131 Nev., Advance Opinion 65
IN THE SUPREME COURT OF THE STATE OF NEVADA
KAZUO OKADA, No. 68310
Petitioner,
vs.
THE EIGHTH JUDICIAL DISTRICT FILED
COURT OF THE STATE OF NEVADA,
IN AND FOR THE COUNTY OF CLARK; OCT 1 5 2 15
AND THE HONORABLE ELIZABETH K.
CLERK cmsue.
GOFF GONZALEZ, DISTRICT JUDGE, BY
Respondents, CFBEF DE
and
VVYNN RESORTS LIMITED, A NEVADA
CORPORATION; ELAINE WYNN; AND
STEPHEN WYNN,
Real Parties in Interest.
Original petition for a writ of prohibition or mandamus
challenging a district court order denying a motion for a protective order.
Petition denied.
Holland & Hart, LLP, and J. Stephen Peek, Bryce K. Kunimoto, Robert J.
Cassity, and Brian G. Anderson, Las Vegas; BuckleySandler, LLP, and
David S. Krakoff, Benjamin B Klubes, Joseph J. Reilly, and Adam Miller,
Washington, D.C.,
for Petitioner.
Pisanelli Bice, PLLC, and Todd L. Bice, James J. Pisanelli, and Debra L.
Spinelli, Las Vegas; Wachtell, Lipton, Rosen & Katz and Paul K. Rowe
and Bradley R. Wilson, New York, New York; Glaser Weil Fink Howard
Avchen & Shapiro, LLC, and Robert L. Shapiro, Los Angeles, California,
for Real Party in Interest Wynn Resorts Limited.
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Jolley Urga Woodbury & Little and William R. Urga and David J. Malley,
Las Vegas; Munger, ToIles & Olson, LLP, and Ronald L. Olson, Mark B.
Helm, Jeffrey Y. Wu, and Soraya C. Kelly, Los Angeles, California,
for Real Party in Interest Elaine P. Wynn.
Campbell & Williams and Donald J. Campbell and J. Colby Williams, Las
Vegas,
for Real Party in Interest Stephen A. Wynn.
BEFORE THE COURT EN BANC.'
OPINION
By the Court, HARDESTY, C.J.:
This writ petition arises from litigation between plaintiff
Wynn Resorts and a former member of its board of directors, defendant
Kazuo Okada. Wynn Resorts noticed Okada's deposition for ten days in
Las Vegas even though Okada resides in Hong Kong and owns businesses
in Tokyo, Japan. Okada filed a motion for a protective order, requesting
that his deposition be taken in Tokyo or, alternatively, Hong Kong, and
that it be shortened to three days. The district court denied his motion,
and Okada filed this writ petition, contending that the district court
ignored a common-law presumption that his deposition should take place
'The Honorable James E. Wilson, Jr., District Judge in the First
Judicial District Court, and The Honorable Steve L. Dobrescu, District
Judge in the Seventh Judicial District Court, were designated by the
Governor to sit in place of The Honorable Ron Parraguirre, Justice, and
The Honorable Kristina Pickering, Justice, who voluntarily recused
themselves from participation in the decision of this matter. Nev. Const.
art. 6, § 4(2).
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where he resides and that the district court ignored NRCP 30(d)(1)'s
presumption that depositions should be limited to one day.
While we elect to entertain this writ petition because it
presents important issues of law that need clarification, we nevertheless
deny Okada's request for writ relief. As for the deposition's location, we
agree with the district court's rejection of Okada's argument regarding the
common-law presumption and conclude that the district court was within
its discretion in determining that Okada failed to demonstrate good cause
for having his deposition moved to a location other than Las Vegas. As for
the deposition's duration, we conclude that the district court properly
exercised its discretion in departing from NRCP 30(d)(1)'s presumptive
one-day time frame and adopting Wynn Resorts' ten-day proposal.
FACTS
Kazuo Okada is a Japanese citizen who lives in Hong Kong
and is a former member of Wynn Resorts' board of directors. Okada is also
the president, secretary, and treasurer of Aruze USA, a financial holding
company with its principal place of business in Tokyo. Aruze, which is a
wholly owned subsidiary of Universal Entertainment Corporation, a
Japanese corporation, owns 20 percent of Wynn Resorts' stock.
