On August 28, 2012, the SEC filed this securities enforcement action against the defendants under 15 U.S.C. §§ 78u(d) and 78u(e). Summarized below are the facts alleged in the complaint relevant to the motions before the court.

Sanofi-Aventis (“Sanofi”) is a French pharmaceutical company based in Paris, France, and Chattem, Inc. (“Chattem”) is a publicly-traded corporation located in Chattanooga, Tennessee. In September 2009, the CEOs of the two companies met to discuss potential strategic relationships. By mid-November 2009, the two companies were engaged in negotiations that would result in Sanofi purchasing Chattem at a price per share significantly higher than that at which Chattem was trading.

In November 2009, members of Chattem's board of directors were advised of Sanofi's interest in acquiring Chattem, as well as the terms of the proposed purchase. Beginning in December 2009, one of the members of the Chattem board of directors had a series of conversations and meetings with Thomas D. Melvin, Jr., a licensed certified public accountant (“CPA”), to determine how to limit his personal tax liability that would result from Sanofi's offer and the forced exchange of his options in Chattem stock. During the course of their conversations and meetings, the board member disclosed material nonpublic information about the impending tender offer to Melvin, who subsequently shared the information with Cain and Jinks. After learning of the material nonpublic information from Melvin, Cain purchased large amounts of Chattem securities. Cain then advised Doffing of the pending purchase of Chattem, sharing the material nonpublic information he learned from Melvin. Doffing subsequently purchased large amounts of Chattem securities. Cain also caused another individual to purchase shares of Chattem securities based on the material nonpublic information he learned from Melvin. After learning of the material nonpublic information from Melvin, Jinks purchased large amounts of Chattem securities. Jinks also caused another individual to purchase shares of Chattem securities based on the material nonpublic information he learned from Melvin.

*2 On December 21, 2009, prior to the markets opening, Chattem announced that it had entered into an agreement to be acquired by Sanofi. Under the agreement, Sanofi agreed to make a tender offer for all of Chattem's outstanding shares at a share price of $93.50 per share. The tender offer price was significantly higher than the closing share price on the prior trading day, Friday, December 18, 2009. On December 21, 2009, Chattem's share price closed at $93.02 and trading volume increased by almost 3,270% to 10.3 million shares. Following the announcement on December 21, 2009, Cain, Doffing, and Jinks sold their Chattem securities for substantial profit.

Cain and Doffing, along with their spouses who are not parties to this case, object to two sets of subpoenas served by the SEC on nonparties to produce telephone records from January 1, 2009, to the present. They request that the court quash the subpoenas or issue a protective order.

The initial subpoenas encompass subpoenas served on AT&T Inc., CBeyond, Inc., Comcast Cable Communications, LLC, and Neustar, Inc. The SEC filed a notice of serving subpoenas on October 28, 2013 [Doc. No. 67]. The subpoenas were dated October 1, 2013, and required production of documents and other information by October 16, 2013. Rule 45(b)(1) states, “If the subpoena commands the production of documents, electronically stored information, or tangible things or the inspection of premises before trial, then before it is served, a notice must be served on each party.”[1] Cain and Doffing argue that the SEC did not comply with the notice requirement of Rule 45(b)(1). The SEC admits that it served notice on each party after it began the process of serving the subpoenas. The SEC argues that its failure to provide the parties with the requisite notice was due to counsel's oversight and that it has subsequently served amended subpoenas. However, in a reply brief, Cain and Doffing note that at least one provider responded to the initial subpoenas on October 29, 2013, which is only one day after the SEC filed its notice of service of subpoenas. The court further orders that the SEC may not use the documents or other information produced pursuant to the initial subpoenas in this matter.[2]

The amended subpoenas encompass subpoenas served on AT&T Inc., Verizon Wireless, CBeyond, Inc., and Comcast Cable Communications, LLC. The SEC filed a notice of serving subpoenas on October 31, 2013 [Doc. No. 69]. Unlike the initial subpoenas, the amended subpoenas were dated October 31, 2013, and required production of documents or other information by November 4, 2013. Cain and Doffing object to the amended subpoenas on a few grounds. The court addresses each of the objections below.

