Filed 8/27/14 Vasquez v. Cal. School of Culinary Arts CA2/2 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO

DANIEL VASQUEZ et al.,
Plaintiffs and Respondents,

v.

CALIFORNIA SCHOOL OF CULINARY ARTS, INC., et al.,
Defendants;
SALLIE MAE, INC.,
Real Party in Interest and Appellant. No. B250600
(Los Angeles County Super. Ct. BC393129)

APPEAL from an order of the Superior Court of Los Angeles County. Jane L. Johnson, Judge. Affirmed.

Stroock & Stroock & Lavan, Lisa M. Simonetti, Joa nn M. Nguyen and Wesley M. Griffith for Real Party in Interest and Appellant.

Gallo LLP, Ray E. Gallo and Dominic R. Valerian; Kirtland & Packard, Michael Louis Kelly, Behram V. Parekh and Joshua A. Fields for Plaintiffs and Respondents.

No appearance for Defendants.2 Real party in interest and appellant Sallie Mae, Inc. (Sallie Mae) appeals from an order awarding plaintiffs and respondents Daniel Vasquez, et al. (collectively, plaintiffs) $11,487 in attorney fe es and costs incurred after plain tiffs successfully opposed Sallie Mae’s motion to quash a busin ess records subpoena seeking electronically stored information pertaining to student loans made to them by Sallie Mae. We affirm the trial
court’s order.
BACKGROUND The parties Plaintiffs are 1,034 former students w ho enrolled in a culinary school owned and/or operated by defendants California Sc hool of Culinary Arts, Inc. and Career Education Corporation. In their amended cons olidated complaint, pl aintiffs allege that
defendants defrauded them into enro lling in culinary school by numerous misrepresentations about grad uation rates, employment pros pects after graduation, and anticipated income levels. Pl aintiffs asserted claims for fraud, breach of contract, and violations of the Unfair Competition Law, Consumer Legal Remedies Act, and the Private Postsecondary and Vocat ional Education Reform Act.
Sallie Mae services student loans obtai ned by some of the plaintiffs for the purpose of attending defe ndants’ culinary program. 1 The business records subpoenas Plaintiffs issued a business records subp oena to Sallie Mae on July 25, 2012 (the first subpoena) seeking production of their loan files. Sallie M ae responded with an August 13, 2012 letter offering to comply with the first subpoena if plaintiffs agreed to pay Sallie Mae’s processing fe es, including, as au thorized by Evidence Code section 1563, subdivision (b), $.10 per page for photocopies and $24 per hour for clerical time. The letter explained that the average borrowe r file consists of approximately 300 pages and requires between two and three hours of clerical time to process and that some borrowers may have multiple lo ans and multiple loan files. Obtaining the requested

