Brown v. Dash
Brown v. Dash
2021 WL 4434978 (C.D. Cal. 2021)
July 27, 2021
MacKinnon, Alexander F., United States Magistrate Judge
Summary
The Court denied the motion to quash the subpoena served by Plaintiff Christopher Brown on nonparty JPMorgan Chase Bank, but granted the request for a protective order. The Court forbade production of documents under Plaintiff's current subpoena to JPMorgan and denied Plaintiff's motion to stay and motion to strike portions of Defendants' declarations.
Christopher Brown
v.
Damon Anthony Dash, et al
v.
Damon Anthony Dash, et al
Case No. 2:20-CV-10676-DSF-AFMx
United States District Court, C.D. California
Filed July 27, 2021
Counsel
Ilene Bernal, Deputy Clerk, Attorneys Present for Plaintiff: N/AN/A, Court Reporter / Recorder, Attorneys Present for Defendants: N/A
MacKinnon, Alexander F., United States Magistrate Judge
Proceedings (In Chambers): ORDER -- (1) DENYING DEFENDANTS' MOTION TO QUASH SUBPOENA TO JP MORGAN CHASE BANK, BUT GRANTING DEFENDANTS' REQUEST FOR A PROTECTIVE ORDER CONCERNING THAT SUBPOENA (ECF No. 30) (2) DENYING PLAINTIFF'S MOTION TO STRIKE AFFIDAVITS AND DECLARATIONS BY DEFENDANT DAMON DASH AND COUNSEL MICHAEL TRAYLOR (ECF No. 32)
*1 Defendants Damon Dash, Poppington LLC (“Poppington”), The Dash Group LLC (“The Dash Group”), and Raquel Horn have moved to quash a subpoena served by Plaintiff Christopher Brown on nonparty JPMorgan Chase Bank (“JPMorgan”). In the alternative, Defendants move for a protective order. (ECF No. 30.) Defendants have also requested a stay pending a forthcoming motion to disqualify Plaintiff's counsel. Plaintiff has opposed the motion and has filed a cross motion to strike the affidavits of Defendant Damon Dash and Defendants' counsel Michael Traylor. (ECF No. 32.) As set forth below, Defendants' motion to quash is denied, but the request for a protective order is granted.
1. Plaintiff has served a subpoena on JPMorgan seeking production of essentially all records of defendants The Dash Group and Poppington. (ECF No. 30 at 12-16.) All Defendants have moved to quash the subpoena (or alternatively for a protective order), arguing that the requested financial records are irrelevant, the subpoena was served for improper purposes, and production of the requested records would violate Defendants' privacy interests. (ECF No. 30.) Plaintiff opposes the motion, asserting that the requested bank records are necessary to establish his alter ego, successor liability, and de-facto merger claims as alleged in the amended complaint. (ECF No. 32.)
2. Federal Rule of Civil Procedure 26(b)(1) provides that a party may obtain discovery “regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case[.]” Factors to consider include “the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant 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.” Fed. R. Civ. P. 26(b)(1). Discovery need not be admissible in evidence to be discoverable. Id. However, a court “must limit the frequency or extent of discovery otherwise allowed by [the Federal] rules” if “(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or (iii) the proposed discovery is outside the scope permitted by Rule 26(b)(1).” Fed. R. Civ. P. 26(b)(2)(C). A court may enter a protective order under Rule 26(c) forbidding disclosure or discovery to protect a person from annoyance, embarrassment, oppression, or undue burden or expense. Further, the Federal Rules of Civil Procedure must be “construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.” Fed. R. Civ. P. 1.
3. When objections are raised regarding discovery seeking confidential or personal information, the right to discover relevant information must be weighed against the right to privacy, and confidential information may be required to be disclosed after such weighing - particularly when confidentiality can still be maintained via court orders. See Ragge v. MCA/Universal Studios, 165 F.R.D. 601, 604-05 (C.D. Cal. 1995); Rubin v. Regents of University of California, 114 F.R.D. 1, 3 (N.D. Cal. 1986). In a federal action based on diversity of citizenship jurisdiction, state law governs privilege and privacy claims. Fed. R. Evid. 501; In re Cal. Pub. Utils. Comm'n, 892 F.2d 778, 781 (9th Cir. 1989) (“In diversity actions, questions of privilege are controlled by state law.”); Oakes v. Halvorsen Marine Ltd., 179 F.R.D. 281 (C.D. Cal. 1998) (applying California law to the plaintiff's right to privacy claim).
