Marshall v. GE Marshall Inc et al

Filing 94

OPINION AND ORDER The Motion for Expedited Hearing and/or Ruling on the Individual Defendants Motion to Modify Subpoenas and Motion for Protective Order DE 81 filed by the individual defendants on March 16, 2012, is DENIED AS MOOT; the Motion for P rotective Order DE 85 filed by the individual defendants on March 21, 2012, is GRANTED IN PART; and the Motion to Modify Subpoenas DE 86 filed by the individual defendants on March 21, 2012, is DENIED. Signed by Magistrate Judge Andrew P Rodovich on 6/20/12. (kjp)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
CASA M. MARSHALL,

)
)
Plaintiff
)
)
v.
)
)
GE MARSHALL, INC.; M5, INC.;
)
MBIP LLC; TOWER ROAD LLC; JOLIET)
ROAD PROPERTIES LLC; CRCFR
)
PROPERTIES LLC; FRANK A.
)
MARSHALL; CLINTON E. MARSHALL; )
ROGER W. MARSHALL; ROSS J.
)
MARSHALL, individually and in
)
their official capacities as an )
officer director and/or
)
shareholder of GE Marshall Inc, )
M5 Inc., MBIP LLC, Tower Road
)
LLC, Joliet Road Properties LLC,)
CRCFR Properties LLC, and as a )
beneficiary of the Glen E.
)
Marshall Marital Trust; MARIE
)
MARSHALL, as Trustee of the Glen)
E. Marshall Marital Trust; KAREN)
MARSHALL, as beneficiary of the )
Glen E. Marshall Marital Trust, )
)
Defendants
)

CIVIL NO. 2:09 cv 198

OPINION AND ORDER
This matter is before the court on the Motion for Expedited
Hearing and/or Ruling on the Individual Defendants’ Motion to
Modify Subpoenas and Motion for Protective Order [DE 81] filed by
the individual defendants on March 16, 2012; the Motion for
Protective Order [DE 85] filed by the individual defendants on
March 21, 2012; and the Motion to Modify Subpoenas [DE 86] filed
by the individual defendants on March 21, 2012.

Because the date by which the defendants requested a ruling
has passed, the Motion for Expedited Hearing and/or Ruling on the
Individual Defendants’ Motion to Modify Subpoenas and Motion for
Protective Order [DE 81] is DENIED AS MOOT.
For the reasons set forth below, the Motion for Protective
Order [DE 85] is GRANTED IN PART, and the Motion to Modify
Subpoenas [DE 86] is DENIED.
Background
On February 28, 2011, the plaintiff, Casa M. Marshall, filed
a seven-count amended complaint alleging: (1) gender discrimination; (2) age discrimination; (3) violation of the ADA; (4) Title
VII Retaliation; (5) violation of the Family and Medical Leave
Act of 1993; (6) Breach of Fiduciary Duty to Minority Shareholder; and (7) Breach of Duty of Good Faith and Fair Dealing.
The parties engaged in discovery, and on February 3, 2012, the
plaintiff served the defendants with two subpoenas - one directed
to Commercial Advantage, Inc. and the other directed to BKD, LLP.
Commercial Advantage is a commercial, professional, and industrial real estate business, and BKD is a CPA and advisory firm.
Both hold personal financial documents belonging to the individual defendants.
The Commercial Advantage subpoena seeks production of:
[A]ny and all files concerning G.E. Marshall
Inc., M5 Inc., Frank Marshall, Clinton Mar2

