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Jeffrey E. Essner ( State Bar No. 1 21 438)
Joan R. Gallo ( State Bar No. 65875)
Dori L. Yob ( State Bar No. 227364)
HOPKINS & CARLEY
ALawCorporation
The Letitia Building
70 S First Street
San Jose, CA 951 1 3- 2406
mailing address:
P. O. Box 1 469
San Jose, CA951 09- 1 469
Telephone: ( 408) 286- 9800
Facsimile: ( 408) 998-4790
Attorneys for Defendants and Cross -Complainants
Martins Beach 1 , LLCand Martins Beach 2, LLC
FILh I'D
SAN MATEOCOUNTY
AFIR\ 2 9 201
Clerkof
By
SUPERIORCOURT OFTHE STATE OFCALIFORNIA
COUNTYOFSAN MATEO
SURFRIDERFOUNDATION, a Non-
CASE NO. CIV520336
Profit Organization,
MARTINS BEACH1 , LLCANDMARTINS
Plaintiff,
BEACH2, LLC' S MEMORANDUMOF
V.
MARTINS BEACH1 , LLC, a California
Corporation; MARTINS BEACH2, LLC,
a California Corporation; and DOES l
through 20, inclusive,
Defendants.
MARTINS BEA
20 BEACH2, LLC,
21
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V.
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HoPKINS & CARLEY
ATTORNEYS AT LAW
SAN JOSE PALOALTO
BURBANK
1 ; LLC;
Cross -Complainants,
SURFRIDERFOUNDATION, a Non -
Profit Organization; and ROES 1 through
20, inclusive,
Cross -Defendants.
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POINTS ANDAUTHORITIES IN
SUPPORT OFMOTION TOQUASH
CIVILSUBPOENADIRECTEDTO
VINODKHOSLA
BYFAX
Date:
May 2- 1 , 201 4
Time: 9:00 a. r. a. m.
Dept.: Law& Motion
Trial Date:
May 5, 201 4
MARTINS BEACH1 , LLCANDMARTINS BEACH2, LLC' S MEMORANDUMOFPOINTS AND
AUTHORITIES IN SUPPORT OFMOTION TOQUASHCIVILSUBPOENADIRECTEDTOVINODKHOSLA
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TABLE OFCONTENTS
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MARTINS BEACH 1 , LLC AND MARTINS BEACH 2, LLC' S MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF MOTION TOQUASHCIVILSUBPOENA DIRECTEDTOVINODKHOSLA
Page
I. INTRODUCTION..............................................................................................................
1
II. STATEMENT OFFACTS.................................................................................................
3
A. The Relevant Pleadings...........................................................................................
3
B.
Discovery
Propounded
By
Surfrider.......................................................................
3
C. The Notice of Deposition and Subpoenas to Vinod Khosla...................................
4
III. LEGALARGUMENT........................................................................................................
5
A.
Code of Civil Procedure Section 1 987. 1 Provides the Court With Broad
Powers to Issue An Order Quashing the Subpoena to Protect Mr. Khosla
Fromthe " Unreasonable or Oppressive Demands, Including Unreasonable
Violations of the Right of Privacy" Associated with Surfrider' s Attempt to
Compel Mr. Khosla to Testify at Trial and Produce Documents ............................ 5
B.
There is Good Cause for the Issuance of an Order Quashing the Subpoena
Because the Subpoena Does Not Sufficiently Explain the Materiality of the
Matters and Things Sought or Sufficiently Describe the Documents ..................... 5
C.
Mr. Khosla' s Lackof Unique Personal Knowledge of Relevant
Information, Combined With The Fact that Surfrider Has Already Obtained
All Information It Seeks Through Less Intrusive Means, Constitute Good
Cause for an Order Quashing the Subpoena........................................................... 7
1 .
The LLCs are Manager Managed With All Management and
Oversight Responsibility for Their Operations Vested In Mr. Steve
Baugher.......................................................................................................
7
2.
Surfrider Has Already Obtained All Information It Seeks Through
Less Intrusive Means and Has an Improper Motive for Seeking the
Depositionof Mr. Khosla..........................................................................
1 0
3.
There is Good Cause for An Oder Quashing the Subpoena Because
Surfrider Seeks Mr. Khosla' s Testimony For An Improper Motive......... 1 1
D.
