Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_04-cv-02266/USCOURTS-cand-5_04-cv-02266-17/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 15:15 Antitrust Litigation

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

Advanced Microtherm, Inc., et al., 

Plaintiffs,

 v.

Norman Wright Mechanical Equipment

Corporation, et al.,

Defendants. /

NO. C 04-02266 JW 

ORDER GRANTING IN PART AND

DENYING IN PART PLAINTIFFS’

MOTION TO ALLOW EXAMINATION

OF WITNESSES

I. INTRODUCTION

This case arises out of disputes between a number of corporations and individuals over

various large construction projects. Plaintiffs Advanced Microtherm, Inc. ("AMT") and HVAC

Sales, Inc. ("HVAC") (collectively, "Plaintiffs") are California corporations in the business of, inter

alia, obtaining orders for manufacturers of commercial and industrial ventilation systems. 

Defendants are corporations and individuals involved in the construction industry, including: other

businesses that obtain orders for manufacturers of ventilation systems, landowners, construction

engineering firms, construction management firms, architectural firms, and their employees. 

In Recommended Discovery Order Number Fourteen ("RDO14"), the Special Master denied

Plaintiffs' Motion to Allow Examination of Witnesses Under Discovery Order. (hereafter, "Motion,"

Docket Item No. 291.) On March 13, 2007, the Court held a hearing on Plaintiffs' objections. Based

on the arguments of the parties in the papers and at the hearing, the Court GRANTS in part, and

DENIES in part Plaintiffs' Motion.

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II. BACKGROUND

In the interest of brevity, the Court refrains from reciting the entire lengthy factual

background of this case already set forth in the Court's prior orders. (See, e.g., Order Denying

Defendant NSW's Motion to Dismiss Plaintiffs' First, Second, Third, Ninth, Tenth, Eleventh,

Twelfth, and Thirteenth Causes of Action; Granting NSW's Motion to Dismiss Plaintiffs' Fourth

Cause of Action; Denying NSW's Motion for a More Definite Statement; and Denying NSW's

Motion to Strike Certain Portions of Plaintiffs' Complaint, Docket Item No. 28.) The causes of

action in the Third Amended Complaint arise out of Plaintiffs' allegations that Defendants engaged

in a massive anti-competitive scheme involving a large number of products over a large number of

construction projects. In pleading one of many examples of Defendants’ alleged wrongdoing,

Plaintiffs list sixteen products in Table 1 and twenty-one products in Table 2, and allege that

Defendant NSW was able to "control sales and . . . able to dictate pricing of the aforementioned

goods to customers and tie the sale of separate products in 'Table 1' together, as well as, tie the sale

of products identified in 'Table 2' to those identified in 'Table 1.'" (TAC ¶ 50). Plaintiffs allege

unlawful anticompetitive conduct also occurred with respect to the thirty-four "other construction

projects" listed at Table 3 (TAC ¶ 55). 

In April of 2005, the Court notified the parties of its intent to appoint a Special Master with

the authority to resolve discovery disputes and to hear certain pretrial motions. The parties did not

object to the proposed appointment, and the Court appointed a Special Master on May 25, 2005. 

(Docket Item No. 116.)

On March 23, 2006, the Court modified the Special Master's RDO7. Based on the large

number of products and construction projects involved in the case, the Court ordered Plaintiffs to

select five construction projects to be the focus of initial discovery efforts, and tentatively ordered a

separate Rule 42(b) trial with respect to the selected projects. (Order Granting in Part and Denying

in Part Objections to Recommended Discovery Order Number Seven, Docket Item No. 239.) 

Plaintiff s filed their Motion on December 22, 2006. Plaintiffs seek to depose witnesses

regarding anticompetitive practices not directly related to the five selected projects. On January 23,

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2007, the Special Master issued RDO14 denying Plaintiffs' Motion to Allow Examination of

Witnesses Under Discovery Order. Plaintiffs filed objections to RDO14 on February 2, 2007. 

(hereafter, "Objections," Docket Item No. 291.)

III. DISCUSSION

A. Standard of Review

Plaintiffs contend that RDO14 constitutes a "dispositive order" and therefore the Court

should review it de novo. (Objections at 2.)

Generally, discovery orders by the Special Master are non-dispositive and are reviewed by

this Court under a "clearly erroneous" or "abuse of discretion" standard pursuant to Rule 53(g)(5)

and the Court's Order Appointing Special Master. (See Docket Item No. 116.) RDO14 raises

standard discovery issues which do not render it dispositive or "functionally" similar to a dispositive

order. See Victoria's Secret Stores v. Artco Equip. Co., 194 F. Supp. 2d 704, 714 (S.D. Ohio 2002). 

