Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_01-cv-20289/USCOURTS-cand-5_01-cv-20289-7/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court

For the Northern District of California

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*E-FILED 1/23/06*

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

TXU ENERGY TRADING COMPANY, 

ET AL., 

Plaintiffs,

 v.

LEPRINO FOODS COMPANY, 

Defendant. /

NO. 01-cv-20289 RMW (RS)

ORDER GRANTING IN PART

AND DENYING IN PART

LEPRINO'S MOTION TO

COMPEL AND DENYING

REQUEST FOR SANCTIONS 

I. INTRODUCTION

Defendant Leprino Foods Company ("Leprino") moves to compel plaintiff Txu Energy

Retail L.P. ("Txu") to provide additional documents in response to its set of requests for production

of documents served on August 10, 2004. While Txu has produced paper copy documents, Leprino

contends that no electronic data has been produced, nor has Txu provided copies of its "customer

file," or fully responded to Request Nos. 1 through 14. As a result, Leprino also seeks sanctions

against Txu, which responds that it provided all relevant materials and is under no obligation to recreate electronic backup tapes since it produced papers copies of the requested documents. The

motion to compel was heard by the Court on January 18, 2006. Based on all papers filed to date, the

oral argument of counsel, and the joint letter submitted on January 20, 2006, the motion to compel is

granted in part and denied in part, as set forth below, and the request for sanctions is denied. 

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II. BACKGROUND

This is a breach of contract case, filed under the Uniform Commercial Code, for the purchase

of natural gas. Between 1999 and 2001, Txu sold natural gas to Leprino through an agent, non-party

Willis Bennett dbaWestern Retail. Txu alleges that Western Retail failed to calculate properly the

cost of the gas and, therefore, undercharged Leprino. Once Txu discovered the errors, it tendered

corrected invoices to Leprino, who refused to pay, claiming to have already done so. Leprino also

contends that it is under no obligation to pay Txu again since no contract exists between the two

parties.

Txu filed this action against Leprino, and about 16 other California customers who

purchased natural gas. Western Retail, in the meantime, on behalf of Leprino and all other California

customers, sued Txu in district court in the state of Colorado. As a result of the filing of that action,

the presiding judge stayed this action. The Colorado action settled on the eve of trial, the stay was

then lifted in this case, and all defendants except Leprino settled with Txu. Prior to the entry of a

stay, however, Leprino served a set of requests for the production of documents on Txu. While many

documents have since been produced, Leprino contends that Txu failed to provide all responsive

documents and, therefore, now moves to compel production. Leprino also seeks sanctions against

Txu, due to both the necessity of filing this motion and for the alleged destruction of a "customer

file," as discussed below. 

III. STANDARDS

Under the Federal Rules of Civil Procedure, Rule 26(b)(1),

 [p]arties may obtain discovery regarding any matter, not privileged, 

that is relevant to the claim or defense of any party...For good cause, 

the court may order discovery of any matter relevant to the subject matter 

involved in the action. Relevant information need not be admissible at 

the trial if the discovery appears reasonably calculated to lead to the 

discovery of admissible evidence.

Evidence is relevant if it has "any tendency to make the existence of any fact that is of consequence

to the determination of the action more probable or less probable than it would be without the

evidence." Federal Rules of Evidence, Rule 401. Discovery may be limited by the court for good

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cause shown "to protect a party or person from annoyance, embarrassment, oppression, or undue

burden or expense." Fed. R. Civ. P. 26(c). 

Motions to compel are authorized by Rule 37 of the Federal Rules of Civil Procedure:

[If] a party fails to answer an interrogatory submitted under Rule 33, or if a

party, in response to a request for inspection submitted under Rule 34, fails

to respond that inspection will be permitted as requested or fails to permit

inspection as requested, the discovering party may move for an order

compelling an answer, or a designation, or an order compelling inspection

in accordance with the request. The motion must include a certification that

the movant has in good faith conferred or attempted to confer with the

person or party failing to make the discovery in an effort to secure the

information or material without court action. 

Fed. R. Civ. P. 37(a)(2)(B).

