Cher v. Mary Bono Case No.: CV 21-8157 JAK (RAOx) United States District Court, C.D. California Filed February 13, 2025 Oliver, Rozella A., United States Magistrate Judge Proceedings: (In Chambers) MINUTE ORDER RE: MOTION TO COMPEL PLAINTIFF'S SALE AGREEMENT WITH ICONIC CHER LLC [130] *1 Pending before the Court is Defendant Mary Bono's (“Defendant”) Motion to Compel Plaintiff Cher's (“Plaintiff”) Sale Agreement with Iconic Cher LLC (“Motion”). Dkt. No. 130. The discovery dispute arises from Defendant's Motion in Limine to limit the use of evidence at trial regarding Plaintiff's sale agreement with Iconic Cher LLC (“Iconic”) to evidence that was produced during the discovery phase of the litigation. See Dkt. No. 119. District Judge Kronstadt denied the Motion in Limine, but permitted Defendant to take a deposition of Iconic or Plaintiff with respect to any newly produced documents. Dkt. No. 122. On December 16, 2024, the parties filed a proposed schedule for remaining case deadlines, which included a briefing schedule for a motion to compel. Dkt. No. 128. Judge Kronstadt adopted the parties' proposed dates for briefing a motion to compel. Dkt. No. 129. Pursuant to that schedule, Defendant filed her Motion on January 10, 2025. Dkt. No. 130. The Motion is supported by a Declaration of Daniel J. Schacht (“Schacht Declaration”) with exhibits. Dkt. No. 130-1–130-14. The parties stipulated to extend the time for Plaintiff to file an opposition, which Judge Kronstadt granted. Dkt. Nos. 131, 132. Plaintiff filed her Opposition on January 24, 2025. Dkt. No. 133. The Opposition is supported by a Declaration of Daniel Brescoll (“Brescoll Declaration”), Dkt. No. 133-1, a Declaration of J. Eugene Salomon (“Salomon Declaration”), Dkt. No. 133-2, and a Declaration of Peter Anderson (“Anderson Declaration”) with an exhibit, Dkt. Nos. 133-3, 133-4. The parties did not propose the filing of a reply, so the matter stands fully briefed with the Motion and Opposition. See Dkt. Nos. 128, 131. The Court held a hearing by video on the Motion on February 5, 2025. Dkt. No. 137. At the hearing, Plaintiff's counsel suggested that the Court conduct an in camera review of the unredacted Asset Purchase Agreement (“APA”) and General Assignment (“GA”) at issue. Following the hearing, the Court directed that the APA and GA be lodged by email. Dkt. No. 137. The Court has completed its in camera review. For the reasons set forth below, Defendant's motion is granted-in-part. I. BACKGROUND A. The Marriage Settlement Agreement and Section 304(c) Notice In 1978, as part of a Marriage Settlement Agreement (“MSA”), Plaintiff was assigned an undivided 50% interest in Sonny Bono's (“Sonny”) “right, title and interest, individually or through any other business, corporation, firm or entity in which he has an interest” in and to contingent receipts payable after July 14, 1978, “from musical compositions and interests therein, written and composed, in whole or in part, by [Sonny] or others prior to February 1, 1974, and/or acquired by [Sonny and certain other entities] prior to [the couple's separation]” (the “Composition Royalties”). Dkt. No. 64-5 ¶ 10(d). In 2016, Defendant issued a Section 304(c) notice terminating Sonny's grants of transfers or licenses of copyright in musical compositions that he had authored or co-authored, with the earliest terminations beginning in 2018 and then continuing through 2026. Dkt. No. 92-1 ¶¶ 29-32, 103. After the terminations became effective, Defendant stopped paying Plaintiff her portion of the U.S. Composition Royalties under the MSA. Dkt. No. 92-1 ¶ 35. B. Discovery Dispute Background *2 Plaintiff sold her interest in the Composition Royalties to Iconic effective July 1, 2022, pursuant to an Asset Purchase Agreement (“APA”) dated December 9, 2022, and a General Assignment (“GA”) dated January 5, 2023. Mot. at 2; Opp'n at 4; Schacht Decl., Exs. D, K. Defendant propounded interrogatories and requests for production seeking information related to the sale and assignment. Mot. at 2-6. Plaintiff produced a redacted copy of the GA. Id.; Schacht Decl., Ex. D. Plaintiff asserted that the redacted portions of the GA and the entire APA and communications about the deal constituted trade secret/confidential financial information. Schacht Decl., Ex. E. Plaintiff also asserted the attorney-client privilege and