Landfall 2, Inc. v. Datascore-AI, LLC
Landfall 2, Inc. v. Datascore-AI, LLC
2024 WL 1203273 (S.D. Fla. 2024)
March 21, 2024
Matthewman, William, United States Magistrate Judge
Summary
The court granted a motion to compel production of documents related to fraudulent transfers of assets from a previous case, where the plaintiff's complaint was dismissed with prejudice due to misconduct. The court found the requested ESI to be relevant and ordered the respondents to produce all responsive documents in their possession.
Additional Decisions
LANDFALL 2, INC., a Florida corporation, Plaintiff,
v.
DATASCORE-AI, LLC, a Texas limited liability company; BRENT BIGGS, individually; and DATASCORE ENTERPRISES, CORP., a Delaware corporation, Defendants
v.
DATASCORE-AI, LLC, a Texas limited liability company; BRENT BIGGS, individually; and DATASCORE ENTERPRISES, CORP., a Delaware corporation, Defendants
Case No. 22-cv-80801-MIDDLEBROOKS/MATTHEWMAN
United States District Court, S.D. Florida
Entered on FLSD Docket March 21, 2024
Counsel
Christopher J. Malafis, The Malafis Firm, P.A., Merritt Island, FL, for Plaintiff Landfall2, Inc.Ryan Matthew Clancy, Ainsworth & Clancy, PLLC, Miami, FL, for Plaintiff Gina Brody.
Amy Yoon, Pro Hac Vice, Binah B. Yeung, Pro Hac Vice, Cairncross & Hempelmann, P.S., Seattle, WA, Woodrow Heath Pollack, Shutts and Bowen, LLP, Tampa, FL, for Defendants Datascore-AI, LLC, Brent Biggs.
Amy Yoon, Pro Hac Vice, Binah B. Yeung, Pro Hac Vice, Cairncross & Hempelmann, P.S., Seattle, WA, Brett Michael Amron, Peter Joseph Klock, II, Bast Amron LLP, Miami, FL, Woodrow Heath Pollack, Shutts and Bowen, LLP, Tampa, FL, for Defendant Datascore Enterprises, Corp.
Matthewman, William, United States Magistrate Judge
ORDER GRANTING DEFENDANT DATASCORE ENTERPRISES, CORP.’S MOTION TO COMPEL PRODUCTION OF DOCUMENTS RESPONSIVE TO SUBPOENA DUCES TECUM [DE 138]
*1 THIS CAUSE is before the Court upon the following: (1) Defendant Datascore Enterprises, Corp.’s (“Defendant” or “Defendant Datascore”) Motion to Compel Production of Documents Responsive to Subpoenas Duces Tecum (“Motion to Compel”) [DE 138]; (2) Respondents Desiree Weidstrand, Ryan Neill, and Landfall Media Group, LLC's (“Respondents”) Response [DE 140]; (3) Defendant's Reply [DE 141]; and (4) Defendant and Respondents’ Joint Notice Regarding Status of Discovery Dispute (“Joint Notice”) [DE 142]. The Court held an in-person hearing on the Motion to Compel, on March 19, 2024. During the in-person hearing, the Court made certain rulings with respect to Defendant's Motion to Compel. This Order memorializes and expands upon those rulings.
I. BACKGROUND
As previously noted in the Undersigned's Report and Recommendation on Defendant's Verified Motion for Attorneys’ Fees and/or Nontaxable Expenses and Costs [DE 133], this case “has a long and tortured history due to the repeated misconduct of Plaintiff Landfall and its prior counsel, Darren R. Aponte, Esq.” Indeed, the long and tortured history of this case is explained in detail in the Undersigned's “Report and Recommendation on Imposition of Sanctions Against Plaintiff and Its Counsel for Bad Faith Misconduct, Violations of Court Orders, and Discovery Violations stemming from Defendant's Motion to Compel” [DE 78].