In 2010, Wynn Resorts began an investigation to determine
whether Okada was engaged in business dealings in the Philippines that
might render him an "Unsuitable Person" to be on Wynn Resorts' board of
directors, which, if demonstrated, would jeopardize Wynn Resorts'
entitlement to certain gaming licenses. Contemporaneous with Wynn
Resorts' investigation, Okada filed suit against Wynn Resorts in Nevada
state court in which he sought an order compelling Wynn Resorts to
produce certain corporate documents. As part of that lawsuit, which the
parties refer to as the "Books and Records" case, and which was randomly
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assigned to the same district court judge presiding over the underlying
matter, Okada traveled to Las Vegas to be deposed. By all accounts,
Okada's deposition in the Books and Records case was fraught with
difficulties, based in large part on the need to translate each deposition
question into Japanese and each of Okada's answers into English, the
presence of a second translator to verify the accuracy of the first
translator's translation, and what Wynn Resorts characterizes as
"obstructionist behavior" on the part of Okada's attorneys.
It is unclear how or if the Books and Records litigation was
resolved, but by 2012, the investigation into Okada's business dealings
had led Wynn Resorts' board of directors to conclude that Okada was
indeed an "Unsuitable Person." According to Wynn Resorts' interpretation
of its articles of incorporation, this status authorized Wynn Resorts to
redeem the stock shares that Okada (through Aruze and Universal) owns.
Consequently, Wynn Resorts' board voted to redeem all of Okada's stock
and issued him a promissory note with a value of just under $2 billion.
When Okada refused Wynn Resorts' tender, Wynn Resorts
instituted the underlying action against Okada, Aruze, and Universal in
which Wynn Resorts asked for, among other things, a declaration that it
had complied with its articles of incorporation in deeming Okada an
"Unsuitable Person" and in forcing the redemption of his Wynn Resorts
stock shares. Aruze and Universal filed counterclaims seeking, among
other things, the opposite declaratory relief. Aruze also asserted claims
against individual members of Wynn Resorts' board of directors, including
real parties in interest Stephen Wynn and Elaine Wynn, who, in turn,
asserted counterclaims against Aruze.
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As part of the discovery process, Wynn Resorts filed a notice of
deposition of Okada, which scheduled Okada's deposition in Las Vegas
over the course of ten days. Okada moved for a protective order,
challenging both the location and duration of the deposition. He asserted
that as a defendant, his deposition should presumptively be conducted
where he resides (Hong Kong) or at his codefendant companies' places of
business (Tokyo) and that the deposition should not exceed three days.
At a hearing on Okada's motion, Okada attempted to convince
the district court that federal courts apply a "presumption" in favor of
holding a defendant's deposition where the defendant resides or, in the
case of a corporate representative being deposed, where the corporation
has its principal place of business. In response, the district court
expressed doubt, stating, "Where do you get that? Where do you get this
presumption? Because it's not how it is in Nevada State Court." Later on,
the district court indicated that it "might order [the parties] to go to Tokyo
under certain circumstances, but this probably isn't one of them."
As for the duration of the deposition, Okada argued that a
ten-day deposition was excessive, pointing out that NRCP 30(d)(1)
presumptively limits a deposition "to 1 day of 7 hours." Okada conceded
that in light of the case's factual complexities, and given the need for
translators, a one-day deposition would not allow sufficient time.
Consequently, Okada offered to stipulate to a three-day deposition,
evidently based on the premise that the case's complexities would justify
an additional day and that the need for translators would justify another
additional day. In response, the district court judge observed, the "[o]ne
day rule hasn't applied in my court since it passed. I've suspended it in
every case." The district court then proceeded to discuss with the parties
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whether Okada's three-day proposal was feasible in light of the problems
in the previous deposition in the Books and Records case. Finding that
three days would be insufficient, the district court indicated that the ten-
day deposition in Las Vegas should proceed as scheduled but that Okada
could seek to shorten it if he believed that Wynn Resorts was prolonging
the deposition simply to harass him The district court also indicated that
one of the ten days should be allocated to Elaine Wynn so that she could
depose Okada with respect to her claims.
