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SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

VANTOR HOLDINGS CORP.,

Plaintiff,

CASCADE RETAIL HOLDINGS INC.,

Defendant.

Case No. 21STCV-34872

REPLY BRIEF OF DEFENDANT CASCADE RETAIL HOLDINGS INC. IN FURTHER SUPPORT OF ITS OPPOSITION TO PLAINTIFF VANTOR HOLDINGS CORP.'S MOTION TO COMPEL CLASS-CERTIFICATION-STYLE EXPANDED DISCOVERY

Hearing Date: August 3, 2022 Time: 9:00 a.m. Department: 56 Judge: Hon. Margaret Takahashi

Filed: July 29, 2022

CALDERWOOD & HARKNESS LLP Douglas Carmichael (SBN 198742) Francesca Morano (SBN 224316) Yuki Nakamura (SBN 289511) Carlos Espinoza (SBN 312847) 600 South Grand Avenue, Suite 3200 Los Angeles, California 90071 Telephone: (213) 555-9400 Facsimile: (213) 555-9401

Attorneys for Defendant Cascade Retail Holdings Inc.

TABLE OF AUTHORITIES

Cases

Statutes

I. INTRODUCTION

Defendant Cascade Retail Holdings Inc. ("Cascade" or "CRH") respectfully submits this reply brief in further support of its Opposition to Plaintiff Vantor Holdings Corp.'s ("Vantor") Motion to Compel Class-Certification-Style Expanded discovery, originally filed on June 15, 2022. This reply addresses the arguments raised in Vantor's reply memorandum filed on July 15, 2022, and demonstrates that those arguments provide no basis for the extraordinary relief Vantor seeks.

Vantor's reply brief represents a transparent attempt to recast its sweeping demand for discovery into all of Cascade's supplier relationships — spanning hundreds of commercial counterparties across multiple product categories, geographic regions, and distribution channels — as a narrowly tailored inquiry into "pattern-and-practice" evidence. This effort at relabeling fails for three independent and mutually reinforcing reasons.

First, Vantor's "pattern-and-practice" theory lacks any legal foundation in the context of a tortious interference claim involving three specific supplier relationships. Pattern-and-practice discovery is a tool developed in employment discrimination class actions, antitrust conspiracy litigation, and securities fraud proceedings — not in bilateral commercial disputes between two companies over three identified supply contracts. Vantor's complaint does not allege a pattern-and-practice claim, and Vantor cannot use the discovery process to construct a new theory of liability that finds no support in its operative pleadings.

Second, even if Vantor's "pattern-and-practice" theory had some colorable legal basis — which it does not — the discovery sought would impose an enormous and disproportionate burden on Cascade. The parties have already engaged in extensive discovery over the past ten months. Cascade has collected 452,316 documents from its custodians and enterprise systems, reviewed 198,740 of those documents, and produced 78,412 documents to Vantor. Vantor's motion would multiply this burden several times over, requiring Cascade to identify, collect, process, review, and produce documents relating to every one of its supplier relationships — a task that would encompass hundreds of thousands of additional documents and millions of dollars in additional e-discovery costs. Vantor's motion does not even attempt to acknowledge this burden, much less justify it.

Third, Vantor has failed to demonstrate any relevance of Cascade's unrelated supplier relationships to the claims actually at issue in this litigation. The three causes of action in Vantor's complaint — tortious interference with contractual relations, tortious interference with prospective economic advantage, and unfair business practices under California Business and Professions Code Section 17200 — arise exclusively from Cascade's agreements with three identified suppliers: Hemsworth Consumer Products LLC ("Hemsworth"), Tridale Manufacturing Inc. ("Tridale"), and Orion Lifestyle Brands Corp. ("Orion"). Whether Cascade separately entered into supply agreements with other, unrelated suppliers — pursuant to a legitimate supplier diversification initiative or otherwise — has no bearing whatsoever on whether Cascade knew of Vantor's exclusive supply agreements with those three entities, whether Cascade intentionally disrupted those agreements, or whether Vantor suffered damages as a result.

Discovery in this case should be proportionately scoped to those three supplier relationships, the communications and conduct surrounding them, and the decisions that led to Cascade's alleged interference. The Court should deny Vantor's motion in its entirety.

II. VANTOR'S "PATTERN-AND-PRACTICE" ARGUMENT IS A LITIGATION TACTIC, NOT A COGNIZABLE DISCOVERY THEORY

A. Vantor's Complaint Does Not Allege a Pattern-and-Practice Claim

The operative complaint in this matter was filed on September 7, 2021. It identifies only three supplier relationships as the basis for Vantor's tortious interference claims: the exclusive supply agreement between Vantor and Hemsworth Consumer Products LLC, the exclusive supply agreement between Vantor and Tridale Manufacturing Inc., and the exclusive supply agreement between Vantor and Orion Lifestyle Brands Corp. These three agreements, and the conduct that Vantor alleges disrupted them, form the entirety of the factual predicate for Vantor's three causes of action.

Nowhere in the complaint does Vantor allege that Cascade engaged in a "pattern and practice" of systematically targeting Vantor's suppliers, or that Cascade pursued a broader scheme of anti-competitive conduct affecting entities beyond Hemsworth, Tridale, and Orion. The complaint contains no allegations regarding Cascade's relationships with any other suppliers. It does not reference a general course of tortious conduct. It does not assert claims on behalf of anyone other than Vantor itself, and it seeks damages measured exclusively by the losses allegedly flowing from the disruption of these three specific contractual relationships.

Having elected to frame its complaint in this manner — and having had ample opportunity over the past ten months to seek leave to amend — Vantor cannot now use the discovery process as a vehicle to construct a theory of liability that finds no support in its operative pleadings. The scope of permissible discovery is tethered to the claims and defenses actually at issue. While California's discovery rules are construed liberally, they do not grant a litigant carte blanche to rummage through an adversary's files in search of a new claim. As this Court is well aware, discovery is intended to illuminate the claims that have been pled, not to generate claims that have not.

Vantor's reply brief tacitly acknowledges this deficiency. Rather than pointing to specific allegations in its complaint that would support a pattern-and-practice theory, Vantor instead argues that such evidence would be "relevant" to its existing claims — a contention that Cascade addresses and refutes in Section II.B below. But the threshold problem remains: Vantor is seeking discovery to support a theory it has never pled. If Vantor believes that Cascade's broader supplier relationships are relevant to its claims, the proper course is to seek leave to amend the complaint to allege a pattern-and-practice theory, at which point the Court could assess the sufficiency of those allegations under applicable pleading standards. Vantor has not done so, and discovery should not be expanded to accommodate a theory that exists only in Vantor's motion papers.

Moreover, Vantor's strategic decision to pursue this discovery through a motion to compel — rather than through an amended complaint — is itself telling. Vantor apparently recognizes that a pattern-and-practice allegation would face significant scrutiny at the pleading stage, given the absence of any factual predicate in the existing record. It is far easier to persuade a court to authorize broad discovery, on the hope that something incriminating might emerge, than to allege specific facts supporting a broader theory of liability. But the discovery rules are not a mechanism for circumventing pleading requirements, and the Court should not permit Vantor to achieve through a motion to compel what it could not achieve through its complaint.

B. Pattern-and-Practice Evidence Is Irrelevant to the Elements of Tortious Interference

Even setting aside the pleading deficiency, Vantor's "pattern-and-practice" argument fails on its own terms because the evidence sought is irrelevant to any element of Vantor's tortious interference claims.

Under well-established California law, tortious interference with contractual relations requires proof of five elements: (1) a valid contract between the plaintiff and a third party; (2) the defendant's knowledge of that contract; (3) intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contract; and (5) resulting damages to the plaintiff. See Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148; Harborview Industries (1990) 50 Cal.3d 1118, 1126; Applied Equip. Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 514. Similarly, tortious interference with prospective economic advantage requires proof that the defendant engaged in wrongful conduct independently tortious or otherwise unlawful that disrupted an economic relationship the plaintiff reasonably expected to yield an economic benefit. See della Penna v. Crowne Albany Industries (1995) 11 Cal.4th 376, 393.

Each of these elements must be proven with respect to the specific contracts at issue in this case — and only those contracts. As applied here, the relevant agreements are:

(1) The Hemsworth Supply Agreement, executed on March 15, 2019, for a three-year term expiring March 14, 2022, pursuant to which Hemsworth Consumer Products LLC agreed to supply Vantor with exclusive access to certain home goods product lines;

(2) The Tridale Supply Agreement, executed on January 10, 2020, for a two-year term expiring January 9, 2022, pursuant to which Tridale Manufacturing Inc. agreed to supply Vantor with exclusive access to certain consumer electronics accessory product lines; and

(3) The Orion Supply Agreement, executed on July 1, 2018, for a four-year term expiring June 30, 2022, pursuant to which Orion Lifestyle Brands Corp. agreed to supply Vantor with exclusive access to certain personal care product lines.

