Opinion
3:18-cv-02280-DMS-AHG
10-29-2021
PRUCO LIFE INSURANCE COMPANY, Plaintiff, v. CALIFORNIA ENERGY DEVELOPMENT INC., et al., Defendants.
ORDER DENYING MOTIONS FOR PROTECTIVE ORDER REGARDING THE DEPOSITIONS OF JASON VOELKER AND MICKEY NICHOLSON
Honorable Allison H. Goddard United States Magistrate Judge.
I. BACKGROUND
On October 18, 2021, the Court issued an Order Setting Firm Dates for Certain Outstanding Depositions. ECF No. 300. In that Order, the Court set firm dates for the depositions of several witnesses in the case, including parties Mickey Nicholson and Jason Voelker. Id. at 2. The Court specified that Mr. Voelker would be deposed both in his individual capacity and in his capacity as the 30(b)(6) representative of California Energy Development, Inc. (“CEDI”). Id. The Court further set a deadline of October 27, 2021 for any party who wished to request that his/its deposition take place outside the Southern District of California-without a stipulation to that effect by all parties-to “submit legal authority by email to the Court” in support. Id. at 3.
In response, counsel for CEDI submitted an informal motion seeking a protective order pursuant to Rule 26(c)(1), requesting that the deposition of Mr. Voelker be taken remotely or outside the Southern District of California. CEDI's motion is attached hereto as Exhibit A. Life Advance, LLC (“Life Advance”) submitted a response in opposition to CEDI's request on October 28, 2021, also via email to the Court. Life Advance's Opposition to CEDI's motion is attached hereto as Exhibit B.
Additionally, Mickey Nicholson submitted an informal brief to the Court via email on October 27, 2021, requesting that his deposition be conducted remotely. Mr. Nicholson's informal motion is attached hereto as Exhibit C. The Court ordered Life Advance to lodge a response to Mr. Nicholson's request with Court via email by noon on October 29, 2021 (ECF No. 306), and Life Advance did so. Life Advance's Opposition to Mr. Nicholson's motion is attached hereto as Exhibit D.
During the same timeframe, on October 26, 2021, the Court scheduled a discovery conference for October 28, 2021 to discuss Pruco Life Insurance Company's (“Pruco”) Motion to Quash Deposition Subpoena of Kelly D. Fair (“Motion to Quash”). ECF No. 304. Following the discussion of the Motion to Quash, the Court excused counsel for Pruco and allowed the remaining parties to be heard regarding the deposition-related disputes.
Having considered the parties' arguments during the hearing, as well as the briefs submitted informally to the Court regarding the deposition dispute, the Court DENIES the request that Mr. Voelker be deposed outside of the Southern District of California, and further DENIES the requests to allow Mr. Nicholson and Mr. Voelker to be deposed remotely. Both Mr. Nicholson and Mr. Voelker are ORDERED to appear for their depositions in person in the Southern District of California, as noticed, for the reasons that follow.
II. LEGAL STANDARD
Rule 30 of the Federal Rules of Civil Procedure sets forth the procedures for depositions. As a general rule, the deposition of a party may be set wherever the deposing party designates, subject to the power of the court to grant a protective order. Lord v. Flanagan, No. 13cv26-BU-DLC-JCL, 2014 WL 51655, at *2 (D. Mont. Jan. 7, 2014); see S.E.C. v. Banc de Binary, No. 13cv993-RCJ-VCF, 2014 WL 1030862, at *3 (D. Nev. Mar. 14, 2014) (noting that Rule 30(b)(1) requires “‘[a] party who wants to depose a person by oral questions [to] state the time and place of the deposition, '” and explaining that “[g]enerally, this means that the examining party may unilaterally choose a deposition's location”). “[T]he court has a wide discretion in selecting the place of examination.” Lord, 2014 WL 51655, at *2 (quoting 8A C. Wright & A. Miller, Federal Practice and Procedure § 2112 (3d ed. 2010)); see also Hyde & Drath v. Baker, 24 F.3d 1162, 1166 (9th Cir. 1994) (“A district court has wide discretion to establish the time and place of depositions.”). Under Rule 30, “[t]he parties may stipulate-or the court may on motion order-that a deposition be taken by telephone or other remote means, ” such as video conferencing. Fed.R.Civ.P. 30(b)(4); see Banc de Binary, 2014 WL 1030862, at *10 (‘other remote means' includes videoconferencing).
