Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_03-cv-01561/USCOURTS-cand-3_03-cv-01561-11/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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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

I-ENTERPRISE CO.,

Plaintiff,

 v.

DRAPER FISHER JURVETSON

MANAGEMENT CO., et al.,

Defendants.

 /

No. C-03-01561 MMC (EDL)

ORDER GRANTING IN PART

PLAINTIFF’S MOTION TO COMPEL 

Defendants are the general partners of venture capital funds Draper Fisher Jurvetson Fund V, L.P.

and Draper Fisher Jurvetson Fund VI. Plaintiff is a limited partner in Fund V and Fund VI and has

committed approximately $42 million to the Funds. Plaintiff alleges that the individual Defendants engaged

in material misrepresentations and fraud in the marketing of Fund V and Fund VI, breached their fiduciary

duties in the management of the funds and wrongfully paid themselves over $70 million in management fees

and $30 million in other distributions from those funds. Plaintiff now moves to compel documents from one

of Defendants’ three testifying experts, Paul Gompers, and from Defendants’ non-testifying consultant,

Cornerstone Research, an expert support service. Specifically, Plaintiff seeks: (1) all communications that

Cornerstone sent to or received from Defendants’ three testifying experts; (2) all analyses and raw data

Cornerstone prepared on behalf of or at the direction of those testifying experts or that Cornerstone

received from the experts; and (3) documents that Professor Gompers withheld from production.

1. Cornerstone

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On March 29, 2005, Plaintiff served a subpoena on Cornerstone seeking: (1) all draft expert

reports from the three experts; (2) all documents sent to or received from Defendants’ three testifying

experts; and (3) all documents reflecting raw data or analyses that Cornerstone provided to the experts. 

See Declaration of Ashok Ramani Ex. B. Cornerstone agreed to produce some documents, but withheld

documents relating to: (1) preliminary work regarding opinions to which the experts will not testify at trial

because they relate to claims that Plaintiff has dropped or that were eliminated from the case; (2)

documents created after the March 11, 2005 exchange of expert rebuttal reports regarding Cornerstone’s

and the testifying experts’ assistance in preparing defense counsel for depositions of Plaintiff’s experts; and

(3) documents created after the March 11, 2005 exchange of rebuttal reports regarding Cornerstone’s and

the testifying experts’ work done to assist defense counsel in preparing for the summary judgment motion. 

See Declaration of Jeffery Lokey ¶¶ 10-12. Cornerstone argues that the documents should not be

produced because they are protected by the work product doctrine, they do not relate to the scope of the

testifying expert’s opinions and there are no exceptional circumstances that justify disclosure under Federal

Rule of Civil Procedure 26(b)(4). 

The work product doctrine protects documents prepared by a party’s non-testifying consultant like

Cornerstone to the extent that those documents reflect advice and were prepared in anticipation of

litigation. See Fed. R. Civ. P. 26(b)(3). However, intentional disclosures of work product to a testifying

expert witness effectively waives the work product privilege as to materials related to matters about which

the expert will testify. See Intermedics v. Venitrex, Inc., 139 F.R.D. 384, 388 (N.D. Cal. 1991)

(“[A]bsent an extraordinary showing of unfairness that goes well beyond the interests generally protected

by the work product doctrine, written and oral communications from a lawyer to an expert that are related

to matters about which the expert will offer testimony are discoverable, even when those communications

otherwise would be deemed opinion work product.”). The importance of ensuring a fair opportunity to

cross-examine the expert at trial counsels in favor of construing the subject matter of the expert’s opinions

broadly and resolving ambiguities about which capacity a dual purpose expert is functioning in favor of

waiver. See In re Air Crash at Dubrovnik, Croatia , 2001 WL 777433, *3 (D. Conn. 2001) (where an

expert both testifies and consults, the work product doctrine may only be invoked to protect work that is

clearly done only in the expert’s consultative capacity; “any ambiguity about which function was served by

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the expert when creating a document must be resolved in favor of discovery.”); see also Monsanto Co. v.