Whether Cascade entered into supply agreements with other, unrelated suppliers — suppliers with whom Vantor had no contractual relationship and no reasonable expectation of future economic benefit — has no bearing on any of these elements. Such evidence does not tend to prove or disprove that valid contracts existed between Vantor and Hemsworth, Tridale, or Orion. It does not tend to prove or disprove that Cascade knew of those specific contracts. It does not tend to prove or disprove that Cascade engaged in intentional acts designed to disrupt those specific contracts. And it does not tend to prove or disprove that Vantor suffered damages as a result of any such disruption.

Vantor's reply attempts to bridge this gap by arguing that Cascade's broader supplier diversification initiative — referred to internally at Cascade as "Project Atlas," launched in February 2021 — is itself evidence of a "scheme" to poach Vantor's suppliers. This argument conflates lawful competitive activity with tortious conduct and fundamentally mischaracterizes the nature and scope of Project Atlas.

As the record evidence already produced in this litigation makes clear, Project Atlas was a legitimate business initiative designed to identify and onboard approximately twenty-five new suppliers across multiple product categories, including home goods, consumer electronics accessories, and personal care products. The initiative was conceived and approved by Cascade's executive leadership team in the ordinary course of business, in response to well-documented supply chain disruptions and vendor concentration risks that the COVID-19 pandemic had exposed across the retail industry. Cascade is a publicly traded, multi-channel retailer with approximately $6.8 billion in annual revenue and more than 340 retail locations nationwide. The decision to diversify its supplier base was a routine and unremarkable strategic initiative of the kind undertaken by major retailers throughout the industry — not a "scheme" to target Vantor or its suppliers.

The fact that three of the suppliers contacted during Project Atlas — Hemsworth, Tridale, and Orion — had pre-existing exclusive supply relationships with Vantor is the factual dispute at the heart of this litigation. Cascade denies that it knew of those exclusive supply agreements at the time it contacted those suppliers, and discovery into the circumstances surrounding those three specific interactions is entirely appropriate. But the fact that Cascade also contacted or contracted with other suppliers who had no exclusive supply relationship with Vantor — and as to whom no interference is alleged — is simply irrelevant. It proves nothing about Cascade's knowledge of or intent to disrupt the Hemsworth, Tridale, and Orion agreements.

Vantor's Section 17200 claim fares no better. The unfair competition law provides a broad equitable remedy, but it does not expand the scope of permissible discovery beyond what the underlying substantive claims support. See Glenrock Corporation (2003) 29 Cal.4th 1134, 1150 (Section 17200 claim must be predicated on an underlying unlawful, unfair, or fraudulent act). Here, Vantor's Section 17200 claim is derivative of its tortious interference claims and is premised on the same three supplier relationships. It does not independently authorize the sweeping discovery Vantor seeks.

C. Vantor Cites No Authority Supporting discovery of This Scope in a Tortious Interference Case

Vantor's reliance on discovery standards borrowed from the class certification context is entirely misplaced. This is not a class action. There is one plaintiff — Vantor Holdings Corp. — three identified supplier relationships, and three discrete causes of action. There is no putative class, no class representative, no commonality or typicality inquiry, and no need for the court to assess whether classwide patterns exist. The class-certification discovery framework exists to serve a specific procedural purpose that has no application here.

The cases cited by Vantor in its reply underscore this fundamental disconnect. Vantor relies principally on federal antitrust decisions involving allegations of industry-wide price-fixing conspiracies, where the nature of the claim itself requires proof of coordinated conduct across multiple transactions and market participants. Vantor also cites securities fraud cases applying the fraud-on-the-market presumption, where the relevant inquiry necessarily extends to the defendant's public statements and their effect on an entire market of investors. These contexts are fundamentally different from a bilateral tortious interference dispute between two companies over three identified supply contracts. In the antitrust and securities contexts, the very theory of liability presupposes that the defendant's conduct affected multiple parties and transactions; the scope of discovery naturally follows from the scope of the claim. Here, by contrast, the claims are tethered to three specific agreements and three specific suppliers. The scope of discovery should be correspondingly limited.

Vantor has not cited — because it cannot cite — a single case in which a California court authorized "pattern-and-practice" Discovery of the scope sought here in a tortious interference action. This is not surprising. Tortious interference is, by its nature, a claim that is proven contract by contract, relationship by relationship. Broad discovery into unrelated supplier relationships is neither authorized by the law of tortious interference nor warranted by the facts of this case.

III. THE REQUESTED DISCOVERY IS DISPROPORTIONATE TO THE NEEDS OF THE CASE

Even if Vantor's "pattern-and-practice" theory had some arguable relevance — which it does not — the discovery sought would be wildly disproportionate to the needs of this case. The parties have already engaged in extensive, robust, and costly discovery focused on the three supplier relationships at issue, and Vantor has failed to explain why the enormous additional burden of expanded discovery is justified by the claims and defenses actually in dispute.

A. The discovery Burden on Cascade Has Already Been Enormous

To date, Cascade has engaged in a comprehensive and good-faith discovery effort that has been anything but minimal. The scope of document collection, review, and production already undertaken in this matter reflects the seriousness with which Cascade has approached its discovery obligations:

• Documents Collected: Cascade has collected 452,316 documents from its custodians and enterprise systems, including email accounts, shared network drives, the company's SAP enterprise resource planning system, its procurement management platform (Ridgeline Industries ProcureOne), and certain archived repositories.

• Documents Reviewed: Of those collected documents, Cascade's legal team and contract review attorneys have completed first-level review of 198,740 documents, applying detailed relevance and privilege coding protocols developed in consultation with e-discovery counsel.

• Documents Produced: Cascade has produced 78,412 documents to Vantor, encompassing communications, memoranda, presentations, financial analyses, contracts, purchase orders, and internal reports relating to the Hemsworth, Tridale, and Orion supplier relationships, the Project Atlas initiative, and Cascade's procurement decision-making during the relevant period.

• Privilege Log: Cascade's privilege log currently contains 3,214 entries, each individually logged with the information required by California law, including the date of the document, its author and recipients, the general subject matter, and the specific privilege asserted.

• Vantor's Production: Vantor has produced 41,308 documents in this litigation — a fraction of Cascade's production, despite the fact that Vantor, as the plaintiff, bears the burden of proving its claims.

• Third-Party Productions: Third-party subpoena productions from Hemsworth Consumer Products LLC, Tridale Manufacturing Inc., and Orion Lifestyle Brands Corp. have yielded an additional 23,567 documents, which have been made available to both parties.

The existing discovery has been squarely focused on the three supplier relationships at issue, the Project Atlas planning and communications that touched upon those relationships, and Cascade's procurement decision-making processes. This is the appropriate and proportionate scope for a case involving three discrete tortious interference claims arising from three identified supply agreements.

Cascade has not engaged in gamesmanship or obstructionism. It has produced tens of thousands of documents responsive to Vantor's requests, including internal communications among senior procurement executives, board-level presentations regarding supplier diversification strategy, financial models assessing the commercial value of the Hemsworth, Tridale, and Orion relationships, and correspondence between Cascade's representatives and personnel at each of the three suppliers. This production provides Vantor with a robust evidentiary record from which to prove — or fail to prove — its claims.

B. Expanding discovery to All Cascade Supplier Relationships Would Require Review of Hundreds of Thousands of Additional Documents

Vantor's motion, if granted, would require Cascade to identify, collect, process, review, and produce documents relating to every one of its supplier relationships — an undertaking of staggering scope. Cascade maintains active supply relationships with hundreds of suppliers across its retail and e-commerce operations, spanning multiple product categories including home goods, consumer electronics and accessories, personal care and wellness products, apparel, sporting goods, seasonal merchandise, and food and beverage. These relationships are managed by dozens of procurement professionals across Cascade's regional and national buying teams.

The volume of potentially responsive documents associated with these relationships is enormous. Internal estimates prepared by Cascade's information technology department, in consultation with its e-discovery vendor Krane Investigations LLC, indicate that expanding the document collection to encompass all supplier relationships during the relevant time period would require the identification and processing of an estimated additional 600,000 to 800,000 documents. These documents reside across multiple data sources, including the email accounts of additional custodians not yet subject to collection, Cascade's procurement management platform, its vendor management system, contract repositories maintained by each regional buying office, and archived project files associated with the supplier diversification initiative.

