the information sought with reasonable particularity; and (6) calls for a legal conclusion. Subject to and without waiving said objections, Defendant is in the process of identifying whether there are any relevant, non-objectionable documents responsive to this Request. Accordingly, Defendant reserves its right to supplement its response as discovery continues.
Text of Most Recent Response:
Defendant will produce this information when: (1) Defendant establishes that it is the owner of the ABreez Software and that Bartech has no right, title or interest in ABreez; and (2) appropriate safeguards are in place so that Bartech cannot use this sensitive information to further disrupt Defendant's contractual relationship with its clients.

Docket Nos. 442 at 7, 442-10 at 6-7.

         In the joint statement, Defendant submits that the case should be bifurcated between issues of ownership of the ABreez software and damages. Docket No. 442 at 10. Defendant submits that, although it did not raise this objection in its initial response to Plaintiff's request, it has not waived the objection because “[s]ince [it] was still determining what Plaintiff's Request No. 7 meant, it could not possibly anticipate all proper objections at that time.” Id. at 7.

         Plaintiff submits that Defendant has waived its objection because Defendant did not raise it in its initial responses. Id. at 11. Plaintiff further submits that, although Defendant initially objected to Plaintiff's request as vague and ambiguous, “it could at least comprehend that damages are the focal point” of the request. Id. at 12. . . . .

         Failure to assert an objection to discovery requests constitutes a waiver of an objection. See Wilson v. Greater Los Angeles Ass'n of Realtors, 2016 U.S. Dist. LEXIS 58595, at *8 (D. Nev. May 2, 2016) (citing Richmark Corp. v. Timber Falling Consultants, 959 F.2d 1468, 1473 (9th Cir. 1992) (internal citation omitted)). Defendant had the opportunity to obtain clarification from Plaintiff regarding any terms it found vague or ambiguous. The meet and confer ordered by the Court at Docket No. 415 should not have served as Defendant's first attempt to obtain such clarification. Moreover, Defendant's confusion as to certain terms could not have reasonably clouded its understanding that Plaintiff was requesting discovery regarding damages, even generally, to the degree it could not anticipate its current objection.

         Accordingly, the Court GRANTS Plaintiff's motion regarding Request for Production Number 7 as unopposed.[2]

         ii. Request for Production 15

         For the period of January 1, 2014 to the present, copies of GEM's:

(a) Financial statements and filed tax returns (including parent and subsidiary companies);
(b) Business plan(s); and
(c) Operating budget(s).
Text of Initial Response:
Defendant objects to Request No. 15 on the grounds that it: (1) is vague with respect to the phrases “Financial statements”, “including parent and subsidiary companies”, “Business plan” and “Operating budget”; (2) is vague and ambiguous requiring Defendant to speculate as to its meaning; (3) is overly broad in that it is not limited to the time period and subject matter relevant to this litigation; (4) is overly broad and unduly burdensome; (5) calls for privileged information; (6) asks for information not reasonably calculated to lead to the discovery of admissible evidence; and (7) fails to identify the information sought with reasonable particularity.
Text of Most Recent Response:
Defendant objects to Request No. 15 on the grounds that it: (1) is overly broad in that it is not limited to the time period; and (2) asks for information not reasonably calculated to lead to the discovery of admissible evidence.

Docket Nos. 442 at 15, 442-10 at 10.

         Defendant submits that this request is overly broad because the time period within which Plaintiff requests the information dates almost three years prior to Defendant becoming a party to the instant case. Docket No. 442 at 15. Defendant further submits that this request is not reasonably calculated to lead to the discovery of admissible evidence because disclosure of a party's tax returns and other financial information is “disfavored” and should not be “routinely required.” Id. at 15-16 (internal citation omitted).

         Plaintiff submits that its request is not overly broad “given GEM's lengthy and surreptitious involvement in this litigation” and because Defendants Vincent Tessier and Christelle Pigeat “began conspiring to develop the ABreez software using Bartech's misappropriated trade secrets by at least 2012.” Id. at 17-18. Plaintiff further submits that its request is reasonably calculated to lead to admissible evidence because “GEM's finances will likely uncover the details and circumstances concerning GEM's purchase of Mobile Simple and the ABreez Software” and because such information is relevant to Plaintiff's request for punitive damages.[3] Id. at 18.

         Defendant's argument in support of its objections does not cite to any binding case law. Id. at 15-16. Although the Court finds that tax returns and other financial information are relevant to Plaintiff's request for punitive damages, [4] it finds that the time period within which Plaintiff makes its request is overbroad. See Trejo v. Macy's, Inc., 2014 U.S. Dist. LEXIS 35464, at *6-7 (D. Nev. Mar. 18, 2014) (finding that information about a defendant's financial status is relevant to a plaintiff's request for punitive damages); see also Phillips v. Clark Cty. Sch. Dist., 2012 U.S. Dist. LEXIS 5309, at *37-38 (D. Nev. Jan. 18 2012) (finding that a “defendant's financial condition is relevant to the pursuit of punitive damages, ” and that a plaintiff does not have to “make a prima facie showing of merit on its punitive damage claim” before the court can permit discovery of a defendant's net worth, noting that such information generally is not secret from the public); see also Acton v. Target Corp., 2010 U.S. Dist. LEXIS 150874, at *6 (W.D. Wash. May 11, 2010) (permitting Plaintiff to “make brief inquiries as to [the defendant's] financial resources, as those resources are relevant to Plaintiff's claim for punitive damages).

