Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_08-cv-01987/USCOURTS-casd-3_08-cv-01987-7/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332fr Diversity-Fraud

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

COLLEGESOURCE, INC.,

Plaintiff,

CASE NO. 08CV1987-GPC(MDD)

ORDER OVERRULING

PLAINTIFF’S OBJECTIONS TO

MAGISTRATE JUDGE’S ORDER

PURSUANT TO FEDERAL RULE

OF CIVIL PROCEDURE 72

[Dkt. No. 260.]

vs.

ACADEMYONE, INC.,

Defendant.

Before the Court is Plaintiff’s Objection to Magistrate Judge’s Order on Joint

Motion for Determination of Discovery Dispute filed on June 22, 2015 pursuant to

Federal Rule of Civil Procedure (“Rule”) 72. (Dkt. No. 254.) Defendant filed an

opposition. (Dkt. No. 267.) Plaintiff filed a reply. (Dkt. No. 268.) Based on the

reasoning below, the Court OVERRULES Plaintiff’s Objection to the Magistrate

Judge’s order. 

Background

On October 27, 2008, Plaintiff CollegeSource, Inc. (“Plaintiff” or

“CollegeSource”) filed this action against Defendant AcademyOne, Inc. (“Defendant”

or “AcademyOne”) alleging numerous causes of action based on Defendant’s alleged

improper access and use of Defendant’s databases. On September 21, 2009, Plaintiff

filed a notice of appeal of the district court’s order granting motion to dismiss for lack

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of personal jurisdiction. (Dkt. Nos. 93, 99.) 1

While this case was dismissed and on appeal with the Ninth Circuit, on July 20,

2010, CollegeSource filed a separate complaint against AcademyOne in the United

States District Court for the Eastern District of Pennsylvania alleging similar causes of

action. See CollegeSource, Inc. v. AcademyOne, Inc., No. 10-CV-3542 (E.D. Pa., filed

July 20, 2010) (“the Pennsylvania Action).

In the Pennsylvania Action, AcademyOne filed a motion for summary judgment

on all of CollegeSource’s claims on February 27, 2012. (Pennsylvania Action,

10cv3542-MAM, Dkt. No. 164.) After full briefing, the Pennsylvania district court

held a hearing on AcademyOne’s motions on June 13, 2012. (Id., Dkt. No. 206.) On

September 21, 2012, after the motion for summary judgment wasfully briefed and after

having had oral argument, CollegeSource filed a motion for leave to supplement its

opposition to Defendant’s motion for summary judgment and conduct additional

discovery based on newly uncovered evidence due to excusable neglect. (Id., Dkt. No.

222.) On September 27, 2012, the Court denied Plaintiff’s motion. (Id. Dkt. No. 225.) 

On October 25, 2012, the Court in the Pennsylvania Action granted Defendant

AcademyOne’s motion for summary judgment in its entirety. (Id., Dkt. No. 226;

CollegeSource, Inc. v. AcademyOne, Inc., No. 10-3542, 2012 WL 5269213 (E.D. Pa.

Oct. 25, 2012.) On November 2, 2012, CollegeSource filed a notice of appeal with the

Third Circuit. (Pennsylvania Action, 10cv3542-MAM, Dkt. No. 228.) 

Meanwhile, in this case, on October 15, 2012, CollegeSource filed an amended

motion for partial summary judgment on the merits of its case. (Dkt. No. 172.) On 2

March 8, 2013, AcademyOne filed an opposition to Plaintiff’s motion for summary

judgment which included an expert report by Paul Lewis dated March 8, 2013. (Dkt.

No. 215, Landou Decl., Ex. A, Lewis’ Rebuttal Expert Report (filed under Seal).) On

District Judge Marilyn L. Huff ruled on the motion to dismiss prior to the case

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being transferred to the undersigned judge on October 4, 2012. (Dkt. No. 164.) 