The cost implications are equally staggering. Krane Investigations LLC has already incurred costs of approximately $487,000 in processing and hosting the existing document collection — a figure that reflects the substantial volume of data involved, the complexity of Cascade's enterprise systems, and the need for advanced processing techniques to de-duplicate, de-NIST, and index the collected material. Expanding the scope of collection as Vantor requests would, according to Krane's preliminary estimates, increase processing and hosting costs by an additional $650,000 to $900,000. When the costs of attorney review are added — at rates that, even using contract review attorneys, would amount to several hundred thousand dollars for a collection of this size — the total incremental cost of the expanded discovery would easily exceed $1.5 million.

Vantor's motion does not acknowledge these burdens. It does not estimate the volume of additional documents that would need to be collected and reviewed. It does not address the cost of expanded processing and hosting. It does not explain why Cascade should be required to bear these costs. And it does not explain why the information sought — documents relating to Cascade's supply relationships with entities that have nothing to do with Vantor's claims — is sufficiently important to justify this burden.

C. Proportionality Under California Law Requires Balancing Burden Against Need

The California discovery statutes and the case law interpreting them impose a proportionality requirement that the Court must apply in evaluating Vantor's motion. Under Code of Civil Procedure Section 2017.010, the scope of discovery extends to any matter "not privileged, that is relevant to the subject matter involved in the pending action . . . if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence." But this broad standard is subject to the proportionality limitations set forth in Sections 2017.020 and 2019.030, which authorize the court to limit discovery if it determines that "the burden, expense, or intrusiveness of that discovery clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence."

The California Supreme Court's decision in Williams v. Superior Court (2017) 3 Cal.5th 531 emphasized that proportionality is not merely a discretionary consideration but a substantive limitation on the scope of permissible discovery. The court held that the trial court must balance "the burden, expense, and intrusiveness of the discovery" against "the likelihood that the information sought will lead to the discovery of admissible evidence" and "the importance of the discovery in resolving the issues." Id. at 549. Courts have consistently applied these principles to deny or limit discovery requests that impose burdens disproportionate to the claims at issue. See, e.g., Calcor Space Facility, Inc. v. Superior Court (1997) 53 Cal.App.4th 216, 223–224; Gonzalez v. Superior Court (1995) 33 Cal.App.4th 1539, 1546; Obrey v. Johnson (1984) 161 Cal.App.3d 709, 717.

Application of these principles here compels denial of Vantor's motion. Even accepting Vantor's damages claim at face value — $87.4 million in total alleged damages, broken down as $34.2 million attributable to the Hemsworth relationship, $22.8 million attributable to the Tridale relationship, and $30.4 million attributable to the Orion relationship, with each figure based on projected multi-year revenue streams discounted at a rate of 8.5% — the damages arise solely from the alleged loss of three identified supplier relationships. Every dollar of Vantor's claimed damages is traceable to a specific contract with a specific supplier. Discovery into Cascade's unrelated supplier relationships adds nothing to the damages calculus and nothing to the liability analysis. It would not help the trier of fact determine whether Cascade knew of Vantor's exclusive supply agreements, whether Cascade intentionally disrupted those agreements, or whether Vantor was damaged as a result.

The burden of the expanded discovery, on the other hand, is enormous — conservatively estimated at more than $1.5 million in incremental costs, months of additional review time, and the diversion of Cascade's in-house legal resources from other matters. Under any reasonable proportionality analysis, the balance tips decisively against the discovery Vantor seeks.

IV. VANTOR'S SPECIFIC ARGUMENTS IN ITS REPLY ARE WITHOUT MERIT

Vantor's reply brief raises three specific arguments in support of its motion, none of which withstands scrutiny. Cascade addresses each in turn.

A. Vantor's Argument That "Other Supplier Relationships Show Cascade's Modus Operandi"

Vantor argues that if Cascade engaged in similar conduct with other suppliers — that is, if Cascade contacted or contracted with suppliers who had pre-existing exclusive supply agreements with third parties — it would demonstrate a "modus operandi" showing that Cascade's interference with Vantor's supplier relationships was intentional and knowing rather than inadvertent. In theory, this argument has a surface appeal: evidence that Cascade regularly targeted suppliers bound by exclusive agreements might, if it existed, tend to show that Cascade's conduct with respect to Hemsworth, Tridale, and Orion was deliberate rather than accidental.

But there is a critical problem with this argument: Vantor has offered no factual basis whatsoever for believing that any of Cascade's other supplier relationships involved interference with another party's exclusive supply agreements. Vantor's argument is entirely speculative. It rests on the assumption that, among Cascade's hundreds of supplier relationships, there must be some that involved the same type of conduct alleged in this case. But Vantor has identified no document, no witness, and no factual predicate supporting that assumption.

To the contrary, the existing discovery record affirmatively undermines Vantor's hypothesis. Of the 2,847 internal Cascade emails relating to Project Atlas that have been reviewed and produced in discovery, only 14 reference Vantor's existing supplier relationships with Hemsworth, Tridale, or Orion. Vantor has not identified a single document — from Cascade's production, from third-party productions, or from any other source — suggesting that Cascade targeted, or was even aware of, exclusive supply agreements between any of its other new suppliers and any third party. Not one.

The absence of any factual predicate is dispositive. Vantor's argument amounts to a textbook fishing expedition: lacking any evidentiary basis for its theory, Vantor asks the Court to authorize broad and burdensome discovery on the hope that something incriminating might emerge if Cascade is forced to turn over enough documents. This is precisely the type of discovery abuse that proportionality limits are designed to prevent. As the court observed in Digital Music News LLC v. Superior Court (2014) 226 Cal.App.4th 216, 230, a party seeking discovery must demonstrate a "reasonable belief" that the discovery will yield relevant evidence; mere speculation that relevant documents might exist somewhere in the responding party's files is insufficient.

Furthermore, even if Vantor could identify one or two additional supplier relationships in which Cascade allegedly interfered with a third party's exclusive supply agreement — which it has not — the probative value of such evidence would be marginal at best and would be vastly outweighed by the burden of identifying it. To find such evidence, Cascade would be required to review documents pertaining to hundreds of supplier relationships, the vast majority of which would yield nothing of relevance. The needle-in-a-haystack nature of Vantor's request is itself compelling evidence that the discovery sought is disproportionate.

B. Vantor's Argument That Cascade's Objections Are "Boilerplate"

Vantor's reply characterizes Cascade's discovery objections as "boilerplate" and argues that Cascade has failed to substantiate the burden it claims. This characterization is both inaccurate and unfair.

Cascade's objections are not boilerplate. They are specific, detailed, and substantiated by the facts of this case. In its opposition brief and supporting declarations, Cascade has:

(a) Identified the precise burden of the discovery already completed in terms of documents collected (452,316), documents reviewed (198,740), documents produced (78,412), and privilege log entries (3,214);

(b) Explained with specificity why the requested expanded discovery is not relevant to any claim or defense in this litigation, addressing each element of Vantor's tortious interference claims and demonstrating that evidence of Cascade's unrelated supplier relationships does not tend to prove or disprove any element;

(c) Provided declarations from Cascade's Director of Information Technology, Jennifer Kowalczyk, and from Krane Investigations LLC's project manager, Stephen Raines, quantifying the estimated cost and burden of the expanded discovery; and

(d) Demonstrated that the existing discovery scope has been robust and comprehensive, providing Vantor with a thorough evidentiary record relating to the three supplier relationships at issue, the Project Atlas initiative, and Cascade's procurement decision-making.

These are not boilerplate objections. They are the very type of specific, substantiated objections that the discovery rules contemplate and that this Court has repeatedly indicated it expects from the parties in this litigation. Vantor's dismissive characterization should be disregarded.

C. Vantor's Argument That Cascade Should Bear the Cost of Expanded discovery

Vantor's reply argues, in passing, that Cascade should bear the cost of the expanded discovery because Cascade is a large, well-resourced company that can afford it. This argument is legally meritless and factually irrelevant.

The question is not whether Cascade can afford to pay for the expanded discovery; the question is whether Cascade should be required to do so. Under California law, a party objecting to discovery on grounds of burden may seek a protective order shifting the costs to the requesting party. See Code Civ. Proc. § 2031.060(b). Even if the Court were inclined to permit some measure of expanded discovery — which Cascade submits it should not — the cost of that discovery should be borne by Vantor as the requesting party, given the disproportionate burden the discovery would impose and the speculative nature of Vantor's relevance theory.

Cascade should not be required to subsidize Vantor's litigation strategy of transforming a straightforward tortious interference case involving three identified supplier relationships into a sprawling, open-ended investigation of Cascade's entire supplier network. If Vantor wishes to pursue such an investigation, it should pay for it.

