Securities And Exchange Commission v. Berry, No. 5:2007cv04431 - Document 200 (N.D. Cal. 2011)
Court Description: ORDER GRANTING 169 SEC's Motion to Compel Interrogatory Responses. See order for details. Signed by Magistrate Judge Howard R. Lloyd on 4/1/2011. (hrllc1, COURT STAFF) (Filed on 4/1/2011)
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Securities And Exchange Commission v. Berry Doc. 200 1 ** E-filed April 1, 2011 ** 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 9 FOR THE NORTHERN DISTRICT OF CALIFORNIA 10 For the Northern District of California NOT FOR CITATION 8 United States District Court 7 SAN JOSE DIVISION 11 SECURITIES AND EXCHANGE COMMISSION, No. C07-04431 RMW (HRL) 12 ORDER GRANTING THE SEC’S MOTION TO COMPEL INTERROGATORY RESPONSES Plaintiff, 13 v. 14 [Re: Docket No. 169] LISA C. BERRY, 15 16 Defendant. ____________________________________/ 17 BACKGROUND 18 The Securities and Exchange Commission (“SEC”) filed this civil enforcement action in 19 2007 in relation to alleged improper stock option backdating at Juniper Networks, Inc. (“Juniper”). 20 Defendant Lisa Berry (“Berry”) was General Counsel of Juniper from June 1999 to January 2004, 21 and the SEC alleges that she oversaw Juniper’s stock option granting process. 22 23 The relevant facts are summarized in chronological order below: • April 29, 2009: The SEC served its First Set of Interrogatories (containing Interrogatory 24 Nos. 3, 4, 8, 9, 10, 11, and 12). LaMarca Decl., Ex. C. These interrogatories ask Berry to 25 describe in detail each communication regarding the process by which stock options were 26 granted at Juniper that she had with any of the following: (1) any member of Juniper’s board 27 of directors; (2) any auditors from Ernst & Young LLP; (3) former Juniper CFO Marcel 28 Gani; (4) any person with the law firm of Wilson Sonsini Goodrich & Rosati PC; (5) former Dockets.Justia.com 1 Juniper CEO Scott Kriens; (6) former Juniper Stock Administrator Leilani Eames; and (7) 2 former Juniper Stock Administrator Brienne Taloff Fisher. Id. 3 • June 1, 2009: Berry served her original responses to the SEC’s First Set of Interrogatories. 4 Id., Ex. A. Along with incorporating her general objections, Berry objected to Interrogatory 5 Nos. 3, 4, 8, 9, 10, 11, and 12 on the following grounds: (1) that the phrase “the process” 6 was vague and ambiguous; (2) that the interrogatories were overly broad and subject her to 7 undue burden, oppression, and expense; (3) that the interrogatories call for information 8 protected by the attorney-client privilege and attorney work product doctrine; and (4) that 9 Berry “has not been informed that Juniper Networks has waived its attorney-client privilege and therefore is unable to respond” to the interrogatories. Id. For the Northern District of California United States District Court 10 11 • Amendment privilege, so it noticed her deposition. Id. ¶ 9. 12 13 Last week of December 2010: SEC learned that Berry would no longer invoke her Fifth • January 29, 2011: Berry served her amended responses to the SEC’s First Set of 14 Interrogatories. Id., Ex. B. She objected to Interrogatory Nos. 3, 4, 8, 9, 10, 11, and 12 on the 15 same grounds as before. Id. 16 • February 7-8, 2011: Berry was deposed. Id. ¶ 9. 17 • February 22, 2011: Berry’s counsel stated in an email that she believed that Interrogatory 18 Nos. 3, 4, 8, 9, 10, 11, and 12 either were, or should have been, asked during Berry’s 19 February 7-8, 2011 deposition, such that further responses would be duplicative. Id., ¶ 12. 20 • March 7, 2011: During a meet and confer telephone call, Berry’s counsel tells the SEC that 21 she would not respond to Interrogatory Nos. 3, 4, 8, 9, 10, 11, and 12 because the questions 22 were the type that would have been better posed during her February 7-8, 2011 deposition. 23 Id. 24 With depositions of other witnesses scheduled to take place soon, the SEC now moves for an 25 order compelling Berry to respond to Interrogatory Nos. 3, 4, 8, 9, 10, 11, and 12. Docket No. 169 26 (“MTC”). Berry opposed the motion. Docket No. 186 (“Opp’n”). 