Accordingly, the abuse of discretion standard is appropriate. The Court notes, however, that the

outcome of its analysis below does not depend on the application of this standard. 

B. RDO14

Plaintiffs contend that inability to depose witnesses on subjects unrelated to the five selected

projects prejudices them in the following ways: (1) they will be forced to depose the same witnesses

on multiple occasions; (2) they are unable to preserve testimony on anticompetitive acts outside the

scope of the five projects; (3) they are unable to obtain evidence of Defendants' general business

practices, which are probative of violations within the scope of the five projects. As a remedy,

Plaintiffs propose they be allowed "to conduct deposition examination of Defendants' wrongful acts

outside the scope of the initial five projects..." (Motion at 18-19.)

Plaintiffs' proposed solution is essentially that, in the context of depositions, the Court should

abandon the discovery limitations it imposed in its order of March 23, 2006. Plaintiffs' justifications

for such a course of action are similar or identical to those it has previously raised. The Court finds

the Special Master did not abuse his discretion in denying Plaintiff's motion. At the hearing,

however, Plaintiffs represented that limited questioning outside the context of the current discovery

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plan would facilitate the parties' current mediation efforts and potential settlement. Accordingly, the

Court will modify the current discovery plan as described below. 

IV. CONCLUSION

The Court adopts Recommended Discovery Order Fourteen, and DENIES Plaintiffs' Motion

to Allow Examination of Witnesses Under Discovery Order, except that: 

1) Plaintiffs may designate two (2) witnesses for deposition on topics relevant to the

litigation, without regard for the five project limitation. Each deposition shall be limited to one day

of 7.5 hours. 

2) Defendants retain all rights to discovery on subjects on which testimony is taken at the

depositions of the two designated witnesses, including the right to take separate depositions of the

witnesses at a later date.

3) Disputes regarding the scope of deposition questioning of the two designated witnesses,

as well as the scope of questioning of witnesses testifying regarding the five selected projects, will

be resolved by the Special Master. The Special Master shall also have authority to resolve issues

related to discovery from third parties. 

4) In the event that the testimony of the two designated witnesses or other circumstances in

the case provide good cause, the Special Master may entertain a motion by Plaintiffs to alter the

current discovery plan by substituting a different project for one of the five currently selected. 

Dated: March 20, 2007 

JAMES WARE

United States District Judge

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THIS IS TO CERTIFY THAT COPIES OF THIS ORDER HAVE BEEN DELIVERED TO:

Bruce H. Winkelman bwinkelman@Craig-Winkelman.com

Christopher T. Coco ccoco@provostumphrey.com

David B. Abramowitz dabramowitz@lordbissell.com

Dennis P. Fitzsimons dfitzsimons@bjg.com

Ethan L Shaw elshaw@moorelandrey.com

Flora F Vigo fvigo@omm.com

Gabriel G. Green ggreen@lordbissell.com

Janette George Leonidou jleonidou@alr-law.com

Jeffrey G. Nevin jgnevin@freitaslaw.com

Jesse Thomas Rhodes trhodesiii@aol.com

Jill Battilega Rowe jrowe@cwclaw.com

John Morwick Ross jross@cwclaw.com

John T. Williams jwilliams@lordbissell.com

Kenneth Lawrence Mahaffey kmahaffey@pecklaw.com

Lisa Dritsas Wright lwright@alr-law.com

Maria Giardina 

maria.giardina@sdma.com,

sharon.godske@sdma.com,

diana.knott@sdma.com,

SDMACalendaring@sdma.com

Matthew A. Fischer matthew.fischer@sdma.com

Maureen Ellen McTague mem@severson.com

Merrit Jones mjones@cwclaw.com

Michael Bernard Murphy mbm@severson.com

Michael F. Tubach mtubach@omm.com

Paul Bartlett pbjatp@swbell.net

Paul B. Lahaderne paul.lahaderne@sdma.com

Peter Michael Hart p.hart@wrightrobinson.com

Pruett Moore pmooreiii@sbcglobal.net

Robert A. Goodin rgoodin@gmssr.com

Stephen D. Kaus skaus@cwclaw.com

Steven Ellis Conigliaro sconigliaro@omm.com

Stuart E. Jones sjones@wrightrobinson.com

Thomas C. Tagliarini tagliarinilaw@aol.com

Tommy L Yeates1 tyeates@moorelandrey.com

Wayne T. Lamprey wlamprey@gmssr.com

Zane D Negrych zanenegrych@sbcglobal.net

Dated: March 20, 2007 Richard W. Wieking, Clerk

By: /s/JW Chambers 

Elizabeth Garcia

Courtroom Deputy

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