The Subpoena Violates Mr. Khosla' s Constitutional Privacy Rights by
Seeking
Private Financial Records Without Good Cause .....................................
1 1
E.
Sanctions Should Be Awarded Against Surfrider and Its Attorneys .................... 1 2
IV. CONCLUSION.................................................................................................................
1 3
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HOPKINS & CARLEY
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TABLE OFAUTHORITIES
Page
Cases
Britt v. Superior Court
1 978) 20 Cal. 3d 844................................................................................................................
1 1
Cobb v. Superior Court
1 979) 99 Cal. App.3d 543.......................................................................................................... 1 2
Davis v. Superior Court
1 992) 7 Cal.App.4th 1 008......................................................................................................... 1 2
Department ofHealth Services v. Sup. Ct. -
1 980) 1 04 Cal.App. 3d 80........................................................................................................... 5
Fortunato v. Superior Court
2003) 1 1 4 Cal. AppAth 475......................................................................................................
1 2
Hofnan Corp. v. Superior Court
1 985) 1 72 Cal. App.3d 357........................................................................................................ 1 1
Liberty Mutual Ins. Co. v. Superior Court
1 992) 1 0 Cal. AppAth 1 282.....................................................................................................
1 0
Statutes
Code of Civil Procedure section 1 985.......................................................:.....................................
5
Code of Civil Procedure section 1 985( b).........................................................................................
6
Code of Civil Procedure section 1 987. 1 ....................................................................................
5, 1 0
Code of Civil Procedure section 1 987. 1 ( a)....................................................................................
1 1
Code of Civil Procedure section 1 987. 1 ( b)......................................................................................
5
Code of Civil Procedure section 1 987. 2.....................................................:..................................
1 2
Constitutional Provisions
California Constitution, Article 1 , Section 1 ..................................................................................
1 1
Other Authorities
Cal. Prac. Guide Civ. Pro. Before Trial Ch. 8C- 5, 8: 303 ( The Rutter
Group
201 0) ....................
1 2
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BURRANK
I. INTRODUCTION
Defendants Martins Beach 1 , LLCand Martins Beach 2, LLC(" Martins" )
bring this
motion to quash the trial subpoena (" Subpoena" )
to a non-party to this action, Vinod Khosla.
This is the second time, Martins has filed this motion.
Plaintiff Surfrider Foundation
Surfrider" )
previously sought to take the deposition of Mr. Khosla and the Court granted
Martins motion to quash on the grounds that the deposition subpoena and notice were not
properly
served.
The instant motion to quash should also be granted on the grounds that there is
no basis in lawor fact to call Mr. Khosla to testify at trial.
As more fully explained below, the affidavit in support of the Subpoena does not describe
the materiality of the matters on which Surfrider seeks the testimony of Mr. Khosla and does not
describe the materials sought with sufficient particularity. The affidavit includes only a
conclusory statement that good cause exists because Mr. Khosla and his wife are members of the
trust that is a member of the LLCs and that therefore, Mr. Khosla supposedly has knowledge
germane to the issues in dispute. There is no explanation of what knowledge Mr. Khosla may
have, which issues this knowledge relates to, or any explanation of the need for Mr. Khosla' s
testimony whatsoever. This is because Mr. Khosla simply does not have any unique knowledge
relevant to the issues in this litigation. Moreover, the records sought are not described with
sufficient specificity or are duplicative of records that have already been produced by the LLCs
during discovery in this matter.
The LLCs are " manager managed" limited liability companies with one asset, certain real
property located at 22325 Cabrillo Highway, and commonly known as Martins Beach ( the
Property" ).
Plaintiff brought this lawsuit against the LLCs under the " private attorney general"
provisions of the Coastal Act in an effort to force the LLCs to apply for a Coastal Development
Permit (" CDP" )
to control access to its private property, Martins Beach, even though there is no
public right of access to the Property. Plaintiffasserted three separate causes of action in its
complaint: ( 1 )
Declaratory
Relief Under the Coastal Act; (
2) Injunctive Relief Under the Coastal
Act; and ( 3) Civil Fines and Penalties Under the Coastal Act. The central question in the case is
whether the alleged activities undertaken by the LLCs on its private property constitute
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development" under the definition of that termin the Coastal Act, and therefore required a CDP.
