Case Name:   Guang Tian, et al. vs. Ma Laboratories, Inc., et al.

Case No.:       1-11-CV-195373

 

This is a putative wage and hour class action brought by plaintiffs Tian, Nie, J. Wu, Yin, T. Ma, Tie, Chang, Y. Wu, Bao Jie Zhang (“Zhang”), Chao Hui Liu (“Liu”), and Christopher Cavaliere (“Cavaliere”) (collectively “Plaintiffs”) on behalf of all present and former employees of defendant Ma Labs, Inc. (“Ma Labs”), a computer component distributor doing business in California.  The operative Second Amended Complaint (“SAC”), filed July 9, 2013, names as defendants Ma Labs, its founder and Chairman Abraham C. Ma, and its Chief Executive Officer Christine Rao (collectively “Defendants”).  The SAC asserts twelve causes of action, including both class and individual causes of action: (1) unlawful failure to pay required overtime; (2) unlawful failure to pay minimum wage; (3) unlawful failure to provide off-duty meal periods and meal period compensation; (4) unlawful failure to provide off-duty rest periods; (5) unlawful failure to timely pay wages upon separation from employment; (6) unlawful failure to furnish and keep accurate wage statements; (7) wrongful termination in violation of public policy, retaliation; (8) unfair competition – unlawful acts; (9) unfair competition – unfair acts; (10) unfair competition – fraudulent acts; (11) unfair competition – for preliminary and permanent injunction; and (12) violation of Private Attorney General Act.

 

On June 12, 2013, the Court appointed Thomas Denver, Esq. as the Discovery Referee in this action pursuant to California Code of Civil Procedure section 639, subdivision (a)(5).

 

On May 27, 2014, the Court issued an order on Plaintiffs’ motion for protective order, requiring Defendants to obtain leave of Court for any further communications with potential class members regarding the lawsuit.  The Court also required Defendants to send a corrective notice notifying class members that Ma Labs cannot have further communications with them regarding the lawsuit without leave of Court, and Ma Labs cannot retaliate against them for cooperating with Plaintiffs’ counsel or participating in the lawsuit.  On June 2, 2014, Defendants filed an ex parte request for clarification, and the Court adopted a process by which Ma Labs would give 48 hours’ prior notice to prospective interviewees by a form pre-approved by the Court.  On July 2, 2014, the Court issued its Order Re: Corrective Notice, requiring the corrective notice, with translations in Chinese and Spanish, to be mailed to the putative class within 5 business days, either by third party administrator or Defendants.

 

On July 18, 2014, Defendants filed a REDACTED Notice of Mailing of Corrective Notice and REDACTED Declaration of Christine H. Long Amending Notice of Mailing of Corrective Notice.

 

On August 27, 2014, the Discovery Referee filed Recommended Discovery Order (“RDO”) No. 15 granting Plaintiffs’ motion to compel a second deposition of Mark Musto, Ma Labs’ general counsel and former counsel of record in this case.

 

Defendants object to RDO No. 15 and move to seal Exhibit A to the Notice of Mailing of Corrective Notice and Exhibit A to the Declaration of Christine H. Long Amending Notice of Mailing of Corrective Notice.

 

Objections to RDO No. 15

 

In RDO No. 15, the Discovery Referee found that although Mr. Musto was already deposed for approximately nine hours on December 11, 2012, Plaintiffs demonstrated good cause for a subsequent deposition of Mr. Musto because he worked in capacities other than counsel in connection with the employment and employment terminations which are the subject of this lawsuit, and has provided multiple declarations in support of various motions in this matter.[1]  The Discovery Referee further found that the parties had entered into a stipulated “Mediation Plan of Plaintiffs and Defendant” dated November 8, 2012 that provided for a pre-mediation deposition of Mr. Musto, to be followed by further discovery if mediation failed.  The Discovery Referee found that the first two prongs of the three-prong test for depositions of attorneys involved in the litigation under Carehouse Convalescent Hosp. v. Superior Court (2006) 143 Cal.App.4th 1558 and Spectra-Physic, Inc. v. Superior Court (1988) 198 Cal.App.3d 1487 were clearly met for Mr. Musto due to his knowledge and involvement in the case, and any privilege issues could be decided on a question-by-question basis.  The Discovery Referee ordered an additional five hours of deposition testimony.

 

Defendants argue the Discovery Referee did not apply the applicable test for an attorney deposition, and under the proper test, Plaintiffs have not met the “extreme good cause” requirement for permitting a deposition of previous counsel of record and current general counsel because (1) the information sought is still available from less intrusive sources; (2) Plaintiffs have not shown that the information sought is crucial to their case; and (3) the information sought is very likely privileged.  Defendants argue that Plaintiffs have not even met the lesser good cause standard for a second deposition of an ordinary witness because (1) they already deposed Mr. Musto for over 10 hours on December 11, 2012, during which Mr. Musto answered all questions except one; (2) Plaintiffs expressly ended, rather than adjourned, the deposition; and (3) Plaintiffs did not move to compel further testimony in connection with the first deposition.  Defendants argue that Plaintiffs have stonewalled discovery on a recording surreptitiously made by a former employee of Mr. Musto and Helen Guan, and Mr. Musto is entitled to have this recording before any further deposition takes place.  Defendants seek $3,300 in monetary sanctions in connection with Plaintiffs’ motion to compel.

