1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 STACY CHANG, Case No. 22-cv-02010-AMO (DMR)
8 Plaintiff, ORDER ON JOINT DISCOVERY 9 v. LETTER
10 CARLOS CASHMAN, et al., Re: Dkt. No. 82 11 Defendants.
12 The parties filed a joint discovery letter in which Plaintiff Stacy Chang moves to compel 13 Defendants Carlos Cashman; Arrowside Ventures, LLC; Arrowside Capital, LLC; Arrowside 14 Fund GP, LLC; and Cashman Family Investments II, LLC to respond to a single request for 15 production (“RFP”). [Docket No. 82.] This matter is suitable for resolution without a hearing. 16 Civ. L.R. 7-1(b). For the following reasons, the motion to compel is denied. 17 I. BACKGROUND 18 This case stems from an employment dispute between Plaintiff and Defendant Cashman. 19 Plaintiff alleges that she “is an accomplished professional in the venture capital industry.” She 20 joined Founders Fund in 2017 where she worked as Chief of Staff. [Docket No. 109 (Second Am. 21 Compl., “SAC”) ¶¶ 1, 33.] In January 2020, third-party Thomas Copeman introduced Plaintiff to 22 Cashman, the co-founder and CEO of Thrasio, which has been valued at $10 billion. Id. at ¶¶ 2, 23 35. In May 2021, Copeman told Chang that Cashman “wanted to create a new investment 24 platform and raise a fund to work more closely with early-stage founders” and would provide $10 25 million of capital. Id. at ¶¶ 2, 37. Copeman “sought to gauge whether Chang was interested in 26 joining [the new entity] as a partner.” Id. at ¶ 38. 27 Plaintiff alleges that Cashman and Copeman subsequently recruited Plaintiff to join the 1 2021, “Cashman treated Chang as a full-time employee and partner in Arrowside” and the parties 2 “mutually agreed and understood that Chang was now working for Cashman and Arrowside.” Id. 3 at ¶ 49. Arrowside Capital, LLC “would employ Chang and all of the other partners, and provide 4 services and benefits to all employees, including infrastructure, offices, and IT systems,” and 5 ownership of the entity would be split among the partners. Id. at ¶ 8. Based on statements from 6 Cashman, Copeman, and another anticipated partner, Plaintiff “believed that she would receive 7 carried interest from any investments she introduced to [Arrowside] Fund [GP].” Id. at ¶¶ 44, 45. 8 On October 13, 2021, Plaintiff told Cashman and Copeman that she would be “winding 9 down her responsibilities at Founders Fund and resigning” in the coming weeks. Id. at ¶ 57. Her 10 last day at Founders Fund was November 30, 2021. Id. at ¶ 15. On December 10, 2021, Copeman 11 told Plaintiff that she would no longer be part of Arrowside and offered her one-month’s pay and 12 carry interest for three of her funding deals. Id. at ¶ 72. She rejected this proposal. Id. 13 Plaintiff filed the complaint in March 2022 against Defendants Cashman; Arrowside 14 Capital, LLC; Arrowside Fund GP, LLC; Arrowside Ventures, LLC; and Cashman Family 15 Investments II, LLC. She filed the SAC in March 2024 and added Perseverus LLC as a defendant. 16 She alleges the following claims in the SAC: 1) fraudulent inducement; 2) negligent 17 misrepresentation; 3) misrepresentations in violation of California Labor Code section 970; 4) 18 breach of contract; 5) promissory estoppel; 6) unjust enrichment; 7) failure to pay wages upon 19 separation of employment; 8) violation of California Business and Professions Code section 17200 20 et seq.; and 9) failure to reimburse expenses and losses in violation of California Labor Code 21 section 2802. 22 Plaintiff now moves to compel Defendants to produce documents in response to request for 23 production (“RFP”) No. 18. 24 II. LEGAL STANDARD 25 Federal Rule of Civil Procedure 26 provides
