Klein v. TD Ameritrade Holding Corporation, et al

Filing 163

ORDER that Ameritrade's Motion for Protective Order (Filing No. 141 ) and Supplemental Motion for Protective Order (Filing No. 146 ) are granted. Ford's Motion to Compel Responsive Discovery (Filing No. 149 ) is denied without prejudic e. Ameritrade's Motion for Leave to File Sur-Reply (Filing No. 159 ) is denied. The parties' Joint Motion to Extend Class Certification Schedule (Filing No. 162 ) is granted. The parties shall have to on or before January 6, 2017, to confer and submit a proposed amended progression to resolve the class certification dispute. The court will hold a telephone conference on January 13, 2017, at 11:00 a.m. for the purpose of finalizing the amended progression order and resolving any outstanding discovery disputes. Plaintiff's counsel shall initiate the conference with the assigned magistrate judge and participating counsel. Ordered by Magistrate Judge Thomas D. Thalken. (LAC)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
GERALD J. KLEIN,
Plaintiff,

8:14CV396

vs.
ORDER
TD AMERITRADE HOLDING
CORPORATION,
TD AMERITRADE, INC., and
FREDRIC TOMCZYK,
Defendants.
This matter is before the court on TD Ameritrade Holding Corporation, TD
Ameritrade, Inc., and Fredric Tomczyk’s (collectively Ameritrade) Motion for Protective
Order (Filing No. 141) and lead plaintiff, Roderick Ford’s (Ford) Motion to Compel
Responsive Discovery (Filing No. 149). Ameritrade filed a brief (Filing No. 142) and an
index of evidence (Filing No. 143) in support of the Motion for Protective Order.
Ameritrade further filed a Supplemental Motion for Protective Order (Filing No. 146) and
an index of evidence (Filing No. 147) in support of the supplemental motion. Ford filed
a brief (Filing No. 150) and an index of evidence (Filing No. 151) in opposition to the
motions for protective order and in support of his motion to compel. Ameritrade filed a
brief (Filing No. 155) and an index of evidence (Filing No. 156) in reply. Ford filed a
brief (Filing No. 157) and index of evidence (Filing No. 158) in reply for his motion.
Ameritrade filed a Motion for Leave to File Sur-Reply (Filing No. 159) to which Ford
responded opposing the sur-reply, or in the alternative, seeking leave to consult his
expert witness and file a retort. For the reasons set forth below, further briefing is
denied, Ameritrade’s motions for protective order are granted and Ford’s motion to
compel is denied without prejudice.

BACKGROUND
Here, Ford alleges, Ameritrade violated federal securities law. See Filing No. 1 Complaint p. 1.

Parties requested an in-person conference prior to the entry of a

scheduling order and the hearing was held on August 9, 2016. See Filing No. 126.

During the hearing, counsel for the parties had an opportunity to argue and raise
challenges to the discovery issues related to Ford’s class certification claim. See Filing
No. 143-2 - Tr. p. 1-39. Ford specifically argued against bifurcation of the discovery, but
after a lengthy discussion with counsel, the court bifurcated discovery and ordered that
no merit discovery would be allowed until the class certification issue was resolved. Id.
An evidentiary hearing is scheduled for May 2, 2017, on the class certification issue.
See Filing No. 129 - Text Order.
Ford asserts, on September 22, 2016, he served First Requests for Production of
Documents and on October 5, 2016, he served First Set of Interrogatories on
Ameritrade. See Filing No. 150 – Ford Brief p. 4. Ford alleges Ameritrade provide the
requested discovery even though such discovery is necessary for Ford to support class
certification.

Id. 1-16.

Ameritrade contests Ford’s discovery requests and alleges

Ford’s requests violate the progression order by attempting to obtain merit-based
discovery, which is beyond the scope of the progression order. See Filing No. 142 Ameritrade Brief p. 1-10.

Parties have attempted to resolve the discovery issues

without the court’s involvement; however, they have not been able to do so. See Filing
No. 143-4 to -6.

