Spectrum Scientifics, LLC v. Celestron Acquisition, LLC

Background

The court addressed a discovery dispute in related cases involving allegations that the defendants conspired to fix prices, divide the telescope market, and engage in other anticompetitive conduct. Sylvia and Jean Shen are sisters of David Shen, who owns and controls several related companies referred to as the “Synta” entities. Sylvia and Jean Shen are defendants in the direct purchaser plaintiffs’ case, but not in the indirect purchaser plaintiffs’ case. The opinion states that they reside in Canada.

The direct purchaser plaintiffs wanted to take the Shens’ depositions immediately. The indirect purchaser plaintiffs also wanted depositions, but only after relevant documents had been produced. The defendants did not object to producing the Shens for deposition at some point, but objected to separate depositions and to the proposed timing. The Shens also had pending motions to dismiss and to strike the operative complaint in the direct purchaser action.

Court’s Analysis

The court rejected the direct purchaser plaintiffs’ position that the discovery rules gave them an unrestricted right to take the depositions whenever they wished. Although discovery methods generally may be used in any sequence, the parties also must use discovery procedures to help secure a just, speedy, and inexpensive resolution and must confer about a discovery plan. The court emphasized its authority to manage discovery and require coordination.

The court observed that the direct purchaser plaintiffs had not adequately explained what information they expected to obtain from the Shens or how the depositions were relevant and proportional to the case. At the hearing, the direct purchaser plaintiffs said Sylvia Shen was a decisionmaker for Celestron Acquisition, LLC and likely had information about the alleged conspiracy, while Jean Shen was expected to have at least some knowledge of it. The court understood that both groups of plaintiffs intended to cover substantially the same subjects with the witnesses.

The court also considered whether the depositions should be delayed until the presiding judge ruled on the pending dismissal motions. The opinion identifies that issue but does not state that the court ordered a delay pending those motions. The court separately declined to delay the depositions until pandemic-related travel restrictions allowed defense counsel to participate in person in Canada. Instead, the parties were directed to try to agree in advance on videoconference procedures.

Disposition

Judge Virginia K. DeMarchi denied the direct purchaser plaintiffs’ demand that Sylvia and Jean Shen be ordered to sit for depositions within 14 days. The court required the parties to coordinate these depositions as they must coordinate other discovery involving a witness whom more than one party wants to question. This was a discovery-management ruling; the court did not decide the underlying antitrust claims or the pending motions to dismiss.