On September 26, 2011, the Ninth Circuit reversed the district court’s decision 2

and remanded the case to the district court. (Dkt. No. 110.) 

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March 29, 2013, Plaintiff filed objections to Lewis’ Report. (Dkt. No. 219.) 

On November 28, 2012, AcademyOne filed a motion for summary judgment

based on claim and issue preclusion based on the district court’s ruling granting its

motion for summary judgment in the Pennsylvania Action. (Dkt. No. 186.) On March

11, 2013, CollegeSource filed a motion to stay and a motion to refer summary

judgment related motion to Magistrate Judge Dembin for report and recommendation. 

(Dkt. Nos. 204, 207.) On April 15, 2013, the Court granted Plaintiff’s motion to stay

the case pending a ruling by the Third Circuit. (Dkt. No. 230.) On April 16, 2013, the

Court terminated all pending motionssubject to reopening once the stay islifted. (Dkt.

No. 231.) 

On February 5, 2015, the Third Circuit affirmed the district court’s grant of

summary judgment in favor of Defendant. CollegeSource, Inc. v. AcademyOne, Inc.,

597 F. App’x 116 (3d Cir. 2015). On March 6, 2015, Defendant filed a notice of denial

of rehearing by the Third Circuit. (Dkt. No. 239.) On May 14, 2015, Plaintiff informed

the Court it would not file a petition for certiorari with the United States Supreme

Court. (Dkt. No. 245.) 

On May 28, 2015, the Court granted the parties’ joint motion to lift the stay and

set a telephonic status conference. (Dkt. No. 247.) At the status hearing, the Court

indicated it would first rule on Defendant’s motion for summary judgment on claim

preclusion based on the judgment in the Pennsylvania action before ruling on

Plaintiff’s motion for partial summary judgment concerning liability. (Dkt. No. 252 at

5 .) Subsequently, the Court set a briefing schedule on Defendant’s motion for

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summary judgment based on claim preclusion. (Dkt. No. 249.) At the hearing,

Plaintiff raised a discovery issue, and the Court directed the parties to the Magistrate

Judge. (Dkt. No. 252.) 

On June 16, 2015, the parties filed a joint motion for determination of a dispute

regarding production of material considered by Defendant’s expert Paul Lewis in his

The page number is based on the CM/ECF pagination. 3

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expert report, (Dkt. No. 215), submitted in opposition to Plaintiff’s motion for partial

summary judgment in March 2013. (Dkt. No. 253.) On June 22, 2015, the Magistrate

Judge denied the joint motion for discovery dispute regarding materials considered by

Defendant’s expert. (Dkt. No. 254.) On July 6, 2015, based on the Magistrate Judge’s

ruling, Plaintiff filed a notice of reopening of its motion for partialsummary judgment. 

(Dkt. No. 259.) 

On the same day, Plaintiff filed the instant Objection to the Magistrate Judge’s

ruling denying its motion to compel Defendant’s expert, Paul Lewis, to produce the

materials he relied on in his expert report. (Dkt. No. 260.)

A. Standard of Review of Magistrate Judge’s Discovery Order

Under Federal Rule of Civil Procedure 72(a), aggrieved parties may file

objections to the rulings of a magistrate judge in non-dispositive matters within

fourteen days. Fed. R. Civ. P. 72(a). In reviewing a magistrate judge’s order, the

district judge “must consider timely objections and modify or set aside any part of the

order that is clearly erroneous or is contrary to law.” Fed. R. Civ. P. 72(a); 28 U.S.C.

§ 636(b)(1)(A); see also United States v. Raddatz, 447 U.S. 667, 673 (1980); Osband

v. Woodford, 290 F.3d 1036, 1041 (9th Cir. 2002). A magistrate judge’s legal

conclusions are reviewable de novo to determine whether they are “contrary to law”

and findings of fact are subject to the “clearly erroneous” standard. Perry v.

Schwarzenegger, 268 F.R.D. 344, 348 (N.D. Cal. 2010). 

