Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_14-cv-03953/USCOURTS-cand-5_14-cv-03953-12/pdf.json

Nature of Suit Code: 470
Nature of Suit: Civil (Rico)
Cause of Action: 28:1441 Petition for Removal- Racketeering (RICO) Act

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United States District Court

For the Northern District of California

*E-Filed: April 7, 2015*

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

MONTEREY BAY MILITARY HOUSING, 

LLC; et al.,

Plaintiffs, v.

PINNACLE MONTEREY LLC; et al.,

Defendants. ____________________________________/

No. C14-03953 BLF (HRL)

ORDER RE: DISCOVERY DISPUTE 

JOINT REPORT #6

[Re: Docket No. 125]

Plaintiffs sue Defendants for “a series of systematic frauds” relating to Defendants’ 

management of military housing at the Presidio of Monterey and Fort Irwin. Fourth Am. Compl. ¶ 

2. Pinnacle asserts that non-party Tierra Vista Communities LLC (“TVC”) manages a privatized 

military housing facility located in California and has obtained property and general liability 

insurance for the property. TVC, however, asserts that it is one part of a large family of corporate 

entities under the Lend Lease Americas, Inc. (“Lend Lease”) umbrella, and the property and general 

liability insurance coverage applicable to TVC’s and its direct affiliates’ various military housing 

projects exists only in the context of a global insurance program applicable to numerous affiliated 

military housing developments.

Defendant Pinnacle Monterey LLC, Pinnacle Irwin LLC, American Management Services 

California Inc., American Management Services LLC (dba Pinnacle), and Stanley Harrelson 

(collectively “Pinnacle” or “Defendants”) served a subpoena duces tecum on TVC. TVC objected

to the subpoena on the grounds that it would be burdensome to produce documents responsive to 

Case 5:14-cv-03953-BLF Document 166 Filed 04/07/15 Page 1 of 5
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United States District Court

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each of Pinnacle’s requests. Pinnacle subsequently narrowed the scope of the subpoena to request 

documents sufficient to show the cost of property and general liability insurance on a per-unit or per 

$100 of total insured value basis incurred for each of the projects defined by the subpoena. 

In Discovery Dispute Joint Report #6, Pinnacle seeks an order compelling TVC to comply 

with the narrowed scope of the subpoena. TVC argues that the subpoena should be quashed on the 

grounds that the documents sought are not relevant to the issues in this action, compliance with the 

subpoena would impose an undue burden on TVC, and compliance would require TVC to provide 

to its direct business competitor, for no legitimate purpose, proprietary and confidential business 

information.

Rule 45 of the Federal Rules of Civil Procedure authorizes the issuance of a subpoena 

commanding a non-party to attend and testify; produce designated documents, electronically stored 

information, or tangible things in that non-party’s possession, custody or control; or permit the 

inspection of premises. Fed. R. Civ. P. 45(a)(1)(A)(iii). The scope of discovery through a Fed. R. 

Civ. P. 45 subpoena is the same as that applicable to Fed. R. Civ. P. 34 and the other discovery 

rules. Fed. R. Civ. P. 45 advisory committee’s note (1970).

Parties may obtain discovery about any nonprivileged matter that is relevant to any party’s 

claim or defense. Fed. R. Civ. P. 26(b)(1). “Relevance under Rule 26(b)(1) is construed more 

broadly for discovery than for trial.” Truswal Sys. Corp. v. Hydro-Air Eng’g, Inc., 813 F.2d 1207, 

1211 (Fed. Cir. 1987). “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). 

Discovery is not unfettered, however. A court must limit the extent or frequency of 

discovery if it finds that (a) the discovery sought is unreasonably cumulative or duplicative or can 

be obtained from a source that is more convenient, less burdensome or less expensive; (b) the party 

seeking discovery has had ample opportunity to obtain the information through discovery; or (c) the 

burden or expense of the discovery sought outweighs its likely benefit, considering the needs of the 

case, the amount in controversy, the parties’ resources, the importance of the issues at stake, and the 

importance of the discovery in resolving those issues. Fed. R. Civ. P. 26(b)(2)(C)(i)-(iii).

