Supplemental Briefs in CA Discovery Dispute #2
Elysium and ChromaDex have filed supplemental briefs regarding the second discovery dispute in California. You can read the briefs here:
ChromaDex's Supplemental Discovery Brief
Elysium's Supplemental Discovery Brief
We covered the initial briefs last week, which were embodied in a 100+ page joint stipulation.
I don't know what prompted the supplemental briefs -- possibly a request by the magistrate judge that the parties find some way to simplify the issues. If so, I'm not sure that His Honor will be very satisfied. There doesn't seem to be a way to simplify this.
But we also get a good sense in these briefs of why we have a justice system in the first place. You can feel how close we are to very old fashioned tribal warfare. Whether, or for how long the justice system can stave that off -- or even IF it is in fact staving that off -- is a fair question.
Just to give a flavor of the supplemental briefs, here is what ChromaDex says:
Defendant Elysium Health, Inc. (“Elysium”), as the party resisting discovery, has not met its “burden to show discovery should not be allowed.” Keith H. v. Long Beach Unified Sch. Dist., 228 F.R.D. 652, 655–56 (C.D. Cal. 2005). In the parties’ Joint Stipulation (“J.S.”), Plaintiff ChromaDex, Inc. (“ChromaDex”) demonstrates several reasons why the requested documents are relevant, none of which have anything to do with the dismissed conversion claims. The Court should compel Elysium—self described as ChromaDex’s “best customer” (J.S. at 4–5)—to produce documents showing how it secretly recruited ChromaDex employees and stole ChromaDex trade secrets and other information on which it relied to further its plans to wrongfully (a) obtain $3 million in ChromaDex ingredients without paying, and (b) develop a new source of nicotinamide riboside (“NR”) to compete with ChromaDex’s.
Elysium's world-view is entirely different:
ChromaDex’s motion to compel the production of documents that relate solely to its dismissed-with-prejudice conversion claim, its continued attempts to fish for new potential claims through impermissible discovery, and its efforts to disguise its own contractual breaches by claiming entitlement to know the content of entirely separate contracts to which it is not a party should be seen for what they are: A cynical ploy in furtherance of its policy to force a competitor from a lucrative market and a distraction from its own malfeasance.
In general, I find ChromaDex's brief, as we saw in ChromaDex's New York summary judgment brief on Monday, to be substantive, dense, and tightly argued. E.g.,
Elysium insists that because ChromaDex’s trade secret claim arises from one document, “any discovery regarding trade secret misappropriation is limited to conduct involving [that document].”1 (J.S. at 82.) That is not the law. Documents concerning Elysium’s other acts of misappropriation are relevant because those acts were part and parcel of the same misconduct, committed by the same agents, by which Elysium misappropriated ChromaDex’s trade secrets. As discussed in the Joint Stipulation, the documents sought in Request Nos. 141, 143, 146, 148, 149, 151, 153, 154, and 155 easily clear the relevance standard. (J.S. at 60–76.)
Elysium incorrectly suggests that the documents ChromaDex seeks are not admissible. (J.S. at 80–81.) First, Elysium’s position concedes that evidence of its repeated misconduct exists and has not been produced, further demonstrating that Elysium’s emphasis on the unrelated dismissal of the conversion claim is a ploy to hide further damaging material. And Elysium overlooks the rule that “[i]nformation . . . need not be admissible in evidence to be discoverable.” Fed. R. Civ. P. 26(b)(1).
Elysium's arguments, although well-crafted, still sound more to me like snarling:
ChromaDex’s assertions that this information is relevant to defend against Elysium’s counterclaims are based on a stark misrepresentation of Elysium’s allegations. Elysium’s counterclaim at issue is for ChromaDex’s breach of the NR Supply Agreement. As relevant here, Elysium alleges that ChromaDex violated its contractual obligations to inform Elysium that acetamide was present in the NR that ChromaDex sold to Elysium – not that acetamide was present in Elysium’s product Basis, or that acetamide is currently present in Basis. (See, e.g., Third Amended Counterclaim (ECF No. 103) at ¶¶ 90-113, 143-156.) The issue is whether ChromaDex supplied Elysium with NR that contained acetamide at levels over the limits set by California’s Proposition 65.1 The only relevant tests are the tests of the NR supplied by ChromaDex during the contractual period – a position endorsed by ChromaDex when it deemed it advantageous. (See JS at 106-07.) Elysium’s new source of NR, or the other ingredients in Basis, are simply irrelevant to the question of whether ChromaDex’s NR contained acetamide.
This pattern of irrelevance runs throughout ChromaDex’s discovery requests at issue...
I think ChromaDex has the stronger arguments in general, and I can't believe that Magistrate Judge McCormick is going to pull out a fine-tooth comb and make an discrete ruling on every single discovery request, but we'll see.