Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_18-cv-07233/USCOURTS-cand-5_18-cv-07233-7/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 18:1836(b) - Civil Action to Protect Trade Secrets

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Case No.: 5:18-cv-07233-EJD

ORDER DENYING DEFENDANTS’ MOTION FOR CERTIFICATION FOR 

INTERLOCUTORY APPEAL PURSUANT TO 28 U.S.C. SECTION 1292(B) AND STAY

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

WERIDE CORP., et al.,

Plaintiffs,

v.

KUN HUANG, et al.,

Defendants.

Case No. 5:18-cv-07233-EJD 

ORDER DENYING DEFENDANTS’ 

MOTION FOR CERTIFICATION FOR 

INTERLOCUTORY APPEAL

PURSUANT TO 28 U.S.C. SECTION 

1292(B) AND STAY

Re: Dkt. No. 381

Pursuant to 28 U.S.C. § 1292(b), Defendants Zhong Zhi Xing Technology Co. Ltd. and 

AllRide.ai Inc. (“Defendants”) move to certify for interlocutory appeal the Court’s August 22, 

2019 (Dkt. No. 252), September 18, 2019 (Dkt. No. 289), October 16, 2019 (Dkt. No. 319), and 

November 22, 2019 (Dkt. No. 366) Orders. Additionally, Defendants move for a stay pending 

appeal pursuant to 28 U.S.C. § 1292(b). The Court takes the matter under submission for decision 

without oral argument pursuant to Civil Local Rule 7-1(b). For the reasons below, Defendants’ 

motion is DENIED.

I. BACKGROUND

On March 22, 2019, the Court granted in part Plaintiffs’ motion for a preliminary 

injunction and authorized expedited discovery of each party’s source code. See Dkt. No. 116. 

Recognizing that the production of Defendants’ source code could be complicated by Chinese law, 

the Court referred the discovery issue to the assigned Magistrate Judge for further briefing. Id. To 

guide the Magistrate Judge’s review, the Court held that “the importance of this discovery weighs

heavily in favor of authorizing the discovery.” Dkt. No. 116 at 27. During the course of 

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Case No.: 5:18-cv-07233-EJD

ORDER DENYING DEFENDANTS’ MOTION FOR CERTIFICATION FOR 

INTERLOCUTORY APPEAL PURSUANT TO 28 U.S.C. SECTION 1292(B) AND STAY

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United States District Court

Northern District of California

discovery, Defendants issued general objections to producing documents protected under Chinese 

secrecy laws. See Dkt. No. 149. The assigned Magistrate Judge considered the issue and 

overruled those objections. Dkt. No. 252 (the “Discovery Order”).

Defendants filed an Objection to the Discovery Order. Dkt. No. 281. Defendants argued 

that the Magistrate Judge’s holding that Defendants may not withhold documents based on the 

application of Chinese law was in error because (1) Defendants had not yet identified any 

documents withheld on this basis and thus the issue was not ripe, and (2) the Magistrate Judge did 

not conduct an analysis of the factors required under Societe Nationale Industrielle Aerospatiale v. 

U.S. Dist. Court for S. Dist. of Iowa, 482 U.S. 522 (1987). The Court affirmed the Magistrate 

Judge and denied that motion. Dkt. No. 289. The Court found that the Discovery Order was 

based on sound reasoning and the parties’ conduct in discovery, specifically, the fact that 

Defendants failed to identify documents subject to their objection or to present any evidence to 

support their objection. Id. The Court also noted that Defendants “never raised the [Aerospatiale] 

factors in their briefing before the Magistrate Judge, despite Plaintiff twice raising them . . . 

[Defendants] cannot refuse to engage an issue before the Magistrate Judge and then complain that 

the Magistrate Judge did not sufficiently consider the issue.” Id. 

