the people of the state of california, Plaintiff, vs. kandypens, inc., et al., Defendants.
Case No.: 18STCV03053
Hearing Date: September 12, 2019
Hearing Time: 8:30 a.m.
[TENTATIVE] ORDER RE:
PLAINTIFF’S MOTION FOR ISSUE AND/OR MONETARY SANCTIONS AGAINST DEFENDANT KANDYPENS, INC. FOR FAILING TO COMPLY WITH DISCOVERY ORDERS;
PLAINTIFF’S MOTION TO CONTINUE TRIAL
Plaintiff the People of the State of California (the “People”) filed this action against Defendant Kandypens, Inc. (“Kandypens”) on October 31, 2018. This is a government enforcement action seeking to limit Kandypens’s ability to sell vaping products to minors. The People seek injunctive relief and civil penalties for violations of Business and Professions Code section 17200, et seq., Business and Profession Code section 22950, et seq. (the “STAKE Act”), and Health and Safety Code section 25249.5, et seq. (“Prop 65”).
On May 10, 2019, a Stipulation and Order was filed setting forth the terms of an agreement between the People and Kandypens relating to certain discovery propounded by the State (the “First Stipulated Order”). In the First Stipulated Order, Kandypens agreed to produce all requested financial information (Request for Production Nos. 51 and 52) by May 17, 2019; all requested records of online sales in California (Requests for Production Nos. 53 and 54); contracts and agreements with third parties regarding marketing and promotion (Requests for Production Nos. 17, 19-22, 24, and 26); and communications with third parties and internal documents regarding marketing strategies (Requests for Production Nos. 15, 16, 18, 28-30, 56-80) by no later than May 31, 2019. Kandypens also agreed to produce all other responsive documents and privilege log for withheld documents by no later than July 5, 2019; provide supplemental responses to Special Interrogatories, Set Three, by no later than May 24, 2019; provide supplemental responses to Requests for Production, Set One, Nos. 1 and 12 by no later than May 24, 2019; provide an amended response to Special Interrogatory No. 20; and to meet and confer regarding the remaining disputes.
On June 19, 2019, a Second Informal Discovery Conference Stipulation and Order was filed (the “Second Stipulated Order”). In the Second Stipulated Order, Kandypens agreed to produce by no later than July 10, 2019, all documents responsive to Requests for Production, Set One, and Requests for Production, Set Two, according to various conditions set forth therein. For instance, the parties agreed on specific search terms that would be used by Kandypens in determining what emails were responsive. Kandypens also agreed to produce specific documents responsive to Request for Production Nos. 1, 8-12, 17, 19-22, 24, 26, 28-30, 31-34, 35-37, 38-41, 47, 48-50, 51-52, 53-54, 81-82, and 83-84. Kandypens also agreed to re-produce with attachments all emails that had previously been produced without attachments and to provide supplemental responses to Special Interrogatory Nos. 8-13, and 16. There were a number of other deadlines for production set forth in the Second Stipulated Order, but the latest deadline was July 10, 2019.
The People contend that Kandypens has failed to comply with both the First Stipulated Order and the Second Stipulated Order. In particular, as of the date the instant motion was filed (on August 16, 2019), Kandypens had not produced any supplemental discovery responses or a single additional document pursuant to the Second Stipulated Order.
The People now move for an order imposing issue sanctions against Kandypens that would essentially prohibit Kandypens from opposing the People’s claim that Kandypens violated Business and Professions Code section 17200 by marketing its tobacco products to youth. As an alternative to issue sanctions, the People move for an order directing Kandypens to produce documents and supplemental responses to the discovery still at issue. The People also seek monetary sanctions in the amount of $20,204 (to the People) and $1,500 (to the Court). As a further alternative to imposing issue sanctions, the People move for an order continuing trial by at least 90 days. Kandypens opposes.
