COR Clearing, LLC v. Calissio Resources Group, Inc. et al

Filing 228

MEMORANDUM AND ORDER that defendant, Signature Stock Transfer Inc.'s motion to compel production of documents is denied. Ordered by Senior Judge Lyle E. Strom. (Copy mailed to pro se party) (LAC)

IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEBRASKA
COR CLEARING, LLC, a Delaware )
limited liability company,
)
)
Plaintiff,
)
)
v.
)
)
CALISSIO RESOURCES GROUP,
)
INC., a Nevada corporation,
)
ADAM CARTER, an individual,
)
SIGNATURE STOCK TRANSFER,
)
INC, A Texas corporation; and )
DOES 1-50,
)
)
Defendants.
)
______________________________)

8:15CV317

MEMORANDUM AND ORDER

This matter is before the Court on the defendant,
Signature Stock Transfer, Inc.’s motion to compel production of
documents (Filing No. 194).

Along with its motion, Signature

Stock Transfer, Inc. filed two exhibits (Filing No. 194-1 and
Filing No. 194-2).

Plaintiff, COR Clearing, LLC, filed a brief

in opposition to the motion (Filing No. 212) as well as an index
of evidence in support of its brief (Filing No. 213).

No reply

brief was filed and the time for doing so has passed.

See NECivR

7.1(c) (providing that the “moving party may file a reply brief
and index of evidence within 7 days after the opposing party
files and serves the opposing brief.”).

After review of the

motion, the exhibits, the brief and index of evidence in

opposition, and the relevant law, the Court finds that Signature
Stock Transfer, Inc.’s motion should be denied.
BACKGROUND
On August 26, 2015, COR Clearing filed its first
complaint against Calissio Resources Group, Inc. (“Calissio”),
Adam Carter (“Carter”), Signature Stock Transfer, Inc.
(“Signature”), and Does 1-50 (Filing No. 1).

Plaintiff’s

complaint alleged three causes of action including:

(1) a

request for declaratory judgment; (2) unjust enrichment; and (3)
fraud.

See id. at 9-13.

The complaint alleged that defendants

“calculated [a] scheme to defraud the marketplace and the
clearing system in order to obtain millions of dollars from
unsuspecting market participants by exploiting a weakness in the
dividend payment system of the third-party Depositary Trust
Clearing Corporation (“DTCC”).”

(Id. at 1).

On November 10, 2015, following a hearing, the Court
denied COR’s expedited motion (Filing No. 20) for the appointment
of a limited purpose receiver (Filing No. 80).

On December 8,

2015, the Court denied Signature’s motion (Filing No. 29) to
dismiss (Filing No. 85).

On April 21, 2016, the Court granted

plaintiff’s application (Filing No. 108) for default judgment
against Calissio Resources Group, Inc. (Filing No. 109).

On May

23, 2016, the Court granted plaintiff’s motion (Filing No. 94) to
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compel TDAC “to produce documents and things responsive to
[plaintiff’s] subpoena served on or about December 4, 2015.”
(Filing No. 116).
On August 2, 2016, the Court granted plaintiff leave to
file an amended complaint (Filing No. 122).

On December 9, 2016,

the Court denied the Clearing Firm Defendants’ joint motion
(Filing No. 137) to dismiss the amended complaint (Filing No.
160).

On January 25, 2017, COR sought and was granted leave to

again amend its complaint (Filing No. 171 and Filing No. 174).1
On January 30, 2017, COR filed its Second Amended Complaint
(Filing No. 175).

On February 10, 2017, National Financial

Services, LLC filed its answer (Filing No. 181).

On February 13,

2017, defendants TD Ameritrade Clearing, Inc. and Scottrade, Inc.
filed their respective answers (Filing No. 183 and Filing No.
184).

On February 15, 2017, E-Trade Clearing, LLC filed its

answer (Filing No. 186).
On March 6, 2017, the Court issued its Third Amended
Final Progression Order (Filing No. 193).

On April 3, 2017,

Signature brought the instant motion seeking to compel COR’s
production of 43 different requests for production made by
Signature (Filing No. 194).

1

COR’s motion to amend was unopposed.
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LAW
Federal Rule of Civil Procedure 26(b)(1) allows
[p]arties [to] obtain discovery
regarding any nonprivileged matter
that is relevant to any party’s
claim or defense and proportional
to the needs of the case,
considering the importance of the
issues at stake in the action, the
amount in controversy, the parties’
relative access to relevant
information, the parties’
resources, the importance of the
discovery in resolving the issues,
and whether the burden or expense
of the proposed discovery outweighs
its likely benefit. Information
within this scope of discovery need
not be admissible in evidence to be
discoverable.
Fed. R. Civ. P. 26(b)(1).

The United States Supreme Court has

held that discovery under Rule 26 should be “construed broadly to
encompass any matter that bears on, or that reasonably could lead
to other matter that could bear on, any issue that is or may be
in the case.”

Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340,

351, 98 S. Ct. 2380, 57 L. Ed. 2d 253 (1978).

However, this

broad interpretation and liberal application of the rule does not
provide unlimited discovery.

Oppenheimer, 437 U.S. at 351; see

also Hickman v. Taylor, 329 U.S. 495, 507, 67 S. Ct. 385, 91 L.
Ed. 451 (1947) (stating “discovery, like all matters of
procedure, has ultimate and necessary boundaries.”).

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Initially “[t]he party seeking discovery must satisfy
some threshold showing of relevancy before discovery is
required.”

Lubrication Technologies, Inc. v. Lee’s Oil Service,

LLC, Civil No. 11-2226 (DSD/LIB), 2012 WL 1633259, at *2 (D.
Minn. April 10, 2012) (internal citation omitted).

However,

“[o]nce that threshold has been met, the resisting party ‘must
show specifically how . . . each . . . [request for production]
is not relevant or how [the discovery] is overly broad,
burdensome, or oppressive.’”

Lubrication Technologies, 2012 WL

1633259, at *2 (quoting St. Paul Reinsurance Co., Ltd. v.
Commercial Financial Corp., 198 F.R.D. 508, 512 (N.D. Iowa 2000))
(alterations in original).
DISCUSSION
The Court finds that Signature, as the party seeking
the discovery, has failed to sufficiently satisfy its initial
burden.

The Court notes that since Signature’s filing of the

motion, COR has produced a number of the documents requested in
Signature’s motion (Filing No. 212 at 1, 5).

The Court further

notes Signature’s failure to provide the Court with any
substantive briefing beyond the two-page conclusory analysis
contained within the motion itself.

It is especially telling

that after COR filed its brief in opposition to Signature’s
motion and informed the Court of COR’s supplementing its
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production to provide additional documents, Signature failed to
file a reply brief to further address the issues it raised in its
motion.

Therefore, Signature’s motion to compel production of

documents will be denied.

Accordingly,

IT IS ORDERED that defendant, Signature Stock Transfer
Inc.’s motion to compel production of documents is denied.
DATED this 2nd day of June, 2017.
BY THE COURT:
/s/ Lyle E. Strom
____________________________
LYLE E. STROM, Senior Judge
United States District Court

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