V. IF THE COURT IS INCLINED TO GRANT ANY EXPANDED DISCOVERY, IT SHOULD BE NARROWLY LIMITED

Cascade's primary position is that Vantor's motion should be denied in its entirety. The discovery already completed is comprehensive and proportionate to the claims at issue, and Vantor has failed to demonstrate any legal or factual basis for expanded discovery into Cascade's unrelated supplier relationships.

However, if the Court determines that any discovery beyond the three supplier relationships at issue is warranted — a determination that Cascade respectfully submits would be erroneous — Cascade requests that the Court impose strict limitations to cabin the scope and cost of any additional discovery. Specifically, Cascade proposes the following framework:

1. Numerical Limitation on Additional Supplier Relationships. Any expanded discovery should be limited to no more than five (5) additional supplier relationships identified by Vantor. Vantor should be required to make a particularized showing of relevance for each such relationship, demonstrating specific, articulable facts — not mere speculation — supporting a reasonable belief that the supplier had an exclusive supply agreement with a third party at the time Cascade contacted the supplier. In the absence of such a showing, the Court should not authorize discovery into any additional relationships.

2. Categorical Limitation on Documents. For any additional supplier relationships for which discovery is authorized, the categories of documents subject to production should be limited to communications between Cascade personnel and the supplier relating to any pre-existing exclusive supply agreements those suppliers may have had with third parties at the time of Cascade's initial contact. General procurement documents, purchase orders, pricing information, and other commercial terms of Cascade's agreements with those suppliers should be excluded from the scope of any expanded discovery, as such information has no relevance to Vantor's claims.

3. Temporal Limitation. Any expanded discovery should be limited to the period from February 2021 — the date of the launch of Project Atlas — through August 15, 2021 — the date of the last Cascade supply agreement at issue, specifically the Cascade–Tridale agreement executed during the relevant period. Documents pre-dating the launch of Project Atlas and post-dating the completion of the relevant supplier onboarding process are not relevant to Vantor's claims and should be excluded.

4. Cost-Shifting. Vantor should be required to bear the full costs of any expanded collection, processing, review, and production — including the costs of additional document processing and hosting through Krane Investigations LLC or another mutually agreed-upon e-discovery vendor, and the costs of attorney review of any additional documents collected. Cascade should not be required to subsidize the cost of discovery that it contends is unnecessary and that the Court has authorized, if at all, only over Cascade's objection.

These limitations represent the narrowest reasonable framework for any expanded discovery and would ensure that any additional discovery is proportionate to the needs of the case. Cascade reserves all rights to object to specific discovery requests within this framework on grounds of relevance, privilege, or undue burden.

VI. CONCLUSION

For the foregoing reasons, Vantor's motion to compel class-certification-style expanded discovery should be denied. The discovery Vantor requests is disproportionate to the claims at issue, irrelevant to any element of Vantor's causes of action, and designed to impose maximum burden on Cascade rather than to advance any legitimate claim or defense.

The discovery already completed in this litigation is more than sufficient to address the three supplier relationships and three causes of action at issue. The parties and third-party subpoena respondents have collectively produced over 143,000 documents, with Cascade alone having collected 452,316 documents, reviewed 198,740 documents, and produced 78,412 documents to Vantor. Third-party productions from Hemsworth, Tridale, and Orion have yielded an additional 23,567 documents. This record provides Vantor with a comprehensive evidentiary foundation from which to pursue its claims. It does not need — and the law does not entitle it to — unfettered access to Cascade's entire supplier network.

Cascade respectfully requests that the Court deny Vantor's motion in its entirety or, in the alternative, impose the narrow limitations described in Section V above. In either case, Cascade requests an award of the reasonable costs and fees incurred in opposing this motion, to the extent authorized by applicable law.

Dated: July 29, 2022

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Douglas Carmichael Partner

Francesca Morano Partner

Yuki Nakamura Senior Associate

Carlos Espinoza Associate

600 South Grand Avenue, Suite 3200 Los Angeles, California 90071 Telephone: (213) 555-9400 Facsimile: (213) 555-9401

Attorneys for Defendant Cascade Retail Holdings Inc.

PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

I, Carlos Espinoza, declare as follows:

I am an associate at Calderwood & Harkness LLP, counsel for Defendant Cascade Retail Holdings Inc. in the above-captioned matter. I am a citizen of the United States and am employed in the County of Los Angeles, State of California. I am over the age of eighteen (18) years and am not a party to this action. My business address is 600 South Grand Avenue, Suite 3200, Los Angeles, California 90071.

On July 29, 2022, I caused a true and correct copy of the foregoing document, entitled REPLY BRIEF OF DEFENDANT CASCADE RETAIL HOLDINGS INC. IN FURTHER SUPPORT OF ITS OPPOSITION TO PLAINTIFF VANTOR HOLDINGS CORP.'S MOTION TO COMPEL CLASS-CERTIFICATION-STYLE EXPANDED DISCOVERY, to be served on the following parties by the methods indicated below:

Via Electronic Service Through the Court's Electronic Filing System and Email:

Martin Kessler, Esq. Natalie Whitfield, Esq. KESSLER, BRANDT & WHITFIELD LLP 1999 Avenue of the Stars, Suite 2800 Los Angeles, California 90067 Telephone: (310) 555-7200

Email: mkessler@kbwlaw.com; nwhitfield@kbwlaw.com

Attorneys for Plaintiff Vantor Holdings Corp.

Via Electronic Service Through the Court's Electronic Filing System and Email (for informational purposes):

Diana Prescott, Esq. WORTHAM & ADAIR LLP 611 West Sixth Street, Suite 2400 Los Angeles, California 90017 Telephone: (213) 555-3100

Email: dprescott@worthamadair.com

Local Counsel

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Executed on July 29, 2022, at Los Angeles, California.

________________________________________

Carlos Espinoza

Page

I. INTRODUCTION	1
II. VANTOR'S "PATTERN-AND-PRACTICE" ARGUMENT IS A LITIGATION TACTIC, NOT A COGNIZABLE DISCOVERY THEORY	3
A. Vantor's Complaint Does Not Allege a Pattern-and-Practice Claim	3
B. Pattern-and-Practice Evidence Is Irrelevant to the Elements of Tortious Interference	5
C. Vantor Cites No Authority Supporting discovery of This Scope in a Tortious Interference Case	8
III. THE REQUESTED DISCOVERY IS DISPROPORTIONATE TO THE NEEDS OF THE CASE	9
A. The discovery Burden on Cascade Has Already Been Enormous	10
B. Expanding discovery to All Cascade Supplier Relationships Would Require Review of Hundreds of Thousands of Additional Documents	12
C. Proportionality Under California Law Requires Balancing Burden Against Need	14
IV. VANTOR'S SPECIFIC ARGUMENTS IN ITS REPLY ARE WITHOUT MERIT	16
A. Vantor's Argument That "Other Supplier Relationships Show Cascade's Modus Operandi"	16
B. Vantor's Argument That Cascade's Objections Are "Boilerplate"	18
C. Vantor's Argument That Cascade Should Bear the Cost of Expanded discovery	19
V. IF THE COURT IS INCLINED TO GRANT ANY EXPANDED DISCOVERY, IT SHOULD BE NARROWLY LIMITED	20
VI. CONCLUSION	22

Page

Applied Equip. Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503	6
Calcor Space Facility, Inc. v. Superior Court (1997) 53 Cal.App.4th 216	14, 15
della Penna v. Crowne Albany Industries (1995) 11 Cal.4th 376	6
Digital Music News LLC v. Superior Court (2014) 226 Cal.App.4th 216	15
Gonzalez v. Superior Court (1995) 33 Cal.App.4th 1539	14
Greenly v. Cooper (1978) 77 Cal.App.3d 382	5
Glenrock Corporation (2003) 29 Cal.4th 1134	7
Obrey v. Johnson (1984) 161 Cal.App.3d 709	14
Harborview Industries (1990) 50 Cal.3d 1118	6
Reeves v. Hanlon (2004) 33 Cal.4th 1140	6
Williams v. Superior Court (2017) 3 Cal.5th 531	14, 15

Page

Cal. Bus. & Prof. Code § 17200	2, 7
Cal. Code Civ. Proc. § 2017.010	14
Cal. Code Civ. Proc. § 2017.020	15, 20
Cal. Code Civ. Proc. § 2019.030	15
Cal. Code Civ. Proc. § 2031.060	20