Ultimately, on February 16, 2023, Judge Middlebrooks entered an Order Adopting Report and Recommendation [DE 83], in which Judge Middlebrooks dismissed Plaintiff's Complaint [DE 1-3] with prejudice, struck Plaintiff's Answer to Defendant Datascore's Counterclaim [DE 28], and directed Defendant Datascore to either dismiss its counterclaims against Plaintiff or move for a Clerk's default. [DE 83 at 1–2]. In response, Defendant Datascore filed a Motion for Entry of Default by Clerk [DE 84], and the Clerk entered default thereafter. See DE 87. Defendant Datascore then moved for final default judgment. See DE 93. And, on April 28, 2023, the Court granted Defendant Datascore's motion for final default judgment and entered final default judgment against Plaintiff. See DEs 104, 105. Now, Defendant has filed the instant Motion to Compel, seeking discovery in aid of execution of judgments. See DE 138 at 1.
II. THE MOTION TO COMPEL, RESPONSE, REPLY, AND JOINT NOTICE
a. Defendant's Motion to Compel [DE 138]
Defendant seeks an order: “(i) compelling Respondents ... to produce all documents responsive to Datascore's subpoenas duces tecum and (ii) overruling Respondents’ general objections to the subpoenas.” [DE 138 at 1]. More specifically, Defendant seeks discovery in aid of execution against Plaintiff Landfall 2, Inc. Id. In this regard, Defendant notes that Respondent Landfall Media Group, LLC (“LMG”) was formed “just two months before judgments were entered against Landfall” and asserts that “[o]ver the last year, Plaintiff's operations were wound down and shifted over to LMG in order to avoid the judgments.” Id.
*2 According to Defendant, LMG holds itself out to the world as a “mere continuation” of Plaintiff Landfall 2, Inc. Id. Moreover:
Despite not coming into existence until 2022, LMG claims to have been founded in 2006 – the year Landfall was founded. Plaintiff's president/CEO, Kevin Brody, holds himself out as the president/CEO of LMG – a role which he has claimed to hold at LMG since 2006. So, too do key employees/contractors of Landfall (and now LMG), such as Respondent Desiree Widstrand (“Widstrand”), who holds herself out as being employed by LMG continuously since 2021, and Enrique Vazquez, who holds himself out as being employed by LMG continuously since 2019. The web address of Landfall directs visitors to a minimally LMG-re-branded version of Landfall's website, the social media accounts of Landfall were re-branded for LMG, and the phone number of Landfall is now the phone number of LMG. Respondent Ryan Neill (“Neill”) is a long-time friend and neighbor of Kevin Brody, with no apparent experience in the lead generation business, and appears to be the straw owner of LMG.
Id. at 9. Thus, Defendant notes that its document requests to Respondents “are focused on obtaining documents and communications related to the transfer of assets from Landfall to LMG and the relationship between LMG, Brody, and Neill.” Id. And, while Defendant states that it initially sought similar information from Plaintiff, Plaintiff “claimed in a sworn interrogatory answer that no intellectual property, customer lists, or digital assets of Plaintiff were transferred to or for the benefit of LMB or Neill, which is plainly false.” Id. It is therefore Defendant's position that third-party discovery is entirely appropriate, as respondents “are likely in possession of information related to fraudulent transfers of Landfall's assets to a successor entity for the purpose of evading this Court's judgments.” Id.
b. Respondents’ Response [DE 140]
Respondents argue that, while it is clear Defendant has “crushed” Plaintiff in this litigation, there is no indication “that Landfall 2's officers, directors and employees are not, and were not, entitled to all of the personal liability protections afforded by Chapter 607 of the Florida Statutes.” [DE 140 at 1]. According to Respondents, “[t]here is nothing in the record (or the law) which does not allow Landfall 2's officers, directors and employees to start a new business and get on with their lives,” and the Motion to Compel “has offered nothing but conclusory allegations that Respondents are engaged in a mere-continuation, subject to successor liability.” Id.
Respondents note that Defendant has served “voluminous document requests on each of the Respondents ... which are to be followed for each and every document request.” Id. at 2–3. Respondents argue that Defendant “should be required to exhaust all sources of information within this case to make a plausible showing that there may be successor liability prior to requiring the Respondents to hire attorneys and ESI experts to comply with these document requests.” Id. at 3. Indeed, Respondents maintain that Defendant has failed to show a substantial need for the materials that cannot otherwise be met without undue hardship. Id. at 4–5.
