Case Name: Peter Ogtanyan v. Google, Inc.
Case No.: 2014-1-CV-259301

This action arises from a contractual dispute related to the Google Adsense Content Program (“Adsense”) operated by defendant Google, Inc. (“Defendant”). Plaintiff Peter Ogtanyan (“Plaintiff”) filed the operative First Amended Complaint (“FAC”) on January 15, 2016, asserting causes of action against Defendant for (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, (3) violation of Business and Professions Code section 17200, et seq., and (4) declaratory relief. To support his claims, Plaintiff alleges the following: Adsense enables websites to earn revenue from Defendant each time an Internet user clicks on an advertisement. (FAC, ¶ 10.) Defendant drafts all contracts and policies that govern its relationship with Adsense participants, including the terms of service that allow it to terminate accounts and refuse to pay for activity that it deems “invalid.” (Id., ¶¶ 11-13.) Plaintiff entered into an agreement (“the Contract”) with Defendant to publish Adsense advertisements on www.pubshare.com (“Pubshare”). (Id., ¶¶ 1 & 17-19.) Pubshare displayed Adsense advertisements in compliance with the Defendant’s policies and generated a substantial number of user clicks from September to November 2013. (Id., ¶¶ 1, 18-22, & 25.) Furthermore, Pubshare displayed Adshare advertisements in the same manner as other popular websites such as about.com, chacha.com, dictionary.com, and answers.com that Defendant continued to pay and did not terminate from Adsense. (Id., ¶¶ 24-26.) In November 2013, Defendant owed Plaintiff nearly $1 million under the Contract. (Id., ¶ 2.) Instead of paying, Defendant terminated Plaintiff’s Adsense account, ostensibly because Pubshare violated the generally applicable terms and conditions. (Id., ¶¶ 2 & 29-30.) Defendant summarily rejected Plaintiff’s internal appeal, refused to reinstate his account, and refused to pay for the Adshare activity on Pubshare from September to November 2013. (Id., ¶¶ 2 & 31-33.)

The present discovery dispute involves Defendant’s Second Set of Requests for Production of Documents (“RFPDs”), specifically RFPD No. 44 and identically worded requests by Defendant contained in six business records subpoenas directed at non-parties Memez.com LLC, Red Blue Media LLC, Tommy Callaway, Razvan Romanescu, Ogannes Pashayan, and Christopher Rosiak. The RFPD and each of the subpoenas seeks the following: “ALL DOCUMENTS that REFER OR RELATE to PUBSHARE from the inception of PUBSHARE through the present.”

Plaintiff responded to RFPD no. 44 as follows: “Plaintiff objects to this Request as vague and ambiguous with respect to the phrase ‘refer or relate to Pubshare.’ Plaintiff additionally objects to this Request to the extent it calls for the production of attorney-client privileged or attorney work product information. Plaintiff also objects to this Request as overbroad and unduly burdensome. Plaintiff additionally objects to this Request to the extent it exceeds the permissible limits of discovery issued by the Court in its January 7, 2016 Order re Google’s Motion to Compel. Subject to and without waving the foregoing objections, Plaintiff will produce all responsive documents in his custody, control, or possession to the extent that such documents have not already been produced.”

The Court interprets Plaintiff’s reference to the prior order signed January 7 and filed January 15 as an objection on relevance grounds (and therefore rejects the argument that such an objection has been waived) as the present dispute duplicates a prior motion in this case.

