Craig Cunningham v. Matrix Financial Services, LLC

Filing 7

MINUTE (IN CHAMBERS) ORDER TO SHOW CAUSE RE CONTEMPT OR OTHER SANCTIONS by Magistrate Judge John D. Early. Connexum is ORDERED to show cause, in writing, within twenty-one (21) days of personal service of this Order why it should not be held in contempt and sanctioned. Movant is ORDERED to personally serve this Order and the Motion on Connexum. Movant shall file proof of such personal service within twenty-one (21) days of this Order. (see document for further details) (hr)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
Title

8:20-mc-00065-CJC-JDE
Date
Craig Cunningham v. Matrix Financial Services, LLC

Present: The Honorable

January 7, 2021

John D. Early, United States Magistrate Judge

Maria Barr

n/a

Deputy Clerk

Court Reporter / Recorder

Attorneys Present for Plaintiff(s):

Attorneys Present for Defendant(s):

None present

None present

Proceedings:

(In Chambers) Order to Show Cause Re Contempt or Other
Sanctions

I.
INTRODUCTION
On October 13, 2020, Craig Cunningham (“Movant”), proceeding pro se, filed a
“Motion for Sanctions and a finding of contempt” to enforce an out-of-district, third party
subpoena against Connexum, LLC (“Connexum”). Dkt. 1 (“Motion”). The dispute arises
out of Connexum’s alleged failure to respond to a subpoena issued by the United States
District Court for the Eastern District of Texas (“ED Texas”) in Cunningham v. Matrix
Financial Services, LLC, Case No. 4:19-cv-00896-ALM-CAN (E.D. Tex.) (“Underlying
Action”).
On December 5, 2019, Movant filed the Underlying Action, alleging violations of the
Telephone Consumer Protection Act. Movant filed the operative First Amended Complaint
(“FAC”) on May 4, 2020. Underlying Action, Dkt. 50. Several motions to dismiss the FAC
are currently pending in the Underlying Action.
In connection with the Underlying Action, Movant claims he sent a subpoena to
nonparty Connexum on August 18, 2020, attaching a copy of an email Movant purportedly
sent to “support” at the email address “[e-mail].” Motion ¶ 1, Exh. A.
Movant maintains that, to date, Connexum has not produced any documents responsive to
his subpoena, filed any objections, or moved to quash “with any court.” Id. ¶¶ 1, 3. He
claims Connexum’s “refusal to produce records is causing an unnecessary delay in the
[Underlying Action] and is preventing [him] from identifying parties . . . .” Id. ¶ 2. Movant
requests that the Court sanction Connexum $10,000 for not responding to the subpoena,
CV-90 (10/08)

CIVIL MINUTES - GENERAL

Page 1

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
Title

8:20-mc-00065-CJC-JDE
Date
Craig Cunningham v. Matrix Financial Services, LLC

January 7, 2021

hold it in contempt, sanction it $500 per day for each additional day that it refuses to provide
responses, from the date of service of the subpoena, and order it to produce the documents.
Id. ¶¶ 4, 10. Connexum has not appeared or filed an opposition to the Motion.
On November 3, 2020, the Court issued an Order to Show Cause why the Motion
should not be denied because Movant failed to demonstrate that Connexum was properly
served with either the subpoena or the Motion. Dkt. 4 (“OSC”). On November 19, 2020,
Movant filed a Response to the OSC, wherein Movant explained that he served the
subpoena by email pursuant to an agreement and served the Motion by certified mail to the
agent for service of process. Dkt. 5 (“Response”).
In light of Movant’s representations in his Response, the Court vacates the OSC and
issues an Order to Show Cause why Connexum should not be held in contempt or
sanctioned for failure to comply with Movant’s subpoena for documents. In so doing, the
Court makes no findings as to whether the subpoena or the Motion were properly served
upon Connexum.
II.
RELEVANT LAW
Under Rule 45 of the Federal Rules of Civil Procedure, a party may serve a subpoena
commanding a nonparty to produce and permit inspection of documents. Cal. Sportfishing
Prot. All. v. Chico Scrap Metal, Inc., 299 F.R.D. 638, 642 (E.D. Cal. 2014). The “subpoena
must be issued by the court where the underlying action is pending, but challenges to the
subpoena are to be heard by the district court encompassing the place where compliance
with the subpoena is required.” Europlay Cap. Advisors, LLC v. Does, 323 F.R.D. 628, 629
(C.D. Cal. 2018) (citation omitted). “A subpoena may command . . . production of
documents, electronically stored information, or tangible things at a place within 100 miles
of where the person resides, is employed, or regularly transacts business in person[.]” Fed.
R. Civ. P. 45(c)(2)(A).
“Any person who is at least 18 years old and not a party may serve a subpoena.” Fed.
R. Civ. P. 45(b)(1). Further, Rule 45(b)(1) provides that service of a subpoena “requires
delivering a copy to the named person . . . .” While the Ninth Circuit has not determined
whether Rule 45 requires personal service, In re Subpoena to VaughnPerling, 2019 WL
8012372, at *3 (C.D. Cal. Dec. 2, 2019), most courts interpret Rule 45(b) to require personal
service of the subpoena. See Fujikura Ltd. v. Finisar Corp., 2015 WL 5782351, at *5 (N.D.
Cal. Oct. 5, 2015) (collecting cases where Rule 45(b) is understood to require personal
service of the subpoena); see also In re Subpoena to VaughnPerling, 2019 WL 8012372, at
CV-90 (10/08)

