Lion Electric Company v. Nikola Corporation

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Lion Electric Company, No. CV-23-00372-PHX-DGC 10 Plaintiff, ORDER

11 v. 12 Nikola Corporation, 13 Defendant. 14 15 Nikola has filed three motions for letters rogatory, asking the Court to initiate the 16 process of obtaining depositions of three witnesses in Canada. The motions come only 17 weeks before the close of discovery and are opposed by Lion. 18 The fact discovery deadline in this case is October 31, 2024, after being extended 19 once for good cause. Doc. 52. The Court’s scheduling order specifically states: “The 20 parties are advised that the Court intends to enforce the deadlines set forth in this Order, 21 and should plan their litigation activities accordingly.” Doc. 39 at 4. The fact discovery 22 period commenced on October 18, 2023. Doc. 39 at 1. The parties have had more than a 23 year to complete depositions and other fact gathering, and yet Nikola did not file its motions 24 for letters rogatory until September 27, 2024, just over one month before the close of 25 discovery. Docs. 77-80. 26 The decision to issue letters rogatory rests within the discretion of the court. United 27 States v. Sedaghaty, 728 F.3d 885, 917 (9th Cir. 2013). In the Court’s experience, letters 28 rogatory can take many months to produce a witness in a foreign country. Issuing letters 1 rogatory at this late stage of the litigation would result in fact discovery extending well 2 beyond the October 31, 2024 deadline. 3 Rule 16 provides that a discovery deadline set by the Court may “be modified only 4 for good cause[.]” Fed. R. Civ. P. 16(b)(4); see Johnson v. Mammoth Recreations, Inc., 5 975 F.2d 604, 608 (9th Cir. 1992). The good cause standard primarily considers the 6 diligence of the party seeking the amendment. Id. at 609. “The district court may modify 7 the pretrial schedule ‘if it cannot reasonably be met despite the diligence of the party 8 seeking the extension.’” Id. (quoting Fed. R. Civ. P. 16 advisory committee’s notes (1983 9 amendment)). Where a party has not been diligent, the inquiry ends and the motion is 10 denied. Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1087 (9th Cir. 2002); Johnson, 975 11 F.2d at 609. 12 The question, then, is whether Nikola could through reasonable diligence have 13 completed the letters rogatory process by the discovery deadline. 14 A. Jean Bazinet. 15 Nikola seeks to depose Jean Bazinet, Lion’s former Procurement Director. Nikola 16 argues that his testimony is directly relevant because he was involved in the contract 17 negotiations and battery procurement that are at the heart of this dispute. Doc. 87 at 5. 18 Lion argues that Nikola’s motion is untimely. 19 Nikola has known the importance of Mr. Bazinet for many months. Its own motion 20 states that he “provided significant testimony in the related arbitration” between Lion and 21 Romeo that was instituted on October 26, 2022. Doc. 87 at 2. Mr. Bazinet submitted a 22 witness statement in that arbitration on June 2, 2023. Doc. 92 at 3 & Ex. A. What is more, 23 Nikola identified Mr. Bazinet as a person likely to have discoverable information in its 24 initial disclosure statement served almost one year ago. Id. Ex. B. Nikola asked Lion on 25 July 22, 2024, if Lion could present Mr. Bazinet for a deposition, and Lion responded one 26 week later stating that it did not represent him. Id. Ex. D. And yet Nikola waited two 27 months to seek a letter rogatory. 28 1 Nikola argues that it waited to review Lion’s full document production before 2 deciding whether to depose Mr. Bazinet, but Nikola itself states that he provided significant 3 testimony more than a year ago, and Nikola listed him as a person with relevant knowledge 4 in its initial discovery disclosures. Nikola also asserts that the importance of deposing Mr. 5 Bazinet became clear just weeks ago on October 2, 2024, when another deponent in this 6 case testified that Mr. Bazinet was the right person to answer questions. But that testimony 7 clearly was not the impetus for this motion – Nikola filed this motion before the October 2 8 deposition. Doc. 78. 9 In short, Nikola has known of Mr. Bazinet’s relevance to this case for more than a 10 year and yet did not take steps to depose him until weeks before the close of discovery. 11 B. Patrick Judson Kenney. 12 Mr. Kenney served as Lion’s Senior Vice President, Procurement & Supply Chain. 13 Doc. 88 at 2. Like Mr. Bazinet, he provided what Nikola characterizes as “significant 14 testimony” in the related arbitration. Id. In fact, Nikola states that Kenney provided 15 arbitration testimony on “key issues in this federal case.” Id. Mr. Kenney submitted a 16 witness statement in the arbitration on June 2, 2023. Doc. 93 at 3 & Ex. A. And Nikola 17 identified Mr. Kenney as a person likely to have discoverable information in its own initial 18 disclosures served on November 10, 2023. Further, Lion informed Nikola on July 22, 19 2024, that it could not present Mr. Kenney for a deposition, and yet Nikola waited more 20 than two months to file this motion. Id. at 3.1 21 Nikola argues that it acted in a timely manner because Lion did not add Mr. Kenney 22 to its disclosure statement until September 27, 2024, stating that he may have discoverable 23 information on various facts in this case. But Nikola had so identified Mr. Kenney almost 24 a year earlier in its initial disclosures. Doc. 93-1 at 15. In short, Nikola has known of Mr. 25 Kenney’s relevance to this case for more than a year and yet did not take steps to depose 26 him until weeks before the close of discovery.

27 1 Lion previously had agreed to present Mr. Kenney for a deposition, but he declined 28 to appear when Nikola refused to pay his consulting fee. Doc. 88 at 3. 1 C. —__ Lion Customer. 2 Nikola’s third request concerns a Lion customer based in Canada. Nikola seeks to depose a representative of the customer because Lion has identified the customer as one 4) which cancelled its contract for Lion trucks as a consequence of not receiving battery packs from Romeo. Doc. 89 at 2. But Lion identified the customer for Nikola on March 20, 2024, and identified the substantial amount of revenue Lion allegedly lost when the 7 | customer’s contract was cancelled. Doc. 94-1 at 28. In March and April 2024, the 8 | customer was identified in discovery responses and included discovery search terms, and Nikola noticed the depositions of four other customers who allegedly had cancelled contracts. Id. at3 & Exs.B & C. Nikola argues that Lion did not add a representative of 11 | the customer to its initial disclosures until September 27, 2024, but Nikola knew about the 12 | customer and its claimed loss six months earlier and yet took no steps to schedule the 13 | deposition. 14 D. Conclusion. 15 Nikola was well aware of these witnesses and their relevance to this case long before 16 | it acted to depose them, and they could have been deposed within the year allowed for fact 17 | discovery through reasonable diligence. As a result, good cause to extend the discovery 18 | schedule does not exist under Rule 16(b)(4) and the Court will not issue the requested 19 | letters rogatory. 20 IT IS ORDERED that Nikola’s corrected motions for letters rogatory (Docs. 87, 88, 89) are denied. The motions have been lodged under seal, but no motion to seal has been filed. See Doc. 86. The Court rules on them nonetheless because the close of 23 | discovery is fast approaching. The lodging of these documents, and the generally unworkable state of the docket (see Doc. 98), appears to be due to the parties’ inability to 25 | work together and reach reasonable agreements. See, e.g., Doc. 86. The parties shall confer 26 | and promptly submit a stipulation on the proper filing treatment of Docs. 78-80 and 87-89. 27 Dated this 23rd day of October, 2024. Danl 6. Couns aan ©. phel 4 David G. Campbell