United States District Court, D. Nebraska
COR CLEARING, LLC, a Delaware limited liability company, Plaintiff,
CALISSIO RESOURCES GROUP, INC., a Nevada corporation, ADAM CARTER, an individual, SIGNATURE STOCK TRANSFER, INC, A Texas corporation; and DOES 1-50, Defendants.
MEMORANDUM AND ORDER
E. STROM, SENIOR JUDGE
matter is before the Court on plaintiff, COR Clearing,
LLC’s (“COR Clearing” or
“plaintiff”), motion to compel (Filing No.
94). COR Clearing’s motion seeks “an
order compelling TD Ameritrade (“TDAC”) to
produce documents and things responsive to COR
Clearing’s subpoena served on or about December 4,
2015.” (Id.) The matter has been fully briefed
by the parties. See Filing Nos. 95, 98, 103, and
After review of the motion, the parties’ briefs, and
the applicable law the Court finds as follows.
August 26, 2015, plaintiff filed suit against Calissio
Resources Group, Inc. (“Calissio”), Adam Carter,
Signature Stock Transfer, Inc., and Does 1-50 (collectively
“defendants”) (Filing No. 1).
Plaintiff’s complaint alleges three causes of action
against defendants including: (1) a request for declaratory
judgment; (2) unjust enrichment; and (3) fraud. See
Id. at 9-13. Plaintiff claims that defendants
“calculated [a] scheme to defraud the marketplace and
the clearing system in order to obtain millions of dollars
from unsuspecting market participants by exploiting a
weakness in the dividend payment system of the third-party
Depositary Trust Clearing Corporation
(“DTCC”).” (Id. at 1).
October 5, 2015, plaintiff asked the Court to appoint a
receiver “for the limited purpose of instructing [t]he
[DTCC] to make post-payable adjustments in accordance with
its policies and procedures.” (Filing No. 20
at 1). Numerous third parties, including TDAC, objected to
the appointment of the receiver. See Filing Nos.
32-36, 40-41, 43, 47-48, 53-56, 59-64, 66-73, 75-77. The
Court ordered a hearing on plaintiff’s motion (Filing
No. 65). On November 10, 2015, after hearing
arguments from the plaintiff and TDAC, the Court denied
plaintiff’s motion to appoint a receiver. (Filing No.
about December 4, 2015, plaintiff served a subpoena on TDAC.
See Filing No. 98 at 1. COR Clearing
alleges TDAC is in possession of “highly
relevant” documents and other materials pertinent to
COR Clearing’s underlying claims. See Id.
Specifically, plaintiff makes five requests including:
“[d]ocuments sufficient to identify all individuals,
businesses, and entities to which [TDAC] sold or transferred
any share of Calissio stock between and including June 30,
2015 and August 19, 2015, ” (Filing No. 96-2
at 9); and “[a]ll documents consisting or relating to
any communication between [TDAC] and any person, individual,
introducing firm, broker, dealer, regulatory agency, or
entity, including, without limitation, DTCC and FINRA,
” (Id. at 10). (Id. at 9-11).
Rule of Civil Procedure 26(b)(1) allows
[p]arties [to] obtain discovery regarding any nonprivileged
matter that is relevant to any party’s claim or defense
and proportional to the needs of the case, considering 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. Information within this scope
of discovery need not be admissible in evidence to be
Fed. R. Civ. P. 26(b)(1). The United States Supreme Court has
held that discovery under Rule 26 should be “construed
broadly to encompass any matter that bears on, or that
reasonably could lead to other matter that could bear on, any
issue that is or may be in the case.” Oppenheimer
Fund, Inc. v. Sanders, 437 U.S. 340, 351, 98 S.Ct. 2380,
57 L.Ed.2d 253 (1978). However, this broad interpretation and
liberal application of the rule does not provide unlimited
discovery. Oppenheimer, 437 U.S. at 351; see
also Hickman v. Taylor, 329 U.S. 495, 507, 67 S.Ct. 385,
91 L.Ed. 451 (1947) (stating “discovery, like all
matters of procedure, has ultimate and necessary
“[t]he party seeking discovery must satisfy some
threshold showing of relevancy before discovery is
required.” Lubrication Technologies, Inc. v.
Lee’s Oil Service, LLC, Civil No. 11-2226
(DSD/LIB), 2012 WL 1633259, at *2 (D. Minn. April 10, 2012)
(internal citation omitted). However, “[o]nce that
threshold has been met, the resisting party ‘must show
specifically how . . . each . . . [request for production] is
not relevant or how the discovery is overly broad,
burdensome, or oppressive.’” Lubrication
Technologies, 2012 WL 1633259, at *2 (quoting St.
Paul Reinsurance Co., Ltd. v. Commercial Financial
Corp., 198 F.R.D. 508, 512 (N.D. Iowa 2000))
(alterations in original).
of relevance in discovery rulings are left to the sound
discretion of the trial court . . . .” Hayden v.
Bracy, 744 F.2d 1338, 1342 (8th Cir. 1984) (internal
citations omitted). District courts may limit “the
scope of discovery after balancing a number of
interests.” Slate v. ABC, 802 F.Supp.2d 22, 26
(D.D.C. 2011) (citing In re Sealed Case (Medical
Records), 381 F.3d 1205, 1215 (D.C. Cir. 2004)
(additional citations and quotations omitted)). One of the
interests that may be included in the district court’s
balancing is a right to privacy. See Seattle Times Co. v.
Rhinehart, 467 U.S. 20, 35 n.21, 104 S.Ct. 2199, 81
L.Ed.2d 17 (1984); see also Hardie v. National Collegiate
Athletic Ass’n, No. 13cv346-GPC (DHB), 2013 WL
6121885, at *3 (S.D. Cal. Nov. 20, 2013) (providing
“federal courts . . . recognize a right of privacy that
can be raised in response to discovery requests.”). A
number of courts have held that the “standards for
nonparty discovery require a stronger showing of relevance
than . . . party discovery.” Stamy v. Packer,
138 F.R.D. 412, 419 (D.N.J. 1990) (citing Laxalt v.
McClatchy, 116 F.R.D. 455, 458 (D. Nev. 1986); Dart
Industries Co. v. Westwood Chemical Co., 649 F.2d 646,
649 (9th Cir. 1980); Slater Steel, Inc. v. Vac-Air Alloys
Corp., 107 F.R.D. 246, 248 (W.D.N.Y. 1985)).
plaintiff served the December 4, 2015, subpoena, TDAC
responded with a letter detailing TDAC’s objections and
stated that “TDAC will not be producing any documents
in response to the [s]ubpoena.” (Filing No.
96-3 at 3). Following TDAC’s letter, both
counsel for plaintiff and TDAC discussed the matter further
in an attempt to find a mutually agreeable solution (Filing
No. 98 at 6). TDAC expressed a willingness to
provide “some limited production of information.”
(Id.) However, plaintiff insisted on the production
of “two critical sets of information: the identity of
the at least 764 TDAC customers who initiated purchases of
Calissio shares during the ...