Cain and Doffing appear to first argue that the court should quash the amended subpoenas because the initial subpoenas were not served in compliance with Rule 45(b)(1). They take the position that the SEC's attempt to correct the deficiencies with the initial subpoenas by serving amended subpoenas does not cure the prejudice caused by the initial subpoenas. In response to this argument, the SEC argues that it remedied the deficiencies with the initial subpoenas when it served the amended subpoenas. As set forth above, the court has determined that the initial subpoenas were served in violation of Rule 45(b)(1). However, the fact that the court has quashed the initial subpoenas does not require it to quash the amended subpoenas. Therefore, the court considers the amended subpoenas separately from the initial subpoenas.

*3 Cain and Doffing next argue that the amended subpoenas are not relevant and are unduly burdensome. Rule 45(c)(3)(A)(iv) states that the court must quash or modify a subpoena that “subjects a person to undue burden.” Cain and Doffing note that the amended subpoenas expand on the subpoenas that were served earlier in this matter and request documents and other information from January 1, 2009, to the present. Cain and Doffing argue that any documents or other information from after January 1, 2010, to the present are not relevant. Their position is that the relevant period of time does not extend beyond January 1, 2010. The SEC believes that documents and other information from after January 1, 2010, are relevant because it was after January 1, 2010, that the investigation into the alleged insider trading took place. According to the SEC, the documents and other information from after January 1, 2010, may show coordinated behavior between the defendants and may support the imposition of an injunction. Cain and Doffing also identify additional information sought pursuant to the amended subpoenas that they believe is not relevant, including payment information and records related to nonparties. The SEC argues that its request for payment information is relevant because Doffing claimed in his response to a previous subpoena that he was unable to produce certain records because his employer owned his cell phone. The SEC also argues that records of nonparties are relevant because the defendants may have used their phones.

Rule 26(b)(1) sets forth the general scope of discovery. Rule 26(b)(1) states, “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense—including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who may know of any discoverable matter.” The Eleventh Circuit Court of Appeals has held that the “ ‘Federal Rules of Civil Procedure strongly favor full discovery whenever possible,’ as this rule generally entitles a civil litigant ‘to discovery of any information sought if it appears reasonably calculated to lead to the discovery of admissible evidence.’ ” Republic of Ecuador v. Hinchee, No. 12-16216, 2013 WL 6655490 at *3 (11th Cir. 2013) (quotations omitted). The court finds that the documents and information sought pursuant to the amended subpoenas are relevant and discoverable. The amended subpoenas appear reasonably calculated to lead to the discovery of admissible evidence. In addition, the court finds that the amended subpoenas do not impose an undue burden. Cain and Doffing admit that at least one telecommunications provider responded to the initial subpoenas. Considering the scope of the amended subpoenas is similar to the scope of the initial subpoenas, the court does not believe the amended subpoenas impose an undue burden. The court denies Cain's and Doffing's requests to quash the amended subpoenas pursuant to Rule 45(c)(3)(A)(iv).

In addition to requesting that the court quash the subpoenas, Cain and Doffing move for a protective order pursuant to Rule 26(c) preventing the disclosure of records or information. Cain and Doffing argue that the amended subpoenas seek documents and other information that were already produced pursuant to subpoenas served in 2010, 2011, and 2012. The SEC acknowledges that the amended subpoenas seek some documents and other information that were produced pursuant to previous subpoenas. However, the SEC argues that the productions in response to the previous subpoenas are not complete and that the amended subpoenas request additional documents and other information that were not requested previously. The SEC also argues that the amended subpoenas cannot be harassing or annoying to the defendants because they require production of documents and other information from only the telecommunications providers.

Rule 26(c)(1) states, “The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” The court finds that Cain and Doffing have not shown that there is good cause for the court to issue a protective order. Cain and Doffing have not provided a sufficient basis to find that a protective order is necessary to protect a party or person from annoyance, embarrassment, or oppression. The amended subpoenas seek relevant and discoverable documents and other information. Furthermore, as discussed above, the court has not found that the amended subpoenas are unduly burdensome. Accordingly, the court denies the request for a protective order.