1 Sallie Mae previously was a defendant in this action but was dismissed on November 22, 2011.3 documents could th us have cost the 800 plaintiffs with Sallie Mae lo ans more than $60,000. Because the cost of obtaining hard copi es of their loan files was prohibitive, plaintiffs revised their document request by serving a second subpoena on September 28, 2012 (the second subpoena). The second subpoena sought electronically stored information consisting of 44 specific data fi elds on student loans for 786 plaintiffs and requested that the information be produced “on digital data disk(s) in a reasonably usable form, i.e., in a format that is electronically searchable and sortable.” The second subpoena also requested a cost estimate for complying with the su bpoena before Sallie Mae produced the electronica lly stored information. Upon Sallie Mae’s receipt of the second subpoena, counsel e ngaged in an email exchange in which plaintiffs repeatedly asked Sallie Mae for a revised cost estimate for producing the requested electronically stored information. Sallie Mae’s counsel initially refused to comply with the subpoena, stating that “Sa llie Mae has no obligation to do research on the loans . . . and to prepare a spreadsheet.” Sallie Mae’s counsel also expressed doubt that plaintiff’s revised request “would significantly reduce the cost, given the research involved.” Plaintiffs’ c ounsel explained that the second subpoena was “not a request for research, but a request for data Sallie Mae maintains in its database.” Sallie Mae’s counsel refused to provide a cost estimate and referred pl aintiff’s counsel to
the “cost statute.” Salle Mae then filed a motion to quash the business records subpoena on October 22, 2012. Motion to quash In its motion to quash, Sallie Mae argue d that the business records subpoena was improper because it sought information that was irrelevant and unrelated to the underlying lawsuit; it sought in formation that plaintiffs already had; it improperly imposed on Sallie Mae an affirmative duty to do something other th an produce existing documents and records; and it shifted the cost and burden of plain tiffs’ litigation efforts to Sallie Mae. Sallie Mae also filed obj ections to the busine ss records subpoena on various grounds, including th at it was unduly burdensome, that the information sought4 was not relevant or was already in plain tiffs’ possession, and was outside the proper scope of discovery, in that it would requir e Sallie Mae to perform research, implement information technology programming, and create a spreadsheet. Plaintiffs opposed the motion to quash, arguing that the requested information was relevant to their action against defendants and that they did not have that information. Plaintiffs further argued that they were en titled, under Code of Ci vil Procedure section 1985.8, 2 to require Sallie Mae to produce the re quested electronically stored information on digital data disks in a format that is electr onically searchable and sortable. Plaintiffs acknowledged their obligation to pay the re asonable costs Sallie Mae would incur in complying with the seco nd subpoena, but argued that they were not required to pay for the cost of producing paper r ecords they were not seeking. Plaintiffs claimed Sallie Mae lacked substantial justification for its motion to quash and asked the trial court to award them reasonable attorney fees and expenses in curred in opposing the motion. In reply to plaintiffs’ opposition, Sallie Ma e continued to argue that th e subpoena improperly sought
to have Sallie Mae undertake elect ronic data research for free.
The trial court denied Sallie Mae’s moti on to quash, finding that the information sought by plaintiffs was re levant and not already in their possession. The court concluded that Sallie Mae was obligated, und er section 1985.8, subdivision (b), to provide the requested informati on in accordance with plaintiffs ’ specifications. The trial court further found that Sallie Mae’s objectio ns to the subpoena, including the objection that plaintiffs were seeking to avoid paying the reasonable cost of complying with the subpoena, to be without merit. The trial court stated that “Although the court cannot
conclude that the motion was made in bad faith, many of the objections appear to be without substantial justification, particularly in view of th e fact that Sallie Mae, Inc. continues to make arguments (such as costs) which Plaintiffs have already agreed to pay.” The trial court ordered plaintiffs a nd Sallie Mae to meet and confer regarding

