Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_07-cv-00773/USCOURTS-casd-3_07-cv-00773-6/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

SOUTHERN DISTRICT OF CALIFORNIA

GEORGE A. BROOKS; BROOKS

INDUSTRIES, INC.,

Plaintiff,

v.

MOTSENBOCKER ADVANCED

DEVELOPMENTS, INC.; GREGG A.

MOTSENBOCKER; SKIP A.

MOTSENBOCKER,

Defendants. 

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Civil No. 07cv773 BTM (NLS)

ORDER GRANTING IN PART AND

DENYING IN PART PLAINTIFF’S

FOURTH MOTION TO COMPEL

[Doc. No. 88]

George Brooks and Brooks Industries, Inc. (Plaintiffs) filed this fourth motion to compel

defendant Motsenbocker Advanced Developments, Inc. (MAD) to respond to their third set of Requests

for Production of documents (RFPs), and to compel defendants Gregg Motsenbocker and Skip

Motsenbocker to respond to their second sets of RFPs. Defendants refused to produce responses to any

of the requests based on objections. Plaintiffs narrowed some of the requests, but Defendants still have

not produced any responsive documents.

For the following reason, the Court GRANTS in part and DENIES in part Plaintiffs’ motion to

compel.

Telephone Numbers Used.

In RFP no. 54 of Plaintiffs’ third request to MAD, Plaintiffs request that MAD provide “all

documents containing phone numbers you have used either landline or cellular from April 1997 to April

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2006.” In RFP no. 1 to Gregg and Skip Motsenbocker, Plaintiffs request “All documents containing

telephone numbers you have used either at work at home or cellular from April 1997 to April 2006.” 

Defendants objected to both requests on grounds that the RFPs were overbroad, irrelevant, an unjustified

invasion of privileged privacy, unnecessarily called for all of Defendants’ phone books, and contained

third parties’ private identification and contact information for which Plaintiffs failed to provide proper

notice.

Plaintiffs later limited the request to documents. For RFP no. 54, Plaintiffs request: “Documents

showing phone number that MAD has been billed for from April 1997 to April 2006. Further, MAD

need not produce all phone bills, just one document for each phone number containing somewhere on it

the phone number.” Pls.’ Ex. E, p.58. For RFP no. 1, Plaintiffs amended the request to say:

“Documents showing phone numbers that Gregg & Skip Motsenbocker have been billed for from April

1997 to June 2005. Further, MAD need not produce all phone bills, just one document for each phone

number containing somewhere on it the phone number.” Pls.’ Ex. E, p.58.

While Defendants maintained their original objections to the revised requests, in the

opposition–under the express title of “RFP No. 54”–they provide the phone and fax numbers for MAD. 

In the reply, Plaintiffs state that they no longer seek a response to RFP no. 54. They do argue, however,

that because the individual defendants made no argument regarding RFP no. 1, this Court should order

them to respond to the amended RFP.

The Court finds amended RFP no. 1 to be overbroad to the extent it calls for phone numbers that

were not used to conduct business. Therefore, the Court GRANTS in part Plaintiffs’ motion as to RFP

no. 1, and orders Gregg Motsenbocker and Skip Motsenbocker to provide, by July 3, 2008, to Plaintiffs

any phone numbers they used from April 1997 to April 2006 to conduct business for MAD. The

individuals may exclude phone numbers, such as home phone numbers, unless those numbers were used

to conduct business.

/ / /

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/ / /

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Travel Records.

In RFP no. 55 to MAD, Plaintiffs request “All travel records including calendars from April

1997 to April 2006.” In RFP no. 2 to Gregg and Skip Motsenbocker, Plaintiffs request “All travel

records including personal calendars from April 1997 to April 2006.” Defendants objected to both

requests on grounds that the RFPs were overbroad, irrelevant, an unjustified invasion of privileged

privacy, unnecessarily called for Defendants’ private and confidential credit information, and contained

third parties’ private identification and contact information for which Plaintiffs failed to provide proper

notice. Plaintiffs then limited the RFPs to seek “All travel records including calendars from April 1997

to June 2005 of George Brooks, Gregg Motsenbocker and Skip Motsenbocker.” Defendants maintain

their objections.

The party resisting discovery must explain why the discovery is impermissible and has the

burden to clarify, explain and support its objections. Blankenship v. Hearst Corp., 519 F.2d 418, 429

(9th Cir. 1975). Simply asserting these boilerplate objections is insufficient to meet Defendants’ burden

of explaining why the RFPs are objectionable. See Bible v. Rio Properties, Inc., 2007 U.S. Dist. LEXIS

80017, *11 (C.D. Cal. 2007) (citations omitted). 

