Optronic Technologies, Inc. v. Ningbo Sunny Electronic Co., Ltd.

Background

Optronic Technologies, Inc. (referred to as “Orion” in the order) sought a judgment debtor examination of Ningbo Sunny Electronic Co. under California Code of Civil Procedure section 708.110, applied through Federal Rule of Civil Procedure 69(a)(2). The requested examination was to occur at the courthouse, and Orion asked that Wenjun “Peter” Ni appear and testify for Ningbo Sunny. The court had granted Orion’s application and set the examination for January 28, 2020.

Ningbo Sunny moved to quash, or cancel, the examination order. It argued that California Code of Civil Procedure section 708.160 barred requiring the examination at that location because Ningbo Sunny and Mr. Ni reside in China and have no place of business in the county or within 150 miles of the courthouse. Ningbo Sunny also asked for a later date because Mr. Ni was unavailable from January 25 through February 1, 2020, during the Chinese New Year holiday. Ningbo Sunny stated that it did not seek to avoid an examination, but wanted one on a mutually agreeable date.

Court’s Analysis

Section 708.160(b) provides that a person generally may not be required to attend an examination outside the county where the person resides or has a place of business unless the distance is less than 150 miles. The court considered whether this limitation applied to a judgment debtor based in a foreign country. It agreed with the reasoning of a prior district court decision that the statute does not clearly exempt foreign-based judgment debtors. The court noted that the statute’s text contains no such exception.

The court explained that section 708.160 governs the location of an examination when a judgment creditor chooses to use California’s debtor-examination procedure. It does not eliminate the court’s power to enforce its judgments or prevent Orion from using other discovery methods. Under Rule 69(a)(2), the court said, Orion could seek discovery under either applicable state procedures or the Federal Rules of Civil Procedure, and the court has substantial discretion to select the location of a deposition.

Disposition

The court granted Ningbo Sunny’s motion to quash insofar as its prior order required Mr. Ni or Ningbo Sunny to appear for the judgment debtor examination at the courthouse. The court stated that Orion could pursue an examination under the Federal Rules by taking the necessary steps. Unless the parties agreed otherwise, the court expected that examination to occur in San Jose during the week of February 3, 2020, to accommodate Mr. Ni’s unavailability.

The court also denied Orion’s request for an order preserving the status quo and preventing Ningbo Sunny from accepting payments in overseas accounts, without prejudice to Orion’s option to raise that issue with the presiding judge. The court found that it had no authority to issue that relief. The scheduled January 28 hearing was vacated.