ANALYSIS
If discovery is initially limited to a class certification issue, “the plaintiff bears the
burden of advancing a prima facie showing that [the class action requirements are
satisfied or] discovery is likely to produce substantiation of the class allegations.” Jarrett
v. Panasonic Corp. of N. Am., 8 F. Supp. 3d 1074, 1090 (E.D. Ark. 2013) (quoting
Mantolete v. Bolger, 767 F.2d 1416, 1424 (9th Cir. 1985)). Specifically, the plaintiff
must demonstrate “discovery measures are likely to produce persuasive information
substantiating the class action allegations.” Doninger v. Pac. Nw. Bell, Inc., 564 F.2d
1304, 1313 (9th Cir. 1977). “Mere speculation that information might be useful will not
suffice; litigants seeking to compel discovery must describe with a reasonable degree of
specificity, the information they hope to obtain and its importance to their case.” Telco
Grp., Inc. v. Ameritrade, Inc., No. 8:05CV387, 2006 WL 560635, at *2 (D. Neb. Mar. 6,
2006) (citing Cervantes v. Time, Inc., 464 F.2d 986, 994 (8th Cir. 1972)). Once the
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plaintiff’s burden is met, “[t]he party opposing a motion to compel has the burden of
showing its objections are valid by providing specific explanations or factual support as
to how each discovery request is improper.”

Montes v. Union Pac. R. Co, No.

8:09CV226, 2010 WL 4684010, at *2 (D. Neb. Nov. 12, 2010) (citing St. Paul
Reinsurance Co. v. Commercial Fin. Corp., 198 F.R.D. 508, 511 (N.D. Iowa 2000)).
“Bare assertions that discovery requested is overly broad, unduly burdensome,
oppressive or irrelevant are ordinarily insufficient to bar production.” Kellogg v. Nike,
Inc., No. 8:07CV70, 2007 WL 4570871, at *10 (D. Neb. Dec. 26, 2007) (citing St. Paul,
198 F.R.D. at 511-12). The “party resisting discovery must show specifically how each
interrogatory or request for production is not relevant or how each question is overly
broad, burdensome or oppressive.” Kooima v. Zacklift Int'l, Inc., 209 F.R.D. 444, 446
(D.S.D. 2002).
After reviewing parties’ motions, briefs, and indexes of evidence, the sole issue
for the court is to decide whether Ford has presented sufficient justification for the
disputed discovery to compel Ameritrade to disclose the information at this time. Ford
argues Ameritrade failed to show good cause for denying Ford’s discovery requests and
the requested information is necessary for Ford to prove his class certification claim.
See Filing No. 150 - Ford Brief p. 1-16. Ford failed to substantiate why he needs
additional discovery to show class certification is warranted. The disputed discovery
expands beyond the scope of the class certification issue.

Ford seeks discovery

encompassing “all [Ameritrade] clients” and “all communications,” which demonstrates
the discovery surpasses the class certification issue. In addition, Ford failed to limit the
discovery requests to a reasonable time frame; for instance, Ford does not identify a
time frame limited to demonstrate specificity as required for the class certification
issues. See Filing No. 143-3.
At this stage of the litigation, the court finds no justification for compelling
Ameritrade to provide the requested discovery.

Ford’s discovery requests are

overbroad and, at this time, not relevant, as beyond the scope of the class certification
issues. Moreover, Ameritrade has provided extensive discovery on the lead plaintiffs’
equity orders and concedes, for purposes of the class certification process, many of the
plaintiff’s elements of proof for class certification. See Filing No. 155 Ameritrade Brief p.
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14-15. Ameritrade contends the chief issues for class certification are economic loss
and reliance, neither of which relate to the discovery sought by Ford. Id. Nevertheless,
the court finds Ford’s motion to compel should be denied without prejudice to allow Ford
an opportunity to narrow the requests and provide detailed justification correlating
specific discovery sought to class certification issues based on the proportional needs of
the case. See Fed. R. Civ. P. 26(b). Upon consideration,

IT IS ORDERED:
1.

Ameritrade’s

Motion

for

Protective

Order

(Filing

No.

141)

and

Supplemental Motion for Protective Order (Filing No. 146) are granted.
2.

Ford’s Motion to Compel Responsive Discovery (Filing No. 149) is denied

without prejudice.
3.

Ameritrade’s Motion for Leave to File Sur-Reply (Filing No. 159) is denied.

4.

The parties’ Joint Motion to Extend Class Certification Schedule (Filing

No. 162) is granted. The parties shall have to on or before January 6, 2017, to confer
and submit a proposed amended progression to resolve the class certification dispute.
5.

The court will hold a telephone conference on January 13, 2017, at 11:00

a.m. for the purpose of finalizing the amended progression order and resolving any
outstanding discovery disputes. Plaintiff's counsel shall initiate the conference with the
assigned magistrate judge and participating counsel.
Dated this 7th day of December, 2016.
BY THE COURT:
s/ Thomas D. Thalken
United States Magistrate Judge

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