Plaintiff argues that the Court should review the Magistrate Judge’s ruling de

novo because it relates to the parties’ respective cross motions for summary judgment. 

Defendant contends that “clearly erroneous or contrary to law” standard should apply

because the Magistrate Judge’s ruling did not dispose of any claims or defenses in the

case and the de novo standard does not apply just because the discovery relates to a

motion for summary judgment.

The Court need not make a determination on which standard of review applies

because even under the de novo standard, Plaintiff is not entitled to relief. 

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B. Relevance to Plaintiff’s Motion for Partial Summary Judgment

First, the Magistrate Judge (“MJ”) noted that Plaintiff’s request for discovery

referenced in Lewis’ report mirror the objections made by Plaintiff to the Report in

March 2013. At that time, Plaintiff did not seek discovery and only sought to exclude

certain opinions of Lewis. The Magistrate Judge concluded that it found no basis to

order the Judge requested discovery in relation to Plaintiff’s terminated motion for

partial summary judgment. (Dkt. No. 254.) 

Plaintiff objects arguing that the Magistrate Judge improperly made its

determination due to the fact that the MJ assumed the motion was terminated. 

Defendant asserts that the Magistrate Judge correctly ruled because Plaintiff’s motion

for partial summary judgment was not pending at the time. 

At the status hearing, this Court indicated that it would first rule on

AcademyOne’s motion for summary judgment on claim preclusion before ruling on

Plaintiff’s motion for partial summary judgment due to the potential possibility that

Plaintiff’s motion for summary judgment could be mooted by the Court’s ruling on

Defendant’s motion. (Dkt. No. 252 at 4-5.) The question posed to the MJ was

“whether or not these discovery matters need to be addressed at this point given the

motion that will be considered in August or whether or not the discovery issue should

be stayed until the Court decides the motion.” (Dkt. No. 252 at 11.) 

Notwithstanding whether the MJ’s ruling hinged on the fact that the Plaintiff’s

motion was terminated and not refiled, the issue before the MJ was whether the

requested discovery is relevant to AcademyOne’s motion for summary judgment, not

CollegeSource’s motion for summary judgment. (See Dkt. No. 252 at 5, 11.) In its

objection, besides arguing that the MJ improperly denied its request for discovery

because there was no motion “pending”, CollegeSource does not provide any reason

why discovery is needed. The joint motion before the MJ also provides no reason why

discovery is needed on Plaintiff’s motion for summary judgment at thistime. (Dkt. No.

253 at 2-4.) The Court concludes that Plaintiff has not demonstrated that discovery is

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needed at this time on its motion for summary judgment that is not currently being

considered by the Court even though Plaintiff has now reopened its motion. 

Accordingly, the Court OVERRULES Plaintiff’s objection to the MJ’s ruling on

this issue. 

C. Relevance to Defendant’s Pending Motion for Summary Judgment

Plaintiffseeks discovery of materials Defendant’s expert, Paul Lewis, a forensic

computer expert, allegedly considered, but did not produce, in his expert report filed

in opposition to Plaintiff’s motion for partial summary judgment in March 2013. 

According to CollegeSource, Lewis relied on a copy of Defendant’s Apple server that

was different than the one produced to Plaintiff, and it did not discover this until Lewis

filed his rebuttal expert report in March 2013, which was months after judgment had

been entered in the Pennsylvania action. Plaintiff argues because Lewis considered an

Apple server different than what was produced, it demonstratesthat Defendant deleted

files from its Apple server prior to production. Plaintiff argues it was deprived of

“crucial evidence” to litigate the claims in the Pennsylvania action, and recovery of the

alleged deleted files from expert Lewis’ copy of the Apple server would constitute

“crucial evidence” that would make it impossible for defendant to establish the “full

and fair opportunity” element. 