26 Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the 27 needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to discovery in resolving the issues, and whether the burden or expense 1 of the proposed discovery outweighs its likely benefit. 2 Fed. R. Civ. P. 26(b)(1). “Information within this scope of discovery need not be admissible in 3 evidence to be discoverable.” Id. “Relevancy, for the purposes of discovery, is defined broadly, 4 although it is not without ultimate and necessary boundaries.” Gonzales v. Google, Inc., 234 5 F.R.D. 674, 679-80 (N.D. Cal. 2006). “While the party seeking to compel discovery has the 6 burden of establishing that its request satisfies relevancy requirements, the party opposing 7 discovery bears the burden of showing that discovery should not be allowed, and of clarifying, 8 explaining, and supporting its objections with competent evidence.” Lofton v. Verizon Wireless 9 (VAW) LLC, 308 F.R.D. 276, 281 (N.D. Cal. 2015) (citing La. Pac. Corp. v. Money Mkt. 1 10 Institutional Inv. Dealer, 285 F.R.D. 481, 485 (N.D. Cal. 2012)). 11 III. DISCUSSION 12 RFP No. 18 seeks “[a]ll settlement agreements, cease and desist letters, demand letters, and 13 deposition testimony from Carlos Cashman in previous or threatened litigation involving Mr. 14 Cashman, including in Sasha Hoffman v. Thras.io Inc., et al., Case No. 1:20-cv-12224-PBS (D. 15 Mass.) and actual or threatened litigation involving OrionCKB.” Jt. Letter Ex. A. Defendants 16 made numerous objections to the RFP, including that it is “vague, ambiguous, overly broad, 17 unduly burdensome, and not reasonably calculated to lead to the discovery of admissible 18 evidence.” They also argue that the request seeks privileged and/or confidential, proprietary 19 materials. Id. However, the parties focus their discussion on the relevance of the requested 20 materials and burden of production and do not address Defendants’ other objections. Accordingly, 21 the court focuses on the parties’ dispute regarding relevance. 22 Plaintiff contends that the complaint in Sasha Hoffman v. Thras.io Inc., et al. “accused 23 Defendant Cashman of ‘refus[ing] to provide [Plaintiff] with the fully earned, vested Thras.io 24 equity repeatedly promised to her in return for her work in helping to get Thras.io off the 25 ground.’” Jt. Letter 2 (citation omitted). According to Plaintiff, the complaint “goes on to detail 26 repeated unfulfilled promises made by Mr. Cashman that are strikingly similar to those recounted 27 in Plaintiff’s Amended Complaint here.” Id. As to the OrionCKB matter, Plaintiff contends that 1 litigation related to ‘employment and a position . . . there was a dispute over the eventual 2 compensation that would have been due.’” Id. (quoting Cashman Dep. 43-44). According to 3 Plaintiff, “Cashman failed to ‘document[ ] properly’ the employee’s position, and the dispute was 4 eventually settled after he received a demand letter.” Id. (quoting Cashman Dep. 44-46). 5 Plaintiff contends that RFP No. 18 “seeks what should not amount to more than a handful 6 of documents that are critical to this case, which include . . . one deposition transcript, two 7 settlement agreements, and less than five letters.” Jt. Letter 2. She argues that “[t]hese documents 8 should confirm that Defendant Carlos Cashman engaged in nearly identical misconduct as that 9 alleged by Plaintiff Chang in in [sic] in the Thras.io and OrionCKB matters” and that she 10 “anticipates these documents will therefore demonstrate his pattern of making employment 11 promises he has no intention of maintaining.” Id. Plaintiff further contends that the requested 12 materials are relevant to “refut[ing] Defendant Cashman’s insistent claims that he was unaware of 13 the consequences of his oral promises to Plaintiff.” Id. at 3.