The district court entered a written order denying Okada's
motion, and Okada filed this petition for a writ of prohibition or
mandamus, asking that this court direct the district court to "resolve [his]
Motion based on the correct legal standards" This court stayed Okada's
deposition pending our resolution of his petition. 2
DISCUSSION
Under certain circumstances, "a writ of mandamus may be
issued to compel the district court to vacate or modify a discovery order." 2
Valley Health Sys., LLC v. Eighth Judicial Dist. Court, 127 Nev. 167, 171,
252 P.3d 676, 678 (2011). Generally, "[Wiscovery matters are within the
district court's sound discretion, and we will not disturb a district court's
ruling regarding discovery unless the court has clearly abused its
discretion." Club Vista Fin. Servs., LLC v. Eighth Judicial Dist. Court,
2 Following oral argument in this matter, this court entered an order
denying Okada's writ petition, lifting the stay, and indicating that this
opinion would follow.
3Although "a writ of prohibition is a more appropriate remedy for
the prevention of improper discovery," Valley Health, 127 Nev. at 171 n.5,
252 P.3d at 678 n.5, Okada is not seeking to prevent improper discovery
but only to restrict the location and duration of that discovery.
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128 Nev., Adv. Op. 21, 276 P.3d 246, 249 (2012); see Hyde & Drath v.
Baker, 24 F.3d 1162, 1166 (9th Cir. 1994) ("A district court has wide
discretion to establish the time and place of depositions."). "[Vs/le generally
will not exercise our discretion to review discovery orders through [writ
petitions], unless the challenged discovery order is one that is likely to
cause irreparable harm, such as [(1)] a blanket discovery order, issued
without regard to the relevance of the information sought, or [(2)1 an order
that requires disclosure of privileged information." Club Vista, 128 Nev.,
Adv. Op. 21, 276 P.3d at 249. "Nevertheless, in certain cases,
consideration of a writ petition raising a discovery issue may be
appropriate if an important issue of law needs clarification and public
policy is served by this court's invocation of its original jurisdiction." Las
Vegas Sands Corp. v. Eighth Judicial Dist. Court, 130 Nev., Adv. Op. 61,
331 P.3d 876, 878-79 (2014) (internal quotation omitted).
Here, although the challenged order does not fall within either
of this court's two presumptive categories for considering a discovery-
related writ petition, we exercise our discretion to consider Okada's
petition because it raises important issues of law that need clarification.
Id. Namely, although Okada asks this court to direct the district court to
resolve his motion for a protective order "based on the correct legal
standards," this court has not previously considered what those standards
are. Additionally, while the district court's ultimate decision in this
matter is supported by the record as explained herein, we note that
district courts should make specific findings on the record when ruling on
motions implicating the issues addressed in this opinion See Lioce v.
Cohen, 124 Nev. 1, 19-20, 174 P.3d 970, 982 (2008) (recognizing that
specific findings promote meaningful review of a lower court's
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discretionary ruling). Accordingly, this opinion sets forth basic
frameworks for district courts to use in addressing issues regarding the
location and duration of depositions of parties. 4
Deposition location
NRCP 30 governs generally the taking of depositions, but the
rule does not set forth any restrictions as to where the deposition must
take place. See NRCP 30(a)(1) ("A party may take the testimony of any
person, including a party, by deposition upon oral examination. . .
NRCP 30(b)(1) ("The notice shall state the time and place for taking the
deposition and the name and address of each person to be examined. . . .").
Although the absence of any location-based restrictions suggests that "the
examining party may set the place for the deposition of another party
wherever he or she wishes," 8A Charles Alan Wright, Arthur R. Miller &
Richard L. Marcus, Federal Practice and Procedure §2112 (3d ed. 2010),
the examining party's wishes are "subject to the power of the court to
grant a protective order." Id. Protective orders, in turn, are governed by
NRCP 26(c)(2), which permits a district court, "for good cause shown," to
"protect a party. . . from annoyance, embarrassment, oppression, or undue
burden or expense" by ordering that a deposition "may be had only on
specified terms and conditions, including a designation of the time or
place."
