Brincko v Rio Properties Inc

Filing 175

ORDER Denying 163 Motion to Compel the Re-Opening of Deposition of Defendant Rio Properties, Inc.. In denying the motion to re-open discovery, the court makes no finding whether the disputed documents are or are not privileged, and/or whether any applicable privilege has been waived. Signed by Magistrate Judge Peggy A. Leen on 5/18/11. (Copies have been distributed pursuant to the NEF - MMM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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In Re:

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NATIONAL CONSUMER MORTGAGE, LLC
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Debtor.
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JOHN P. BRINCKO,
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Plaintiff,
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vs.
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RIO PROPERTIES, INC.,
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Defendant.
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__________________________________________)

Case No.2:10-cv-00930-PMP-PAL
ORDER
(Motion to Compel - Dkt. #163)

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The court conducted a hearing on May 17, 2011, on the Plaintiff’s Motion to Compel the Re-

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Opening of the Deposition of Rio Properties, Inc. (Dkt. #163) which was initially filed in Bankruptcy

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Court before this matter was transferred here, and re-filed pursuant to this court’s order. Bijan Amini

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and John Bailey appeared on behalf of the Plaintiff. James Fogelman and James Boyle appeared on

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behalf of the Defendant. The court has considered the moving and responsive papers and the arguments

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of counsel.

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The Plaintiff Trustee seeks to re-open the deposition of the Rio’s Rule 30(b)(6) designee

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concerning a deposition notice originally served September 2008, requiring the Rio to produce its

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witness(es) knowledgeable about Rio’s compliance with anti-money laundering laws and regulations.

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The Trustee requests reopening of the Rio’s Rule 30(b)(6) deposition on this topic to examine the

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witness(es) on documents identified in the Trustees Appendix A produced by Rio’s parent company,

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Harrah’s Operating Company (“HOC”). These documents were identified on a privileged document

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log and withheld from production. The Trustee filed a motion to compel production of these withheld

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documents while the matter was still before the Bankruptcy Court. The motion was fully briefed, and

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Judge Albert issued a tentative ruling indicating he intended to grant the motion to compel. However,

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during oral argument on the motion, he suggested that the parties reach a stipulation to resolve the

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motion. The parties were able to reach a stipulation which Judge Albert approved. The stipulation and

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order approving the stipulation entered between Rio Properties, Inc., and the Trustee regarding the

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disputed documents are attached as exhibits to the Trustee’s motion.

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The Trustee also asks that, to the extent Rio is unable to produce a knowledgeable witness or
witnesses to testify about the documents identified in Appendix A, that Plaintiff be given leave to

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depose any former employees of the Rio, or current or former employees of HOC who prepared the

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documents or are knowledgeable about their subject matter. The Trustee maintains that re-opening

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Rio’s Rule 30(b)(6) deposition is necessary to establish the admissibility of the withheld documents as

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well as other documents identified in Appendix A, and to obtain information relating to Rio’s

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corporate organization and financial review of the Rio Race and Sports Betting department where

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Favata wagered the Debtor’s funds.

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Rio opposes the motion asserting discovery should not be reopened because the Plaintiff was

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not sufficiently diligent in pursuing discovery within the time allowed by the Bankruptcy Court. Rio

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points out that re-opening depositions is disfavored as a general rule and argues that the Trustee has

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taken numerous depositions. It asks that any attempt by the Trustee to reopen discovery on the basis of

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documents identified in Appendix A be denied because it would be unnecessarily duplicative of

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discovery already conducted.

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Having reviewed and carefully considered the moving and responsive papers and voluminous

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supporting exhibits, the court finds that Plaintiff has not established that production of the disputed

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withheld documents warrants reopening of discovery in this case. The Plaintiff has taken multiple

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depositions to support its claims and to investigate Rio’s defenses concerning the applicable statutory

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and regulatory compliance obligations at issue. Plaintiff has deposed Kevin Ortzman, Rio’s Regional

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Vice President of Finance; David Darvey, Rio’s former Compliance Specialist; David Pemberton, Rio’s

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Director of Specialty Games (the department that oversaw the Rio Sports Book during the relevant time
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period); and Sheila Eyler, Rio’s Compliance Director. Additionally, both sides have designated experts

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who opine concerning the applicable regulatory standards for Nevada casinos during the relevant time

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period, and the parties are in the process of scheduling and completing these depositions. The parties

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had nearly two years to conduct fact discovery while the matter remained in Bankruptcy Court, and

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were granted numerous extensions. Under these circumstances, the court finds the Plaintiff has had an

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adequate opportunity to conduct discovery from Rio concerning the various laws and regulations

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underlying the Plaintiff’s claims, and Rio’s affirmative defense that it accepted Favata’s transfers in

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good faith under 11 U.S.C. 550(b). See, Fed R. Civ P. 26(b)(2)(C)(ii). Accordingly,

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IT IS ORDERED :
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Plaintiff’s Motion to Compel the Re-Opening of Deposition of Defendant Rio
Properties, Inc., is DENIED.

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In denying the motion to re-open discovery, the court makes no finding whether the

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disputed documents are or are not privileged, and/or whether any applicable privilege

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has been waived.

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Dated this 18th day of May, 2011.

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________________________________________
Peggy A. Leen
United States Magistrate Judge

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