*3 In conclusion, Respondents argue that Defendant's “subpoenas should be quashed for failing to present any evidence to support the need for the fishing expedition beyond the similarity in names of two corporations [and] on the employment of one person by both corporations at different times.” Id. at 5. Respondents argue that Defendant “has the answers to their questions attached as sworn interrogatory answers to the Motion to Compel.” Id.
c. Defendant's Reply [DE 141]
To the extent Respondents argue that the officers, directors, and employees of Landfall opted to “start a new business and get on with their lives,” Defendant argues that:
[a]s set forth in the Motion [to Compel], which is supported by substantial evidence appended thereto, that ‘new business’ is engaged in the same business as Landfall, has the same CEO as Landfall, has the same senior employees (among others) as Landfall, has the same website as Landfall, has the same social media accounts as Landfall, has the same phone number as Landfall, and holds itself out to the world as an uninterrupted continuation of Landfall's business.
Id. at 2.
Next, Defendant contends that Respondents “do not even attempt” to refute the evidence in support of the Motion to Compel. Id. To this end, Defendant notes that, while Respondents make the “bald assertion” that the Motion to Compel offers nothing but conclusory allegations, the Motion to Compel points out that Respondents’ claim that there is “no asset connection” between Landfall and LMG is “plainly false” when considering LMG's possession of Landfall's intellectual property. Id.
Turning to the law, Defendant argues that, “given the close links between LMG and Landfall, the relevance of the discovery sought from Respondents is apparent on its face, and good reason exists to require Respondents to produce all responsive documents in their possession.” Id. at 3. According to Defendant, Rule 69(a) of the Federal Rules of Civil Procedure expressly permits a judgment creditor to obtain discovery in aid of execution from any person, “and it is well established in this District that third parties may be examined as to a judgment debtor's assets, and even as to their own if there is ‘at least some demonstration of concealed or fraudulent transfers or alter ego relationship with the judgment debtor.’ ” Id. (quoting Democratic Republic of Congo v. Air Cap. Grp., No. 12-Civ-20607, 2018 WL 324976, at *2 (S.D. Fla. Jan. 8, 2018)). Moreover, Defendant notes that “[b]arebones claims of hardship by the party seeking to quash or modify a subpoena do not suffice.” Id. at 4.
Further, Defendant argues that “it was incumbent upon Respondents to do more than serve boilerplate objections and make a generalized, unfounded, and unsworn assertion that compliance would mandate the undue burden of hiring an ESI expert to collect and produce the documents.” Id. And to the extent Respondents took issue (for the first time) with the production of documents based upon the ESI production instructions, Defendant notes that it “subsequently offered to accept Respondent's documents in their native format or as they are kept in the ordinary course of business.” Id. at 5.
d. Joint Notice [DE 142]
In the Joint Notice, Defendant and Respondents note that several issues remain for determination by the Court with respect to the Motion to Compel [DE 138]. Specifically: (1) whether “the discovery sought from Respondents is relevant to Datascore's efforts to execute upon the judgments entered by this Court”; (2) whether Respondents’ objections to the subpoenas based on relevance, burdensomeness, overbreadth, and upon information being proprietary and confidential should be overruled; and (3) whether sanctions or cost-shifting should be awarded. Id. at 2–3.
*4 Defendant maintains that the relevancy of the documents is apparent on its face, and that “[t]he foregoing requests are aimed at discovering the nature of the relationship between Landfall and LMG, which appears to be a mere continuation of the business of Landfall created for the purpose of evading the judgments in this case, as well as the disposition of assets of Landall.” Id. at 3. In this regard, Defendant argues that Respondents’ objections are threadbare and should be overruled, and that Respondents “should be ordered to absorb any costs associated with responding to the subpoenas.” Id. at 4.
Respondents, on the other hand, argue that Defendant's third-party discovery “is a burdensome fishing expedition.” Id. at 4. According to Respondents, “Datascore should be required to exhaust all sources of information within this case to make a plausible showing that there may be successor liability prior to requiring the Respondents to hire attorneys and ESI experts to comply with these document requests.” Id.