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
VANTOR HOLDINGS CORP.,
Plaintiff,
v.
CASCADE RETAIL HOLDINGS INC.,
Defendant.
Case No. 21STCV-34872
REPLY BRIEF OF DEFENDANT CASCADE RETAIL HOLDINGS INC. IN FURTHER SUPPORT OF ITS OPPOSITION TO PLAINTIFF VANTOR HOLDINGS CORP.'S MOTION TO COMPEL CLASS-CERTIFICATION-STYLE EXPANDED DISCOVERY
Hearing Date: August 3, 2022 Time: 9:00 a.m. Department: 56 Judge: Hon. Margaret Takahashi
Filed: July 29, 2022
CALDERWOOD & HARKNESS LLP Douglas Carmichael (SBN 198742) Francesca Morano (SBN 224316) Yuki Nakamura (SBN 289511) Carlos Espinoza (SBN 312847) 600 South Grand Avenue, Suite 3200 Los Angeles, California 90071 Telephone: (213) 555-9400 Facsimile: (213) 555-9401
Attorneys for Defendant Cascade Retail Holdings Inc.
TABLE OF CONTENTS
TABLE OF AUTHORITIES
Cases
Statutes
I. INTRODUCTION
Defendant Cascade Retail Holdings Inc. ("Cascade" or "CRH") respectfully submits this reply brief in further support of its Opposition to Plaintiff Vantor Holdings Corp.'s ("Vantor") Motion to Compel Class-Certification-Style Expanded discovery, originally filed on June 15, 2022. This reply addresses the arguments raised in Vantor's reply memorandum filed on July 15, 2022, and demonstrates that those arguments provide no basis for the extraordinary relief Vantor seeks.
Vantor's reply brief represents a transparent attempt to recast its sweeping demand for discovery into all of Cascade's supplier relationships — spanning hundreds of commercial counterparties across multiple product categories, geographic regions, and distribution channels — as a narrowly tailored inquiry into "pattern-and-practice" evidence. This effort at relabeling fails for three independent and mutually reinforcing reasons.
First, Vantor's "pattern-and-practice" theory lacks any legal foundation in the context of a tortious interference claim involving three specific supplier relationships. Pattern-and-practice discovery is a tool developed in employment discrimination class actions, antitrust conspiracy litigation, and securities fraud proceedings — not in bilateral commercial disputes between two companies over three identified supply contracts. Vantor's complaint does not allege a pattern-and-practice claim, and Vantor cannot use the discovery process to construct a new theory of liability that finds no support in its operative pleadings.
Second, even if Vantor's "pattern-and-practice" theory had some colorable legal basis — which it does not — the discovery sought would impose an enormous and disproportionate burden on Cascade. The parties have already engaged in extensive discovery over the past ten months. Cascade has collected 452,316 documents from its custodians and enterprise systems, reviewed 198,740 of those documents, and produced 78,412 documents to Vantor. Vantor's motion would multiply this burden several times over, requiring Cascade to identify, collect, process, review, and produce documents relating to every one of its supplier relationships — a task that would encompass hundreds of thousands of additional documents and millions of dollars in additional e-discovery costs. Vantor's motion does not even attempt to acknowledge this burden, much less justify it.
Third, Vantor has failed to demonstrate any relevance of Cascade's unrelated supplier relationships to the claims actually at issue in this litigation. The three causes of action in Vantor's complaint — tortious interference with contractual relations, tortious interference with prospective economic advantage, and unfair business practices under California Business and Professions Code Section 17200 — arise exclusively from Cascade's agreements with three identified suppliers: Hemsworth Consumer Products LLC ("Hemsworth"), Tridale Manufacturing Inc. ("Tridale"), and Orion Lifestyle Brands Corp. ("Orion"). Whether Cascade separately entered into supply agreements with other, unrelated suppliers — pursuant to a legitimate supplier diversification initiative or otherwise — has no bearing whatsoever on whether Cascade knew of Vantor's exclusive supply agreements with those three entities, whether Cascade intentionally disrupted those agreements, or whether Vantor suffered damages as a result.
Discovery in this case should be proportionately scoped to those three supplier relationships, the communications and conduct surrounding them, and the decisions that led to Cascade's alleged interference. The Court should deny Vantor's motion in its entirety.
II. VANTOR'S "PATTERN-AND-PRACTICE" ARGUMENT IS A LITIGATION TACTIC, NOT A COGNIZABLE DISCOVERY THEORY
A. Vantor's Complaint Does Not Allege a Pattern-and-Practice Claim
The operative complaint in this matter was filed on September 7, 2021. It identifies only three supplier relationships as the basis for Vantor's tortious interference claims: the exclusive supply agreement between Vantor and Hemsworth Consumer Products LLC, the exclusive supply agreement between Vantor and Tridale Manufacturing Inc., and the exclusive supply agreement between Vantor and Orion Lifestyle Brands Corp. These three agreements, and the conduct that Vantor alleges disrupted them, form the entirety of the factual predicate for Vantor's three causes of action.
Nowhere in the complaint does Vantor allege that Cascade engaged in a "pattern and practice" of systematically targeting Vantor's suppliers, or that Cascade pursued a broader scheme of anti-competitive conduct affecting entities beyond Hemsworth, Tridale, and Orion. The complaint contains no allegations regarding Cascade's relationships with any other suppliers. It does not reference a general course of tortious conduct. It does not assert claims on behalf of anyone other than Vantor itself, and it seeks damages measured exclusively by the losses allegedly flowing from the disruption of these three specific contractual relationships.
Having elected to frame its complaint in this manner — and having had ample opportunity over the past ten months to seek leave to amend — Vantor cannot now use the discovery process as a vehicle to construct a theory of liability that finds no support in its operative pleadings. The scope of permissible discovery is tethered to the claims and defenses actually at issue. While California's discovery rules are construed liberally, they do not grant a litigant carte blanche to rummage through an adversary's files in search of a new claim. As this Court is well aware, discovery is intended to illuminate the claims that have been pled, not to generate claims that have not.
Vantor's reply brief tacitly acknowledges this deficiency. Rather than pointing to specific allegations in its complaint that would support a pattern-and-practice theory, Vantor instead argues that such evidence would be "relevant" to its existing claims — a contention that Cascade addresses and refutes in Section II.B below. But the threshold problem remains: Vantor is seeking discovery to support a theory it has never pled. If Vantor believes that Cascade's broader supplier relationships are relevant to its claims, the proper course is to seek leave to amend the complaint to allege a pattern-and-practice theory, at which point the Court could assess the sufficiency of those allegations under applicable pleading standards. Vantor has not done so, and discovery should not be expanded to accommodate a theory that exists only in Vantor's motion papers.
Moreover, Vantor's strategic decision to pursue this discovery through a motion to compel — rather than through an amended complaint — is itself telling. Vantor apparently recognizes that a pattern-and-practice allegation would face significant scrutiny at the pleading stage, given the absence of any factual predicate in the existing record. It is far easier to persuade a court to authorize broad discovery, on the hope that something incriminating might emerge, than to allege specific facts supporting a broader theory of liability. But the discovery rules are not a mechanism for circumventing pleading requirements, and the Court should not permit Vantor to achieve through a motion to compel what it could not achieve through its complaint.
B. Pattern-and-Practice Evidence Is Irrelevant to the Elements of Tortious Interference
Even setting aside the pleading deficiency, Vantor's "pattern-and-practice" argument fails on its own terms because the evidence sought is irrelevant to any element of Vantor's tortious interference claims.
Under well-established California law, tortious interference with contractual relations requires proof of five elements: (1) a valid contract between the plaintiff and a third party; (2) the defendant's knowledge of that contract; (3) intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contract; and (5) resulting damages to the plaintiff. See Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148; Harborview Industries (1990) 50 Cal.3d 1118, 1126; Applied Equip. Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 514. Similarly, tortious interference with prospective economic advantage requires proof that the defendant engaged in wrongful conduct independently tortious or otherwise unlawful that disrupted an economic relationship the plaintiff reasonably expected to yield an economic benefit. See della Penna v. Crowne Albany Industries (1995) 11 Cal.4th 376, 393.
Each of these elements must be proven with respect to the specific contracts at issue in this case — and only those contracts. As applied here, the relevant agreements are:
(1) The Hemsworth Supply Agreement, executed on March 15, 2019, for a three-year term expiring March 14, 2022, pursuant to which Hemsworth Consumer Products LLC agreed to supply Vantor with exclusive access to certain home goods product lines;
(2) The Tridale Supply Agreement, executed on January 10, 2020, for a two-year term expiring January 9, 2022, pursuant to which Tridale Manufacturing Inc. agreed to supply Vantor with exclusive access to certain consumer electronics accessory product lines; and
(3) The Orion Supply Agreement, executed on July 1, 2018, for a four-year term expiring June 30, 2022, pursuant to which Orion Lifestyle Brands Corp. agreed to supply Vantor with exclusive access to certain personal care product lines.
