1- OPINION & ORDER

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

VESTA CORPORATION,

No. 3:14-cv-001142-HZ

Plaintiff,

OPINION & ORDER

v.

AMDOCS MANAGEMENT 

LIMITED and AMDOCS, INC., 

Defendants.

Stephen English

Erick J. Haynie

Julia E. Markley

PERKINS COIE, LLP 

1120 NW Couch Street, 10th Floor 

Portland, OR 97209

Attorneys for Plaintiff

Robert A. Shlachter

Joshua L. Ross

STOLL STOLL BERNE LOKTING & SHLACHTER P.C.

209 SW Oak Street, Suite 500

Portland, OR 97204
2- OPINION & ORDER

Bruce G. Vanyo

Richard H. Zelichov

Christina L. Costley

KATTEN MUCHIN ROSENMAN LLP

2029 Century Park East, Suite 2600

Los Angeles, CA 90067

Attorneys for Defendants

HERNÁNDEZ, District Judge:

Plaintiff Vesta Corporation brings this Motion for Imposition of Sanctions against 

Defendants Amdocs Management Limited and Amdocs, Inc. Pl.’s Mot. Sanc., ECF 524. Plaintiff 

contends that Defendants “denied and actively concealed evidence” that they targeted Plaintiff’s

customers AT&T and Cricket. Id. at vii. Plaintiff requests the Court sanction Defendants by 

providing additional time for discovery, informing the jury of Defendants’ misconduct, 

instructing the jury that they may consider the alleged misconduct in their deliberations, and 

awarding monetary sanctions. Id. at 17–20. The Court grants Plaintiff’s motion in part. The 

Court will allow Plaintiff additional discovery related to AT&T and Cricket and award monetary 

sanctions. However, the Court declines to award additional sanctions at this time.

BACKGROUND

Plaintiff Vesta, an electronic payments and fraud prevention technology company, has 

sued Defendants Amdocs Management Limited and Amdocs, Inc. (collectively, “Defendants”),

telephone billing software and services companies, for breach of contract and misappropriation

of trade secrets. Fourth Am. Compl. Intro, ECF 405. Specifically, Plaintiff alleges that in the 

course of collaborating on various projects and the attempted acquisitions of Plaintiff by 

Defendants, Plaintiff shared “highly confidential and proprietary information,” which 

Defendants used and relied upon “improperly to create, price and sell a competing product in

order to increase its profits.” Id. As a result of Defendants’ misappropriation and breach of 
3- OPINION & ORDER

contract, Plaintiff alleges it “suffered lost profits and royalties on various accounts, including 

MetroPCS, Sprint and T-Mobile.” Id. at ¶¶ 79, 85, 95, 108.

At various points in this litigation, Plaintiff has sought information pertaining to

Defendants attempts to sell their product to AT&T and Cricket. In September of 2015, Plaintiff 

propounded Interrogatory No. 4, which requested Defendants “state with specificity each 

customer or potential customer that [Defendants] have sold or attempted to sell [their] Payment 

Solution.” Markley Decl. Ex. 12, at 10, ECF 525. After Defendants initially did not respond, the 

Court ordered Defendants to answer Interrogatory 4. Opinion & Order, April 4, 2016, ECF 221. 

Defendants responded almost three weeks later and indicated that they had “sold or provided 

sales proposals concerning its enterprise payment processing (“EPP”) solution to” MetroPCS, 

Sprint, T-Mobile, Comcast, and Cablevision. Markley Decl. Ex. 15, at 8, ECF 526.

In September of 2016, Plaintiff issued Requests for Production 108 and 109, which 

sought documents related to Defendants’ pitch of EPP products to AT&T and Cricket. Pl.’s Mot. 

Sanc. 5 (citing Markley Decl. Ex. 16, ECF 525). Defendants again declined to respond. Id. 

Plaintiff sought the Court’s assistance, but it declined to compel Defendants’ response. Markley 

Decl. Ex. 17, ECF 525 (Hearing, Sept. 15, 2016, at 66:1–17). At that time, Plaintiff could not 

identify for the Court any reason it believed that Defendants had a connection to AT&T or 

Cricket. Id. Plaintiff only stated that it “might have seen something about [Cricket and AT&T] in 

the documents produced on September 13.” Id. In its motion, Plaintiff emphasizes that 

Defendants remained silent during this discussion. Pl.’s Mot. Sanc. 6.

