Zavislak v. Netflix, Inc.

• Court: District Court, N.D. California
• Decided: April 11, 2022
• Docket: 5:21-cv-01811
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 MARK ZAVISLAK, Case No. 5:21-cv-01811-EJD

9 Plaintiff, ORDER RE MOTION FOR RELIEF FROM NONDISPOSITIVE PRETRIAL 10 v. ORDER OF MAGISTRATE JUDGE

11 NETFLIX, INC., Re: Dkt. No. 129 Defendant. 12

13 14 Plaintiff Mark Zavislak moves for relief from Magistrate Judge Nathanael Cousins’s order 15 denying Zavislak’s motion to compel an additional deposition and additional search and document 16 production. Mot. for Relief from Nondispositive Pretrial Order of Magistrate Judge (“Mot.”), Dkt. 17 No. 129. Having considered Zavislak’s arguments, the Court REMANDS the issue to the 18 Magistrate Judge for further consideration. 19 I. BACKGROUND 20 In this action, Zavislak asserts claims for monetary damages and injunctive relief for 21 Netflix’s alleged failure to supply information requested pursuant to § 104(b)(4) of the Employee 22 Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1024(b)(4). Dkt. No. 16. The 23 Court referred all discovery matters to Judge Cousins. Dkt. Nos. 14, 50. 24 On February 15, 2022, Judge Cousins permitted Zavislak to depose Netflix’s in-house 25 counsel, Jon Hicks, as a fact witness and stated that “Netflix may object to any questions calling 26 for privileged information.” Dkt. No. 97. The Hicks deposition took place on February 25, 2022, 27 during which Netflix’s counsel objected based on attorney-client privilege and instructed Hicks 1 not to answer certain questions. Dkt. No. 110 at 1. The parties subsequently submitted discovery 2 disputes to Judge Cousins regarding whether the fiduciary exception applies to Netflix’s assertions 3 of privilege as to the Hicks deposition and certain documents. Dkt. Nos. 110, 111. 4 On March 18, 2022, Judge Cousins denied Zavislak’s request to compel further deposition 5 of Hicks and denied Zavislak’s request to compel an additional search and document production in 6 response to Request for Production No. 12. Dkt. No. 117. In so ordering, Judge Cousins rejected 7 Zavislak’s application of Wit v. United Behavioral Health, No. 13-cv-02346-JCS, 2016 WL 8 258604 (N.D. Cal. Jan. 21, 2016) and his reliance on Hicks’s role as a lawyer who handles both 9 ERISA requests and as a liaison to Netflix’s outside counsel. Id. at 2. Judge Cousins ultimately 10 found both sides’ arguments unpersuasive and declined to apply the fiduciary exception because 11 “hard cases should be resolved in favor of the privilege.” Id. at 2 (quoting United States v. Mett, 12 178 F.3d 1058, 1065 (9th Cir. 1999)). 13 On April 1, 2022, Zavislak filed the motion now before the Court. 14 II. LEGAL STANDARD 15 Subject to some limitations not relevant here, any nondispositive pretrial matter before the 16 district court may be referred to a magistrate judge for determination. 28 U.S.C. § 636(b)(1)(A). 17 Once rendered, the decision of the magistrate judge may only be reconsidered by the district court 18 where the order is “clearly erroneous” or “contrary to law.” Id.; Fed. R. Crim. P. 59(a). This 19 standard is not easily satisfied because it affords the magistrate judge significant deference. 20 United States v. Abonce-Barrera, 257 F.3d 959, 969 (9th Cir. 2001) (“[T]he text of the 21 Magistrates Act suggests that the magistrate judge’s decision in such nondispositive matters is 22 entitled to great deference by the district court.”). Indeed, “the reviewing court may not simply 23 substitute its judgment for that of the deciding court.” Grimes v. City & Cnty. of S.F., 951 F.2d 24 236, 241 (9th Cir. 1991). 25 “The ‘clearly erroneous’ standard applies to factual findings and discretionary decisions 26 made in connection with non-dispositive pretrial discovery matters.” F.D.I.C. v. Fid. & Deposit 27 Co. of Maryland, 196 F.R.D. 375, 378 (S.D. Cal. 2000). “A finding is ‘clearly erroneous’ when 1 although there is evidence to support it, the reviewing court, after reviewing the entire evidence, is 2 left with the definite and firm conviction that a mistake has been committed.” United States v. 3 U.S. Gypsum Co., 333 U.S. 364, 395 (1948). 4 III. DISCUSSION 5 Zavislak now requests that the Court compel (1) document production of pre-litigation 6 communications with Netflix’s in-house and outside counsel relating to documentary production 7 under ERISA § 104(b)(4) and the processing of his request for such production and (2) further 8 deposition of Jon Hicks concerning those communications. Mot. at 1, 4–5. He contends that 9 Judge Cousins did not correctly apply the legal standard set forth in United States v. Mett, 178 10 F.3d 1058 (9th Cir. 1999), and that Judge Cousins “misapprehend[ed]” Zavislak’s citation to Wit. 11 As to the latter argument regarding Wit, the Court has reviewed the discussion concerning 12 that case in the discovery letter outlining Zavislak’s position, Zavislak’s proposed order, and 13 Judge Cousins’s order. The arguments and explanations that Zavislak now provides regarding Wit 14 were not presented to Judge Cousins previously. The Court cannot say that Judge Cousins’s 15 determination in this respect was clearly erroneous or contrary to the law. 16 As to the former argument regarding application of Mett, that case provides ample 17 direction on the application of the fiduciary exception in the ERISA context. “As applied in the 18 ERISA context, the fiduciary exception provides that ‘an employer acting in the capacity of 19 ERISA fiduciary is disabled from asserting the attorney-client privilege against plan beneficiaries 20 on matters of plan administration.’” Mett, 178 F.3d at 1063. The Ninth Circuit described the 21 limited application of the fiduciary exception as follows:

22 On the one hand, where an ERISA trustee seeks an attorney’s advice on a matter of plan administration and where the advice clearly does 23 not implicate the trustee in any personal capacity, the trustee cannot invoke the attorney-client privilege against the plan beneficiaries. 24 On the other hand, where a plan fiduciary retains counsel in order to defend herself against the plan beneficiaries (or the government 25 acting in their stead), the attorney-client privilege remains intact. 26 Id. at 1064. “[W]here a fiduciary seeks legal advice for her own protection, the core purposes of 27 the attorney-client privilege are seriously implicated and should trump the beneficiaries’ general 1 right to inspect documents relating to plan administration.” Jd. at 1065. 2 Here, it is not clear whether the privileged communications at issue concerned purely a 3 || matter of plan administration (i.e., which documents were necessary to respond to Zavislak’s 4 || request) to which the fiduciary exception applies, or whether the communications concerned 5 defensive advice in anticipation of a lawsuit from Zavislak, to which the exception would not 6 apply. Id. at 1066 (“[W]hile the fiduciary exception does apply to advice on matters of plan 7 administration, the attorney-client privilege reasserts itself as to any advice that a fiduciary obtains 8 || in an effort to protect herself from civil or criminal liability.”); see Dkt. No. 19-9 (February 11, 9 2021 letter from Zavislak to Netflix invoking the potential for civil liability under 29 U.S.C. 8 10 1132(c)(1)). The Ninth Circuit has indicated that the application of the fiduciary exception turns 11 on “the nature of the particular attorney-client communication . . . . This communication-by- 12 || communication analysis, while perhaps untidy, is crucial if the attorney-client privilege and the 5 13 fiduciary exception are to coexist.” Mett, 178 F.3d at 1065-66. Because the current record is 14 || insufficiently developed for the Court to determine whether Zavislak’s requested relief is 3 15 warranted, the Court requests Judge Cousins examine the nature of the communications at issue. 16 || Iv. CONCLUSION 3 17 For the foregoing reasons, the Court REMANDS the issue to Judge Cousins for 18 || consideration of whether or not the communications and information sought implicate Netflix’s 19 || role as fiduciary or potential litigant. 20 IT IS SO ORDERED. 21 Dated: April 11, 2022 22 23 EDWARD J. DAVILA 24 United States District Judge 25 26 27 28 || Case No.: 5:21-cv-01811-EJD ORDER RE MOT. FOR RELIEF FROM NONDISPOSITIVE PRETRIAL ORDER