The Operating Agreements for the LLCs, which were produced during discovery,
demonstrate that the LLCs are " manager managed" meaning that all management and operational
decision making authority is fully vested in a professional non-member manager, Mr. Steve
Baugher. Mr. Khosla is not an officer, director, managing agent, or even an employee of the
LLCs. Mr. Baugher testified at his deposition that he made all decisions regarding public access
to the beach,
including
the activities Surfrider alleges constitute " development" , and had full
responsibility and oversight over the LLCs' property. Mr. Baugher further testified that Mr.
Khosla and his wife have no involvement in the management of the Property. Mr. Baugher
further testified that he has never discussed or received written instructions fromMr. Khosla
regarding allowing or disallowing public access to cross the Property, outside the presence of
counsel. Mr. Khosla simply has no information that is relevant to the claims in this litigation.
This case presents a legal issue. That is, whether the activities alleged in the complaint
constitute " development" under the Coastal Act. Nonetheless, Surfrider has deposed the Person
Most Knowledgeable of the LLCs, Mr. Baugher in both his individual capacity and his capacity
as the PMKof the LLCs. Surfrider has also deposed on- site property manager, Mr. JimDeeney.
These are the individuals with any potentially unique personal knowledge of any facts related to
the issues pled in the Complaint. Surfrider has also propounded two sets of special
interrogatories, two sets of forminterrogatories, two sets of requests for admission, and two sets
of requests for production of documents on the LLCs.
In light of the exhaustive discovery efforts to date, and the absence of any relevant
information in Mr. Khosla' s possession, and, most importantly, the absence of a persuasive reason
to compel Mr. Khosla to testify, the Surfrider' s efforts to force Mr. Khosla to testify at trial can
only be explained by an improper motive to harass, annoy, or invade the privacy of Mr. Khosla,
to create some perceived leverage, or to generate publicity.
The LLC' s respectfully requested that the Court grant its motion to quash and award
sanctions against Surfrider and its attorneys in the amount of $2, 280.
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II. STATEMENT OFFACTS
A. The Relevant Pleadings
Plaintiff, the Surfrider Foundation, brought this lawsuit under the " private attorney
general" provisions of the Coastal Act in an effort to force a private property owner to apply for a
Coastal Development Permit (" CDP" )
to control access to its private property, Martins Beach,
even though there is no public right of access to the
Property.' More specifically, Plaintiff asserts
that the LLCs have engaged in " development"
by: ( 1 ) maintaining a fence, gate, and no
trespassing signs that have existed on the Property since long before the Property was purchased
by the LLCs; (2) repainting a billboard that advertised the business of a predecessor -in -interest;
and ( 3) having security on the Property to monitor for trespassers to avoid injury and liability to
the owner. ( RJN, Exh. A.)
Plaintiff claims these activities resulted in a " change in intensity" of
use of the Property and therefore constitute " development" as that termis defined under the
Coastal Act. ( Id.)
Based on the undisputed facts, these activities do not constitute " development"
under the Coastal Act, or under any sense of the word.
On October 29, 201 2, an " unincorporated association" referred to as " Friends of Martins
Beach" brought the issue of public access to the Property squarely before this Court in a separate
lawsuit against Martins Beach 1 , LLCand Martins Beach 2, LLCasserting various theories as to
why the LLCs are required to allowpublic access to the beach via the private road, and' seeking to
establish the " general public' s" right to use certain portions of the
Property
for recreation.
2
On
October 24, 201 3, the Court granted Summary Judgment in favor of the LLCs, finding there is
not, nor has there ever been, a legal " right" for any member of the publicto be on the Property in
general, or use Martins Beach Road to access the beach.
B.
Discovery Propounded By Surfrider
Surfrider has propounded extensive discovery in this case, including two sets of special
interrogatories, two sets of forminterrogatories, two sets of requests for admission, and two sets
1
Request for Judicial Notice in Support of Defendants' Motion to Quash Subpoena to Vinod
Khosla (
hereinafter " RJN" ) at Exh. A.
2
Declaration of Dori Yob in Support of Defendant Martins Beach 1 , LLCand Martins Beach 2,
LLC' s Motion to Quash Subpoena (" Yob Dec." ), 1 2.
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of requests for production of documents. ( YobDec. 1 3.)