Defendant previously sought to compel further responses to its First Set of RFPDs directed at Plaintiff, specifically RFPD Nos. 21 (seeking “ALL DOCUMENTS that REFER or RELATE to PUBSHARE”), 24 (seeking “ALL DOCUMENTS that EVIDENCE, REFER OR RELATE to the formation or layout of PUBSHARE”), 27 (seeking “ALL DOCUMENTS that EVIDENCE, REFER OR RELATE to user traffic on PUBSHARE . . .”), 28 (seeking “ALL DOCUMENTS that EVIDENCE, REFER OR RELATE to the sources of internet traffic of PUBSHARE.”), 29 (seeking “ALL DOCUMENTS which EVIDENCE, REFER OR RELATE to PUBSHARE from its inception to the present.”), 30 (seeking “ALL DOCUMENTS that EVIDENCE, REFER OR RELATE to PUBSHARE’S expenses from its inception to the present.”) and 31 (seeking “ALL DOCUMENTS that EVIDENCE, REFER OR RELATE to PUSHARE’S marketing.”)

That motion was heard by the Court (Hon. Huber) on December 10, 2015. The Court’s December 15, 2015 “Order After Hearing” stated in pertinent part that Google’s Motion was granted “as to all [RFPDs] directed to Ogtanyan and third parties EXCEPT as to Request No. 16, directed to Memez.com and Requests Nos. 7 and 8 addressed to Red Blue Media LLC. The cut off for all productions is December 10, 2013.” Defense Counsel was directed to prepare a formal order consistent with the ruling. The prepared Order stated in pertinent part that Plaintiff “shall produce to Google all non-privileged and non-work product protected documents that are responsive to Google’s Requests for Production Nos. 21, 24, 27, 28, 29, 30 and 31, and that were created on or before December 13, 2013.” The non-parties were also directed to produce “all non-privileged and non-work product protected documents” responsive to the business records subpoenas “that were created on or before December 13, 2013.” That Order was signed by the Court (Hon. Huber) on January 7, 2016 and filed January 15, 2016.

Subsequently in another Order dated January 15, 2016 Plaintiff was granted leave to file the operative FAC which added (among other things) language to paragraphs 38 (part of the 1st cause of action) and 43 (part of the 2nd cause of action) alleging that Google’s actions “damaged Plaintiff because he lost future profits as a result. Had Plaintiff received his earnout as Google was contractually obligated to pay, he would have re-invested those earnings into driving more user traffic to his website and would have continued to earn advertising revenue from Pubshare through other on-line advertising programs, even if he was no longer permitted to use Adsense itself.”

I. RFPD No. 44 directed at Plaintiff
In the context of a motion to compel further responses and production relative to a RFPD propounded on a party, the applicable statute mandates that the moving party preliminarily establish good cause for the discovery sought. (Code Civ. Proc. “CCP”, §2031.310, subd. (b) [“motion shall set forth specific facts showing good cause justifying the discovery sought by the demand”].) Similarly, if a party moves to compel another party to the action to produce documents sought attendant to a deposition notice, the moving party is required by statute to demonstrate good cause for the requested records. (CCP §2025.450, subd. (b).)

In contrast, the statute governing a motion to compel a nonparty to comply with a business records subpoena does not specifically contain any good cause requirement. Consequently, a leading practice guide on civil procedure concludes that a showing of good cause apparently is not required on a motion to compel a nonparty to comply with a business records subpoena. (Weil & Brown, Cal. Practice Guide: Civ. Proc. Before Trial (The Rutter Group 2015), §8:609.3.) However, the Fourth Appellate District “read a similar requirement into” the statute “since it is unlikely the Legislature intended to place greater burdens on a nonparty than on a party to the litigation.” (Calcor Space Facility, Inc. v. Superior Court (1997) 53 Cal.App.4th 216, 223-224.) Subsequently, the Second Appellate District, citing Calcor, also applied a good cause requirement to a motion to compel a nonparty to comply with a subpoena. (Digital Music News LLC v. Superior Court (2014) 226 Cal.App.4th 216, 224.) Accordingly the Court finds that good cause must be shown to justify both the RFPD directed at Plaintiff and the subpoenas for business records directed at the nonparties here.

