ORDER

GREGORY G. HOLLOWS, Magistrate Judge.

Presently before the court is plaintiff's motion to withdraw admissions, which was filed on December 1, 2011 and came on regularly for hearing on January 12, 2012. (Dkt. No. 42.) On January 5, 2012, the parties filed their joint statement regarding the discovery disagreement pursuant to E.D. Cal. L.R. 251 (dkt. nos. 63, 641), along with declarations by counsel (dkt. nos. 62, 66).

At the hearing, Robert Weems appeared on behalf of plaintiff, and Matthew Ruggles and Eric Ostrem appeared on behalf of defendants. Having reviewed the parties' joint statement, the court's record in this matter, and the applicable law, the court now issues the following order.

BACKGROUND

Facts Giving Rise to the Litigation

The background facts are taken from the operative complaint filed on May 13, 2011. (Dkt. No. 1.) Plaintiff North American Lubricants Company ("NALC") is a manufacturer and wholesale distributor of lubricating oils, primarily passenger car motor oil in the "do it for me" market. (See Complaint, Dkt. No. 1 ["Compl."] ¶ 31.) NALC services its customers through a network of authorized blenders, distributors and/or dealers of its products and services. (Compl. ¶ 44.) These customers market, sell, install, and maintain plaintiff's products for their customers, but these entities may also market, sell, install, and maintain products manufactured by plaintiff's competitors. (Id.)

Defendant Shane Terry was the president of NALC from November 2005 until he resigned on January 26, 2011 and formed a new company, defendant United Petroleum Company, LLC ("UPC"), which offers products and/or services that compete with NALC. (Compl. ¶¶ 8, 45, 45, 47, 49.) At least two of NALC's former national account sales managers, defendants Goldman and Hensing, also joined UPC in the first half of 2011. (Compl. ¶¶ 10, 11.) The remaining defendants are other executives, members, and/or directors of UPC. (Compl. ¶¶ 13-16.)

In this action, NALC alleges that defendants committed a variety of wrongful conduct, including defendants Terry, Goldman, and Hensing accessing and transmitting NALC's confidential information to one or more of defendants before leaving their employment with NALC; soliciting NALC's employees and customers; using NALC's customer contact information, customer account information, and sales and pricing data; and using logos, advertising, and trade dress for UPC products that are confusingly similar to NALC's trademark and advertising. (Compl. ¶¶ 47-48, 59, 99-101, 109, 116.) NALC asserts the following causes of action: (1) violation of the Computer Fraud and Abuse Act; (2) violation of the Arizona Trade Secrets Act; (3) misappropriation/conversion; (4) breach of contract; (5) breach of implied covenant of good faith and fair dealing; (6) tortious interference with contract; (7) unfair competition (Lanham Act sections 32 and 43(A)); (8) unfair competition (common law); (9) unfair business practices; and (10) breach of fiduciary duty by corporate officers/managers. (Compl. ¶¶ 94-172.)

The parties have already held the Fed. R. Civ. P. 26(f) conference and commenced discovery.

Facts Related to the Discovery Dispute

On October 13, 2011, defendants served plaintiff with its Requests for Admission, Set One, ("RFAs") by mail, containing the following 13 requests:

(Dkt. No. 62, Ex. A; Dkt. No. 63 at 5.) Both parties agree that plaintiff's responses to the RFAs were due November 15, 2011, but that plaintiff's responses were untimely served on November 21, 2011. (Dkt. No. 62, ¶ 2; Dkt. No. 63 at 5.); see also Fed. R. Civ. P. 6(d), 36(a)(3). Plaintiff asserts that its "failure to timely file responses was due to inadvertent miscalendaring of the response date by reference to the California Rules of Civil Procedure." (Dkt. No. 63 at 6.)

On November 23, 2011, plaintiff filed its initial motion to withdraw the deemed admissions, noticed for hearing on December 15, 2011. (Dkt. No. 40.) After defendants' counsel pointed out a conflict between the hearing date and a previously scheduled deposition (dkt. no. 62, ex. B), plaintiff ultimately withdrew that motion and filed the instant motion with a January 12, 2012 hearing date. (Dkt. Nos. 42, 43.) In the course of the parties' meet-and-confer efforts, defendants agreed to permit withdrawal of the deemed admissions as to Request Nos. 1-5 and 13.2 However, Request Nos. 6-12 remain at issue.