Defendants next filed a motion for reconsideration of the Discovery Order before the 

Magistrate Judge. Dkt. No. 300. Specifically, Defendants sought to withhold fourteen documents 

from discovery on account of Chinese secrecy laws and attached the Declaration of Hui Zhan, a 

Chinese lawyer and former judge, as evidence. Dkt. No. 300-2. The Magistrate Judge denied the

motion for reconsideration. Dkt. No. 319; Dkt. No. 327 (the “Reconsideration Order”). The 

Magistrate Judge held that Defendants did not present newly discovered facts or facts that could 

not have been discovered through reasonable diligence as of the date of the Discovery Order, and 

that “the failure to present them was because of the defense’s failure to reasonably pursue its own 

discovery obligations during the pre-August 22nd period of the case.” Id. Despite this finding, 

the Magistrate Judge considered the declarations Defendants submitted in support and found them 

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Case No.: 5:18-cv-07233-EJD

ORDER DENYING DEFENDANTS’ MOTION FOR CERTIFICATION FOR 

INTERLOCUTORY APPEAL PURSUANT TO 28 U.S.C. SECTION 1292(B) AND STAY

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unpersuasive. Id. Finally, the Magistrate Judge noted that the Aerospatiale factors still indicate in 

favor of production. Id.

Defendants objected to the Reconsideration Order and sought relief from this Court. Dkt. 

No. 345. After filing the motion for relief, Defendants filed a Supplemental Declaration attaching 

the translation of a letter from the Government Counsel for the Administrative Committee of 

Nanjing Economic and Technological Development District in support of their motion (the 

“Letter”). Dkt. No. 359. The Court denied Defendants’ motion for relief. Dkt. No. 366. The 

Court found the Letter unpersuasive, finding that “Defendants have not shown that they acted 

diligently to obtain the Letter before the Discovery Order issued.” Id. Following the Court’s 

order, Plaintiff filed a motion for discovery sanctions related to, among other things, Defendants’

withholding of the documents at issue. Dkt. No. 376. That motion remains pending. 

Defendants now ask this Court to certify the discussed orders for interlocutory appeal 

pursuant to 28 U.S.C. § 1292(b). Defendants’ Motion for Certification for Interlocutory Appeal 

(“Mot.”), Dkt. No. 381; see also Defendants’ Reply In Support of Motion for Certification For

Interlocutory Appeal (“Reply”), Dkt. No. 399. Plaintiffs oppose this motion. See WeRide’s

Opposition to Motion for Certification for Interlocutory Appeal (“Opp.”), Dkt. No. 397. 

II. DISCUSSION

A district court may certify a non-dispositive order for interlocutory appeal pursuant to 28 

U.S.C. § 1292(b) if: (1) a controlling question of law is at issue; (2) there are substantial grounds 

for a difference of opinion on the issue; and (3) an immediate appeal may materially advance the 

ultimate termination of the litigation. Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010). 

Certification is inappropriate unless all three Section 1292(b) requirements are met. Id. In 

seeking interlocutory appeal, the movant bears a heavy burden to show that “exceptional 

circumstances justify a departure from the basic policy of postponing appellate review until after

the entry of a final judgment.” Coopers & Lybrand v. Livesay, 437 U.S. 463, 475 (1978).

“Section 1292(b) is a departure from the normal rule that only final judgments are appealable, and 

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ORDER DENYING DEFENDANTS’ MOTION FOR CERTIFICATION FOR 

INTERLOCUTORY APPEAL PURSUANT TO 28 U.S.C. SECTION 1292(B) AND STAY

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therefore must be construed narrowly.” James v. Price Stern Sloan, Inc., 283 F.3d 1064, 1067 n.6 

(9th Cir. 2002); In re Cement Antitrust Litig. (MDL No. 296), 673 F.2d 1020, 1027 (9th Cir. 1981)

(“The precedent in this circuit has recognized the congressional directive that section 1292(b) is to 

be applied sparingly and only in exceptional cases.” (citing United States v. Woodbury, 263 F.2d 

784, 788 n.11 (9th Cir. 1959)). 

A question need not “be dispositive of the lawsuit in order to be regarded as 

controlling.” Woodbury, 263 F.2d at 787. Rather, “all that must be shown in order for a question 

to be ‘controlling’ is that resolution of the issue on appeal could materially affect the outcome of 

litigation in the district court.” In re Cement Antitrust Litig., 673 F.2d at 1026. 