Rule 26(c)(1), in turn, governs protective orders. A court may grant a protective order “‘to regulate the terms, conditions, time or place of discovery.'” Cadent Ltd. v. 3M Unitek Corp., 232 F.R.D. 625, 629 (C.D. Cal. 2005) (quoting Pro Billiards Tour Ass'n, Inc. v R.J. Reynolds Tobacco Co., 187 F.R.D. 229, 230 (M.D. N.C. 1999)). Under that rule, “[t]he court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense[.]” Fed.R.Civ.P. 26(c)(1). In order to make the requisite showing of good cause, “the party seeking protection bears the burden of showing specific prejudice or harm will result if no protective order is granted.” Phillips ex rel. Estates of Byrd v. General Motors Corp., 307 F.3d 1206, 1210-11 (9th Cir. 2002); WebSideStory, Inc. v. NetRatings, Inc., No. 06cv408-WQH-AJB, 2007 WL 1120567, at *1-*2 (S.D. Cal. Mar. 22, 2007) (“To establish good cause, the moving party must make a clear showing of a particular and specific need for the order.”). The court has broad discretion in deciding “when a protective order is appropriate and what degree of protection is required.” Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984); see Phillips, 307 F.3d at 1211-12.
III. DISCUSSION
A. CEDI's Motion for Protective Order regarding Mr. Voelker's Deposition
The Court finds that CEDI has failed to meet the Rule 26(c)(1) “good cause” standard to warrant a protective order requiring Mr. Voelker's deposition to take place outside of the Southern District of California, or alternatively, that it take place remotely. Specifically, CEDI requests that the Court issue a protective order requiring Life Advance to take Mr. Voelker's deposition(s) in the Northern District of California, where Mr. Voelker resides and where CEDI has its principal place of business. In the alternative, CEDI requests that the Court allow Mr. Voelker's deposition to proceed remotely.
In its brief, CEDI argues that “the bar is set very low” to meet the good cause requirement of Rule 26 where the noticed location of the deposition is not in the district where the defendant lives or has its principal place of business. In support of this proposition, CEDI cites to SEC v. Aly, 320 F.R.D. 116, 118 (S.D.N.Y. 2017). However, the Aly case does not support CEDI's argument that the bar is “very low.” Indeed, the case cuts against CEDI's argument in at least one significant way, because it explains that “[t]he presumption that a deposition should take place where a defendant resides is based in part on the assumption that the plaintiff exercised choice as to the forum of the lawsuit, and thus the presumption is weakest where the plaintiff was constrained to file suit in a particular forum. ” Id. (emphasis added). Here, not one of the three parties involved in the dispute-CEDI, Mr. Voelker, and Life Advance-is the plaintiff in this action. Instead, all three are interpleader defendants who were haled into Court by Plaintiff Pruco due to their competing claims to the policy proceeds at issue in this interpleader action. Therefore, as explained in the very case upon which CEDI relies, the presumption is not applicable where, as here, the party who noticed the deposition is not a plaintiff who chose the forum of the lawsuit.
The Court further notes that CEDI has not established that its principal place of business is not in this district. As Life Advance points out in its Opposition, records from the California Secretary of State website continue to show that California Energy Development, Inc. is a dissolved corporation with its principal address at 8400 Miramar Road, San Diego, California, 92126. The Statement of Information for CEDI filed on July 19, 2016 lists the location of the principal executive office as San Diego. Additionally, minutes from the special meeting of the shareholders of CEDI held on September 29, 2020, when a new Board of Directors was elected, show that the meeting took place at 141 North Magnolia Avenue, El Cajon, CA, 92020, which is also located in this district. ECF No. 193-2. There is no evidence before the Court that the corporation has ever been incorporated or held its principal place of business in the San Francisco area, as Mr. Voelker now reports in his declaration submitted to the Court.
A second reason the Aly case is inapposite is that the deponent there “declared under penalty of perjuy that he has assets only of approximately $1,000, ” making travel from Pakistan to New York a “prohibitive burden to him.” 320 F.R.D. at 118-19. Taking into account the deponent's minimal resources, as described in a sworn affidavit under penalty of perjury, the failure of the deposing party to refute the affidavit, and the fact that the deponent's passport had expired and he had no visa to enter the United States, the Court determined that it would be unduly burdensome to force the deponent to travel to New York or another country for his deposition. Id. at 119. However, even then, the Court did not require the deposing party to travel to the deponent's place of residence in Pakistan, instead ordering that the deposition take place remotely. Id. at 119-120.