shall, Roger Marshall, Ross Marshall, Casa
Marshall, Karen Marshall, the Glen E. Marshall Marital Trust, any beneficiary of the
Glen E. Marshall Marital Trust; and/or any
Grantor Retained Annuity Trust relating to
G.E. Marshall Inc., M5 Inc., Frank Marshall,
Clinton Marshall, Roger Marshall, Ross Marshall, Casa Marshall, Karen Marshall and/or
the Glen E. Marshall Marital Trust, including
but not limited to the following: any and all
documents, electronically stored information,
objects, commercial evaluation, appraisals,
business valuation and/or evaluations, and
permit their inspection and copying.
Similarly, the BKD subpoena seeks production of:
[A]ny and all files concerning G.E. Marshall
Inc., M5 Inc., Frank Marshall, Clinton Marshall, Roger Marshall, Ross Marshall, Casa
Marshall, Karen Marshall, the Glen E. Marshall Marital Trust, and/or any beneficiary
or income recipient of the Glen E. Marshall
Marital Trust including but not limited to
the following: any and all documents, electronically stored information, objects, commercial evaluation, appraisals, business
valuation and/or evaluations; and discussions
or meetings concerning estate planning, stock
valuation, stock discounts, gifts, distributions, annuity payments and/or any Grantor
Retained Annuity Trust relating to G.E. Marshall Inc., M5 Inc., Frank Marshall, Clinton
Marshall, Roger Marshall, Ross Marshall, Casa
Marshall, Karen Marshall and/or the Glen E.
Marshall Marital Trust; and permit their
inspection and copying.
The defendants object to the subpoenas, arguing they are overly
broad and seek irrelevant information.
Discussion
Federal Rule of Civil Procedure 45(c)(3)(A)(iii) provides

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that "[o]n timely motion, the Court by which a subpoena was
issued shall quash or modify the subpoena if it . . . requires
disclosure of privileged or other protected material and no
exception or waiver applies."

"[T]he party seeking to quash a

subpoena under Rule 45(c)(3)(A) has the burden of demonstrating
that the information sought is privileged or subjects a person to
an undue burden." Hodgdon v. Northwestern University, 245 F.R.D.
337, 341 (N.D. Ill. 2007).

Implicit in the rule is the require-

ment that a subpoena seek relevant information. See Stock v.

Integrated Health Polan, Inc., 241 F.R.D. 618, 621-622 (S.D. Ill.
2007); Syposs v. United States, 181 F.R.D. 224, 226 (W.D.N.Y.
1998) ("The reach of a subpoena issued pursuant to Fed.R.Civ.P.
45 is subject to the general relevancy standard applicable to
discovery under Fed.R.Civ.P. 26(b)(1)."). Relevancy under this
rule is construed broadly to encompass "any matter that bears on,
or that reasonably could lead to other matter[s] that could bear
on, any issue that is or may be in the case." Chavez v. Daimler-

Chrysler Corp., 206 F.R.D. 615, 619 (S.D. Ind. 2002) (quoting
Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351, 98 S.Ct.
2380, 57 L.Ed.2d 253 (1978)). Even when information is not
directly related to the claims or defenses identified in the
pleadings, the information still may be relevant to the broader
subject matter at hand and meet the rule's good cause standard.

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Sanyo Laser Products, Inc. v. Arista Records, Inc., 214 F.R.D.
496, 502 (S.D. Ind. 2003).
Commercial Advantage, Inc. is a commercial, professional,
and industrial real estate business, and BKD, LLP is a national
CPA and advisory firm providing wealth advisory, tax, estate, and
investment planning services.

The defendants contend that any

files that Commercial Advantage or BKD holds pertaining to the
individual defendants relate to their personal finances and are
beyond the scope of the plaintiff’s complaint.

The defendants do

not object to the subpoenas to the extent they seek information
concerning the corporate defendants, G.E. Marshall, Inc., M5,
Inc., MBIP, LLC, Tower Road, LLC, Joliet Road Properties, LLC,
and CRCFR Properties, LLC.
The plaintiff opposes the defendants’ motion to quash on
several grounds.

First, the plaintiff argues that the informa-

tion sought is relevant to her discrimination claims and reasonably calculated to lead to the discovery of admissible evidence.
Specifically, the plaintiff states that information concerning
the individual defendants, who are outside of the plaintiff’s
protected class, could establish that they engaged in selfdealing or conflict of interest transactions, received company
funds or benefits that the plaintiff did not receive, were
provided larger dividends, profits, or income, and were paid with

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company funds for unrelated activities.

The plaintiff did not

receive any of these payments, and she relies on this to show she
was treated less favorably.
To succeed on her gender discrimination claims, the plaintiff will have to show that:

1) she belongs to a protected

group; 2) she was performing to the employer’s legitimate expectations; 3) she suffered an adverse employment decision; and 4)
the employer treated similarly situated employees who were not in
the protected group more favorably.