attorney work product for internal communications involving her lawyers. Id. Defendant deposed Plaintiff and her manager, Lindsay Scott, regarding the sale to Iconic. Mot. at 7. Scott testified that he does not know more than the general public about the sale. Id.; Schacht Decl., Ex. H at 65:16-66:13. Plaintiff testified that she did know what Iconic is or whether she sold her rights to Sonny's publishing royalties. Mot. at 7; Schacht Decl., Ex. I at 156:20-157:14, 160:16-19. Fact discovery closed on July 17, 2023. Dkt. No. 50. In support of her motion for summary judgment, Plaintiff submitted a declaration in which she stated that she entered a purchase agreement on or around December 9, 2022, in which she agreed to sell her right to the Composition Royalties. Dkt. No. 65-3 ¶ 9. Plaintiff stated that she retained the right to recover Composition Royalties due and payable prior to July 1, 2022, and that the determination of whether or not Defendant terminated Plaintiff's rights to the Composition Royalties would affect the value of the property she assigned the buyer and what Plaintiff receives in exchange. Id. On May 29, 2024, Judge Kronstadt issued an Order on the parties' motions for summary judgment. Dkt. No. 107. Within that Order, Judge Kronstadt found that resolving the question of “whether Plaintiff is entitled to the share of the Composition Royalties due under the MSA after July 1, 2022, i.e., the royalty rights assigned to the third-party buyer ... turns on the provisions of the General Assignment, which have not been fully disclosed.” Id. at 12. Although Plaintiff represented at the hearing that disputes as to the proper assignment of damages can be resolved by future litigation, Judge Kronstadt found that this was not sufficient to resolve the breach of contract claim as a matter of law. Id. On September 27, 2024, Plaintiff's counsel emailed Defendant's counsel a letter dated July 25, 2024, from Iconic to both sets of counsel, in which Iconic claimed that it has no objection to the Composition Royalties from after July 1, 2023 being awarded to Plaintiff, and Plaintiff and Iconic would determine what Iconic is entitled to at a later date. Schacht Decl., Ex. J. Defendant submitted her motion in limine on October 30, 2024, which was denied on November 18, 2024. Dkt. Nos. 119, 122. On November 26, 2024, Plaintiff produced a redacted copy of the APA. Schacht Decl., Ex. K. Schedule 4.4 of the APA contains a list of contracts and agreements (“Subject Agreements”). Id. On December 5, 2024, Defendant requested unredacted copies of the APA, the General Assignment, and the Subject Agreements. Schacht Decl., Ex. L. *3 On December 6, 2024, Plaintiff's counsel responded that it was too late for Defendant to pursue additional discovery, and that the vast majority of the requested documents were not relevant and highly confidential. Schacht Decl., Ex. M. II. DISCUSSION A. Legal Standard Federal Rule of Civil Procedure 26(b) (“Rule 26(b)”) provides that the scope of discovery is “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 issue 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.” Fed. R. Civ. P. 26(b). On motion or on its own, the Court must limit the frequency or extent of discovery if it determines that the proposed discovery is outside the scope permitted by Rule 26(b)(1). Fed. R. Civ. P. 26(b)(2)(C). “The party seeking to compel discovery has the burden of establishing that its request satisfies the relevancy requirements of Rule 26(b)(1).” Louisiana Pac. Corp. v. Money Market 1 Inst. Inv. Dealer, 285 F.R.D. 481, 485 (N.D. Cal. 2012) (citing Soto v. City of Concord, 162 F.R.D. 603, 610 (N.D. Cal. 1995)). “[T]he party opposing discovery has the burden of showing that discovery should not be allowed, and also has the burden of clarifying, explaining, and supporting its objections with competent evidence.” Id. Under Federal Rule of Civil Procedure 26(c), a court may sua sponte grant a protective order for good cause. Fed. R. Civ. P. 26(c); Stiletto Television, Inc. v. Hastings, Clayton and Tucker, Inc., No. CV 18-3911-DSF (PLAx), 2019 WL 13033619, at *2 (C.D. Cal. Mar. 28, 2019). A protective order may include a requirement that confidential commercial information not be revealed. Fed. R. Civ. P. 26(c)(1)(G). B. Timeliness The Court will not deny the Motion for being untimely. Judge