On May 12, 2017, Plaintiff took a 30(b)(6) deposition of Manuel Zepeda on topics related 

to Defendants’ marketing of their payment solution to other companies. Markley Decl. Exs. 18, 

19, ECF 525. During that deposition, Plaintiff asked Mr. Zepeda if he was “aware that 
4- OPINION & ORDER

[Defendants] attempted to market [their payment solution] to AT&T” and if he was “aware of 

any other entity that [Defendants] attempted to market [their] payment solution to besides” 

Sprint, MetroPCS, T-Mobile, Comcast, and Cablevision. Id. at Ex. 19 (Zepeda Dep. 111:3-10). 

To both questions, Mr. Zepeda answered “No.” Id. 

In preparation for the the May 23, 2017, deposition of Defendants’ witness Howard 

Connors, Plaintiff uncovered evidence that suggested Defendants had attempted to sell a 

competing product to AT&T and Cricket. Pl.’s Mot. Sanc. 7 (citing Markley Decl. Ex. 20–21, 

ECF 526). Plaintiff used that evidence at Mr. Connors’s deposition, and he admitted to his 

participation in meetings with Cricket about Defendants’ product and his knowledge of 

Defendants’ efforts to sell its product to AT&T. Markley Decl. Ex. 22, ECF 526 (Connors Dep. 

60:15–63:12; 139:22–140:25; 143:25–144:18). 

In the months that followed, Plaintiff again sought documents related to Defendants’ 

external communications with AT&T and Cricket with the assistance of the Court. Hearing, Aug. 

1, 2017, ECF 455; Order, Sept. 12, 2017, ECF 490. The “Court granted, without limitation, 

Vesta’s request for Amdocs’ pitches and proposals of its EPP product to AT&T and Cricket and, 

relatedly, Amdocs’ communications with AT&T and Cricket about Vesta and processing 

payments.” Order, ECF 490. Defendants appear to have provided some documents pertaining to 

Defendants’ external communications regarding Cricket and AT&T. Pl.’s Mot. Sanc. 8.

On November 3, 2017, Plaintiff emailed Defendants regarding the present motion, and 

the parties conferred on this issue. Zelichov Decl. Ex. 3, ECF 530. Defendants indicated they 

were willing to provide internal correspondence regarding sales pitches to AT&T and Cricket. 

Id. at 3, 5. Plaintiff declined their offer on the grounds that it “still falls short of the discovery 

Vesta seeks” and filed this motion. Id. at 1.
5- OPINION & ORDER

STANDARDS

Rule 26 imposes a duty on counsel to certify “the lawyer has made a reasonable effort to 

assure that the client has provided all information and documents available to him that are 

responsive to the discovery demand.” Fed. R. Civ. P. 26(g), 1983 advisory committee note. Rule 

26 also requires parties to supplement their disclosures, interrogatories, requests for production, 

or requests for admission “in a timely manner if the party learns that in some material respect the 

disclosure or response is incomplete or incorrect and . . . the additional or corrective information 

has not otherwise been made known to the other parties during the discovery process or in 

writing.” Fed. R. Civ. Pro. 26(e)(1)(A). Under Rule 30(b)(6), when an organization is named as a 

deponent, it must “designate one or more officers, directors, or managing agents . . . to testify on 

its behalf.” Fed. R. Civ. Pro. 30(b)(6). These deponents must be adequately prepared to testify 

fully on the information known or available to the organization. Id. (“The persons designated 

must testify about information known or reasonably available to the organization.”).

Federal Rule of Civil Procedure 37 provides sanctions for “failure to make disclosures or 

to cooperate in discovery.” Under Rule 37(c), when a party fails to comply with Rule 26(a) or 

(e) the court “may order payment of . . . reasonable expenses. . . , may inform the jury of the 

party’s failure, and may impose other appropriate sanctions, including any of those orders listed 

in Rule 37(b)(2)(A)(i)-(iv).” Fed. R. Civ. P. 37(c)(1). When a party fails to adequately prepare a 

30(b)(6) deponent, the court may award sanctions under Rule 37(d), which also include 

reasonable expenses and those orders listed in Rule 37(b)(2)(A)(i)-(vi). Fed. R. Civ. P. 37(d)(3);

Pioneer Drive, LLC v. Nissan Diesel Am., Inc., 262 F.R.D. 552, 560–61 (D. Mt. 2009) (finding 

sanctions under Rule 37(d) “are available when an organization fails to produce and prepare a 
6- OPINION & ORDER

knowledgeable witness under Rule 30(b)(6).”). The decision to award sanctions is within the trial 

court’s discretion. Payne v. Exxon Corp., 121 F.3d 503, 507 (9th Cir. 1997).

