IN RE PFA INSURANCE MARKETING LITIGATION

Background

The plaintiffs filed an administrative motion to extend the discovery cut-off, which was August 6, 2021. Premier Financial Alliance, Inc. opposed the motion. The plaintiffs sought additional time for two purposes.

First, they sought to depose Jack Wu, identified as an Executive Field Director of PFA and as being “second only to the CEO.” The requested extension depended on Magistrate Judge Kim allowing the deposition or Wu being produced after the discovery deadline. Plaintiffs argued that more recent discovery, including the July 20, 2021 deposition of Wayne Meadows, provided evidence that Wu was a “managing agent” of PFA and had significant involvement in the alleged pyramid scheme. Magistrate Judge Kim had previously denied the request to depose Wu without prejudice, allowing plaintiffs to renew it if they obtained more supporting evidence.

Second, plaintiffs sought time to request documents that might be found to have been improperly withheld by Steven Early. In a related miscellaneous case concerning enforcement of a subpoena, Magistrate Judge Kim had required a privilege log for documents Early withheld based on attorney-client privilege and had stated that she could select documents for private judicial review. Appeals from that order were pending before the United States Court of Appeals for the Ninth Circuit. Plaintiffs sought to preserve the ability to request any documents later found to have been improperly withheld.

Legal Standard

Under Federal Rule of Civil Procedure 16(b)(4), a scheduling order may be modified only for good cause and with the judge’s consent. The primary focus is the diligence of the party seeking the change, although prejudice to the opposing party may also be relevant.

Court’s Analysis

For the Wu deposition, the court found that plaintiffs acted diligently. It concluded that they learned material information about Wu’s management role during the recent Meadows deposition, which justified the timing of their motion. The court also found no indication that Premier Financial Alliance, Inc. would be prejudiced by the extension. It therefore found good cause and granted the motion for the limited purpose of allowing plaintiffs to take Wu’s deposition if Magistrate Judge Kim ordered it.

For the withheld documents, the court found the request premature because the Ninth Circuit’s ruling on the pending appeal was uncertain. The court denied the motion on that issue without prejudice. It stated that plaintiffs could move to reopen discovery for the limited purpose of seeking documents improperly withheld by Early if the Ninth Circuit affirmed Magistrate Judge Kim’s order and Magistrate Judge Kim found that documents had been improperly withheld.

Disposition

Judge Yvonne Gonzalez Rogers granted in part and denied in part the plaintiffs’ motion to extend the discovery cut-off. The motion was granted as to the conditional opportunity to depose Wu and denied without prejudice as to the request concerning potentially improperly withheld documents.