Whether Cascade entered into supply agreements with other, unrelated suppliers — suppliers with whom Vantor had no contractual relationship and no reasonable expectation of future economic benefit — has no bearing on any of these elements. Such evidence does not tend to prove or disprove that valid contracts existed between Vantor and Hemsworth, Tridale, or Orion. It does not tend to prove or disprove that Cascade knew of those specific contracts. It does not tend to prove or disprove that Cascade engaged in intentional acts designed to disrupt those specific contracts. And it does not tend to prove or disprove that Vantor suffered damages as a result of any such disruption.
Vantor's reply attempts to bridge this gap by arguing that Cascade's broader supplier diversification initiative — referred to internally at Cascade as "Project Atlas," launched in February 2021 — is itself evidence of a "scheme" to poach Vantor's suppliers. This argument conflates lawful competitive activity with tortious conduct and fundamentally mischaracterizes the nature and scope of Project Atlas.
As the record evidence already produced in this litigation makes clear, Project Atlas was a legitimate business initiative designed to identify and onboard approximately twenty-five new suppliers across multiple product categories, including home goods, consumer electronics accessories, and personal care products. The initiative was conceived and approved by Cascade's executive leadership team in the ordinary course of business, in response to well-documented supply chain disruptions and vendor concentration risks that the COVID-19 pandemic had exposed across the retail industry. Cascade is a publicly traded, multi-channel retailer with approximately $6.8 billion in annual revenue and more than 340 retail locations nationwide. The decision to diversify its supplier base was a routine and unremarkable strategic initiative of the kind undertaken by major retailers throughout the industry — not a "scheme" to target Vantor or its suppliers.
The fact that three of the suppliers contacted during Project Atlas — Hemsworth, Tridale, and Orion — had pre-existing exclusive supply relationships with Vantor is the factual dispute at the heart of this litigation. Cascade denies that it knew of those exclusive supply agreements at the time it contacted those suppliers, and discovery into the circumstances surrounding those three specific interactions is entirely appropriate. But the fact that Cascade also contacted or contracted with other suppliers who had no exclusive supply relationship with Vantor — and as to whom no interference is alleged — is simply irrelevant. It proves nothing about Cascade's knowledge of or intent to disrupt the Hemsworth, Tridale, and Orion agreements.
Vantor's Section 17200 claim fares no better. The unfair competition law provides a broad equitable remedy, but it does not expand the scope of permissible discovery beyond what the underlying substantive claims support. See Glenrock Corporation (2003) 29 Cal.4th 1134, 1150 (Section 17200 claim must be predicated on an underlying unlawful, unfair, or fraudulent act). Here, Vantor's Section 17200 claim is derivative of its tortious interference claims and is premised on the same three supplier relationships. It does not independently authorize the sweeping discovery Vantor seeks.
C. Vantor Cites No Authority Supporting discovery of This Scope in a Tortious Interference Case
Vantor's reliance on discovery standards borrowed from the class certification context is entirely misplaced. This is not a class action. There is one plaintiff — Vantor Holdings Corp. — three identified supplier relationships, and three discrete causes of action. There is no putative class, no class representative, no commonality or typicality inquiry, and no need for the court to assess whether classwide patterns exist. The class-certification discovery framework exists to serve a specific procedural purpose that has no application here.
The cases cited by Vantor in its reply underscore this fundamental disconnect. Vantor relies principally on federal antitrust decisions involving allegations of industry-wide price-fixing conspiracies, where the nature of the claim itself requires proof of coordinated conduct across multiple transactions and market participants. Vantor also cites securities fraud cases applying the fraud-on-the-market presumption, where the relevant inquiry necessarily extends to the defendant's public statements and their effect on an entire market of investors. These contexts are fundamentally different from a bilateral tortious interference dispute between two companies over three identified supply contracts. In the antitrust and securities contexts, the very theory of liability presupposes that the defendant's conduct affected multiple parties and transactions; the scope of discovery naturally follows from the scope of the claim. Here, by contrast, the claims are tethered to three specific agreements and three specific suppliers. The scope of discovery should be correspondingly limited.
Vantor has not cited — because it cannot cite — a single case in which a California court authorized "pattern-and-practice" Discovery of the scope sought here in a tortious interference action. This is not surprising. Tortious interference is, by its nature, a claim that is proven contract by contract, relationship by relationship. Broad discovery into unrelated supplier relationships is neither authorized by the law of tortious interference nor warranted by the facts of this case.
III. THE REQUESTED DISCOVERY IS DISPROPORTIONATE TO THE NEEDS OF THE CASE
Even if Vantor's "pattern-and-practice" theory had some arguable relevance — which it does not — the discovery sought would be wildly disproportionate to the needs of this case. The parties have already engaged in extensive, robust, and costly discovery focused on the three supplier relationships at issue, and Vantor has failed to explain why the enormous additional burden of expanded discovery is justified by the claims and defenses actually in dispute.
A. The discovery Burden on Cascade Has Already Been Enormous
To date, Cascade has engaged in a comprehensive and good-faith discovery effort that has been anything but minimal. The scope of document collection, review, and production already undertaken in this matter reflects the seriousness with which Cascade has approached its discovery obligations:
• Documents Collected: Cascade has collected 452,316 documents from its custodians and enterprise systems, including email accounts, shared network drives, the company's SAP enterprise resource planning system, its procurement management platform (Ridgeline Industries ProcureOne), and certain archived repositories.
• Documents Reviewed: Of those collected documents, Cascade's legal team and contract review attorneys have completed first-level review of 198,740 documents, applying detailed relevance and privilege coding protocols developed in consultation with e-discovery counsel.
• Documents Produced: Cascade has produced 78,412 documents to Vantor, encompassing communications, memoranda, presentations, financial analyses, contracts, purchase orders, and internal reports relating to the Hemsworth, Tridale, and Orion supplier relationships, the Project Atlas initiative, and Cascade's procurement decision-making during the relevant period.
• Privilege Log: Cascade's privilege log currently contains 3,214 entries, each individually logged with the information required by California law, including the date of the document, its author and recipients, the general subject matter, and the specific privilege asserted.
• Vantor's Production: Vantor has produced 41,308 documents in this litigation — a fraction of Cascade's production, despite the fact that Vantor, as the plaintiff, bears the burden of proving its claims.
• Third-Party Productions: Third-party subpoena productions from Hemsworth Consumer Products LLC, Tridale Manufacturing Inc., and Orion Lifestyle Brands Corp. have yielded an additional 23,567 documents, which have been made available to both parties.
The existing discovery has been squarely focused on the three supplier relationships at issue, the Project Atlas planning and communications that touched upon those relationships, and Cascade's procurement decision-making processes. This is the appropriate and proportionate scope for a case involving three discrete tortious interference claims arising from three identified supply agreements.
Cascade has not engaged in gamesmanship or obstructionism. It has produced tens of thousands of documents responsive to Vantor's requests, including internal communications among senior procurement executives, board-level presentations regarding supplier diversification strategy, financial models assessing the commercial value of the Hemsworth, Tridale, and Orion relationships, and correspondence between Cascade's representatives and personnel at each of the three suppliers. This production provides Vantor with a robust evidentiary record from which to prove — or fail to prove — its claims.
B. Expanding discovery to All Cascade Supplier Relationships Would Require Review of Hundreds of Thousands of Additional Documents
Vantor's motion, if granted, would require Cascade to identify, collect, process, review, and produce documents relating to every one of its supplier relationships — an undertaking of staggering scope. Cascade maintains active supply relationships with hundreds of suppliers across its retail and e-commerce operations, spanning multiple product categories including home goods, consumer electronics and accessories, personal care and wellness products, apparel, sporting goods, seasonal merchandise, and food and beverage. These relationships are managed by dozens of procurement professionals across Cascade's regional and national buying teams.
