Monster Energy Co. v. Vital Pharm., Inc., et al. Case No. 5:18-cv-01882-JGB (SHKx) United States District Court, C.D. California Filed June 16, 2020 Counsel Christina Von der Ahe Rayburn, Jennifer Bunn Hayden, Allison Lauren Libeu, Hueston Hennigan LLP, Newport Beach, CA, Jennifer N. Popp, John C. Hueston, Joseph Alan Reiter, Michael Hayes Todisco, Moez M. Kaba, Sourabh Mishra, Steven N. Feldman, Amber Elizabeth Munoz, Lauren M. Johnson, Sara Haji, Varun Behl, Hueston Hennigan LLP, Los Angeles, CA, for Monster Energy Co. Michael D. Scully, Holly L. K. Heffner, Joan Borzcik Flaherty, Justin D. Lewis, Michael D. Kanach, Gordon Rees Scully and Mansukhani LLP, San Diego, CA, Timothy K. Branson, Gordon Rees Scully Mansukhani LLP, Los Angeles, CA, Ann T. Field, Pro Hac Vice, Sara A. Frey, Pro Hac Vice, Gordon Rees Scully Mansukhani LLP, Philadelphia, PA, Erica W. Stump, Pro Hac Vice, Erica W. Stump PA, Ft. Lauderdale, FL, Francis Massabki, Pro Hac Vice, Marc J. Kesten, Vital Pharmaceuticals Inc., Weston, FL, Jeffrey R. Lilly, Pro Hac Vice, Kenneth J. Ferguson, Pro Hac Vice, Michael R. Klatt, Pro Hac Vice, Gordon Rees Scully Mansukhani LLP, Austin, TX, JoAnna M. Doherty, Pro Hac Vice, Peter G. Siachos, Pro Hac Vice, Gordon Rees Scully Mansukhani LLP, Florham Park, NJ, Sean P. Flynn, Gordon Rees Scully Mansukhani LLP, Irvine, CA, for Vital Pharm., Inc., et al. Kewalramani, Shashi H., United States Magistrate Judge Proceedings: ORDER DENYING DEFENDANTS' MOTION FOR PROTECTIVE ORDER [ECF NO. 193] *1 On March 6, 2020, the Court held a telephonic hearing regarding a protective order Defendants Vital Pharmaceuticals, Inc. (“VPX”) and John Owoc (“Owoc”, collectively “Defendants”) are seeking. Defendants believe that Plaintiff Monster Energy Corporation (“Plaintiff” or “Monster”) has engaged in improper discovery practices, which include the most recently propounded Requests for Admission (“RFAs”). Electronic Case Filing Number (“ECF No.”) No. 185, Order Re: Discovery Dispute. Based on the instructions provided during that telephonic hearing, on April 21, 2020, Defendants filed a Motion for Protective Order Regarding Plaintiff Monster Energy Company's Oppressive Requests for Admission (“Motion”). ECF No. 193, Motion. Defendants also included a declaration by Defendants' counsel and seven exhibits, including the RFAs at issue. ECF Nos. 193-1 through 193-8. In addition to the relief regarding the served discovery, Defendants also asked the Court to impose protocols for discovery going forward including determining whether certain discovery could be served. On May 5, 2020, following an agreed to extension, Plaintiff filed its Opposition to Defendants' Motion for a Protective Order Regarding Monster's Pending Requests for Admission (“Opposition”). ECF No. 200, Opposition. In addition to this Opposition, Plaintiff filed a declaration by Plaintiff's counsel and twenty-one exhibits. ECF No. 201, ECF Nos. 201-1—201-21. On May 12, 2020, Defendants filed a Reply In Support of Their Motion for Protective Order Regarding Plaintiff Monsters Energy Company's Oppressive Requests for Admission (“Reply”). ECF No. 212, Reply. The parties also provided various unredacted documents and briefs for the Court's review. See ECF No. 202, 203. On May 19, 2020, at Defendants' request, the Court held a hearing on this and other matters that arose as part of the ongoing disputes between the parties. ECF No. 221, Minutes of Hearing. The matter stands ready for decision. After reviewing the close to 400 pages of briefing and attachments, for the reasons set forth below, the Court DENIES Defendants' Motion. Additionally, Defendants are ORDERED to provide responses to the RFAs addressed in this Order by July 15, 2020. I. BACKGROUND A. Factual And Procedural History Monster commenced this action in September 2018 against Defendants. ECF No. 1, Compl. On April 3, 2019, Monster filed its First Amended Complaint (“FAC”) against VPX and several other defendants alleging the following claims: (1) a violation of the Lanham Act; (2) unfair competition; (3) false advertising; (4) trade libel; (5) intentional