Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_13-cv-02219/USCOURTS-cand-4_13-cv-02219-23/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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United States District Court 

Northern District of Californi

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

TRUE HEALTH CHIROPRACTIC INC, et 

al., 

Plaintiffs, 

v. 

MCKESSON CORPORATION, et al., 

Defendants. 

Case No. 13-cv-02219-HSG (DMR) 

ORDER RE: JOINT DISCOVERY 

LETTER 

Re: Dkt. No. 183 

Before the court is a joint discovery letter filed by Plaintiffs True Health Chiropractic, Inc. 

and McLaughlin Chiropractic Associates, Inc. and Defendants McKesson Corporation and 

McKesson Technologies, Inc. (“MTI”). [Docket No. 183.] In the joint letter, Plaintiffs move to 

compel Defendants to produce certain documents from McKesson entities other than those for 

which Defendants have already produced documents. The court held a hearing on this matter on 

May 21, 2015. For the reasons stated below and at the hearing, Plaintiffs’ motion is denied. 

I. BACKGROUND 

The factual background of this case has been summarized elsewhere. See, e.g., Docket 

Nos. 127, 143, 157, 178. In brief, this putative class action challenges Defendants’ alleged 

practice of sending unsolicited facsimile advertisements, or so-called “junk faxes,” in violation of 

the Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Prevention Act of 

2005, 47 U.S.C. § 227 (“TCPA”). The faxes attached to the Second Amended Complaint are all 

advertisements for medical software. 

On June 23, 2014, Plaintiffs filed their first motion to compel Defendants to produce “all 

facsimile advertisements that it transmitted during the four-year period prior to the filing of the 

Complaint.” [Docket No. 79.] After delays due to Defendants’ motion stay the case, the court 

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held a hearing on the discovery letter and ordered the parties to further meet and confer. The 

parties were unable to resolve their dispute without judicial intervention. They filed another joint 

discovery letter, in which Plaintiffs, among other things, moved the court to compel Defendants to 

produce faxes falling within the following description: 

Any document that was: (1) created, in whole or in part, by one or 

more employees of the marketing department of McKesson 

Corporation, McKesson Technologies, Inc., McKesson Provider 

Technologies, or other McKesson entity; (2) transmitted to one or 

more fax numbers via server, computer, or other automated 

function; (3) that advertised the commercial availability or quality of 

any property, good, or service or McKesson; (4) after June 20, 2009. 

Docket No. 143 (order dated December 5, 2014) at 3 (emphasis added). Defendants generally 

objected to this proposal as being too burdensome, but did not specifically note a problem with 

discovery requests that targeted McKesson entities other than the named Defendants. Neither 

party educated the court about the corporate structure of the various McKesson entities and their 

relationship to each other. The court ordered production as requested by Plaintiffs, but the court 

was not called upon at that time to consider whether a search for documents from “the marketing 

department of McKesson Corporation, McKesson Technologies, Inc., McKesson Provider 

Technologies, or other McKesson entity” was appropriate. 

Subsequently, Defendants produced only four exemplar faxes, limiting their production to 

faxes that were “similar in substance” to the faxes attached to the pleadings. Plaintiffs brought a 

motion for sanctions against Defendants alleging that Defendants had failed to produce the 

discovery ordered by the court. [Docket No. 162.] At the sanctions hearing, new counsel 

appeared for Defendants, and represented for the first time that production of responsive 

documents would be ‘impossible’ by April 2, 2015, and could include irrelevant documents. The 

court thus ordered Defendants to produce responsive documents only from the marketing 

departments of McKesson Corporation or McKesson Technologies by April 2, 2015. The court 

stated that it was “not excusing Defendants from producing documents from “McKesson Provider 

Technologies or other McKesson entities,” as delineated in its December 5, 2014 order. However, 

based on defense counsel’s representation about the potential burden and overbreadth of such a 

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production, the court ordered the parties to meet and confer further. Id. 