Kronstadt denied Defendant's Motion in Limine but expressly permitted Defendant to take additional depositions with respect to newly produced documents. Dkt. No. 122. Judge Kronstadt also permitted Defendant to file this Motion to Compel and set a deadline for completion of depositions related to the Iconic agreements, if needed. Dkt. No. 129. The Court considers the Motion to be timely. C. Discoverability of Redacted and Withheld Documents 1. The Parties' Arguments Defendant argues that the unredacted APA, GA, and Subject Agreements are relevant. Mot. at 11-13. Defendant contends that these documents are necessary to establish what, if any, interest Plaintiff has in post-July 1, 2022 Composition Royalties, and to avoid a risk that a share of the Composition Royalties are awarded to Plaintiff that actually belong to Iconic. Id. at 11. Defendant also asserts that the documents will allow the Court to determine the amount of Composition Royalties that Plaintiff is entitled to under copyright law. Id. at 11. Defendant's position is that to the extent Plaintiff is entitled to any Composition Royalties, she is not entitled to one-half of the publisher's share of the Composition Royalties that reverted to Sonny's heirs. Id. at 12. Defendant argues that the valuation of the disputed Royalties as redacted in Section 2.5 of the APA reflects what Plaintiff believes she is entitled to in this litigation. Id. Defendant asserts that “what Plaintiff sold to Iconic and what representations she made about the Royalties are vital to determine the damages in this case.” Id. at 13. Defendant argues that she is not seeking “the Coca-Cola formula” or sensitive personal information about Plaintiff, and therefore the confidentiality of the requested documents should not preclude disclosure, particularly in light of the protective order issued in this case. Id. *4 Plaintiff responds that the redacted portions of the GA and APA are not relevant. Opp'n at 10. Plaintiff contends that the portions of the documents relating to other assigned rights or general contract terms of the overall sale are not relevant. Id. at 11-12. As to the Composition Royalties, Plaintiff asserts that it is not in dispute that Plaintiff assigned her right in post-July 1, 2022 Composition Royalties to Iconic. Id. at 12. And Plaintiff argues that Defendant's reference to royalties under the Copyright Act is nonsensical because the MSA is the source of Plaintiff's right to the Composition Royalties. Id. at 14. Plaintiff contends that nothing in Sections 2.2 or 2.5 of the APA suggests that Plaintiff is entitled to less than 50% of the Composition Royalties. Id. at 15. With respect to Section 2.5, Plaintiff explains that it demonstrates hypothetical situations to illustrate how the holdback provision works. Id. at 16-17. Plaintiff maintains that the redacted portions of the GA and APA contain information that is highly sensitive and confidential to both Plaintiff and Iconic. Id. at 17-18. 2. Analysis As to the confidentiality of the requested information, the Court finds that the circumstances of this case and the redacted information support Plaintiff's position that production under a protective order, even with the addition of an Attorneys' Eyes Only (“AEO”) designation, may not be sufficient to protect the Plaintiff and Iconic's interest in keeping the information confidential. Although it is not uncommon for a party to have a commercial or competitive interest in the opposing party's confidential information, generally outside litigation counsel are not involved in the business of a party and thus disclosure under an AEO provision is sufficient to mitigate the risk of any unfair commercial or competitive advantage. Here, Defendant does not dispute that she and her family have been in discussions with Iconic regarding the sale of their share of the Composition Royalties. Defendant also does not dispute that her attorney of record in this litigation is involved in the negotiations with Iconic. Thus, disclosure of information regarding the sale of Plaintiff's share of the Composition Royalties under an AEO designation carries a similar risk as disclosure to Defendant herself. And while the Court does not believe Defendant's counsel would expressly use AEO-designated information outside the confines of this litigation, it would be difficult