Case Name: Danning Jiang v. James Cai, et al.
Case No.: 2019-CV-341417

(1) Motion to Quash Service of Deposition Subpoena for Production of Business Records to Jack Xu and Request for Monetary Sanctions by Plaintiff Danning Jiang and Non-Parties Hansheng Ke and Changmao Tang

(2) Request for Monetary Sanctions by Defendants James Cai (aka Jingming Cai) and SAC Attorneys LLP, a limited liability partnership

Factual and Procedural Background

This is an action for abuse of process. Plaintiff Danning Jiang (“Jiang”) is an attorney licensed in the State of California. (First Amended Complaint [“FAC”] at ¶ 1.) Defendant James Cai (aka Jingming Cai) is also an attorney licensed in the State of California and the owner of defendant SAC Attorneys LLP, a limited liability partnership (collectively, “Defendants”). (Id. at ¶¶ 2-3.) Defendants had previously represented an entity known as Chuangjia International Co. dba as TX Trading (“TX Trading”). (Id. at ¶ 5.) TX Trading is jointly owned by Jack Xu (“Xu”) and Shu Teng (“Teng”) as husband and wife. (Ibid.)

On May 31, 2016, on behalf of TX Trading, Defendants filed an interpleader complaint (case no. 16CV295764) against Xu, Teng, and Edadoc USA, Inc. (“Edadoc”). (FAC at ¶ 6.) Edadoc was a joint venture formed among Shenzhen Edadoc Technology Co., Ltd. (“Shenzhen”), Xu, and Teng. (Ibid.) TX Trading asserted in its complaint that a $58,439 fund withdrawn by Teng from Edadoc’s bank account was under dispute among the joint venture parties. (Ibid.) TX Trading did not deposit the interpleader funds and dismissed the complaint with prejudice on June 23, 2016. (Ibid.)

On June 16, 2016, attorney Jiang represented Edadoc and filed a cross-complaint against TX Trading, Xu, and Teng, alleging claims for breach of fiduciary duty, fraud, breach of contract, and declaratory relief. (FAC at ¶ 7.)

On July 28, 2016, Defendants, representing TX Trading, Xu, and Teng, filed a cross-complaint against Edadoc, adding as cross-defendants Jiang, Hansheng Ke (“Ke”), Shenzhen, and Changmao Tang (“Tang”). (FAC at ¶ 8.) Ke is the CEO of Edadoc and Tang is the CEO of Shenzhen. (Id. at ¶ 8, fns. 1-2.) Defendants subsequently amended the cross-complaint on three separate occasions. (Id. at ¶ 8.) As to these cross-complaints, Defendants sued Jiang for misrepresentation, negligence, breach of fiduciary duty and unfair competition. (Id. at ¶ 9.) Jiang believed these allegations were false and the parties thereafter engaged heavily in litigation. (Id. at ¶¶ 9-13.) During this time, attorney Jiang asked Defendants to drop the frivolous claims or he would pursue liability for malicious prosecution. (Id. at ¶ 9.)
On July 5, 2017, Defendants were substituted out and replaced by attorney James Li (“Li”). (FAC at ¶ 14.) Li filed a fourth amended cross-complaint removing harmful allegations against attorney Jiang. (Id. at ¶ 15.)

On March 29, 2018, TX Trading, Xu, and Teng dismissed their claims against Jiang with prejudice. (FAC at ¶ 16.)

On January 30, 2019, Jiang filed the operative FAC against Defendants alleging causes of action for: (1) abuse of process; (2) wrongful use of civil proceedings; and (3) unfair business practices (Bus. & Prof. Code, § 17200).

Discovery Dispute

On February 13, 2019, Defendants served a Deposition Subpoena for Production of Business Records to Xu. (Jiang Decl. at ¶ 3, Ex. 1.) The Subpoena seeks production of the confidential settlement agreement entered into in the previous case. (Ibid.)

In response to the Subpoena, attorney Jiang sent an email to defense counsel regarding information requested in the Subpoena. (Jiang Decl. at ¶ 5, Ex. 3.) Defense counsel stated that he anticipated filing an anti-SLAPP motion and that the confidential settlement agreement was relevant to the issue of whether claims had been released. (Ibid.)

To provide Defendants with the requested information and maintain the confidential settlement agreement, attorney Jiang offered an alternative means to release the information. (Jiang Decl. at ¶ 6.) Jiang proposed that both he and attorney Li provide email responses to defense counsel regarding the question if the “counsel” or “attorney” was included or excluded from the release of the settlement agreement. (Ibid.) Defense counsel declined the proposal and requested that attorney Li comply with the Subpoena absent a court order to the contrary. (Id. at ¶ 6, Ex. 4.)