Aventis Cropscience, N.V., 214 F.R.D. 545, 547 (E.D. Mo. 2002) (“A court need not compel disclosure

of materials an expert considered in his consultative capacity (i.e., before he was designated as a testifying

expert) that have no relation to the expert’s role as an expert. When, however, the subject matter of those

materials relates to the facts and opinions the expert expressed in his report, the courts should order

disclosure when there is at least an ambiguity as to whether the materials informed the expert’s opinion.”).

Cornerstone argues that documents relating to claims dropped from the case and not included in the

expert reports are not discoverable because they are outside the scope of the experts’ opinions. At the

hearing, Cornerstone clarified that it was only seeking to protect documents related to dismissed claims

regarding valuation of holdings in non-public portfolio companies. The expert reports do not contain

opinions on this issue. Nor has there been a showing that the valuation claims are within the broad scope of

the expert opinions. Therefore, the work product protection has not been waived for documents relating

solely to the valuation claims that are no longer at issue in this case. Moreover, Plaintiff has not shown

exceptional circumstances justifying production of these documents: 

A party may, through interrogatories or deposition, discover facts known or opinions

held by an expert who has been retained or specially employed by another party in

anticipation of litigation or preparation for trial and who is not expected to be called as

a witness at trial, only as provided in Rule 35(b) or upon a showing of exceptional

circumstances under which it is impracticable for the party seeking discovery to obtain

facts or opinions on the same subject by other means.

Fed. R. Civ. P. 26(b)(4)(B); see also FMC Corp. v. Vendo Co., 196 F. Supp. 2d 1023, 1047 (E.D. Cal.

2002) (stating that exceptional circumstances may exist where: “1) the object or condition at issue is

destroyed or had deteriorated after the non-testifying expert observes it but before the moving party’s

expert has an opportunity to observe it; or 2) there are no other available experts in the same field or

subject area.”). Therefore, Plaintiff’s motion to compel production of these documents is denied. 

Cornerstone next argues that it is properly withholding documents relating to Cornerstone’s and the

testifying experts’ assistance, after the exchange of rebuttal reports, in preparing Defendants’ counsel for

Plaintiff’s experts’ depositions and for their summary judgment motion, because these documents do not

relate to the formation of the experts’ opinions. These documents are within the scope of the testifying

experts’ reports, however, and are therefore subject to waiver of the work product protection. The Court

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conducted an in camera review of these documents to assess whether they are discoverable. Based on that

review, Plaintiff’s motion to compel production of these documents is granted in part as follows. 

Production of these documents shall occur only after the depositions of Plaintiff’s experts, as Plaintiff agreed

to at the hearing. 

With respect to the documents created by Cornerstone for Defendants’ attorneys in preparation for

depositions and trial, Defendants lodged several documents relating directly to the subject matter of the

experts’ opinions, many of which were reviewed or possibly reviewed by Defendants’ testifying experts or

were addressed to a testifying expert. Cornerstone shall produce the documents regarding the Audit

Working Paper and the Potential Questions for the Deposition of Thomas Porter because they were shown

to or reviewed by a testifying expert and relate substantively to the expert opinions. Cornerstone shall also

produce the Potential Follow Up to the Rebuttal Reports of Plaintiff’s Experts; although the expert cannot

recall whether he reviewed it, the document includes notations indicating the testifying expert’s responsibility

for certain items, so he likely examined it. Cornerstone shall also produce the e-mail that was sent to

Professor Gompers, among others, which relates to discussions of relevant issues. The webpage snapshot,

which does not appear to have been reviewed by an expert and does not relate substantively to the

experts’ opinions, need not be produced. 

With respect to the documents created by Cornerstone to assist Defendants’ attorneys in

preparation for their summary judgment motion, Defendants lodged various e-mails regarding scheduling or

attaching pleadings, and drafts of documents relating to the summary judgment motion, all of which were

reviewed by testifying experts. Drafts and all copies of pleadings for the summary judgment motion that

were lodged for in camera review shall be produced because they relate to the experts’ opinions and were

reviewed by the experts. To the extent that the e-mails relate merely to scheduling, they need not be

produced because they do not relate substantively to the experts’ opinions, even though they were

reviewed by the experts. For the same reason, the e-mail to an expert attaching the subpoena need not be

produced. 