27 LEGAL STANDARD 28 2 1 A party in a civil case may serve written interrogatories on another party, and the responding 2 party must serve its answers and any objections within thirty days. FED. R. CIV. P. 33. Any untimely 3 objection to an interrogatory is waived unless the court finds good cause for excuse. FED. R. CIV. P. 4 33(b)(4). If no response is made, the propounding party may apply for an order compelling a 5 response. FED. R. CIV. P. 37(a)(3)(B)(iii). Subject to the limitations imposed by subsection (b)(2)(C), under Federal Rule of Civil 6 7 Procedure 26, “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to 8 any party’s claim or defense . . . .” FED. R. CIV. P. 26(b)(1). “Relevant information need not be 9 admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of For the Northern District of California United States District Court 10 admissible evidence.” Id. However, “[o]n motion or on its own, the court must limit the frequency 11 or extent of discovery otherwise allowed by these rules or by local rule if it determines that: (i) the 12 discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other 13 source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery 14 has had ample opportunity to obtain the information by discovery in the action; or (iii) the burden or 15 expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, 16 the amount in controversy, the parties’ resources, the importance of the issues at stake in the action, 17 and the importance of the discovery in resolving the issues.” FED. R. CIV. P. 26(b)(2)(C). DISCUSSION 18 Berry puts forth several reasons why she should not have to respond to the interrogatories at 19 20 21 22 issue. A. Whether the Interrogatories Are Overbroad and Unduly Burdensome In her interrogatory responses, Berry objected to the interrogatories as being overbroad and 23 unduly burdensome. She renews that objection here. “By its very nature,” Berry contends, “the 24 SEC’s demand that Ms. Berry describe ‘each communication’ regarding the stock option process 25 with more than a dozen individuals is overbroad and unduly burdensome.” Opp’n at 5. In order to 26 respond, she says she will be required “to recall and describe communications with more than a 27 dozen people that occurred over a three-and-a-half year period [that was] as much as twelve years 28 ago . . . .” Id. at 4. 3 1 The SEC correctly points out that none of the authority cited by Berry supports her claim 2 that the interrogatories are, “by [their] nature,” overbroad and unduly burdensome. Indeed, the cases 3 cited by Berry are easily distinguished from the situation here. In JJCO, Inc. v. Isuzu Motors Am., 4 Inc., CIV. NO. 08-00419 SOM/LEK, 2009 U.S. Dist. LEXIS 102121, at *12 (D. Haw. Oct. 30, 5 2009), the plaintiff sought “all correspondence between Isuzu and GM over a four-year period,” all 6 of which could not possibly relate to the plaintiff’s claims. In Brown’s Crew Car of Wyo. LLC v. 7 State Transp. Auth., Case No.: 2:08-cv-00777-RLH-LRL, 2009 U.S. Dist. LEXIS 39469, at *14-15, 8 18-19 (D. Nev. May 1, 2009), the intervenor sought information that was “well beyond the scope 9 and purpose of this action” and even appeared “calculated to needlessly increase the cost of For the Northern District of California United States District Court 10 litigation.” And in In re Ebay Seller Antitrust Litig., No. C 07-1882 JF (RS), 2008 WL 5212170, at 11 *2 (N.D. Cal. Dec. 11, 2008), the court determined that the defendant’s contention interrogatories 12 seeking “all facts” supporting the plaintiff’s allegations were inappropriate at that time and so it 13 denied the defendant’s motion without prejudice after noting that there was no dispute that the 14 plaintiff would have to respond fully to the interrogatories at some point. 15 In this case, though, the SEC’s interrogatories request that Berry describe conversations she 16 had with specific individuals about a specific topic that is directly relevant to this action. Moreover, 17 Berry has been aware of these interrogatories for more than two years, so she cannot now claim that 18 she has been caught off guard by them. Accordingly, the Court rejects Berry’s “burdensome” 19 argument. 20 21 B. Whether the Interrogatories Are Cumulative of Berry’s Deposition Testimony Berry next argues that answering the interrogatories would be cumulative of her deposition 22 testimony. She cites her deposition testimony where the SEC asked whether, for instance, she had 23 ever had discussions about stock options with the individuals mentioned in the interrogatories. 24 Opp’n at 6 (citing Docket No. 187 (“Harris Decl.”), Exs. B, C). “These questions and testimony,” 25 she contends, “demonstrates that the SEC is simply seeking what it already has.” Id. at 7. 26 The SEC initially argues that Berry waived any “cumulative” objection since she did not 27 include it in either her original or amended interrogatory responses and only mentions it now. 28 Docket No. 195 (“Reply”) at 4 (citing Fed. R. Civ. P. 33(b)(4) (“Any ground not stated in a timely 4 1 objection is waived unless the court, for good cause, excuses the failure.”)); see also MTC 3-4. The 2 SEC’s argument is well-taken. Even if the Court excuses this failure, though, the SEC argues that defendant cannot be 3 4 allowed to refuse to answer interrogatories, then attend a deposition, and then claim that the 5 deposition testimony should suffice as a response to the interrogatories. Reply at 5; MTC at 5. 