Case Information
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA TLALOC MUNOZ, MIGUEL RUIZ, Case No.: 3:22-cv-01269-AJB-AHG EDGAR CORONA, and STEVEN ORDER RESOLVING JOINT SNAVELY, MOTION FOR DETERMINATION individually and on behalf of themselves OF DISCOVERY DISPUTE AND and all others similarly situated, DENYING PLAINTIFFS’ MOTION
Plaintiffs, TO COMPEL
v. [ECF No. 82]
EARTHGRAINS DISTRIBUTION, LLC and BIMBO BAKERIES USA, INC.,
Defendants.
Before the Court is Plaintiff Tlaloc Munoz, Miguel Ruiz, Edgar Corona, and Steven Snavely’s (collectively, “Plaintiffs”) and Defendant Earthgrains Distribution, LLC and Bimbo Bakeries USA, Inc.’s (collectively, “Defendants”) Joint Motion for Determination of Discovery Dispute. ECF No. 82. Plaintiffs seek an order from the Court requiring Defendants to produce documents in response to Request for Production (“RFP”) Nos. 22 and 28. . For the reasons set forth below, Plaintiffs’ motion to compel is DENIED without prejudice .
I. BACKGROUND
On May 2, 2025, Plaintiffs filed the operative amended complaint in this matter, alleging that they were misclassified as independent contractors and, thus, that Defendants failed to pay Plaintiffs overtime, failed to provide meal and rest breaks, failed to provide compliant wage statements, deducted certain amounts from wages, and failed to reimburse necessary business expenses. ECF No. 52. Plaintiffs are current and former Distributers and bring their action on behalf of themselves and a class of similarly situated people. Id . Defendant Earthgrains Baking Companies, LLC (“Earthgrains”) is a wholly owned subsidiary of Defendant Bimbo Bakeries USA, Inc. (“BBU”), which is a wholly owned subsidiary of Grupo Bimbo, S.A.B. de C.V. (“Grupo Bimbo” or “parent company”). ECF No. 82-3 at 6; see ECF No. 11-2 at 24. As such, Grupo Bimbo is the ultimate parent company of both Earthgrains and BBU. Id .
Plaintiff Munoz served his second set of RFPs on Defendants. Of those, RFP No. 22 seeks:
DOCUMENTS and ESI reflecting how Defendants or their parents/sister corporations report revenues and expenses, including but not limited to quarterly or annual reports that capture how Defendants and their parents/sister corporations document their gross revenues and their expenses including distribution expenses.
Email to Chambers (July 30, 2025, at 4:39 PM); see also ECF No. 82 at 10. RFP No. 28 seeks:
DOCUMENTS and ESI discussing title and risk of loss for bakery products that California DISTRIBUTORS stock on retail shelves including but not limited to Defendants’ and their parent/sister corporations’ revenue recognition analysis documents that been effect from 2016 through present (by in effect meaning the last updated version that existed from 2016 through present). .
On July 28, 2025, the parties notified the Court that they disagreed about Defendants’ responses to Plaintiff Munoz’s RFP Nos. 22 and 28. Email to Chambers (July 28, 2025, at 9:21 PM); see Chmb.R. at 2. The Court held a discovery conference on August 1, 2025. ECF No. 75. The Court found it appropriate to issue a briefing schedule. ECF No. 76. The parties timely filed their Joint Motion for Determination of Discovery Dispute on August 18, 2025. ECF No. 82. This order follows.
II. LEGAL STANDARD
The Federal Rules of Civil Procedure permit parties to obtain nonprivileged
information if it is (1) relevant to any party’s claim or defense, and (2) proportional to the
needs of the case. F ED . R. C IV . P. 26(b). Courts have broad discretion to determine
relevance for discovery purposes.
