Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-03508/USCOURTS-cand-3_04-cv-03508-12/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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The parties have brought this dispute before the Court by letter briefs dated November 3, 2005

(Docket No. 128), November 4, 2005 (Docket No. 132), November 18, 2005 (Docket No. 138),

November 30, 2005 (Docket No. 159), and December 5, 2005 (Docket No. 161).

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

TELEPHIA, INC.,

Plaintiff,

 v.

STEVEN CUPPY, et al.,

Defendants. /

No. C 04-03508 SI

ORDER GRANTING IN PART

DEFENDANTS’ MOTION TO COMPEL

Now before the Court is a discovery dispute in this matter.1 Defendants seek to compel plaintiff

to respond to a number of interrogatories and document requests that seek information primarily related

to plaintiff’s finances. For the following reasons, the Court GRANTS IN PART defendant’s motion.

DISCUSSION

The dispute in this case involves a technology for collecting data on cell phone usage for

wireless service providers. Plaintiff purchased the technology from defendants and subsequently

brought suit, claiming that defendants had made numerous misrepresentations about the product.

Plaintiff alleges that defendants’ misrepresentations led it to an overvaluation of defendants’ technology.

Plaintiff also alleges that it had to spend significant amounts of money fixing undisclosed defects in the

product. Defendants countersued, seeking to recover damages for breach of contract, including royalty

payments under the purchase agreement. Defendants now seek to compel responses to three

Case 3:04-cv-03508-SI Document 236 Filed 01/24/06 Page 1 of 5
United States District Court

For the Northern District of California

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In their original letter brief, defendants also sought to compel plaintiff to produce an updated

privilege log. Defendants has since advised the Court that plaintiff has complied with this request.

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It appears that “Market Metrics” is plaintiff’s name for the product it purchased from

defendants.

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interrogatories and four document requests.2

1. Requests for Production, Set Two, Nos. 1, 2, and 3

These requests generally seek financial documents that divulge revenue and expenses related

to the Market Metrics product.3

 This information is highly relevant to defendants’ defenses and

counterclaims. The financial information is relevant to the former because of plaintiff’s claim that it

was forced to expend money to repair defects in defendants’ product; it is relevant to the latter because

defendants need the information to establish their claim for royalties. 

In response to defendants’ motion, plaintiff claims that it has responded fully to these requests

and has produced all financial documents in its possession. Defendants question the thoroughness of

plaintiff’s response, claiming that much of the information requested is still missing. Defendants,

however, have not established that there is any specific set of documents that plaintiff is withholding.

Given plaintiff’s specific representation in its letter brief that “Telephia has in fact produced all financial

documents in its possession,” Pl. Br., at 1, the Court DENIES defendants’ request.

2. Interrogatory Nos. 15 and 16

Defendant’s Interrogatory No. 15 states: “State all financial results on a monthly and quarterly

basis, including but not limited to budgeted and actual figures for revenues and expenses, for the Market

Metrics product for the years 2002, 2003 and 2004 and the first six months of 2005.” Def. Br., Exh. A.

Defendant’s Interrogatory No. 16 reads: “State all Market Metrics monthly revenue, on a per customer

basis, for the years 2003 and 2004 and for the first six months of 2005.” Id. The interrogatories are

almost exact parallels of Requests for Production Nos. 1 and 2.

Plaintiff does not contest the fact that the information sought is highly relevant to defendants’

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claims. Indeed, defendants require this information to be able to prepare their claim for royalties, a key

component of their case. See Def. Counterclaims, at ¶¶ 48-54 (seeking “royalties equal to 7.5% of

certain of its revenues on a quarterly basis”). Instead, plaintiff’s opposition brief objects to the

interrogatories only on the ground that they are “completely duplicative of defendants’ Requests for

Production, Set Two, Nos. 1 and 2.”

Because of the strong relevance of the information the interrogatories seek, the Court does not

find that a response would be unduly burdensome to plaintiff. This is especially true given that

defendants have questioned the completeness of plaintiff’s document production. Thus, the Court

GRANTS plaintiff’s motion with respect to Interrogatories No. 15 and 16.

2. Interrogatory No. 17

This interrogatory seeks information related to each individual Market Metrics customer,

including “the specific markets reported,” “the revenue associated with each market,” and “the type of

reports produced for each market.” As with the above discovery, this information is highly relevant to

defendants’ counterclaims for royalties, as well as to their defenses against plaintiff’s claim that

defendants’ product did not work as promised.

Plaintiff claims that responding to this interrogatory would be unduly burdensome because the

information must be “compiled from a review and analysis of several different categories of

documents,” all of which plaintiff claims defendants now possess. In light of the high relevance of the

information sought, however, the Court rejects plaintiff’s claims of undue burden.

Plaintiff also claims that defendants’ motion should be denied because defendants refused to

agree to a stipulation that “[b]y the second quarter of 2007, Telephia will have generated revenues from

its Market Metrics product, which, were all those revenues royaltable and were those revenues not

subject to Telephia’s Right of Offset, would be sufficient to exhaust the $4 million royalty cap under

the SPA.” Pl. Oppo. Br., Exh. B. The Court finds that plaintiff’s proposed stipulation in inadequate.

As mentioned above, the specific financial information defendants seek is relevant to defendants’

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defense against Telephia’s claims that defendants’ technology was ineffective when first acquired.

Given that the stipulation does not break down plaintiff’s financial results over a period of time, it is

simply too general to serve that function. 

The Court therefore GRANTS defendants’ motion with respect to Interrogatory No. 17.

4. Requests for Production, Set Two, No. 14

This request seeks “[a]ll documents that refer to or reflect communications between Telephia

and/or Criterion and NTELOS after July 31, 2004.” Def. Br., Exh. B. Once again, plaintiff represents

in its letter brief that it has produced “all documents relevant to Telephia’s communication with

NTelos.” Pl. Br. at 1. Defendants maintain that they have been unable to find any correspondence

related to plaintiff’s contract with NTelos in plaintiff’s document production. They also argue that

plaintiff has previously been wrong about the contents of its document production; apparently Telephia

had not produced a copy of its contract with NTelos even after it had asserted it had produced all

documents related to Request No. 14. See Def. Reply Br., at 3.

Given the confusion over the production of plaintiff’s contract with NTelos, the Court finds that

there have been some irregularities with respect to plaintiff’s production of documents responsive to

Request No. 14. Accordingly, the Court ORDERS plaintiff to provide defendants with the specific

location in their document production of documents that are responsive to Request No. 14.

CONCLUSION

For the foregoing reasons, the Court GRANTS IN PART defendants’ motion to compel (Docket

No. 128). Plaintiff’s request for costs is DENIED.

IT IS SO ORDERED.

Dated: January 24, 2006 

 

SUSAN ILLSTON

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United States District Judge

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