Largan Precision Co, LTD v. Motorola Mobility, LLC.

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 LARGAN PRECISION CO, LTD, Case No. 21-cv-09138-JSW (DMR)

8 Plaintiff, ORDER ON JOINT DISCOVERY 9 v. LETTER

10 MOTOROLA MOBILITY LLC., Re: Dkt. No. 120 11 Defendant.

12 The parties filed a joint discovery letter in this patent infringement action in which Plaintiff 13 Largan Precision Co., Ltd. (“Largan”) moves to compel Defendant Motorola Mobility LLC 14 (“Motorola”) to produce documents responsive to requests for production (“RFPs”). [Docket No. 15 120.] This matter is suitable for determination without oral argument. Civ. L.R. 7-1(b). For the 16 following reasons, the motion to compel is granted. 17 I. BACKGROUND 18 Largan moves to compel Motorola to produce additional documents in response to 14 19 RFPs.1 Motorola objects that it has produced all non-privileged responsive documents in its 20 possession, custody, or control, and that any additional responsive documents are “in the hands of” 21 third-party suppliers located overseas and “outside of Motorola’s legal control.” Jt. Letter 4. 22 Largan responds that the contractual relationships between the overseas suppliers and Motorola 23 and/or its parent company, Lenovo, establish that Motorola has control over the responsive 24 documents. The sole dispute between the parties is whether Motorola has control over third-party 25 documents and should be compelled to produce them; the parties do not dispute the relevance of 26 the requested documents or their discoverability. 27 II. DISCUSSION 1 Under Federal Rule of Civil Procedure 34, a party may serve on another party a request to 2 produce documents, electronically stored information, and tangible things within the responding 3 party’s possession, custody, or control. Fed. R. Civ. P. 34(a)(1). A party must serve responses and 4 objections to RFPs within 30 days of service of the discovery. Fed. R. Civ. P. 34(b)(2). Rule 34 5 requires a party to produce or permit inspection of documents responsive to a request for 6 production when such documents are in the party’s “possession, custody, or control.” Fed. R. Civ. 7 P. 34(a)(1). The party seeking the documents bears the burden of demonstrating that the 8 responding party exercises such control. United States v. Int'l Union of Petroleum & Indus. 9 Workers, 870 F.2d 1450, 1452 (9th Cir. 1989). In the Ninth Circuit, a “practical ability to obtain 10 the requested documents” from a related organization is not enough to constitute control because 11 the related organization “could legally–and without breaching any contract–[ ] refuse to turn over 12 such documents.” In re Citric Acid Litig., 191 F.3d at 1107-08. Instead, “control” is defined as 13 “the legal right to obtain documents upon demand.” Id. 14 The parties submitted six contracts between Motorola or Lenovo and five third-party 15 suppliers.2 Five of the six contracts contain a provision that Motorola, Lenovo, or a 16 Motorola/Lenovo designated auditor “may inspect Supplier’s facilities, equipment, materials, 17 books and records that pertain to this Agreement and may audit for compliance with this 18 Agreement during the term of this Agreement and 3 years thereafter.” See Exs. H at § 21.2; I at § 19 21.2; K at § 21.3; L at § 21.3; M at § 21.3. The sixth contract contains a similar provision: 20 “Motorola may inspect Supplier’s facilities, equipment, materials, records, and the Products that 21 pertain to this Agreement, and may audit for compliance with this Agreement. Upon expiration or 22 termination of this Agreement, at Motorola’s request, Supplier will transfer all records that pertain 23 to this Agreement to Motorola . . .” Ex. J at § 20.5. 24 These contract provisions establish that documents that “pertain to” Motorola and 25 Lenovo’s agreements with their third-party suppliers are under the control of Motorola and 26 27 1 Lenovo, since they have “the legal right to obtain documents upon demand.” See In re Citric 2 Acid., 191 F.3d at 1107. Specifically, the provisions require the third-party suppliers to allow 3 Motorola and Lenovo to inspect “records” without limitation during the terms of the agreements. 4 See, e.g., Lofton v. Verizon Wireless (VAW) LLC, No. 13-cv-05665-YGR (JSC), 2014 WL 5 10965261, at *1-2 (N.D. Cal. Nov. 25, 2014) (holding that audit provisions in contracts between 6 defendant and third-party vendors that gave defendant “the right, at all times, to examine and audit 7 records” without restriction gave defendant “control” over the vendors’ records); Doe v. AT&T 8 Western Disability Benefits Program, No. C-11-4603 DMR, 2012 WL 1669882, at *4-5 (N.D. 9 Cal. May 14, 2012) (contract provision securing the defendant’s right to access third parties’ 10 records to perform inspections or audits placed “documents and data, and the information within 11 them, within Defendant’s control.”) 12 Motorola contends that the contractual provisions discussed above “permit Motorola to 13 inspect only certain documents under limited circumstances,” specifically, “audit[s] for 14 compliance.” Jt. Letter 4-5. According to Motorola, “Largan’s discovery requests are not an 15 ‘audit for compliance.’” Id. at 5. As a result, it argues, it “has no contractual mechanism to 16 require its non-party suppliers to produce” information responsive to Largan’s RFPs. Id. This 17 argument is not persuasive because the provisions in question do not condition Motorola and 18 Lenovo’s access to the suppliers’ records and other items on the performance of an audit; rather, 19 they state that Motorola/Lenovo “may inspect” records “that pertain to” the agreements and “may 20 audit for compliance.” Motorola also argues that the audit provisions are limited in time, e.g., 21 “upon expiration or termination of this Agreement,” see Ex. J, but it does not dispute that each of 22 the six agreements are currently still in effect such that the obligations set forth therein still apply. 23 The cases cited by Motorola are not helpful here because they either do not involve disputes over 24 contractual provisions that purportedly gave a party control over a third-party’s documents or do 25 not identify and analyze relevant contractual language. See Jt. Letter 5 (citing Driscoll’s, Inc. v. 26 California Berry Cultivars, LLC, No. 2:19-CV-00493- TLN-CKD, 2022 WL 3348019, at *4 (E.D. 27 Cal. Aug. 12, 2022) (“Plaintiffs do not address the legal control test and fail to demonstrate how 1 ‘documents upon demand.’ Plaintiffs do not argue that the various service contracts contain any 2 such provision”); MGI Digital Tech. S.A. v. Duplo U.S.A., No. 822CV00979DOCKESX, 2023 3 || WL 6814842, at *4 (C.D. Cal. Aug. 24, 2023) (“the terms of the contract do not give Duplo USA 4 || the right to obtain from Duplo Japan the requested documents.”); Albornoz v. Wal-Mart Assocs., 5 || Inc., No. 1:22-CV-01229-JLT-CDB, 2023 WL 4686292, at *1 (E.D. Cal. July 21, 2023) (“the 6 || Court has reviewed the contracts/agreements submitted ex parte by Defendants for in camera 7 inspection and concludes those contracts/agreements do not provide Defendants a legal right to 8 || access Sedgwick’s videos.”)). 9 The court concludes that Largan has met its burden of demonstrating that Motorola has 10 || control over documents “pertain[ing] to” the agreements between Motorola/Lenovo and the five 11 third-party suppliers that are in the suppliers’ possession or custody. Accordingly, Largan’s 12 || motion to compel is granted. Motorola shall produce all responsive documents within 21 days of 5 13 the date of this order. 14 || 11. CONCLUSION 15 For the foregoing reasons, Largan’s motion to compel is granted. A 16 ‘SE DISTRIGS IT IS SO ORDERED. vy || Datea: July 22, 2024 hs 19 Zz ir 18 S©

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