Case 5:18-md-02834-BLF Document 877 Filed 05/16/23 Page 1 of 5
`
`
`
`
`
`
`
`
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`IN RE PERSONALWEB
`TECHNOLOGIES, LLC, ET AL. PATENT
`LITIGATION.
`
`
`
`
`
`Case No. 18-md-02834-BLF
`Case No. 5:18-cv-00767-BLF
`Case No. 5:18-cv-05619-BLF
`
`ORDER ON JOINT STATEMENT RE
`AMAZON’S MOTION TO COMPEL
`PRODUCTION OF DOCUMENTS
`WITHHELD AS PRIVILEGED
`
`Re: -2834 Dkt. No. 860
`
`
`
`Over the past year, judgment-creditor Amazon has come to this Court for assistance in
`
`compelling production from judgment-debtor PersonalWeb and subpoenaed third-party investors
`
`Brilliant Digital Entertainment, Inc. (“BDE”), Monto Holdings, Pty, Ltd. (“Monto”), Europlay
`
`Capital Advisors, LLC (“ECA”) and Claria Innovations, LLC (“Claria”) (collectively “Investors”)
`
`in Amazon’s effort to enforce the judgment against PersonalWeb. The Court’s management of the
`
`many disputes between Amazon and Investors is reflected in several orders over the past thirteen
`
`months. See, e.g., Dkt. 738, 779, 850. In September 2022, the Court set a deadline of October 22,
`
`2022 for Investors’ production of a privilege log, and that privilege log is the subject of the present
`
`dispute. Dkt. 860, 863-2, 869, 872.
`
`The many post-judgment discovery disputes between these parties have informed this
`
`Court as to the principals involved and relationships between the parties and as such provide
`
`context for the dispute at hand. In consideration of that context, the parties’ briefing on this
`
`dispute, relevant case law and Federal Rules of Civil Procedure, the Court determines that this
`
`matter may be resolved without oral argument. Civ. L.R. 7-1(b). For the reasons stated herein,
`
`the Court DENIES WITHOUT PREJUDICE Amazon’s motion.
`
`I.
`
`RELEVANT BACKGROUND
`
`Amazon now moves to compel production of certain documents on Investors’ privilege
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 5:18-md-02834-BLF Document 877 Filed 05/16/23 Page 2 of 5
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`log. Specifically, Amazon seeks two categories of documents from the time period March 2,
`
`2021-April 30, 2021 on the grounds that claims of privilege have been waived. Dkt. 860, 864.
`
`The first category comprises documents between certain of the Investors and their attorneys on
`
`which attorney Jeffrey Gersh is copied. Amazon contends that Mr. Gersh did not represent the
`
`Investors in this correspondence but rather was counsel for plaintiff PersonalWeb. Consequently,
`
`Amazon argues, the documents were shared with a third party, waiving the attorney-client
`
`privilege. The second category is documents between Investors and their attorneys for which
`
`Amazon contends there has been a subject matter waiver. Finally, Amazon argues for a broad
`
`application of the crime-fraud exception to privilege.
`
`Investors raise a number of arguments against waiver. As to the first category, they argue
`
`that Mr. Gersh was not copied on the correspondence in his capacity as counsel for PersonalWeb
`
`but rather in light of his or his firm’s long-standing relationship with Investors. Dkt. 860, 869.
`
`Alternatively, Investors argue even if Mr. Gersh was acting as counsel for PersonalWeb, Investors
`
`and PersonalWeb shared a common interest in defeating Amazon’s efforts to access PersonalWeb
`
`assets and as such the documents are protected by a “common interest” privilege. As for subject
`
`matter waiver, the third-party Investors argue that the subject matter of the produced documents
`
`does not support a broad waiver. Investors further argue as to subject matter waiver and the crime
`
`fraud exception that there is first a failure of proof and, at a minimum, a document-by-document
`
`in-camera review would be required to ensure that any waiver was strictly applied.
`
`II.
`
`DISCUSSION
`
`This Court has previously articulated the challenge of balancing the generally broad scope
`
`of post-judgment discovery with Investors’ status as third parties with acknowledged ties to
`
`PersonalWeb, all in consideration of the proportionality requirements of Rule 26. See Dkt. 850.