4 BecauseOkada is a party, we do not address the application of
NRCP 30 to a nonparty.
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Thus, NRCP 26(c)'s language indicates that the deponent
must show "good cause" for not being required to travel to the deposition
location. Cf. Cadent Ltd. v. 3M Unitek Corp., 232 F.R.D. 625, 629 (C.D.
Cal. 2005) (recognizing that FRCP 26(c), which is the analog to NRCP
26(c), requires the party seeking the protective order to establish "good
cause"). Nonetheless, courts have recognized that a "general rule" has
evolved, independent of Rule 26(c), under which the deposition of a
defendant takes place where the defendant resides or, in the case of a
corporate defendant's Rule 30(b)(6) representative, where the corporation
has its principal place of business. 5 See New Medium Techs. LLC v. Barco
5 Courts describe this general rule as having evolved from the
principle that, "in the absence of special circumstances, a party seeking
discovery must go where the desired witnesses are normally located."
Farquhar v. Shelden, 116 F.R.D. 70, 72 (RD. Mich. 1987) (citing Salter v.
Upjohn Co., 593 F.2d 649, 671 (5th Cir. 1979)). Notably, this general rule
does not apply when it is the plaintiff who is seeking to avoid being
deposed in the forum where he or she has instituted the underlying action,
the reason being that the plaintiff picked the forum and should not be
heard to complain about the inconvenience of being deposed there. See,
e.g., O'Sullivan v. Rivera, 229 F.R.D. 187, 189 (D. N.M. 2004); Farquhar,
116 F.R.D. at 72; Petersen v. Petersen, No. 14-1516, 2014 WL 6774293, at
*1 (E.D. La. Dec. 2, 2014).
In this respect, we note that a defendant who files a compulsory
counterclaim is treated as a defendant, whereas a defendant who files a
permissive counterclaim is treated as a plaintiff. See, e.g., Wis. Real
Estate Inv. Tr. v. Weinstein, 530 F. Supp. 1249, 1253 (E.D. Wis. 1982);
Zuckert V. Berkliff Corp., 96 F.R.D. 161, 162 (N.D. Ill. 1982); Pinkham v.
Paul, 91 F.R.D. 613, 615 (D. Me. 1981). Here, although Okada did not
assert any counterclaims against Wynn Resorts, Aruze and Universal did.
But Wynn Resorts only noticed Okada's deposition personally, not in his
capacity as Aruze's or Universal's NRCP 30(b)(6) representative. As a
result, we need not consider whether Okada must testify in Clark County
because of the counterclaims asserted by Aruze or Universal.
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N.V., 242 F.R.D. 460, 466 (N.D. Ill 2007) (summarizing cases and
recognizing this general rule).
Based on this general rule, Okada contends that a
"presumption" exists in favor of holding a defendant's deposition where he
resides or where the corporation has its principal place of business and
that it is the plaintiffs burden to demonstrate why the deposition should
be held elsewhere. See Culver v. Wilson, No. 3:14-CV-660-CRS-CHL, 2015
WL 1737779, at *3 (W.D. Ky. April 16, 2015) (observing that the "general
rule[ ] create[s] a presumption that there is good cause [under Rule 26(c)]
for a protective order when a deposition is noticed for a location other than
the defendant's place of residence" (internal quotation omitted)); see also
In re Outsidewall Tire Litig., 267 F.R.D. 466, 471-73 (E.D. Va. 2010)
(recognizing the existence of a presumption); Six W. Retail Acquisition,
Inc. v. Sony Theatre Mgmt. Corp., 203 F.R.D. 98, 107 (S.D.N.Y. 2001)
(same). We agree with the district court's rejection of Okada's
presumption argument, as it runs counter to the language in NRCP 26(c),
which requires the person seeking a protective order from the district
court to establish "good cause" for obtaining that protection. Thus, the
district court in this case properly declined to place an affirmative burden
on Wynn Resorts to justify why Okada's deposition should be taken in Las
Vegas.
