Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_13-cv-03384/USCOURTS-cand-5_13-cv-03384-4/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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Case No. 5:13-cv-03384-PSG

ORDER RE: MOTION FOR DEFAULT JUDGMENT, MOTION TO COMPEL AND MOTION 

FOR ATTORNEY’S FEES 

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United States District Court 

For the Northern District of California 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 

VENTURE CORPORATION LTD., et al.,

 Plaintiffs and 

Counterdefendants, 

 v. 

JAMES P. BARRETT, 

 Defendant and 

Counterclaimant. 

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Case No. 5:13-cv-03384-PSG

ORDER RE: MOTION FOR 

DEFAULT JUDGMENT, MOTION TO 

COMPEL AND MOTION FOR 

ATTORNEY’S FEES 

(Re: Docket Nos. 111, 119, 120)

 

The deposition of patent attorney Craig Stainbrook, specially occurring after the close of 

discovery, has inspired a flurry of motions. Defendant and Counterclaimant James Barrett moves 

for default judgment1

 and Plaintiff and Counterdefendants Venture Corporation Ltd., et al., move 

to compel and for attorney’s fees.2

 Barrett alleges that documents produced in the deposition 

revealed the Ventures’ failure to produce relevant contracts between the Ventures and third-party 

Agilent Technologies. Barrett says this failure violated this court’s discovery order of October 16, 

2014. For this transgression, Barrett requests default judgment and fees and costs, or alternatively 

 

1 See Docket No. 111. 

2 See Docket Nos. 119, 120. Stainbrook joins in both motions. 

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Case No. 5:13-cv-03384-PSG

ORDER RE: MOTION FOR DEFAULT JUDGMENT, MOTION TO COMPEL AND MOTION 

FOR ATTORNEY’S FEES 

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further discovery and another opportunity for summary judgment. The Ventures in turn allege that 

although Stainbrook waived privilege as to “prosecution of the patents and patent application at 

issue,”3 Stainbrook inadvertently disclosed to Barrett privileged documents that fall outside of that 

waiver. The Ventures say they timely requested that Barrett return or destroy those documents 

pursuant to Fed. R. Civ. P. 26(b)(5), but Barrett refused. The Ventures request that Barrett return 

or destroy the documents and any derivative materials.4 They separately move for $5,000 in 

attorney’s fees.5

 The court GRANTS-IN-PART Barrett’s motion and GRANTS the Ventures’ motion to 

compel. Barrett is entitled to the contracts and a further deposition on the subject of those 

contracts. Default judgment and a second motion for summary judgment, however, are not 

warranted. For his part, Barrett shall destroy or return the communications and drafts that the 

Ventures requested. The court DENIES all parties any fees or costs. 

I. 

 Fed. R. Civ. P. 37(b)(2)(A) provides remedies for violations of discovery orders, including 

“rendering a default judgment against the disobedient party.”6

 “A court must consider the 

following five factors before declaring default: (1) the public’s interest in expeditious resolution of 

litigation; (2) the court’s need to manage its docket; (3) the risk of prejudice to the other party; (4) 

the public policy favoring the disposition of cases on their merits; and (5) the availability of less 

drastic sanctions.”7

 

3

 Docket No. 109 at ¶ 8. 

4 See Docket No. 119 at 7. 

5 See Docket No. 120. 

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 Fed. R. Civ. P. 37(b)(2)(A)(vi); see also Hester v. Vision Airlines, Inc., 687 F.3d 1162, 1169 (9th 

Cir. 2012). 

7 Hester, 687 F.3d at 1169. 

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Case No. 5:13-cv-03384-PSG

ORDER RE: MOTION FOR DEFAULT JUDGMENT, MOTION TO COMPEL AND MOTION 

FOR ATTORNEY’S FEES 

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Barrett requests default judgment that (1) both Ventures “waived” assignment of VDSI’s 

invention agreement clause and are estopped from asserting that the VDSI invention agreement is 

the basis for the assignment of Barrett’s inventions to the Ventures; and (2) the assignments of 

Barrett’s invention rights to VCL were transferred for the consideration of the joint venture, 

because VCL needed to purchase the inventions to avoid Agilent.8

 Barrett further requests that the 

Ventures pay all of Barrett’s accrued attorney’s fees and costs until the date of the disclosure and 

that the Ventures produce all Agilent contracts.9 At the very least, Barrett says he should be able to 

conduct one more deposition on the contracts, and file a second motion for summary judgment.10 

As explained below, the court agrees with Barrett that relief is warranted, but only up to a point. 

As an initial matter, Barrett fails to establish that the Ventures violated a court order as Rule 

37 requires. Barrett points to this court’s October 14 order, but that order deals with the 

organization and form of the Ventures’ production, not any specific failure by the Ventures to 

produce the disputed contracts.11 Even if that order did address the contracts now at issue, Barrett 

has not established that default is the appropriate remedy. 

First, the public’s interest in speedy resolution might normally favor Barrett, but in this 

case, trial is less than a month away. The case has been active for nearly two years. A default 

judgment would not materially expedite resolution. 