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 STACY CHANG, Case No. 22-cv-02010-AMO (DMR)
8 Plaintiff, ORDER ON JOINT DISCOVERY 9 v. LETTER
10 CARLOS CASHMAN, et al., Re: Dkt. No. 82 11 Defendants.
12 The parties filed a joint discovery letter in which Plaintiff Stacy Chang moves to compel 13 Defendants Carlos Cashman; Arrowside Ventures, LLC; Arrowside Capital, LLC; Arrowside 14 Fund GP, LLC; and Cashman Family Investments II, LLC to respond to a single request for 15 production (“RFP”). [Docket No. 82.] This matter is suitable for resolution without a hearing. 16 Civ. L.R. 7-1(b). For the following reasons, the motion to compel is denied. 17 I. BACKGROUND 18 This case stems from an employment dispute between Plaintiff and Defendant Cashman. 19 Plaintiff alleges that she “is an accomplished professional in the venture capital industry.” She 20 joined Founders Fund in 2017 where she worked as Chief of Staff. [Docket No. 109 (Second Am. 21 Compl., “SAC”) ¶¶ 1, 33.] In January 2020, third-party Thomas Copeman introduced Plaintiff to 22 Cashman, the co-founder and CEO of Thrasio, which has been valued at $10 billion. Id. at ¶¶ 2, 23 35. In May 2021, Copeman told Chang that Cashman “wanted to create a new investment 24 platform and raise a fund to work more closely with early-stage founders” and would provide $10 25 million of capital. Id. at ¶¶ 2, 37. Copeman “sought to gauge whether Chang was interested in 26 joining [the new entity] as a partner.” Id. at ¶ 38. 27 Plaintiff alleges that Cashman and Copeman subsequently recruited Plaintiff to join the 1 2021, “Cashman treated Chang as a full-time employee and partner in Arrowside” and the parties 2 “mutually agreed and understood that Chang was now working for Cashman and Arrowside.” Id. 3 at ¶ 49. Arrowside Capital, LLC “would employ Chang and all of the other partners, and provide 4 services and benefits to all employees, including infrastructure, offices, and IT systems,” and 5 ownership of the entity would be split among the partners. Id. at ¶ 8. Based on statements from 6 Cashman, Copeman, and another anticipated partner, Plaintiff “believed that she would receive 7 carried interest from any investments she introduced to [Arrowside] Fund [GP].” Id. at ¶¶ 44, 45. 8 On October 13, 2021, Plaintiff told Cashman and Copeman that she would be “winding 9 down her responsibilities at Founders Fund and resigning” in the coming weeks. Id. at ¶ 57. Her 10 last day at Founders Fund was November 30, 2021. Id. at ¶ 15. On December 10, 2021, Copeman 11 told Plaintiff that she would no longer be part of Arrowside and offered her one-month’s pay and 12 carry interest for three of her funding deals. Id. at ¶ 72. She rejected this proposal. Id. 13 Plaintiff filed the complaint in March 2022 against Defendants Cashman; Arrowside 14 Capital, LLC; Arrowside Fund GP, LLC; Arrowside Ventures, LLC; and Cashman Family 15 Investments II, LLC. She filed the SAC in March 2024 and added Perseverus LLC as a defendant. 16 She alleges the following claims in the SAC: 1) fraudulent inducement; 2) negligent 17 misrepresentation; 3) misrepresentations in violation of California Labor Code section 970; 4) 18 breach of contract; 5) promissory estoppel; 6) unjust enrichment; 7) failure to pay wages upon 19 separation of employment; 8) violation of California Business and Professions Code section 17200 20 et seq.; and 9) failure to reimburse expenses and losses in violation of California Labor Code 21 section 2802. 22 Plaintiff now moves to compel Defendants to produce documents in response to request for 23 production (“RFP”) No. 18. 24 II. LEGAL STANDARD 25 Federal Rule of Civil Procedure 26 provides
26 Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the 27 needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to discovery in resolving the issues, and whether the burden or expense 1 of the proposed discovery outweighs its likely benefit. 2 Fed. R. Civ. P. 26(b)(1). “Information within this scope of discovery need not be admissible in 3 evidence to be discoverable.” Id. “Relevancy, for the purposes of discovery, is defined broadly, 4 although it is not without ultimate and necessary boundaries.” Gonzales v. Google, Inc., 234 5 F.R.D. 674, 679-80 (N.D. Cal. 2006). “While the party seeking to compel discovery has the 6 burden of establishing that its request satisfies relevancy requirements, the party opposing 7 discovery bears the burden of showing that discovery should not be allowed, and of clarifying, 8 explaining, and supporting its objections with competent evidence.” Lofton v. Verizon Wireless 9 (VAW) LLC, 308 F.R.D. 276, 281 (N.D. Cal. 2015) (citing La. Pac. Corp. v. Money Mkt. 1 10 Institutional Inv. Dealer, 285 F.R.D. 481, 485 (N.D. Cal. 2012)). 