2. Professor Gompers

Professor Gompers stated in his expert reports that based on his review of “several hundred VC

offering memoranda” and “hundreds of PPMs and limited partnership agreements,” Defendants’ offering

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memoranda, private placement memoranda (“PPM”) and limited partnership agreements were not unusual. 

See Ramani Decl. Ex. M at 6; Ex. N at 4. On March 22, 2005, Plaintiff served a deposition subpoena on

Gompers, seeking production of documents, including “[t]he several hundred VC offering memoranda

reviewed by Mr. Gompers in the past.” See Ramani Decl. Ex. K. Professor Gompers did not produce

these documents at his deposition. See Ramani Decl. Ex. A at 8:22-9:16. 

Professor Gompers testified at his deposition that the hundreds of PPMs and limited partnership

agreements that he referenced in the expert reports included those that formed the basis of his research for

two articles published in 1996 and 1999, which are now housed in the Harvard Archives. See Ramani

Decl. Ex. A at 9:1-16. He testified that those archived documents are subject to confidentiality agreements. 

See id. He also testified that he continues to receive other partnership agreements that he generally does

not retain. See id. Ex. A at 9:11-16; Jonathan Sanders Decl. Ex. A at 11:12-15; 15:8-10. 

Plaintiff makes a good argument that Professor Gompers waived any objections to the document

production because he failed to object to the subpoena pursuant to Federal Rule of Civil Procedure 45. 

See U.S. ex rel. Schwartz v. TRW, Inc., 211 F.R.D. 388, 392 (C.D. Cal. 2002) (“Failure to serve timely

objections waives all grounds for objection, including privilege.”). In certain circumstances and for good

cause, however, the failure to object will not bar consideration of objections. See, e.g., American Elect.

Power Co., Inc. v. United States, 191 F.R.D. 132, 136-37 (S.D. Ohio 1999) (“‘In unusual circumstances

and for good cause, however, the failure to act timely will not bar consideration of objections.’ [citation

omitted] Courts have found unusual circumstances where: (1) the subpoena is overbroad on its face and

exceeds the bounds of fair discovery; (2) the subpoenaed witness is a non-party acting in good faith; and

(3) counsel for the witness and counsel for the subpoenaing party were in contact concerning the witness’

compliance prior to the time the witness challenged the legal basis for the subpoena.” [citations omitted]). 

Here, even if Professor Gompers failed to timely object, there is good cause to find that his objections have

not been waived. Although his status as a non-party expert does not relieve him of his obligation to

respond to discovery, the subpoena sought fifteen categories of documents and Professor Gompers

produced over 12,000 documents. He is a non-party and there is no evidence that he acted in bad faith. 

Prior to his deposition, he stated, through letters by defense counsel dated March 31, 2005 and April 1,

2005 that were attached to his document production, that some documents were being withheld. See CollCase 3:03-cv-01561-MMC Document 438 Filed 09/15/05 Page 5 of 8
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Very Decl. Ex. A, B (“These documents . . . comprise the document responsive to the subpoena . . .

except for expert reports older than five years, expert reports and testimony subject to confidentiality

agreements or order, or documents that are publicly available.”). He appeared without separate counsel

for his deposition in response to the subpoena and produced the majority of categories of documents

requested in that subpoena. In his deposition, he testified openly about withholding the archived

documents. Therefore, the Court finds that Professor Gompers did not waive the objections to the

subpoena. 

Documents considered by an expert in forming his or her opinions are discoverable. See Fed. R.

Civ. P. 26(a)(2)(B); Mushroom Associates v. Monterey Mushroom, 1992 US Dist. LEXIS 20640, *7

(N.D. Cal.) (“The defendants shall have access to all documents considered by [the expert], whether

rejected or relied upon. ‘Considered’ applies to all documents [the expert] reviewed in preparation for his

expert testimony.”); United States v. City of Torrance, 163 F.R.D. 590, 593-94 (C.D. Cal. 1995). 