interference with contractual relations; (6) intentional interference with prospective economic advantage; (7) conversion; (8) larceny; (9) false patent marking; (10) a violation of the California Uniform Trade Secrets Act; (11) a violation of the Defend Trade Secrets Act; and (12) a violation of the Computer Fraud and Abuse Act. ECF No. 61, FAC. On May 20, 2019, the Court denied in part Defendants' Motion to Dismiss and concluded Monster sufficiently pleaded Lanham Act, unfair competition, and false advertising claims, among other claims. ECF No. 95, Order re: Mot. to Dismiss. The FAC alleged Defendants label and market BANG Energy Drink, but that BANG does not provide the extraordinary benefits advertised. ECF No. 61, FAC at ¶¶ 44-55. With respect to the Lanham Act, unfair competition, and false advertising claims, Monster alleged that in addition to the falsity of other claims made regarding the benefits of drinking BANG, there is no creatine in BANG and that “Super Creatine” is in fact creatyl-l-leucine, a fundamentally different molecule than creatine; creatyl-l-leucine is functionally useless and passes through the body largely unutilized; and, third, even if creatyl-l leucine did break down into creatine, which it does not, there is not enough of it in BANG to have a material effect on the body—creatyl-l-leucine thus offers no health benefit whatsoever. Id. at ¶¶ 51-55, ¶¶ 121-147. *2 With respect to the contract claims, Monster alleged, in addition to other claims, that Defendants interfered with contracts that Monster has with retailers regarding shelf space, placement of products, and use of improper tactics. Id. at ¶¶ 152-165. Finally, Monster asserted a series of trade secret and Computer Fraud and Abuse Act (“CFAA”) claims arising from Defendants' actions in hiring former Monster employees, requiring these employees to provide information regarding pricing and other proprietary information, giving false assurances to those former Monster employees that providing such information was permissible, and improperly accessing Monster's computers. Id. at ¶¶ 184-204. B. RFAs At Issue Though generally the issue is whether Plaintiff's overall discovery behavior has been improper, the RFAs before the Court are Plaintiff's sets 3 and 4 of RFAs to Defendant VPX, which include RFA Nos. 341-537, and Plaintiff's set 3 to Owoc, RFA Nos. 350-476. ECF No. 193-1, Kanach Dec. at 4. Redacted versions of these RFAs are attached at ECF Nos. 193-2 and 193-3, which are Exhibits A and B to Defendants' counsel's declaration. There are 324 RFAs at issue. However, of these 324 RFAs, there are 197 unique RFAs. This is because of the 197 RFAs served on VPX and 127 RFAs served on Owoc, 127 RFAs propounded to both parties seek the same information from both VPX and Owoc and 70 RFAs propounded to VPX were not propounded to Owoc. ECF No. 200, Opp'n at 5. Defendants argue that this is not the true scope to show the level of discovery abuse because the totality of discovery propounded should by Plaintiff includes “1,381 discovery requests on VPX and Owoc, consisting of 1,013 requests for admission, 324 requests for production, and more than 44 interrogatories. In addition, Monster has served 43 ‘third-party’ subpoenas that implicate both privileged and proprietary information of VPX.” ECF No. 193, Defs.' Mot. at 3 (emphasis in original). At the hearing, Plaintiff's counsel clarified, stating that there were 537 unique RFAs served on one or both Defendants represented by Defendants' counsel. Finally, Plaintiff and Defendants both appear to agree that this is a complex case. See ECF No. 200, Opp'n at 5. II. DISCUSSION A. Applicable Legal Standards 1. Federal Rule Of Civil Procedure 26 Federal Rule of Civil Procedure (“Rule”) 26(b)(1) governs the scope of permissible discovery and provides: Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable. Relevancy, for purposes of discovery, “has been construed broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case.” Nguyen v. Lotus by Johnny Dung Inc., No. 8:17-cv-01317-JVS-JDE, 2019 WL 3064479, at *1 (C.D. Cal. June 5, 