11 III. DISCUSSION 12 RFP No. 18 seeks “[a]ll settlement agreements, cease and desist letters, demand letters, and 13 deposition testimony from Carlos Cashman in previous or threatened litigation involving Mr. 14 Cashman, including in Sasha Hoffman v. Thras.io Inc., et al., Case No. 1:20-cv-12224-PBS (D. 15 Mass.) and actual or threatened litigation involving OrionCKB.” Jt. Letter Ex. A. Defendants 16 made numerous objections to the RFP, including that it is “vague, ambiguous, overly broad, 17 unduly burdensome, and not reasonably calculated to lead to the discovery of admissible 18 evidence.” They also argue that the request seeks privileged and/or confidential, proprietary 19 materials. Id. However, the parties focus their discussion on the relevance of the requested 20 materials and burden of production and do not address Defendants’ other objections. Accordingly, 21 the court focuses on the parties’ dispute regarding relevance. 22 Plaintiff contends that the complaint in Sasha Hoffman v. Thras.io Inc., et al. “accused 23 Defendant Cashman of ‘refus[ing] to provide [Plaintiff] with the fully earned, vested Thras.io 24 equity repeatedly promised to her in return for her work in helping to get Thras.io off the 25 ground.’” Jt. Letter 2 (citation omitted). According to Plaintiff, the complaint “goes on to detail 26 repeated unfulfilled promises made by Mr. Cashman that are strikingly similar to those recounted 27 in Plaintiff’s Amended Complaint here.” Id. As to the OrionCKB matter, Plaintiff contends that 1 litigation related to ‘employment and a position . . . there was a dispute over the eventual 2 compensation that would have been due.’” Id. (quoting Cashman Dep. 43-44). According to 3 Plaintiff, “Cashman failed to ‘document[ ] properly’ the employee’s position, and the dispute was 4 eventually settled after he received a demand letter.” Id. (quoting Cashman Dep. 44-46). 5 Plaintiff contends that RFP No. 18 “seeks what should not amount to more than a handful 6 of documents that are critical to this case, which include . . . one deposition transcript, two 7 settlement agreements, and less than five letters.” Jt. Letter 2. She argues that “[t]hese documents 8 should confirm that Defendant Carlos Cashman engaged in nearly identical misconduct as that 9 alleged by Plaintiff Chang in in [sic] in the Thras.io and OrionCKB matters” and that she 10 “anticipates these documents will therefore demonstrate his pattern of making employment 11 promises he has no intention of maintaining.” Id. Plaintiff further contends that the requested 12 materials are relevant to “refut[ing] Defendant Cashman’s insistent claims that he was unaware of 13 the consequences of his oral promises to Plaintiff.” Id. at 3. According to Plaintiff, Cashman’s 14 “previous experiences with employees who also believed they would be paid for their work 15 starting a company with him, as the Thras.io Complaint alleges and the OrionCKB matter seems 16 to address, would refute Mr. Cashman’s claims of ignorance here” and “would significantly 17 resolve the issue of whether Mr. Cashman has previously deceived employees as to their roles in 18 start-up ventures . . . as he did with Plaintiff.” Id. 19 Defendants dispute the relevance of the requested materials. They argue that the 20 allegations in Hoffman related to the misclassification of the plaintiff as an independent contractor, 21 which is not at issue in this lawsuit, and that the plaintiff’s claims were “directed primarily at” 22 individuals and entities other than Cashman.” Id. at 4. They also argue that the OrionCKB matter 23 “involved an employer/employee dispute over a job position, with an entirely different set of facts 24 and circumstances.” Id. According to Defendants, these two matters involved “entirely different 25 facts, different players, and different companies” and are “plainly irrelevant.” Id. at 3-4. 