Doherty v. Comenity Capital Bank
, No. 16cv1321-H-
BGS,
Information must also be “proportional to the needs of the case” to fall within the
scope of permissible discovery. F ED . R. C IV . P. 26(b)(1). When analyzing the
proportionality of a party’s discovery requests, a court should consider the importance of
the issues at stake in the action, the amount in controversy, the parties’ relative access to
the information, the parties’ resources, the importance of the discovery in resolving the
issues, and whether the burden or expense of the proposed discovery outweighs its likely
benefit. . “The 2015 amendments to Rule 26(b)(1) emphasize the need to impose
‘reasonable limits on discovery through increased reliance on the common-sense concept
of proportionality.’”
Roberts v. Clark Cnty. Sch. Dist.
,
The party seeking to compel discovery has the burden of establishing that its request
satisfies the relevancy requirements of Rule 26.
Seegert v. Rexall Sundown
, No. 17-cv-
01243-JAH-JLB, 2019 WL 12044514, at *3 (S.D. Cal. March 26, 2019);
see Bryant v.
Ochoa
, No. 07CV200-TM-PCL, 2009 WL 1390794, at *1 (S.D. Cal. May 14, 2009).
“Thereafter, the party opposing discovery has the burden of showing that the discovery
should be prohibited, and the burden of clarifying, explaining or supporting its objections.”
Seegert
,
District courts have broad discretion to manage discovery.
Laub v. United States
DOI
,
/ /
/ /
/ / 1 III. RELEVANCE
Plaintiffs seek documents that analyze how Defendants and their parent company report and recognize revenues. ECF No. 82 at 4. [1] Plaintiffs seek this information to test who Defendants and their parent corporation view as their actual “customer”—i.e., whether it is the Plaintiff-Distributors, as Defendants allege; or the retailers, as Plaintiffs allege. ECF No. 82 at 4–5. Plaintiffs contend that revenue recognition analysis documents will show the scope of Defendants’ “relative control of the operation,” which relates to the first two prongs of the ABC test as to whether Plaintiffs should be considered employees. Id . at 5. Plaintiffs also argue that because Grupo Bimbo acts as a guarantor to Plaintiffs’ Distribution Agreements, Grupo Bimbo’s accounting policies are relevant and should be made available. . at 8. The Court finds Plaintiffs’ argument persuasive and concludes that this information goes to the merits of Plaintiffs’ claims regarding misclassification. Thus, the Court finds that Plaintiffs have met their burden to establish that the information sought by RFP Nos. 22 and 28 is relevant. The Court also finds that the information is proportional to the needs of the case. The documents are important to the issues at stake in the action, Plaintiffs do not otherwise have access to the information, and the amount in controversy reflects a class action with eight causes of action and over one hundred class members. See ECF No. 52 at 8.
Defendants argue that RFP Nos. 22 and 28 are “disproportionate to the needs for class certification.” ECF No. 82 at 11. [2] However, as the Court has instructed the parties many times, “[f]act and class discovery are not bifurcated.” ECF No. 43 at 1; ECF No. 71 at 3. When discovery is not bifurcated, “the parties are permitted to conduct discovery 1 relevant to both class certification and the merits of the case.” Hawkins v. Kroger , No. 15cv2320-JM-BLM, 2019 WL 4416132, at *3 (S.D. Cal. Sept. 16, 2019). Defendant’s conclusory objection as to proportionality ignores the Court’s express direction in this regard. See Lucas v. Jos. A. Bank Clothiers, Inc ., No. 14cv1631-LAB-JLB, 2015 U.S. Dist. LEXIS 189140, at *2 (S.D. Cal. Aug. 6, 2015) (“The Court overrules Defendant’s objection that its communications regarding pricing strategy are not relevant to class certification. Discovery in this case is not bifurcated, and Defendant has not met its burden of showing that producing the communications at issue prior to a ruling on class certification would be unduly burdensome. [3] ”); In re Toys “R” Us-Delaware, Inc ., No. ML-08-1980-MMM- FMOx, 2010 WL 4942645, at *5 (C.D. Cal. July 29, 2010) (overruling defendant’s objection that the discovery sought was premature because it did not relate to class certification). As such, Defendants’ conclusory objection does not persuade the Court that Plaintiffs’ RFPs are not proportional to the needs of the case.