See Moser v. Indiana Depart-

ment of Corrections, 406 F.3d 895, 900 (7th Cir. 2005); O'Neal v.
City of Chicago, 392 F.3d 909, 911 (7th Cir. 2004); Williams v.
Waste Management of Illinois, Inc., 361 F.3d 1021, 1029 (7th Cir.
2004).

The Seventh Circuit broadly defines the phrase "adverse

employment action" to mean "one that is materially adverse,
meaning more than a mere inconvenience or an alteration of job
responsibilities." Hilt-Dyson v. City of Chicago, 282 F.3d 456,
465 (7th Cir. 2002) (quotation and citation omitted). Under this
definition, the court recognizes three categories of materially
adverse employment actions:
(1) cases in which the employee's compensation, fringe benefits, or other financial
terms of employment are diminished, including
termination; (2) cases in which a nominally
lateral transfer with no change in financial
terms significantly reduces the employee's
career prospects by preventing her from using
her skills and experience, so that the skills
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are likely to atrophy and her career is likely to be stunted; and (3) cases in which the
employee is not moved to a different job or
the skill requirements of her present job
altered, but the conditions in which she
works are changed in a way that subjects her
to a humiliating, degrading, unsafe, unhealthful, or otherwise significantly negative alteration in her workplace environment.

O'Neal, 392 F.3d at 911
See also Arizanovska v. Wal-Mart Stores, Inc., ___ F.3d ___, 2012
WL 2104517 (7th Cir. June 12, 2012).

The plaintiff’s employment

discrimination claims are brought solely against her employers,
the corporate defendants.

The employers are not opposing the

information requested by the subpoenas, and any discriminatory
payments should be reflected in the corporate records.
The plaintiff argues that the individual defendants’ financial records are relevant because they will show that she was
treated adversely because the individual defendants received
larger dividends, profits, or income.

However, the individual

defendants’ personal financial information and estate planning
records will not suggest whether the employer took discriminatory
actions.

This information is personal to the individual defen-

dants and any payments and their purposes can be determined from
the corporate records.

It is not clear how the individual

defendants’ personal financial data will reflect the actions the
employer took.

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The plaintiff also alleges that the individual defendants
breached their fiduciary duties of good faith and fair dealing
and that their personal financial data bears directly on these
claims.

Specifically, the plaintiff argues that the individual

defendants offered her a buy-out that was not made in good faith
and was based on discounted five year old values, arbitrary value
opinions, self dealing, and conflict of interest transactions.
These allegations were raised not only against the corporate
entities, but also against the individual defendants.

Because

the plaintiff raised these claims against the individual defendants, their individual actions are relevant to the plaintiff’s
claims.

The information the plaintiff seeks will show whether

the individual defendants received payments from the corporate
entities that the plaintiff did not receive.

The amounts and

frequency of any such payments may serve as circumstantial
evidence that the defendants were engaged in self-dealing transactions and breached their fiduciary duties.
As part of her claim that the defendants breached their
fiduciary duties, the plaintiff argues that the individual defendants’ personal financial information will show whether the
parties entered and executed a Grantor Retained Annuity Trust
(GRAT) that transferred a majority of the assets of the Glen E.
Marshall Marital Trust to Frank, Clinton, Roger, Ross, and Casa

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Marshall.

The plaintiff complains that whether the GRAT was

initiated could change the value of her case.

By reviewing the

defendants’ personal financial information and the information
regarding the trust, the plaintiff will be able to determine
whether payments were made, which will affect the value of her
claim.

Despite the defendants’ representations that they did not

enter or execute a GRAT, the plaintiff is entitled to discover
whether any such agreement was in fact entered and executed.
defendants’ denial is not a basis for quashing a subpoena.

The

See,

e.g., Voltage Pictures, LLC v. Does 1–5,000, ___ F.Supp.2d ___,
2011 WL 1807438, *2 (D.D.C. 2011); First Time Videos v. Does

1–500, 276 F.R.D. 241, 250–51 (N.D. Ill. Aug. 9, 2011); MGCIP v.
Does 1–316, 2011 WL 2292958 (N.D. Ill. June 9, 2011).
Regardless of the GRAT, the amount and frequency of payments
the individual defendants received that the plaintiff did not may
serve as circumstantial evidence that the individual defendants
were breaching their duty.

