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Mondis Technology Ltd. v. LG Electronics, Inc.

United States District Court, D. New Jersey

September 19, 2017

MONDIS TECHNOLOGY LTD., Plaintiff,
v.
LG ELECTRONICS, INC. and LG ELECTRONICS U.S.A., INC., Defendants.

          OPINION & ORDER

          CATHY L. WALDOR UNITED STATES MAGISTRATE JUDGE

         This matter comes before the court upon a motion by Movant, Mondis Technology Ltd. (“Mondis”), for a protective order and to quash subpoena Defendants, LG Electronics, Inc. and LG Electronics U.S.A., Inc. (“LG”), served upon Mondis' trial-counsel Jeffery Plies (“Mr. Plies”). The Court heard oral argument on this matter on August 4, 2017 and, for the reasons set forth below, the Court denies the motion.

         I. Background

         On June 21, 2014, Plaintiff, Mondis, filed its Complaint in the underlying litigation against Defendants, LG, in the Eastern District of Texas for patent infringement on five patents, including U.S. Patent No. 7, 475, 180 (the “180 patent”). (See Docket No. 2:17-cv-2531, Quash Brief, ECF No. 1 (henceforth “Quash Brief”), at 1; see also Docket No. 2:17-cv-2531, Opp. Brief, ECF No. 5 (henceforth “Opp. Brief”), at 3). However, on January 28, 2015, LG moved to transfer the case to the District of New Jersey and in June of that year the case was transferred. (See Docket No. 2:15-cv-4431, Motion to Change Venue, ECF No. 24).

         On May 12, 2014 and November 3, 2014, LG filed separate petitions for ex parte reexamination at the Patent Office (“PTO”) against the originally asserted patents, which resulted in the cancellation of the asserted claims of all but the ‘180 patent. (Quash Brief, at 1; Opp. Brief, at 3).

         In response to LG's petitions for ex parte reexaminations, Mondis' attorney, Scott Warren, filed an office action response on May 11, 2015, which relied on a Declaration from Mondis Director Michael Spiro. (Opp. Brief, at 3). The office action response stated: “[s]ignificantly, the ‘180 patent has been licensed to all of the world's major manufacturers of display units” (Id.) The original statement in the declaration of Mr. Spiro says: “[a]ll of the world's major display makers have now taken licenses for the Patents.” (Quash Brief, at 2). LG alleges that Mondis' statements to the PTO were demonstrably false as Mondis had acknowledged in the underlying litigation that several manufacturers of display units had not licensed the asserted patents. (Opp. Brief, at 3). LG brought this to Mondis' attention on July 24, 2015. (Id.) In an attempt to fix this misrepresentation made by Mr. Spiro, Mondis submitted a supplemental declaration stating that “all of the world's major computer monitor makers - i.e., those with more than 5% global market share” had taken a license. (Id. at 4.) This declaration was submitted as part of an Information Disclosure Statement (IDS) that consisted of more than 1, 500 pages. (Id.)

         On October 31, 2016, LG filed an Amended Answer alleging as both an affirmative defense and a counterclaim that Mondis had committed inequitable conduct at the PTO during reexamination of the ‘180 patent. (Opp. Brief, at 4) The District of New Jersey recognized that additional discovery would be needed on the new inequitable conduct allegations. (Id.). As a result, LG sent letters to Dechert LLP, the law firm representing Mondis, listing 24 Dechert attorneys and patent agents it intended to subpoena and depose. (Quash Brief, at 3). LG alleges that in requesting that Mondis identify the role of the 24 attorneys/agents of record, it was their hope to minimize any potential interference for Mondis and its attorneys and to avoid being overly burdensome. (Opp. Brief, at 4). Mondis responded to those letters by stating that “proper procedure would be to proceed with [Mr. Spiro's] deposition first and then evaluate whether any relevant non-privileged information remained that would warrant the depositions of Dechert attorneys.” (Quash Brief, at 3). LG refused Mondis' proposal and Mondis identified four past and present Dechert attorneys who performed work on the reexamination involved in LG's inequitable conduct claim. (Id.) Mondis stated its position that deposing Mr. Plies, the presently co-lead trial counsel for Mondis, who has represented Mondis regarding the ‘180 patent for the past eight years, would be improper. (Id.)