After meet and confer efforts, Surfrider
filed a motion to compel production of, inter alfa, purchase and title documents and financial
records. That motion was denied to the extent it sought documents unrelated to " public access
and
any
alleged restrictions on publicaccess to the beach." ( See RJN, Exh. B.) Surfrider has also
taken the depositions of. (1 ) the PMKfor Martins Beach 1 and Martins Beach 2, LLC; (2) Steven
Baugher, personally; ( 3) on-site property manager, JimDeeney; and ( 4) an expert disclosed in the
Friends of Martins Beach case, Bill Lott. ( Yob Dec. 1 4.)
The discovery conducted by Surfrider
has not lead to any information demonstrating that Mr. Khosla possesses knowledge of any fact
relevant to the claims in this litigation.
C.
The Notice of Deposition and Subpoenas to Vinod Khosla
On February 1 9, 201 4, Surfrider served the LLCs with a notice to take the deposition of
Mr. Vinod Khosla. ( Yob Dec., 5.)
During meet and confer efforts, Surfrider refused to
withdrawthe notice and on February 28th purported to serve a subpoena on the LLCs' attorneys.
Mr. Khosla was never personally served with the notice or subpoena and there was no agreement
among
counsel to accept service on behalf of Mr. Khosla. ( Id. at 6.)
As a result of Surfrider' s
refusal to withdrawthe notice and subpoena seeking Mr. Khosla' s deposition, the LLC' s filed a
motion to quash on March 7, 201 4. ( 1 d.)
The Court granted the motion to quash at the April 2,
201 4
hearing
on the motion, with a written order
following
on April 1 7, 201 4. (
Id.) The Court
granted the motion on the grounds that the subpoena was
improperly
served. ( Id.)
On April 7, 201 4, a fewdays after Martins Motion to Quash the Deposition Subpoena was
granted, Surfrider served the Subpoena on Mr. Vinod Khosla seeking personal appearance and
production of documents at trial. ( Yob Dec., Exh. A.)
The affidavit to the Subpoena indicates
that Surfrider seeks the
following
three categories of documents fromMr. Khosla: ( 1 ) " The
purchase and title documents" for the LLCs'
property; (
2) "
The Operating Agreement for [the
LLCs' ]' ; and ( 3) "
Financial records reflecting payments fromKFT Trust UTAdated l 1 / 1 / 1 986 to
the LLCs]" . ( Id.)
The sole explanation provided in the affidavit regarding the materiality of Mr.
Khosla' s testimony and/ or the documents sought is the following:
Good cause exists for the production of the documents because the witness and
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his wife are the sole members of the KFT Trust UTAdated 1 1 / 1 7/ 1 986 which is
listed as the sole member of each Defendant. Furthermore, Defendants' manager,
Mr. Baugher, and the property manager, Mr. Deeney have both identified the
witness as having been involved in the purchase of the property and having
unique knowledge about circumstances germane to the issues in dispute.
Id.)
There is no explanation regarding what relevant " knowledge" Mr. Khosla may have. There
is also no mention of any specific " circumstances" or " issues" .
III. LEGALARGUMENT
A.
Code of Civil Procedure Section 1 987. 1 Provides the Court With Broad
Powers to Issue An Order Quashing the Subpoena to Protect Mr. Khosla
Fromthe " Unreasonable or Oppressive Demands, Including Unreasonable
Violations of the Right of Privacy" Associated with Surfrider' s Attempt to
Compel Mr. Khosla to Testify at Trial and Produce Documents
Pursuant to Code of Civil Procedure. section 1 985, a trial subpoena must include " an
affidavit...
showing good cause for the production of the matters and things described in the
subpoena,
specifying
the exact matters or things desired to be produced, [
and] setting forth in full
detail the
materiality
thereof to the issues involved in the case." ( Code of Civ. Proc. 1 985.)
Any
party, witness, consumer, employee, or person whose personally identifying information is sought
may
make a motion to quash a trial subpoena. ( Code of Civ. Proc. 1 987. 1 ( b).)
The court " may
make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon
those terms or conditions as the court shall declare,
including
protective orders." ( Code of Civ.
Proc. 1 987. 1 .) "
In addition, the court may make any other order as may be appropriate to protect
the person fromunreasonable or oppressive demands, including unreasonable violations of the
right of
privacy
of the person." ( 1 d.)