DISCUSSION

With regards to requests for admission, "[a] matter is admitted unless, within 30 days after being served, the party to whom the request is directed serves on the requesting party a written answer or objection addressed to the matter and signed by the party or its attorney." See Fed. R. Civ. P. 36(a)(3). "A matter admitted under this rule is conclusively established unless the court, on motion, permits the admission to be withdrawn or amended." Fed. R. Civ. P. 36(b). "[T]he court may permit withdrawal or amendment if it would promote the presentation of the merits of the action and if the court is not persuaded that it would prejudice the requesting party in maintaining or defending the action on the merits." Id.; see also Hadley v. United States, 45 F.3d 1345, 1348 (9th Cir. 1995) ("Two requirements, therefore, must be met before an admission may be withdrawn: (1) presentation of the merits of the action must be subserved, and (2) the party who obtained the admission must not be prejudiced by the withdrawal.") "[A] district court's failure to consider these factors will constitute an abuse of discretion." Conlon v. United States, 474 F.3d 616, 625 (9th Cir. 2007).

However, Rule 36(b) is permissive — even if its two factors are satisfied (for withdrawing an admission), a court may still deny relief to withdraw the admissions. See e.g. Conlon, 474 F.3d at 625 ("Therefore, when a district court finds that the merits of the action will be subserved and the nonmoving party will not be prejudiced, it `may' allow withdrawal, but is not required to do so under the text of Rule 36(b).") "[T]he district court may consider other factors, including whether the moving party can show good cause for the delay and whether the moving party appears to have a strong case on the merits." Id.

Presentation of the Merits

"The first half of the test in Rule 36(b) is satisfied when upholding the admissions would practically eliminate any presentation of the merits of the case." Conlon, 474 F.3d at 622 (citing Hadley, 45 F.3d at 1348). "Thus, the question is not whether allowing the deemed admissions would have any effect on a trial on the merits of the case; it is whether it would eliminate the need to reach a trial on the merits at all." Carden v. Chenega Security & Protection Servs., LLC, 2011 WL 1344557, at *2 (E.D. Cal. Apr. 8, 2011).

In Conlon, the plaintiff alleged that the Parole Commission was negligent in issuing a warrant for his arrest resulting in his incarceration. Id. at 619. In the course of discovery, the plaintiff failed to respond to the government's requests for admission. Id. at 619-20. The requests included solicitations to admit that the "issuance of the [. . .] warrant was not caused by any negligent or wrongful act or omission of any employee of the United States"; that the "arrest was not caused by any negligent or wrongful act or omission by any employee of the United States"; and that no portion of the incarceration "was caused by any negligent or wrongful act or omission of any employee of the United States." Id. The Ninth Circuit held that the plaintiff satisfied the first prong of the Rule 36(b) analysis, because the government relied on these admissions in its subsequent motion for summary judgment, which was granted. Id. at 622. In particular, the deemed admissions eliminated any need for presentation on the merits because, pursuant to Rule 36, plaintiff had "admitted that neither the issuing of the warrant, his arrest or his subsequent incarceration were caused by negligent or wrongful acts or omissions of United States employees." Id.

Here, defendants argue that plaintiff has not met the first prong of Rule 36(b), because the matters deemed admitted by plaintiff's late responses would not completely eliminate a trial on the merits. While Request Nos. 1-5 and 13 are undoubtably dispositive of large portions of plaintiff's case, defendants have already agreed that plaintiffs may withdraw those admissions. By contrast, defendants contend, Request Nos. 6-12 serve to narrow the scope of factual issues concerning plaintiff's claims, but do not entirely limit plaintiff's ability to present the merits of its claims. The problem with this argument is that several of the remaining requests can be construed as eliminating the presentation of the merits as to core issues in the litigation.

For example, Request Nos. 6-8, if admitted, would establish that defendants Terry, Goldman, and Helsing did not access "any NALC computer or database" after they left NALC's employment.3 It is unclear whether the admissions only refer to defendants somehow accessing the official NALC computers or databases after their employment ceased, or whether the admissions would include defendants' alleged access to any unlawful copies of databases and customer lists they may have obtained prior to leaving NALC's employment. A large part of plaintiff's case relates to allegations that defendants gathered confidential and trade secret information from plaintiff's computer systems while still employed by NALC, transmitting the information to themselves and others, and subsequently utilizing that information in competing with NALC. (See e.g. Complaint, Dkt. No. 1, ¶¶ 99-101, 112-16, 121-22, 127-31.) Thus, an admission that defendants never accessed any NALC database (including any unlawful copies of files and customer lists) after they left NALC's employment would significantly undermine plaintiff's claims.

