Tiger Natural Gas, Inc. v. Pacific Gas and Electric Company

Background

Tiger Natural Gas, Inc. sought review of Magistrate Judge Kim’s September 21, 2018, order concerning two discovery issues: the defendants’ designation of Harold Pestana as a potential witness and Tiger’s request for documents from Pacific Gas and Electric Company’s core gas supply department.

In an earlier discovery ruling dated July 31, 2018, Judge Kim had denied Tiger’s motion to compel production of documents relating to the core gas supply department. Tiger did not seek review of that ruling and structured its case and expert disclosures assuming that the witnesses and documents would not be produced. The defendants later identified Pestana, an employee in that department, as a potential witness, while stating that they did not believe his information was relevant.

On September 21, 2018, Judge Kim ruled that the defendants’ disclosure of Pestana was unnecessary under the initial-disclosure rule because the defendants had designated him out of concern that Tiger might later assert a new theory. Judge Kim denied Tiger’s request to strike Pestana from the supplemental disclosures and again denied the request for documents.

Review standard

Under Federal Rule of Civil Procedure 72(a), a district court reviewing a magistrate judge’s non-dispositive order must change or set aside the order if it is clearly erroneous or contrary to law. A ruling is clearly erroneous only when review of the evidence leaves the court firmly convinced that a mistake was made. A ruling is contrary to law when the magistrate judge fails to apply, or misapplies, relevant legal authority or procedural rules.

Court’s analysis

The court found that Judge Kim’s ruling concerning Pestana was not clearly erroneous or contrary to law. Tiger had not cited authority supporting its request to strike Pestana from the supplemental disclosures. The court also stated that it did not read Judge Kim’s order as allowing the defendants to withhold fact discovery and later use that discovery as a defense.

Regarding the core gas supply documents, the defendants represented that they did not intend to introduce evidence about that department. The court considered Tiger’s allegations that transportation and storage fees became stranded costs and that the alleged billing schemes affected competition. It concluded that Tiger had not articulated a theory showing why discovery concerning the department was relevant to its claims, and that Judge Kim had not clearly erred in reaching that conclusion.

Disposition

Judge Jeffrey S. White denied Tiger’s motion for review of Judge Kim’s order without prejudice. The court stated that it could revisit the issue as the case progressed, including by reopening fact discovery if necessary or through motions before trial.