Defendant contends that the motion for summary judgment does not rely or cite

to Lewis’ expert report, and the issue of claim preclusion is a legal issue. According

to Defendant, the court looks at whether Plaintiff lacked a fair opportunity to prosecute

its claim. Lastly, it argues that Plaintiff challenged Defendant’s production ofits Apple

backup server on multiple occasions in the Pennsylvania action. 

In the joint motion for discovery dispute before the MJ, Plaintiff argued that the

materials considered by Lewis “may be highly relevant for plaintiff to present evidence

in opposition to defendant’s summary judgment motion . . . .” and for the Court to

determine whether it was deprived of crucial evidence or witnesses in the prior

litigation. (Dkt. No. 253 at 6.) 

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On June 22, 2015, the Magistrate Judge denied Plaintiff’s motion to compel and

concluded that the relevance of the allegedly undisclosed materials relied upon by

Lewis to determine whether Plaintiff had a full and fair opportunity to litigate its case

in the federal court in Pennsylvania is “not apparent” and appeared to the Court that

whether Plaintiff had a full and fair opportunity to litigate is a legal question capable

of determination without further discovery. (Dkt. No. 254 at 3-4.) 

Defendant’s motion for summary judgment is based on both the doctrines of

claim preclusion and issue preclusion. (Dkt. No. 251-1.) Plaintiff argues that under

the United States Supreme Court ruling in Blonder-Tongue Labs., Inc. v. Univ. of

Illionois Fdn., 402 U.S. 313 (1971), it was deprived of “crucial evidence” in the prior

litigation. Defendant argues that all that is required is the minimum procedural

requirements of due process which Plaintiff received in the Pennsylvania Action. 

The Court applies the federal law of claim preclusion when considering the

preclusive effect of a federal court judgment. First Pacific Bancorp., Inc. v. Helfer, 224

F.3d 1117, 1128 (9th Cir. 2000). Under federal law, the party moving on collateral

estoppel bears the burden to demonstrate that the opposing party had a full and fair

opportunity to litigate the issues. See In re Associated Vintage Group, Inc., 283 B.R.

549, 562 (9th Cir. 2002). While Defendant will have the burden to demonstrate that

Plaintiff had a full and fair opportunity to litigate the issuesin the Pennsylvania Action

in its motion for summary judgment, at this junction, the issue raised by Plaintiff, in

this motion, is a motion to compel discovery of documents, and the burden is on

Plaintiff to make a showing that discovery is warranted.

“Under res judicata, a final judgment on the merits of an action precludes the

parties or their privies from relitigating issues that were or could have been raised in

that action.” Allen v. McCurry, 449 U.S. 90, 94 (1980) (citation omitted). “Under

collateral estoppel, once a court has decided an issue of fact or law necessary to its

judgment, that decision may preclude relitigation of the issue in a suit on a different

cause of action involving a party to the first case.” Id. (citation omitted). “Res

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judicata and collateral estoppel relieve parties of the cost and vexation of multiple

lawsuits, conserve judicial resources, and, by preventing inconsistent decisions,

encourage reliance on adjudication.” Id. 

The Ninth Circuit prefers the use of the terms claim preclusion and issue

preclusion. Robi v. Five Platters, Inc., 838 F.2d 318, 321-22 (9th Cir. 1988). 

The doctrine of “claimpreclusion” barsthe relitigation of a claim, even

if the particular theories of recovery or defenses raised in the second

proceeding were not actually litigated in the first action. Claim

preclusion is also known as the doctrine of merger and bar, and is

synonymous with “res judicata” when that expression is used in a

narrow sense. The doctrine of “issue preclusion” bars the relitigation

of all issuesthat were litigated in a prior proceeding, even if the second

proceeding is an action on a claim different from the one asserted in

the first action. Issue preclusion encompasses the doctrines of direct

and collateral estoppel.

Shaw v. State of California, 788 F.2d 600, 605 (9th Cir. 1986). 