IV. POSSESSION, CUSTODY, OR CONTROL
The Court will next address Defendants’ assertion that they do not have possession, custody, or control of the requested documents.
A. Legal Standard
Pursuant to Federal Rule of Civil Procedure 34, a party must produce relevant, non-
privileged documents in its “possession, custody, or control.” F ED . R. C IV . P. 34(a)(1). The
phrase “‘possession, custody, or control’ is in the disjunctive and only one of the numerated
requirements need be met.”
Soto
, 162 F.R.D. at 619 (citation omitted);
see Nugent v.
Secretlab US, Inc.
, No. 22-cv-8944-RFK-PHK,
With regard to “possession” or “custody” of a document, courts typically refer to a
party’s “actual” possession or custody, or “physical” possession or custody.
Nugent
, 2024
WL 4331812, at *4 (collecting cases). Further, “[a] party having actual possession of
documents must allow discovery even if the documents belong to someone else; legal
ownership of the documents is not determinative.”
Stone v. Vasquez
, No. 1:05-cv-1377-
JAT,
“Control” is defined as “the legal right to obtain documents upon demand.”
In re
Citric Acid Litig.
,
Central to the question of control “is the relationship between the party and [] entity
having actual possession of the documents.”
Seegert
,
(1) whether the corporations have interlocking corporate structure and management; (2) whether the corporations operate as a single unit in all aspects of the relevant business; (3) whether the corporations have identical stockholders and directors; (4) whether the subsidiary acted as the agent of the parent in the relevant transaction; (5) whether the subsidiary can secure documents from the parent to meet its own business needs; (6) whether the subsidiary has some ownership interest in the parent; (7) and other factual inquiries that are case specific.
Id. ; see Cryptography Rsch., Inc. v. Visa Int’l Serv. Ass’n , No. C04-04143-JW-HRL, 2005 WL 8162416, at *2 n.2 (N.D. Cal. Aug. 4, 2005) (describing factors and also explaining that “[a] showing that the subsidiary is the ‘alter ego’ of the parent corporation is another possible way to prove that this ‘legal right’ exists”).
B. Parties’ Positions Plaintiffs argue that Defendants have actual possession or custody of Grupo Bimbo’s accounting documents. ECF No. 82 at 6. Plaintiffs contend that, because BBU’s president, Tony Gavin, is a member of Grupo Bimbo’s steering committee, “presumably Mr. Gavin has access to Grupo Bimbo’s annual reports in addition to the underlying financial data and memorandums that more deeply analyze the same topics presented in the annual reports.” Id . Plaintiffs also contend that Mr. Gavin could access the documents “through central repositories or shared computer systems.” Id .
Plaintiffs also argue that Defendants have control of Grupo Bimbo’s accounting documents because Grupo Bimbo “directly asserts itself into the relationship between Plaintiffs and Defendants” by guaranteeing Defendants’ performance. ECF No. 82 at 7. Specifically, Plaintiffs contend that Defendants structure the Distribution Agreements sent to potential distributors “as a franchise opportunity which is guaranteed by Grupo Bimbo and relies on Grupo Bimbo’s audited financial statements.” ECF No. 82 at 3; see ECF No. 11-2 at 21 (Defendants’ Franchise Disclosure Document (“FDD”), stating that “Grupo Bimbo guarantees E[arthgrains]’s obligations to our distributors (franchisees) under our distribution (franchise) agreements”); Id . at 113 (Defendants’ FDD, stating that “our performance obligations to you under the terms of the Distribution Agreement are unconditionally guaranteed by our ultimate parent, Grupo Bimbo”); Id . at 258 (Exhibit to Defendants’ FDD, representing that Grupo Bimbo “absolutely and unconditionally guarantees the performance by Earthgrains”). Plaintiffs also point to Grupo Bimbo having consolidated finances that include reporting about Defendants. ECF No. 82 at 4, 8. Additionally, Plaintiffs assert that, since BBU’s president is on Grupo Bimbo’s steering committee, there is an overlap in directors and management that supports a finding of control. . at 4; see ECF No. 82-7 at 2 (Mr. Gavin listed as steering committee “board member” on Grupo Bimbo’s website); ECF No. 82-4 at 213 (Mr. Gavin listed as member of steering committee on Grupo Bimbo’s 2023 annual report). Plaintiffs also highlight that, as president of BBU, Mr. Gavin reports directly to Grupo Bimbo’s Executive Vice President, Mark Bendix. ECF No. 82-8 at 5. Plaintiffs argue that Defendants impermissibly “accept Grupo Bimbo’s audited financials in place of their own and its guarantee of the performance under the contract, but on the other hand disclaim any legal ability to get additional financial and accounting information from Grupo Bimbo[.]” ECF No. 82 at 8.