to compartmentalize such information. While Plaintiff and Iconic's interest in keeping this information confidential would not justify the withholding of clearly relevant material, where material is not relevant or has very limited or marginal relevance, it is unlikely to be proportional to the needs of the case under Rule 26(b)(1). The Court turns to the relevance of the requested discovery. There are three categories of information that have been redacted from the APA and General Assignment: (1) information related to the sale of rights and interests in Plaintiff's solo work and other assets that are not the Composition Royalties at issue in this lawsuit; (2) information related to the general terms and price of the overall transaction between Plaintiff and Iconic; and (3) information related or referring to the instant litigation and the Composition Royalties at issue but for which Plaintiff disputes relevance. Following an in camera review of the unredacted APA and GA, the Court finds that redacted information that falls under the first category (sale of rights and interests in Plaintiff's solo work and other assets that are not the Composition Royalties at issue in this lawsuit) is not relevant. At the hearing, Defendant's counsel raised for the first time an argument that information regarding other assets could reveal reasons why Iconic and Plaintiff valued the Composition Royalties differently. The Court is not persuaded that information about other assets can somehow be compared to the treatment of the Composition Royalties to provide any relevant information to Defendant. Plaintiff's rights to the Composition Royalties arise from a specific contract, the MSA. Other rights and assets are not at issue in this litigation and arise from different laws and agreements. Plaintiff does not need to disclose information that falls under this category. *5 As to the second category (general terms and price of the overall transaction between Plaintiff and Iconic), the Court finds that most of the redacted information is not relevant. Because Defendant raised a concern regarding publisher royalties, the Court will direct the removal of redactions pertaining to publishers and publisher royalties in the APA and GA as these references do not appear to involve highly sensitive information. As to the third category of information, there are some references to the MSA and Composition Royalties in the APA and GPA that have been redacted and do not appear to involve highly sensitive information. Some of these redacted portions reveal information that Defendant already has or appear to be of limited relevance, but the Court will order them to be unredacted as they relate to the MSA and the Composition Royalties. There are also attachments to the unredacted version of the APA lodged in camera that were not included in the redacted version filed by Defendant. One of those attachments is the GA, which was disclosed separately and need not be disclosed again as an attachment to the APA. As to the other attachments, most are not relevant to this litigation. There are some attachments that refer to the MSA or Composition Royalties. While they do not appear to reveal any new information, the Court will order that they be produced for completeness. Tables at the end of this order set forth the specific redactions that should be removed. With respect to the remaining redacted portions of the APA or GA, the Court finds that these portions are not relevant and the Court does not believe anything within reflects Plaintiff's representations or positions regarding how much of the Composition Royalties she is entitled to with respect to the publisher's share or regarding anything else on the merits of this litigation. The Court will address the relevance of one redaction in detail as it appears to be part of the core of the instant dispute. Under the APA, Iconic has not yet paid Plaintiff for her share of the Composition Royalties. Instead, Iconic has held back this payment, and the payment will be some percentage of an amount defined as the MSA Holdback Amount. Schacht Decl., Ex. K at 4. The monetary value of the MSA Holdback Amount is redacted. Id. at 41. The Court has confirmed that the redacted MSA Holdback Amount is a discrete dollar value, not a calculation or formula that is affected by some factor such as the