2019) (internal citations and quotation marks omitted). “Generally, the purpose of discovery is to remove surprise from trial preparation so the parties can obtain evidence necessary to evaluate and resolve their dispute.” Duran v. Cisco Sys., Inc., 258 F.R.D. 375, 378 (C.D. Cal. 2009) (internal citations and quotation marks omitted). *3 Because discovery must be both relevant and proportional, the right to discovery, even plainly relevant discovery, is not limitless. See Fed. R. Civ. P. 26(b)(1); Nguyen, No. 8:17-cv-01317-JVS-JDE, 2019 WL 3064479, at *1. Consequently, the ability to seek discovery may be denied where: “(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or (iii) the proposed discovery is outside the scope permitted by Rule 26(b)(1).” Fed. R. Civ. P. 26(b)(2)(C). “The district court enjoys broad discretion when resolving discovery disputes, which should be exercised by determining the relevance of discovery requests, assessing oppressiveness, and weighing these factors in deciding whether discovery should be compelled.” United States ex rel. Brown v. Celgene Corp., No. CV 10-3165 GHK (SS), 2015 WL 12731923, at *2 (C.D. Cal. July 24, 2015) (internal citations and quotation marks omitted). Further, in the case of assessing the appropriate scope of RFAs, Rule 26(b)(2)(A) expressly provides that “the court may ... limit the number of requests under Rule 36,” which governs RFAs. 2. Federal Rule Of Civil Procedure 36 Rule 36(a)(1) provides: (1) Scope. A party may serve on any other party a written request to admit, for purposes of the pending action only, the truth of any matters within the scope of Rule 26(b)(1) relating to: (A) facts, the application of law to fact, or opinions about either; and (B) the genuineness of any described documents. Rule 36(a)(4) and (5) further provide: (4) Answer. If a matter is not admitted, the answer must specifically deny it or state in detail why the answering party cannot truthfully admit or deny it. A denial must fairly respond to the substance of the matter; and when good faith requires that a party qualify an answer or deny only a part of a matter, the answer must specify the part admitted and qualify or deny the rest. The answering party may assert lack of knowledge or information as a reason for failing to admit or deny only if the party states that it has made reasonable inquiry and that the information it knows or can readily obtain is insufficient to enable it to admit or deny. (5) Objections. The grounds for objecting to a request must be stated. A party must not object solely on the ground that the request presents a genuine issue for trial. The Ninth Circuit has stated that “[a]dmissions are sought, first, to facilitate proof with respect to issues that cannot be eliminated from the case and, second, to narrow the issues by eliminating those that can be.” Conlon v. United States, 474 F.3d 616, 622 (9th Cir. 2007) (citing Rule 26, advisory committee note). However, “[s]ome courts in this circuit have reasoned that ‘[r]equests for admissions are not principally discovery devices. and they are not to be treated as substitutes for discovery process to uncover evidence[.]’ ” Lauter v. Rosenblatt, No. 2:15-CV-08481-DDP(KSx), 2019 WL 4138020, at *12 (C.D. Cal. July 1, 2019) (quoting Safeco of America v. Rawstron, 181 F.R.D. 441, 445 (C.D. Cal. 1998) (internal citation and quotation marks omitted)). Rather, the court in that opinion indicated that RFAs are “to narrow the issues for trial by identifying and eliminating those matters on which the parties agree.” Safeco, 181 F.R.D. at 443. There does not appear to be a bright-line test to determine the number of RFAs that are appropriate in a case. “Rather, as with all discovery, the Court must consider whether the discovery sought meets the relevance and proportionality requirements of Rule 26.” Lauter, No. 2:15-CV-08481-DDP(KSx), 2019 WL 4138020, at *19 (internal citations omitted). *4 Further, “a party seeking a protective order has a ‘heavy burden’ to show why discovery should be denied ....” Sequoia Prop. & Equip. Ltd. P'ship v. United States, 203 F.R.D. 