The volume of potentially responsive documents associated with these relationships is enormous. Internal estimates prepared by Cascade's information technology department, in consultation with its e-discovery vendor Krane Investigations LLC, indicate that expanding the document collection to encompass all supplier relationships during the relevant time period would require the identification and processing of an estimated additional 600,000 to 800,000 documents. These documents reside across multiple data sources, including the email accounts of additional custodians not yet subject to collection, Cascade's procurement management platform, its vendor management system, contract repositories maintained by each regional buying office, and archived project files associated with the supplier diversification initiative.
The cost implications are equally staggering. Krane Investigations LLC has already incurred costs of approximately $487,000 in processing and hosting the existing document collection — a figure that reflects the substantial volume of data involved, the complexity of Cascade's enterprise systems, and the need for advanced processing techniques to de-duplicate, de-NIST, and index the collected material. Expanding the scope of collection as Vantor requests would, according to Krane's preliminary estimates, increase processing and hosting costs by an additional $650,000 to $900,000. When the costs of attorney review are added — at rates that, even using contract review attorneys, would amount to several hundred thousand dollars for a collection of this size — the total incremental cost of the expanded discovery would easily exceed $1.5 million.
Vantor's motion does not acknowledge these burdens. It does not estimate the volume of additional documents that would need to be collected and reviewed. It does not address the cost of expanded processing and hosting. It does not explain why Cascade should be required to bear these costs. And it does not explain why the information sought — documents relating to Cascade's supply relationships with entities that have nothing to do with Vantor's claims — is sufficiently important to justify this burden.
C. Proportionality Under California Law Requires Balancing Burden Against Need
The California discovery statutes and the case law interpreting them impose a proportionality requirement that the Court must apply in evaluating Vantor's motion. Under Code of Civil Procedure Section 2017.010, the scope of discovery extends to any matter "not privileged, that is relevant to the subject matter involved in the pending action . . . if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence." But this broad standard is subject to the proportionality limitations set forth in Sections 2017.020 and 2019.030, which authorize the court to limit discovery if it determines that "the burden, expense, or intrusiveness of that discovery clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence."
The California Supreme Court's decision in Williams v. Superior Court (2017) 3 Cal.5th 531 emphasized that proportionality is not merely a discretionary consideration but a substantive limitation on the scope of permissible discovery. The court held that the trial court must balance "the burden, expense, and intrusiveness of the discovery" against "the likelihood that the information sought will lead to the discovery of admissible evidence" and "the importance of the discovery in resolving the issues." Id. at 549. Courts have consistently applied these principles to deny or limit discovery requests that impose burdens disproportionate to the claims at issue. See, e.g., Calcor Space Facility, Inc. v. Superior Court (1997) 53 Cal.App.4th 216, 223–224; Gonzalez v. Superior Court (1995) 33 Cal.App.4th 1539, 1546; Obrey v. Johnson (1984) 161 Cal.App.3d 709, 717.
Application of these principles here compels denial of Vantor's motion. Even accepting Vantor's damages claim at face value — $87.4 million in total alleged damages, broken down as $34.2 million attributable to the Hemsworth relationship, $22.8 million attributable to the Tridale relationship, and $30.4 million attributable to the Orion relationship, with each figure based on projected multi-year revenue streams discounted at a rate of 8.5% — the damages arise solely from the alleged loss of three identified supplier relationships. Every dollar of Vantor's claimed damages is traceable to a specific contract with a specific supplier. Discovery into Cascade's unrelated supplier relationships adds nothing to the damages calculus and nothing to the liability analysis. It would not help the trier of fact determine whether Cascade knew of Vantor's exclusive supply agreements, whether Cascade intentionally disrupted those agreements, or whether Vantor was damaged as a result.
The burden of the expanded discovery, on the other hand, is enormous — conservatively estimated at more than $1.5 million in incremental costs, months of additional review time, and the diversion of Cascade's in-house legal resources from other matters. Under any reasonable proportionality analysis, the balance tips decisively against the discovery Vantor seeks.
IV. VANTOR'S SPECIFIC ARGUMENTS IN ITS REPLY ARE WITHOUT MERIT
Vantor's reply brief raises three specific arguments in support of its motion, none of which withstands scrutiny. Cascade addresses each in turn.
A. Vantor's Argument That "Other Supplier Relationships Show Cascade's Modus Operandi"
Vantor argues that if Cascade engaged in similar conduct with other suppliers — that is, if Cascade contacted or contracted with suppliers who had pre-existing exclusive supply agreements with third parties — it would demonstrate a "modus operandi" showing that Cascade's interference with Vantor's supplier relationships was intentional and knowing rather than inadvertent. In theory, this argument has a surface appeal: evidence that Cascade regularly targeted suppliers bound by exclusive agreements might, if it existed, tend to show that Cascade's conduct with respect to Hemsworth, Tridale, and Orion was deliberate rather than accidental.
But there is a critical problem with this argument: Vantor has offered no factual basis whatsoever for believing that any of Cascade's other supplier relationships involved interference with another party's exclusive supply agreements. Vantor's argument is entirely speculative. It rests on the assumption that, among Cascade's hundreds of supplier relationships, there must be some that involved the same type of conduct alleged in this case. But Vantor has identified no document, no witness, and no factual predicate supporting that assumption.
To the contrary, the existing discovery record affirmatively undermines Vantor's hypothesis. Of the 2,847 internal Cascade emails relating to Project Atlas that have been reviewed and produced in discovery, only 14 reference Vantor's existing supplier relationships with Hemsworth, Tridale, or Orion. Vantor has not identified a single document — from Cascade's production, from third-party productions, or from any other source — suggesting that Cascade targeted, or was even aware of, exclusive supply agreements between any of its other new suppliers and any third party. Not one.
The absence of any factual predicate is dispositive. Vantor's argument amounts to a textbook fishing expedition: lacking any evidentiary basis for its theory, Vantor asks the Court to authorize broad and burdensome discovery on the hope that something incriminating might emerge if Cascade is forced to turn over enough documents. This is precisely the type of discovery abuse that proportionality limits are designed to prevent. As the court observed in Digital Music News LLC v. Superior Court (2014) 226 Cal.App.4th 216, 230, a party seeking discovery must demonstrate a "reasonable belief" that the discovery will yield relevant evidence; mere speculation that relevant documents might exist somewhere in the responding party's files is insufficient.
Furthermore, even if Vantor could identify one or two additional supplier relationships in which Cascade allegedly interfered with a third party's exclusive supply agreement — which it has not — the probative value of such evidence would be marginal at best and would be vastly outweighed by the burden of identifying it. To find such evidence, Cascade would be required to review documents pertaining to hundreds of supplier relationships, the vast majority of which would yield nothing of relevance. The needle-in-a-haystack nature of Vantor's request is itself compelling evidence that the discovery sought is disproportionate.
B. Vantor's Argument That Cascade's Objections Are "Boilerplate"
Vantor's reply characterizes Cascade's discovery objections as "boilerplate" and argues that Cascade has failed to substantiate the burden it claims. This characterization is both inaccurate and unfair.
Cascade's objections are not boilerplate. They are specific, detailed, and substantiated by the facts of this case. In its opposition brief and supporting declarations, Cascade has:
(a) Identified the precise burden of the discovery already completed in terms of documents collected (452,316), documents reviewed (198,740), documents produced (78,412), and privilege log entries (3,214);
(b) Explained with specificity why the requested expanded discovery is not relevant to any claim or defense in this litigation, addressing each element of Vantor's tortious interference claims and demonstrating that evidence of Cascade's unrelated supplier relationships does not tend to prove or disprove any element;
(c) Provided declarations from Cascade's Director of Information Technology, Jennifer Kowalczyk, and from Krane Investigations LLC's project manager, Stephen Raines, quantifying the estimated cost and burden of the expanded discovery; and
(d) Demonstrated that the existing discovery scope has been robust and comprehensive, providing Vantor with a thorough evidentiary record relating to the three supplier relationships at issue, the Project Atlas initiative, and Cascade's procurement decision-making.
These are not boilerplate objections. They are the very type of specific, substantiated objections that the discovery rules contemplate and that this Court has repeatedly indicated it expects from the parties in this litigation. Vantor's dismissive characterization should be disregarded.
C. Vantor's Argument That Cascade Should Bear the Cost of Expanded discovery
Vantor's reply argues, in passing, that Cascade should bear the cost of the expanded discovery because Cascade is a large, well-resourced company that can afford it. This argument is legally meritless and factually irrelevant.
