Monster Energy Company v. Vital Pharmaceuticals, Inc., et al Case No. EDCV 18-1882 JGB (SHKx) United States District Court, C.D. California Filed October 12, 2021 Counsel MAYNOR GALVEZ, Deputy Clerk, Attorney(s) Present for Plaintiff(s): None Present Not Reported, Court Reporter, Attorney(s) Present for Defendant(s): None Present Bernal, Jesus G., United States District Judge Proceedings: Order (1) DENYING Plaintiff's Motion to Disqualify Dr. Larry Chiagouris from Serving as Expert (Dkt. No. 416); (2) DENYING Defendants' Motion for Review of Portions of Magistrate Judge's Discovery Order (Dkt. No. 417); (3) GRANTING IN PART Plaintiff's Motion for Attorney Fees (Dkt. No. 419); and (4) GRANTING Plaintiff's Applications to File Documents Under Seal (Dkt. Nos. 420; 426; 445; 530; 531) (IN CHAMBERS) *1 Before the Court are four motions: (1) Plaintiff's motion to disqualify Dr. Larry Chiagouris from serving as an expert (“Mot. to Disqualify,” Dkt. No. 416); (2) Defendants' motion for review of portions of Magistrate Judge's discovery Order (“Mot. to Review,” Dkt. No. 417); and (3) Plaintiff's motion for attorney fees (“Mot. for Fees,” Dkt. No. 419) (collectively, “Motions”). The Court finds this matter appropriate for resolution without a hearing. See Fed. R. Civ. P. 78; L.R. 7-15. After considering the papers filed in support of and in opposition to these matters, the Court DENIES the Motion to Disqualify, DENIES the Motion to Review, GRANTS IN PART the Motion for Fees, and GRANTS Plaintiff's applications to file documents under seal. I. BACKGROUND Plaintiff Monster Energy Company (“Monster”) initiated this action against Defendants Vital Pharmaceuticals, Inc. (“VPX”) and John H. Owoc (“Owoc”) (collectively, “Defendants”) on September 4, 2018. (Dkt. No. 1.) On April 3, 2019, Plaintiff filed a First Amended Complaint alleging causes of action for (1) 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 marketing; (10) violation of the California Uniform Trade Secrets Act; (11) violation of the Defend Trade Secrets Act; and (12) violation of the Computer Fraud and Abuse Act. (Dkt. No. 61.) On May 20, 2019, the Court granted in part Defendants' motion to dismiss the FAC, dismissing the Claims 4 and 7-9. (“MTD Order,” Dkt. No. 94.) A. Plaintiff's Motion to Disqualify Monster filed its Motion to Disqualify on June 1, 2021, along with the Declaration of Justin M. Greer (“Greer Decl.,” Dkt. No. 416-2), and Exhibits A-T (Dkt. Nos. 416-3 to -22). On June 21, 2021, Defendants filed an opposition. (“Disqualification Opp'n,” Dkt. No. 427.) In support of their Opposition, Defendants filed the Declaration of Dr. Larry Chiagouris (“Chiagouris Decl.,” Dkt. No. 427-1); the Declaration of Timothy K. Branson (“Branson Decl. re Disqualification,” Dkt. No. 427-2); and the Declaration of Peter G. Siachos (“Siachos Decl. re Disqualification,” Dkt. No. 427-3, along with Exhibits A-B (Dkt. Nos. 427-4 to -5)). On June 27, 2021, Defendants filed a supplemental declaration by Dr. Larry Chiagouris. (“Suppl. Chiagouris Decl.,” Dkt. No. 450.) On June 28, 2021, Monster filed its reply. (“Disqualification Reply,” Dkt. No. 454 (redacted), 456 (under seal).) In support of its Reply, Monster filed the Declaration of Justin M. Greer (“Greer Reply Decl.,” Dkt. No. 454-1), along with Exhibits U-Y (Dkt. Nos. 454-2 to -6). B. Defendants' Motion for Review Defendants filed their Motion for Review of portions of the Magistrate Judge's Discovery Order on June 9, 2021, along with a supporting Declaration of Peter G. Saichos (“Saichos Decl. re Review,” Dk. No. 417-2). Monster filed its opposition on June 21, 2021 (“Review Opp'n,” Dkt. No. 423), along with the Declaration of Sourabh Mishra (“Mishra Decl. re Review,” Dkt. No. 423-1, and Ex. A, Dkt. No. 423-2). C. Plaintiff's Motion for Attorney Fees *2 Plaintiff filed its Motion for Fees on June 19, 2021. (See Mot. for Fees; Dkt. No. 421-1 (under seal).) In support of the Motion for Fees, Plaintiff filed the Declaration of Allison L. Libeau (“Libeau Decl.,” Dkt. No. 419-2) with Exhibits A-C (Dkt. Nos. 419-3 to -5), and the