Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_14-cv-04062/USCOURTS-cand-5_14-cv-04062-26/pdf.json

Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 15:1 Antitrust Litigation

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

ROBERT A. NITSCH, et al.,

Plaintiffs,

v.

DREAMWORKS ANIMATION SKG, INC., 

et al.,

Defendants.

Case No. 5:14-cv-04062 LHK (HRL)

ORDER RE DISCOVERY DISPUTE

JOINT REPORT NO. 1

Re: Dkt. 321

In this consolidated antitrust class action, plaintiffs sue their former employers, claiming

that defendants engaged in a conspiracy to fix and suppress employee compensation and to restrict 

employee mobility. Plaintiffs further allege that defendants fraudulently concealed the conspiracy, 

thereby preventing plaintiffs from timely filing their claims.

At issue in Discovery Dispute Joint Report (DDJR) No. 1: Whether defendants should be 

permitted to conduct discovery of 500 absent class members (approximately 5% of the certified 

class). Defendants also state that they reserve the right to seek discovery from additional class 

members later. The matter is deemed suitable for determination without oral argument. Civ. L.R. 

7-1(b). Upon consideration of the parties’ respective arguments, this court denies defendants’ 

request for discovery.

Ordinarily, discovery of absent class members is not allowed. McPhail v. First Command 

Fin. Planning, Inc., 251 F.R.D. 514, 517 (S.D. Cal. 2008). That is because absent class members

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are not required to do anything, and “‘subject[ing] absent class members to discovery may defeat 

the purpose of certifying the class in the first place.’” Id. (quoting On the House Syndication, Inc. 

v. Federal Express Corp., 203 F.R.D. 452, 456 (S.D. Cal. 2001)). Such discovery is only allowed

where the party seeking it establishes that “(1) the discovery is not designed to take undue 

advantage of class members or to reduce the size of the class, (2) the discovery is necessary, 

(3) responding to the discovery requests would not require the assistance of counsel, and (4) the 

discovery seeks information that is not already known by the proponent.” Id. (citing Clark v. 

Universal Builders, Inc., 501 F.2d 324, 340-42 (7th Cir.1974); see also Holman v. Experian 

Information Solutions, Inc., No. C11-00180 CW (DMR), 2012 WL 2568202, at *3 (N.D. Cal., 

July 2, 2012) (same).

Here, defendants propose to serve 4 document requests and 11 interrogatories1to elicit

information about whether and when absent class members had actual or constructive knowledge

of the alleged conspiracy and whether they acted diligently in trying to uncover the facts giving 

rise to their claims---i.e. elements of plaintiffs’ fraudulent concealment claim. Defendants argue 

that this discovery is necessary to “fully litigate” their statute of limitations defense. Additionally, 

they contend that the proposed requests are short and simple and seek information largely 

available only in the files and minds of class members.

Defendants’ stated purpose in seeking this discovery is to find evidence to establish their 

defense. The practical effect, however, would be to reduce the size of the class by ferreting out 

and eliminating individual claims. As noted above, defendants propose to start with discovery on 

500 members, and reserve the right to seek discovery of even more members later. While 

defendants say that they do not (and could not) possess the requested information, some of the 

proposed requests focus on defendants’ alleged misleading actions, i.e., matters that do not strike 

this court as dependent upon proof from absent class members. Moreover, it appears that the 

requested information may also be available from other sources. Defendants acknowledge that 

 

1 Defendants apparently intended to, but did not, append a copy of their proposed discovery 

requests to DDJR No. 1. Nevertheless, a copy of the requests apparently was previously posted to 

another motion, at Dkt. 306-1.

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United States District Court

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they have some email communications and say that they have obtained other evidence through 

discovery from class representatives. Additionally, this court is told that defendants have 

subpoenaed class members’ unions for the same information. Finally, this court is unpersuaded 

that the responding to the proposed discovery, including the preparation of privilege logs, would 

not require the assistance of counsel. See, e.g., McPhail, 251 F.R.D. at 518 (noting that, in order 

to properly respond to the proposed discovery, each absent class member “would need to confer 

with Class Counsel to understand the purpose of the request, the penalty for not filing a response, 

the need to discuss all relevant information, the need to refresh their recollection with 

documentation, the need to understand the context of the request in light of the allegations of the 

complaint and the reason the Defendants are making the request.”).

Defendants’ citation to Town of New Castle v. Yonkers Contracting Co., Inc., No. 88 Civ. 

2952 (CES), 1991 WL 159848 (S.D.N.Y., Aug. 13 1991) and Transamerica Refining Corp. v. 

Dravo Corp., 139 F.R.D. 619 (S.D. Tex. 1991) do not persuade this court to the contrary. In Town 

of New Castle, discovery was allowed, in part, because of the finite size of the class (around 20 

members) and because the court found that defendants would be unable to disprove the fraudulent 

concealment claim without the requested discovery. 1991 WL 159848 at *2. For the reasons 

discussed above, defendants have not demonstrated that is the case here. In Transamerica 

Refining Corp., discovery was permitted because the court concluded that the requested 

information was known only to absent class members and was necessary to the determination of 

common questions. 139 F.R.D. at 621-22. Here, defendants have not convincingly explained how 

evidence that might bar individual claims may be imputed to the class as a whole.

Defendants argue that precluding this discovery from absent class members will violate the 

Rules Enabling Act, which provides that rules of procedure and evidence “shall not abridge, 

enlarge or modify any substantive right.” 28 U.S.C. § 2072(b). However, in her certification 

order, Judge Koh concluded that individual issues concerning defendants’ statute of limitations 

defense may be reserved for individual treatment, similar to procedures used for individualized 

damages inquiries. See, e.g., Vaquero v. Ashley Furniture Indus., Inc., 824 F.3d 1150, 1156 (9th 

Cir. 2016) (“The district court has discretion to shape the proceedings. With a class of only about 

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600 members, the court could choose an option such as the use of individual claim forms or the 

appointment of a special master, which plainly would allow Defendants to raise any defenses they 

may have to individual claims.”); Arthur Young & Co. v. U.S. Dist. Ct., 549 F.2d 686, 696 (9th 

Cir. 1977) (finding no error in the decision to separate issues relevant to certain defenses for 

individual adjudication at the close of the class trial); McPhail, 251 F.R.D. at 519 (concluding that 

“inquiry into individual issues can take place during a second phase of trial or during the claims 

administration process”); On the House Syndication, Inc., 203 F.R.D. at 458 (stating that “the 

most appropriate time to gather any necessary information from individual class members is 

generally after a determination of liability and before payment of individual claims.”).

Based on the foregoing, defendants’ request for discovery from absent class members is 

denied.

SO ORDERED.

Dated: October 14, 2016

______________________________________

HOWARD R. LLOYD

UNITED STATES MAGISTRATE JUDGE

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