This is not to say, however, that we disavow the general rule
altogether, as the defendant's residence or corporation's principal place of
business factors into several of the considerations that district courts
should evaluate when addressing a defendant's motion for a protective
order regarding the location of a deposition. See 7 James Wm. Moore et
al., Moore's Federal Practice § 30.20(1)(b)(ii) (3d ed. 2015) (recognizing that
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the "presumptions as to where the deposition should take place are merely
decisional rules that facilitate the determination when other relevant
factors do not favor one side over the other"). In this respect, we endorse
the approach taken by courts that consider the three factors of "cost,
convenience and litigation efficiency" in determining whether a protective
order is warranted to change the location of a defendant's deposition. See,
e.g., Buzzeo v. Bd. of Educ., Hempstead, 178 F.R.D. 390, 393 (E.D.N.Y.
1998) ("[T]he general 'good cause' standard of Rule 26(c) of the Federal
Rules of Civil Procedure—as shown through an analysis of cost,
convenience and litigation efficiency—is the appropriate standard under
which to evaluate the motion [for a protective order]."); Mill-Run Tours,
Inc. v. Khashoggi, 124 F.R.D. 547, 550-51 (S.D.N.Y. 1989) (considering
these three factors in ruling on a motion for a protective order); Harrier
Techs., Inc. v. CPA Glob. Ltd., No. 3:12CV167 (WWE), 2014 WL 4537458,
at *3 (D. Conn. Sept. 11, 2014) (same); Scooter Store, Inc. v. Spinlife.com ,
LLC, No. 2:10-cv-18, 2011 WL 2118765, at *2-4 (S.D. Ohio May 25, 2011)
(same).
Similarly, we endorse the approach taken by courts that
consider the following five factors:
(1) the location of counsel for the parties in the
forum district; (2) the number of corporate
representatives a party is seeking to depose;
(3) the likelihood of significant discovery disputes
arising, which would necessitate resolution by the
forum court; (4) whether the persons sought to be
deposed often engage in travel for business
purposes; and (5) the equities with regard to the
nature of the claim and the parties' relationship.
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7 Moore, supra, § 30.20(1)(b)(ii) (setting forth factors and compiling cases
that have applied those factors). While we note that the five-factor inquiry
appears better suited to analyzing an NRCP 30(b)(6) deposition than that
of an individual defendant, we emphasize that both the three-factor
inquiry and the five-factor inquiry provide a nonexhaustive list of factors
that are to be considered regarding the location of a defendant's
deposition, and that district courts have wide discretion in resolving
disputes relating to the location of a deposition. 6 See Club Vista, 128 Nev.,
Adv. Op. 21, 276 P.3d at 249 ("Discovery matters are within the district
court's sound discretion ...."); see also Hyde & Drath, 24 F.3d at 1166 ("A
district court has wide discretion to establish the time and place of
depositions."). These factors take into consideration the defendant's
residence or principal place of business, but they also provide a broader
scope of analysis than a general rule favoring deposing the defendant
where he or she resides. Additionally, as opposed to a general rule that
puts the burden on the party seeking discovery, these factors are more in
line with NRCP 30(a), which does not express a preference for the location
of a deposition, and NRCP 26(c), which permits a court to enter a
protective order designating the time and place of a deposition when the
party whose deposition has been noticed shows good cause for the court to
do so.
6 For
instance, although it was not raised as an issue in this case,
some courts have resolved such disputes by requiring the nontraveling
party to pay the expenses of the traveling party. See New Medium, 242
F.R.D. at 468-69; 8A Wright & Miller, supra, § 2112 (noting that this may
be an effective means of resolving such disputes).
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In this case, the record demonstrates that these factors
influenced the district court's decision-making process. For instance, the
district court's comment that it "might order [the parties] to go to Tokyo
under certain circumstances, but this probably isn't one of them," was
preceded by a comment from Wynn Resorts' attorney regarding the cost,
convenience, and efficiency of requiring translators, videographers, and
both parties' Las Vegas-based attorneys to travel to Tokyo instead of
requiring only Okada to travel to Las Vegas. Similarly, the district court
recognized the potential for discovery disputes to arise based upon the
"obstructionist behavior" by Okada's attorneys in his Books and Records
deposition and the logistical difficulties inherent in resolving those
disputes if the parties and the district court were separated by a 16-hour
time difference. Moreover, the district court pointed out that the equities
favored Wynn Resorts, as Okada was capable of traveling to Las Vegas for
his Books and Records deposition when he was seeking affirmative relief
from a Nevada court, and no evidence clearly demonstrated that he would
be prejudiced by having to do so again.