2 All further statutory references are to the Code of Civil Procedure, unless otherwise stated.5 compliance with the subpoena and scheduled a further hearing on plaintiffs’ request for attorney fees. Request for attorney fees Plaintiffs and Sallie Mae submitted a join t status report in connection with the hearing on plaintiffs’ request for attorney fees. Plaintiffs reported that Sallie Mae had estimated the cost of comply ing with the business record s subpoena at $18,848 and had provided a declaration explaini ng its estimate. Plaintiffs st ated they were willing to pay Sallie Mae’s estimated price subject to a cr edit of $11,487 for the costs incurred in opposing Sallie Mae’s motion to quash. Plaintiffs furthe r stated they had requested ownership of the computer co de Sallie Mae would write in order to comply with the subpoena to avoid incurring the same programming costs for future productions.
Sallie Mae stated that co mplying with the subpoena would require a complex computer programming and data extraction project that would cost $18,848. The cost estimate, and programming and data extracti on tasks necessary to comply with the subpoena were explaine d in detail in a declaration by Sallie Mae’s senior director of systems development. Sallie Mae further stated that it had rejected plaintiffs’ proposal that they own any computer code Sallie Ma e creates in order to comply with the subpoena. Sallie Mae urged th e court to deny plaintiffs’ request for attorney fees, arguing that plaintiffs contin ued to “unreasonably resist the costs associated with compliance.” Following a May 28, 2013 hearing, the tr ial court granted plaintiffs’ request for $11,487 in attorney fees, finding that Sallie Mae’s mo tion to quash was without substantial justification for the reasons stated in the court’s previo us ruling denying the motion to quash. This appeal followed. Du ring pendency of the appeal , plaintiffs filed a motion
under section 907 and California Rules of Court, rule 8.276(a), seeking $25,245 in sanctions against Sallie Mae and its attorney, Lisa Simonetti, jointly and severally, for filing a frivolous appeal.6 DISCUSSION
I. Standard of review Section 1987.2, subdivision (a ), provides that a trial court may in its discretion award reasonable attorney fees and expenses incurred in ma king or opposing a motion to quash “if the court finds the motion was made or opposed in bad faith or without substantial justification.” “Sub stantial justification” means “t hat a justification is clearly
reasonable because it is we ll grounded in both law and fact. [Citations.]” ( Doe v. United States Swimming, Inc. (2011) 200 Cal.App.4th 1424, 1434 .) We review the trial court’s ruling on the discovery sancti on imposed here under the abus e of discretion standard. ( Id. at p. 1435.) II. Propriety of attorney fee award
Sallie Mae contends there was substantia l justification for its motion to quash because plaintiffs’ right to discovery was lim ited to the production of existing records
and information and Sallie Mae was not re quired to undertake extensive computer programming in order to create a spreadsheet that did not al ready exist. Although Sallie Mae does not appeal the denial of its motion to quash, its appeal of the trial court’s sanctions order challenges one of the bases fo r the trial court’s ruling on that motion -- that plaintiffs’ subpoena sought informati on within the scope of permissible discovery
under section 1985.8. As we discuss, the trial court did not err by concluding that Sallie Mae lacked substantial legal and factual justif ication for its refusal to comply with the subpoena.
A. Section 1985.8 The Electronic Discovery Act, effective J une 29, 2009, added to the Code of Civil Procedure provisions regarding discovery of electronically st ored information, including section 1985.8. (Assem. Bill No. 5 (2009-20 10 Reg. Sess.) § 2.) The Act was amended in 2012 to expand the provisions regarding electronic discovery and, among other things, set forth procedures for objecting to the sp ecified form or forms of producing the electronically stored information requested by the subpoena. (S en. Bill No. 1574 (2011- 2012 Reg. Sess.) § 4.) Those amendments became effective on January 1, 2013. ( Ibid. )7 We apply the provisions of section 1985. 8 in effect at the time Sallie Mae was served with the second subpoena, before th e effective date of the 2012 amendments. Those provisions require d non-parties such as Sallie Mae to produce electronically stored information, notwithstanding Sallie Mae’s assertion to the contrary. Section 1985.8, subdi vision (a)(1) states: “A subpo ena in a civil proceeding may require that electronically stored inform ation, as defined in Section 2016.020, 3 be produced and that the party serving the su bpoena, or someone acting on the party’s request, be permitted to inspect, copy, test, or sample the information.” The statute allows the party serving the subpo ena to “specify the form or forms in which each type of
information is to be produced.” (§ 1985.8
, subd. (b).) It further provides that “[i]f necessary, the subpoenaed person , at the reasonable expense of the subpoenaing party, shall, through detection devices, transl ate any data compilations, included in the subpoena into a reasonab ly usable form.” ( Id. , subd. (g).) 4
Section 1985.8 allows the subpoenaed person to oppose production of electronically stored information “on the basis that the information is from a source that is not reasonably accessible becau se of undue burden or expense.” (§ 1985.8, subd. (d).) 5 The subpoenaed person bear s the burden of establishi ng such inaccessibility. ( Ibid. ) Even if the subpoenaed person establishes that the electronically stored information is not reasonably accessible because of undue burden or expense, the court may order its production if the court finds good cause for doing so. ( Id ., subd. (f)). 6 In such cases, the court may limit the discovery or impose cond itions, including “allocation of the expense of discovery.” ( Ibid .)