*4 Cain and Doffing argue that the amended subpoenas did not provide the telecommunications providers subject to the subpoenas a reasonable time to comply. Rule 45(c)(3)(A)(i) provides that the court must quash or modify a subpoena that “fails to allow a reasonable time to comply.” The amended subpoenas were dated October 31, 2013, and the SEC filed a notice of serving the subpoenas on the same date. The subpoenas required production of the requested information by November 4, 2013, a mere 4 days after the date of the subpoenas. The SEC states in its consolidated response brief, “The truncated due date on the amended subpoenas was required in order to obtain the records with sufficient time within the discovery period to ascertain whether the telephone records raised additional issues upon which the Commission would need to seek discovery.” Consolidated Resp. in Opp'n to Mots. at 2–3 [Doc. No. 74]. The SEC also argues that Cain and Doffing had adequate notice to file their objections to the subpoenas.

The court finds that the subpoenas did not allow a reasonable time to comply. Further, the court notes that any need for a truncated due date was caused by the SEC's failure to comply with Rule 45 when it served the initial subpoenas. While the court has the authority to quash the amended subpoenas, the court elects to modify the amended subpoenas to allow a reasonable time for compliance. Because the time to respond to the amended subpoenas has already passed, the court modifies the amended subpoenas to allow 20 days from the date of this order for the telecommunications providers to comply with the amended subpoenas.[3]

Cain and Doffing express concern that the SEC may have received or will receive documents or information that contain communications that are subject to attorney-client, accountant-client, or spousal privilege. The SEC indicates that it modified the amended subpoenas to remove any request for the content of text messages to address Cain's and Doffing's concerns. To further protect against the disclosure of privileged information, the court orders the SEC to produce copies of all documents or information received pursuant to the amended subpoenas within 15 days of this order or within 15 days of receipt of the documents or information if it has not been produced by the telecommunications providers. Cain and Doffing may file a motion with the court if privileged information was produced pursuant to the amended subpoenas. However, based on the assurances of the SEC, the court believes that neither Cain nor Doffing will need to file any motion with respect to the production of privileged information.

A few days prior to the close of discovery, the SEC issued letters to Morgan Stanley, Raymond James, and TD Ameritrade pursuant to Sections 17(a) and 17(b) of the Securities and Exchange Act of 1934. Cain and Doffing argue that the SEC issued the letters in an attempt to skirt the Federal Rules of Civil Procedure. Cain and Doffing request that the court amend their motions to quash or for protective order to include the letters issued by the SEC. In a surreply filed with the court, the SEC argues that it has the authority to issue the letters pursuant to Sections 17(a) and 17(b), and that it issued the letters instead of serving subpoenas to save expense. The SEC also argues that the request to quash the letters is procedurally improper because Cain and Doffing raise a new request in their reply brief rather than filing a separate motion.

*5 The court finds that Cain and Doffing improperly sought to amend their motions to include the letters issued by the SEC. Cain and Doffing should have filed a separate motion to quash the letters or for protective order, or should have filed a motion to amend their previously filed motions. Accordingly, the court denies Cain's and Doffing's motions to the extent that they seek relief from the letters issued by the SEC.

Cain and Doffing move to transfer the case to the Newnan division of the United States District Court for the Northern District of Georgia pursuant to 28 U.S.C. § 1404 and Local Rule 3.4. Cain and Doffing argue that the Newnan division is the proper venue to hold the trial because the majority of the parties and the key witnesses reside within the Newnan division. The SEC argues that Cain and Doffing waived any right to object to venue by not objecting at the outset of this action. The SEC also argues that transfer of this case to the Newnan division would not result in greater convenience to the defendants or witnesses and would significantly inconvenience the SEC.

The court does not address whether Cain and Doffing waived the right to move for transfer of the case to the Newnan Division. Instead, the court considers whether transfer is proper pursuant to 28 U.S.C. § 1404 or Local Rule 3.1. Section 1404(a) states, “For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.” The court finds that the convenience of the parties does not weigh in favor of transferring the case to the Newnan division for trial. The court is aware that the defendants and many of the witnesses reside in or around Griffin, Georgia. However, the Atlanta division courthouse and the Newnan division courthouse are nearly equidistant from Griffin, Georgia. The commute from Griffin, Georgia to the Atlanta division courthouse may be slightly longer than the commute to the Newnan division because of traffic patterns, but the difference is not sufficient to warrant transfer. In addition, the court believes it will be able to schedule a trial in this matter more expeditiously in the Atlanta division. Therefore, the interest of justice weighs against transfer of the case to the Newnan division for trial. Similarly, the court finds that there is not a proper basis to transfer the case for trial to the Newnan division pursuant to Local Rule 3.1. Accordingly, the court denies Cain's and Doffing's motions to transfer the case to the Newnan division for trial.

