Vizio, Inc. v. Desay A&V Science & Technology Co., Ltd. et al. Case No. SA CV 14-00874-JVS (DFMx) United States District Court, C.D. California Filed August 10, 2015 Counsel David N. Tarlow, Robert M. Waxman, John W. Shenk, Ervin Cohen and Jessup LLP, Beverly Hills, CA, Matthew J. Eandi, Eandi Fitzpatrick LLP, Los Angeles, CA, for Vizio Inc. Stanley Pun, William K. Enger, John R. Danos, Wilson Elser Moskowitz Edelman and Dicker LLP, Tracy J. Luu-Varnes, Arent Fox LLP, Los Angeles, CA, for Desay A&V Science & Technology Co., Ltd. et al. McCormick, Douglas F., United States Magistrate Judge Proceedings: (In Chambers) Order re: Plaintiff's Motion for Sanctions and to Compel [Dkt. 31] *1 Plaintiff Vizio, Inc. (“Plaintiff”) moves for an order for sanctions against Defendants Desay A&V Science & Technology Co. Ltd. (“Desay A&V”) and Desay Corporation (“Desay Corp.”) (together, “Defendants”) for their failure to appear at depositions as well as an order compelling Defendants to provide further responses to certain RFPs. 30(b)(6) Deposition on Non-Alter Ego Topics Defendants appear to concede that they have not made available a witness on topics 5, 10, 13, 16, 18, 19, 20, and 21 of Plaintiff's Rule 30(b)(6) notices. Defendants contend that they are trying to obtain the cooperation of a former contractor to serve as their Rule 30(b)(6) witness on these topics, and notes that the contractor is “equally available” to Plaintiff. This argument is unavailing. Defendants have a duty under Rule 30 to designate and produce a witness who is able to testify fully about the topics noticed. The designated witness speaks for the corporate entity. If necessary, Defendants must educate its designee, or prepare them to answer fully questions that may be posed on the designated topics. See Schwarzer, Tashima & Wagstaffe, Fed. Civ. Pro. Before Trial ¶ 11:1415.1 (2014 rev. ed.) (hereinafter “SWT”) (“If the entity no longer employs anyone knowledgeable about the designated matter, it must prepare a representative (using documents, former employees or other sources) to testify at the deposition.”). Accordingly, Plaintiff's motion is GRANTED with respect to topics 5, 10, 13, 16, 18, 19, 20, and 21 of Plaintiff's Rule 30(b)(6) notices to Defendants. Defendants are ORDERED to make a witness or witnesses available in Los Angeles on the designated topics within fourteen (14) days of the date of this order. RFPs and 30(b)(6) Deposition re: Alter Ego Liability Through the remaining two Rule 30(b)(6) topics and the disputed RFPs, Plaintiff seeks discovery to establish its claim that Desay Corporation is the alter ego of Desay A&V. Plaintiff argues that this information is sought to show “commingling of funds, undercapitalization of [Desay A&V], siphoning of funds by [Desay Corporation], and other important alter ego factors” as delineated under California law. For the reasons set forth below, the Court rejects Defendants' arguments that this discovery is unjustified, premature, and violates Defendants' right to privacy. Although the contract between Plaintiff and Desay A&V contains a choice of law provision, that provision expressly relates that it relates to disputes about the agreement. See Complaint, Exh. D at 19 (“This Agreement shall be interpreted, construed and governed by the internal laws of the State of California, USA, without giving effect to its conflict of laws principles.”). Courts have held that such language does not apply to the analysis of alter ego liability, as those issues are collateral to the agreement. See Wehlage v. EmpRes Healthcare Inc., 821 F. Supp. 2d 1122, 1127 (N.D. Cal. 2011). If there is no relevant contractual choice of law provision, the choice of law issue then turns on whether the law of the forum state (California) or the law of Desay Corporation's place of incorporation (China) should govern the alter-ego inquiry. Sunnyside Dev. Co., LLC v. Opsys Ltd., No. 05-0553, 2005 WL 1876106, at *3 (N.D. Cal. Aug. 8, 2005). In this diversity action, that question must be determined on California choice of law rules. Id. Under California law, the Court must consider whether the laws of California and China actually differ; if so, the Court must examine each state's interest in applying its law to determine if there is a true conflict; and if each state has a legitimate interest the Court must compare the impairment to each jurisdiction under the other's rule of law. Arno v. Club Med Inc., 22 F.3d 1464, 1467 (9th