The question is not whether Cascade can afford to pay for the expanded discovery; the question is whether Cascade should be required to do so. Under California law, a party objecting to discovery on grounds of burden may seek a protective order shifting the costs to the requesting party. See Code Civ. Proc. § 2031.060(b). Even if the Court were inclined to permit some measure of expanded discovery — which Cascade submits it should not — the cost of that discovery should be borne by Vantor as the requesting party, given the disproportionate burden the discovery would impose and the speculative nature of Vantor's relevance theory.
Cascade should not be required to subsidize Vantor's litigation strategy of transforming a straightforward tortious interference case involving three identified supplier relationships into a sprawling, open-ended investigation of Cascade's entire supplier network. If Vantor wishes to pursue such an investigation, it should pay for it.
V. IF THE COURT IS INCLINED TO GRANT ANY EXPANDED DISCOVERY, IT SHOULD BE NARROWLY LIMITED
Cascade's primary position is that Vantor's motion should be denied in its entirety. The discovery already completed is comprehensive and proportionate to the claims at issue, and Vantor has failed to demonstrate any legal or factual basis for expanded discovery into Cascade's unrelated supplier relationships.
However, if the Court determines that any discovery beyond the three supplier relationships at issue is warranted — a determination that Cascade respectfully submits would be erroneous — Cascade requests that the Court impose strict limitations to cabin the scope and cost of any additional discovery. Specifically, Cascade proposes the following framework:
1. Numerical Limitation on Additional Supplier Relationships. Any expanded discovery should be limited to no more than five (5) additional supplier relationships identified by Vantor. Vantor should be required to make a particularized showing of relevance for each such relationship, demonstrating specific, articulable facts — not mere speculation — supporting a reasonable belief that the supplier had an exclusive supply agreement with a third party at the time Cascade contacted the supplier. In the absence of such a showing, the Court should not authorize discovery into any additional relationships.
2. Categorical Limitation on Documents. For any additional supplier relationships for which discovery is authorized, the categories of documents subject to production should be limited to communications between Cascade personnel and the supplier relating to any pre-existing exclusive supply agreements those suppliers may have had with third parties at the time of Cascade's initial contact. General procurement documents, purchase orders, pricing information, and other commercial terms of Cascade's agreements with those suppliers should be excluded from the scope of any expanded discovery, as such information has no relevance to Vantor's claims.
3. Temporal Limitation. Any expanded discovery should be limited to the period from February 2021 — the date of the launch of Project Atlas — through August 15, 2021 — the date of the last Cascade supply agreement at issue, specifically the Cascade–Tridale agreement executed during the relevant period. Documents pre-dating the launch of Project Atlas and post-dating the completion of the relevant supplier onboarding process are not relevant to Vantor's claims and should be excluded.
4. Cost-Shifting. Vantor should be required to bear the full costs of any expanded collection, processing, review, and production — including the costs of additional document processing and hosting through Krane Investigations LLC or another mutually agreed-upon e-discovery vendor, and the costs of attorney review of any additional documents collected. Cascade should not be required to subsidize the cost of discovery that it contends is unnecessary and that the Court has authorized, if at all, only over Cascade's objection.
These limitations represent the narrowest reasonable framework for any expanded discovery and would ensure that any additional discovery is proportionate to the needs of the case. Cascade reserves all rights to object to specific discovery requests within this framework on grounds of relevance, privilege, or undue burden.
VI. CONCLUSION
For the foregoing reasons, Vantor's motion to compel class-certification-style expanded discovery should be denied. The discovery Vantor requests is disproportionate to the claims at issue, irrelevant to any element of Vantor's causes of action, and designed to impose maximum burden on Cascade rather than to advance any legitimate claim or defense.
The discovery already completed in this litigation is more than sufficient to address the three supplier relationships and three causes of action at issue. The parties and third-party subpoena respondents have collectively produced over 143,000 documents, with Cascade alone having collected 452,316 documents, reviewed 198,740 documents, and produced 78,412 documents to Vantor. Third-party productions from Hemsworth, Tridale, and Orion have yielded an additional 23,567 documents. This record provides Vantor with a comprehensive evidentiary foundation from which to pursue its claims. It does not need — and the law does not entitle it to — unfettered access to Cascade's entire supplier network.
Cascade respectfully requests that the Court deny Vantor's motion in its entirety or, in the alternative, impose the narrow limitations described in Section V above. In either case, Cascade requests an award of the reasonable costs and fees incurred in opposing this motion, to the extent authorized by applicable law.
Dated: July 29, 2022
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
CALDERWOOD & HARKNESS LLP
By: ________
Douglas Carmichael Partner
Francesca Morano Partner
Yuki Nakamura Senior Associate
Carlos Espinoza Associate
600 South Grand Avenue, Suite 3200 Los Angeles, California 90071 Telephone: (213) 555-9400 Facsimile: (213) 555-9401
Attorneys for Defendant Cascade Retail Holdings Inc.
PROOF OF SERVICE
STATE OF CALIFORNIA, COUNTY OF LOS ANGELES
I, Carlos Espinoza, declare as follows:
I am an associate at Calderwood & Harkness LLP, counsel for Defendant Cascade Retail Holdings Inc. in the above-captioned matter. I am a citizen of the United States and am employed in the County of Los Angeles, State of California. I am over the age of eighteen (18) years and am not a party to this action. My business address is 600 South Grand Avenue, Suite 3200, Los Angeles, California 90071.
On July 29, 2022, I caused a true and correct copy of the foregoing document, entitled REPLY BRIEF OF DEFENDANT CASCADE RETAIL HOLDINGS INC. IN FURTHER SUPPORT OF ITS OPPOSITION TO PLAINTIFF VANTOR HOLDINGS CORP.'S MOTION TO COMPEL CLASS-CERTIFICATION-STYLE EXPANDED DISCOVERY, to be served on the following parties by the methods indicated below:
Via Electronic Service Through the Court's Electronic Filing System and Email:
Martin Kessler, Esq. Natalie Whitfield, Esq. KESSLER, BRANDT & WHITFIELD LLP 1999 Avenue of the Stars, Suite 2800 Los Angeles, California 90067 Telephone: (310) 555-7200
Email: mkessler@kbwlaw.com; nwhitfield@kbwlaw.com
Attorneys for Plaintiff Vantor Holdings Corp.
Via Electronic Service Through the Court's Electronic Filing System and Email (for informational purposes):
Diana Prescott, Esq. WORTHAM & ADAIR LLP 611 West Sixth Street, Suite 2400 Los Angeles, California 90017 Telephone: (213) 555-3100
Email: dprescott@worthamadair.com
Local Counsel
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
Executed on July 29, 2022, at Los Angeles, California.
________________________________________
Carlos Espinoza
Page
I. INTRODUCTION | 1
II. VANTOR'S "PATTERN-AND-PRACTICE" ARGUMENT IS A LITIGATION TACTIC, NOT A COGNIZABLE DISCOVERY THEORY | 3
A. Vantor's Complaint Does Not Allege a Pattern-and-Practice Claim | 3
B. Pattern-and-Practice Evidence Is Irrelevant to the Elements of Tortious Interference | 5
C. Vantor Cites No Authority Supporting discovery of This Scope in a Tortious Interference Case | 8
III. THE REQUESTED DISCOVERY IS DISPROPORTIONATE TO THE NEEDS OF THE CASE | 9
A. The discovery Burden on Cascade Has Already Been Enormous | 10
B. Expanding discovery to All Cascade Supplier Relationships Would Require Review of Hundreds of Thousands of Additional Documents | 12
C. Proportionality Under California Law Requires Balancing Burden Against Need | 14
IV. VANTOR'S SPECIFIC ARGUMENTS IN ITS REPLY ARE WITHOUT MERIT | 16
A. Vantor's Argument That "Other Supplier Relationships Show Cascade's Modus Operandi" | 16
B. Vantor's Argument That Cascade's Objections Are "Boilerplate" | 18
C. Vantor's Argument That Cascade Should Bear the Cost of Expanded discovery | 19
V. IF THE COURT IS INCLINED TO GRANT ANY EXPANDED DISCOVERY, IT SHOULD BE NARROWLY LIMITED | 20
VI. CONCLUSION | 22
Page
Applied Equip. Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503 | 6
Calcor Space Facility, Inc. v. Superior Court (1997) 53 Cal.App.4th 216 | 14, 15
della Penna v. Crowne Albany Industries (1995) 11 Cal.4th 376 | 6
Digital Music News LLC v. Superior Court (2014) 226 Cal.App.4th 216 | 15
Gonzalez v. Superior Court (1995) 33 Cal.App.4th 1539 | 14
Greenly v. Cooper (1978) 77 Cal.App.3d 382 | 5
Glenrock Corporation (2003) 29 Cal.4th 1134 | 7
Obrey v. Johnson (1984) 161 Cal.App.3d 709 | 14
Harborview Industries (1990) 50 Cal.3d 1118 | 6
Reeves v. Hanlon (2004) 33 Cal.4th 1140 | 6
Williams v. Superior Court (2017) 3 Cal.5th 531 | 14, 15
Page
Cal. Bus. & Prof. Code § 17200 | 2, 7
Cal. Code Civ. Proc. § 2017.010 | 14
Cal. Code Civ. Proc. § 2017.020 | 15, 20
Cal. Code Civ. Proc. § 2019.030 | 15
Cal. Code Civ. Proc. § 2031.060 | 20

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

VANTOR HOLDINGS CORP.,

CASCADE RETAIL HOLDINGS INC.,

TABLE OF CONTENTS

TABLE OF AUTHORITIES

I. INTRODUCTION

III. THE REQUESTED DISCOVERY IS DISPROPORTIONATE TO THE NEEDS OF THE CASE

IV. VANTOR'S SPECIFIC ARGUMENTS IN ITS REPLY ARE WITHOUT MERIT

VI. CONCLUSION

CALDERWOOD & HARKNESS LLP

CALDERWOOD & HARKNESS LLP

PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

Record

Parties

Dates

Amounts