1 WO 2 3 4 5
9 Berkadia Real Estate Advisors LLC, No. CV-22-00049-TUC-CKJ
10 Plaintiff, ORDER
11 v.
12 Arthur R Wadlund, et al.,
13 Defendants. 14 15 On January 12, 2023, the Plaintiff filed a motion to compel responses to Amended 16 Subpoenas, issued September 2022, from nonparties Marcus& Millichap Real Estate 17 Investment Services Inc., (IPA), Ryan Sarbinoff, Hamid Panahi, Steve Gebing, Lisa Ringo 18 Hartly, and Krista Ying (Nonparties). 19 Plaintiff tendered subpoenas to these six Nonparties. Only Lisa Ringo Hartly and 20 Krista Ying responded in part producing some documents which Plaintiff charges were in 21 large part heavily redacted. Plaintiff asks the Court to order reproduction of documents 22 already produced, including: 1) unredacted copies of all documents; 2) complete copies of 23 all documents, including all attachments, and 3) all missing information, including email 24 addresses of senders and recipients. Produce a Privilege Log accounting for their claims of 25 privilege and produce those documents contained on their current Privilege Logs which are 26 not privileged. 27 28 1 Additionally, Plaintiff asks the Court to order the Nonparties to produce written1 2 responses to the Amended Subpoenas and production of documents concerning: 1) 3 Defendants, Hartley, and Ying’s relationships with IPA, including any payments IPA 4 offered to purchase Berkadia’s Tucson office; 2) Defendants’ illegal competitive work for 5 and solicitation of Berkadia’s clients on behalf of or in concert with the Nonparties; 3) 6 Defendants’ and the Non-Parties’ misappropriation, use, and possession of Berkadia’s 7 confidential and trade secret information; and 4) recruitment of Defendants, Ying, and 8 Hartley, and IPA’s takeover of Berkadia’s Tucson office, including negotiation of its lease 9 with A. Wadlund and communications in November 2021.2 10 This discovery focuses on fleshing out email evidence that on December 2, 2021, 11 Sarbinoff sent Defendants’ IPA Salesperson Agreements, and on December 21, 2021, C. 12 Wadlund sent Sabinoff his existing pipeline, including clients that Plaintiff alleges were 13 under exclusive listing agreement with Berkadia, such as Alterra, San Xavier, and Cherry 14 Lofts. By December 27, while still employed with Plaintiff, Defendants began working 15 with Sarbinoff and James Crawley, IPA’s Sales Manager, to assess Berkadia’s networks to 16 determine how best to transfer information from its Salesforce and Outlook databases 17 directly onto IPA’s system. Around the same time, A. Wadlund negotiated a lease for IPA 18 to take over Berkadia’s office space; it appears that the Defendants own the property leased 19 by Plaintiff and now leased by IPA. 20 In Reply to the Nonparties’ response to the motion to compel, Plaintiff asserts the 21 response ignores Plaintiff’s efforts undertaken to resolve the disputed subpoenas by 22 narrowing the scope and agreeing to provide necessary protections for IPA’s assertions of 23 confidentiality and proprietary interest by adding an attorneys’ eyes-only provision to the 24 1 The Court is confused by this reference to written responses because the subpoenas 25 are for document productions. 2 The motion to compel aimed at Nonparties Ying and Hartley failed to provide a 26 separate statement of the question, the answer, and reasoning regarding deficiency; requirement does not apply where there has been a complete and total failure t respond to 27 discovery. LRCiv. 37.1; see (P Resp. Ds’ MC Rule 30(b)(6) Depo. (Doc. 115) at 5 (arguing for dismissal of Defendants’ motion to compel production of Rule 30(b) deponent based 28 on same noncompliance). 1 existing Protective Order. According to Plaintiff, “Berkadia has been very clear in its 2 discussions with the Non-Parties about the limited subset of information it is seeking by 3 narrowing it to the [] categories of documents,” as follows:
4 1. Defendants’ work with, on behalf of, or for the benefit of IPA while employed by Berkadia; 2. Defendants’ relationship and duties with IPA; 3. 5 payments from IPA to Defendants in exchange for them going over to IPA; 4. Berkadia’s confidential information and trade secrets misappropriated and 6 used by the Non-Parties; and 5. Defendants’ and the Non-Parties’ improper solicitation of Berkadia’s clients. 7 (P Reply (Doc. 129) at 3.) 8 Taking Plaintiff’s at their word, the majority of the motion to compel falls away, leaving 9 basically three disputes: 1) how much of the information sought regarding the relationships 10 and transactions between Defendants and IPA and its agents and employees can be more 11 conveniently and economically obtained directly from the Defendants. Fed. R. Civ. 12 P.26(b)(2)(C)(i). It appears that one reason for tendering these inquiries to the Nonparties 13 is due to Defendants’ failure to produce and respond to these same or similar discovery 14 requests. See (P MC, Ex. 26: October 14, 2022, memo (Doc. 122-22) at 3.) The contours 15 of relevancy having now been established, and with Defendants soon to answer and 16 respond, this is no longer a reason for seeking such discovery from these Nonparties. 17 Likewise, there is no reason for continued nondisclosures based on assertions by 18 Nonparty IPA that it does not want to make disclosures of its own confidential and 19 proprietary information. Plaintiff is willing to modify the Amended Protective Order to 20 accommodate this concern. “Confidentiality is not a bar to discovery. A protective order 21 that restricts use of confidential discovery materials and requires such materials to be filed 22 under seal can provide adequate protection for confidentiality.” Cf., Seafirst Corp. v. 23 Jenkins, 644 F. Supp. 1160, 1164 (W.D. Wash. 1986) (refusing to create a “new” privilege 24 beyond deliberative process privilege). Once this order of protection is place, the 25 Nonparties redactions and claims of privilege must be revisited. See example: (P MC, Ex. 26 32: Supplemental Privilege Log (Doc. 122-23) at 14-26 (claiming nondisclosure based on 27 confidentiality and/or proprietary interests, or outside the scope of discovery). As narrowed 28 by Plaintiff, this discovery is relevant and not privileged. The same logic applies to 1 redactions made by responding Nonparties that were based on the confidentiality and 2 proprietary interests of IPA. 3 Plaintiff makes a relevant inquiry into “Berkadia’s confidential information and 4 trade secrets that Plaintiff alleges were misappropriated and used by the Nonparties or 5 Defendants after they began working for IPA. This discovery should be answered by the 6 Nonparties. Likewise, Nonparties should answer and respond to discovery seeking 7 information about Defendants and the Non-Parties’ improper solicitation of Berkadia’s 8 clients. The Court agrees with the Nonparties’ position that there is no support for an 9 assertion that Berkadia’s current or prospective clients are relevant to this inquiry. See 10 (Order (Doc. 133) at 12.) Berkadia’s clients shall be defined as clients (using the common 11 meaning for this term) on or before the time of the alleged misappropriation. 12 The parties shall meet and confer, with Plaintiff identifying the remaining 13 subpoenaed discovery relevant to produce information for the above subsets of 14 information. This shall be done based on the assumption that Defendants shall respond and 15 answer the discovery requests that have been propounded to them so that Nonparties are 16 not burdened by discovery which should be obtained from Defendants, pursuant to Rule 17 26(b)(2)(C)(i). This way, Plaintiff may avoid duplication. See (P Reply (Doc. 129) at 6 18 (complaining of document dump of “documents either already obviously in Berkadia’s 19 hands (because they belonged to Berkadia) or not relevant).
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1 WO 2 3 4 5
9 Berkadia Real Estate Advisors LLC, No. CV-22-00049-TUC-CKJ
10 Plaintiff, ORDER
11 v.