Declaration of Sourabh Mishra (“Mishra Decl. re Fees,” Dkt. No. 419-6) with Exhibits 1-15 (Dkt. Nos. 419-7 to -15). Defendants filed their opposition on June 28, 2021 (“Fees Opp'n,” Dkt. No. 458), along with the Declaration of Timothy K. Branson (“Branson Decl. re Fees,” Dkt. No. 458-1) and Exhibit A (Dkt. No. 458-2). Plaintiff replied on July 26, 2021. (“Fees Reply,” Dkt. No. 529 (redacted), 532 (under seal).) In support, Plaintiff filed the Declaration of Justin Greer along with Exhibits 27-31 (“Greer Decl. re Fees,” Dkt. No. 529-1; Exs. 27-31, Dkt. Nos. 529-2 to -6), and its objections to Defendants' evidence (Dkt. No. 529-7 (redacted), 532-2 (under seal)). II. LEGAL STANDARD A. Motion to Disqualify Federal courts have the inherent power to disqualify expert witnesses to protect the integrity of the adversarial process, protect privileges that otherwise may be breached, and promote public confidence in the legal system. See Campbell Indus. v. M/V Gemini, 619 F.2d 24, 27 (9th Cir. 1980) (“A district court is vested with broad discretion to make discovery and evidentiary rulings conducive to the conduct of a fair and orderly trial”). However, disqualification is a “drastic measure that courts should impose only hesitantly, reluctantly, and rarely.” Hewlett-Packard Co. v. EMC Corp., 330 F. Supp.2d 1087, 1092 (N.D. Cal. 2004). “Disqualification of an expert is warranted based on a prior relationship with an adversary if (1) the adversary had a confidential relationship with the expert and (2) the adversary disclosed confidential information to the expert that is relevant to the current litigation.” See id. at 1092–93 (internal citations omitted). Generally, both factors must be present for disqualification to be appropriate. Id. Courts additionally consider whether disqualification would be fair to the affected party and would promote the integrity of the legal process. Id. at 1093. B. Motion for Review A district court has authority to modify or vacate a magistrate judge's pretrial order where it has been shown that the order is “clearly erroneous or contrary to law.” 28 U.S.C. § 636(b)(1)(A); see also Fed. R. Civ. P. 72(a). Under Federal Rule of Civil Procedure 72(a), when a non-dispositive pretrial matter is referred to a magistrate judge, a party may serve and file objections to the magistrate judge's order within fourteen days of being served with the order. Fed. R. Civ. P. 72(a). An objecting party must file a motion for review by the assigned district judge, designating the specific portions of the ruling objected to. L.R. 72-2.1. The district judge must then “consider timely objections and modify or set aside any part of the order that is clearly erroneous or contrary to law.” Fed. R. Civ. P 72(a). The “contrary to law” standard governs a district judge's review of a magistrate judge's determinations that are purely legal in nature. Brooks v. Motsenbocker Advanced Developments, Inc., 2008 WL 3049983, at *1 (S.D. Cal. Aug. 1, 2008). The “clearly erroneous” standard governs a district court's review of a magistrate judge's factual determinations. Maisonville v. F2 America, Inc., 902 F.2d 746, 747-748 (9th Cir. 1990). C. Motion for Attorney Fees *3 Defendant moves for attorney fees under Federal Rule of Civil Procedure 37 and Local Rule 37-4. Federal Rule of Civil Procedure 37(a)(5)(B) provides that where a party's motion to compel discovery is denied, courts “must, after giving an opportunity to be heard, require the movant, the attorney filing the motion, or both to pay the party or deponent who opposed the motion its reasonable expenses incurred in opposing the motion, including attorney's fees.” Fed. R. Civ. P. 37(a)(5)(B). However, the court “must not order this payment if the motion was substantially justified or other circumstances make an award of expenses unjust.” Id. In addition, under Local Rule 37–4, courts have discretion to impose sanctions against any counsel who fails to comply with the requirements of Local Rule 37. See Local Rule 37–4 (“The failure of any counsel to comply with or cooperate in the foregoing