447, 451 (E.D. Cal. 2001) (citing Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975)). In addition, “courts do not readily grant protective orders against an entire set of discovery requests on the grounds that the number of requests is excessive.” Lauter, No. 2:15-CV-08481-DDP(KSx), 2019 WL 4138020, at *19 (citing Jones v. Skolnik, No. 3:10-cv-00162-LRH, 2014 WL 2625000, at *2 (D. Nev. June 12, 2014)). B. Analysis The Magistrate Judge finds that it is relevant to point out that this case has been litigated extensively by both parties, including serving numerous discovery requests both on parties to this lawsuit as well as on third parties. This is not intended as a criticism, but as an explanation of why Defendants' argument that the extent of discovery has been abused by Plaintiff is not persuasive in this dispute. The matters at issue are complex and the damages that Plaintiff seeks is represented to be substantial. As noted above, there is no bright line number regarding how many RFAs are appropriate in a particular case and the number of RFAs, in and of itself, is not a controlling factor in granting a protective order. Though Defendants' cite to cases where courts granted a protective order based solely on the number of RFAs propounded, Plaintiff has countered with cases where a substantial number of RFAs have been allowed. See ECF No. 193, Defs.' Mot. at 5-6; ECF No. 200, Opp'n at 6. Neither party has cited, nor has this Magistrate Judge found any controlling case from the Ninth Circuit regarding the appropriateness to grant a protective order based on the number of RFAs propounded. As the plain language of Rule 36(a)(1) provides, an RFA is appropriate so long as it relates to “the truth of any matters within the scope of Rule 26(b)(1).” Therefore, this Magistrate Judge does not find the cases granting a protective order solely on the basis of the number of RFAs propounded to be persuasive and believes that the better, albeit more time-consuming, approach is to determine the appropriate number of RFAs based on the “proportional ... needs of the case.” Fed. R. Civ. P. 26(b)(1). Here, the case is complex and involves, among other things claims related to the marketing, sale, and formulation(s) of BANG. With respect to the formulation(s) of BANG, the scientific analysis of that information appears, at the discovery stage, to warrant the production of information to “facilitate proof with respect to issues that cannot be eliminated from the case and ... to narrow the issues by eliminating those that can be.” Conlon, 474 F.3d at 622. Additionally, the contract, trade secret, and CFAA related claims warrant the discovery of information related to the hiring of former Monster employees who are alleged to have provided proprietary information to Defendants. For ease of analysis, the Court will assess the various categories of related RFAs based on the subject matter of the RFA, as best as is feasible. 1. RFAs Related To Defendants' Employment Practices, Employment Of Former Monster Employee Stephen Cohen, And Access To Or Defendants Acquisition Of Monster's Proprietary Information: (RFA Nos. 474-483, 487-500, 504-507 to VPX) *5 Generally, RFAs 474-483, 487-500, and 504-507 to VPX relate to the terms of employment and employment by VPX of a former Monster employee and the materials that the former Monster employee provided to VPX from Monster or was instructed to bring from Monster. See ECF No. 203-4, Under Seal Filing of Plaintiff's Relevancy Position (“Pl.'s Relevancy Position”) at 28-35. On their face, these RFAs are relevant to Monster's trade secret claims and potentially relevant to Monster's CFAA claims. Defendants have not provided any declaration or other information, even after being asked during the hearing on the matter, to establish how burdensome it would be to provide this information. Consequently, the Motion for Protective Order with respect to RFAs 474-483, 487-500, and 504-507 to VPX are DENIED. 