Case 5:14-cv-03953-BLF Document 166 Filed 04/07/15 Page 2 of 5
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United States District Court

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Fed. R. Civ. P. 45(d)(3)(B) provides that the court may quash or modify a subpoena if it 

requires: “(i) disclosing a trade secret or other confidential research, development, or commercial 

information; or (ii) disclosing an unretained expert’s opinion or information that does not describe 

specific occurrences in dispute and results from the expert’s study that was not requested by a 

party.” “In the circumstances described in Rule 45(d)(3)(B), the court may, instead of quashing or 

modifying a subpoena, order appearance or production under specified conditions if the serving 

party: (i) shows a substantial need for the testimony or material that cannot be otherwise met 

without undue hardship; and (ii) ensures that the subpoenaed person will be reasonably 

compensated.” Fed. R. Civ. P. 45(d)(3)(C). Additionally, Fed. R. Civ. P. 45(c)(3) provides that the 

court must quash or modify a subpoena that imposes an undue burden.

First, the narrowed subpoena at issue here seeks information that is not relevant or calculated 

to lead to the discovery of admissible evidence. Lend Lease is a large military housing developer 

with a large portfolio of nationwide military use properties of varying scopes, of which TVC’s 

California properties are one component. All of them are insured under one program specific to 

Lend Lease’s individualized’s global risk profile and loss history and developed over the course of 

Lend Lease’s relationships with its various insurers. This proprietary insurance program is of a 

different variety and scope from Defendants’ program, and based on the allegation against 

Defendants, it is run in a different manner. Lend Lease’s program is specific to military use 

properties only, while Defendants’ program co-mingles military and public use risks. In addition, 

the insurance costs associated with Lend Lease’s program are limited exclusively to actual external 

insurance costs (i.e., premiums), while Defendants’ insurance costs include internal administrative 

fees in addition to premiums. Thus, Lend Lease’s program is not comparable to the program 

obtained by Defendants. Dissecting this program in an attempt to establish which costs are 

attributable, on a “per unit or per $100 of total insured value basis” to those properties developed 

and/or managed by TVC in California would potentially necessitate production of all documents 

related to this program. 

Second, the documents sought, and the information contained within, consist of proprietary 

and confidential business information. Defendants do not dispute that the documents they seek from 

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TVC/Lend Lease contain confidential business information. Accordingly, Defendants must 

demonstrate a substantial need for the documents that cannot otherwise be met without undue 

hardship. Defendants have not done so here. Defendants assert that their expert “requires the 

information sought by the Subpoena” in order to respond to the underlying expert’s report. 

Defendants do not explain, however, why Defendants’ expert requires another developer’s insurance 

information, which is not comparable to the insurance program obtained by Defendants that is at 

issue here. 

Accordingly, Pinnacle’s request for an order compelling TVC to comply with the narrowed 

scope of the subpoena is denied. TVC’s request to quash the subpoena is granted.

IT IS SO ORDERED.

Dated: April 7, 2015

HOWARD R. LLOYD

UNITED STATES MAGISTRATE JUDGE

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C14-03953 BLF (HRL) Notice will be electronically mailed to:

Alice Y Chu chua@gtlaw.com, baileyme@gtlaw.com, svlitdock@gtlaw.com

Amanda D. Donson donsona@gtlaw.com, svlitdock@gtlaw.com, zhangju@gtlaw.com

Andrew Lee Mathews amathews@ams-ms.com

Cindy Hamilton hamiltonc@gtlaw.com, baileyme@gtlaw.com, svlitdock@gtlaw.com

Daniel G. Hildebrand hildebrandd@gtlaw.com

Donna Marie Welch dwelch@kirkland.com, annemarie.hittler@kirkland.com, 

carrie.gillfillan@kirkland.com, laura.kemphues@kirkland.com

Douglas R. Young dyoung@fbm.com, calendar@fbm.com

Ian David Burkow burkowi@gtlaw.com

Jeffrey L. Willian jeffrey.willian@kirkland.com, annemarie.hittler@kirkland.com, 

carrie.gillfillan@kirkland.com, lkemphues@kirkland.com

Jessica Jane Bluebond-Langner jessica.bluebond-langner@kirkland.com

Kara L. Arguello kara.arguello@berliner.com, sabina.hall@berliner.com

Karen P. Kimmey kkimmey@fbm.com, bheuss@fbm.com, calendar@fbm.com

Lindsay Erin Hutner hutnerl@gtlaw.com, altamiranot@gtlaw.com, svlitdock@gtlaw.com

Marc Howard Cohen marc.cohen@kirkland.com

Thomas Edward Dutton duttont@gtlaw.com, KelleyJ@gtlaw.com

William J. Goines goinesw@gtlaw.com, baileyme@gtlaw.com, svlitdock@gtlaw.com

Yates McLaughlin French yfrench@kirkland.com

Counsel are responsible for distributing copies of this document to co-counsel who have not 

registered for e-filing under the court’s CM/ECF program.

Case 5:14-cv-03953-BLF Document 166 Filed 04/07/15 Page 5 of 5