procedures may result in the imposition of sanctions.”); MySpace, Inc. v. Wallace, 2008 WL 1766714, at *1 (C.D. Cal. 2008) (“Local [Rule] 37–4 permits a court to impose sanctions for failure to comply with or cooperate in the procedures.”). III. DISCUSSION A. Motion to Disqualify Plaintiff moves to disqualify Defendants' expert Dr. Larry Chiagouris, arguing that: (1) Monster and Dr. Chiagouris had a confidential relationship in a prior case, Morris v. Monster Beverage Corp., Case No. RG13685028 (Morris); (2) Monster provided Dr. Chiagouris privileged information related to VPX's defenses in this litigation; (3) the balance of potential prejudice favors exclusion; and (4) public policy favors disqualification. The Court disagrees. 1. Confidential Relationship Monster retained Dr. Chiagouris to serve as an expert witness in Morris, a 2013 wrongful death action challenging the amount of caffeine and other stimulants in Monster's products, as well as Monster's alleged lack of adequate labeling in its products. (Mot. to Disqualify at 4.) Dr. Chiagouris was set to testify about “consumer impressions, demographics, behavior and appeal relative to the marketing of Monster Energy drinks[.]” (Schlesinger Decl. Ex. 2.) Monster entered into a formal engagement agreement with Dr. Chiagouris, which obligated him to treat any communications from Monster's counsel as “confidential and protected” and to “take all reasonable steps to maintain that confidentiality.” (Schlesinger Decl. Ex 1.) Monster's counsel in Morris asserts that it prepared Dr. Chiagouris to be a testifying witness in that case, providing funding and directing the opinions he was set to offer, and sharing privileged information. (Id.) Monster argues that this supports a confidential relationship. Broadcom Corp. v. Emulex Corp., 2010 WL 11465478, at *2 (C.D. Cal. Apr. 5, 2010) (finding confidential relationship where expert signed confidentiality agreement and agreed not to disclose any information). Defendants dispute Monster's representation of its relationship with Dr. Chiagouris. Defendants argue that the relationship created in Morris is far from “sufficiently substantial” to warrant the drastic measure of disqualification. (Disqualification Opp'n at 4-5.) Hewlett-Packard, 330 F. Supp. 2d at 1092-1093. In assessing whether a confidential relationship exists, courts consider several factors, including: whether the relationship was one of long standing and involved frequent contacts instead of a single interaction with the expert, whether the expert is to be called as a witness in the underlying case, whether alleged confidential communications were from expert to party or vice-versa, and whether the moving party funded or directed the formation of the opinion to be offered at trial. *4 Id. at 1093 (citation omitted). “The emphasis ... is not on whether the expert was retained per se but whether there was a relationship that would permit the litigant reasonably to expect that any communications would be maintained in confidence.” Id. As Defendants point out, Monster settled Morris weeks after Dr. Chiagouris was retained, so that his engagement lasted for a total of 45 days. (Disqualification Opp'n at 4-5.) Dr. Chiagouris formed no opinions, wrote no report, and gave no testimony. (Chiagouris Decl. ¶ 8.) The Court agrees that this single, brief engagement from 2015 does not support the existence of an enduring confidential relationship serious enough to compel disqualification. That Dr. Chiagouris signed a confidentiality agreement does not merit disqualification where “little of substance occur[ed] during the course of the relationship.” Hewlett-Packard, 330 F. Supp. 2d at 1094; Stencel, 174 F. Supp. 2d at 1083. Despite Monster's representations to the contrary, the Court is not persuaded that Dr. Chiagouris's interactions with Monster have been “frequent and consistent enough to warrant a finding that [he] has developed a basic understanding of [Monster's] modus operandi, patterns of operation, and decision-making process.” Bryant v. American Seafood Co., LLC, 2008 WL 