         On February 2-3, 2017, LG served deposition subpoenas on the four Dechert attorneys: Vincent Gallo, Derek Brader, Scott Warren and Jeffery Plies. (Id.) On February 7 and 10, 2017, Mondis and LG met and conferred regarding the subpoenas. (Id.) Mondis identified the PTO submissions that Derek Brader worked on; confirming that he did not have any knowledge relevant to the new allegations. LG withdrew that subpoena. (Opp. Brief, at 5). With respect to Mr. Warren, Mondis permitted LG to question him to the extent he could answer any non-privileged questions. (Quash Brief, at 4). During the meet and confer Mondis reiterated that it was improper for LG to depose Mr. Plies, the co-lead trial counsel for Mondis on the case at hand. (Id.).

         To date, LG has taken the depositions of Mr. Spiro, Mr. Warren, and Mr. Gallo. (Docket No. 2:15-cv-4431, ECF No. 201, at 6). The issue stands as to whether or not LG should be allowed to depose Mr. Plies. Mondis moved to quash the subpoena served on Mr. Plies in the Eastern District of Texas on February 16, 2017. That action was moved to the District of New Jersey and eventually both matters were consolidated under the current Docket Number 15-cv-4431.

         II. Legal Standard

         Under Rule 26, “parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Fed.R.Civ.P. 26(b)(1); see also In re Ex Parte Global Energy Horizons Corp., 647 F. App'x 83, 86 (3d Cir. 2016) (courts only allow “discovery [that] appears reasonably calculated to lead to the discovery of admissible evidence”). The movant bears the burden of persuasion in a motion to quash a subpoena and for a protective order. Jones v. Hirschfeld, 219 F.R.D. 71, 74-75 (S.D.N.Y 2003); see also Sea Tow Intern., Inc. v. Pontin, 246 F.R.D. 421, 424 (E.D.N.Y. 2007); see also Memory Bowl v. North Pointe Ins. Co., 280 F.R.D. 181, 185 (D.N.J. 2012) (stating that the party seeking a protective order usually bears the burden of persuasion). If the subpoena falls outside the scope of permissible discovery, “requires disclosure of privileged or other protected matter, ” or “subjects a person to undue burden, ” the Court has the authority to quash or modify it upon a timely motion by the party served. Fed.R.Civ.P. 45(d)(3).

         LG's inequitable conduct claim is based on Mr. Spiro's allegedly false statements in his declaration and the related office action response filed with the PTO. (Opp. Brief, at 1-2). Mr. Plies as the attorney who assisted Mr. Spiro in drafting the statement necessarily has some relevant knowledge under Rule 26, but there is an added layer of analysis given that LG is seeking to take the deposition of an attorney. Although there is no prohibition against deposing adverse counsel regarding relevant and non-privileged material, courts take great care when receiving these requests. Younes v. 7-Eleven, Inc., No. 13-3500, 2015 WL 12843884, at *2 (D.N.J. Mar. 11, 2015); see also In re Matter of Subpoenas Served on Collins, No. 14-934, 2014 WL 12586370, at *3 (W.D. Tex. Nov. 7, 2014) (stating that federal courts generally dislike the practice of deposing a party's attorney).

         This District, like many others, uses the Shelton factors when considering whether an attorney should be deposed. There are three factors that must be satisfied when determining whether to depose opposing counsel: “(1) no other means exist to obtain the information, (2) the information sought is relevant and non-privileged, and (3) the information sought is crucial to the preparation of the case.” Stepanski v. Sun Microsystems, Inc., No. 10-2700, 2011 WL 8990579, at *15 (D.N.J. Dec. 9, 2011), report and recommendation adopted, No. 10-2700, 2012 WL 3945911 (D.N.J. Sept. 10, 2012) (citing Shelton v. Am. Motors Corp., 805 F.2d 1323, 1327 (8th Cir. 1986)).

         II. ...


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