3 Section 2016.020, subdivis ion (e) states: “‘Electronically stored information’ means information that is stor ed in an electronic medium.”

4 The 2013 amendments renumbered this section as subdivision (h).

5 The 2013 amendments renumbered this section as subdivision (e).

6 The 2013 amendments renumbere d this section as subdivision (g).8 Subdivision (k) of section 1985.8 states that “An order of the court requiring compliance with a subpoena i ssued under this section sh all protect a person who is neither a party nor a party’s officer from undue burden or expense resulting from compliance.” (§1 985.8, subd. (k).) 7 Section 1985.8 authorized plaintiffs to request electronically stored information and to “specify the form or fo rms in which each type of inform ation is to be produced.” (§ 1985.8, subd. (b).) The statute required Sallie Mae to “translate any data compilations included in the subpoena into a reasonably usable form.” (Former § 1985.8, subd. (g).) The subpoena sought informati on within the permissible scope of discovery under section
1985.8.
B. Federal case law The motion to quash was premised on th e ground that the subpoena was improper because it required Sallie Mae to do more than produce records as they already exist and
that Sallie Mae could not be co mpelled to perform research, or to compile data through a programming effort in orde r to create a spreadsheet. There is little California case law regard ing discovery of electronically stored
information under section 19 85.8. We look, therefore, to federal case law on the discovery of electronically stored informati on under the Federal Rules of Civil Procedure for guidance on the subject. “‘Because of the similarity of California and federal discovery law, federal decisions have histor ically been considered persuasive absent contrary California decisions.’ [Citation.]” ( Ellis v. Toshiba America Information Systems, Inc. (2013) 218 Cal.App.4th 853, 8 62, fn. 6, quoting Liberty Mutual Ins. Co. v. Superior Court (1992) 10 Cal.App.4th 1282, 1288.)
Federal decisions hold that a court will not automatically assume that compliance with a subpoena is unduly burdensome because it requests the production of electronically stored information. ( Zubulake v. UBS Warburg LLC (S.D.N.Y. 2003) 217 F.R.D 309, 318.) Federal cour ts have also held that a su bpoenaed person may not object