To obtain a protective order or an order to quash the Subpoena to Mr. Khosla, the LLCs
need
only
showthat there is " good cause" for issuance of the order. ( Code Civ. Proc. 1 987. 1 ;
see also Department
of
Health Services v.
Sup.
Ct. ( 1 980) 1 04 Cal.
App.
3d 80, 84).
The LLCs
readily meet this burden.
B.
There is Good Cause for the Issuance of an Order Quashing the Subpoena
Because the Subpoena Does Not Sufficiently Explain the Materiality of the
Matters and Things Sought or Sufficiently Describe the Documents
Acopy of an affidavit shall be served with a subpoena duces tecumissued before trial,
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showing good cause for the production of the matters and things described in the subpoena,
specifying the exact matters or things desired to be produced, setting forth infull detail the
materiality thereof to the issues involved in the case, and stating that the witness has the desired
matters or things in his or her possession or under his or her control." ( Code Civ. Proc. 1 985( b)
emphasis added].)
The affidavit in support of the Subpoena fails to showgood cause for Mr. Khosla' s
testimony or production of any documents, fails to specify the exact matters or things desired to
be produced, and fails to set forth the materiality of the materials sought or Mr. Khosla' s
testimony in any detail. The sole grounds provided for in the affidavit for seeking Mr. Khosla' s
testimony is his status as a member of the trust that is a member of the LLCs. There is no dispute
in this litigation regarding ownershipof the Property and, as set forth more full below, Mr.
Khosla has no unique knowledge of the facts underlying this litigation. The affidavit also states
that Mr. Baugher and Mr. Deeney have identified the witness as having unique knowledge about
circumstances germane to the issues in dispute. There is no explanation whatsoever regarding
what circumstances or issues Mr. Khosla may have knowledge of and, as explained below,
precisely
the opposite is true
documents produced and deposition testimony in the case have
established Mr. Khosla has no unique knowledge of any facts relevant to the instant litigation.
Simply put, Surfrider has not, and cannot set forth the materiality of Mr. Khosla' s testimony or
the documents sought because neither is material to the issues in this litigation.
In addition, the documents sought by the Subpoena have not been identified with
sufficient
specificity..
The terms " purchase and title" documents and " [
f]inancial records" are
hopelessly vague and it is not possible to determine what specific documents are sought by the
Subpoena.. The documents sought are also either duplicative of documents already produced
during discovery ( the Operating Agreement for the LLCs) or were previously sought by Surfrider
during discovery and were the subject of a motion to compel that was denied (purchase and title
documents and financial records). ( See RJN, Exh. B.)
Specifically, Surfrider' s motion to compel
was denied to the extent it sought documents unrelated to the issue of public access and any
alleged restrictions on publicaccess to the beach because any such documents are irrelevant to
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this litigation. ( See id.)
Therefore, the Subpoena should be quashed in its entirety.
C.
Mr. Khosla' s Lackof Unique Personal Knowledge of Relevant Information,
Combined With The Fact that Surfrider Has Already Obtained All
Information It Seeks Through Less Intrusive Means, Constitute Good Cause
for an Order Quashing the Subpoena
1 .
The LLCs are Manager Managed With All Management and
Oversight Responsibility for Their Operations Vested In Mr. Steve
Baugher
The Operating Agreement for the LLCs, which was produced during written discovery,
plainly states that Martins Beach 1 , LLCand Martins Beach 2, LLCare both manager managed
limited
liability
companies.
3 (
See Yob Decl., Exh. B. at
p.
2- 3.)
Steve Baugher is the LLCs'
manager. ( See id.)
The business, .property and affairs of the LLCs are managed exclusively by
Mr. Baugher. ( Id. at Exh. B.)
Paragraph 4. 1 ( a) of the Operating Agreement states:
Exclusive Management by Manager. The business, property and affairs of the
Company will be managed exclusively by the Manager. Except for situations in
which the approval of the Member is expressly required by the Act, the Articles or
this Agreement, the Manager will have full, complete and exclusive authority,
power, and discretion to manager, and control the business, property, and affairs of
the Company, to make all decisions regarding those matters and to performany
and all other acts or activities customary or incident to the management of the
Company' s business, property and affairs.
Yob Dec., Exh. B,
p.
3.)