Their financial information is

relevant for this purpose.

However, the plaintiff has not

established how the individual defendants’ estate planning
document are relevant to this inquiry or will tend to show that
the defendants took unwarranted payment.

Therefore, the court

must determine whether the estate planning information is relevant to any of the plaintiff’s claims.

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The plaintiff also argues that the defendants’ personal
financial information is relevant to determining the punitive
damages. The majority of federal courts, and courts within this
Circuit, have permitted plaintiffs seeking punitive damages to
discover information related to the defendant’s financial condition prior to making a prima facie case that she may recover
punitive damages.

See United States v. Autumn Ridge Condominium

Association, Inc., 265 F.R.D. 323, 327-28 (N.D. Ind. 2009)
(citing Platcher v. Health Professionals, Ltd., 2007 WL 2772855,
*2 (C.D. Ill. Sept. 18, 2007) (finding that the individual
defendants' financial condition is discoverable in relation to a
punitive damages claim *328 against them). See also El-Bakly v.

Autozone, Inc., 2008 WL 1774962, *5 (N.D. Ill. April 16, 2008)
(finding evidence of financial status relevant to the award of
punitive damages); Equal Employment Opportunity Comm'n v. Staff-

ing Network, 2002 WL 31473840, *4 (N.D. Ill. Nov. 4, 2002) (finding that the defendant's financial information may be relevant to
the issue of punitive damages)).

The Seventh Circuit has ac-

knowledged that "plaintiffs who are seeking punitive damages
often present evidence of the defendant’s wealth."

Kemezy v.

Peters, 79 F.3d 33, 36 (7th Cir. 1996).
Because the plaintiff seeks punitive damages against both
the corporate defendants and the individual defendants, the

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individual defendants’ financial documents are relevant to her
claim and therefore subject to discovery.

Although the individ-

ual defendants object to turning over estate planning documents,
they have done nothing more than state that the documents are
irrelevant and have not demonstrated why the information is
unrelated to the plaintiff’s claim for punitive damages.

The

money in the Glen E. Marshall Marital Trust and any money the
defendants have saved that will be revealed by the estate planning documents bear on their net worth and are relevant to the
plaintiff’s request for punitive damages.
The defendants also seek to have the personal financial
information limited to the previous three years and request the
court to enter a protective order to prohibit disclosure or use
of the individual defendants’ personal financial information
outside of this litigation.

The defendants refer the court to

Autumn Ridge Condominium, 265 F.R.D. at 323, in support of their
argument that the financial information should be limited to the
past three years.

In Autumn Ridge Condominium, the court deter-

mined that only the defendants’ current assets and liabilities
were relevant to the punitive damages claims against them and
that two years of financial documents were sufficient to determine the defendants’ net worth.

Autumn Ridge Condominium, 265

F.R.D. at 329.

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The court would limit the discovery to the past three years
of financial documents if the financial documents only were
relevant to the plaintiff’s request for punitive damages.

How-

ever, as explained above, the individual defendants’ financial
information is relevant to the plaintiff’s claim for breach of
fiduciary duty because it may show whether the defendants improperly siphoned money from the corporations thereby reducing the
companies’ value.

Because the alleged acts may have begun prior

to the past three years, the plaintiff is entitled to examine the
defendants’ financial data extending further back than in Autumn

Ridge Condominium.

Therefore, the court will not limit the

discovery request to the past three years.
The court will GRANT the defendants’ request for a protective order to prohibit disclosure or use of the individual
defendants’ personal financial information outside of this
litigation.

It is expected that the parties will agree on a

protective order and submit it for court approval.
_______________
Based on the foregoing, the Motion for Expedited Hearing
and/or Ruling on the Individual Defendants’ Motion to Modify
Subpoenas and Motion for Protective Order [DE 81] filed by the
individual defendants on March 16, 2012, is DENIED AS MOOT; the
Motion for Protective Order [DE 85] filed by the individual

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defendants on March 21, 2012, is GRANTED IN PART; and the Motion
to Modify Subpoenas [DE 86] filed by the individual defendants on
March 21, 2012, is DENIED.
ENTERED this 20th day of June, 2012

s/ ANDREW P. RODOVICH
United States Magistrate Judge

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