Cir. 1994). *2 Neither side tells the Court enough about Chinese law for the Court to determine whether there is a true conflict. Plaintiff argues that Defendants, as the foreign law proponent, bear the burden of showing that Chinese law differs materially from the law of California. It appears that Plaintiff is correct. “[T]he foreign law proponent must identify the applicable rule of law in each potentially concerned state and must show it materially differs from the law of California. The fact that two or more states are involved does not in itself indicate there is a conflict of laws problem.” Washington Mut. Bank, FA v. Superior Court, 24 Cal. 4th 906, 919-20 (2001). Accordingly, the Court is unable to conclude at this point that Plaintiff's RFPs are broadly irrelevant because they seek information that is not relevant under Chinese law. Turning to Defendants' other objections, the Court overrules Defendants' objections that Plaintiff's requested discovery violates their right to privacy in light of the parties' protective order. The Court also overrules Defendants' objection that discovery of alter ego issues would be premature. It appears, however, Defendants' overbreadth objections to Plaintiff's discovery requests may be well-taken. The scope of Plaintiff's discovery requests would implicate all of a long historical relationship between Desay Corporation and Desay A&V. It does not appear to the Court that the parties have held any meaningful discussions about how such discovery could be narrowly-tailored. See Myers v. Prudential Insc. Co. of America, 581 F. Supp. 2d 904, 913 (E.D. Tenn. 2008) (“Much of discovery is a fishing expedition of sorts, but the Federal Rules of Civil Procedure allow the Courts to determine the pond, the type of lure, and how long the parties can leave their lines in the water.”). Given the Court's ruling on some of the threshold issues discussed above, the Court believes that the parties should be given an opportunity to discuss Plaintiff's discovery requests before the Court begins to intervene. Jiang Deposition Je Jiang is the President of Desay Corporation. On June 15, 2015, Plaintiff noticed Jiang's deposition for June 25, 2015, in Beverly Hills, California. Ignoring the general rule that a party served with a deposition notice must obtain a protective order before the date of the deposition, see SWT ¶ 11:1166, Defendants sent a letter objecting to Plaintiff's notice, making arguments that the time and place noticed were not reasonable and characterizing the notice as thus “ineffective.” Even if the Court were inclined to agree with Defendants' arguments about the reasonableness of Plaintiff's deposition notice, the Court is not willing to countenance Defendants' position that Plaintiff's notice was “ineffective.” Defendants cite no authority—and the Court is aware of none—that supports the proposition that a deposition notice can be so unreasonable that it becomes ineffective. Thus, as noted above, it was incumbent upon Defendants to obtain a protective order before Jiang failed to appear for his deposition. See New England Carpenters Health Benefits Fund v. First DataBank, Inc., 242 F.R.D. 164, 166 (D. Mass. 2007) (“What is not proper practice is to refuse to comply with the notice, put the burden on the party noticing the deposition to file a motion to compel, and then seek to justify non-compliance in opposition to the motion to compel.”). It does not appear that Plaintiff incurred any costs in connection with Defendants' non-compliance with Jiang's deposition notice. The Court will accordingly not impose monetary sanctions, but it will consider ordering Jiang to appear in Los Angeles for a deposition. Further Meet-and-Confer In light of the Court's rulings above, the Court takes tomorrow's hearing off calendar and ORDERS the parties to meet and confer further by the end of this week about the scope of alter ego discovery and Jiang's deposition. The Court believes that the parties are better situated than it to reach a compromise about these topics. If the parties are unable to reach a resolution, the Court will hold a further hearing on Plaintiff's motion on August 18, 2015, at 10:00 a.m. At that hearing, the Court will ask both sides how it proposes to resolve any remaining dispute, and why its proposals are more reasonable than the other side's. The Court will then likely choose the proposal it deems more reasonable. *3 ______ : _______ Initials of Clerk ts