Sky Financial and Intelligence, LLC v. Cliq, Inc Case No.: 8:22-01670 ADS United States District Court, C.D. California Filed March 28, 2025 Spaeth, Autumn D., United States Magistrate Judge Proceedings: (IN CHAMBERS) ORDER DENYING PLAINTIFF SKY FINANCIAL AND INTELLIGENCE, LLC'S MOTION TO COMPEL PRODUCTION OF DOCUMENTS (DKT. NO. 109) I. INTRODUCTION *1 Before the Court is a Motion to Compel by Plaintiff Sky Financial and Intelligence, LLC (the “Motion”). (Dkt. No. 109.) Plaintiff moves to compel Defendant Cliq, Inc. to produce all residual reports in Excel format in response to Request No. 3 of its Requests for Production of Documents, Set One (the “RFP”). (Dkt. No. 110, Joint Stipulation (“JS”).) Defendant opposes the Motion and requests sanctions pursuant to Federal Rule of Civil Procedure 16 and 37. (Id.) The parties filed a Joint Stipulation as required by Local Rule 37. (Id.) For the reasons discussed below, the Motion and the request for sanctions are denied. II. RELEVANT BACKGROUND Defendant is an independent sales organization that sells and provides credit and debit card processing services to and for merchants. (Dkt. No. 1, Compl. at ¶ 14; Dkt. No. 31, Answer at ¶ 14.) Plaintiff and Defendant entered into an Acquiring Independent Contractor Agreement (the “Agreement”). (Compl. at ¶ 1.; Answer at ¶ 1.) According to Plaintiff, under the Agreement, it was to act as an independent contractor and market Defendant's services to procure merchants for Defendant's business. (Compl. at ¶ 2.) On September 12, 2022, Plaintiff initiated this action. (Compl.) Plaintiff asserts claims for breach of contract and breach of covenant of good faith and fair dealing.[1] (Id. at ¶¶ 24-29, 39-43.) Plaintiff alleges Defendant has underpaid and failed to pay Plaintiff for its services. (Id. at ¶ 26.) Among other allegations, Plaintiff contends Defendant produced “inaccurate residual reports ... in an attempt to overcharge and under pay [Plaintiff] for its services ....” (Id.) On February 27, 2023, Defendant filed an Answer to the Complaint. (Answer.) Defendant raises fourteen affirmative defenses. (Id.) Plaintiff sought the alleged inaccurate residual reports in discovery. Specifically, the RFP seeks: “All communications, text messages, e-mails, attachments, other documents, and/or any other ESI between Cliq and any agent or employee of Cliq regarding residual reports related to any and all merchants acquired by Sky.” (Dkt. No. 110-1, Declaration of Peter Kessler (“Kessler Decl.”), Ex. 1-3 at 114.) On September 1, 2023, Defendant served its response to the RFP. (Id. at 142.) In its response, Defendant objected to the RFP on several grounds and agreed to “produce other discovery responsive to this Request in its possession, custody, or control on a rolling basis over the next two weeks.” (Id. at 115.) In a January 30, 2025 deposition, Plaintiff asked Andy Phillips about the RFP as a representative of Defendant and in his personal capacity. (Kessler Decl., Ex. 1-2, 10:1-5.) Plaintiff showed Phillips the RFP and a residual report Plaintiff produced in this litigation (the “Residual Report Exemplar”). (Id. at 70:17-73:5; see also Kessler Decl., Ex. 1-4 (the Residual Report Exemplar).) Plaintiff asked Phillips to provide all residual reports that were generated in the format of the Residual Report Exemplar. (Kessler Decl., Ex. 1-2, 73:8-76:6.) Phillips agreed to look for residual reports in the format of the Residual Report Exemplar and produce them if found. (Id.) Defendant clarified Plaintiff should not contact Phillips directly and objected to the relevance of the requested residual reports. (Id.) An errata sheet for Phillips's deposition testimony clarifies that he will produce the residual reports “if [he] is instructed to do so by [his] attorney or the court.” (Dkt. No. 110-2, Declaration of Joshua Herndon (“Herndon Decl.”), Ex. 2-14.) After the deposition, Defendant did not confirm whether it searched for the residual reports, and it did not produce them. (Kessler Decl., Ex. 1-5.) III. DISCUSSION *2 By this Motion, Plaintiff seeks an order compelling Defendant to produce all residual reports in the format of the Residual Report Exemplar. Defendant opposes the Motion on the ground that it is untimely and requests $7,350 in sanctions pursuant to Federal Rule of Civil Procedure 16 and 37 for attorney's fees incurred to respond to the Motion. The Motion was filed on March 5, 2025. (Dkt. No. 109.) Plaintiff contends Defendant waived any objection as to the timeliness of the Motion, because Andy Phillips agreed to produce the residual reports after the discovery deadline. (JS 15.) Defendant asserts the Motion is untimely as the parties were required to file all motions to compel related to the RFP by August 30, 2024. (JS 16.) At the latest, Defendant contends Plaintiff was required to file all motions to compel related to the deposition of Andy Phillips by January 31, 2025. The Scheduling Order and subsequent orders modifying the Scheduling Order establish the deadline to file motions to compel in this action. The Scheduling Order governs this action unless modified by the Court. FED. R. CIV. P. 16(e). The Scheduling Order states: The Scheduling Order establishes a cut-off date for discovery in this action. This is not the date by which discovery requests must be served; it is the date by which all discovery must be completed and all related motions filed. Consistent with Federal Rule of Civil Procedure 16(b)(4), the Court will not approve stipulations between the parties that permit responses to be served after the cut-off date unless the parties show good cause... Any motion regarding the inadequacy of responses to discovery must be filed and served by or before the discovery cut-off date. (Dkt. No. 22 at 3.) The Court extended the Fact Discovery Cut-Off several times for good cause demonstrated by the stipulation of the parties. (Dkt. Nos. 42, 48, 70, 91, 105.) With a limited exception, the Fact Discovery Cut-Off was August 30, 2024. (Dkt. Nos. 70, 91.) For the limited purpose of the depositions of Defendant, Andy Phillips, Ken Haller, Plaintiff, and XY Labs, LLC, the Fact Discovery Cut-Off was extended to January 31, 2025. (Dkt. No. 105.) Here, the Motion seeks to compel residual reports responsive to RFP No. 3. (JS 5.) The deadline to file a motion to compel the production of documents was August 30, 2024. (Dkt. Nos. 70, 91.) Though Plaintiff establishes the residual reports are relevant, it has failed to demonstrate good cause for its belated filing. See Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (affirming denial of motion to amend complaint as untimely where plaintiff “[f]ailed to heed clear and repeated signals that not all necessary parties had been named”). For this reason, the Motion is denied. Defendant requests sanctions in the amount of $7,350 pursuant to Federal Rule of Civil Procedure 16 and 37. Because the Court finds Plaintiff was substantially justified in making the Motion, the request for sanctions is denied. IT IS SO ORDERED. Footnotes [1] On February 2, 2023, the Court granted Defendant's Motion to Dismiss in part, dismissing Plaintiff's claims for restitution/unjust enrichment and conversion. (Dkt. No. 30.) Plaintiff did not file an amended complaint.