12 Arthur R Wadlund, et al.,
13 Defendants. 14 15 On January 12, 2023, the Plaintiff filed a motion to compel responses to Amended 16 Subpoenas, issued September 2022, from nonparties Marcus& Millichap Real Estate 17 Investment Services Inc., (IPA), Ryan Sarbinoff, Hamid Panahi, Steve Gebing, Lisa Ringo 18 Hartly, and Krista Ying (Nonparties). 19 Plaintiff tendered subpoenas to these six Nonparties. Only Lisa Ringo Hartly and 20 Krista Ying responded in part producing some documents which Plaintiff charges were in 21 large part heavily redacted. Plaintiff asks the Court to order reproduction of documents 22 already produced, including: 1) unredacted copies of all documents; 2) complete copies of 23 all documents, including all attachments, and 3) all missing information, including email 24 addresses of senders and recipients. Produce a Privilege Log accounting for their claims of 25 privilege and produce those documents contained on their current Privilege Logs which are 26 not privileged. 27 28 1 Additionally, Plaintiff asks the Court to order the Nonparties to produce written1 2 responses to the Amended Subpoenas and production of documents concerning: 1) 3 Defendants, Hartley, and Ying’s relationships with IPA, including any payments IPA 4 offered to purchase Berkadia’s Tucson office; 2) Defendants’ illegal competitive work for 5 and solicitation of Berkadia’s clients on behalf of or in concert with the Nonparties; 3) 6 Defendants’ and the Non-Parties’ misappropriation, use, and possession of Berkadia’s 7 confidential and trade secret information; and 4) recruitment of Defendants, Ying, and 8 Hartley, and IPA’s takeover of Berkadia’s Tucson office, including negotiation of its lease 9 with A. Wadlund and communications in November 2021.2 10 This discovery focuses on fleshing out email evidence that on December 2, 2021, 11 Sarbinoff sent Defendants’ IPA Salesperson Agreements, and on December 21, 2021, C. 12 Wadlund sent Sabinoff his existing pipeline, including clients that Plaintiff alleges were 13 under exclusive listing agreement with Berkadia, such as Alterra, San Xavier, and Cherry 14 Lofts. By December 27, while still employed with Plaintiff, Defendants began working 15 with Sarbinoff and James Crawley, IPA’s Sales Manager, to assess Berkadia’s networks to 16 determine how best to transfer information from its Salesforce and Outlook databases 17 directly onto IPA’s system. Around the same time, A. Wadlund negotiated a lease for IPA 18 to take over Berkadia’s office space; it appears that the Defendants own the property leased 19 by Plaintiff and now leased by IPA. 20 In Reply to the Nonparties’ response to the motion to compel, Plaintiff asserts the 21 response ignores Plaintiff’s efforts undertaken to resolve the disputed subpoenas by 22 narrowing the scope and agreeing to provide necessary protections for IPA’s assertions of 23 confidentiality and proprietary interest by adding an attorneys’ eyes-only provision to the 24 1 The Court is confused by this reference to written responses because the subpoenas 25 are for document productions. 2 The motion to compel aimed at Nonparties Ying and Hartley failed to provide a 26 separate statement of the question, the answer, and reasoning regarding deficiency; requirement does not apply where there has been a complete and total failure t respond to 27 discovery. LRCiv. 37.1; see (P Resp. Ds’ MC Rule 30(b)(6) Depo. (Doc. 115) at 5 (arguing for dismissal of Defendants’ motion to compel production of Rule 30(b) deponent based 28 on same noncompliance). 1 existing Protective Order. According to Plaintiff, “Berkadia has been very clear in its 2 discussions with the Non-Parties about the limited subset of information it is seeking by 3 narrowing it to the [] categories of documents,” as follows:
4 1. Defendants’ work with, on behalf of, or for the benefit of IPA while employed by Berkadia; 2. Defendants’ relationship and duties with IPA; 3. 5 payments from IPA to Defendants in exchange for them going over to IPA; 4. Berkadia’s confidential information and trade secrets misappropriated and 6 used by the Non-Parties; and 5. Defendants’ and the Non-Parties’ improper solicitation of Berkadia’s clients. 7 (P Reply (Doc. 129) at 3.) 8 Taking Plaintiff’s at their word, the majority of the motion to compel falls away, leaving 9 basically three disputes: 1) how much of the information sought regarding the relationships 10 and transactions between Defendants and IPA and its agents and employees can be more 11 conveniently and economically obtained directly from the Defendants. Fed. R. Civ. 12 P.26(b)(2)(C)(i). It appears that one reason for tendering these inquiries to the Nonparties 13 is due to Defendants’ failure to produce and respond to these same or similar discovery 14 requests. See (P MC, Ex. 26: October 14, 2022, memo (Doc. 122-22) at 3.) The contours 15 of relevancy having now been established, and with Defendants soon to answer and 16 respond, this is no longer a reason for seeking such discovery from these Nonparties. 