On February 25, 2019, attorney Jiang, on behalf of non-parties Ke and Tang (collectively, “Non-Parties”) served an objection to the production. (Jiang Decl. at ¶ 7, Ex. 5.) The specific grounds for the objection provide: “The subpoenaed document has been kept confidential by all parties to the document. The subpoena invades non-parties’ right to privacy. The subpoena is unnecessary given the fact that the Plaintiff in this action has offered an alternative means to release the subpoenaed information to the Requesting Party.” (Id. at Ex. 5.)

Following the objection, attorney Li took the position that, absent a motion to quash, he would produce the document on March 6, 2019. (Jiang Decl. at ¶ 7.) Similarly, defense counsel took the position that, unless there is a court order quashing service by the date of production, attorney Li must produce the document. (Ibid.) The parties were unable to informally resolve this dispute and thus attorney Jiang seeks intervention from the Court.
Currently before the Court is a motion to quash service of deposition subpoena for production of business records by attorney Jiang and the Non-Parties. Defendants filed written opposition to the motion. Attorney Jiang filed reply papers. Both sides request an award of monetary sanctions in conjunction with the motion.

Motion to Quash Service of Deposition Subpoena

Attorney Jiang moves to quash the deposition subpoena on the following grounds: (1) the Subpoena was not personally served in compliance Code of Civil Procedure section 2020.220; and (2) the Non-Parties were not served with a notice of privacy rights.

Legal Standard

The court may, “upon motion reasonably made by a [party] … make an order quashing [a] subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare ….” (Code Civ. Proc., § 1987.1, subds. (a) and (b)(1).)

Personal Service of Deposition Subpoena

Attorney Jiang first argues the Subpoena is defective as it was not personally served in compliance with Code of Civil Procedure section 2020.220.

Discovery from a nonparty may be accomplished through a deposition subpoena. (Code Civ. Proc., § 2020.010, subd. (b).) A deposition subpoena may command the attendance and testimony of the deponent and the production of records and “tangible things.” (Id., § 2020.020, subd. (c).) Such a subpoena that commands production of tangible things shall specify any sampling or testing that is sought. (Id., § 2020.510, subd. (a)(3).) Personal service of a deposition subpoena requires a person who is a resident of California to appear, testify and produce whatever documents or things are specified in the subpoena; and also to appear in any proceedings to enforce discovery. (Id., § 2020.220, subd. (c)(3).)

Here, the Subpoena was directed to deponent Xu, a party to the prior action, for production of the confidential settlement agreement. In opposition, defense counsel states he served attorney Li, who is counsel for Xu, with the Subpoena for the purpose of obtaining the settlement agreement. (Barnhorst Decl. at ¶ 8.) According to defense counsel, attorney Li advised him that he was authorized by Xu to accept service of the Subpoena via email. (Id. at ¶ 9.) Defendants however do not provide any legal authority establishing that service by email to Xu’s counsel is proper in lieu of personal service to the deponent. (See People v. Dougherty (1982) 138 Cal.App.3d 278, 282 [“Where a point is merely asserted…without any argument of or authority for its proposition, it is deemed to be without foundation and requires no discussion.”].) Nor does the Code of Civil Procedure provide any such exception. Defendants thereafter attempt to argue that Jiang has no standing to object to service of the Subpoena. As a preliminary matter, this argument is underdeveloped and not supported by legal authority. Also, as the reply points out, attorney Jiang, as a signing party to the settlement agreement, would appear to have standing to object to the extent that such production would violate his privacy rights. (See Reply at p. 3.)

As the deposition subpoena was not personally served on deponent Xu, the motion to quash service of deposition subpoena for production of business records is GRANTED. Having granted the motion on this ground, the Court declines to address the alternative argument on whether the Non-Parties were served with a notice of privacy rights.

Requests for Monetary Sanctions

Both sides request an award of monetary sanctions in conjunction with the motion to quash service of deposition subpoena.

Code of Civil Procedure section 1987.2, subdivision (a), provides that a trial court may in its discretion award reasonable attorney fees and expenses incurred in making or opposing a motion to quash “if the court finds the motion was made or opposed in bad faith or without substantial justification.” (Code Civ. Proc., § 1987.2, subd. (a).)

Defendants’ request for monetary sanctions is DENIED as they did not prevail in opposing the motion.

While attorney Jiang prevails on the motion, the Court exercises its discretion and declines to award sanctions at this time. Therefore, the request for monetary sanctions by attorney Jiang is DENIED.