Houston Municipal Employees Pension System v. BofI Holding, Inc.

District Court, S.D. California·Decided September 29, 2021·No. 3:15-cv-02324·Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 IN RE: BofI HOLDING, Inc. Securities Case No.: 15-CV-2324-GPC-KSC Litigation, 12 ORDER:

13 (1) GRANTING PLAINTIFF’S 14 MOTION REGARDING 15 OBJECTIONS TO ORDER REGARDING DISCOVERY 16 DISPUTES; AND 17 (2) DIRECTING DEFENDANTS TO 18 PRODUCE DEPOSITION 19 TESTIMONY

20 [ECF No. 214] 21 22 Before the Court is Plaintiff’s Motion Regarding Objections to Magistrate Judge 23 Crawford’s June 15, 2021 Order Regarding Discovery Disputes, filed on June 29, 2021. 24 ECF No. 214-1. Defendants filed their response in opposition to the motion on July 23, 25 2021, ECF No. 225, and Plaintiffs filed their reply on August 6, 2021, ECF No. 235. 26 For the foregoing reasons, Plaintiff’s motion is GRANTED. 27 1 Factual and Procedural Background 2 I. First Requests for Production and the February 26, 2021 Order 3 On December 22, 2020, Plaintiff, Houston Municipal Employee Pension System 4 (hereinafter “Plaintiff”) served a first set of Requests for Production (“First RFPs”) to 5 Defendants. Within the set of requests, Plaintiff’s RFP No. 2 sought “all Documents and 6 Communications produced in the Erhart Action” and “all transcripts and video 7 recordings of depositions taken in the Erhart Action.” ECF No. 183-4 at 11; see also 8 ECF No. 214-1, Plaintiff’s Motion (“Pl.’s Mot.”) at 7; ECF No. 225, Defendants’ 9 Opposition (“Defs.’ Opp.”) at 6.1 Defendants objected to this request (and others), and 10 the parties were unable to resolve the disputes during subsequent meet and confer 11 conferences. See Defs.’ Opp. at 6. 12 Judge Crawford declined to order Defendants to fulfill the request because Plaintiff 13 “ha[d] not met [its] burden of demonstrating the relevance of all discovery exchanged in 14 Erhart to this case,” and that Plaintiff’s request for “wholesale production” of discovery 15 from the Erhart whistleblower action was overbroad and unwarranted. ECF No. 182, 16 Feb. 26, 2021 Order, at 5. Judge Crawford did direct Defendants to produce documents 17 that were “otherwise responsive” to Plaintiff’s requests in the First RPFs. Id. However, 18 Defendants did not interpret Judge Crawford’s Order as requiring Defendants to produce 19 “any deposition transcripts or recordings,” so they did not do so. Defs.’ Opp. at 7. 20 II. Second Requests for Production and the June 15, 2021 Order 21 On March 12, 2021, Plaintiff served a second set of requests for production 22 (“Second RFPs”) on Defendants. The instant motion is limited to the dispute over RFP 23 24 25

26 1 The Court cites to page numbers reflected on the CM/ECF pagination. 27 1 No. 59 which asked Defendants to produce: “[a]ll transcripts and video recordings of 2 depositions, taken in the Erhart action” relating to eleven specific deposed witnesses.2 3 On April 12, 2021, Defendants objected to RFP No. 59 “with virtually all the same 4 objections used for Request No. 2” and because Defendants believed Judge Crawford 5 “had already ruled on this issue” so the objection was not timely. Defs’ Opp. at 7-8. 6 The parties once again failed to resolve their disagreement regarding RFP No. 59 7 among themselves or during discovery conferences, Pl.’s Mot. at 8, so on June 11, 2021 8 they argued their positions before Judge Crawford.3 On June 15, Judge Crawford issued 9 an order. ECF No. 206, June 15, 2021 Order. Judge Crawford again declined to compel 10 Defendants to produce the deposition testimony “outright,” but held that “fairness 11 requires that if defendants plan to use the transcripts and videotapes for any purpose in 12 this litigation, plaintiffs must be given equal access to them.” June 15 Order at 2 13 (emphasis in original). The Order also conditioned Defendants’ obligation by instructing 14 that “any transcript or videotape that defendants intend to use in this litigation shall be 15 produced to plaintiff no less than 14 days before the witness is deposed.” Id. During the 16 hearing, Judge Crawford also stated, “[i]t cannot be that the defense has these transcripts 17 and uses them for its preparation of this case and any future impeachment but the plaintiff 18 is precluded from having that same opportunity.” ECF No. 220, June 11, 2021 Hearing 19 Transcript (“June 11 Tr.”) at 16. 20 21 22

