Weston v. DocuSign, Inc.

Background

This securities-fraud class action concerns allegations that DocuSign, Inc. made misrepresentations about its projected post-pandemic performance. The amended complaint relied partly on statements from confidential witnesses, who were identified by job title, employer, and employment dates rather than by name. Their identities had been disclosed to defendants during the litigation.

The parties presented two discovery disputes. Defendants sought communications and documents involving plaintiffs, their counsel or investigators, and former DocuSign employees, including the confidential witnesses. Defendants also sought fee agreements and related communications between plaintiffs’ counsel and Hach & Rose, counsel for certain confidential witnesses. Plaintiffs sought text messages from employees and other non-defendant custodians.

Confidential-witness materials

The court found that plaintiffs had agreed to provide their communications with the confidential witnesses and held that disclosure appropriate. It also stated that fee agreements and communications about those agreements were discoverable because fee arrangements generally are not protected by attorney-client privilege, and plaintiffs had not given a reason why these agreements should be treated differently.

The court did not require broader disclosure of plaintiffs’ investigative materials, including interview notes and witness summaries. It also did not require plaintiffs to identify former DocuSign employees who were not confidential witnesses or disclose what those employees said. The court applied the work-product doctrine, which generally protects litigation-preparation materials from discovery, and found that defendants had not shown either a substantial need for the information or that it could not be obtained elsewhere. The court noted that defendants knew the confidential witnesses’ identities and could depose them or serve them with document subpoenas. It left open the possibility of additional production if defendants later showed good cause to overcome the work-product protection.

Text messages

Plaintiffs had narrowed their request from 53 custodians to 25 and showed more than 20 examples of employees, including custodians, using text messages for work. The court held that relevant text messages were discoverable and rejected defendants’ arguments that DocuSign lacked possession, custody, or control of the devices or that the request was disproportionate and could not be completed by the discovery deadline.

The court concluded that DocuSign had control over relevant messages because its employment agreements required employees who used personal devices to transmit company information to search for that information and allowed DocuSign access to personal devices to retrieve it. The court also found the narrowed request proportionate to the needs of the case and ordered DocuSign to obtain and produce the relevant text messages from the 25 custodians.

Ruling

Judge Orrick resolved the discovery dispute by approving production of plaintiffs’ communications with the confidential witnesses, recognizing the discoverability of the specified fee-related materials, declining to compel broader work-product materials, and ordering DocuSign to obtain and produce the requested relevant texts. The order did not decide the merits of the securities-fraud claims.