 

Plaintiffs argue that Defendants’ cited cases concerning depositions of currently litigating counsel are distinguished because Mr. Musto became a key witness long before this case was contemplated (e.g., he drafted waivers of employment rights, he wrote many of the policies and procedures for meal and rest breaks, he was a first person witness to Plaintiffs’ alleged policy violations), and in February of 2014, Mr. Musto withdrew as Defendants’ litigation counsel knowing he would be a trial witness.  Plaintiffs contend that cases involving depositions of then-existing opposing counsel concerning matters that arose after the case was filed are distinguishable from the situation here, where Mr. Musto is being deposed on matters that occurred before the litigation was filed, and for which he had an expectation of testifying.  Plaintiffs further argue that the Spectra-Physics test is nevertheless satisfied because (1) there is no other practical means to obtain the information Mr. Musto has concerning the facts of this case without taking his depositions, since interrogatories are cumbersome and the February 2015 trial date is looming; (2) Mr. Musto’s direct involvement in communications with the putative class members, the termination of plaintiff of Jing Jian Wu and the creation of warning notices based on Mr. Musto’s observations of employee’s work performance are subject areas that are critical to preparing Plaintiffs’ case at trial; and (3) Defendants have not demonstrated that Plaintiffs will necessarily invade any privilege.  Plaintiffs further argue there is good cause for Mr. Musto’s continued deposition because the parties’ pre-mediation agreement provided for further discovery if mediation failed, and Plaintiffs never foreclosed future sessions of Mr. Musto’s deposition, as the Discovery Referee found in his Recommended Order No. 15.  As for conditioning Mr. Musto’s additional deposition on production of the illegal tape recording of Mr. Musto, Plaintiffs flatly deny the existence of any such recording.  Plaintiffs argue they should be awarded sanctions in the amount of $7,500.00 against Defendants and their counsel.  Plaintiffs also argue that Defendants should pay all of Mr. Denver’s fees and costs associated with Plaintiffs’ motion to compel.

 

Analysis:  As Plaintiffs point out, Spectra-Physics and Carehouse are distinguishable in that they govern the taking of depositions of “opposing counsel” due to the potential disruption to the adversarial system and the “chilling effect” between client and attorney that such depositions may cause.  (See Spectra-Physics, supra, 198 Cal.App.3d at pp. 1494-1495; Carehouse, supra, 143 Cal.App.4th at pp. 1562-1563.)  Here, Mr. Musto has withdrawn as Defendants’ litigation counsel and provided evidence as a percipient witness in at least seven declarations filed in this matter.  Under these circumstances, the main policy concerns underlying Spectra-Physics and Carehouse are not implicated.

 

Even if the three-prong test for opposing counsel depositions clearly applied, the Court finds there is extreme good cause for an additional deposition of Mr. Musto due to his firsthand knowledge of relevant and important events in this case.  “California applies a three-prong test in considering the propriety of attorney depositions.  First, does the proponent have other practicable means to obtain the information?  Second, is the information crucial to the preparation of the case?  Third, is the information subject to a privilege?  [Citations.]”  (Carehouse, supra, 143 Cal.App.4th at p. 1563.)

 

Mr. Musto’s personal knowledge of critical information as a witness was briefed in Plaintiffs’ motion to compel.[2]  Defendants do not challenge the Discovery Referee’s express finding that Mr. Musto was “deeply involved in all of the history upon which the claims in this case are predicated” and that he “is very possibly the single most knowledgeable witness in the case.  His numerous declarations in the matter evidence this fact.”[3]  Instead, Defendants argue that that Mr. Musto’s factual knowledge does not constitute extreme good cause for a second deposition because Plaintiffs already had a full opportunity to depose him.  However, as the Discovery Referee pointed out, Mr. Musto’s December 11, 2012 deposition was taken pursuant to the parties’ Mediation Plan,[4] and during Mr. Musto’s deposition, Defendants’ counsel repeatedly objected to and instructed Mr. Musto not to answer questions that allegedly exceeded the scope of the deposition for mediation purposes.[5]  An additional deposition would allow Plaintiffs to obtain relevant information from Mr. Musto without the limited scope of the Mediation Plan.

 

Mr. Musto’s undisputed firsthand knowledge as a percipient witness to relevant factual events and information also supports a finding that the information sought from his deposition is crucial to the preparation of the case.  His anticipated testimony as a trial witness further supports a finding that his deposition, unfettered by objections based on the scope of mediation, is crucial to the preparation of Plaintiffs’ case.

 

Regarding “other practicable means to obtain the information,” Plaintiffs’ point is well-taken that interrogatories are a poor substitute for deposing a percipient witness.  (See Meritplan Insurance Co. (1981) 124 Cal.App.3d 237, 241.)  Defendants argue that other witnesses like Helen Guan, Abraham Ma, Christy Yee and others have offered factual declarations on the same subject matter as Mr. Musto, so they can be deposed instead of him.  Again however, Defendants do not challenge the Discovery Referee’s finding that Mr. Musto may be “the single most knowledgeable witness in the case”, and Mr. Musto’s deposition would be necessary to understand how he will testify at trial.