2. RFAs Related to Testing, Studies Done, Or Knowledge Related To Creatine, Super-Creatine, Creatyl-L-Lucine, and BANG's Physiological Effects (RFA Nos. 341-343, 347-386, 394-424, 431, 432, 441, 442, 444, 445, 447-456, 461-473, 485, 501-503, 508, 509, 514 to VPX, RFA Nos. 350-352, 356-395, 403-433, 440, 441, 450, 451, 453, 454, 456-465, 470-476 to Owoc) Many of these RFAs seek information that is scientific in nature and may even seek information that would be required to be obtained from an expert. This is not to say that providing the answers will be easy. However, under the Rule 26(b)(1) proportionality test, these requests are relevant and proportional to the needs of this complex case with complex scientific issues. Specifically, with respect to the relevancy, the Court finds that this information is relevant as it seeks information from Defendants to prove Plaintiff's claims that Defendants' misrepresented certain aspects of BANG. In support of Defendants' argument that this is an improper use of the RFA process and is better suited to expert testimony, Defendants cite to Rule 26(b)(4) and Emerson v. Lab. Corp. of Am., No. 1:11-CV-01709, 2012 U.S. Dist. LEXIS 60636, at *5 (N.D. Ga. May 1, 2012). ECF No. 193, Mot. at 7. However, the “Rule 36 request, like those here, are properly directed to a party's position on a fact or the application of law to fact or the party's opinion about a fact or the application of law to fact—and can address ultimate facts that may present a genuine issue for trial.” McKinney/Pearl Rest. Partners, L.P. v. Metro. Life Ins. Co., 322 F.R.D. 235, 253 (N.D. Tex. 2016). This Court finds the reasoning in McKinney/Pearl to be persuasive. Specifically, in McKinney/Pearl, the court addressed the opinion in Emerson as well as other courts that agreed with Emerson and also addressed the reasoning in cases that disagreed with Emerson. Id. at 252-53. Relying on Rule 36(a)(4), and the language that requires a party to make a “reasonable inquiry ... or [which] can be readily obtain[ed],” Rule 36(a)(4), before responding to an RFA, the court noted that Rule 36 “does not require [a party] to, for example, seek out a third party who has not already been brought within the scope of the litigation by way of deposition or to locate and identify an expert who is not already retained for this case,” McKinney/Pearl, 322 F.R.D. at 253 (N.D. Tex. 2016). Further, with respect to Rule 26(b)(4), as explained in McKinney/Pearl, the two rules, Rule 26(b)(4) and Rule 36, address different aspects of discovery. “The party's position on a factual question may well be informed by consultation with a retained expert. But an expert's knowledge or opinions, on the one hand, and a party's position on a fact or the application of law to fact or opinion about either, on the other, are separate objects of discovery.” McKinney/Pearl, 322 F.R.D. at 253–54. *6 “In short, a party cannot avoid discovery—whether by an interrogatory, a Rule 36 request, or Federal Rule of Civil Procedure 30(b)(6) deposition testimony—of its own views on a factual matter in dispute (or perhaps, in fact, not in dispute) simply because its view on that matter may be informed by consulting with its retained experts.” Id. at 254. Therefore, the Motion for Protective Order with respect to RFA Nos. 341-343, 347-386, 394-424, 431, 432, 441, 442, 444, 445, 447-456, 461-473, 485, 501-503, 508, 509, and 514 to VPX and RFA Nos. 350-352, 356-395, 403-433, 440, 441, 450, 451, 453, 454, 456-465, and 470-476 to Owoc is DENIED. 3. RFAs Related To Sales And Marketing Of BANG And Other Products Containing Creatyl-L-Lucine By VPX Within (RFA Nos. 344-346, 387-393, 425-430, 433, 434, 437-440, 443, 446, 484, 486, 510-513, 515-537 to VPX, RFA Nos. 353-355, 396-402, 434-439, 442, 443, 446-449, 452, and 455 to Owoc) With respect to the claims made by Defendants as part of the sales and marketing of BANG, these are relevant and go to a major part of the case. Further, there is no indication that requiring a response to these RFAs would be burdensome. That these questions may be posed during deposition, as Defendants argue, ECF No. 193, Mot. at 9, does not make them any less appropriate in the form of an RFA and may in fact narrow the questioning