Chang v. Cashman

Background

Stacy Chang brought an employment-related lawsuit against Carlos Cashman, Arrowside Ventures, LLC, Arrowside Capital, LLC, Arrowside Fund GP, LLC, and Cashman Family Investments II, LLC. She later filed a second amended complaint adding Perseverus LLC as a defendant. The opinion states that Chang alleges claims including fraudulent inducement, negligent misrepresentation, misrepresentations under California Labor Code section 970, breach of contract, promissory estoppel, unjust enrichment, failure to pay wages at separation, unfair competition, and failure to reimburse expenses and losses under California Labor Code section 2802.

Chang alleges that Cashman and others recruited her to join a new investment platform. She alleges that Cashman treated her as a full-time employee and partner, that Arrowside Capital would employ her and provide employee services and benefits, and that she believed she would receive carried interest from investments she introduced. After she left Founders Fund, she was told that she would no longer be part of Arrowside. She rejected an offer of one month’s pay and carry interest for three funding deals.

Discovery request

Chang moved to compel responses to Request for Production No. 18. The request sought all settlement agreements, cease-and-desist letters, demand letters, and deposition testimony from Cashman in previous or threatened litigation involving him, including a matter identified in the opinion as Sasha Hoffman v. Thras.io Inc., et al., and litigation involving OrionCKB.

The defendants objected that the request was vague, ambiguous, overly broad, burdensome, and not reasonably calculated to lead to admissible evidence. They also asserted privilege and confidentiality objections. The parties focused their joint discovery letter on relevance and the burden of production, so the court addressed the relevance dispute.

Chang argued that the requested materials could show that Cashman had made similar employment promises in other ventures and could rebut his asserted lack of awareness of the consequences of his oral promises. She characterized the requested production as a small number of documents, including one deposition transcript, two settlement agreements, and fewer than five letters.

The defendants argued that the first matter primarily concerned the alleged misclassification of a worker as an independent contractor, which was not at issue in Chang’s case. They also argued that the OrionCKB matter involved different facts, people, and companies and was therefore irrelevant.

Court’s analysis

Federal Rule of Civil Procedure 26(b)(1) permits discovery of nonprivileged information that is relevant to a claim or defense and proportional to the needs of the case. The court explained that the party seeking to compel discovery bears the burden of showing relevance, while the opposing party must support its objections when discovery is challenged.

The court held that Chang had not met her burden. Regarding the Hoffman matter, Chang asserted that the allegations were similar but did not describe the similarities or explain how the materials would rebut Cashman’s claimed lack of awareness. The court also noted that Chang appeared to have access to public filings from that matter and that the complaint identified worker misclassification as the subject of that case, while Chang did not assert a misclassification claim.

Regarding OrionCKB, the court found Chang’s relevance argument speculative and conclusory. Chang provided few details beyond stating that the matter involved an employment dispute about compensation. She did not explain the significance of Cashman’s deposition testimony or identify similarities between that matter and her allegations.

The court distinguished decisions in which discovery was ordered because the requested materials concerned the same or clearly related conduct at issue in the lawsuit. The court concluded that the connection here was too general because the other matters appeared to involve employment disputes but Chang had not shown that they involved the same or similar conduct.

Disposition

Judge Donna M. Ryu denied Chang’s motion to compel. The order did not decide the merits of Chang’s underlying employment claims.