Case Number: BC500829 Hearing Date: April 09, 2014 Dept: 34

SUBJECT: Motion to compel production of documents responsive to subpoena

Moving Party: Defendant Siemens Healthcare Diagnostics Inc. (“defendant”)

Resp. Party: Plaintiffs University of Southern California (“USC”) and USC Care Medical Group Inc. (“USC Care”)

Defendant’s motion to compel production of documents in response to the subpoena propounded upon USC is DENIED.

BACKGROUND:

Plaintiff commenced this action on February 8, 2013, seeking declaratory relief as to the interpretations of certain contracts between plaintiff and defendants regarding medical diagnostic equipment leased by defendants’ predecessor. Plaintiff filed a first amended complaint on March 17, 2014.

On February 25, 2013, defendant and cross-complainant Siemens Healthcare Diagnostics, Inc., filed a cross-complaint asserting three causes of action for breach of contract, three causes of action for breach of the implied covenant of good faith and fair dealing, and a cause of action for unjust enrichment. Defendant filed a first amended cross-complaint on March 17, 2014.

ANALYSIS:

Defendant moves to compel USC to produce documents responsive to defendant’s subpoena that was served upon USC on October 3, 2013. USC was not a party to the action when the subpoena was served or when the motion was made. However, USC was added as a party when plaintiffs filed a first amended complaint, and Siemens filed a first amended cross-complaint, on 3/17/14.

A subpoena for business records is a method that may be used to obtain discovery from a non-party. (See Code Civ. Proc., § 2020.010(b).) The method for obtaining business records from a party is an inspection demand pursuant to Code of Civil Procedure section 2031.010, et seq. Notably, it is easier to obtain discovery from a non-party with a subpoena than to obtain discovery from an opposing party with an inspection demand. (Weil & Brown, Civ. Proc. Before Trial (The Rutter Group 2013) ¶ 8:540.2.) For example, with a motion to compel further responses to an inspection demand, the propounding party must show good cause for production; a showing of good cause is not required for a business records subpoena. (Ibid.)

Defendant provides no authority to support its position that a party that was served with a subpoena before it became a party has a continuing obligation to comply with that subpoena after being named as a party. The only two cases cited by defendant – Cornwall v. Santa Monica Dairy Co. (1977) 66 Cal.App.3d 250 and Terry v. SLICO (2009) 175 Cal.App.4th 352 – did not address this issue and therefore are not authority to support defendant’s argument. (See Marriage of Cornejo (1996) 13 Cal.4th 381, 388 [a decision is not authority for what it does not consider].) More importantly, there is no showing that, when a subpoenaed non-party becomes a party, the lower burden to compel compliance with a subpoena applies, instead of the more difficult showing for a motion to compel further responses to inspection demands.

Even if the Court were to consider the instant motion as a motion to compel production pursuant to a business records subpoena, the motion appears to be untimely. A motion to compel a non-party to comply with a subpoena “shall be made no later than 60 days after the completion of the record of the deposition.” (Code Civ. Proc., § 2025.480(b).) This rule applies to business records subpoenas. (See Weil & Brown, ¶ 8:609.1.) “[O]bjections served in response to . . . business records subpoenas constitute[] a record of the deposition,” and the propounding party has 60 days from the date of service of the objections to file a motion to compel. (Unzipped Apparel, LLC v. Bader (2007) 156 Cal.App.4th 123, 136. See also id. at pp. 131-134.) This deadline is mandatory. (Id. at p. 136.) USC served objections to the subpoena on 10/21/13. (See Chang Decl., Exh. B.) According to defendant, USC had not produced responsive documents prior to the filing of the instant motion. (See id., ¶¶ 26-27.) Defendant did not bring the instant motion until 2/21/14 – four months after the date that the objections were served.

Assuming defendant wishes for the Court to treat the instant motion as a motion to compel further responses to inspection demands, defendant must establish that the motion is procedurally proper.