Defendants contend that there are six controlling questions of law at issue:

i. Whether a court may prospectively adjudicate a party’s objection that disclosure of 

documents would violate the law of a foreign state, before the party has identified 

any such documents;

ii. Whether a court may prospectively adjudicate a party’s objection that disclosure of 

documents would violate the law of a foreign state, without first engaging in the 

analysis set forth in Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Court 

for S. Dist. of Iowa, 482 U.S. 522 (1987);

iii. Whether parties seeking to limit discovery under principles of international comity 

are required to first secure the review and opinion of the foreign state before 

seeking relief from the Court;

iv. Whether and the standard by which, in a case involving the collection, search and 

production of hundreds of thousands of foreign-language documents in a foreign 

sovereign state, a party raising a general discovery objection that disclosure of 

certain documents would violate the laws of a foreign state has waived the ability 

to challenge production for purposes of Aerospatiale by unreasonable delay in 

identifying the specific documents at issue;

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Case No.: 5:18-cv-07233-EJD

ORDER DENYING DEFENDANTS’ MOTION FOR CERTIFICATION FOR 

INTERLOCUTORY APPEAL PURSUANT TO 28 U.S.C. SECTION 1292(B) AND STAY

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v. Whether a party seeking to overcome an assertion of privilege based on a foreign 

state’s secrets must show a heightened need for the documents and/or prejudice 

from failing to receive them; and

vi. Whether the imposition of sanctions in response to a party’s failure to disclose 

documents because such disclosure is prohibited by the laws of a foreign state 

violates the Eighth Amendment’s prohibition on the imposition of excessive fines.1

Mot. at 3–4.

Defendants argue that these questions are controlling because they determine whether 

Defendants must produce certain documents, the production of which may subject the Defendants

to penalties under Chinese law. Defendants argue that the potential penalties they face would

disrupt their business operations and may limit their ability to “fully defend themselves in this 

litigation.” Mot. at 8. While the Court recognizes that Defendants face the possibility of 

consequences under Chinese law for producing certain documents, neither that possibility nor the 

resulting effect on Defendants’ business operations materially affects the outcome of the 

underlying claims in this case. See Woodbury, 263 F.2d at 787–88 (“[L]itigants have always had 

to deal with difficult choices of this kind as a result of orders entered prior to or during trials. 

Nothing in the statute or in its legislative history indicates that 1292(b) was designed to relieve the 

parties from such hazards.”).

Defendants cite Kuehner v. Dickinson & Co. in support of their argument that the 

questions presented are controlling. Kuehner v. Dickinson & Co., 84 F.3d 316, 319 (9th Cir. 

1996). In Kuehner, the Ninth Circuit upheld the district court’s certification for interlocutory 

appeal of an order to stay proceedings pending arbitration, even though the question at issue was 

not determinative of the merits of the dispute. In doing so, the Ninth Circuit found that “an order 

may involve a controlling question of law if it could cause the needless expense and delay of 

 1

 Plaintiffs’ motion for sanctions (Dkt. No. 376) remains pending, thus no sanctions have been 

imposed on Defendants. 

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Case No.: 5:18-cv-07233-EJD

ORDER DENYING DEFENDANTS’ MOTION FOR CERTIFICATION FOR 

INTERLOCUTORY APPEAL PURSUANT TO 28 U.S.C. SECTION 1292(B) AND STAY

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litigating an entire case in a forum that has no power to decide the matter.” Kuehner, 84 F.3d at

319. Here, unlike Kuehner, the Court’s orders to compel production do not concern fundamental 

issues such as the Court’s or an arbitral tribunal’s jurisdiction. Thus, Kuehner is inapposite.

Defendants also rely on In re Cement Antitrust Litig. There, the Ninth Circuit denied 

interlocutory appeal of the district court judge’s decision to recuse himself because the recusal 

order would “neither affect the ability of the district court to render a binding decision nor 

materially affect the outcome of the litigation in the district court.” In re Cement Antitrust Litig., 

673 F.2d at 1027. Similarly, the resolution of each of Defendants’ proposed questions of law 

would not materially affect the outcome of the claims in this case. Rather, these questions affect

discrete discovery issues; namely, the need for Defendants to produce certain documents. Cf.

Woodbury, 263 F.2d at 787 (“The issues of this lawsuit and the ability of the court to render a 

binding decision therein are in no way affected by the order to produce documents.”). 

Because the Court finds that none of the questions presented for interlocutory appeal are 

controlling questions of law, the Court does not address the second or third requirements for 

interlocutory appeal. Having denied Defendants’ motion for certification for interlocutory appeal, 

Defendants’ request for a corresponding stay is now moot.

III. CONCLUSION

For the reasons set forth above, Defendants’ motion for certification for interlocutory 

appeal and a stay pursuant to 28 U.S.C. § 1292(b) is DENIED.

IT IS SO ORDERED.

Dated: March 26, 2020

______________________________________

EDWARD J. DAVILA

United States District Judge

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