11450833, at *1 (W.D. Wa. Mar. 27, 2008). The Court finds that Monster fails to meet its burden to establish a confidential relationship that merits disqualification. Hewlett-Packard Co., 330 F. Supp. 2d at 1098. The Court need not address the remaining factors. Id. at 1093 (“[I]f only one of the two factors is present, disqualification likely is inappropriate.”). The Court DENIES Plaintiff's Motion to Disqualify Dr. Chiagouris. B. Motion for Review Defendants move the Court to review Magistrate Judge Kewalramani's May 26, 2021 Order granting in part and denying in part Plaintiff's motion for a protective order. (Dkt. No. 407.) Defendants argue that Judge Kewalramani's ruling was contrary to law and clearly erroneous in its application of the apex doctrine to limit or disallow the depositions of Monster's Co-Chief Executive Officers (“CEOs”) Rodney C. Sacks and Hilton H. Schlosberg. In particular, Judge Kewalramani ordered Monster to make Mr. Sacks available for a remote deposition no longer than two hours, but prohibited the deposition of Mr. Schlosberg entirely. Defendants argue that (1) considerable evidence demonstrates that both Sacks and Schlosberg were active executives involved in key aspects of the subject matter of this lawsuit; and (2) the Magistrate Judge improperly placed the burden on VPX to justify the depositions, rather than requiring Monster to meet its high burden, as the opposing party, to show why the depositions should not be allowed; among other arguments. (See Mot. for Review.) The Court concludes that the Magistrate Judge's Order was neither contrary to law nor clearly erroneous. As Plaintiff points out, Judge Kewalramani properly applied the apex doctrine to determine whether it was likely that Sacks and Schlosberg may have unique, first-hand knowledge about the facts at issue. (Review Opp'n at 7-8.) And the Court is not persuaded that Judge Kewalramani's references to the evidence proffered by VPX support Defendants' claim that he improperly placed the burden on Defendants to justify the depositions, or ignored Monster's burden. After reviewing the underlying ruling and the parties' arguments, the Court finds that Defendants fail to establish any legal or factual error. Thus, the Court finds no reason to disturb Judge Kewalramani's ruling. Defendants' Motion for Review is DENIED. C. Motion for Attorney Fees *5 Monster seeks an order requiring Defendants to cover Monster's attorney fees in connection with a discovery dispute VPX brought before the Court on May 27, 2021. (See Mot. for Fees.) On May 20, 2021, Magistrate Judge Kewalramani held a telephonic conference to address a discovery dispute brought by VPX. (Mishra Fees Decl., Ex. 6.) While Judge Kewalramani denied almost all of VPX's requests, shortly thereafter, VPX sought to begin the motion to compel process based on substantially similar requests. (Mot. for Fees at 1, 4-5.) Despite Monster's attempts to narrow the issues (in particular, taking into account the Court's May 20 ruling), Defendants declined to do so ahead of the May 27, 2021 hearing. Only on the day of the hearing did VPX agree to narrow the issues in dispute. (Id.) Judge Kewalramani denied VPX's motion to compel. In so doing, Judge Kewalramni “invite[d] [Plaintiff] to seek its fees in responding to and preparing for this latest request for a discovery hearing.” (Dkt. No. 410; see also Dkt. No. 419-15 at 17:21-23 (“And I invite Monster to file a fees motion in this case – in this matter.”).) Plaintiff does so here. Plaintiff argues that two distinct legal theories support the award of fees. First, Federal Rule of Civil Procedure 37(a)(5)(B) provides that courts “must, after giving an opportunity to be heard,” require a movant who lost a motion to compel to pay the opposing party “its reasonable expenses incurred in opposing the motion, including attorney's fees.” Plaintiff argues that this is appropriate here, where VPX lost its motion to compel and failed to show substantial justification for engaging in motion practice on overbroad requests, many of which the Court had already