IV. DISCUSSION

A. Request for Sanctions

Civil L.R. 7-8 requires that any request for sanctions be filed and noticed for hearing under

separate cover. In this instance, Leprino simply included its request for sanctions within its motion

to compel, in violation of Rule 7-8. Accordingly, the request for sanctions is denied. Moreover, as

noted at the hearing, the Court does not find this situation appropriate for the imposition of sanctions

as both parties have raised justifiable arguments. 

B. Motion to Compel

1. Document Requests

In its motion to compel, Leprino complains that Txu failed to produce electronic documents

responsive to its discovery requests. Although conceding that numerous printed electronic

documents have been provided, Leprino argues that the electronic, original data is also necessary

since that material contains "critical metadata and dates" not available on the printed versions. In

the letter submitted to the Court on January 20, 2006, however, Leprino now argues that Txu should

be required to conduct a diligent search for all responsive documents, whether in printed or

electronic format, which have not been previously produced. Leprino contends that Txu, rather than

conducting a search of its files and responding to the document requests, simply provided all

documents which had been provided in the Colorado case. That response, according to Leprino, is

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inadequate since it remains unclear whether Txu possesses additional, responsive documents which

were not provided in the Colorado action.

Contrary to Leprino's contention, however, and as pointed out by Txu, amended responses

have been offered by Txu which specifically state that a diligent search has been made for all

responsive documents. See Txu's Proposed Amended Responses, attached to Joint Letter dated

January 20, 2006. In its amended responses, Txu states either that no documents were found or

identifies the location of the produced documents. Id. Accordingly, at least to the extent that the

responses request printed materials, Txu's amended responses appear to answer fully Leprino's

requests for the time period from January 1, 1999 to December 31, 2001. Disputes remain, however,

concerning the production of electronic files, as well as whether Txu must provide documents

covering a lengthier time frame.

a. Electronic Data

Leprino argues that Txu must provide the requested information in electronic format,

pursuant to Fed. R. Civ. Pro. 34, despite the fact that paper copies of the materials have been

provided, since it contends that only the electronic version contains "critical metadata." Contrary to

this argument, however, it does not appear that such production is necessary or warranted, especially

in that the data no longer exists in a form which could be easily retrieved and reproduced and is thus

"non-accessible." Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 318 (S.D. New York 2003). 

Although Leprino correctly notes that the district court in the Zubulake case required defendant to

produce its inaccessible electronic data, electronic production was ordered there because plaintiff

Zubulake had established additional, responsive emails existed and that, accordingly, defendant

could not have properly searched its electronic files in response to her discovery requests. 

Here, counsel for Leprino conceded at the hearing that he knows of no documents which

have not been produced, with the exception of some email attachments, which are addressed

separately below. Rather, Leprino argues that it needs metadata to confirm whether a proposed

contract was sent to it by Txu. Txu responds that no metadata exists which could confirm that such

contract was sent because it alleges that it sent that document by regular mail, not electronically. As

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1

 Leprino failed to identify any request which asks Txu to produce its "customer files." 

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a result, the Zubulake result is not instructive for our purposes. The burden and expense to Txu of

requiring it to search and create electronic files responsive to Leprino's discovery requests far

outweighs the marginal benefit which would be derived from such production. Leprino's motion to

compel production of electronic files or data is, therefore, denied.

b. Relevant Time Frame

Leprino argues that Txu must provide all documents responsive to Request Nos. 3, 5-8, and

10 for the time frame between December 31, 2001 and June 20, 2003. Although Txu produced all

responsive documents from January 1, 1999 through December 31, 2001, on the basis that the

parties' last transaction concluded by the end of December 2001, it is reasonable to assume, as

Leprino does, that additional, responsive documents may exist regarding the parties' disputes

thereafter. The fact that some of those documents may be privileged, as noted by Txu, does not

excuse their production, but simply requires that Txu identify such documents on a privilege log. As

a result, Txu is ordered to produce documents, in paper form, which are responsive to Request Nos.

3, 5-8, and 10 for the time frame between December 31, 2001 and June 20, 2003, and serve a log

reflecting any responsive materials withheld on a claim of privilege. 