required at a deposition. With respect to the RFAs directed to results by AIBMR, which refers to AIBMR Life Sciences, Inc., these RFAs are seeking to obtain Defendants' position regarding what the information provided by AIBMR, not what AIBMR is claiming. For example, RFA No. 341 to VPX asks whether AIBMR concluded that a “maximum safe limit” of a particular item exists. If this determination of fact is not clear, Defendants may have a different conclusion than AIBMR and Plaintiff is entitled to know that position to determine whether or not an issue remains outstanding. Similarly, the other RFAs that seek to obtain Defendants' position regarding information provided by AIBMR and its relation to the products sold by Defendants are appropriate. See RFA No. 345 to VPX (seeking Defendants' position whether Defendants sold BANG before AIBMR made a particular conclusion); RFA No. 346 to VPX (seeking Defendants' position whether Defendants' sold a particular amount of a product before AIBMR made a particular conclusion); RFA No. 351 to VPX (seeking Defendants' position regarding the conclusion arrived at by AIBMR). These are appropriate and there is no basis to conclude that requiring a response would be unduly burdensome or improper under Rules 26 and 36. Therefore, Defendants' Motion for Protective Order with respect to RFA Nos. 344-346, 387-393, 425-430, 433, 434, 437-440, 443, 446, 484, 486, 510-513, and 515-537 to VPX and RFA Nos. 353-355, 396-402, 434-439, 442, 443, 446-449, 452, and 455 to Owoc is DENIED. 4. RFAs Related To Defendants' Business Dealings (RFA Nos. 435 and 436 to VPX, RFA Nos. 444 and 445 to Owoc) In RFA Nos. 435 and 436 to VPX and RFA Nos. 444 and 445 to Owoc, Plaintiff seeks information regarding the licensing of creatyl-L-leucine and SUPER CREATINE to third parties. ECF No. 193-2, RFAs to VPX at 17; ECF No. 193-4, RFAs to Owoc at 16-17. Plaintiff's argument is that this relates to damages, and Defendants argue that this inquiry is better suited for a deposition. *7 Without knowing how relevant this information is to the prosecution of the case, when balanced against the effort it would take to respond, it does not appear inappropriately burdensome and the motion for protective order with respect to RFA Nos. 435 and 436 to VPX and RFA Nos. 444 and 445 to Owoc is DENIED. 5. RFAs Related To Marketing Products Outside of the U.S.A. (RFA Nos. 457-460 to VPX, RFA Nos. 466-469 to Owoc) With respect to the RFAs directed to the sale of products in Canada, Plaintiff argues that this information is relevant as it would potentially be relevant at trial to show the impact of the marketing of BANG in the United States with references to creatine and SUPER CREATINE, whereas in Canada, a similar market, Defendants did not use this marketing. Defendants correctly raise the point that representations made in Canada “are not at issue in this case.” ECF No. 193, Defs.' Mot. at 4. This inquiry appears to be of diminishing worth to the prosecution of this case, which is governed by laws and requirements in the United States. Further to utilize this information would require Plaintiff to show other similar facts that may not allow for an apple to apple comparison for the purposes that Plaintiff seeks and may not be admissible at trial. However, Rule 26(b)(1) states that “[i]nformation within th[e] scope of discovery need not be admissible in evidence to be discoverable.” When weighed against the effort it would take to respond to these four unique RFAs that do not seek scientific information regarding the products in Canada, it is appropriate for purposes argued by Plaintiff. For these reasons, Defendants' Motion for Protective Order as to RFA Nos. 457-460 to VPX and RFA Nos. 466-469 to Owoc is DENIED. III. CONCLUSION For the reasons set forth previously, Defendants' Motion is DENIED and Defendants are ORDERED to provide responses to the RFAs addressed in this Order by July 15, 2020. Additionally, Defendants' request to institute a modified discovery dispute protocol is DENIED for the reasons set forth during the May 19, 2020 hearing. IT IS SO ORDERED.