2012-00118165-CU-AT

Paul Martin vs. Costco Wholesale Corporation

Nature of Proceeding: Motion for Protective Order

Filed By: Wang, Stacey H.

***If any party request oral argument, then at the time the request is made, the
requesting party shall inform the court and opposing counsel of the specific
issue(s) on which oral argument is sought.***

Defendant FNA Liberty Group, Inc.’s (“FNA”) motion for protective order is GRANTED.

This is a consumer class action based on the allegedly false and misleading use of the
phrase “Proudly Made in America” on packaging for pressure washers that FNA
allegedly imports and sells. Representative Plaintiff Paul Martin (“Martin”) served
notice of the oral deposition of FNA President Gus Alexander (“Alexander”). FNA now
moves for an order relieving Alexander of any obligation to appear for deposition. FNA
argues that Martin has not met the criteria for the deposition of Alexander, who is non-
party, a high-ranking executive of a corporation with over 500 employees and five vice
presidents who oversee FNA’s operations. One of those vice presidents is responsible
for product labeling. Nonetheless, Alexander’s is the first deposition that Martin has
sought in this case.

To take Alexander’s deposition, Martin must show that Alexander has unique or
superior personal knowledge of discoverable information. (See Liberty Mutual Ins. Co.
v. Superior Court (1992) 10 Cal.App.4th 1282, 1288.)

If not, as will presumably often be the case in the instance of a large
national or international corporation, the trial court should issue the
protective order and first require the plaintiff to obtain the necessary
discovery through less intrusive methods. These would include
interrogatories directed to the high-level official to explore the state of his
or her knowledge or involvement in plaintiff’s case; the deposition of
lower level employees with appropriate knowledge and involvement in
the subject matter of the litigation; and the organizational deposition of
the corporation itself, which will require the corporation to produce for
deposition the most qualified officer or employee to testify on its behalf
as to the specified matters to be raised at the deposition. (§ 2025, subd.
(d)(6).) Should these avenues be exhausted, and the plaintiff make a
colorable showing of good cause that the high-level official possesses
necessary information to the case, the trial court may then lift the
protective order and allow the deposition to proceed.

(Id.) At the outset, the court rejects Martin’s suggestion that, because FNA is family-
owned and has annual revenues of approximately $100 million, it is too small a
company to benefit from Liberty Mutual, supra.

Martin asserts that, based on interviews with FNA employees and other investigation,
his counsel “believes” that Alexander was “likely to be directly and personally involved”
in the decision to place the disputed labels on FNA’s products. (See Sosa Decl., ¶ 5.)
To support his position, Martin has produced documents indicating that Alexander was
made aware of efforts to re-label FNA’s pressure washers beginning in January 2012,
when Martin filed this lawsuit.

In addition, Martin desires Alexander’s deposition to obtain information about issues in
a separate lawsuit by FNA against former FBA employee Demetrios Arvantis
(“Arvantis”), who is Alexander’s brother-in-law. (See Wang Decl., Exh. A at 2.) FNA is
suing Arvantis in Chicago for alleged theft of trade secrets. (Alexander Decl., ¶ 7.)

Martin’s evidence falls short of establishing either that Alexander has unique or
superior knowledge about this case, on the one hand, or that discovery about the
decision to place “Proudly Made in America” labels onto FNA products cannot be
obtained through other means, on the other. The evidence submitted with Martin’s
Opposition merely indicates that Alexander was aware of efforts to change FNA’s
labels, not that he has any unique or superior knowledge about the decision to place
“Proudly Made in America” labels onto products in the first place. Moreover, the
evidence of Alexander’s awareness of re-labeling efforts does not show that such
awareness was superior or unique. Nor does Martin offer any explanation as to why
he has failed to notice the deposition of FNA’s vice president in charge of product
labeling. That Martin has sought Alexander’s deposition for discovery related to
Arvantis, who has no apparent connection to the issues in this case, further
undermines Martin’s position.

The motion is granted, and Alexander need not appear for deposition or respond to
any document requests attached to his deposition notice. Before seeking Alexander’s
deposition hereafter, Martin must attempt to obtain the subject discovery by means
other than Alexander’s oral deposition.

Furthermore, the court agrees with FNA that a monetary sanction against Martin is
warranted. (See CCP § 2025.420(h) [monetary sanction mandatory absent the losing
party’s substantial justification or other circumstances making the sanction unjust].)
Exactly what Martin expects to obtain from Alexander’s deposition is itself rather
vague. Furthermore, during the meet-and-confer process, FNA informed Martin’s
counsel that other executives were available for deposition and that the law required
certain conditions to be satisfied–not present here–before seeking a corporate
president’s deposition. Nonetheless, Martin refused to withdraw the deposition notice
and has opposed the instant motion on grounds that lack merit. However, FNA’s
request for $8,000 in attorney’s fees is excessive.

The court imposes a monetary sanction against Martin in the amount of $960 (3 hrs @
reasonable rate of $300/hr + $60 filing fee.) Without more information about Attorney
Wang’s experience and qualifications, the court will not credit her with an hourly rate of
$525. That hourly rate is high for legal work performed in this community, even in a
consumer class action.

Martin shall pay the sanction no later than May 22, 2014. If Martin fails to pay the
sanction by such date, then FNA may lodge for the court’s signature a formal order
awarding sanctions, which may be enforced as a separate judgment. (See Newland v.
th
Superior Court (1995) 40 Cal.App.4 608, 615.)

The minute order is effective immediately. No formal order pursuant to CRC 3.1312 or
further notice is required.