DISCUSSION

Plaintiff asks the Court to sanction Defendants for failing to disclose their attempts to sell 

their competing product to AT&T and Cricket. Pl.’s Mot. Sanc. 2–3. Plaintiff contends that this 

failure was willful and prejudicial. Id. at 3. Plaintiff requests that the Court (1) permit targeted

discovery without moving the trial date; (2) inform the jury of Defendants’ alleged misconduct;

(3) inform the jury that they may consider the alleged misconduct in determining whether any 

misappropriation of trade secrets was willful; and (4) award monetary sanctions consisting of all 

attorneys’ fees and costs resulting from this misconduct. Id. 17–20. Defendants respond that

sanctions are inappropriate as their omission was both inadvertent and not prejudicial to Plaintiff.

Defs.’ Opp’n, ECF 528.

According to Plaintiff, there are three incidents where Defendants intentionally concealed 

their attempts to sell a competing product to AT&T and Cricket: (1) Defendants’ responses to 

Plaintiff’s Interrogatory No. 4, (2) Defendants’ silence during a hearing on Plaintiff’s Requests 

for Production Nos. 108 and 109, and (3) the 30(b)(6) deposition of Manuel Zepeda. Pl.’s Mot. 

Sanc. 2. However, these incidents do not suggest that Defendants engaged in willful or 

intentional discovery misconduct. Defendants assert that counsel reasonably inquired into the 

response to Interrogatory No. 4 and did not know of these attempts to sell their product to 

Cricket or AT&T when they completed their response. Defs.’ Opp’n Mot. Sanc. 3, 11 (citing 

Zelichov Decl. ¶¶ 2, 3). Defendants state that their employees did not inform counsel of these 

sales attempts either because they had forgotten or did not know about them in the first place. Id.

at 3. The Court is also unpersuaded that Defendants’ silence during an exchange between the 
7- OPINION & ORDER

Court and Plaintiff’s counsel amounts to “[misleading] the Court into denying the motion.” Pl.’s 

Mot. Sanc. 6. Finally, while Defendants’ expert, as a 30(b)(6) deponent, should have answered 

based on institutional knowledge rather than personal knowledge, this incident does not amount 

to the level of affirmative misrepresentation asserted by Plaintiff. 

Further, Defendants disclosed some of this information, albeit in a limited way, prior to 

the end of fact discovery. Defendants produced documents referencing AT&T and Cricket in the 

fall of 2016. Defs.’ Opp’n 4 (citing Zelichov Decl. Exs. 4, 5, 6, 7, 8, 9 (documents produced 

August 11 and 26, 2016, and December 28, 2016)). This undermines Plaintiff’s assertion that

Defendants actively concealed this information from Plaintiff. Howard Connors, an employee of 

Defendants, also discussed AT&T and Cricket at his deposition prior to the end of fact

discovery. Zelichov Decl. Ex. 13 (Connors 30(b)(6) Dep. 62:16–63:12; 139:22–140:25; 142:5–

20; 143:25–144:18). Finally, Defendants recently indicated to Plaintiff their willingness to 

provide additional discovery regarding AT&T and Cricket. Zelichov Decl. ¶ 8, Ex. 3 (emails 

discussing additional discovery requests). The Court therefore declines to grant all of the 

requested sanctions. 

The Court is aware, however, that Plaintiff may be prejudiced by this omission if it is not 

allowed to pursue additional discovery. This information is relevant to Plaintiff’s claims of 

Defendants’ misuse of their confidential information and Plaintiff’s damages. Pl.’s Mot. Sanc. 

11–13. As the case schedule has already been moved to accommodate discovery on Plaintiff’s 

damages theory, Order, ECF 538, the Court grants Plaintiff’s requested additional time to pursue 

discovery regarding AT&T and Cricket. The Court also awards monetary sanctions in an 

amount to be determined at the end of the litigation.

///
8- OPINION & ORDER

CONCLUSION

Plaintiff’s Motion for Imposition of Sanctions [524] is GRANTED in part. Plaintiff will 

be allowed additional time for targeted discovery to be determined at a scheduling conference.

Plaintiff is directed to file its request for the specific amount of monetary sanctions within 14 

days of after the entry of judgment. The Court declines to award additional sanctions at this time.

IT IS SO ORDERED.

 

MARCO A. HERNÁNDEZ

United States District Judge

Dated this _______________ day of February, 2018.