Nelson v. Millennium Labs., Inc. (In re Uehling)

• Decision Date: 27 June 2013
• Docket Number: Case No. 1: 13-mc-00022-BAM
• Court: U.S. District Court — Eastern District of California
• Parties: In Re Ryan Uehling Kelly Nelson, Plaintiff, v. Millennium Laboratories, Inc., et al., Defendants. Pending in the United States District Court for the District of Arizona as Case No. 2: 12-cv-01301-SLG

In Re Ryan UehlingKelly Nelson, Plaintiff,

v. Millennium Laboratories, Inc., et al., Defendants.Pending in the United States District Court for the District of Arizona as Case No. 2: 12-cv-01301-SLG

Case No. 1: 13-mc-00022-BAM

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

Dated: June 27, 2013

ORDER GRANTING MILLENNIUM

LABORATORIES, INC.'S MOTION TO

COMPEL RYAN UEHLING TO

ANSWER DEPOSITION QUESTIONS

Pending before the Court is Millennium Laboratories, Inc.'s ("Defendants" or "Millennium") Petition for Motion to Compel Ryan Uehling ("Uehling") to Answer Deposition Questions. (Doc. 1.) Uehling is a third-party witness in Nelson v. Millennium Laboratories, Inc., Case No. 2: 12-cv-01301-SLG (D. Ariz., filed June 18, 2012), the underlying litigation.

In addition to the Joint Discovery Statement filed on May 17, 2013, the parties have submitted various supplemental briefs in support of their respective positions. (Doc. 7, 11, 12, 16, 18, 20.) The Court heard oral arguments on June 21, 2013. (Doc. 21.) Counsel Donald Fischbach and Andrew Slater appeared in person for Uehling. Counsel Michael Loucks and Ryan Eddings appeared in person for Millennium. Id. Having carefully considered the parties' submissions, oral argument, and the record in this case, the Court GRANTS Millennium's Motion to Compel.

I. BACKGROUND

This dispute arises out of discovery in litigation currently pending in the United States District Court for the District of Arizona, Nelson v. Millennium Laboratories, Inc., No. 2:12-cv-01301-SLG (D. Ariz. filed June 18, 2012). In that case, Plaintiff Kelly Nelson ("Nelson"), a former Millennium employee, asserts various employment-related claims (age and sex discrimination, sexual harassment, retaliation and various tort-based claims). Among these claims, Nelsen alleges Millennium retaliated against her for complaining about Millennium's improper business practices.

Ryan Uehling is not a party to the Arizona case. Uehling, a former Millennium employee, previously held the position of Regional Business Director in the West region and directly supervised Nelson prior to his termination from Millennium. Nelson identified Uehling as a witness in support of her claims against Millennium. Uehling resides in this District.

Uehling appeared for deposition on April 2, 2013, pursuant to notices and subpoenas served by both Nelson and Millennium. During direct examination by Nelson's counsel, Uehling testified, inter alia, that Nelson had been a model employee while reporting to him at Millennium and that in his view, there was no job-related basis for her termination. Uehling also testified that Nelson had expressed concerns to him regarding certain business practices that she had been directed to participate in as a Millennium employee.

Millennium's counsel thereafter questioned Uehling regarding his knowledge of those business practices. Millennium also sought to explore Uehling's potential bias. Uehling, however, refused to answer 135 questions on grounds of relevance and various privileges. Specifically at issue in this Motion are two privileges that were asserted to 61 deposition questions: (1) a non-designated statutory privilege based upon "certain statutory obligations to not reveal certain information;" and (2) attorney-client privilege.¹

II. DISCUSSION

A. Legal Standard

Rule 26(b) states that "[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense." Fed. R. Civ. P. 26(b). "Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Id. Relevance requires only that the evidence have "any" tendency to prove or disprove "any" consequential fact. This test incorporates two separate components: (1) Logical relevance, meaning the evidence must have some tendency, however slight, to make any fact more or less probable; and (2) Legal Relevance, meaning the evidence must relate to a fact "of consequence" to the case, i.e., will the "fact" that the evidence is offered to establish help in determining some issue in the case? See, Guthrey v. California Dept. of Corrections and Rehabilitation, 2012 WL 2499938 (E.D. Cal. 2012), citing, Jones & Rosen, Federal Civil Trials and Evidence (2011) Evidence, para. 8:111, p. 8B-2. "'Generally, the purpose of discovery is to remove surprise from trial preparation so the parties can obtain evidence necessary to evaluate and resolve their dispute.' " Moon v. SCP Pool Corp., 232 F.R.D. 633, 636 (C.D.Cal.2005) (quoting Oakes v. Halvorsen Marine Ltd., 179 F.R.D. 281, 283 (C.D.Cal.1998)).