Defendants subsequently investigated its documents and learned that all of the faxes 

attached to the operative complaint “were created by or at the direction of one or more former 

employees of Physician Practice Solutions (“PPS”), a business unit under McKesson Technologies 

Inc.” Cheung Decl. [Docket No. 179] at ¶ 4. Defendants searched for marketing documents 

created by PPS that were transmitted to fax numbers during the relevant time period. Id. As a 

result of this search, Defendants produced 37 previously-unproduced exemplar faxes to Plaintiffs, 

raising the total number of unique faxes known to Plaintiffs to 45. Letter at 1. According to 

Defendants, they “have already produced every fax that reasonably comes within the scope of the 

allegations in Plaintiff’s Second Amended Complaint.” Letter at 2. 

Plaintiffs now request that Defendants expand their search for exemplar faxes to other 

McKesson entities, departments, business units, and/or affiliates. The parties met and conferred 

and were unable to resolve their dispute without judicial intervention. This letter followed. 

II. CORPORATE STRUCTURE OF DEFENDANT MCKESSON CORPORATION 

The two Defendants named in this action are McKesson Corporation and MTI, and the 

putative class is defined as “[a]ll persons who . . . were sent [faxes] . . . advertising the commercial 

availability of any property, goods, or services by or on behalf of Defendants” from whom 

Defendants did not obtain permission to send faxes. Sec. Am. Compl. [“SAC,” Docket No. 90] at 

¶ 21. 

Defendants have provided a declaration explaining some aspects of the corporate structure 

and organization of McKesson Corporation. See Shuford Decl. [Docket No. 192]. McKesson 

Corporation has over 600 subsidiaries or affiliated companies that are separate legal entities. 

McKesson Corporation and its subsidiaries employ 70,400 full-time employees as of March 31, 

2015. Id. at ¶ 4. More than 400 of McKesson Corporation’s subsidiaries or affiliated companies 

are non-United States legal entities acquired through McKesson Corporation’s acquisition of 

Celesio AG. Id. at ¶ 2. 

Many of the approximately 200 subsidiaries or affiliated companies in the United States 

have multiple business units. Id. at ¶ 3. These business units are “constantly changing.” For 

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example, Plaintiffs’ original discovery request sought documents from “the marketing department 

of . . . McKesson Provider Technologies,” which no longer exists as a business unit.1 The 

different business units have different leadership personnel, and generally operate independently 

from one another. Id. The subsidiaries and business units affiliated with McKesson Corporation 

offer different services and products. Id. at ¶ 5. Those that sell software offer different types of 

software (e.g., software for supply chain management, document management, medical imaging, 

and surgery services) to different types of customers (pharmacies, physicians, government entities, 

hospitals). Id.

MTI is a subsidiary of McKesson Corporation. Over the past few years, MTI has had 

between approximately 10,000 and 13,400 employees. Id. at ¶ 6. MTI has several main business 

units, which oversee a variety of businesses, including nurse call centers and solutions for 

radiology and cardiology departments. The Business Performance Solutions unit (“BPS”) is one 

of the main business units in MTI. These main business units, including BPS, can encompass a 

number of separately incorporated entities. In addition to the main business units, there are at least 

27 smaller business units. PPS is a sub-unit that falls under the BPS business unit.2 Since 2009, 

the business units within MTI have frequently reorganized, and the business units’ alignment with 

legal entities has changed. Id. at ¶ 6. 

According to McKesson’s Assistant Secretary and Manager of the Subsidiary Group Anne 

Schuford, there is no central database that McKesson Corporation can search to determine whether 

the 200 American subsidiaries or affiliated companies have sent marketing faxes, or to collect all 

marketing faxes sent by any McKesson-related entity. Id. at ¶ 7. There is also no central database 

that MTI can search to determine whether any of the business units that roll up into it have sent 

marketing faxes. Id. 

 

1

 It remains unclear from the parties’ submissions what subsidiary or affiliated entity McKesson 

Provider Technologies belonged to, or why Plaintiffs seek documents from this particular business 

unit. McKesson Provider Technologies does not appear in the Second Amended Complaint. 

2

 Unlike BPS, PPS does not encompass separately incorporated entities, nor is PPS itself a 

separate corporate entity. 

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III. LEGAL STANDARDS 

Federal Rule of Civil Procedure 26 provides that a party may obtain discovery “regarding 

any nonprivileged matter that is relevant to any party’s claim or defense.” Fed. R. Civ. P. 