To establish “good cause,” the burden is on the moving party to show both relevance to the subject matter (e.g., how the information in the documents would tend to prove or disprove some issue in the case) and specific facts justifying discovery (e.g., why such information is necessary for trial preparation or to prevent surprise at trial). (Glenfed Develop. Corp. v. Sup. Ct. (1997) 53 Cal.4th 1113, 1117, Court’s emphasis.) Only when the moving party establishes “good cause,” does the burden shift to the responding party to justify its objections. (Kirkland v. Sup. Ct. (2002) 95 Cal.App.4th 92, 98.)

Defendant’s motion is DENIED as it has failed to show specific facts demonstrating good cause for discovery of any documents whose production was not already directed by the Court’s January 15, 2016 Order on the prior motion to compel.

Defendant’s repeated references to the “lost profits” language added to the 1st and 2nd causes of action in the FAC do not, contrary to Defendant’s argument, justify discovery of “ALL DOCUMENTS that REFER or RELATE to PUBSHARE from the inception of PUBSHARE through the present.” Defendant admits that Pubshare ceased to exist in June 2014 and that it had ceased operations several months prior to that. Furthermore, the “lost profits” language itself does not help Defendant meet its burden to show specific facts justifying discovery of any documents that “refer or relate to” Pubshare “through the present.” As Plaintiff points out, the lost profits claim is based on a hypothetical scenario where Defendant did not refuse to pay Plaintiff money allegedly owed, did not terminate Plaintiff’s Adsense account in November 2013 and did not deny Plaintiff’s appeal of that decision on December 13, 2013. In that scenario, Plaintiff would have allegedly been able to re-invest funds received from Defendant into his web site and increase user traffic. In general, Pubshare documents generated after December 13, 2013 would have no relevance to this “lost profits” theory and the Court notes that Plaintiff and the third parties have already agreed to produce all documents relating to Pubshare’s revenues and expenses. (See Declaration of Plaintiff Counsel Randolph Gaw at 4.)

Contrary to Defendant’s argument, neither the Court’s December 15, 2015 “Order After Hearing,” the Order prepared by counsel, signed by the Court and filed on January 15, 2016, nor the transcript of the December 10, 2015 hearing (attached as exhibit A to the Declaration of Defense Counsel Nicole Altman) support the notion that the Court (Hon. Huber) had already stated that after Plaintiff amended to add a claim for lost profits Defendant would be permitted to seek additional discovery without time limitation. Even if there had been such a statement it would not bind the Court in its analysis of the present motion, nor could it relieve Defendant of its burden to demonstrate through specific facts that good cause exists for the requested production.

The Court is also not inclined to exercise its inherent power under CCP §1008 to reconsider the January 15, 2016 Order, which is in practical terms what Defendant is seeking, on the basis that the “lost profits” language added in the FAC constitutes a new fact or circumstance. The Court’s prior order of January 15, 2016, while not binding on the Court here, appropriately limited the compelled production. If Plaintiff or any of the Third Parties fail to comply with the January 15, 2016 Order Defendant may bring a motion pursuant to CCP §2031.310(i).

Finally, assuming for purposes of argument that Defendant had met its burden to show relevance through specific facts, and the burden passed to Plaintiff to justify his objections, the Court would sustain Plaintiff’s objection to RFPD no. 44 on the grounds that it is overbroad in both scope (all documents that “refer or relate to Pubshare”) and time (“through the present.”)

II. Business Records Subpoenas directed at Third Parties
As noted above the business records subpoenas directed at Memez.com LLC, Red Blue Media LLC, Tommy Callaway, Razvan Romanescu, Ogannes Pashayan and Christopher Rosiak (titled “Request for Production No.1”) are identical to RFPD no. 44.

Plaintiff’s motion to compel is also DENIED as to all of the Third Parties. Nonparties are entitled to more consideration than litigants in discovery. (See Calcor, supra, at 223-224.) As Defendant has failed to show good cause to compel Plaintiff to provide further responses, it has also failed to make that showing as to the Third Parties.