Case Name: Grail Semiconductor, Inc. v. Mitsubishi Electric & Electronics USA, Inc. (as successor to Mitsubishi Electric America, Inc.)

Case No.: 1-07-CV-098590

Motion to Compel Further Responses to Request For Production of Documents by Defendant Mitsubishi Electric & Electronics USA, Inc. (as successor to Mitsubishi Electric America, Inc.)

Factual and Procedural Background

In June 2007, plaintiff Grail Semiconductor, Inc. (“Grail”) filed an action against defendant Mitsubishi Electric & Electronics USA, Inc. (“MEUS”) alleging breach of a non-disclosure agreement that the parties entered into. After trial, the jury found that MEUS had breached the NDA and that Grail was harmed by the breach. In its verdict the jury calculated damages in a total amount of $123,898,889. Judgment on the verdict was entered on May 16, 2012.

Thereafter, MEUS moved for judgment notwithstanding the verdict (“JNOV”), attacking both the finding of breach and the measure of damages used by the jury. MEUS also moved for a new trial, again asserting insufficient evidence of breach and excessive damages. The trial court orally denied the motion for JNOV, finding substantial evidence to support the verdict on the issue of breach. The court also denied the motion for new trial on each ground except one: the jury had used an incorrect measure of damages, resulting in an excessive award. MEUS appealed the post-trial orders.

Grail challenged the trial court’s finding as to the injunction, citing a provision for injunctive relief in the NDA and asserting the necessity of the remedy for Grail’s future commercial opportunities. Following a hearing on Grail’s renewed motion for an injunction, the trial court determined that Grail had not shown a likelihood of irreparable harm that could not be compensated by damages. The court filed its order denying the request on September 8, 2012. Thereafter, Grail filed a notice of cross-appeal.

The Court of Appeal affirmed the post-trial orders. The appellate court held that the trial court did not err in ordering a new trial on damages because the startup technology company had established every element of breach, including resulting harm. The trial court did not find insufficient proof of the existence of damages; it ruled only that the amount of those damages was calculated improperly and thus warranted a new trial using the correct measure of value. Also, the Sixth District held that the trial court did not abuse its discretion in declining to order injunctive relief because the startup technology company failed to carry its burden to show that damages for the breach would be insufficient to prevent any future harm. Furthermore, the Court found that Grail did not demonstrate that the technology corporation was continuing to disclose information in violation of the NDA.

Therefore, the case returned to the trial court for a new trial on damages.

Discovery Dispute

On October 15, 2014, MEUS served its Request for Production of Documents, Set One for New Trial on Damages (“RPD”) by mail. (See Declaration of Collin P. Wedel at ¶ 5; Exhibit D.) On November 19, 2014, Grail served its responses to RPD interposing various objections. (Id. at ¶ 6; Exhibit E.)

On December 22, 2014, counsel for MEUS sent a meet and confer letter to Grail’s attorney addressing the deficiencies in the responses and requesting supplemental answers and document production. (See Declaration of Collin P. Wedel at ¶ 7; Exhibit F.) Despite efforts to meet and confer, the parties were unable to informally resolve the matter and thus MEUS seeks intervention from the court.

On February 9, 2015, MEUS filed a motion to compel further responses to RPD. Grail filed written opposition to the motion. MEUS filed and served reply papers.

Motion to Compel Further Responses to RPD

MEUS seeks an order from the court compelling a further response to RPD nos. 1-45 because the objections raised lack merit.

1. Legal Standard

A responding party to an inspection demand must respond separately to each item in the demand by stating one of the following: (1) an agreement to comply; (2) a representation of inability to comply, or (3) objections. (Code Civ. Proc. § 2031.210.) If a party demanding a response to an inspection demand deems: (1) a statement of compliance with the demand is incomplete; (2) a representation of inability to comply is inadequate, incomplete, or evasive; or (3) an objection in the response is without merit or too general, that party may move for an order compelling further response to the demand. (Code Civ. Proc. § 2031.310-320; Weil & Brown, California Practice Guide: Civil Procedure Before Trial (Rutter Group 2014) at § 8:1490.)

2. Good Cause Requirement

A motion to compel further responses to RPD must “set forth specific facts showing good cause justifying the discovery sought by the demand.” (Code Civ. Proc., § 2031.310, subd. (b)(1).) The moving party establishes good cause by showing: (1) relevance to the subject matter of the case; and (2) specific facts justifying discovery. (Kirkland v. Sup. Ct. (2002) 95 Cal.App.4th 92, 98 [the party who seeks to compel production has met his burden of showing good cause simply by a fact-specific showing of relevance].)

Here, MEUS claims that the subject document requests are relevant to the issue of damages which is the subject of the retrial. Discovery is allowed for any matters that are not privileged and relevant to the subject matter, and a matter is relevant if it appears reasonably calculated to lead to the discovery of admissible evidence. (Code Civ. Proc., § 2017.010.) Having satisfied the burden of good cause, the burden shifts to Grail to justify any objections to document production.