Professor Gompers considered the archived documents with respect to his opinion in this case and

expressly based his expert opinion in significant part on these documents. Professor Gompers and

Defendants point out that he did not specifically review the archived documents in preparation for his expert

reports; instead, he relied on his memory. Accordingly, they argue that his reliance on the archived

documents is no different than an expert’s reliance on any other general background information that the

expert learned in the course of his education and training, which need not be produced. But the opposing

party normally would be able to effectively cross-examine the expert on his general education and training

by using non-confidential readily available sources, such as well-known treatises in the field. Here, by

contrast, the PPMs that Professor Gompers relied upon are confidential documents not otherwise readily

available to Plaintiff. The fact that he did not retain other similar documents that he has also received and

relied on since the publication of his articles does not obviate the need for the archived documents, but

instead underscores it. Nor are the documents so voluminous, scattered and impractical to retrieve as

documents only recalled from an expert’s broad general background. Rather, they are centrally archived. 

The Court is also not persuaded by the argument that the confidential documents are protected by

academic freedom arising out of the First Amendment journalist’s privilege. See Shoen v. Shoen, 5 F.3d

1289, 1292 (9th Cir. 1993) (“Rooted in the First Amendment, the privilege is a recognition that society’s

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interest in protecting the integrity of the newsgathering process, and in ensuring the free flow of information

to the public, is an interest ‘of sufficient social importance to justify some incidental sacrifice of sources of

facts needed in the administration of justice.’”) (quoting Herbert v. Lando, 441 U.S. 153, 183 (1979)). 

The “critical question for deciding whether a person may invoke the journalist’s privilege is whether she is

gathering news for dissemination to the public. The test is . . . whether the person seeking to invoke the

privilege had ‘the intent to use the material -- sought, gathered or received -- to disseminate information to

the public and whether such intent existed at the inception of the newsgathering process.’” See Shoen, 5

F.3d at 1293 (quoting von Bulow v. von Bulow, 811 F.2d 136, 144 (2d Cir. 1987)). 

The Ninth Circuit has not extended the journalist’s privilege to academic authors or researchers in

general. Professor Gompers relies on a district court case in which the court analogized an academic

researcher to a journalist, but applied a balancing test to determine that the researcher, who was not a party

or expert in the case, did not have to produce confidential source material. See Richards of Rockford, Inc.

v. PG&E, 71 F.R.D. 388, 390 (N.D. Cal. 1976) (holding that academic researchers, who were not

experts in the case, were not required to produce confidential sources because the researchers were third

parties to the case, the research project was not initiated for the lawsuit but involved research about

questions of public policy, the events at issue in the case were not the focus of the research project and the

factual issues presented by the lawsuit could be resolved without resort to the confidential information,

which was merely supplementary). Richards does not aid Professor Gompers and is factually

distinguishable in all key respects. While there are good reasons to extend a qualified privilege to purely

academic researchers whom a party seeks to draft involuntarily into its litigation wars, that situation is a far

cry from academics who choose to serve as paid experts and voluntarily base their opinions in part on

confidential research. Academic freedom can be preserved by academics foregoing such non-academic

roles, or at least confining their opinions to those based on non-confidential research. No court has

endorsed the remedy proposed here of shielding from the opposing party the material relied upon by the

hired expert as a sword in the name of academic freedom. 

The Court is nonetheless mindful of Professor Gompers’s legitimate concerns that the archived

documents are subject to confidentiality agreements and his research might be chilled if the companies that

cooperated with him fear that their materials will now be used against them by Plaintiff in other litigation. 

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The Court considered ordering production of the documents with redactions, but is convinced that

redaction of all of the documents at this time would be very time-consuming and costly, yet potentially

unnecessary, as Plaintiff may introduce few, if any, into evidence if the case is not resolved prior to trial. 

Instead, Plaintiff’s motion to compel Professor Gompers to produce the archived documents is granted, but

subject to attorneys’ and outside experts’ eyes only under the protective order. Redaction may be

warranted if and when Plaintiff seeks to introduce them into the public record. If so, Defendants may ask

the Court for appropriate protection at that time. 

IT IS SO ORDERED.

Dated: September 15, 2005 

ELIZABETH D. LAPORTE

United States Magistrate Judge

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