23 2 Each party listed the eleven witnesses as: (1) Jonathan Ball; (2) Eshel Bar-Adon; (3) 24 named Defendant Gregory Garrabrants; (4) named Defendant Andrew J. Micheletti; (5) 25 Cynthia Brickey-Wyatt; (6) Jan Durrans; (7) Heather Michaud; (8) Kristi Procopio; (9) Mike Sisk; (10) Brian Swanson; and (11) John Tolla. 26 3 The official transcript of the June 11, 2021 hearing is available at ECF No. 220. 27 1 Plaintiff filed the motion now before the Court to set aside Judge Crawford’s June 2 15 Order, and to compel Defendants to produce the depositions of the witnesses named in 3 RFP No. 59. ECF No. 214-1, Pl.’s Mot. 4 Legal Standard 5 Under 28 U.S.C.A. § 636(b)(1), a district judge to whom a case is assigned may 6 designate a magistrate judge to hear and determine any pretrial matter pending before the 7 court, with limited exceptions. The same statute also empowers the district judge to 8 “reconsider any matter . . . where it has been shown that the magistrate judge’s order is 9 clearly erroneous or contrary to law.” Id. § 636(b)(1)(A). A party who takes issue with a 10 magistrate judge’s resolution of pretrial disputes “may serve and file objections to the 11 order within 14 days after being served with a copy,” and the “district judge in the case 12 must consider timely objections and modify or set aside any part of the order that is 13 clearly erroneous or is contrary to law.” Fed. R. Civ. P. 72(a). To determine whether it is 14 “clearly erroneous” the district judge must evaluate whether “on the entire evidence, it is 15 left with the definite and firm conviction that a mistake has been committed.” In re 16 Optical Disk Drive Antitrust Litig., 801 F.3d 1072, 1076 (9th Cir. 2015); see also 17 Concrete Pipe & Prods. v. Construction Laborers Pension Trust, 508 U.S. 602, 623 18 (1993). If a magistrate judge’s order “applies an incorrect legal standard, fails to consider 19 an element of [the] applicable standard, or fails to apply or misapplies relevant statutes, 20 case law, or rules of procedure” the district judge may find it to be contrary to law for the 21 purposes of Rule 72(a). Martin v. Loadholt, No. 1:10-cv-00156-LJO-MJS, 2014 WL 22 3563312, at *1 (E.D. Cal. July 18, 2014). 23 Discussion 24 I. Timing of the Objection under Rule 72(a) 25 As one of their primary arguments against Plaintiff’s objections, Defendants 26 challenge the timing of Plaintiff’s objection to the February 26 Order. See Defs.’ Opp. at 27 1 9. Specifically, Defendants assert that Plaintiff served RFP No. 59 because Plaintiff 2 “fail[ed] to object on a timely basis” to Judge Crawford’s February 26 Order which HAD 3 declined to compel Defendants to respond to RFP No. 2. Id. 4 The Court is not persuaded by Defendants’ argument that Plaintiff failed to object 5 to RFP No. 2 and therefore forfeited or waived the prerogative to seek the deposition 6 testimony requested in RFP No. 59. Defendants’ position necessarily relies on the 7 premise that Plaintiff’s RFP Nos. 2 and 59 are essentially identical. But in declining to 8 compel production, Judge Crawford in the February 26 Order used the term “wholesale” 9 to describe Plaintiff’s indiscriminate request in RFP No. 2 for all communications, 10 depositions, and recordings in the Erhart action. Feb. 26, 2021 Order at 5.

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Houston Municipal Employees Pension System v. BofI Holding, Inc., (S.D. Cal. 2021).

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