outcome of the litigation. While the MSA Holdback Amount is a specific dollar value, the actual amount Iconic will pay Plaintiff for her share of the Composition Royalties depends on the outcome of this litigation, under Section 2.5(c) of the APA, which the Court will refer to as the “MSA Holdback Provision.” The MSA Holdback Provision provides that after a final resolution of this action, Iconic will pay “a percentage of the MSA Holdback Amount equal to the percentage of the MSA Disputed Royalties Artist is entitled to receive pursuant to the resolution of the MSA Action.” Schacht Decl., Ex. K at 4, 41. The term “MSA Disputed Royalties” is defined as “ the amount payable in respect of the exploitation of the Subject Compositions that Artist claims in the MSA Action is payable to her notwithstanding the service by Bono's statutory successors of Notices of Termination pursuant to Section 304 of the Copyright Act, and Bono's statutory successors contend are no longer payable to Artist following the individual effective dates of such Notices of Termination, i.e., 50% of the amounts payable in respect of the exploitation in the United States of the Subject Compositions assigned by Bono to Artist pursuant to paragraphs 10(a)-(d) of the MSA.” Id. at 41. The MSA Holdback Provision further states, “[b]y way of illustration only, if, as the result of a final non-appealable judgment rendered in the MSA Action, or any Settlement Agreement fully and finally resolving the MSA Action, the Veritas Trust is entitled to receive 50% of the MSA Disputed Royalties, then Purchaser shall pay Sellers the sum of [Redacted], and if the Veritas Trust is entitled to receive 150% of the MSA Disputed Royalties, then Purchaser shall pay Sellers the sum of [Redacted].” Id. at 4. The Court has confirmed that the redacted parts of the illustration in the MSA Holdback Provision are the dollar values equal to 50% and 150% of the MSA Holdback Amount. *6 Therefore, the formula by which Plaintiff and Iconic will calculate the amount Iconic will pay Plaintiff for her share of the Composition Royalties depending on the outcome of the litigation has been disclosed, except as to the actual dollar figures. The only question is whether the specific dollar value of the MSA Holdback Amount (and 50% and 150% of that amount in the illustration within the MSA Holdback Provision) is relevant. The Court finds that it is not. As to Defendant's argument that the redacted portions would show whether Plaintiff has an interest in post-July 1, 2022 Composition Royalties, it is undisputed that Plaintiff has sold her interest in post-July 1, 2022 Composition Royalties to Iconic. See Opp'n at 7; Schacht Decl., Ex. K at 4. Iconic has indicated that it has no issue with the post-July 1, 2022 Royalties first being awarded to Plaintiff and then being paid by Plaintiff to Iconic. Schacht Decl., Ex. J. The already unredacted part of the MSA Holdback Provision demonstrates how the outcome of this litigation with respect to the Composition Royalties affects the amount Plaintiff will be paid for the post-July 1, 2022 Composition Royalties. See Schacht Decl., Ex. K at 4. Thus, the already disclosed portions of the APA provide Defendant the information she seeks regarding Plaintiff's interest in the post-July 1, 2022 Composition Royalties. As to Defendant's argument that the redacted portions may reflect Plaintiff's representations or positions regarding how much of the Composition Royalties she is entitled to with respect to the publisher's share, see Mot. at 13, the Court is not persuaded. The MSA Holdback Amount is a dollar figure and does not reveal any representation or position by Plaintiff regarding what percentage of the Composition Royalties to which she believes she is entitled. As to the illustration of 150% of the MSA Disputed Royalites, Defendant can point to the already unredacted language of the MSA Holdback Provision and the definition of MSA Disputed Royalties to make her argument. The Court fails to see why Defendant needs the actual MSA Holdback Amount (or 50% and 150% of the MSA Holdback Amount) to make this argument. Moreover, the MSA Holdback Amount is a highly sensitive piece of information, particularly with respect to negotiations between Iconic and Defendant regarding the possible sale of Defendant's share of the Composition Royalties. Although