Here, Defendants argue the modified RFPs remain objectionable because the travel reports for

Brooks and the Motsenbockers contain the private travel records of individual employees. They also

say Plaintiffs’ claim that “travel records showing the Defendants were at trade shows were [sic] Mr.

Brooks claims to have represented the products would show that Mr. Brooks was indeed a sales

representative ... and that Defendants were well aware that Mr. Brooks was acting as a sales

representative” is (1) unavailing because it is equally viable that Brooks’ presence at the trade shows

was to demonstrate his ability to refinish metal with Defendants’ products; and (2) irrelevant because

Defendants have never denied that Brooks attempted to make sales of Brass Wash, Coating Remover,

Lacquer Remover and Finish Coat at trade shows.

Defendants represent that no travel records demonstrate Brooks was ever paid anything but his

salary to attend trade shows on MAD’s behalf during the eight months he worked for them. Because

this information is at least relevant to Defendants’ defense, the Court finds the documents sought in

Plaintiffs’ amended request for travel records to be relevant to the claims at issue here. Therefore, the

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Court GRANTS Plaintiffs’ motion to compel production of these documents. The Court, however,

sustains Defendants’ objection regarding protection of the private travel records of individual

employees. Defendants shall produce all travel records for Brooks, Gregg Motsenbocker and Skip

Motsenbocker, including calendars, from April 1997 to June 2005, by July 3, 2008. Defendants may

redact the private or confidential information of any individual employees, Gregg Motsenbocker or Skip

Motsenbocker or may produce those documents subject to the protective order.

Requests Relating to Ability to Pay Punitive Damages.

In RFP nos. 58-75 of the third set of requests to MAD, and RFP nos. 3-20 of the second requests

to the individual defendants, Plaintiffs seek Defendants’ financial records to establish Defendants’

ability to pay punitive damages. Defendants object to all the RFPs on the bases that they are overbroad,

irrelevant, call for privileged information within Defendants’ right to privacy as to a party’s confidential

affairs, and premature because there has been no finding of liability for punitive damages. Defendants

argue the information regarding their net worth and financial condition is privileged, private information

protected by the California Constitution, Article I, Section I.

Federal courts hearing diversity cases apply federal procedural law and state substantive law. 

Hanna v. Plumer, 380 U.S. 460, 465 (1965); Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). State

law governs the substance of a privilege asserted in a diversity action. See Fed. R. Evid. 501; 

Davis v. Leal, 43 F.Supp. 2d 1102, 1108 (E.D. Cal. 1999). Defendants argue that California Civil Code

§ 3295(c) is a substantive rule that should apply here. Section 3295(c) requires a prima facie showing

that a plaintiff will prevail on a punitive damages claim before a defendant must produce pretrial

evidence of ability to pay punitive damages. Plaintiffs argue that federal law regarding privilege should

apply because § 3295(c) is a procedural rule and not substantive.

To support their argument that § 3295(c) is a substantive rule, Defendants rely on a Ninth Circuit

case that held a California penal code statute constituted part of California’s substantive state policy

protecting privacy and was properly characterized as a substantive law within the meaning of Erie. 

Feldman v. Allstate Ins. Co., 322 F.3d 660 (9th Cir. 2003). In Feldman, the statute at issue–Cal. Penal

Code § 632–made taping a confidential conversation a crime and limited the admissibility of illegally

intercepted conversations. Id. at 667. The court found that because secretly recording and replaying

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personal conversations might infringe on the right to privacy guaranteed by the California Constitution,

§ 632 embodied a substantive policy aimed to protect the privacy rights of California’s citizens. Id.

In contrast, the statute at issue here, Cal. Civ. Code § 3295(c), provides:

No pretrial discovery by the plaintiff shall be permitted with respect to

[defendant’s profits and financial condition] unless the court enters an

order permitting such discovery . . . Upon motion by the plaintiff

supported by appropriate affidavits . . . the court may at any time enter an

order permitting the discovery . . . if the court finds . . . that the plaintiff

has established that there is a substantial probability that the plaintiff will

prevail on the claim [of punitive damages].

Only a few district courts in California have expressly addressed whether § 3295(c) is a substantive or

procedural rule. They found § 3295(c) to be a procedural rule. See Oakes v. Halvorsen Marine Ltd.,

179 F.R.D. 281, 295-296 (C.D. Cal. 1998) (stating “as a state discovery and procedural law, Civ. C. §

3295 conflicts with Fed. R. Civ. P. 26(b); it establishes a discovery scheme fundamentally inconsistent

with the discovery rules under the Federal Rules of Civil Procedure”); Charles O. Bradley Trust v.