Claim preclusion and issue preclusion cannot be used as a bar “when the party

against whom the earlier decision is asserted did not have a ‘full and fair opportunity’”

to litigate that issue in the earlier case. Kremer v. Chemical Const. Corp., 456 U.S.

461, 480-81 & n.22 (1982); Shaw v. State of Cal. Dept. of Alcoholic Beverage Control,

788 F.2d 600, 606 (9th Cir. 1986) (citing Kremer, 456 U.S. at 482-83 & n. 22) (“The

Supreme Court has held that neither claim nor issue preclusion can be applied by a

federal court if there was not a full and fair opportunity to litigate in the state

proceeding.”). 

In determining whether a party had a full and fair opportunity to litigate in the

prior suit, the United States Supreme Court considered whether “without fault of [its]

own . . . [the plaintiff] was deprived of crucial evidence of witnesses in the first

litigation.” Blonder-Tongue, 402 U.S. at 333 (patentee seeking to relitigate the validity

of a patent after a federal court in a previous lawsuit has already declared it invalid). 

Other factors the Court noted was the choice of forum, the incentive to litigate, any

indication that the first court failed to fully grasp the issues, and whether a party,

without fault on its part, was deprived of crucial evidence or witnesses. Id. at 332-33.

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The decision rests with the trial court’s “sense of justice and equity.” Id. at 334.

“Redetermination of issues is warranted if there is reason to doubt the quality,

extensiveness, orfairness of proceduresfollowed in prior litigation.” Kremer, 456 U.S.

at 481 (citations omitted); Shaw v. State of Cal. Dept. of Alcoholic Beverage Control,

788 F.2d 600, 606 (9th Cir. 1986) (citing Kremer, 456 U.S. at 482-83 & n. 24). 

The Court concludes it does not need discovery that Plaintiff seeks to decide

whether Plaintiff had a full and fair opportunity to litigate the issues in the

Pennsylvania Action. The arguments and facts raised in the parties’ briefs addressing

whether Plaintiff had a full and fair opportunity to litigate the Pennsylvania Action is

an issue to be fully briefed and addressed on Defendant’s motion for summary

judgment on claim and issue preclusion. If the Court finds Plaintiff was deprived of

a full and fair opportunity to litigate, then its causes of action will not be barred by

issue and claimpreclusion, and Plaintiff’s discovery request will most likely be granted

at that time. However, at this point of the proceedings, it is premature for the Court to

order discovery. Accordingly, the Court OVERRULES Plaintiff’s Objection to the

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MJ’s ruling. 

D. Request for Judicial Notice

Defendant filed a request for judicial notice in support of its opposition to

Plaintiff’s objection to Magistrate Judge’s order. (Dkt. No. 266.) The request includes

publically filed documents with the District Court for the Eastern District of

Pennsylvania and the ThirdCircuit. Plaintiff opposes arguing that these documents are

not relevant to the instant issue of materials considered by Defendant’s expert, Paul

Lewis, and not proper as they were not presented to the MJ. 

The court “may judicially notice a fact that is not subject to reasonable dispute

because it . . . can be accurately and readily determined from sources whose accuracy

cannot reasonably be questioned.” Fed. R. Evid. 201. Court filings and other matters

The Court notes that neither party presented cases where discovery was sought 4

in order to demonstrate a full and fair opportunity to litigate. 

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of public policy are subject to judicial notice. See Reyn’s Pasta Bella, LLC v. Visa

USA, Inc., 442 F.3d 741, 746 n. 6 (9th Cir. 2006). 

Because the Court concludes that the records are not relevant in determining

whether the request for discovery should be granted, the Court DENIES Defendant’s

request for judicial notice. 

Conclusion 

Based on the above, the Court OVERRULES Plaintiff’s objections to the

Magistrate Judge’s ruling denying it leave to conduct discovery. 

IT IS SO ORDERED. 

DATED: August 12, 2015

HON. GONZALO P. CURIEL

United States District Judge

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