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City of Seattle v. Zylab North America, LLC

United States District Court, W.D. Washington, Seattle

October 5, 2017

CITY OF SEATTLE, Plaintiff,
v.
ZYLAB NORTH AMERICA, LLC, Defendant.

          ORDER

          JOHN C. COUGHENOUR UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Plaintiff's motion to compel discovery (Dkt. No. 27). Having thoroughly considered the parties' briefing and the relevant record, the Court hereby GRANTS the motion in part and DENIES the motion in part for the reasons explained herein.

         I. BACKGROUND

         In 2014, Plaintiff City of Seattle (“City”) entered into a contract with Defendant ZyLAB North America LLC (“ZyLAB”) under which ZyLAB would provide City with various software services such as an email archiving and eDiscovery system. (Dkt. No. 1-1 at 4.) In March 2016, City terminated the contract because it believed ZyLAB had not provided a system that met the contract's specifications. (Id. at 4-5.) The parties began to negotiate the dispute and discussed entering pre-litigation mediation. (Id. at 6.)

         ZyLAB made a public records request to obtain documents related to the contract and City began to provide the documents. (Id.) City requested ZyLAB produce documents it believed it was entitled to under the terms of the contract. (Dkt. No. 27 at 2.) ZyLAB refused to send City the documents and instead offered that City could come to its Virginia headquarters to take pictures of the documents on a dedicated computer. (Id. at 3.) City viewed ZyLAB's proposed method of document production as another breach of the contract. (Dkt. No. 1-1 at 6-7.)

         On May 5, 2017, City brought this lawsuit against ZyLAB alleging breach of contract, negligent misrepresentation and violation of the Washington Consumer Protection Act. (Dkt. No. 1-1 at 8-12.)[1] ZyLAB counterclaimed for breach of contract. (Dkt. No. 13 at 9.) On June 30, 2017, City made a request for production on ZyLAB seeking documents it hoped to use during a voluntary mediation. (Dkt. No. 18 at 5.) On July 31, 2017, ZyLAB responded to City's discovery requests with objections and refused to produce any of the requested documents. (Dkt. Nos. 27 at 4, 29-1 at 28-39.) Having not received discovery, City sought, and the Court granted, an extension to the mediation deadline. (Dkt. No. 31.)

         On August 31, 2017, City filed its motion to compel (Dkt. No. 27). The Court subsequently ordered the parties to meet and confer in an attempt to resolve the outstanding discovery disputes. (Dkt. No. 38). On September 28, 2017, ZyLAB filed its own motion to compel discovery. (Dkt. No. 39).[2] Parties filed a joint status report on September 29, 2017, outlining the remaining disputes. (Dkt. No. 41). To date, City has provided ZyLAB with thousands of documents regarding the contract dispute. (Dkt. No. 27 at 3.) As far as the Court is aware, ZyLAB has not produced any documents requested by City. (Id. at 4.)

         II. DISCUSSION

         Discovery motions are strongly disfavored. The Court ordered the parties to meet and confer before ruling on City's motion in an effort to bring about resolution short of having to intervene. (Dkt. No. 38.) Since that order, ZyLAB has filed its own motion to compel. (Dkt. No. 39.) It is clear from the history of this case-both before and since City filed suit-that the parties have fought bitterly over the production of documents. (See generally, Dkt. Nos. 18, 27, 39.) The Court observes that the efforts that have gone into litigating the production of documents would have been more productively used to resolve what both parties believe is a straightforward dispute amenable to mediation. (See Dkt. No. 18 at 2) (“[The] City proposed that the parties enter mediation without the production of documents, which would be the most expedient and cost-effective approach.”); (see Dkt. No. 21 at 3) (ZyLAB's counsel stated that “this case cried out for mediation because the case was a simple breach of contract case . . . .”).

         A. Motion to Compel Standard

         “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.” Fed.R.Civ.P. 26(b)(1). Relevant information under Rule 26(b) is “information reasonably calculated to lead to the discovery of admissible evidence.” Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d 625, 635 (9th Cir. 2005). District courts have broad discretion to determine relevancy for the purpose of granting or denying discovery. See Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002).

         When addressing proportionality, the Court considers “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.” Fed.R.Civ.P. 26(b)(1). If requested discovery is not answered, the requesting party may move for an order compelling such discovery. Fed.R.Civ.P. 37(a)(1). The party that resists discovery has the burden to show why the request should be denied. Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975).

         B. City's Motion to Compel

         The Court ordered the parties to file a joint status report listing the remaining issues to be resolved. (Dkt. No. 38.) Having considered the parties' joint status report, and other briefing, the Court makes the following ruling on the four unresolved areas of dispute:

         1. The Applicable Time Period of Discoverable Documents.

         City asks the Court to order ZyLAB to produce all responsive and nonprivileged documents from the period March 4, 2016 to May 5, 2017. (Dkt. No. 41 at 2-3.) ZyLAB asserts that it obtained counsel on March 4, 2016 and responsive documents after that date are protected by attorney client privilege and work product privilege. (Id. at 4.) In addition, ZyLAB states it would be unduly burdensome for it to produce nonprivileged documents from that period. (Id.)

         “A party withholding materials under an assertion of privilege has the burden of proving that the withheld materials are actually privileged.” Cedar Grove Composting, Inc. v. Ironshore Specialty Ins. Co., No. C14-1443-RAJ, slip op. at 5 (W.D. Wash. Dec. 23, 2015) (citation omitted). For documents to fall under the work product privilege they must be both prepared in anticipation of litigation and prepared by or for another party or by or for that other party's ...


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