`
`It is with this continuing challenge in mind that the Court reasons as follows.
`
`In Amazon’s submissions in connection with the present dispute, it has not explained the
`
`relevance of the information sought (a number of documents listed on the Investors’ privilege
`
`log)—specifically, Amazon has not articulated where and how it intends to use the documents.
`
`Normally, the party seeking discovery bears the burden of demonstrating the relevance of the
`
`2
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 5:18-md-02834-BLF Document 877 Filed 05/16/23 Page 3 of 5
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`information sought. See Ellis v. J.P. Morgan Chase & Co., No. 12-cv-03897-YGR (JCS), 2014
`
`WL 1510884, at *3 (N.D. Cal. Apr. 1, 2014). Ultimately, however, “district courts have broad
`
`discretion in determining whether evidence is relevant for discovery purposes.” Surfvivor Media,
`
`Inc. v. Survivor Prods., 406 F.3d 625, 635 (9th Cir. 2005). In evaluating relevance, the Court
`
`takes into account the context of the present dispute. Because Amazon seeks to compel
`
`production of documents Investors listed on their privilege log, the documents are presumably
`
`within the scope of relevant information that the Court already ordered Investors to produce.
`
`The Court also recognizes that the scope of post-judgment discovery is broad. JW Gaming
`
`Dev., LLC v. James, 544 F. Supp. 3d 903, 926 (N.D. Cal. 2021). Such discovery is permitted “[i]n
`
`aid of the judgment or execution.” Fed. R. Civ. P. 69. This Court has an interest in enforcement
`
`of its judgment, and as discussed above the Court has permitted Amazon to conduct discovery of
`
`PersonalWeb and Investors in connection with Amazon’s attempt to enforce the judgment.
`
`Nevertheless, a request for post-judgment discovery is subject to analysis of relevance and
`
`proportionality under Rule 26(b)(1). See JW Gaming Dev., 544 F. Supp. 3d at 926 (“Even so,
`
`there are real limits to [post-judgment] discovery based on proportionality, harassment, and
`
`whether the discover[y] is reasonably calculated to lead to relevant information.”); Erickson
`
`Prods. Inc. v. Kast, No. 5:13-CV-05472-HRL, 2018 WL 2298602, at *3 (N.D. Cal. May 21, 2018)
`
`(“To the extent there are other specific requests for discovery in the [post-judgment] subpoenas
`
`that Erickson wishes to compel, they must bring a motion to compel that discovery, which
`
`identifies the particular requests at issue, details the basis for Erickson's contention that they are
`
`entitled to the requested discovery, and demonstrates how proportionality requirements are
`
`satisfied.”); Slack v. Burns, No. 13-cv-05001-EMC (KAW), 2016 WL 9185136, at *2 (N.D. Cal.
`
`Oct. 7, 2016) (ruling that relevance of post-judgment discovery did not outweigh burden of such
`
`discovery).
`
`Here, the Court has already permitted Amazon to conduct extensive post-judgment
`
`discovery of PersonalWeb and Investors. The results of that discovery were sufficient to enable
`
`Amazon to intervene in the state court receivership action and offer evidence regarding
`
`establishment of the receivership, as it has in that case and in the briefing on the present joint
`
`3
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 5:18-md-02834-BLF Document 877 Filed 05/16/23 Page 4 of 5
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`submission here. See generally Dkt. 863-2 at 1-2; Dkt. 863-4; Dkt. 863-5.
`
`Amazon has not explained if or how the additional documents it now seeks will be used in
`
`this case. Instead, it appears that those documents would be relevant to Amazon’s claim for
`
`equitable subordination in the state court receivership action. As Amazon explained in its
`
`opposition to the motion to strike in the state court receivership action, “[t]o establish equitable
`
`subordination, Amazon must demonstrate, inter alia, inequitable conduct.” Dkt. 863-4 at 14.