Defendants contend that they do not have control over the documents sought by Plaintiffs because Defendants and Grupo Bimbo “are separate companies, with separate employees, documents, and accounting departments;” and, thus, Defendants do not have a legally enforceable right to demand documents from Grupo Bimbo. ECF No. 82 at 9. Defendants argue that they do not have a heightened relationship with their parent corporation. Id . at 13–14. Defendants emphasize that Grupo Bimbo is a foreign company, based in Mexico. Id . at 10. Defendants also point out that Grupo Bimbo has a separate legal team from Defendants’ legal team, including separate outside counsel. Id . at 13. Defendants represent that no BBU employees are on Grupo Bimbo’s Board of Directors and there are no shared executives, directors, or employees. Id . at 14. Though Mr. Gavin is on Grupo Bimbo’s steering committee, Defendants represent that the steering committee serves “to discuss strategic global operations to ensure the corporate family is aligned,” which is not related to Grupo Bimbo’s accounting or financials. Id . at 13–14.
Defendants also contend that they do not have possession or custody of the documents. Defendants emphasize that they do not need to access Grupo Bimbo’s accounting documents to carry out their own financial reporting, partly because the companies operate independently and partly because Grupo Bimbo’s documents are in Spanish. ECF No. 82 at 14. Defendants refute Plaintiffs’ claim that Mr. Gavin could access Grupo Bimbo’s revenue recognition documents on a shared document repository, explaining that the companies have separate document depositories and even members of Defendants’ accounting teams do not have access to Grupo Bimbo’s working financial documents. Id . For example, Defendants represent that Darrell Miller, BBU’s Vice President, Controller, and Treasurer, only has access to a global intranet site where Grupo Bimbo publishes policies, not working financial documents. .
C. Discussion Here, Plaintiffs have not met their burden to establish that Defendants have possession, custody, or control of Grupo Bimbo’s documents. The Court will first address whether Defendants have “control.”
As to the first factor, whether the corporations have interlocking corporate structure
and management, the President of BBU reports directly to Grupo Bimbo’s Executive Vice
President and serves on Grupo Bimbo’s steering committee. ECF No. 82-4 at 213; ECF
No. 82-7 at 2; ECF No. 82-8 at 5. Courts have declined to find control in cases with stronger
evidence of interlocking corporate management than the instant matter.
See, e.g.
,
M.G. v.
Bodum USA, Inc
., No. 19-cv-01069-JCS, 2020 WL 1667410, at *2 (N.D. Cal. April 3,
2020) (finding no control although “all of [subsidiary’s] employees report to [parent
company] and [subsidiary] sends finance, sales, and logistics information to [parent
company] on a weekly basis” and although “[parent company] is involved when
[subsidiary] is sued for personal injuries caused by the device,” because that “merely
describe[s] a fairly typical relationship between a distributor subsidiary, a manufacturing
subsidiary, and their parent corporation and do not establish a legal right to obtain the
documents Plaintiff seeks.”);
Micron Tech.