Rule 30 governs counsel's behavior during a deposition. In particular, Rule 30(c) provides:

Examination and cross-examination of witnesses may proceed as permitted at the trial....

An objection at the time of the examination--whether to evidence, to a party's conduct, to the officer's qualifications, to the manner of taking the deposition, or to any other aspect of the deposition--must be noted on the record, but the examination still proceeds; the testimony is taken subject to any objection. An objection must be stated concisely in a nonargumentative and nonsuggestive manner. A person may instruct a deponent not to answer only when necessary to preserve a privilege, to enforce a limitation ordered by the court, or to present a motion under Rule 30(d)(3).

Fed. R. Civ. P. 30(c)(1) & (2).

B. Millennium's Motion to Compel

Millennium's questions can be grouped into four categories: (1) Actions Uehling took with Millennium property after his termination; (2) Whether attorneys instructed Uehling to take certain actions with Millennium property; (3) Information and directives provided by United StatesAttorneys in connection to Uehling's government/ statutory privileges; and (4) meetings Uehling had with attorneys representing Millennium's competitor, Ameritox. Uehling refused to answer the 61 questions falling in these categories, claiming attorney-client and statutory privileges.

1. Statutory Privilege²

The nature of Uehling's statutory privilege is not a matter of public record. Indeed, Uehling insists he cannot publically discuss the explicit basis for the privilege, nor can he discuss any subject matter related to the basis for this privilege.³ Millennium suspects this statutory privilege relates to Uehling's status as a possible relator in a qui tam action, potentially filed under seal somewhere in the United States. Uehling represents he cannot publically discuss whether he is or is not a relator in a qui tam action.

In a qui tam action, confidentiality provisions of the False Claims Act seek to combat disclosure of information related to a sealed complaint that could compromise the government's investigation. U.S. ex rel. Lujan v. Hughes Aircraft Co., 67 F.3d 242, 245 (9th Cir. 1995). Under the qui tam provisions, Congress mandated that a relator file the qui tam complaint under seal in a federal district court. See 31 U.S.C. § 3730(b). Specifically, 31 U.S.C. § 3730(b)(2) states that:

A copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the Government pursuant to Rule 4(d)(4) of the Federal Rules of Civil Procedure. The complaint shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders. The Government may elect to intervene and proceed with the action within 60 days after it receives both the complaint and the material evidence and information.

31 U.S.C. § 3730(b)(2) allows the government to extend the time-frame which the complaint remains under seal: "[t]he Government may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal under paragraph (2)."

The False Claims Act proscribes a jurisdictional barrier to qui tam actions that have been disclosed in a public forum:

[n]o court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.

§ 3730(e)(4)(A).

The public-disclosure question implicates two distinct but related determinations. First, "we must decide whether the public disclosure originated in one of the sources enumerated in the statute." U.S. ex rel. Meyer v. Horizon Health Corp., 565 F. 3d 1195 (9th Cir. 2009). When a public disclosure originates in one of these sources, we must then determine "whether the content of the disclosure consisted of the 'allegations or transactions' giving rise to the relator's claim, as opposed to 'mere information.' " Id. (quoting Hagood v. Sonoma County Water Agency, 81 F.3d 1465, 1473 (9th Cir.1996)). The Ninth Circuit has held that "information that was 'disclosed in private" is not a public disclosure under the Act. United States ex rel. Schumer v. Hughes Aircraft Co., 63 F.3d 1512, 1518 (9th Cir.1995) (quoting United States ex rel. Stinson, Lyons, Gerlin & Bustamante v. Prudential Ins. Co., 944 F.2d 1149, 1161 (3d Cir.1991)), vacated on other grounds by 520 U.S. 939, 117 S.Ct. 1871, 138 L.Ed.2d 135 (1997); see also United States ex rel. Devlin v. California, 84 F.3d 358, 360 (9th Cir.1996) (holding that, although a newspaper article was a public disclosure, a relator's private disclosure to a reporter in advance of publication was not a public disclosure). Moreover, a public disclosure is restricted to information that is actually made public as opposed to material that is "'only theoretically available upon the public's request.'" Id. at 1519-20 (quoting United States ex rel. Springfield Terminal Ry. Co. v. Quinn...