26 Plaintiff has not met her burden to show that documents responsive to RFP No. 18 are 27 relevant to her claims. With respect to the Hoffman matter, Plaintiff contends that the complaint 1 recounted in Plaintiff’s Amended Complaint here” but does not describe the similarities between 2 the two complaints. Nor does she explain how materials from Hoffman may “refute” Cashman’s 3 claims in this case “that he was unaware of the consequences of his oral promises to Plaintiff.” 4 The lack of support for her relevance argument is especially glaring since Plaintiff appears to have 5 access to public filings in the Hoffman matter. For example, she submitted the first two pages of 6 the complaint in Hoffman with a November 2023 discovery letter. [Docket No. 64-6.] Notably, 7 the plaintiff in Hoffman alleges in the first paragraph of the complaint that “[t]his action seeks a 8 remedy for Defendants’ misclassification of Ms. Hoffman as an independent contractor . . .” See 9 id. Plaintiff makes no misclassification claim in this case. 10 Plaintiff’s relevance argument with respect to the OrionCKB matter is also speculative and 11 conclusory. She provides few details, asserting only that “there was a dispute over the eventual 12 compensation that would have been due” to an employee. See Jt. Letter 2. Defendants quote from 13 Cashman’s deposition, where he testified that “the general dispute was about employment and a 14 position, the person was – had one agreement when they came to work for us, and then that 15 changed when they took a different position. And, you know, it wasn’t documented properly. So 16 there was a dispute over the eventual compensation that would have been due.” Id. at 4. Plaintiff 17 does not explain the significance of this testimony or provide any details as to how the OrionCKB 18 matter involved allegations that are similar to hers. 19 The cases upon which Plaintiff relies in the joint letter are very different from the issue 20 here. See Jt. Letter 3. In Matosich v. Wright Med. Grp., Inc., No. CV 19-16-M-DLC, 2020 WL 21 2216864, at *4 (D. Mont. May 7, 2020), a products liability case, the court ordered the defendant 22 manufacturer to produce expert reports and deposition transcripts for experts “who have 23 previously testified on [the defendant’s] behalf in cases involving fractures of the same [hip 24 implant] component,” reasoning that the materials were “relatively well-calculated to lead to impeachment evidence.” Here, Plaintiff does not explain how “settlement agreements, cease and 25 desist letters, demand letters, and deposition testimony from Carlos Cashman” in the Hoffman and 26 OrionCKB matters could “lead to impeachment evidence.” In Garner v. Amazon.com, Inc., No. 27 1 materials related to a Federal Trade Commission investigation of defendant Amazon regarding 2 || “Amazon’s storage, transmittal, and/or sharing of Alexa audio recordings/transcripts,” which was 3 “conduct that [was] clearly at issue” in the instant lawsuit. Specifically, one of the plaintiffs’ 4 || claims was “based in part on allegations that the Alexa device was intentionally designed to 5 intercept and record as many conversations and collect as much data as possible (including 6 || location data), that defendants retain (and sometimes disclose) recordings even when they know 7 the recordings were unintended and unauthorized, and that Amazon has misled consumers by 8 || failing to accurately describe what it does with the data it collects in order to protect market 9 share.” Id. at *3. In this case, even though Plaintiff appears to have at least some access to 10 || information about the Hoffman matter and was able to examine Cashman regarding the OrionCKB 11 matter, she does not explain how those matters involve the same or similar conduct at issue in this 12. || case, other than the fact that they appear to involve employment-related disputes. This connection
13 is too generalized to support a determination that the requested information is relevant to 14 || Plaintiffs case.
15 As Plaintiff has failed to satisfy her burden to demonstrate the relevance of materials A 16 || responsive to RFP No. 18, the motion to compel is denied.
17 | IV. CONCLUSION 18 For the foregoing reasons, Plaintiff's motion to compel is denied. 19 KS DISTR I> 20 IT IS SO ORDERED. S □□ » A) Dated: April 8, 2024 &) > s SO ORDERED □ 22 iri ~ n . Ryu 23 zr anna M: Ry □ 24 3 Fudge po iL a Sy 25 oN CY iy OS 26 DISTRICS 27 28