III. ANALYSIS
Under Rule 45(a)(1), every subpoena must state the court from which it is issued, state the title of the action and the civil case number, “command each person to whom it is directed to do the following at a specified time and place: attend and testify; produce designated documents, electronically stored information, or tangible things in that person's possession, custody, or control; or permit the inspection of premises”; and set forth the text of Rule 45(d) and (e). Fed. R. Civ. P. 45(a)(1)(A)(i)–(iv). Further, under Rule 45(d)(1), “[a] party or attorney responsible for issuing and serving a subpoena must take reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena.” Fed. R. Civ. P. 45(d)(1). And, pursuant to Rule 45(d)(2), “[a] person commanded to produce documents or tangible things ... may serve on the party or attorney designated in the subpoena a written objection.” Fed. R. Civ. P. 45(d)(2)(B). However, “[a]t any time, on notice to the commanded person, the serving party may move the court for the district where compliance is required for an order compelling production or inspection.” Fed. R. Civ. P. 45(d)(2)(B)(i).
In the instant case, there are three subpoenas at issue—the Subpoena to Testify at a Deposition in a Civil Action for the Corporate Representative of Landfall Media Group, LLC; the Subpoena to Testify at a Deposition in a Civil Action for Ryan M. Neill (the manager of LMG); and the Subpoena to Testify at a Deposition in a Civil Action for Desiree Widstrand (a sales account manager for LMG). See DE 138-7. The Court has carefully examined the three subpoenas at issue and finds them in full compliance with Rule 45(a)(1). Indeed, to the extent the Respondents object to the subpoenas based on relevance, burdensomeness, overbreadth, and upon information being proprietary and confidential, the Court OVERRULES those objections.
This is a case where Defendant Datascore has alleged that LMG and its officers and employees are utilizing LMG as a “mere continuation” of Plaintiff Landfall 2, Inc. The Court finds Datascore has asserted plausible allegations that LMG is a mere continuation of Plaintiff Landfall. In this regard, Defendant has done more than merely allege such—Defendant has attached screenshots of the LinkedIn profiles of key employees and of LMG itself, which appear to demonstrate the veracity of Defendant's allegations. See DEs 138-3, 138-4, 138-5, 138-6. The three subpoenas at issue (with their corresponding production requests) are plainly relevant. Moreover, the Court finds that they are narrowly tailored to the discovery sought.
*5 Further, to the extent Respondents object based upon burdensomeness or upon the confidential nature of some of the documents, the Court notes that no Affidavit or Declaration was provided in Respondents’ Response [DE 140] as to the burdensomeness of the production, and no privilege log or privileged documents have yet been identified. The Court finds that the discovery sought is not burdensome or harassing.
Respondents take issue with Defendant's attempt to seek third-party discovery without first exhausting all other remedies. The Court rejects this assertion and finds the subpoenas patently appropriate in this case. Defendant has demonstrated a good faith basis for the requested post-judgment discovery, especially considering the extensive misconduct by Plaintiff and its alleged failure to pay any monies whatsoever to Defendant. Indeed, the Court finds the subpoenas and their referenced documents to be relevant and proportional to the needs of the case pursuant to Rule 26(b)(1) and Rule 45 of the Federal Rules of Civil Procedure.
IV. CONCLUSION
The Court has carefully considered Defendant's Motion to Compel [DE 138], Respondents’ Response [DE 140]; Defendant's Reply [DE 141], Defendant and Respondents’ Joint Notice [DE 142], argument of counsel during the March 19, 2024 in-person hearing, as well the entire docket in this case. Based on the foregoing, it is hereby ORDERED AND ADJUDGED as follows:
- Defendant's Motion to Compel [DE 138] is GRANTED.
- On or before March 29, 2024 (ten days from the date of the hearing), all three Respondents shall produce the documents referenced in the three subpoenas at issue (see DE 138-7).
- Within twenty (20) days from the date of production of the documents, the depositions of the LMG corporate representative, Ryan Neill, and Desiree Widstrand shall be taken. The Corporate Representative of LMG shall be properly prepared for the deposition.
- The Court wants these documents provided and the depositions taken quickly so that this matter does not linger. The Court expects counsel to immediately confer, schedule deposition dates, times and locations, and complete the depositions in a professional and cooperative manner.
- The Court finds that an award of expenses and costs tied to the Motion to Compel is not appropriate at his juncture. However, if there is any recalcitrance on behalf of Respondents in producing the necessary discovery, or attending their depositions, the Court will revisit this ruling at a later date.
DONE AND ORDERED in Chambers at West Palm Beach, Palm Beach County, in the Southern District of Florida, this 21st day of March, 2024.