7 The 2013 amendments renumbere d this section as subdivision (l).9 to the production of relevant nonprivilege d electronically stored information on the ground that such information can be produced in paper form if the requesting party has specified production in an electronic format. (See Rowe Entertainment, Inc. v. William Morris Agency, Inc. (S.D.N.Y. 2002) 205 F.R.D. 421, 428; Playboy Enterprises v. Welles (S.D.Cal. 1999) 60 F. Supp.2d 1050, 1053.) Sallie Mae’s argument that it cannot be compelled “to do anything other than to produc e records as they already exist” is legally unpersuasive. That the request ed documents exist in paper form does not excuse Sallie Mae’s obligation under section 1985.8 to produce them in an electronic format and in a reasonably usable form. Under federal law, a nonparty cannot av oid complying with a subpoena seeking electronically stored information on the ground that it must create new code to format and
extract that inform ation from its existing systems. In Gonzales v. Google, Inc. (N.D.Cal. 2006) 234 F.R.D 674 ( Gonzales ), nonparty Google , Inc. challenged a subpoena by the United States Attorney General to comp ile and produce information from Google’s search index and to produce a significant number of search queries entered by Google users. The requested information was sou ght in connection with litigation between the
American Civil Liberties Union and the Attorney General challenging the constitutionality of the federal Ch ild Online Protection Act. ( Id. at p. 678.) Google argued that compliance with the subpoena imposed an undue burde n because it did not maintain search query information in the ordinary cour se of business in the format requested by the government. ( Id. at p. 683.) After acknowledging that “[a]s a general rule, non-parties are not required to create doc uments that do not exist, simply for the purposes of discovery,” the court in Gonzales noted: “[G]oogle has not represented that it is unable to extract the information requ ested from its existing systems. Google
contends that it must create new code to format and extract query and URL data from many computer banks, in total requiring up to eight full time days of engineering time. Because the Government has ag reed to compensate Google for the reasonable costs of production, and given the extremely scaled-dow n scope of the subpoena as modified, the10 Court does not find that the technical burden of production excuses Google from complying with the subpoena.” ( Ibid. ) Here, as in Gonzales , Sallie Mae never stated that it was unable to extract the requested information from its existing databa se. Although plaintiffs repeatedly asked Sallie Mae for a cost estimate for extracting and producing the reques ted information and acknowledged their obligation to pay for the “reasonable costs” of production, Sallie Mae refused to provide a cost estimate until after its motion to qu ash had been denied. The cases cited by Sallie Mae in su pport of its position, many of them nonpublished federal decisions, are distinguishable. Clausnitzer v. Federal Express Corp. (N.D.Ga. 2007) 2007 U. S. Dist. LEXIS 61699, Butler v. Portland General Electric
Co. (D.Or. 1990) 1990 U.S. Dist. LEXIS 1407, and Paramount Pictures Corp. v. ReplayTV (C.D.Cal. 2002) 2002 U.S. Dist. LEXIS 2 7800, each involved requests for data or information that the subpoenaed person di d not already maintain. In the instant case,
Sallie Mae did not contend that it did not ma intain the requested information in its database. It simply argued that it should not be required to extract that information and produce it in the form requested by plaintiffs. Ulrich v. Ethyl Gasoline Corp. (W.D.Ky. 1942) 2 F.R.D. 357, on which Sallie Mae also relies, is not only distinguishable from the instant case, it supports plaintiffs’ position. In Ulrich , the defendant objected to a subpoe na on the ground that it required
the defendant to extract and compile information from ex isting documents, “a very laborious undertaking with consid erable expense attached.” ( Id. at p. 359.) The court in
Ulrich required the defendant to do so, provided th e plaintiffs paid for the reasonable cost of complying with the subpoena. ( Id. at p. 360.) In this case, plaintiffs did not seek to have Sallie Mae extract and compile informati on contained in the pa per copies of their loan documents -- a labor intensive and expens ive process -- but to extract electronically
stored information from an exis ting database. Plaintiffs ne ver expressed an unwillingness to pay for the reasonable cost of doing so, bu t rather repeatedly asked Sallie Mae for a
cost estimate. Sallie Mae refu sed not only to comp ly with the subpoen a, but to provide11 the requested cost estimate. The trial cour t did not err by concluding that Sallie Mae’s refusal to comply w ith the subpoena lacked subs tantial legal justification. C. No factual justification Substantial evidence supports the trial c ourt’s finding that Sallie Mae’s objection that plaintiffs sought to a void paying the reasonable cost of the programming and data compilation effort necessary to comply with the subpoena was without merit. The record shows that plaintiffs acknowledged their obl igation to pay for the reasonable costs of production. They repeatedly asked Sallie M ae for a cost estimate. Sallie Mae ignored these requests and did not provide a cost estimate until its motion to quash had been denied and plaintiffs’ request for attorney fees was being heard. The trial court did not err by concluding that Sallie Mae la cked substantial factual justification for refusing to comply with the second subpoena. The order awarding plaintiffs the attorney fees they incurred in opposing th e motion to quash was not an
abuse of discretion.
DISPOSITION The order awarding plaintiffs their atto rney fees and expenses is affirmed.
Plaintiffs’ motion for sanctions is denied. Plaintiffs are awarded their costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

_______ _______________ ______, J. CHAVEZ We concur:

________________ __________, Acting P. J. ASHMANN-GERST

___________________ _______, J.* FERNS

___________________ __________________ __________________ _________________ * Judge of the Los Angeles Superior Court, assigned by the Chie f Justice pursuant to article VI, section 6 of the California Constitution.