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Martorello v. Williams

United States District Court, N.D. Oklahoma

April 15, 2019

JOHN WILLIAMS, Respondent.


          JODI F. JAYNE JUDGE.

         Before the Court is Movant Matt Martorello's (“Martorello”) Motion to Transfer Subpoena-Related Motion to Issuing Court (ECF No. 3) (“Motion to Transfer”), which was referred to the Court by United States District Judge John Dowdell. Respondent John Williams (“Williams”) opposes the motion. For reasons explained below, the Court grants the Motion to Transfer.[1]

         I. Background

         On January 23, 2019, Martorello filed a Motion to Compel Compliance with Subpoena for Documents and Deposition from Williams (ECF No. 1) (“Motion to Compel”). The following day, Martorello filed the present Motion to Transfer, seeking an order transferring the Motion to Compel to the issuing court in the Eastern District of Virginia, pursuant to Federal Rule of Civil Procedure 45(f). On February 13, 2019, Williams filed a Motion to Quash (ECF No. 14), asking the Court to quash the subpoena that is the subject of the Motion to Compel. Because the Court grants the Motion to Transfer, the Court does not reach the merits of any issues presented in the Motion to Compel or Motion to Quash.[2]

         The pending motions and the underlying subpoena arise out of the matter of Williams, et al. v. Big Picture Loans, LLC, et al., No. 3:17-cv-00461-REP-RCY (E.D. Va. Filed June 22, 2017) (“Big Picture”), in which the plaintiffs allege that consumer-lending entities owned by the Lac Vieux Desert Band of Lake Superior Chippewa Indians (the “Tribe”) conspired with Martorello to provide loans to the plaintiffs in violation of Virginia's usury laws. Both the lending entities and Martorello are named as defendants in Big Picture. At issue in Big Picture is whether the lending entities, now owned by the Tribe, used the cover of tribal sovereign immunity to avoid application of the usury laws. The presiding judge in Big Picture, Senior United States District Judge Robert E. Payne, has already ruled that sovereign immunity does not apply to the defendant entities. See ECF No. 124 in Big Picture. The defendant entities have appealed Judge Payne's ruling to the Fourth Circuit Court of Appeals. As a result, Judge Payne has stayed all proceedings as to the defendant entities but has allowed discovery and other matters pertaining to Martorello to proceed.

         In this Court, Martorello moved to compel Williams, a local attorney, to produce documents and appear at a deposition pursuant to a subpoena dated January 9, 2019 (“Subpoena”). Martorello argues that Williams was directly involved in the sale transaction at issue in the underlying action, including the negotiation and drafting of the underlying transaction documents effectuating the sale of Martorello's company, Bellicose Capital, LLC (“Bellicose”), to the Tribe. ECF No. 3 at 4. In his response to the Motion to Compel and in the Motion to Quash, Williams argues: (1) the Subpoena, as well as previous subpoenas served on Williams' counsel in South Dakota, are unenforceable because service was defective and he was given an unreasonable amount of time to respond; (2) he possesses no responsive documents; (3) the requested documents and testimony are protected by the attorney-client privilege; and (4) the requested documents and testimony are not proportional to the needs of the case. ECF Nos. 13, 14.

         More specifically, Williams first argues the Subpoena did not allow a reasonable time for compliance. Further, Williams argues service was defective because his Oklahoma counsel agreed to accept service of the Subpoena on the condition that any objections were litigated in Oklahoma, which Martorello breached by filing the Motion to Transfer. Second, Williams states he cannot produce documents because they remain with his former law firm, Connor & Winters, and he no longer has access to those documents. See ECF No. 13 at 10. Third, Williams contends his conversations with Martorello/Bellicose are protected by attorney-client privilege. See Id. at 3-4. Because Bellicose has since been acquired by Tribal Economic Development Holdings, LLC (“TED”), which is owned by the Tribe, Williams contends that TED now holds the attorney-client privilege regarding all communications between Williams and Martorello/Bellicose. Id. According to Williams, TED has instructed him to assert the privilege and refuse to produce communications between him and Martorello/Bellicose. Id. Although Martorello contends that he seeks only “non-privileged” testimony and documents, Williams responds that Martorello's position on what he considers to be “non-privileged” is unclear. ECF No. 13 at 12. Finally, Williams argues Martorello represented that he already has all the evidence he needs for his defense in Big Picture, and it would be unduly burdensome for Williams to provide testimony or documents that Martorello does not intend to use in support of his defense.

         II. Discussion

         A. Rule 45(f)

         Under Rule 45, a court for the district where subpoena compliance is required may quash or modify a subpoena upon timely motion. See Fed. R. Civ. P. 45(d)(3). Rule 45(f) authorizes transfer of a subpoena-related motion from the court where compliance is required to the issuing court “if the person subject to the subpoena consents or if the court finds exceptional circumstances.” Fed.R.Civ.P. 45(f). The proponent of transfer bears the burden of showing that such “exceptional circumstances” are present. Fed.R.Civ.P. 45(f) advisory committee notes to 2013 amendment. Although Rule 45 does not define “exceptional circumstances, ” the Advisory Committee notes explain:

The prime concern should be avoiding burdens on local nonparties subject to subpoenas, and it should not be assumed that the issuing court is in a superior position to resolve subpoena-related motions. In some circumstances, however, transfer may be warranted in order to avoid disrupting the issuing court's management of the underlying litigation, as when that court has already ruled on issues presented by the motion or the same issues are likely to arise in discovery in many districts. Transfer is appropriate only if such interests outweigh the interests of the nonparty served with the subpoena in obtaining local resolution of the motion.

Id. When faced with a transfer motion, courts must consider “the complexity, procedural posture, duration of pendency, and the nature of the issues pending before, or already resolved by, the issuing court in the underlying litigation.” Miller Constr. Equip. Sales, Inc. v. Clark. Equip. Co., No. MC415-013, 2016 WL 447717, at *5 (S.D. Ga. Feb. 4, 2016) (quotation omitted). The consistency of outcomes and judicial economy are also paramount considerations in the transfer decision. See In re Cassell, No., 2:16-MC-00602-DB-EJF, 2016 WL 3645166, at *1 (D. Utah June 30, 2016) (noting that transfer would “provide consistency, fairness, and efficiency to all parties to this Motion and the underlying litigation”). If the motion is transferred, “judges are encouraged to permit telecommunications methods to minimize the burden a transfer imposes on nonparties, if it is necessary for attorneys admitted in the court where the motion is made to appear in the court in which the action is pending.” Id.

         B. Exceptional Circumstances

         Martorello has satisfied his burden to establish that exceptional circumstances outweigh Williams' interest in local resolution of the dispute and warrant transfer of the Subpoena-related motions to the issuing Virginia court. Specifically, Martorello has shown that (1) the substantive attorney-client privilege issues presented by the Motion to Compel are currently pending in Big Picture, and Judge Payne is better situated to decide those issues consistently; (2) numerous subpoena-related motions in Big Picture have already been transferred to the Eastern District of Virginia from other district courts ...

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