Zenith Capital L.L.C., 2005 U.S. Dist. LEXIS 35562, *9-*10 (N.D. Cal. 2005) (acknowledging that

California law requires a prima facie showing of substantial probability of prevailing on the claim but

finding that federal law regarding privilege applies). In contrast to Feldman, this Court finds that §

3295(c) sets out the procedure for how or when discovery regarding the Defendants’ financial

information may be obtained, and thus is a procedural rule and does not bear on the substance of the

privilege available to Defendants. Under the Federal Rules, the use of protective orders govern how or

when discovery may be obtained. 

Even though the protection of § 3295(c) is not available to Defendants, they are still protected 

by the substance of California’s law on privacy. The substantive right to financial privacy extends to

individuals in litigation. Davis v. Leal, 43 F. Supp. 2d 1102, 1110 (E.D. Cal. 1999). The asserted

privileges that protect financial and proprietary information are not absolute, but are subject to balancing

the needs of the litigation with the sensitivity of the information and records sought. Id. (citing Valley

Bank of Nevada v. Superior Court, 15 Cal.3d 652, 657 (1975)). The party asserting the privilege has the

initial burden to establish the existence of the privilege; then, the burden shifts to the party seeking the

information to justify the need for the information. Id. Courts employ a balancing test to determine

whether a disclosure of financial information might violate a constitutional right to privacy. Charles O.

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Bradley Trust, 2005 U.S. Dist. LEXIS 355562 at *6 (citations omitted). Factors such as ascertainment

of the truth, addressing defendants’ potentially severe conduct and enforcement of rights weigh in favor

of disclosure while widespread dissemination of information favors nondisclosure. Id. at *7-*8

(ordering production of financial documents under a strict protective order limited to counsel only and

requiring destruction of all information at the end of litigation).

Plaintiffs acknowledge the information sought here is highly confidential and to be used to

determine punitive damages. They state that Defendants may designate it confidential under the

Protective Order. In arguing that the balance of factors falls in favor of disclosing the financial

information, Plaintiffs rely on Oakes. In Oakes, the court ordered counterdefendants to respond to three

RFPs and two interrogatories subject to the operative protective order. 179 F.R.D. at 284-285. The

protective order limited confidential material to use only in that litigation. Id. at 283. In ordering

production, the magistrate judge noted the district judge had specifically found–in at least three

instances–that counterdefendants made certain false and libelous statements in an Internet website

regarding some of the counterclaimants’ actions, the counterclaimants were likely to prevail on their

trade libel claim and the counterdefendants had a substantial punitive damages claim. Id. at 282, 286. 

The court also acknowledged that one of the purposes behind allowing the broad discovery into

financial information was to promote settlement so that both sides could realistically appraise the case. 

Id. at 286.

Here, Plaintiffs seek 18 highly sensitive RFPs against each of the defendants. So far, the district

judge has not yet made any finding regarding liability. Currently pending before the district judge is

Defendants’ motion for summary judgment on the issues of the existence of an oral contract; whether

Defendants received valuable services, improvements or enrichments from Plaintiffs; whether Plaintiffs

were wholesale representatives of Defendants; and whether all causes of action are barred by the statute

of limitations and/or laches. 

While Plaintiffs are entitled to discovery of Defendants’ financial information subject to the

Protective Order, requiring the extensive production at this point in the litigation appears to be an

inefficient use of the parties’ resources in light of the pending motion for summary judgment. Even

though this Court has previously ordered that liability and damages discovery not be bifurcated, that

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holding was predicated on Plaintiffs’ representation that the financial information sought was for the

sole purpose of determining compensatory damages. See Pls.’ Opp’n to Mot. to Stay and/or Bifurcate

Discovery, p.10, ll.3-18. Here, Plaintiffs admittedly seek extensive financial information in the 54 posed

RFPs solely for the issue of punitive damages. But they do not need the information at this time to

prepare the heart of their case. Further, it seems unlikely that the parties will be able to seriously

address settlement until the summary judgment motion is adjudicated, so that information will not be

used to facilitate settlement. Therefore, this Court finds that Plaintiffs will suffer no prejudice in

postponing the production of Defendants’ financial information until after the ruling on the summary

judgment motion, and only if the issue of punitive damages remains relevant.

For these reasons, the Court GRANTS in part and DENIES in part Plaintiffs’ request to

compel responses to the 54 RFPs regarding punitive damages. If, after the ruling on the summary

judgment motion, the issue of punitive damages is still relevant, Defendants shall respond to the RFPs,

subject to the terms of the protective order, within 30 days of the summary judgment ruling. If, after the

summary judgment ruling, punitive damages is no longer at issue, Defendants need not respond to the

RFPs.

IT IS SO ORDERED.

DATED: June 13, 2008

Hon. Nita L. Stormes

U.S. Magistrate Judge

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