         Plaintiff requests financial information from Defendant dating from January 1, 2014, based only on Plaintiff's bald assertion regarding Defendant's “lengthy and surreptitious involvement” in the litigation and the fact that Defendants Tessier and Pigeat allegedly began conspiring to misappropriate Plaintiff's trade secrets in 2012. Docket No. 442 at 17-18. Defendant was joined as a party on May 9, 2017. Docket No. 306. Further, the alleged fraudulent sale and transfer of Defendant Mobile Simple Solutions (IAS), Inc.'s (“Mobile Canada”) assets and the ABreez software to Defendant occurred on September 28, 2016. Docket Nos. 406-3, 406-4 (asset and purchase sale agreement). Moreover, it is irrelevant that Defendants Tessier and Pigeat allegedly began to conspire against Plaintiff in 2012 because Plaintiff does not allege Defendant was involved in their alleged conspiracy at that time. The Court therefore finds that the time period within which Plaintiff makes its request is overbroad.

         Accordingly, the Court GRANTS in part and DENIES in part Plaintiff's Request for Production Number 15, as amended to the time period of September 1, 2016.

         iii. Request for Production 16

         All documents concerning sales (actual and projected), advertising, marketing, or licensing of Mobile Simple Software, including but not limited to:

(a) Statements of work;
(b) Invoices;
(c) Accounts receivables; and
(d) Correspondence, including e-mal communications and subscription offers.
. . . .
Text of Initial Response:
Defendant objects to Request No. 16 on the grounds that it: (1) is vague with respect to the terms “discuss, reference, constitute” and “sales” and the phrases “Mobile Simple Software”, “Statements of work”, and “subscription offers”; (2) is vague and ambiguous requiring Defendant to speculate as to its meaning; (3) calls for information and documents protected by the attorney client privilege and the attorney work-product doctrine; (4) seeks information and/or documents not in possession of Defendant; (5) is overly broad and unduly burdensome; and (6) fails to identify the information sought with reasonable particularity. Subject to and without waiving said objections, see all documents produced by Defendant, including but not limited to, documents identified as bates numbers GEM000113 - GEM000146, GEM000317, GEM000540 -GEM000542, and GEM000643 - GEM000641.
Text of Most Recent Response:
Defendant objects to Request No. 16 to the extent it seeks information and documents protected by the attorney-client privilege and the attorney work-product doctrine, as detailed in Defendant's privilege log, Bates numbers GEM000900-GEM000966. Subject to and without waiving said objection, see all documents produced by Defendant, including but not limited to, documents identified as bates numbers GEM000113-GEM000146, GEM000317, GEM000540-GEM000542, GEM000643-GEM000651, and GEM000778-GEM000884.

Docket Nos. 442 at 19, 442-10 at 10-11.

         Defendant objects to this request on grounds of the attorney-client privilege and the attorney work-product doctrine. Docket No. 442 at 19. Defendant submits that it has standing to assert these privileges as to certain communications involving “non-GEM defendants” and third party Snell & Wilmer, LLP (“Snell”), based on “Mr. Manardo's privileged relationship with Christelle Pigeat, who herself maintained a privileged attorney-client relationship with Snell & Wilmer, as [a] financial consultant at the time of the subject communication with Snell & Wilmer.”[5] Id. at 20. Defendant further submits that the accountant-client privilege protects communications involving any “individuals or entities, ” including Mr. Manardo, who acted “in an accounting, CPA, and/or financial advisement capacity.” Id. at 21-23. Defendant also submits that the attorney-client privilege, as applied by the Superior Court of Canada, Province of Québec, District of Montreal (“the Canadian court”), protects any communications between it and its former counsel Gravel, Bernier, Vaillancourt Avocats (“GBV”). Id. at 23-24. Lastly, Defendant submits that it does not possess certain communications relevant to this request that were identified in a privilege log from Defendant Mobile Canada's Canadian bankruptcy proceeding “by virtue of Mr. Manardo's process for viewing and archiving communications, ” where he frequently deletes communications he deems “innocuous, as a means of saving memory space on his phone.” Id. at 24.

         Plaintiff submits Defendant does not have standing to assert the attorney-client privilege because it fails to provide factual support of any agency relationship between itself and Mr. Manardo on behalf of the non-GEM defendants. Id. at 26. Without such support, Plaintiff submits, Mr. Manardo is merely a third party and, therefore, his inclusion on any communications waives the attorney-client privilege. Id. at 30. Additionally, Plaintiff submits Defendant does not have standing to assert the accountant-client privilege because, not only does it fail to provide factual support that Mr. Manardo acted in his capacity as a CPA, but the privilege can only be asserted by Defendant Pigeat if she was a client of Mr. Manardo's. Id. at 27-28. Plaintiff further submits that American law should govern any privilege between Defendant and GBV as it pertains to GBV's representation of Defendant in the alleged fraudulent sale and transfer of Defendant Mobile Canada's assets and the ABreez code to Defendant. Id. at 30-31. Lastly, Plaintiff submits that Defendant's claim that Mr. Manardo “likely did not retain” certain communications is evasive and fails to detail any attempts to search for responsive documents. Id. at 39.

         i. Attorney-Client Privilege as to Snell

         Defendant asserts the protection of the attorney work-product doctrine and submits that it has an “extended” attorney-client relationship with Snell. Id. at 20. However, Defendant fails to provide any meaningfully-developed arguments regarding the attorney work-product doctrine. As such, the Court does not address the merits of this objection. Cf. Kor Media Group, LLC v. ...


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