CEDI has made no similar showing of undue burden here. Indeed, CEDI's counsel Benjamin Gale submitted his own estimates of his and Mr. Voelker's deposition-related expenses, totaling $2,250 (attached to Exhibit A). $1,500 of the anticipated expenses are reported as “Gale's lost hourly billings @ $375/hr x 4 hrs.” Other reported expenses include $500 for air fare for Mr. Gale and Mr. Voelker, $150 for a rental car, and $100 for meals. Setting aside the unusual proposition that the Court should consider Mr. Gale's purported inability to bill CEDI for his travel to attend depositions in connection with this litigation, more significantly, CEDI has failed to show why such expenses are “undue.” Notably, CEDI and Mr. Voelker are not only interpleader defendants in this action, but they have also each brought cross-claims against Life Advance. ECF No. 209, 240, 241. Maintaining and defending claims in a lawsuit will necessarily entail certain costs and expenses. The question under Rule 26(c)(1) is not whether there is any cost to travel to appear for a deposition noticed by an opposing party in litigation, but whether the burden of the cost is undue. CEDI and Mr. Voelker have failed to make such a showing here.
Additionally, the Court notes that the CEDI shareholder meeting minutes show that Mr. Voelker has traveled to this district in connection with CEDI business in the past. Mr. Voelker has also traveled to this district to attend the Early Neutral Evaluation Conference in this matter. ECF No. 125. And, as Life Advance points out in its opposition, CEDI chose to designate Mr. Voelker as its 30(b)(6) representative in this action. CEDI has thus failed to meet its burden of showing a “particular and specific need” for a protective order requiring that the deposition take place elsewhere or by remote means. See WebSideStory, 2007 WL 1120567, at *1-*2.
Moreover, the Court finds that the circumstances of this case demand that depositions take place in person. There is an exceedingly high level of distrust among all parties, as evidenced by the near-constant stream of accusations of bad faith and dishonest conduct the Court has faced from all sides. The credibility of the parties is also a key substantive issue in this case. For that reason, the Court is not inclined to permit key witnesses such as Mr. Voelker to appear by videoconference. See, e.g., Gersh v. Anglin, No. CV-17-50-M-DCL-JCL, 2019 U.S. Dist. LEXIS 162473, at *4-*5 (D. Mont. Apr. 5, 2019) (denying request for defendant's deposition to proceed by videoconference, because “[a]s the named defendant, Anglin will also likely serve as a key witness and his credibility will presumably be a central issue. Plaintiff cites several cases recognizing that a deposition by remote means may be insufficient where, as here, the deponent is a key witness whose testimony and credibility are central to the case. [] This Court agrees that [p]laintiff would be prejudiced if Anglin is not required to appear for an in-person deposition.”); Natural-Immunogenics Corp. v. Newport Trial Grp., No. 15cv2034-JVS-JCGx, 2017 WL 10562990, at *6 (C.D. Cal. Aug. 14, 2017) (denying motion for protective order permitting depositions to proceed by videoconference, in part because “the Quintos are key witnesses in this case. They are [plaintiff]'s principals; they decided to bring this litigation, and they have been actively involved in making litigation decisions, as their counsel have represented. Thus, it is fair to say that their testimony will be controversial, and the tenor of the interactions between the parties and counsel during the depositions may be tense. Videoconference depositions are not suitable for such controversial situations, ” since counsel would be unable to ascertain if anyone is listening in or coaching the witness); see cf. Egan v. Royal Kona Resort, No. 17-322-DKW-KJM, 2018 WL 1528779, at *2 (D. Haw. Mar. 28, 2018) (“Although the Court will always encourage parties to consider remote depositions-particularly if the depositions do not involve key witnesses-the Court agrees with Royal Kona's concerns about the practical limitations on such depositions. Here, where the depositions concern the named Plaintiffs who will be key trial witnesses, the Court agrees that forcing video or telephonic depositions would unfairly prejudice Royal Kona's case evaluation and preparation.”); United States v. Approximately $57,378 in U.S. Currency, No. C-08-5023-MMC-BZ, 2010 U.S. Dist. LEXIS 121022, at *3-*4 (N.D. Cal. Oct. 27, 2010) (denying request for defendant's deposition to proceed by videoconference, because “a deposition by telephone or video conference would be prejudicial to the Government's case. This is primarily because the Government will use Sims' deposition to examine her credibility. To do this, the Government needs an in-person opportunity to observe Sims' demeanor, ask follow-up questions, and confront Sims with prior inconsistent statements she has made.”); Clinton v. Cal. Dep't of Corr., No. CIV-S-05-1600-LKK-CMK-P, 2008 WL 5068586, at *2 (E.D. Cal. Nov. 25, 2008) (declining to order remote deposition of plaintiff because a remote deposition would “place [defendant] at a disadvantage by not allowing defense counsel to adequately observe plaintiff's demeanor to prepare for trial”).