Cain and Doffing move the court to sever their trial from the trial of Jinks, a co-defendant in this matter. Cain and Doffing argue that the SEC does not allege in the complaint that either Cain or Doffing acted in concert with Jinks or were connected in any way to Jinks's purchase of Chattem stock. Their position is that the SEC has not set forth sufficient allegations in the complaint to warrant permissive joinder under Rule 20(a)(2) and that the court should sever the trial of Jinks from the trial of Cain and Doffing pursuant to Rule 21. Cain and Doffing assert that they will suffer prejudice if they are tried in conjunction with Jinks. The SEC argues that the court should deny the motions to sever because this case arises from the same series of transactions involving a single insider-trading scheme. The SEC also argues that severing the trial would prejudice the SEC and result in a waste of judicial resources.

*6 The Eleventh Circuit Court of Appeals has noted that “[t]he Supreme Court has instructed the lower courts to employ a liberal approach to permissive joinder of claims and parties in the interest of judicial economy.” Alexander v. Fulton Cnty. Ga., 207 F.3d 1303, 1323 (11th Cir. 2000) (citing United Mine Workers v. Gibbs, 383 U.S. 715, 724 (1966) (“Under the Rules, the impulse is towards entertaining the broadest possible scope of action consistent with fairness to the parties; joinder of claims, parties and remedies is strongly encouraged.”)). Rule 20(a)(2) provides, “Persons ... may be joined in one action as defendants if: (A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or fact common to all defendants will arise in the action.” Courts have looked to Rule 13(a) to determine what constitutes a transaction or occurrence for the purpose of Rule 20(a). The meaning of the word “transaction” is flexible, and the word “ ‘may comprehend a series of many occurrences, depending not so much upon the immediateness of their connection as upon their legal relationship.’ ” Alexander, 207 F.3d at 1323 (quoting Mosley v. General Motors Corp., 497 F.2d at 1330, 1333 (8th Cir. 1974)). With respect to the second part of Rule 20, it “does not require that all questions of law and fact raised by the dispute be common, but only that some question of law or fact be common to all parties.” Id. at 1324.

The court finds that the SEC has asserted a right to relief against the defendants arising out of the same series of transactions or occurrences. The right to relief asserted by the SEC against the defendants arises out of an alleged insider-trading scheme initiated by Melvin. While Cain, Doffing, and Jinks are alleged to have committed separate illegal acts as a result of the material nonpublic information from Melvin, the separate acts remain a part of the same series of transactions or occurrences. Furthermore, the second requirement for joinder is met in this case. Not all of the questions of law or fact are common to the defendants, but at least some questions of law or fact are common to all defendants in this action. Having found a proper basis to allow permissive joinder of the defendants, the court denies Cain's and Doffing's request to sever their trail from the trial of Jinks.

The court GRANTS IN PART and DENIES IN PART Cain's and Doffing's motions to quash or for protective order [Doc. Nos. 71, 72]. The court DENIES AS MOOT the SEC's motion for permission to file a surreply [Doc. No. 81]. The court GRANTS the SEC's amended motion for permission to file a surreply [Doc. No. 82]. The court GRANTS Doffing's motion to transfer to the extent that it seeks to adopt the motions filed by Cain [Doc. No. 85]. The court DENIES Cain's and Doffing's motions to transfer the case to the Newnan division for trial [Doc. Nos. 83, 85]. The court DENIES Cain's motion to sever [Doc. No. 84].

SO ORDERED this 19th day of February, 2014.

Rule 45 was amended effective December 1, 2013. The court relies on the previous version of Rule 45 in adjudicating the motions before the court. The subpoenas at issue were served prior to December 1, 2013.

With respect to the documents or other information produced pursuant to the initial subpoenas, the SEC may use the documents or other information only if it was later produced pursuant to the amended subpoenas.

The telecommunications providers are not required to produce additional documents or other information if they already produced documents or other information pursuant to the amended subpoenas prior to the court's order. Any telecommunications providers who have not produced documents or other information prior to the court's order are required to produce only documents or information from January 1, 2009, through November 4, 2013.