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 the defendant, Signature Stock
Transfer, Inc.'s motion to compel production of documents
(Filing No. 194). Along with its motion, Signature
Stock Transfer, Inc. filed two exhibits (Filing No.
194-1 and Filing No. 194-2). Plaintiff, COR
Clearing, LLC, filed a brief in opposition to the motion
(Filing No. 212) as well as an index of evidence in
support of its brief (Filing No. 213). No reply
brief was filed and the time for doing so has passed.
See NECivR 7.1(c) (providing that the “moving
party may file a reply brief and index of evidence within 7
days after the opposing party files and serves the opposing
brief.”). After review of the motion, the exhibits, the
brief and index of evidence in opposition, and the relevant
law, the Court finds that Signature Stock Transfer,
Inc.'s motion should be denied.
August 26, 2015, COR Clearing filed its first complaint
against Calissio Resources Group, Inc.
(“Calissio”), Adam Carter (“Carter”),
Signature Stock Transfer, Inc. (“Signature”), and
Does 1-50 (Filing No. 1). Plaintiff's complaint
alleged three causes of action including: (1) a request for
declaratory judgment; (2) unjust enrichment; and (3) fraud.
See Id. at 9-13. The complaint alleged 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).
November 10, 2015, following a hearing, the Court denied
COR's expedited motion (Filing No. 20) for the
appointment of a limited purpose receiver (Filing No.
80). On December 8, 2015, the Court denied
Signature's motion (Filing No. 29) to dismiss
(Filing No. 85). On April 21, 2016, the Court
granted plaintiff's application (Filing No. 108)
for default judgment against Calissio Resources Group, Inc.
(Filing No. 109). On May 23, 2016, the Court granted
plaintiff's motion (Filing No. 94) to compel
TDAC “to produce documents and things responsive to
[plaintiff's] subpoena served on or about December 4,
2015.” (Filing No. 116).
August 2, 2016, the Court granted plaintiff leave to file an
amended complaint (Filing No. 122). On December 9,
2016, the Court denied the Clearing Firm Defendants'
joint motion (Filing No. 137) to dismiss the amended
complaint (Filing No. 160). On January 25, 2017, COR
sought and was granted leave to again amend its complaint
(Filing No. 171 and Filing No.
174).On January 30, 2017, COR filed its Second
Amended Complaint (Filing No. 175). On February 10,
2017, National Financial Services, LLC filed its answer
(Filing No. 181). On February 13, 2017, defendants
TD Ameritrade Clearing, Inc. and Scottrade, Inc. filed their
respective answers (Filing No. 183 and Filing No.
184). On February 15, 2017, E-Trade Clearing, LLC
filed its answer (Filing No. 186).
March 6, 2017, the Court issued its Third Amended Final
Progression Order (Filing No. 193). On April 3,
2017, Signature brought the instant motion seeking to compel
COR's production of 43 different requests for production
made by Signature (Filing No. 194).
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 discoverable.
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 boundaries.”).
“[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).
Court finds that Signature, as the party seeking the
discovery, has failed to sufficiently satisfy its initial
burden. The Court notes that since Signature's filing of
the motion, COR has produced a number of the documents
requested in Signature's motion (Filing No. 212
at 1, 5). The Court further notes Signature's failure to
provide the Court with any substantive briefing beyond the
two-page conclusory analysis contained within the motion
itself. It is especially telling that after COR filed its
brief in opposition to Signature's motion and informed
the Court of COR's supplementing its production to
provide additional documents, Signature failed to file a
reply brief to further address the issues it raised in its