 

As for the issue of privilege, deposing Mr. Musto as a percipient witness based on statements he has made in declarations in this matter does not ostensibly implicate the attorney-client privilege or work-product doctrine, and Defendants’ counsel is free to object if the questioning implicates privileged information.  To be clear, Plaintiffs may not inquire into matters that invade the attorney-client privilege or attorney work-product doctrine, and the scope of questioning should be limited to Mr. Musto’s role as the drafter of waivers of employment rights (and his related communications with putative class members), relevant employment terminations he was involved in (e.g., Jing Jian Wu), policies and procedures for meal and rest breaks and warning notices that he drafted, and any facts or events described in his many declarations filed in this case.

 

As for the illegal tape recording, there is no valid basis to condition Mr. Musto’s subsequent deposition on the production of a tape recording that Plaintiffs have not been shown to possess.  While Defendants’ cited case of Hartbrodt v. Burke (1996) 42 Cal.App.4th 168 supports the relevance and discoverability of a tape recording and rejects the notion that a party can withhold production simply because the other party participated in the recorded discussion, Hartbrodt is distinguishable because the existence of the tape recording was not in dispute, and the plaintiff violated a court order to produce it.  Defendants’ other case authorities are distinguishable where the existence of the tape recording was not disputed.

 

There is also good cause for Mr. Musto’s subsequent deposition under general, non-heightened standards.  (See Cal. Code Civ. Proc., § 2025.610, subd. (b).)  Because it is undisputed that Mr. Musto possesses material relevant information, and the parties’ Mediation Plan provided for only a limited pre-mediation deposition of Mr. Musto, Plaintiffs should be allowed an opportunity to depose Mr. Musto unconstrained by the scope of the mediation.

 

For all of these reasons, Defendants’ objection to RDO No. 15 is OVERRULED.

 

Plaintiffs request $7,500 in monetary sanctions, as well as an order that Defendants pay all of the Discovery Referee’s fees in connection with the motion to compel.

 

California Code of Civil Procedure section 2025.450, subdivision (g)(1) provides that if a motion to compel compliance with a deposition notice is granted, “the court shall impose a monetary sanction…in favor of the party who noticed the deposition and against the deponent or the party with whom the deponent is affiliated, unless the court finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.”  However, the instant matter is not a motion to compel; it is an objection to an order of the Discovery Referee.  Plaintiffs requested monetary sanctions and fee shifting in their motion to compel before the Discovery Referee,[6] and the Discovery Referee implicitly denied both requests.  Plaintiffs did not challenge the Discovery Referee’s implicit denial of monetary sanctions and fee shifting.  Thus, Plaintiffs’ request for monetary sanctions and fee-shifting is DENIED.

 

Motion to Seal

 

Defendants move to seal (1) Exhibit A the Notice of Mailing of Corrective Notice; and (2) Exhibit A to the Declaration of Christine H. Long Amending Notice of Mailing of Corrective Notice.  These exhibits contain a list of putative class members, their telephone numbers and mailing address.

 

Defendants submit that the records should be sealed because the putative class members have an overriding interest in their safety and privacy.

 

“The court may order that a record be filed under seal only if it expressly finds facts that establish: [¶] (1) There exists an overriding interest that overcomes the right of public access to the record; [¶] (2) The overriding interest supports sealing the record; [¶] (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; [¶] (4) The proposed sealing is narrowly tailored; and [¶] (5) No less restrictive means exist to achieve the overriding interest.”  (Cal. Rules of Court, rule 2.550(d).)  “Courts have found that, under appropriate circumstances, various statutory privileges, trade secrets, and privacy interests, when properly asserted and not waived, may constitute overriding interests.”  (In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 298 fn. 3; NBC Subsidiary (KNBC-TV) vs. Superior Court (1999) 20 Cal.4th 1178, 1222, fn. 46.)

 

Here, the putative class members have an overriding interest in the privacy of their addresses and telephone numbers (see Puerto v. Superior Court (2008) 158 Cal.App.4th 1242, 1252) that overcomes the right of public access to the records and supports sealing the records.  A substantial probability exists that this overriding interest would be prejudiced if the records are not sealed because the contact information would be disclosed to the public.  The proposed sealing is narrowly tailored because only the list of personal contact information will remain under seal.  No less restrictive means exist to achieve the overriding interest.

 

The motion to seal is GRANTED.

 

[1] Recom. Disc. Ord. No. 15 at p. 2.

[2] See Exhs. A [moving papers], C [reply papers] to Decl. Susan E. Bishop ISO Defs’ Objs. to RDO No. 15.

[3] RDO No. 15 at p. 3.

[4] See Exh. A to Mot. to Compel, Bishop Exh. A.

[5] See, e.g., Exh. B to the motion to compel [Bishop Exh. A] at pp. 24-25, 30-31.

[6] See Mot. to Compel at pp. 4-5, Bishop Exh. A.