Misuses of the discovery process include failing to respond or to submit to an authorized method of discovery, making an evasive response to discovery, or disobeying a court order to provide discovery. (Code Civ. Proc., § 2023.010(g).) There are a broad range of sanctions available against anyone engaging in conduct that is a misuse of the discovery process, including the issuance of monetary, evidentiary, contempt and terminating sanctions. (Code Civ. Proc.,
A monetary sanction may be imposed against one engaging in the misuse of the discovery process. (Code Civ. Proc., § 2023.030(a).) An issue sanctions may be imposed by way of an order that designated facts shall be taken as established or an order that prohibits any party from supporting or opposing designated claims or defenses. (Code Civ. Proc., § 2023.030(b).) An evidentiary sanction may be imposed by way of an order prohibiting any party engaging in the misuse of the discovery process from introducing designated matters in evidence. (Code Civ. Proc., § 2023.030(c).)
The People contend that issue sanctions are warranted because of Kandypens’s failure to comply with the First and Second Stipulated Order (although it appears that the issues with Kandypens’s responses to the First Stipulated Order are addressed in the Second Stipulated Order). However, it appears that since the People filed this motion, Kandypens has produced additional documents and provided supplemental responses. On August 23, 2019, Kandypens produced an additional 382 documents. (Chan Reply Decl., ¶ 4.) On August 27, 2019, Kandypens produced another 301 documents. (Chan Reply Decl., ¶ 5.) On August 27, 2019, Kandypens served its First Supplemental Response to Plaintiff’s Second Set of Special Interrogatories. (Chan Reply Decl., ¶ 6, Ex. 41.) In opposition to the motion for sanctions, Kandypens submits a declaration from its chief executive officer, Graham Gibson, who states that he has personally searched Kandypens’s emails, documents, and other records to locate information and documents responsive to the requests at issue, that he has produced all documents and information that is responsive to the requests, and that Kandypens does not possess additional information or documents responsive to the requests. (Gibson Decl., ¶¶ 14-16; see also Zender Decl., ¶¶ 11-13.) Kandypens argues that in light of its production, issue sanctions are premature and excessive, and that the People are not entitled to monetary sanctions because the People failed to meet and confer with Kandypens prior to filing the motion for sanctions. The Court notes that Kandypens does not oppose the People’s request for a trial continuance.
Based on the evidence and argument presented, the Court finds that a trial continuance is a more appropriate remedy for the discovery issues presented by the People than issue sanctions. Issue sanctions are not warranted in any event because documents and supplemental responses have now been produced, and the parties are thus encouraged to continue to meet and confer regarding any remaining issues as to that production. However, because documents were not produced until after the motion for sanctions was filed, the Court finds that some monetary sanctions are appropriate. While the People were not required to meet and confer prior to filing a motion for sanctions pursuant to Code of Civil Procedure section 2023.030, the Court notes that a good faith meet and confer attempt is required for the Court to issue an order compelling further responses or further production of documents. (Code Civ. Proc., §§ 2031.310, subd. (b)(2), 2030.300, subd. (b)(1).) On the other hand, the purpose of the IDC process is to encourage the parties to resolve their discovery disputes without having to resort to law and motion.
Kandypens contends that the People’s request for monetary sanctions in the amount of $20,204 is inflated and unreasonable. In light of the mixed ruling on the People’s motion, the Court finds that imposing monetary sanctions in the total amount of $10,040 is reasonable and substantially justified.
Based on the foregoing, the People’s motion for sanctions is denied in part and granted in part.
The Court orders Kandypens to pay $10,040 in monetary sanctions to the People within 30 days of the date of this order.
The Court orders that trial is continued from January 15, 2020 to _____________________________ at ______ a.m., with the Final Status Conference continued from January 3, 2020 to _____________________________ at ______ a.m., both in this department.
The trial readiness and exhibit binders must be lodged in this department by 4 p.m. on ____________.
Discovery and motion cut-off deadlines are according to the new trial date.
The People are ordered to give notice of this ruling.
DATED: September 12, 2019 ________________________________
Hon. Teresa A. Beaudet
Judge, Los Angeles Superior Court