CIVIL MINUTES - GENERAL

Page 2

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
Title

8:20-mc-00065-CJC-JDE
Date
Craig Cunningham v. Matrix Financial Services, LLC

January 7, 2021

*3; Morgutia-Johnson v. City of Fresno, 2015 WL 1021123, at *1 (E.D. Cal. Mar. 9, 2015);
Bond v. Arrowhead Reg’l Med. Ctr., 2014 WL 12853149, at *3 (C.D. Cal. Apr. 9, 2014).
Under Rule 45(g), “[t]he court for the district where compliance is required . . . may
hold in contempt a person who, having been served, fails without adequate excuse to obey
the subpoena or an order related to it.” Fed. R. Civ. Proc. 45(g). Civil contempt is intended
“to coerce [a party] into compliance with the court’s order” or “to compensate the
complainant for losses sustained” from the noncompliance. Shell Offshore Inc. v.
Greenpeace, Inc., 815 F.3d 623, 629 (9th Cir. 2016) (quoting United States v. United Mine
Workers of Am., 330 U.S. 258, 303-04 (1947)).
Additionally, where “a party seeks a contempt sanction against a nonparty, that
nonparty has the right to be heard in a meaningful fashion.” Morgutia-Johnson, 2015 WL
1021123, at *2 (citing SEC v. Hyatt, 621 F.3d 687, 696-97 (7th Cir. 2010)); see also Fisher v.
Marubeni Cotton Corp., 526 F.2d 1338, 1342 (8th Cir. 1975)). “In civil litigation, it would
be rare for a court to use contempt sanctions without first ordering compliance with a
subpoena . . . . Often contempt proceedings will be initiated by an order to show cause, and
an order to comply or be held in contempt may modify the subpoena’s command.” Fed. R.
Civ. P. 45 advisory committee’s notes to 2013 Amendment; see also Hyatt, 621 F.3d at 69495.
To establish civil contempt, the moving party must show by clear and convincing
evidence that the alleged contemnor violated a clear and specific court order. If the moving
party meets this initial requirement, the burden shifts to the alleged contemnor to show that
he or she took every reasonable step to comply and to explain why compliance was not
possible. See FTC v. Affordable Media, LLC, 179 F.3d 1228, 1239 (9th Cir. 1999); Molina
v. City of Visalia, 2015 WL 5193584, at *2 (E.D. Cal. Sept. 4, 2015).
III.
DISCUSSION
The Court denies the Motion to the extent Movant seek an order finding Connexum
in contempt at this time. As explained below, it remains unclear whether the subpoena was
properly served or whether service of waived. It also does not appear that the Motion itself
was personally served. To the extent Movant seeks an order to show cause why Connexum
should not be held in contempt, that request is granted. Movant presented evidence that he
emailed the subpoena to Connexum’s support email account, “[e-mail].”
Motion, Exh. A; Response ¶ 4. Movant claims this was done pursuant to an oral agreement
with Christopher Hall on August 18, 2020, who Movant maintains was previously
CV-90 (10/08)