Thus, although the district court did not make specific
findings in its order, the record demonstrates that the relevant factors
were implicated in the district court's determination that Okada did not
establish good cause to justify his deposition being held somewhere other
than Las Vegas. We therefore perceive no abuse of discretion in the
district court's decision to deny Okada's motion for a protective order, and
we deny Okada's request for writ relief with respect to the location of his
deposition.
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Deposition duration
NRCP 30(d)(1) provides that "[u]nless otherwise stipulated or
ordered by the court, a deposition is limited to 1 day of 7 hours." The rule
also provides that "[t]he court or discovery commissioner must allow
additional time consistent with Rule 26(b)(2) if needed to fairly examine
the deponent or if the deponent, another person, or any other
circumstance impedes or delays the examination." NRCP 26(b)(2), in turn,
sets forth three general considerations that district courts should take into
account in determining whether the length of a deposition should exceed
NRCP 30(d)(1)'s presumptive one-day time frame . (1) whether the
discovery being "sought is unreasonably• cumulative or duplicative, or is
obtainable from some other source that is more convenient, less
burdensome, or less expensive"; (2) whether the party seeking the
discovery has already had an "ample opportunity. . . to obtain the
information sought"; and (3) whether the discovery being sought "is
unduly burdensome or expensive, taking into account the needs of the
case, the amount in controversy, limitations on the parties' resources, and
the importance of the issues at stake in the litigation."
In his writ petition, Okada points to the district court judge's
comment that the "[o]ne day rule hasn't applied in my court since it
passed" and contends that the district court necessarily abused its
discretion in permitting Wynn Resorts to take his deposition over the
course of ten days. But because Okada acknowledges that more than one
day will be "needed to fairly examine [him]," NRCP 30(d)(1), the district
court's comment regarding NRCP 30(d)(1)'s presumptive one-day time
frame has no bearing on whether the district court arbitrarily or
capriciously exercised its discretion in denying Okada's motion for a
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protective order. 7 Moreover, the district court expressly stated that Okada
could move to have the deposition shortened if it became apparent that the
deposition questions were becoming duplicative or unduly burdensome,
and Okada does not suggest that Wynn Resorts has already had an
opportunity to obtain the information it is seeking from another source.
Nor do the parties dispute that the amount in controversy is substantial
and that the issues at stake are important. Thus, the district court's
decision to permit a ten-day deposition, contingent on Okada being
permitted to move to shorten it, aligns with the relevant general
considerations under NRCP 26(b)(2).
In addition to NRCP 26(b)(2)'s general considerations, we note
that the district court's decision is supported by other specific factors that
justify deviating from NRCP 30(d)(1)'s presumptive one-day time frame,
namely: (1) "the witness needs an interpreter," (2) "the examination will
cover events occurring over a long period of time," (3) "the witness will be
questioned about numerous or lengthy documents," and (4) "the need for
each party [in a multiparty case] to examine the witness." 8A Wright &
Miller, supra, § 2104.1 (quoting FRCP 30(d) advisory committee's note
(2000)). Even Okada acknowledges that these factors would have justified
a three-day deposition, and given the district court's familiarity with the
parties, not only in this case but in the Books and Records case, we are
unable to conclude that the district court arbitrarily or capriciously
7 To
be clear, however, the one-day rule does apply to all courts.
Whether a court finds a basis to deviate from the rule is the issue.
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exercised its discretion in rejecting Okada's three-day proposal and
deciding that his deposition could last ten days. We therefore deny
Okada's request for writ relief with respect to the duration of his
deposition.
/Su c&t,ti , C.J.
Hardesty
We concur:
J. J.
Douglas Cherry
J. J.
Saitta Giirboifg
, D.J. , D.J.
Wilson Dobrescu
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