BIBB COUNTY SCHOOL DISTRICT v. DALLEMAND, et al.
ORDER DENYING 88 Motion to Quash; finding as MOOT 86 Motion to Quash; and finding as MOOT 87 Amended Motion to Quash. Ordered by US DISTRICT JUDGE MARC THOMAS TREADWELL on 6/20/2017. (tlh)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
BIBB COUNTY SCHOOL DISTRICT,
ROMAIN DALLEMAND, et al.,
CIVIL ACTION NO. 5:16-CV-549 (MTT)
Plaintiff Bibb County School District (the “School”) issued non-party subpoenas to
Prime Meridian Bank seeking the bank records (including copies of bank statements,
checks, and deposits) of Defendants Pinnacle/CSG, Inc. and Cory McFarlane for the
period of February 1, 2011 through May 5, 2017. Pinnacle and McFarlane jointly move
to quash the subpoenas as to any information relating to the period before July, 2012,
asserting a privilege to financial privacy afforded under Florida law. Doc. 88 at 1-2.
Pinnacle and McFarlane assert that the School has not met its burden under
Florida law to show that: (1) the records are relevant, and (2) the School’s need for the
information outweighs Pinnacle and McFarlane’s privacy interests. Id. at 6. Pinnacle
and McFarlane’s argument is narrow—that the relevancy of, and need for, the pre-July,
2012 documents cannot be demonstrated from the School’s Amended Complaint (Doc.
59). Id. at 7 (“While it may be principally argued that the amended complaint, on its
face, demonstrates the need for the post July 2012 privilege financial information, the
same cannot be said for the pre-July 2012 privilege financial information.”). Pinnacle
and McFarlane conclude that the motion to quash should be granted, or, alternatively,
the Court should conduct an in camera inspection of the documents or hold an
evidentiary hearing. Id. at 9-11. The Court disagrees.
In the complaint, the School alleges that the Defendants defrauded it of almost
$8 million, of which over $3 million went to Pinnacle. Doc. 59 at 130. The figurehead of
the scheme—Defendant Dallemand—was hired by the School as Superintendent on
February 1, 2011. Id. ¶¶ 15, 31-42. Within a few months of being hired, Dallemand
began reorganizing the School’s purchasing department to facilitate his scheme to
defraud the School; the reorganization was complete by July, 2012. Id. ¶¶ 31-42. On
November 12, 2012, Dallemand, purporting to act on behalf of the School, entered into
a licensing agreement with Pinnacle (through McFarlane) for accounting and financial
software that did not exist, but cost the School over $3 million. Id. ¶¶ 80, 84, 107.
Pinnacle and McFarlane do not give a very clear explanation of why the records
preceding July, 2012 are irrelevant. They simply argue that their open involvement in
the scheme occurred after July, 2012. Id. at 7. This may or may not be the case. But
the Court does not agree that the financial records are not discoverable. Though the
complaint does not directly allege Pinnacle and McFarlane’s involvement in the scheme
before July, 2012, if the allegations of the complaint are true, it seems nearly certain
that Pinnacle and McFarlane’s role in the scheme was concocted at some point prior to
their dealings with the School in 2012. One logical way for the School to discover the
date of Pinnacle and McFarlane’s involvement in the alleged scheme is to look at the
subject financial records. The School decided to begin its search by examining all
records after the genesis of the scheme, February 1, 2011, when Dallemend was hired.
This is reasonable.
Accordingly, the Court finds that Pinnacle and McFarlane’s financial records from
February 1, 2011 through July, 2012 are relevant, and that the School’s need for them
outweighs Pinnacle and McFarlane’s privacy interest. The Court sees no need for an in
camera inspection of the documents or an evidentiary hearing. The Court notes that the
information discovered will be subject to a confidentiality order (which is being
separately negotiated by the parties). If the pre-July, 2012 records prove irrelevant or
unnecessary, the Court will grant the information continued protection. This fully
mitigates Pinnacle and McFarlane’s concerns regarding unwarranted negative media
coverage (see Doc. 88 at 6-7).
Pinnacle and McFarlane’s joint motion to quash (Doc. 88) is accordingly
SO ORDERED, this 20th day of June, 2017.
S/ Marc T. Treadwell
MARC T. TREADWELL, JUDGE
UNITED STATES DISTRICT COURT
Pinnacle and McFarlane prematurely filed two non-final versions of the motion to quash (Docs. 86;
87) in error. Doc. 88 at 2 n.1. These motions are MOOT.
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