CIVIL MINUTES - GENERAL

Page 3

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
Title

8:20-mc-00065-CJC-JDE
Date
Craig Cunningham v. Matrix Financial Services, LLC

January 7, 2021

designated a Rule 30(b)(6) corporate representative of Connexum in an unrelated action,
Cunningham v. Montes, Case No. 3:16-cv-00761-jdp (W.D. Wis.), as reflected in a partially
legible deposition transcript submitted with Movant’s Response, which indicates a
“Christopher G. Hall” testified in May 2019 regarding four topics pursuant to a subpoena
served on Connexum, although the topics do not appear to be specified in the legible portion
of the transcript provided. Response ¶ 5, Exh. A. Movant also has submitted a recording of
the telephone call as well as a transcript. During this telephone conversation, Movant
advised an individual, identified only as “Chris,” that he had “a subpoena” he needed “to
get over to you guys” and asked how he “want[ed] that sent over,” to which “Chris”
responded, “Just send it to our [e-mail].” Id., Exh. C. On the call,
Movant advised “it’s just for phone records.” Id. “Chris” asked, “Didn’t we talk once
before?” Id. Movant responded, “We did,” and followed up, “Same thing basically.” Id. In
response, “Chris” said, “Figured that,” after which Movant and “Chris” discussed the
timing of the response and the nature of the search. Id. Based on this conversation, Movant
emailed the subpoena to the generic support email account, which he contends was
sufficient to effect service of the subpoena. See id. ¶¶ 6-8. To date, Connexum has not
responded to the subpoena or filed a response to the Motion. Connexum is ordered to show
cause why it should not be held in contempt or sanctioned for failure to comply with a
subpoena for documents.
Civil contempt is a serious matter that should not be undertaken without evidence
that the party against whom contempt is sought has notice that such proceedings are
underway. See Ochoa v. Lopez, 2016 WL 9712071, at *3 (C.D. Cal. June 20, 2016) (“Civil
contempt is serious business. Civil attorneys often don’t realize that it can ultimately lead to
the deprivation of a person’s liberty . . . . So before a court enters a contempt order, it has to
be sure that the alleged violator has received adequate notice of the potential
consequences.”); see also Cooke v. United States, 267 U.S. 517, 537 (1925) (parties to a
contempt proceeding are entitled to adequate notice and an opportunity to be heard).
Here, it is unclear whether Connexum has been provided adequate notice of the
Motion. In his Motion, Movant included a “Certificate of Service” dated October 5, 2020
with a caption from the Underlying Action, certifying that “a true copy of the foregoing was
mailed to the attorney of record in [the Underlying Action] and Connexum.” Motion at 4
(CM/ECF pagination). Movant provided no other information, including the address where
the Motion was sent or the individual to whom it was mailed. In his Response to the OSC,
Movant claims he served Connexum by USPS certified mail with return receipt on October
26, 2020 (Response ¶ 10), which is six days after the date requested in the Motion for the
production of the documents at issue (see Motion ¶ 10) and twenty-one days after his prior
CV-90 (10/08)