17 Likewise, there is no reason for continued nondisclosures based on assertions by 18 Nonparty IPA that it does not want to make disclosures of its own confidential and 19 proprietary information. Plaintiff is willing to modify the Amended Protective Order to 20 accommodate this concern. “Confidentiality is not a bar to discovery. A protective order 21 that restricts use of confidential discovery materials and requires such materials to be filed 22 under seal can provide adequate protection for confidentiality.” Cf., Seafirst Corp. v. 23 Jenkins, 644 F. Supp. 1160, 1164 (W.D. Wash. 1986) (refusing to create a “new” privilege 24 beyond deliberative process privilege). Once this order of protection is place, the 25 Nonparties redactions and claims of privilege must be revisited. See example: (P MC, Ex. 26 32: Supplemental Privilege Log (Doc. 122-23) at 14-26 (claiming nondisclosure based on 27 confidentiality and/or proprietary interests, or outside the scope of discovery). As narrowed 28 by Plaintiff, this discovery is relevant and not privileged. The same logic applies to 1 redactions made by responding Nonparties that were based on the confidentiality and 2 proprietary interests of IPA. 3 Plaintiff makes a relevant inquiry into “Berkadia’s confidential information and 4 trade secrets that Plaintiff alleges were misappropriated and used by the Nonparties or 5 Defendants after they began working for IPA. This discovery should be answered by the 6 Nonparties. Likewise, Nonparties should answer and respond to discovery seeking 7 information about Defendants and the Non-Parties’ improper solicitation of Berkadia’s 8 clients. The Court agrees with the Nonparties’ position that there is no support for an 9 assertion that Berkadia’s current or prospective clients are relevant to this inquiry. See 10 (Order (Doc. 133) at 12.) Berkadia’s clients shall be defined as clients (using the common 11 meaning for this term) on or before the time of the alleged misappropriation. 12 The parties shall meet and confer, with Plaintiff identifying the remaining 13 subpoenaed discovery relevant to produce information for the above subsets of 14 information. This shall be done based on the assumption that Defendants shall respond and 15 answer the discovery requests that have been propounded to them so that Nonparties are 16 not burdened by discovery which should be obtained from Defendants, pursuant to Rule 17 26(b)(2)(C)(i). This way, Plaintiff may avoid duplication. See (P Reply (Doc. 129) at 6 18 (complaining of document dump of “documents either already obviously in Berkadia’s 19 hands (because they belonged to Berkadia) or not relevant). The Court does not mean to 20 limit the usage of discovery to these Nonparties in a targeted intentional way to investigate 21 the completeness of information obtained from the Defendants, but the Amended 22 Subpoena’s violate Rule26(b)(2)(C)(i) where they seek duplicative documents like copies 23 of contracts or most of the emails sent from Defendants to the Nonparties. 24 The Court denies the Nonparties’ requests for attorney fees related to this motion 25 because much of the problem in completing this discovery flowed from the disputed 26 discovery between the parties. The Nonparties also failed to propose a protective order to 27 facilitate disclosure and instead mischaracterized redactions and nondisclosure as 28 privileged. The Court notes that unless good cause is shown depositions shall be limited to 1 10 as provided for in the rule, Fed. R. Civ. P. 30(A)(2)(i), including depositions of the 2 Nonparties. 3 Accordingly, 4 IT IS ORDERED that the motion to compel responses by Nonparties to Subpoenas, 5 issued September 2022, (Doc. 120) is GRANTED IN PART AND DENIED IN PART, as 6 follows: within 14 days of the filing date of this Order, the Plaintiff and Nonparties shall 7 meet and confer for Plaintiff to identify and the Nonparties to concur regarding 8 amendment, pursuant to this Order, of the document requests pending pursuant to the 9 Subpoenas. 10 IT IS FURTHER ORDERED that the request for attorney fees by the Nonparties 11 is DENIED. 12 IT IS FURTHER ORDERED that within 14 days of the filing date of this Order 13 the Nonparties shall make modifications to the existing Amended Protective Order or draft 14 a separate Protective Order to its satisfaction and provide the document to the Plaintiff for 15 its consideration and to be filed in the case. 16 IT IS FURTHER ORDERED that pursuant to entry of an order of protection for 17 Nonparties’ confidentiality and proprietary interests, the redacted documents shall be 18 reviewed and redisclosed pursuant to the protective order, without redaction. All redactions 19 or nondisclosures based on claims of privilege shall be accompanied by a Privilege Log. 20 IT IS FURTHER ORDERED that the Nonparties shall have 30 days to produce 21 the documents in response to the Subpoenas as amended in accordance with this Order, but 22 not later than March 31, 2023. 23 IT IS FURTHER ORDERED that at the request of the Plaintiff, the Nonparties 24 shall, each through their attorney, tender 3 possible dates for their depositions to be held 25 no later than May 31, 2023. 26 ///// 27 ///// 28 ///// 1 IT IS FURTHER ORDERED that the Motion to Seal Proposed Confidential □□ Nonparty Subpoena Responses and Exhibits (Doc. 121) is GRANTED, and the Clerk || of the Court shall file the Document (lodged Doc. 122) UNDER SEAL. 4 Dated this 17th day of February, 2023. 5 Ee LO Dregs 7 Honorable Cin . J6fgenson United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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