3. Validity of Objections
The responding party may object to any item or category demanded in whole or in part. To be effective, the objection must: (1) identify with particularity the specific document or evidence demanded as to which the objection is made; and (2) set forth the specific ground for objection. (Weil & Brown, supra, at § 8:1474; see Standon Co., Inc. v. Superior Court (Kim) (1990) 225 Cal.App.3d 898, 901.)

In opposition, Grail argues that it previously produced these documents during discovery for the first trial on liability and should not have to produce them again for the retrial for damages. However, this is not a valid objection. To the extent that Grail claims that such producing documents would be burdensome, it fails to provide evidence of any such undue burden. (See West Pico Furniture Co. v. Sup. Ct. (1961) 56 Cal.2d 407, 418 [“[S]ome burden is inherent in all demands for discovery. The objection of burden is valid only when that burden is demonstrated to result in injustice.”].) Furthermore, even if there is some overlap between the issues of liability and damages, the court adheres to the principle that any doubt is generally resolved in favor of permitting discovery. (See Lipton v. Sup. Ct. (1996) 48 Cal.App.4th 1599, 1611 [for discovery purposes, information is relevant if it might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement]; see also Glenfed Dev. Corp. v. Sup. Ct. (1997) 53 Cal.App.4th 1113, 1119 [California’s pretrial discovery procedures are designed to minimize the opportunities for fabrication and forgetfulness, and to eliminate the need for guesswork about the other side’s evidence, with all doubts about discoverability resolved in favor of disclosure].)

Therefore, MEUS’ motion to compel a further response to RPD Nos. 1-45 is GRANTED. Grail shall provide verified code compliant further responses, without objections, and produce all responsive documents within 20 calendar days of this Order.

Grail’s Motion for Protective Order

Grail moves for a protective order under which it will not have to respond to discovery requests propounded by MEUS. In particular, the motion focuses on special interrogatory (“SI”) nos. 44, 45, 48, and 49. (See Grail’s Separate Statement.) Grail claims that such interrogatories are irrelevant to the issue of damages which is the basis for the retrial. MEUS filed written opposition to the motion.
1. Legal Standard

The party to whom interrogatories are directed may “promptly” move for a protective order. (Code Civ. Proc. § 2030.090, subd. (a).) The motion for protective order must be accompanied by a declaration showing the moving party made a “reasonable and good faith attempt” to resolve the issues outside of court. (Ibid.) A court may make any order that justice requires to protect a party or other natural person from “unwarranted annoyance, embarrassment, or oppression or undue burden and expense.” (Code Civ. Proc. § 2030.090, subd. (b).)

The burden is on the party seeking the protective order to show “good cause” for whatever order is sought. (Fairmont Ins. Co. v. Sup. Ct. (2000) 22 Cal.4th 245, 255.) The concept of “good cause” requires a showing of specific facts demonstrating “undue burden,” etc., and justifying the relief sought. (See Goodman v. Citizens Life & Cas. Ins. Co. (1967) 253 Cal.App.2d 807, 819.)

2. Analysis

Grail argues that the issues which are the subject of SI nos. 44, 45, 48 and 49 were already discovered, litigated and decided by the jury at the first trial. Grail claims that these interrogatories do not seek information relevant to the issue of damages, but seek to re-open the issue of liability.

As a threshold matter, there is no competent evidence before the court by way of declarations showing good cause for a protective order. (See Goodman v. Citizens Life & Cas. Ins. Co., supra, 253 Cal.App.2d at p. 819 [appellate court denied motion for protective order where declaration of counsel did not set forth facts to support the request].) Instead, Grail submits only a declaration from counsel identifying certain procedural facts from the case and the parties’ efforts to meet and confer before filing the motion. (See Declaration of Daniel Ferri at ¶¶ 1-6.) To the extent that Grail claims that such discovery would result in unnecessary and burdensome legal expenses, it fails to provide evidence of any such undue burden. (See West Pico Furniture Co. v. Sup. Ct. supra, 56 Cal.2d at p. 418 [“[S]ome burden is inherent in all demands for discovery. The objection of burden is valid only when that burden is demonstrated to result in injustice.”].) In fact, the discovery burden is “undue” only if the inconvenience and expense of responding clearly outweigh the benefits likely to be obtained if the interrogatories are answered. (Code Civ. Proc. §§ 2019.030, subd. (a), 2030.090, subd. (b).) Finally, even if there is some overlap between the issues of liability and damages, the court adheres to the principle that any doubt is generally resolved in favor of permitting discovery. (See Lipton v. Sup. Ct., supra, 48 Cal.App.4th at p. 1611 [for discovery purposes, information is relevant if it might reasonably assist a party in evaluating the case, preparing for trial, or facilitating settlement]; see also Glenfed Dev. Corp. v. Sup. Ct., supra, 53 Cal.App.4th at p. 1119 [California’s pretrial discovery procedures are designed to minimize the opportunities for fabrication and forgetfulness, and to eliminate the need for guesswork about the other side’s evidence, with all doubts about discoverability resolved in favor of disclosure].)
Therefore, Grail’s motion for protective order is DENIED.

Pro Hac Vice Applications

The pro hac vice applications are unopposed and GRANTED, good cause appearing