26(b)(1). “Relevant information need not be admissible at the trial if the discovery appears 

reasonably calculated to lead to the discovery of admissible evidence.” Fed. R. Civ. P. 26(b)(1). 

“Relevancy, for the purposes of discovery, is defined broadly, although it is not without ultimate 

and necessary boundaries.” Gonzales v. Google, Inc., 234 F.R.D. 674, 679-80 (N.D. Cal. 2006). 

“[T]he party opposing discovery has the burden of showing that discovery should not be allowed, 

and also has the burden of clarifying, explaining and supporting its objections with competent 

evidence.” La. Pac. Corp. v. Money Mkt. 1 Institutional Inv. Dealer, 285 F.R.D. 481, 485 (N.D. 

Cal. 2012). 

 A court “must limit the frequency or extent of discovery otherwise allowed by [the 

Federal] rules” if “(i) the discovery sought is unreasonably cumulative or duplicative, or can be 

obtained from some other source that is more convenient, less burdensome, or less expensive; (ii) 

the party seeking discovery has had ample opportunity to obtain the information by discovery in 

the action; or (iii) the burden or expense of the proposed discovery outweighs its likely benefit, 

considering the needs of the case, the amount in controversy, the parties’ resources, the 

importance of the issues at stake in the action, and the importance of the discovery in resolving the 

issues.” Fed. R. Civ. P. 26(b)(2)(C). 

“District courts have broad discretion to control the class certification process, and whether 

or not discovery will be permitted lies within the sound discretion of the trial court.” Vinole v. 

Countrywide Home Loans, Inc., 571 F.3d 935, 942 (9th Cir. 2009) (citations omitted). 

IV. DISCUSSION 

In the Second Amended Complaint, Plaintiffs’ claims target faxes sent “by or on behalf of” 

McKesson Corporation or MTI. SAC at ¶ 21. In the joint letter, Plaintiffs argues that Defendants 

should be ordered to produce documents from all McKesson subsidiaries. Letter at 2. Plaintiffs 

quickly abandoned that position at the hearing. Instead, Plaintiffs assert that Defendants should 

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search for responsive documents in all “business units” of MTI.3 

The court finds that that requiring Defendants to search each of the business units of MTI 

would be burdensome. As described above, MTI is a large entity with many independently 

operating subdivisions, including some that are separate legal entities. Defendants’ counsel 

explained at the hearing that a search for faxes sent by all of MTI’s business units would require 

counsel to first determine what business units existed from 2010 to the present, whether each of 

those business units had a marketing department, who from the business unit or marketing 

department of the business unit would have knowledge of faxes sent by that business unit, what 

those individuals knew, and what documents existed in the files of those individuals. 

Against this burden, and as became clear at the hearing, Plaintiffs have devoted little effort 

to date to obtaining discovery that could aid in defining the scope of the class. Plaintiffs have 

propounded some written discovery, but have yet to take a Rule 30(b)(6) deposition on the topic of 

the organizational structure of McKesson Corporation and its related entities. As a result, 

Plaintiffs have not sufficiently demonstrated that they are entitled to production of documents 

from the business units of MTI other than PPS. As acknowledged by Plaintiffs, all of the faxes 

described in the Second Amended Complaint were generated by PPS. Defendants have now 

produced all responsive faxes from PPS for the relevant time frame. Plaintiffs could not identify 

any evidence connecting any other business unit within MTI besides PPS to the fax transmissions 

that form the basis of their Second Amended Complaint. 

Accordingly, on the current record, the court finds that the burden on Defendants of 

locating and producing faxes from other MTI business units outweighs the likely benefit of the 

proposed discovery, and denies Plaintiffs’ motion to compel. 

V. MOTION TO SEAL 

Defendants move to file under seal an exhibit to the Declaration of Anne Schuford. 

 3

 In the joint letter, Plaintiffs proposed a further limitation to business units “that sell 

computer software (as opposed to Band-Aids, for example).” Letter at 2. Defendants respond 

that limiting their search to “software” products is arbitrary, as there is no principled reason for 

differentiating between business units that sell software products and those that do not. Letter at 

6. 

Case 4:13-cv-02219-HSG Document 197 Filed 05/27/15 Page 6 of 7
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