While this is arguably not as severe a case as Conlon, and some of plaintiff's claims could potentially survive the deemed admissions, it nonetheless seems clear that the merits of major portions of plaintiff's claims would be subserved. Accordingly, the court concludes that the first prong of Rule 36(b) is satisfied.

Prejudice

Under the second prong of Rule 36(b), the party relying on the deemed admission has the burden of proving prejudice. Conlon, 474 F.3d at 622. "The prejudice contemplated by Rule 36(b) is not simply that the party who obtained the admission will now have to convince the factfinder of its truth. Rather, it relates to the difficulty a party may face in proving its case, e.g., caused by the unavailability of key witnesses, because of the sudden need to obtain evidence with respect to questions previously deemed admitted." Id. (internal citation omitted).

Here, defendants concede that no significant prejudice to them would result if withdrawal of the admissions is permitted. (Dkt. No. 63 at 9-10.) The pre-trial scheduling conference is currently set for February 2, 2012 (dkt. no. 44), defendants have not filed motions for summary judgment based on the deemed admissions, and there is no imminent discovery cut-off date. Additionally, defendants did not rely on the deemed admissions for a significant amount of time, because plaintiff served its responses to the RFAs only a few days after they were due and brought a motion to withdraw the deemed admissions shortly after. Additionally, defendants would be in possession of the evidence concerning whether they accessed the data base after leaving plaintiff's employ, as they would know what they did or did not do. Therefore, the second prong of Rule 36(b) is also satisfied. While defendants correctly sought to eliminate what they knew, or did not know, as an issue via requests for admissions, the fact remains that not much discovery needs to be done on data base access (although defendants remain free to query plaintiff about what it knows on the subject).

Accordingly, both factors under Rule 36(b) suggest that plaintiff's motion should be granted.

Other Factors

As discussed above, even if Rule 36(b)'s two factors are satisfied, a court may still deny relief. See e.g. Conlon, 474 F.3d at 625. "[T]he district court may consider other factors, including whether the moving party can show good cause for the delay and whether the moving party appears to have a strong case on the merits." Id.

In this case, plaintiff has not shown good cause for the delay in responding to the RFAs. Plaintiff merely asserts that its "failure to timely file responses was due to inadvertent miscalendaring of the response date by reference to the California Rules of Civil Procedure." (Dkt. No. 63 at 6.) As defendants point out, plaintiff's simple professional negligence is not a good excuse. Nevertheless, the tardy response appears to be inadvertent, and plaintiff served responses only a few days after the due date. Furthermore, the court is unable, based on the record before it, to conclude that plaintiff's claims have no merit. As such, there is no factor strongly militating in favor of a departure from the two-prong Rule 36(b) analysis outlined above. Consequently, plaintiff's motion to withdraw the deemed admissions to Request Nos. 6-12 will be granted. The deemed admissions to Request Nos. 1-5 and 13 will also be withdrawn pursuant to the parties' stipulation and order signed concurrently with this order.

The court recognizes, however, that this is not the first time that plaintiff has been dilatory and neglectful with respect to discovery in this case. Defendants were previously forced to bring a motion to compel further initial disclosures and further responses to an interrogatory. (Dkt. No. 31.) In resolving that motion, the court found that many of plaintiff's disclosures and responses were deficient, plaintiff failed to confer diligently and in good faith with respect to the discovery dispute, plaintiff failed to participate meaningfully in the creation of a joint statement, plaintiff submitted its own untimely statement regarding the discovery disagreement one day prior to the hearing, and failed to appear at the hearing when the case was called.4 (See Dkt. No. 38.) Consequently, plaintiff was sanctioned. (Id.) Plaintiff is cautioned that future dilatory discovery conduct and missed deadlines will not be tolerated and may result in the imposition of further sanctions.

CONCLUSION

For the foregoing reasons, IT IS HEREBY ORDERED THAT:

1. Plaintiff's motion to withdraw admissions (dkt. nos. 42, 64) is granted;

2. The deemed admissions in response to Request Nos. 6-12 are withdrawn;

3. The deemed admissions in response to Request Nos. 1-5 and 13 are withdrawn pursuant to the parties' stipulation and order signed concurrently with this order; and

4. No issue was raised concerning the substance of the late filed responses to the requests for admission, and those responses shall now stand.