CIVIL MINUTES - GENERAL

Page 4

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
Title

8:20-mc-00065-CJC-JDE
Date
Craig Cunningham v. Matrix Financial Services, LLC

January 7, 2021

representation of October 5. Movant purports to attach the return receipt from the USPS,
but the delivery section does not identify who received the delivery, instead stating,
“COVID 19” under the signature and received by portions of the receipt. Response, Exh. E.
Movant has not offered any other evidence to demonstrate he attempted to personally serve
the Motion or that Connexum received actual notice of the Motion.
Where, as here, Movant seeks contempt sanctions against a third party, the Court
must have assurance that the nonparty actually receives notice and has a meaningful
opportunity to respond. As such, as provided below, Movant shall personally serve this
Order to Show Cause and the Motion on Connexum in accordance with Fed. R. Civ. P. 4.
Finally, although the Court does not rule on this issue at this time, there may be an
issue with service of the subpoena. First, Rule 45(b)(1) does not authorize a party to serve a
subpoena. Second, it is unclear whether emailing the subpoena was sufficient to properly
effect service. Most courts interpret Rule 45(b) to require personal service for subpoenas. See
9A Arthur R. Miller, Federal Practice and Procedure Civ. § 2454 (3d ed. Oct. 2020 Update).
Some courts have permitted substitute service of a Rule 45 subpoena under limited
circumstances where “the method of service is reasonably calculated to provide timely, fair
notice and an opportunity to object or file a motion to quash.” In re Subpoena to
VaughnPerling, 2019 WL 8012372, at *3 (quoting Chambers v. Whirlpool Corp., 2016 WL
9451361, at *2 (C.D. Cal. Aug. 12, 2016)). “Courts are more inclined to grant such
alternative service where the serving party has provided sufficient evidence of its earlier
diligence in attempting to effectuate personal service.” Id. (quoting Fujikura Ltd., 2015 WL
5782351, at *5). Generally, emailing a subpoena is not sufficient to effect service and
provide fair notice. See, e.g., Schneider v. CitiMortgage, Inc., 2014 WL 4749181, at *4 (D.
Kan. Sept. 24, 2014) (finding email service insufficient to effect service of a subpoena); Bank
of Okla., N.A. v. Arnold, 2008 WL 482860, at *3 (N.D. Okla. Feb. 20, 2008) (explaining
that “[e]ven if the Court agreed that Rule 45 does not restrict the manner of service of a
subpoena to personal service, the cases so holding have limited alternative service to that
permitted under Rule 4 and have not extended it to email or facsimile”).
Here, Movant does not provide evidence that he attempted to serve Connexum
through in person service or identify any other efforts to ensure Connexum. There is no
evidence that Connexum acknowledged receipt of the subpoena or that an authorized
representative at Connexum actually received it.
A representative of a subpoenaed party can agree to accept service on behalf of the
party, but only if the representative is authorized to do so. See, e.g., Inland Empire Foods,
CV-90 (10/08)

CIVIL MINUTES - GENERAL

Page 5

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
Title

8:20-mc-00065-CJC-JDE
Date
Craig Cunningham v. Matrix Financial Services, LLC

January 7, 2021

Inc. v. Zateca Foods, LLC, 2010 WL 11519370, at * 2 (C.D. Cal. Apr. 27, 2010) (finding
service of subpoenas by mail upon counsel of subpoenaed parties “ineffective” under Rule
45 without a showing counsel was authorized to accept such service). As explained, Movant
argues that “Chris” agreed during the August 2020 telephone call to accept email service of
the subpoena on behalf of Connexum and asserts “Chris” is Christopher Hall, who Movant
claims appeared as a Rule 30(b)(6) deposition designee for Connexum on four unknown
topics more than a year earlier in another case. It is unclear whether “Chris” was authorized
to accept service of a federal subpoena on behalf of Connexum in a manner other than that
provided for in Rule 45. Being designated by a company to serve as a Rule 30(b)(6) witness
on certain topics does not mean the person is authorized to accept service of subpoenas on
behalf of the entity 15 months later. Movant also attaches a California Secretary of State
LLC-12 form to his Response, which appears to indicate that as of February 2020, Mr. Hall
was still a manager/member of Connexum, although Rose M. Amezcua-Moll was the
designated agent for service of process. Response, Exh. F. Like the other exhibits, however,
this does not resolve whether Mr. Hall was authorized to accept serve six months later.
IV.
CONCLUSION AND ORDER
Based on the foregoing, Connexum is ORDERED to show cause, in writing, within
twenty-one (21) days of personal service of this Order why it should not be held in contempt
and sanctioned. Connexum is advised that the failure to respond may be deemed an
admission. See C.D. Local Civil Rule 7-12.
Movant is ORDERED to personally serve this Order and the Motion on Connexum
in accordance with Fed. R. Civ. P. 4, which requires that service be made by someone who
is not a party to the action. Movant shall file proof of such personal service within twentyone (21) days of this Order. If no such proof of personal service is filed by that time, this
Order will be vacated, and the matter dismissed for failure to prosecute, failure to comply
with a Court order, among other potential bases.
IT IS SO ORDERED.

CV-90 (10/08)

CIVIL MINUTES - GENERAL

Page 6