6 Indeed, none of the cases cited by Berry support such a tactic. Instead, the cases she cites merely 7 support the unremarkable proposition that Rule 26 is designed in part to limit discovery that is 8 unreasonably cumulative or duplicative or that could be obtained from some other source that is 9 more convenient, less burdensome, or less expensive. See Fed. R. Civ. P. 26(b)(2)(C); see also For the Northern District of California United States District Court 10 Sloan v. Oakland Police Dep’t., No. C-00-4117 CW (JCS), 2006 U.S. Dist. LEXIS 25100, at *15 11 n.2 (N.D. Cal. Mar. 23, 2006) (noting, among other things, that should defendants bring a motion to 12 compel responses to interrogatories served before plaintiff’s deposition, such a motion will only be 13 granted if the additional interrogatory responses sought are not duplicative of information already 14 obtained, through deposition or otherwise); Pulsecard, Inc. v. Discover Card Services, Inc., Civ. A. 15 No. 94-2304-EEO, 168 F.R.D. 295, 306 (D. Kan. 1996) (“That litigants may engage in successive 16 forms of discovery ‘is not a license to engage in repetitious, redundant and tautological inquiries.’”) 17 (quoting Richlin v. Sigma Design West, Ltd., 88 F.R.D. 634, 640 (E.D. Cal. 1980)) (internal 18 quotation marks omitted); Penk v. Oregon State Bd. of Higher Education, 1983 U.S. Dist. LEXIS 19 10463, at *1-2 (D. Or. Dec. 23, 1983) (defendant had taken extensive depositions of most of 20 plaintiffs’ experts and also had the reports the experts prepared for use at trial, so defendant had had 21 “complete access to the requested information through the other discovery devices it has chosen to 22 use”). 23 Upon review of the transcript (which has been filed under seal), the Court does not believe 24 that Berry’s responses to the interrogatories would be unreasonably cumulative or duplicative of her 25 deposition testimony. Her answers to similar questions may well be different upon review of 26 documents that could refresh her recollection about certain responsive conversations. In this 27 situation, the Court believes it would be unfair to make the SEC, in its words, bear the consequences 28 5 1 of “the vicissitudes of a defendant’s memory during a deposition, especially when the events at 2 issue too place years ago.” Reply at 5. Accordingly, the Court rejects Berry’s “cumulative” argument. 3 C. Whether the SEC Should Have Asked these Questions at Berry’s Deposition Because of 4 5 Privilege Complications 6 Berry also argues that, because the interrogatories (could1) implicate Juniper’s attorney- asked questions implicating Juniper’s privilege at Berry’s deposition. To respond to the 9 interrogatories, Berry says that “[i]t would require Ms. Berry’s counsel to sit down with counsel for 10 For the Northern District of California client privilege, responding to written interrogatories is unworkable and so the SEC should have 8 United States District Court 7 a potentially adverse third-party (Juniper and Juniper’s former employees) and to detail potentially 11 years worth of communications to determine if Juniper would consider each communication to be 12 privileged or if it would waive any specific privilege assertion in order to cooperate with the SEC.” 13 Opp’n at 8. Berry now claims this is unworkable, but this is also the exact solution that Berry herself 14 15 suggested multiple times (even as late as January 29, 2011) and to which Juniper’s counsel 16 (according to the SEC) has been open all along. Berry explains in her opposition that “[w]hile [she] 17 initially offered this as a potential fix to the privilege issue, when the practical implications of the 18 approach were explored it became apparent that it was not workable.” Id. “In fact,” she goes on in a 19 footnote, “Ms. Berry’s counsel did have such a meeting with counsel for Juniper prior to the 20 deposition. That meeting involved a high-level discussion in which Juniper’s counsel provided some 21 general guidance as to the scope of its privilege assertions. However, the parties were not able to 22 reach agreement on how to mechanically proceed in providing responses outside the context of a 23 deposition.” Id. at n.7 (citing Harris Decl. ¶ 5). For this reason, Berry contends that the SEC should 24 have asked Berry about her conversations with the individuals at issue during her deposition. This Court is not convinced that this solution is unworkable. First, as the SEC notes, this 25 26 “very simple mechanism of simply showing her responses to Juniper before she shows them to the 27 1 28 Berry’s opposition seems to assume that any conversation she had about stock options would have been privileged. However, any such conversations may not have involved legal advice or have been maintained in confidence, so her assumption is a bit presumptuous. 