As the manager of the LLCs, Mr. Baugher therefore has full, complete
and exclusive authority, power, and discretion to manage, and control the business property and
affairs of the LLCs. ( Id. at Exh. B.)
On January 30, 201 4, Surfrider took the deposition of the Person Most Knowledgeable of
the LLCs ( Steve Baugher), and also took the deposition of Mr. Baugher in his personal capacity.
Yob Dec., 4.)
During the deposition, Mr. Baugher confirmed that he had complete decision
making authority over the activities Surfrider claims constitute " development" in its Complaint,
i. e. ( 1 )
maintaining
a fence, gate, and no
trespassing
signs; (
2) repainting a billboard that
advertised the business of a predecessor -in -interest; and ( 3) having security on the Property.
With respect to the fence and gate, Mr. Baugher testified that he made the decision to
3
Inexplicably, the Subpoena seeks these same Operating Agreement( s) fromMr. Khosla that
were already produced in discovery in this matter.
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cease allowing access to the Property on the same terms and conditions that the Deeney' s had
allowed access to the Property:
Q:
Can you estimate for me the first time the LLCs decided to cease allowing the
same access that the Deeneys had?
A. Sir, you' re
asking
when we shut the gate and did not open it? Because the
property was operated in the same context for the first two years, say, as the
Deeneys did. So it would have been approximately two years after the purchase.
Q. ... Who made that decision?
A. I did.
Q.
Did you have input from
anybody
in
making
that decision? Yes or No.
A. No.
Q.
Did you discuss that decision with anybody?
A. No.
Id. at Exh. C,
p.
43: 1 3- 44:25.)
Mr. Baugher further explained that he has never discussed or
received written instructions fromMr. Khosla regarding allowing or disallowing public access to
cross the Property without the presence of counsel:
N
MR. ESSNER:
THE WITNESS:
MR. ESSNER:
THE WITNESS:
Q
MR. ESSNER:
THE WITNESS:
Id. at Exh. C, p. 20:24-22: 6.)
Have you ever discussed with the Khoslas allowing or disallowing
publicaccess to cross the property?
Objection. I want to assert the attorney/ client privilege. And make
sure you don' t disclose any communications you may have had in
the presence of counsel. But I just want to admonish you on that.
You can answer the question to the extent that there' s been no
lawyers involved.
To the extent there' s been no lawyers involved?
Correct.
No.
Have you received any written instruction to or fromthe Khoslas
regarding access to the property?
Again I' mgoing to admonish you not to disclose any written
discussions where there were lawyers involved. So if you' re able to
answer that question without disclosing attorney/ client privileged
communication, feel free to do so.
No.
With respect to repainting the billboard on the Property, Mr. Baugher testified that he
made all decisions regarding changing the sign:
Q. Was it your decision to change the sign?
A. Yes.
Q.
Did you have any conversation with anybody
about changing the sign?
MR. ESSNER: Again I' mgoing to admonish you
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not to disclose any communications with counsel.
THE WITNESS: No.
Id. at Exh. C, p. 81 : 1 2- 1 8.)
With respect to hiring the security guards, Mr. Baugher testified that he was the person
who made the decision to hire security guards at the Property:
Q.
Who made the decision to hire security guards?
A. I did.
1 d. at Exh. C, p. 64: 22- 24.)
Mr. Khosla does not have any management responsibilities or day-to-day knowledge of
the LLCs' operations. ( Id. at Exh. C.)
Mr. Khosla is not an officer, director, managing agent, or
employee of the LLCs. ( Id.)
At his deposition, Mr. Baugher testified that Mr. Khosla and his
wife have no involvement in management of the Property at issue in this litigation:
Q.
Do the Khoslas listed as the members have any involvement in management of the
property?
THE WITNESS: No.
Id. at Exh. C, p. 20: 1 7- 22.)
Finally, Mr. Baugher testified that he is the LLCs' only employee:
Q.
Are there
any -- well, currently are there any employees, full-time employees of
the LLCs besides yourself?
A. No.
Q. Are there any part-time employees?
A. No.
Q.
In July through September of 2009 were there any other full-time employees?
A. No.
Q. Any part- time employees?
A. No.
Q.
Since the property was purchased have there been any other employees other than
you?
A. No.
Id. at Exh. C, p. 1 96:2- 1 5.)