This motion must be served within 45 days after service of the response in question (extended if served by mail, overnight delivery, or fax (see Code Civ. Proc., § 1013)); otherwise, the demanding party waives the right to compel any further response to the Code of Civil Procedure § 2031.010 demand. (Code Civ. Proc., §§ 2030.300(c), 2031.310(c), 2033.290(c), 2016.050; see Sperber v. Robinson (1994) 26 Cal.App.4th 736, 745.) The 45 day time limit is mandatory and jurisdictional. (Sexton v. Sup.Ct. (Mullikin Med. Ctr.) (1997) 58 Cal.App.4th 1403, 1410.) However, the parties can also agree in writing on a specific later date by which to file the motion to compel. (Code Civ. Proc., §§ 2030.300(c), 2031.310(c), 2033.290(c).) USC’s responses to the subpoena were served on 10/21/13. (See Chang Decl., Exh. B.) Defendant did not serve the instant motion until 2/21/14 – four months later. Defendant fails to provide a written agreement to extend the deadline for this motion.

Therefore, if the Court were to treat the instant motion as a motion to compel further responses to inspection demands, the motion would be denied as untimely.

Finally, the Court notes that USC’s counsel declares that on 3/26/14, over a month after this motion was filed, he produced on behalf of USC all documents responsive to the subpoena that had previously been produced by USC Care. (See Chan Decl., ¶ 43.) These purported responses are not at issue in the instant motion because they were served after the motion was filed. To the extent that defendant believes that these documents are insufficient, defendant must submit a timely motion to compel further responses.

Defendant argues in its reply that USC’s position – that Siemens must, in effect, start over with discovery – is simply a delaying tactic designed to drive up the cost of litigation. (Reply, p. 3:1-4.) The Court simply notes that this could have been avoided had the parties availed themselves of the Court’s willingness to conduct an informal discovery conference to resolve these discovery disputes. It is the court’s understanding that such an informal discovery conference had been scheduled for January 30, 2014 – three weeks before Siemens filed its motion to compel – but was canceled by Siemens.

Defendant’s motion to compel USC to provide documents responsive to the subpoena is DENIED.

SUBJECT: Motion to compel further responses to requests for production of documents, set two

Moving Party: Plaintiff USC Care Medical Group Inc. (“plaintiff”)

Resp. Party: Defendant Siemens Healthcare Diagnostics Inc. (“defendant”)

Plaintiff’s motion to compel further responses to the second set of requests for production of documents is GRANTED.

BACKGROUND:

Plaintiff commenced this action on February 8, 2013, seeking declaratory relief as to the interpretations of certain contracts between plaintiff and defendants regarding medical diagnostic equipment leased by defendants’ predecessor. Plaintiff filed a first amended complaint on March 17, 2014.

On February 25, 2013, defendant and cross-complainant Siemens Healthcare Diagnostics, Inc., filed a cross-complaint asserting three causes of action for breach of contract, three causes of action for breach of the implied covenant of good faith and fair dealing, and a cause of action for unjust enrichment. Defendant filed a first amended cross-complaint on March 17, 2014.

ANALYSIS:

Plaintiff seeks to compel defendant to provide verified further responses and responsive documents to plaintiff’s second set of requests for production of documents, request numbers 79-81 and 85-91.

Request numbers 79, 80, and 81 seek documents related to compliance reports generated by defendant in connection with other customers who had contracts with language identical or similar to Term XV of the subject agreement with plaintiff. Request numbers 85, 86, and 87 seek communications that relate to any decision by defendant to track and report the compliance of other customers who had contracts with language identical or similar to Term XV. Request numbers 88, 89, and 90 seek communications between defendant and other customers that relate to compliance with any purported minimum purchase requirements. Request number 91 seeks documents that relate to the “Centaur Non-Compliance Project” as that term is used in a document produced by defendant to plaintiff. In response, defendant agreed only to produce documents relating to plaintiff.

