Laatz v. Zazzle, Inc.

Background

Nicky Laatz and Zazzle, Inc. asked the court to resolve a discovery dispute about two depositions. Zazzle wanted to depose Stephen Steinberg, Laatz’s litigation counsel. Laatz wanted to depose Liana Larson, Zazzle’s in-house counsel.

Steinberg communicated with the Copyright Office between February 18 and July 15, 2021, about registration of Laatz’s Blooming Elegant font. Zazzle sought his deposition in connection with its counterclaim asserting that Laatz’s copyright registration was invalid because inaccurate information was provided to the Copyright Office about how the font files were created.

Laatz sought Larson’s deposition in connection with state-law claims for fraudulent misrepresentation, fraudulent concealment, and promissory fraud. Laatz said Larson had received an email linking to the font’s offering page and license terms and had made statements during pre-lawsuit negotiations about Zazzle’s purchase and intended use of the license.

Legal standard

The court explained that Federal Rule of Civil Procedure 30 generally permits a party to depose any person without first obtaining the court’s permission. Under Rule 26(c), however, the court may issue a protective order for good cause to prevent annoyance, embarrassment, oppression, or undue burden or expense. The party seeking protection must show the harm or prejudice that would result from the discovery.

The court discussed the three-part Shelton approach, which courts commonly use when deciding whether to allow a deposition of opposing counsel about the lawyer’s representation in pending litigation. That approach asks whether there are other ways to obtain the information, whether the information is relevant and not privileged or protected, and whether the information is necessary to prepare the case. The court held that this stricter approach does not apply when the lawyer is being questioned as a firsthand witness about events that occurred before the litigation.

Steinberg deposition

The court concluded that Shelton did not govern Zazzle’s proposed deposition of Steinberg because Zazzle sought testimony about Steinberg’s communications with the Copyright Office concerning Laatz’s copyright registration, not about his conduct or strategy in the pending case. The communications occurred more than a year before Laatz filed the action.

The court also found that Zazzle had shown the deposition was necessary, not merely relevant. Steinberg was the only person who made the allegedly inaccurate statements to the Copyright Office, and nothing in the submissions indicated that he was simply repeating Laatz’s exact statements. The court further concluded that the communications with the Copyright Office were not privileged, so questioning about those communications did not itself implicate privilege or work-product protection.

The court therefore permitted Steinberg’s deposition subject to these limits:

- Zazzle could ask only about the communications with the Copyright Office reflected in Exhibits A through C to its counterclaim. - The questioning could cover Steinberg’s understanding of the Copyright Office’s communications, the factual bases for his responses, and whether he believed his statements were truthful and accurate when made. - Zazzle could not ask about Steinberg’s understanding or application of the law or about the substance of communications with Laatz or anyone else with whom he had an attorney-client relationship at the time. - The deposition was limited to two hours on the record. - It had to occur within 14 days of the order unless the parties agreed to a later date. Because that date was after the August 8, 2024 fact-discovery deadline, the parties had to apply to Judge Freeman for an extension of that deadline.

Larson deposition

The court permitted Laatz to depose Larson about her personal knowledge of facts concerning the font license when it was purchased. The court also permitted questioning about statements Larson made during pre-lawsuit negotiations with Laatz or her representatives, and the factual bases for those statements, if Larson participated in those negotiations. The court treated those matters as non-privileged based on the information presented.

The court did not find that Laatz had adequately shown a waiver of privilege concerning Zazzle’s purpose, knowledge, or intent in purchasing the license. Because Larson was Zazzle’s in-house counsel, the court imposed limits to protect attorney-client communications. Laatz could not ask about information Larson obtained through communications with Zazzle employees, her understanding or application of the law or license terms, or the substance of her communications with Zazzle employees about those matters.

The Larson deposition was also limited to two hours on the record and had to occur within 14 days unless the parties agreed to a later date. Because it would occur after the fact-discovery deadline, the parties had to apply to Judge Freeman for an extension.

Disposition

The court granted Zazzle’s request for an order requiring Steinberg to testify at a deposition, with limitations. It also granted Laatz’s request for an order requiring Larson to testify at a deposition, with limitations.