the Court finds that the MSA Holdback Amount is not relevant, to the extent it is marginally relevant, the Court finds that it should not be disclosed because it is confidential commercial information for which the risk of disclosure is not mitigated by an AEO provision. Nothing precludes Defendant from deposing Iconic or Plaintiff as to whether Plaintiff took any position regarding her share of the Composition Royalties, why the parties chose the MSA Holdback Provision as the mechanism to account for the outcome of this litigation, or why a hypothetical award of 150% of the MSA Disputed Royalties was used as an illustration in the APA. However, as confirmed by the Court's in camera review, there is nothing additional in the remaining redacted portions of the APA or GA that reflects any position taken by Plaintiff as to whether her share of the Composition Royalties includes or does not include publisher's royalties. Finally, the Court addresses the Subject Agreements. The Court has reviewed the list of Subject Agreements in Schedule 4.4 to the APA. The redacted agreements do not appear relevant to this litigation as they involve assets other than the Composition Royalties at issue here, and the Court does not believe an in camera review of the content of those agreements is necessary. Plaintiff represents that Defendant has a copy of the Subject Agreements that have not been redacted and Defendant does not appear to dispute this representation. To the extent Defendant requests that Plaintiff produce any of the unredacted agreements, the Court expects the parties to be able to come to a resolution without further Court intervention. *7 The following tables consist of the Court's rulings on what additional portions of the APA and GA should be disclosed to Defendant's counsel. The further unredacted APA and GA shall be disclosed pursuant to an “Attorneys' Eyes Only” (AEO) designation, unless Plaintiff and Iconic agree that such a designation is not required. Plaintiff shall promptly provide notice to Iconic of this order. Plaintiff shall notify opposing counsel if Iconic raises an objection to the removal of these redactions. Absent an objection from Iconic, Plaintiff shall produce the further unredacted APA and GA to Defendant's counsel by February 27, 2025. Asset Purchase Agreement Page No. 20 39-40 42 43, 45 46 PDF pages 181-185 PDF pages 190-222 Pertinent portion Section 7.4 Definition of “Income Ownership and Collection Rights” Definition of “Permitted MSA Action Settlement” Definitions of Publisher, Publisher Royalties, Sellers' Share of Publisher Royalties Definition of “Subject Agreements” Entire letter Entire document Ruling Remove redaction for the first sentence, except with respect to the parenthetical within the first sentence, remove redaction of “other than” and “the Pre-Cut-Off MSA Disputed Royalties,” and the remainder of the parenthetical may be redacted. Remove redaction for the second sentence. Remove redaction of the reference to Publisher Royalties and any necessary context in the first sentence. Remove redactions for the last two sentences, starting with “Notwithstanding.” Remove redaction Remove redaction Remove redaction Produce Produce redacted version with redactions consistent with this Order. General Assignment Page No. PDF pages 9-10 PDF page 10 PDF page 10 PDF page 11 PDF pages 7, 11, 12 PDF page 14 Pertinent Portion Definition of “Income Ownership and Collection Rights” Definition of “MSA” Definition of “MSA Disputed Royalties” Definition of “Pre-Cut-Off MSA Disputed Royalties” Definitions of Assignors' Share of Publisher Royalties, Publisher, Publisher Royalties Definition of “Subject Agreements” Ruling Remove redaction of reference to Assignors' Share of Publisher Royalties and any necessary context in the first sentence. Remove redaction of the last sentence starting with “Notwithstanding.” Remove redaction Remove redaction Remove redaction Remove redaction Remove redaction III. CONCLUSION Defendant's Motion is granted-in-part. Plaintiff shall produce further unredacted versions of the APA and GA to Defendant's counsel by February 27, 2025, absent an objection from Iconic. If Iconic objects to any of the further redactions, the parties are directed to meet and confer on next steps and to file a joint status report by February 27, 2025. IT IS SO ORDERED.