B. Mr. Nicholson's Motion for Protective Order Mr. Nicholson has also requested that his deposition proceed by remote means. See Exhibit C attached hereto.
Mr. Nicholson's request is driven by the fact that he is the sole caretaker for his mother, who suffers from a number of medical problems and is especially vulnerable to COVID-19. Mr. Nicholson is concerned about exposing his mother to COVID-19 and about being away from his mother in case of an emergency.
While the Court is more sympathetic to Mr. Nicholson's arguments regarding his request to have his deposition take place remotely, ultimately, the Court will deny the request for the same reasons explained above with respect to Mr. Voelker's deposition. Like Mr. Voelker, Mr. Nicholson is also a key witness in this case whose credibility is at issue, and who has brought affirmative cross-claims for relief against Life Advance. As Life Advance points out in its Opposition, “discovery and other proceedings in this case [have] been wrought with disputes and antagonistic, illegal activities” such that “[t]he potential for technology problems, sound problems and interruptions will only exacerbate those issues.” As outlined in more detail in its discussion of Mr. Voelker's request above, the Court is further swayed by Life Advance's argument that “[e]xperienced litigation attorneys read body language and find ways to engage witnesses in ways that are not available in a virtual setting.” See also, e.g., Approximately $57,378 in U.S. Currency, 2010 U.S. Dist. LEXIS 121022, at *3-*4 (N.D. Cal. Oct. 27, 2010); Johnson v. Sager, No. C11-1117-RSM-JPD, 2012 WL 213471, at *2 (W.D. Wash. Jan. 24, 2012) (granting a remote deposition, but acknowledging that counsel's “inability to see defendants and to judge their personal demeanors constitutes an important consideration in the decision to permit a [remote] deposition, particularly because [the deposing party] contends that defendants have acted dishonestly and with discriminatory intent.”); Anguile v. Gerhart, No. CIV.A 93-934 (HLS), 1993 WL 414665, at *3 (D.N.J. Oct. 7, 1993) (“[T]he court agrees with the defendant that counsel's ability to see the plaintiff and judge her demeanor is important in this case where the plaintiff is the key witness to most of the relevant facts . . . .”)
The Court also agrees with Life Advance that the need to question Mr. Nicholson regarding many documents during the deposition also counsels in favor of an in-person deposition, as sorting through voluminous documents remotely is “time consuming and difficult.” Further, Mr. Voelker's place of residence is in El Cajon, California, which is only 31.4 miles from the location of the noticed deposition at counsel for Life Advance's office. As Life Advance points out in its opposition, Mr. Nicholson has recently appeared in person in this Court for Show Cause hearings on August 9 and October 12, 2021. ECF Nos. 284, 296. He also appeared in person at the CEDI shareholders meeting on September 26, 2020, when COVID-19 vaccinations were not publicly available. ECF No. 193-2.
Nonetheless, the Court takes seriously the very real threat of the ongoing COVID-19 pandemic. However, in its wide discretion and considering the importance of Mr. Nicholson's testimony and Life Advance's ability to assess his credibility in person, the Court finds on balance that the threat is sufficiently mitigated by the fact that Life Advance has guaranteed that counsel, counsel's staff, and the short-hand reporter are all fully vaccinated. Thus, although Mr. Nicholson's request poses a closer question for the Court, the Court will deny the request in its discretion.
IV. CONCLUSION
For the foregoing reasons, CEDI's and Mickey Nicholson's informal motions for protective order, requesting that the depositions of Mr. Nicholson and Mr. Voelker take place out-of-district and/or remotely, are DENIED. As set forth in the Court's prior Order Setting Firm Dates for Certain Outstanding Depositions (ECF No. 300), the depositions of Mr. Nicholson and Mr. Voelker will take place in person in the Southern District of California.
IT IS SO ORDERED.