Tsatas v. Airborne Wireless Network, Inc.

District Court, D. Nevada·Decided January 7, 2022·No. 2:20-cv-02045·Unknown

Opinion

7 UNITED STATES DISTRICT COURT

8 DISTRICT OF NEVADA

9 * * *

10 Maria Tsatas, et al., Case No. 2:20-cv-02045-RFB-BNW

11 Plaintiffs, ORDER re ECF Nos. 66–73 12 v.

13 Airborne Wireless Network, Inc., et al.,

14 Defendants.

15 16 Plaintiffs filed suit against several Defendants for fraud, breach of fiduciary duty, aiding 17 and abetting breach of fiduciary duty, conversion, intentional interference with contractual 18 relations, and breach of contract. ECF No. 1. The allegations involve fraudulent actions in 19 connection with the offer and sale of certain shares of Apcentive stock and the subsequent 20 exchange of certain shares of Apcentive stock for shares of Airborne stock. 21 Plaintiffs filed several motions to compel discovery from all Defendants. The Court 22 divides the Defendants and motions into three categories: (1) corporate Defendants, (2) 23 Defendants Daniels and Kabilafkas, and (3) the remaining individual Defendants. 24 As to the corporate Defendants, Plaintiffs filed a motion to compel discovery from 25 Defendant Airborne. ECF No. 66. Defendant Airborne responded at ECF No. 82, and Plaintiffs 26 replied at ECF No. 84. Plaintiffs also filed a motion to compel discovery from Defendant 27 Apcentive. ECF No. 67. Defendant Apcentive responded at ECF No. 82, and Plaintiffs replied at 1 As to Defendants Daniels and Kabilafkas, Plaintiffs filed a motion to compel discovery 2 from Daniels. ECF No. 68. Defendant Daniels responded at ECF No. 81, and Plaintiffs replied at 3 ECF No. 83. Plaintiffs also filed a motion to compel discovery from Defendant Kabilafkas. ECF 4 No. 69. Defendant Kabilafkas responded at ECF No. 81, and Plaintiffs replied at ECF No. 87. 5 As to the remaining individual Defendants, Plaintiffs filed a motion to compel discovery 6 from Defendant Jason De Mos. ECF No. 70. Defendant Jason De Mos responded at ECF No. 83, 7 and Plaintiffs replied at ECF No. 88. Plaintiffs also filed a motion to compel discovery from 8 Defendant Marius De Mos. ECF No. 71. Defendant Marius De Mos responded at ECF No. 83, 9 and Plaintiffs replied at ECF No. 89. Next, Plaintiffs filed a motion to compel discovery from 10 Defendant Harris. ECF No. 72. Defendant Harris responded at ECF No. 83, and Plaintiffs replied 11 at ECF No. 90. Lastly, Plaintiffs filed a motion to compel discovery from Defendant Warren. 12 ECF No. 73. Defendant Warren responded at ECF No. 83, and Plaintiffs replied at ECF No. 91. 13 The Court held two hearings: One on October 26, 2021 involving the corporate 14 Defendants, and one on October 28, 2021 involving the remaining Defendants. The parties are 15 familiar with the arguments, so the Court does not repeat them here. 16 I. Overarching Applicable Law 17 “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any 18 party’s claim or defense and proportional to the needs of the case considering the importance of 19 the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant 20 information, the parties’ resources, the importance of the discovery in resolving the issues, and 21 whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed. R. 22 Civ. Pro. 26(b)(1). In other words, information is discoverable if it is (1) relevant, (2) 23 proportional, and (3) not privileged.1 24 25

26 1 Plaintiffs cite to Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340 (1978). While parts of Oppenheimer remain good law, the Court understands that Rule 26 was amended after Oppenheimer was decided and that the 27 scope of what is discoverable is likewise now different. To be clear, the definition of “relevant” did not change with the amendments to Rule 26. However, the Court recognizes evidence must be relevant to “any party’s claim or 1 Although relevance for discovery purposes is defined “very broadly,” Garneau v. City of 2 Seattle, 147 F.3d 802, 812 (9th Cir. 1998) (citation omitted), it is not without boundaries. Rivera 3 v. NIBCO, Inc., 364 F.3d 1057, 1072 (9th Cir. 2014) (“District courts need not condone the use of 4 discovery to engage in ‘fishing expedition[s]’”) (citation omitted). District courts have broad 5 discretion when determining relevancy for discovery purposes. Mfg. Automation & Software Sys., 6 Inc. v. Hughes, Case No. CV 16-8962-CAS (KSX), 2017 WL 5641120, at *3 (C.D. Cal. Sept. 21, 7 2017). 8 The party seeking to compel discovery responses must make a threshold showing that the 9 discovery sought is relevant. See, e.g., Nugget Hydroelectric, L.P. v. Pac. Gas & Elec. Co., 981 10 F.2d 429, 438–39 (9th Cir. 1992); Hofer v. Mack Trucks, Inc., 981 F.2d 377, 380 (8th Cir. 1992); 11 Guzman v. Lincoln Tech. Inst., Inc., No. 2:13-CV-2251-RFB-VCF, 2015 WL 1729711, at *1 (D. 12 Nev. Apr. 15, 2015).2 This is a “relatively low threshold[.]” Nat’l Rifle Ass’n of Am. v. Cuomo, 13 332 F.R.D. 420, 428 (N.D.N.Y. 2019) (internal quotation marks and citation omitted). It merely 14 requires “the possibility of a nexus between the information sought and the claims or defenses of 15 a party.” Id. That is, it is simply a tool used to ensure that before the gates to discovery are open, a 16 minimum showing has been made. 17 Once relevancy is shown, or if relevancy is plain from the face of the request, the party 18 who is resisting discovery has the burden to show that discovery should not be allowed. 19 Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975). The party resisting discovery 20 must specifically detail the reasons why each request is irrelevant or otherwise objectionable, and 21 may not rely on boilerplate, generalized, conclusory, or speculative arguments. F.T.C. v. AMG 22 Servs., Inc., 291 F.R.D. 544, 553 (D. Nev. 2013) (citations omitted). “Boilerplate, generalized 23 objections are inadequate and tantamount to not making any objection at all.” Walker v. 24 Lakewood Condo. Owners Ass’n, 186 F.R.D. 584, 587 (C.D. Cal. 1999) (citations omitted). These 25 26 2 Many courts simply rely on the non-moving party demonstrating that the discovery sought is not relevant 27 and do not address this threshold showing by the moving party. The requirement of a threshold showing makes sense given the language of Rule 26 (allowing parties to obtain information regarding matters relevant to a claim or 1 principles come directly from the plain text of the Federal Rules of Civil Procedure, which 2 require objections to be stated with specificity. Fed. Rs. Civ. P. 33(b)(4); 34(b)(2)(B); 36(a)(5). 3 II. The Scope of the Court’s Ruling 4 The first question the Court needs to determine is the scope of its ruling. 5 The discovery requests at issue can be divided into two categories: that which involves the 6 SEC investigation and that which does not. Here, after Plaintiffs propounded discovery requests, 7 Defendants responded by lodging a multitude of objections as to both categories of information 8 sought. As a result, the parties met and conferred. At that juncture, corporate Defendants 9 explained that they would not respond to any requests unless Plaintiffs agreed to withdraw the 10 requests involving the SEC investigation. 11 Unable to come to an agreement, Plaintiffs filed their motions to compel. Prior to 12 responding to the motions, Defendants produced some—but not all—of the requested discovery. 13 Specifically, they only produced discovery as to the requests that did not involve the SEC 14 investigation.

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