Unreported / Non-Citable
Background
Arun Sharma, a former employee, sued his former employer Anaergia Services, LLC, its parent Anaergia, Inc., and two executives, Andrew Benedek and Brett Hodson, in California state court. His seventeen causes of action allege, among other things, that he was unable to sell his company shares, that Benedek agreed he would receive severance that was never paid, and that he was terminated after sending a whistleblower email. These are allegations only, and the order makes no findings on them. Defendants removed the case to the Southern District of California on diversity grounds. Anaergia, Inc., Hodson, and Benedek (the Responding Defendants) were formally served in July and August 2026, and each moved to dismiss for lack of personal jurisdiction.
Sharma served written discovery and deposition notices on the Responding Defendants, who contended that substantive discovery was premature while the jurisdictional motions were pending. After the parties reached an impasse, Magistrate Judge Janet A. Cabral held a discovery conference on October 6, 2026, concluded that only discovery pertinent to personal jurisdiction was appropriate at that time, and set a deadline for a motion to compel. Sharma then moved to compel one request, identical for all three defendants: all credit card statements for accounts in the defendant's name from August 2024 through August 2025, with dollar amounts fully redactable and account numbers redactable to the last four digits. He argued the statements would objectively show where defendants live and operate, and that redactions and an existing protective order addressed confidentiality. Defendants responded that transaction location alone does not establish jurisdiction, that the request was disproportionate, and that it invaded privacy. Sharma also argued that Anaergia, Inc. and Hodson waived their objections by responding late, and he sought sanctions.
The Court’s Holding
The court denied the motion to compel in a discovery order. Applying Rule 26(b)(1), it assumed for argument's sake that credit card transaction data could help establish personal jurisdiction, but explained that relevance is only half of the inquiry, because the likely benefit must also be weighed against the burden and expense. Even with Sharma's proposed redactions, statements showing what each defendant spends money on, where, and how often were found highly burdensome and invasive of privacy. The court noted that Sharma had rejected defense counsel's offer of a special interrogatory identifying any California transactions, a less invasive method it considered sufficient to answer the jurisdictional question.
The court further found the likely benefit minimal. Citing authority requiring a colorable basis for personal jurisdiction before jurisdictional discovery, and rejecting discovery based on a mere hunch, it concluded that Sharma offered no evidence supporting jurisdiction and instead assumed the statements would supply it. That assumption was the kind of fishing expedition those limits are meant to prevent.
On waiver, the court found the objections of Anaergia, Inc. (four days late) and Hodson (nine days late) untimely but declined to find them waived. It reasoned that courts retain authority to relieve a late party from waiver, that Sharma was not unduly prejudiced by a minimal delay at an early stage, and that so harsh a consequence was unwarranted where Sharma had not yet made a colorable showing of jurisdiction. It added that even if objections were waived, waiver does not make irrelevant or disproportionate discovery discoverable. Because the motion failed, the sanctions request was also denied.
Key Takeaways
- A party seeking jurisdictional discovery should offer some evidence supporting a colorable basis for personal jurisdiction, because a hunch that discovery might reveal forum contacts is not enough.
- Even if financial records are relevant, courts weigh their privacy intrusion and burden against their likely benefit, and redactions may not cure the problem.
- Rejecting a less intrusive alternative, such as an interrogatory identifying forum transactions, can weaken a motion to compel.
- Discovery objections served a few days late may be excused when the case is early and the requesting party shows no undue prejudice.
- Waiver of objections does not make irrelevant or disproportionate discovery discoverable.
Why It Matters
This is an unpublished magistrate judge discovery order, not a final judgment, so it carries no precedential weight and is at most persuasive. It resolves only the motion to compel the credit card statements and the related sanctions request.
The Responding Defendants' motions to dismiss for lack of personal jurisdiction remain pending, and the order decides neither jurisdiction nor the merits. Practitioners should note that privacy and proportionality objections can defeat requests for personal financial records even when a party argues the opposing side waived its objections, and that narrower alternatives are favored.