Mr. Baugher made it clear in his deposition that he had complete decision making
authority over the activities Surfrider claims constitute " development" in its Complaint. Mr.
Baugher further testified that he has not had any communication with Mr. Khosla on these
subjects. Accordingly, even if the Subpoena sufficiently identified the matters or materials
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sought, there is no relevance to Mr. Khosla' s testimony.
2.
Surfrider Has Already Obtained All Information It Seeks Through
Less Intrusive Means and Has an Improper Motive for Seeking the
Deposition of Mr. Khosla
The Court may quash a subpoena where the information sought is unreasonable or
oppressive, including unreasonable violations of the right of privacy of the person whose
testimony
is sought. ( Code Civ. Proc. 1 987. 1 .)
Seeking information froman individual who
has no personal knowledge of the facts underlying the litigation is improper, unreasonable, and
oppressive. (
See Liberty Mutual Ins. Co. v. Superior Court ( 1 992) 1 0 Cal. AppAth 1 282, 1 287
improper to seek deposition " absent a reasonable indication of the [ deponent' s] personal
knowledge of the case and absent exhaustion of less intrusive discovery methods." ]:)
In Liberty Mutual Ins. Co., the court analyzed whether it was appropriate to allowa party
to notice the deposition of a corporate president or officer at the apex of the corporate hierarchy
of the other party. In that case, the corporate officer had no personal knowledge of the case and
less intrusive means of discovery had not been exhausted. The court held that " it amounts to an
abuse of discretion to withhold a protective order when a plaintiff' seeks to depose a corporate
president, or corporate officer at the apex of the corporate hierarchy, absent a reasonable
indication ofthe officer' s personal knowledge ofthe case and absent exhaustion of less intrusive
discovery
methods." ( Id. [emphasis added].)
Here, although Mr. Khosla is not the president at the apex of the corporate hierarchy, the
same reasoning fromLiberty Mutual should apply. Just as the president in Liberty Mutual had no
personal knowledge of the subject matter of the case, Mr. Khosla is similarly removed fromthe
subject matter of the current litigation. Mr. Khosla does not have day to day or any other
management over the LLCs. ( YobDec. at Exh. B.)
All management and decision making
authority
is vested in the LLCs' manager, Steve Baugher. ( Id.)
Just as the president at the apex
of the corporate hierarchy in Liberty Mutual did not have personal knowledge of lowlevel
business dealings within the corporate entity, Mr. Khosla does not have first-hand personal
knowledge of the facts underlying this litigation. Liberty Mutual found that it is unreasonably
burdensome to seek the deposition of an individual removed fromthe litigation with no unique
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personal knowledge of the litigation; it would be similarly unreasonable to require Mr. Khosla to
attend trial as a witness. This is particularly true where, as here, Surfrider has already deposed
the LLCs' manager ( Steve Baugher) and the on-site
property
manager (Jim
Deeney)
the
individuals with unique personal knowledge of any facts relating to this litigation.
3.
There is Good Cause for An Oder Quashing the Subpoena Because
Surfrider Seeks Mr. Khosla' s Testimony For An Improper Motive
Simply put, Surfrider cannot showany likelihood that Mr. Khosla possesses any firsthand
knowledge of facts that may be relevant to the instant litigation. In light of the utter lack of any
unique personal knowledge relating to this litigation, Surfrider' s insistence on calling Mr. Khosla
at trial can only be explained by an improper motive to harass, annoy, invade privacy, and/ or gain
leverage in this litigation. In fact, the only justification provided in the affidavit in support of the
Subpoena seeking Mr. Khosla' s testimony is his position as a member of the trust that is a
member of the LLCs. The ownershipof the Property is neither relevant to this litigation nor in
dispute. Therefore, Surfrider' s Subpoena is improper as it unreasonable, seeks. to cause
oppression, and violates the privacy of a non- party with no unique first-hand knowledge of the
facts underlying this litigation.
D.
The Subpoena Violates Mr. Khosla' s Constitutional' Privacy Rights by
Seeking Private Financial Records Without Good Cause
The Court may make any order that is appropriate to protect against unreasonable
violations of the right of
privacy. (
Code Civ. Proc. 1 987. 1 ( a).)
Information may be shielded
fromproduction if its disclosure would impair a person' s " inalienable right of privacy" provided
by
the California Constitution, Article 1 , Section 1 . (
Britt v. Superior Court ( 1 978) 20 Cal. 3d
844, 855- 56.)