,
As to the second factor, whether the corporations operate as a single unit in all
aspects of the relevant business, Plaintiffs argue that Grupo Bimbo’s consolidated finances
and reporting support a finding of control. However, without more, this factor weighs
against a finding of control.
See Nugent
,
As to the third factor, whether the corporations have identical stockholders and
directors, the only overlapping employee is BBU’s President, who also serves on Grupo
Bimbo’s steering committee. That is not sufficient to establish control.
See, e.g.
,
Dugan v.
Lloyds TBS Bank, PLC
, No. 12-cv-02549-WHA-NJV,
As to the fourth factor, whether the subsidiary acted as the agent of the parent in the
relevant transaction, Plaintiffs assert that Grupo Bimbo acts as the guarantor for Defendants
in their relationship with Plaintiffs. This, however, misses the mark because the test is
focused on control and not merely some financial relationship.
Ehrlich v. BMW of N. Am.,
LLC
, No. CV-10-1151-ABC-PJWx,
As to the fifth factor, whether the subsidiary can secure documents from the parent
to meet its own business needs, Plaintiffs’ allegations regarding document access were
rebutted by Defendants. For example, though Plaintiffs suggested that Mr. Gavin has
access to Grupo Bimbo’s annual reports and underlying financial data “through central
repositories or shared computer systems,” (ECF No. 82 at 6), Defendants represent that is
not the case. ECF No. 82 at 14;
see ASUSTeK Computer Inc. v. Round Rock Rsch.
, LLC,
No. 12-cv-02099-JST-NC,
As to the sixth factor, whether the subsidiary has some ownership interest in the
parent, Plaintiffs assert that Defendants are wholly owned subsidiaries of Grupo Bimbo.
This also falls short of the required showing for control.
See Nugent
,
Accordingly, the Court “concludes that Defendants cannot be compelled to produce the documents in question because based on the evidence presently before the Court, it has not been established that they have possession or control, or the right to control and obtain, the documents requested.” See Thomas , 2007 WL 4302974, at *16 (denying motion to compel because plaintiff had not met its burden to prove that a former employee had control over its former employer’s policy documents, and directing the parties “to meet and confer in good faith to determine what arrangements, if any, can be made to facilitate the production of the requested discovery” since declarations had been provided establishing who other custodians may be).
V. CONCLUSION
For the reasons set forth above, the Court DENIES without prejudice Plaintiffs’ motion to compel. ECF No. 82. Here, Plaintiffs did meet their burden to show that Defendants have possession, custody, or control over the documents. However, the Court is cognizant that discovery is ongoing and “Defendants also will be producing a corporate witness pursuant to Rule 30(b)(6) that can speak generally to Defendants’ revenue recognition processes.” Email to Chambers (July 28, 2025, at 9:21 PM). Thus, Plaintiffs may raise the issue again if they are able to uncover additional evidence through discovery to support their position as to possession, custody, or control.
IT IS SO ORDERED.
Dated: August 26, 2025
Notes
[1] Due to discrepancies between original and imprinted page numbers, page numbers for 25 docketed materials cited in this Order refer to those imprinted by the court’s electronic case filing system. 26
[2] Defendants also argue that Plaintiffs’ RFPs are cumulative and overbroad. ECF No. 82 at 27 11. The Court disagrees. The RFPs are narrowly tailored and directed to relevant information as discussed further herein.
[5]
[3] The Court notes that Defendants likewise state in a conclusory fashion that RFP Nos. 22
17
and 28 are “burdensome.” ECF No. 82 at 11. However, the party “claiming that a discovery
18
request is unduly burdensome must allege specific facts which indicate the nature and
extent of the burden, usually by affidavit or other reliable evidence.”
Laryngeal Mask Co.
19
v. Ambu A/S
, No. 07cv1988-DMS-NLS, 2009 WL 10672487, at *2 (S.D. Cal. Jan. 27,
20
2009) (quoting
Jackson v. Montgomery Ward & Co.
,
[6]