Plaintiff first argues that the documents sought are relevant in order to aid in providing a “practical interpretation” of how defendant viewed its obligations under the compliance clause of the agreement. Plaintiff asserts that defendant’s conduct regarding agreements with other parties is relevant to the interpretation of a term in the contract with plaintiff. The Court notes that the authority cited by plaintiff in support of this argument provides only that the conduct of the parties with respect to their agreement is relevant to determining the intent of the parties. (See Sterling v. Taylor (2007) 40 Cal.4th 757, 772-773; Bohman v. Berg (1960) 54 Cal.2d 787, 795-796; Crestview Cemetery Assoc. v. Dieden (1960) 54 Cal.2d 744, 752-754; City of Hope National Med. Center v. Genentech Inc. (2008) 43 Cal.4th 375, 393; Banning Ranch Conservancy v. Superior Court (2011) 193 Cal.App.4th 903, 915; Richeson v. Helal (2007) 158 Cal.App.4th 268, 279-280; Brooklyn Public Library v. City of New York (1929) 250 N.Y. 495, 501.)

Plaintiff asserts that there is no reason why the relevance must be limited to the parties to the lawsuit. (See Motion, p. 9:18-20.) As Siemens notes, plaintiff fails to provide any authority which has found that a party’s conduct with regard to a separate agreement with a third party has any bearing on the interpretation of a similar contract with the opposing party. On the other hand, Siemens has failed to provide any California authority which would indicate that these other agreements are not relevant. The one case cited by Siemens, Overman v. Bright (1958) 166 Cal.App.2d 515 is actually not helpful to Seimens. According to Overman,

“The partnership at bar was alleged to be oral and to have been entered into about January 1953. The evidence excluded was to the effect that in 1949 defendant had entered into an oral agreement of partnership with one Crossman and that later he had denied the agreement, and to the effect that defendant had promised one McDonald an interest in defendant’s laboratories.

“The evidence was properly excluded. The question here was whether defendant had entered into a partnership with plaintiff. The proffered evidence of defendant’s conduct with others had no relevancy on that issue.” (Id. At p. 516.)

Interestingly, the Overman court then continues: “It is the general rule that in the absence of a common plan, scheme, habit or usage, contracts between different parties have no probative value in the consideration and interpretation of other and different contracts even though one of the parties may be common to both. . . . In the case at bar there was no proof or offer of proof of any common plan, scheme, habit, or usage; and the rulings were correct.” (Id. at pp. 516-517.)

Here, plaintiff is arguing that the agreement was a “form contract,” and hence there is an offer of proof of “common plan, scheme habit or usage.”

Plaintiff also argues that Siemens previously took the position that documents relating to third parties were relevant. The court recalls that during our informal discovery conference on Oct. 21, 2014; Siemens successfully argued for discovery as to some of its competitors.

Siemens basis much of its argument on the assertion that there is no form contract and hence this discovery is irrelevant. According to Siemens, “to the extent USC attempts to argue . . . that its agreement with Siemens is a ‘form contract,’ USC points to no such evidence, nor is there any.” (Opp., p. 9:8-9.) Siemens cites to the deposition testimony of Curt Lange to the effect that “Siemens’ contracts with its other customers are separate and unrelated to the contracts between USC and Siemens.” (Opp., p. 9:7-8.) However, this is not quite what Mr. Lange states in the cited deposition testimony. Although Mr. Lange states that this clause can be negotiated, stricken, amended or changed, he affirms that it is in all of Siemens’ agreements. Referring to the clause in question, Mr. Lange is asked,

Q: “Is this clause or something like it in all of Siemens’ contracts with its customers?
A: “Yes it is.” (Opp., p. 9:25 – 10:4.)

The Court finds that plaintiff has demonstrated good cause for its motion to compel further production. However, the Court is always concerned that an RPD that requires production of “all documents that refer or relate to” might be overbroad. The court will order the parties to meet and confer on this issue to determine whether “documents sufficient to show” or some other limiting phrase might be sufficient in lieu of “all documents that refer or relate to” the reports requested.

Plaintiff’s motion to compel defendant to provide further responses and responsive documents to plaintiff’s second set of requests for production is DENIED.