*2 4. In disputes challenging the issuance of a subpoena, federal courts have typically applied the law of the state where the subpoena was issued. See In re Ramaekers, 33 F. Supp. 2d 312, 316 (S.D.N.Y. 1999) (federal courts presiding over discovery disputes related to litigation in a different forum have “uniformly applied the law of the circuit in which the subpoena issued.”). Because the instant subpoena was issued in a case pending in the Central District of California (and purportedly under the authority of the Central District of California), California state law should be applied to determine the existence of a privacy interest in the requested documents.
5. In Monique Bunn v. Damon Anthony Dash, et al., 2:20-cv-07389-DMG-JC, ECF No. 156 (July 22, 2021), Magistrate Judge Chooljian denied a motion to quash a similar subpoena because the motion had not been brought in the correct court:
[T]his Court does not have the authority to quash the subpoena pursuant to Rule 45. Rule 45 provides that “[o]n timely motion, the court for the district where compliance is required must quash or modify a subpoena” for a number of reasons, including that the subpoena “requires disclosure of privileged or other protected matter, if no exception or waiver applies.” Rule 45(d)(3)(A)(iii) ... It further provide that “[o]n timely motion, the court for the district where compliance is required may, on motion, quash or modify the subpoena if it requires[,]” among other things, disclosing a trade secret or other confidential research, development, or commercial information[.]” Rule 45(d)(3)(B)(i) ... Here, the Subpoena lists Boston, Massachusetts as the place for compliance.... The court where compliance is required can transfer a Rule 45 motion with the responding party's consent or if the court finds exceptional circumstances, but the parties have completely skipped that step and have failed to address this issue altogether. Thus, this Court does not have jurisdiction to entertain this challenge to the Subpoena under Rule 45. See, e.g., Agincourt Gaming, LLC v. Zynga, Inc., 2014 WL 4079555 at *3 (D. Nev. Aug. 15, 2014) (“[W]hen a motion to quash a subpoena is filed in a court other than the court where compliance is required, that court lacks jurisdiction to resolve the motion.”); Europlay Capital Advisors, LLC v. Does, 323 F.R.D. 628, 629-30 (C.D. Cal. 2018) (denying motion to compel compliance with subpoena for lack of jurisdiction as challenges to subpoena to be heard by district court encompassing place where compliance with subpoena required); KGK Jewelry LLC v. ESDNetwork, 2014 WL 1199326, at *3 (S.D.N.Y. Mar. 21, 2014) (denying plaintiff's motion to quash third party subpoenas for lack of jurisdiction per Rule 45). Accordingly, the Motion to Quash is denied to the extent it is predicated on Rule 45.
This Court agrees with the motion to quash analysis in Bunn and denies the portion of Defendants' motion here that seeks to quash the JP Morgan subpoena under Rule 45.
6. Defendants' motion also seeks a protective order under Fed. R. Civ. P. 26, in the alternative. Unlike Bunn, the requested protective order here is not precluded by the case's discovery cut-off, and therefore, the Court will address the merits of that aspect of the motion, as follows.
7. First, Fed. R. Civ. P. 45(a)(1)(A)(iv) requires that every subpoena must “set out the text of Rule 45(d) and (e).” The subpoena issued by Plaintiff to JPMorgan does not set out the text required by Rule 45. When a subpoena is improperly issued and served in this manner, that may be a ground for not enforcing the subpoena. See Cramer v. Target Corp., 2010 WL 1791148, at *2 (E.D. Cal. 2010) (quashing a subpoena for failing to provide the text required by Rule 45); Gerow v. Washington, 2008 WL 4186169, at *2 (W.D. Wash. Sept. 9, 2008) (a subpoena that does not contain the text mandated by Rule 45 is flawed); Williams v. Sampson, 2017 WL 1330502, at *1 (W.D. Wash. Apr. 11, 2017) (it would be inappropriate to issue a subpoena that does not set out the text of Rule 45(d) and (e)).
*3 8. Second, Fed. R. Civ. P. 30(b)(6) states, “In its notice or subpoena [directed to an organization], a party may name as the deponent a public or private corporation, a partnership, an association, a governmental agency, or other entity and must describe with reasonable particularity the matters for examination ... [the subpoena] may set out the matters on which each person designated will testify.” (emphasis added). Here, Plaintiff's subpoena calls for an oral examination of JPMorgan, but the subpoena does not list any topics for examination. Instead, Plaintiff has merely attached a laundry list of documents for JPMorgan to produce. That is not sufficient. See American Reliable Insurance Company v. RoundPoint Mortgage Servicing Corporation, 2016 WL 9108032, at *2 (D. Ariz. 2016) (quashing a subpoena for a failure to designate testimony topics with particularity); Monge v. Maya Magazines, Inc., 2010 WL 2776328, at *4 (D. Nev. 2010) (quashing a subpoena for stating the topics of testimony but failing to meet the reasonable particularity standard of Rule 30(b)(6)).