6 1 Commission” is the same thing that she has done repeatedly for her document productions. Reply at 2 6. Second, while Berry has raised the issue of Juniper’s attorney-client privilege, Juniper — which 3 holds any attorney-client privilege2 and thus has the power to either assert or waive it — has done 4 neither so far. Instead, Juniper’s counsel has left open its offer to review Berry’s proposed responses 5 for privilege.3 Accordingly, the Court rejects Berry’s “unworkable” argument. 6 CONCLUSION 7 Based on the foregoing, the Court GRANTS the SEC’s motion to compel Berry to provide 8 9 full responses to Interrogatory Nos. 3, 4, 8, 9, 10, 11, and 12. Berry shall provide her draft responses For the Northern District of California United States District Court 10 to Juniper’s counsel by April 6, 2011, and Juniper’s counsel shall have until April 9, 2011 to assert 11 any privilege. To the extent that Juniper contends that there is privileged information contained 12 within Berry’s draft responses, that information shall be appropriately described on a privilege log. 13 Berry shall serve full responses to the SEC by April 11, 2011. 14 IT IS SO ORDERED. 15 16 Dated: April 1, 2011 17 HOWARD R. LLOYD UNITED STATES MAGISTRATE JUDGE 18 19 20 21 22 23 24 25 26 27 28 2 On multiple occasions in her opposition, Berry asserts that she cannot or will not forego “her own attorney-client privilege.” See Opp’n at 1:23-2:2, 2:15-17, 3:13-17, 8:17-19. While there is no doubt that Berry, as former General Counsel for Juniper, has an ethical obligation to maintain the confidentiality of privileged communications between her and Juniper, it is Juniper which holds the privilege. 3 SEC attorney Susan LaMarca declares: “During the summer of 2009 . . . . the Commission contacted Juniper’s counsel who informed the Commission that they would be willing to review any responses from the defendant before they were served upon the Commission to confirm that Juniper did not assert any privilege over information she provided in response. We informed defense counsel of Juniper’s position, and we understood that defense counsel had similar conversations with Juniper’s counsel.” LaMarca Decl. ¶ 5. And “[u]pon receipt of [Berry’s] Amended [Interrogatory] Responses [on January 29, 2011], the Commission’s counsel contacted Juniper’s counsel and was informed, once again, that Juniper was still willing to review any proposed responses by the defendant for privilege and had informed her attorneys of the same offer; however, no proposed responses had been provided to him by the defense. He also informed us that he would be available between then and the deposition to review any responses she wished to make.” Id. ¶ 11. 7 1 C07-04431 RMW (HRL) Notice will be electronically mailed to: 2 Amy M. Ross Benjamin Cunningham Geiger Edward W. Swanson Elena Ro James A. Meyers James Neil Kramer Jeffrey Bruce Coopersmith 3 4 5 6 7 8 9 For the Northern District of California United States District Court 10 11 12 Jeremy Emerson Pendrey Joni L. Ostler Judith L. Anderson Katherine Collinge Lubin Marc J. Fagel Mark Philip Fickes Matthew Austen Tolve Matthew Eric Sloan Michael David Torpey Nancy E. Harris Randall Scott Luskey Rebecca Felice Lubens 13 14 15 16 Robert John Nolan Robert Lootfi Tashjian Steven Andrew Hong Susan F. LaMarca Thomas R. Green aross@orrick.com bgeiger@orrick.com eswanson@swansonmcnamara.com roe@sec.gov jmeyers@orrick.com jkramer@orrick.com jeff.coopersmith@dlapiper.com, bradley.meissner@dlapiper.com, evelyn.dacuag@dlapiper.com pendreyj@sec.gov jostler@wsgr.com, pbaird@wsgr.com andersonju@sec.gov, huangw@sec.gov, johnstonj@sec.gov klubin@orrick.com, swortman@orrick.com fagelm@sec.gov fickesm@sec.gov mtolve@orrick.com Matthew.Sloan@skadden.com, eaviad@skadden.com, jlyons@skadden.com, mtroost@skadden.com mtorpey@orrick.com nharris@orrick.com, vsweet@orrick.com rluskey@orrick.com, gpackard@orrick.com jcopoulos@orrick.com, klubin@orrick.com, nharris@orrick.com, rlubens@orrick.com, sjaffer@orrick.com robert.nolan@pillsburylaw.com, docket@pillsburylaw.com tashjianr@sec.gov, bukowskij@sec.gov, huangw@sec.gov, johnstonj@sec.gov shong@orrick.com lamarcas@sec.gov, huangw@sec.gov, johnstonj@sec.gov thomas.green@usdoj.gov, daniel.charlier-smith@usdoj.gov, lily.c.ho-vuong@usdoj.gov 17 18 Counsel are responsible for distributing copies of this document to co-counsel who have not registered for e-filing under the court’s CM/ECF program. 19 20 21 22 23 24 25 26 27 28 8
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