rejected. Second, Central District of California Local Rule 37-4 allows courts to sanction parties who fail to “comply with or cooperate” in the procedures outlined in Local Rule 37. One such procedure is outlined in Local Rule 37-1, requiring that parties sufficiently meet and confer before seeking court intervention to narrow disputes presented to the Court. C.D. Cal. L.R. 37-1. Plaintiff argues that, while Monster met and conferred with VPX, VPX did not narrow its requests until the May 27 hearing before the Court, despite the clear guidance provided by the Court's May 20 ruling. (Mot. for Fees at 2, 5.) Plaintiff argues that this failure to sufficiently meet and confer on discovery matters before seeking court intervention is not an isolated instance. (Id. at 5.) Indeed, Judge Kewalramani noted during the May 27 hearing that this “seems to be a pattern.” (Mishra Fees Decl., Ex. 6 (May 27 Hearing Tr. At 7:3-10).) See Abbywho, Inc. v. Interscope Records, 2007 WL 9701833, at *2 (C.D. Cal. Nov. 5, 2007) (“Communication alone does not satisfy a party's obligations under Rule 37; rather, the communication must be made ‘in a good faith effort’ to resolve the underlying discovery dispute.”). VPX counters that it did not act in bad faith in seeking the requested documents, as it had a colorable claim to seek the Court's intervention.[1] (Fees Opp'n at 4.) However, the Court is not persuaded that its motion to compel was “substantially justified.” Fed. R. Civ. P. 37(a)(5)(B). In particular, the Court considers Judge Kewalramani's determination that certain of its requests were overbroad before VPX moved to compel, and VPX's failure to sufficiently meet and confer before the May 27 hearing to address its similarly overbroad requests. The Court also considers Judge Kewalramani's repeated invitation for Plaintiff to file a motion for fees in relation to this discovery matter, and his observation that VPX's failure to sufficiently meet and confer before seeking the Court's intervention “seem[ed] to be a pattern.” The Court finds that an award of fees is appropriate here. Monster seeks $10,138.00 in attorneys' fees incurred in connection with the May 27, 2021 discovery hearing and preparation of the Motion for Fees. (Mot. for Fees at 10.) VPX argues that these requested fees are unreasonable, as the vast majority of the requested fees ($7,478.40, to be specific) correspond to the time spent preparing the present Motion for Fees. (Fees Opp'n at 6-7.) As Plaintiff points out, courts routinely “award fees for working on fee motions that are large in comparison to the fees awarded on the merits.” (Fees Reply at 4 (citing Hum. Rts. Def. Ctr. v. Cty. of Napa, 2021 WL 1176640, at *14 (N.D. Cal. Mar. 28, 2021)). However, “[a]s a general rule, fees awarded for work on a fee motions should bear a rational relation to the number of hours spent litigating the merits of the case.” Id. (internal quotation marks omitted). Moreover, Defendant's authority on this matter concerns fee motions upon the resolution of a case. Because the fees (and number of hours) related to the preparation of this Motion dwarf those related to the actual discovery hearing, the Court finds that the requested fees are unreasonable. The Court will award the requested $2,659.60 incurred in connection with the discovery hearing, and an equal amount, $2,659.60, in connection with this Motion. *6 The Court GRANTS IN PART Plaintiff's Motion for Fees, and ORDERS VPX to pay Monster $5,319.20 to partially reimburse Monster for attorneys' fees incurred. IV. CONCLUSION For the foregoing reasons, the Court DENIES the Motion to Disqualify, DENIES the Motion to Review, GRANTS IN PART the Motion for Fees, and GRANTS Plaintiff's applications to file documents under seal. IT IS SO ORDERED. Footnotes [1] VPX also claims that Judge Kewalramani's “sua sponte” order for a motion for fees was improper. (Fees Opp'n at 4.) But as Plaintiff points out, Plaintiff specifically requested “that the Court issue discovery sanctions against VPX...” in its correspondence with the Court. (Fees Reply at n.1.)