2. Customer Files

Leprino additionally contends that Txu failed to produce a "customer file" concerning the

Leprino account, based on deposition testimony given by two former Txu employees who testified

that Txu maintained customer files in its Fremont, California office. Txu denies that separate

"customer files" were maintained and notes that all responsive documents which were maintained in

the Fremont office were produced to Leprino such that, if those files existed, they would now be in

the possession of Leprino. Based on Txu's response, Leprino requests that Txu be ordered to provide

a verification, based on personal knowledge, that it has searched it files and that no "customer files"

now exist or were maintained. The amended responses offered by Txu, specifically the amended

response to Request No. 8 which appears to encompass Leprino's request for a "customer file,"1

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addresses this concern. Accordingly, no further production or response appears warranted at this

time. 

3. E-Mail Attachments

Leprino asserts that Txu failed to provide all attachments to the printed versions of the emails

it produced. Instead, while some attachments were produced, several emails which state that there

are attachments were provided without them. During the meet and confer process, Leprino identified

several examples where omissions had occurred and Txu conceded that, in some instances,

attachments were not provided. In other instances, Txu contends that, although the email states that

there is an attachment, in fact no attachment exists but that the email program, Lotus Notes, lists the

prior string of emails as "an attachment." In any event, Txu has searched its files and provided some

of the attachments it located and is still searching for additional attachments. That process should

continue with Txu completing the search and providing all responsive attachments to Leprino within

thirty (30) days of the date of this order.

V. CONCLUSION

For the reasons stated above, Leprino's motion to compel the further production of materials

is granted to the extent that Txu is ordered to produce documents, in paper form, which are

responsive to Request Nos. 3, 5-8, and 10 for the time frame between December 31, 2001 and June

20, 2003. Txu is also ordered to continue to search its files for attachments which were alleged to be

included in emails already provided to Leprino and shall provide all attachments it locates to

Leprino. The subsequent production by Txu shall be completed within thirty (30) days of the date of

this order. In the event that no further attachments are located, Leprino shall inform Txu that it was

unable to locate additional attachments. In all other respects, the motion to compel is denied, as is

the request for sanctions.

IT IS SO ORDERED. 

Dated: January 23, 2006 

RICHARD SEEBORG

United States Magistrate Judge

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THIS IS TO CERTIFY THAT NOTICE OF THIS ORDER HAS BEEN DELIVERED TO:

David T. Biderman dbiderman@perkinscoie.com,

William Stephen Boyd sboyd@hunton.com,

Raymond Carlson levinson@griswoldlasalle.com,

William T. Eliopoulos weliopoulos@rutan.com, llow@rutan.com

J. Randall Faith jrfaith@aol.com,

Mark Fogelman mfogelman@steefel.com, ppomerantz@steefel.com

Arthur Jay Friedman afriedman@steefel.com,

Donald P. Gagliardi dgagliardi@be-law.com, cgrenon@be-law.com

Erin-Leigh A. Henderson ehenderson@rutan.com, llow@rutan.com

Shirley Jackson sjackson@steefel.com

Angus M. MacLeod amacleod@bkscal.com,

Patrick Theodore Markham , Esq ptmarkham@jacobsonmarkham.com,

jlukins@jacobsonmarkham.com; mfogelman@steefel.com; afriedman@steefel.com;

sjackson@steefel.com

William Samuel Niece wsniece@thelenreid.com, mawulfing@thelenreid.com;

sammons@thelenreid.com

Kenneth L. Nissly kennissly@thelenreid.com, ddiaz@thelenreid.com;

gmccombe@thelenreid.com

T. R. Rice tr@astrellalaw.com

Paul M. Zieff pzieff@rjop.com, kchristensen@rjop.com

Susan G. van Keulen svankeulen@thelenreid.com, rrosas@thelenreid.com;

sammons@thelenreid.com

Dated: 1/23/06 Chambers of Judge Richard Seeborg

By: /s/ BAK 

Case 5:01-cv-20289-RMW Document 372 Filed 01/23/06 Page 7 of 7