Blockchain Innovation, LLC v. Franklin Resources, Inc.

Background

The court issued a scheduling order under Federal Rule of Civil Procedure 16. That rule requires scheduling orders to set the time for completing discovery. Northern District of California Local Rule 37-3 provides that discovery-related motions must be filed no later than seven days after the fact-discovery cutoff. The rule covers motions to compel discovery, motions concerning preservation of documents, subpoena motions, and discovery sanctions.

Fact discovery in this case closed on May 31, 2024, so June 7, 2024, was the deadline for discovery-related motions. Blockchain Innovation filed a motion that day seeking information about Defendant Jennifer Johnson’s net worth. The court granted that motion on June 26, 2024, but did not set a compliance deadline. The parties agreed that Johnson’s response did not comply with the June 26 order.

The parties met and conferred about compliance for four months. On December 19, 2024, Blockchain Innovation moved to enforce the June 26 order. The court denied that motion as untimely, while stating that Blockchain Innovation could seek a modification of the case schedule under Rule 16 if it could show good cause. The motion addressed in this order was that request to modify the schedule.

Court’s analysis

The court held that a party may seek a schedule modification to permit an otherwise untimely motion to enforce a discovery order when the underlying discovery motion was filed on time, granted, and allegedly disregarded. The court stated that its orders must be followed and that there must be a way to address noncompliance with an order issued at or after the end of fact discovery.

The court also emphasized that the party seeking enforcement must act promptly. Compliance with a discovery order is itself a discovery-related dispute, and Local Rule 37-3 covers discovery sanctions for failure to comply with a discovery order. The court noted that Blockchain Innovation sought additional discovery—document production and a deposition—after discovery and other litigation activity had proceeded.

The court concluded that Blockchain Innovation had put the issue on hold for months while the parties litigated summary-judgment and expert-evidence motions. That delay was not diligent and did not establish good cause to modify the scheduling order.

The court separately rejected Blockchain Innovation’s argument under Rule 26(e), which concerns supplementing or correcting information or documents previously provided. Although the court agreed that the Local Rule 37-3 deadline does not apply to proper Rule 26(e) supplementation requests, it found that the requested material was not supplementation or correction of information previously received. Instead, Blockchain Innovation sought material that Johnson had never provided.

Disposition

The court denied Blockchain Innovation’s motion to modify the scheduling order. The opinion does not rule on the ultimate merits of the underlying case.