`
`“Amazon therefore alleged that plaintiffs are under common control with PersonalWeb (CII ¶¶ 11-
`
`15), that plaintiffs called the loans in just after the fee award and long before the maturity date (id.,
`
`¶ 18), that this early demand was an attempt to thwart collection of the judgment (id., ¶ 19), that
`
`PersonalWeb coordinated the demand and consented to the receivership to avoid the judgment
`
`(id., ¶¶ 21-22), and that Amazon, as a third party creditor, should be prioritized over the insider
`
`plaintiffs. (Id., ¶ 23).” Id. The likelihood that Amazon seeks the present documents for use in the
`
`state court receivership action is reinforced by statements in Amazon’s supplemental brief. See,
`
`e.g., Dkt. 863-2 at 1-2 (discussing circumstances of creation of receivership). The chronology of
`
`the present dispute also supports a conclusion that the documents are sought for use in the state
`
`court receivership action: the subject documents were first listed on the Investors’ privilege log on
`
`October 3, 2022 (see Dkt. 860-1 ¶ 2; Dkt. 860-2), yet Amazon did not file the present challenge to
`
`those privilege claims until more than five months later, on March 23, 2023. Dkt. 860.
`
`Simply because the post-judgment discovery is intended for use in a collateral proceeding
`
`does not end this Court’s inquiry, however. Such collateral proceedings may be necessary to
`
`enforce this Court’s judgment. In Foltz v. State Farm Mut. Auto. Ins. Co., the Ninth Circuit
`
`expressed a preference for letting the fruits of discovery be used in collateral litigation. 331 F.3d
`
`1122, 1132 (9th Cir. 2003). However, that court also cautioned that “a court should not grant a
`
`collateral litigant's request for such modification automatically. As an initial matter, the collateral
`
`litigant must demonstrate the relevance of the protected discovery to the collateral proceedings
`
`and its general discoverability therein. Requiring a showing of relevance prevents collateral
`
`litigants from gaining access to discovery materials merely to subvert limitations on discovery in
`
`another proceeding . . . Such relevance hinges ‘on the degree of overlap in facts, parties, and issues
`
`4
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 5:18-md-02834-BLF Document 877 Filed 05/16/23 Page 5 of 5
`
`
`
`between the suit covered by the protective order and the collateral proceedings.’” Id. (citations
`
`omitted).
`
`Now that Amazon has intervened in the state court receivership action, this Court must
`
`guard against an end-run around discovery limitations in that case. The parties have previously
`
`informed the Court that discovery in the receivership action is stayed pending a ruling on the
`
`motions to strike and that the state court could have, but had not, allowed certain discovery
`
`notwithstanding the stay. See Dkt. 854 at 1:18-19; Dkt. 857 at 6:16-18. Moreover, although
`
`allowing the use of discovery from one case in collateral litigation is generally favored, requiring a
`
`party to produce documents in one litigation solely for use in another pending case raises
`
`additional concerns. Those concerns distinguish the present dispute from the previous one in
`
`which Amazon sought relief from the protective order in this case to enable it to use documents
`
`already produced in this case in the receivership case. See Dkt. 858.
`
`In sum, this Court has allowed Amazon to conduct post-judgment discovery of
`
`PersonalWeb and Investors, and that discovery enabled Amazon to intervene in the state court
`
`receivership case. In the present circumstances, the Court concludes that it is not proportional to
`
`the needs of this case to undergo the complex analysis and in-camera review that may be
`
`necessary to determine whether to order further production. This particular discovery battle is
`
`now more appropriately waged in the pending state court receivership action. The Court expresses
`
`no view on the proper resolution of the issues raised by the parties, and the denial of Amazon’s
`
`present motion to compel is without prejudice to Amazon’s ability to raise these issues again if the
`
`documents sought become relevant and necessary for other purposes.
`
`III. CONCLUSION
`
`For the reasons discussed above, the DENIES WITHOUT PREJUDICE Amazon’s
`
`motion to compel.
`
`SO ORDERED.
`
`Dated: May 16, 2023
`
`
`
`
`
`SUSAN VAN KEULEN
`United States Magistrate Judge
`
`5
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`Northern District of California
`
`United States District Court
`
`