Second, the court’s need to manage its docket is not a significant factor. While any hiccup 

in the lead-up to trial creates burdens on the court’s docket, the court is fully capable of managing a 

trial in this case in the coming weeks. 

 

8 See Docket No. 111 at 9-10. 

9 See id. 

10 See Docket No. 168. 

11 See Docket No. 62. 

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Case No. 5:13-cv-03384-PSG

ORDER RE: MOTION FOR DEFAULT JUDGMENT, MOTION TO COMPEL AND MOTION 

FOR ATTORNEY’S FEES 

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Third, the risk of prejudice to the Ventures from default is substantial. Barrett claims great 

prejudice has occurred against him, because discovery and the court’s summary judgment order did 

not address the effects of these contracts.12 But great prejudice also would occur against the 

Ventures were the court to grant default judgment and deny them of their right to trial, especially 

where Barrett himself pleaded that the Agilent contracts were not related to this action.13

Fourth, public policy favors a disposition of this case on its merits. Barrett argues the trial 

would not be on the merits if default judgment is not granted, because Barrett did not have access 

to the contracts until discovery was closed and summary judgment denied.14 But limited additional 

discovery can mitigate that risk. Barrett’s proposed default would guarantee it. 

Finally, less drastic sanctions are available. No later than May 5, 2015, the Ventures shall 

produce to Barrett all contracts with Agilent involving Barrett’s work group. No later than May 8, 

2015, the Ventures shall make available a Rule 30(b)(6) deponent on the subject of these contracts. 

No other relief is warranted. 

II. 

Fed. R. Civ. P. 26(b)(5) requires any party notified of the inadvertent production of 

privileged information to “promptly return, sequester, or destroy the specified information and any 

copies it has” and precludes that party from “us[ing] or disclos[ing] the information until the 

 

12 See Docket No. 111 at 10. 

13 See Docket No. 135 at 2; Docket No. 38 at ¶¶ 1.15, 1.16, 1.20, 1.22 (“1.15 James Barrett was 

absorbed from Agilent in the VDSI collaboration, and remained as VDSI’s project manager in 

developing one specific Agilent technology, a telecommunication [sic] company wireless network 

optimization tool. 1.16. VDSI employed Barrett to perform the same project management of 

Agilent’s communications [technology], but now as a project manager for VDSI. 1.22. In early 

2005, Agilent cancelled its contract with VDSI for the Unattended Drive Test project that VDSI 

has been formed to perform. No other projects were on VDSI’s horizon. . . . 1.20. The 

[MineTracer/Refuge Life Support] invention[s] had no relationship at the time of [its] conception 

or reduction to practice to Agilent’s wireless network optimization tool for telecommunications 

companies, or to any anticipated research or development in that area.”). 

14 See Docket No. 168. 

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ORDER RE: MOTION FOR DEFAULT JUDGMENT, MOTION TO COMPEL AND MOTION 

FOR ATTORNEY’S FEES 

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[privilege] claim has been resolved.”15 Fed. R. Evid. 502(d) provides that “[a] federal court may 

order that the privilege or protection is not waived by disclosure connected with the litigation 

pending before the court—in which even the disclosure is also not a waiver in any other federal or 

state proceeding.”16 Such an order allows the clawing back of an inadvertent production of 

privileged material without any risk of waiver even where the producing party has not conducted 

any privilege review.17 

The parties’ protective order incorporates Rule 502(d) and broadens Rule 26(b)(5)’s 

requirement. In this case, any recipient of documents “shall not challenge the propriety of the 

privilege or protection claimed on the grounds that the privilege or protection was waived by 

production of the documents.”18 The protective order further states that “no use shall be made of 

such documents during deposition” before the recipient challenges the propriety of the privilege 

claim on some basis other than the production of the document.19 If the receiving party fails to 

seek or secure determination of the propriety of the privilege, then the recipient must return the 

privileged documents and also “confirm in writing that any analyses, memoranda or notes which 

were internally generated based upon such inadvertently produced information have been 

destroyed.”20

Barrett might be right that the stipulated privilege waiver as to Stainbrook, Stainbrook’s 

role as attorney to both Barrett and the Ventures and the Ventures’ delay in claiming privilege have 

 

15 Fed. R. Civ. P. 26(b)(5). 

16 Fed. R. Evid. 502(d) 

17 See Zubulake v. UBS Warburg LLC, 216 F.R.D. 280, 290 (S.D.N.Y. 2003); accord comments to 

FRE 502(d) (citing Zubulake). 

18 Docket No. 37 at ¶ 12.3. 

19 Id. 

20 Id. 

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Case No. 5:13-cv-03384-PSG

ORDER RE: MOTION FOR DEFAULT JUDGMENT, MOTION TO COMPEL AND MOTION 

FOR ATTORNEY’S FEES 

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all rendered Barrett’s obligations unclear. But the protective order together with the federal rules 

are clear: without any further delay, Barrett must return or destroy the documents at issue and any 

materials derived from them. Given the ambiguity of the parties’ stipulation and waiver, however, 

no fees on this issue are warranted. 

SO ORDERED.

Dated: April 29, 2015 

 _________________________________ 

 PAUL S. GREWAL 

 United States Magistrate Judge 

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