9. Third, the Court must balance the privacy interests of Defendants against Plaintiff's need to discover relevant evidence. As to the individual Defendants, they have a reasonable expectation of privacy in their financial affairs, although this right is not absolute. DeSilva v. Allergan USA, Inc., 2020 WL 5947827, at *5 (C.D. Cal. 2020). Corporations also have a right to privacy (albeit more limited) that is dependent upon its nexus with humans and the context in which a controversy arises. See Roberts v. Gulf Oil Corp., 147 Cal.App.3d 770, 796-97 (1983). These rights to privacy must be balanced against the opponent's right to a fair trial and his right to discover facts relevant to his claim. See Net-Com Servs., Inc. v. Eupen Cable USA, Inc., 2012 WL 12887396, at *3 (C.D. Cal. Nov. 14, 2012).
8. Plaintiff has pled alter-ego, successor liability, and de-facto merger claims in his first amended complaint. The alter ego doctrine prohibits misuse of corporate laws to form of sham corporate entities for the purpose of committing fraud or other misdeeds. See Sonora Diamond Corp. v. Superior Ct., 83 Cal. App. 4th 523 (2000); Associated Vendors, Inc. v. Oakland Meat Co., 210 Cal. App. 2d 825, 842 (1962). To succeed on an alter ego claim, it must be shown (1) there is a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist, and (2) there will be an inequitable result if the acts in question are treated as those of the corporation alone. See Sonora Diamond Corp., 83 Cal. App. 4th at 538.
9. While certain bank records might be relevant to an alter ego claim, Plaintiff is not granted broad and unfettered access to banking and financial records of the parties simply by pleading alter ego. See Copper Sands Home Owners Ass'n, Inc. v. Copper Sands Realty, LLC, 2011 WL 112146, at *2 (D. Nev. Jan. 13, 2011) (alter ego pleadings do not grant plaintiffs “broad and unfettered access to the banking and financial records of other parties...”). The instant subpoena is sweeping in its scope and breadth: Its demands include all bank statements of The Dash Group from 2020 to the present, all documents relating to the Dash Group, all Poppington's bank records from April 2019 to present, all documents relating to The Dash Group that bear the signature of Damon Dash or Raquel Horn, all documents evidencing transfers between The Dash Group's account at JPMorgan with any Poppington account at JPMorgan, and all documents, emails, film, text messages and communications between The Dash Group and JPMorgan. (ECF No. 30 at 15-16.) Such broad requests would undoubtedly capture a wide range of irrelevant, yet private information. Moreover, Plaintiff has not attempted to show how the particular categories of documents sought by the subpoena relate to any specific aspects of his alter ego, successor liability, and de-facto merger claims and has failed to justify the expansive scope of confidential information required by the subpoena.
*4 10. Given the breadth of information sought, enforcement of Plaintiff's subpoena would intrude upon the financial privacy of Defendants, would go substantially beyond what might be relevant to Plaintiffs' claims, and would likely lead to annoyance, embarrassment, or oppression of Defendants. In these circumstances — after balancing Defendants' right to privacy against Plaintiff's need to take relevant discovery — the Court finds that the balance tips in favor of privacy over unbounded discovery. This conclusion is bolstered by the additional fact that Plaintiff has not sought or obtained an order in this case protecting confidential documents produced in discovery.
12. For these reasons, the Court grants Defendants' request for a protective order and forbids production of documents under Plaintiff's current subpoena to JPMorgan in this case. This does not bar an amended subpoena to JPMorgan in this case that complies with the requirements of Fed. R. Civ. P. 45 and that seeks categories of documents narrowed and tailored to only those relevant to Plaintiff's allegations of alter ego, successor liability, and de-facto merger —if timely under the discovery cut-off date in this case.
13. Because the Court is granting Defendants' motion for a protective order, it need not reach Plaintiff's motion to stay. In addition, because the Court has not relied on the challenged portions of Defendants' declarations, it need not resolve Plaintiff's motion to strike portions of those declarations.
IT IS SO ORDERED.
___
:
ib