In fact, the threat to First Amendment Rights may be more severe during litigation,
as the party directing the inquiry may be a litigation adversary who may well attempt to harass its
opponent and gain strategic advantage by probing deeply into areas which an individual may
prefer to
keep
confidential. ( Id. at 857.)
Protection is given to sensitive information which
people
may
wish to
keep
confidential, such as their financial dealings and assets. (
Hofman Corp.
v. Superior Court ( 1 985) 1 72 Cal. App. 3d 357, 362.)
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To compel disclosure of private financial information, a litigant must establish a waiver of
the protections by the objecting party. Such a showing requires establishing a " compelling need"
for the information, as well as its " direct relevance" to the case. (
Davis v. Superior Court ( 1 992)
7 Cal. AppAth 1 008, 1 01 3- 1 5 [ To find waiver of right of privacy, litigant must show" compelling"
need for information that has " direct relevance" to case];
see also Rylaarsdam, Edmon et. al, Cal.
Prac. Guide Civ. Pro. Before Trial Ch. 8C- 5, 8: 303 ( The Rutter
Group
201 0) ["
right of privacy
exists as to a party' s confidential financial affairs, even when the information sought is admittedly
relevant to the litigation (
citing
Cobb v. Superior Court ( 1 979) 99 Cal.
App.
3d 543,' 550.) Such a
waiver is not
easily
established. (
See Fortunato v. Superior Court (2003) 1 1 4 Cal. AppAth 475,
482 [ The waiver ...
of the constitutional right to privacy " must be narrowly rather than expansively
construed" ].)
Here, the Subpoena seeks " purchase and title documents of the real property" and
f]inancial records reflecting payments fromKFT Trust UTAdated 1 1 / 1 7/ 1 986 to Defendants
Martins Beach 1 , LLCand Martins Beach 2, LLC." ( Yob Dec., Exh. A.)
The Khoslas have a
constitutional right to privacy over these documents relating to their financial dealings and assets.
This information is completely irrelevant to the issues in this litigation; namely, whether or not
the LLCs' alleged conduct constitutes development under the Coastal Act or the issue of public
access to the beach. Surfrider has not, and cannot showany need for these documents or Mr.
Khosla' s testimony, let alone the requisite " compelling need" for disclosure of financial
information covered by the constitutional right to privacy. Therefore, the Subpoena should be
quashed in its entirety.
E.
Sanctions Should Be Awarded Against Surfrider and Its Attorneys
Under Code of Civil Procedure section 1 987. 2 the court may award the amount of
reasonable expenses incurred in
making
or
opposing
a motion to quash, "
including reasonable
attorney' s fees" if the court finds that the motion was made or opposed in bad faith or without
substantial justification or that one or more of the requirements of the subpoena was oppressive.
Code Civ. Proc. 1 987. 2.)
Surfrider has misused the Subpoena to improperly seek to compel a third party' s
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testimony for an improper purpose. Surfrider' s conduct has resulted in the LLCs having to bring
the instant motion to quash and incur unnecessary legal fees. Surfrider' s conduct is oppressive in
that it served a defective Subpoena directed at a non-party for the purpose of harassing Mr.
Khosla, attempting to create leverage in this litigation, and/ or to increase publicity in this matter.
Accordingly, sanctions should be awarded in the amount of $2, 280 against Surfrider and its
attorneys. ( See Yob Decl. at 8.)
IV. CONCLUSION
For the reasons stated above, the Subpoena served on Mr. Khosla is defective and
improperly seeks to compel Mr. Khosla to testify at trial despite the fact that he has no unique
personal knowledge of the facts. Surfrider has obtained all available non -privileged information
it seeks and has an improper motive in seeking Mr. Khosla' s testimony. The only purpose for the
Subpoena is to harass and annoy a non-party. Therefore, the LLCs respectfully request that the
Court quash the Subpoena and award sanctions in the amount of $2, 280.
Dated: April, 201 4
HOPKINS & CARLEY
ALawCorporation
By: ni' a" u-
JefflFff. Essner
Dori L. Yob
Attorneys for Defendants and Cross -
Complainants Martins Beach 1 , LLCand
Martins Beach 2, LLC
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