United States of America v. Wicks et al

Filing 23

ORDER denying as moot defendant Dennis Wicks' 16 Motion for Protective Order; and granting the 21 Motion to Compel filed by the United States. Signed by US Magistrate Judge Veronica L. Duffy on 05/03/12. (Duffy, Veronica)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
vs.
DENNIS R. WICKS,
FRANK C. OZAK, and
M. DEAN JORGENSEN, as
trustees of the
FREDA JOHNSON TRUST,
Defendants.

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CIV. 11-5027

ORDER DENYING
DEFENDANT WICKS’ MOTION
FOR PROTECTIVE ORDER
[DOCKET NO. 16]
AND GRANTING PLAINTIFF’S
MOTION TO COMPEL
[DOCKET NO. 21]

INTRODUCTION
This is an action brought by the United States of American to foreclose
on certain federal tax liens arising out of tax obligations allegedly owed by
defendant Dennis R.Wicks. The government alleges that Mr. Wicks
fraudulently transferred some of his property to the Freda Johnson Trust,
which entity the government alleges is not a legal trust, in an attempt to avoid
his tax obligations.
Pending before the court is a motion for a protective order by Mr. Wicks,
who is representing himself pro se. See Docket No. 16. The government resists
Mr. Wicks’ motion and moves to compel Mr. Wicks to respond to the
government’s discovery requests. See Docket No. 21. Both motions were

referred to this magistrate judge for decision by the Honorable Jeffrey L. Viken,
District Judge.
FACTS
The facts which are relevant to these motions are as follows. Mr. Wicks,
a self-employed physician, resides in Custer, South Dakota. Two parcels of
real property are the subjects of the government’s tax liens: the parcel on
which Mr. Wicks has his residence and an undeveloped parcel.
The government alleges that Mr. Wicks did not file federal income tax
returns for the years 2001 and 2002. The government notified Mr. Wicks of
these omissions in late January, 2004. On approximately February 3, 2004,
Mr. Wicks transferred the two above-described parcels of real estate to the
Freda Johnson Trust. The government alleges that the Freda Johnson Trust is
a sham device created in an attempt to shield Mr. Wicks’ assets from the
government. The Freda Johnson Trust is not registered with the Secretary of
State of any state in the United States. It also has no registered tax
identification number.
The government filed its complaint in this matter against Mr. Wicks, the
trust, and the other two individual defendants (who are allegedly trustees of the
trust) on March 31, 2011. See Docket No. 1. After receiving an extension of
time to answer, Mr. Wicks filed a motion to dismiss on June 16, 2011. See
Docket No. 10. This motion remained pending for five months, during which

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time no order was issued directing the parties to hold their Form 52 planning
meeting.
During the pendency of Wicks’ motion, the government alleges that it
contacted the district court’s chambers and inquired about the status of the
motion as well as made inquiry into whether discovery could be pursued. The
government alleges that the district court staff informed it to proceed with
discovery. The government served Mr. Wicks with discovery requests on or
about October 7, 2011. Mr. Wicks has never responded to these requests.
On November 21, 2011, the district court denied Mr. Wicks’ motion to
dismiss. See Docket No. 13. It then directed the parties to hold their Form 52
conference. See Docket No. 15. That conference was held on January 26,
2012. The parties filed a report of their meeting and the district court issued a
Rule 16 scheduling order on February 10, 2012. See Docket Nos. 18, 19.
Under the terms of the court’s scheduling order, the parties were directed to
exchange with each other all prediscovery disclosures required by Fed. R. Civ.
P. 26(a)(1) on or before February 24, 2012.
The day before the parties held their Form 52 planning meeting,
Mr. Wicks moved for a protective order. See Docket No. 16. He objected to the
discovery requests served on him by the government. Mr. Wicks’s sole
objection is that the government requests were premature, having been served
on him prior to the parties’ planning meeting.

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The government resists Mr. Wicks’ motion. See Docket No. 20. The
government also filed a motion to compel Mr. Wicks to respond to the
government discovery requests, noting that Mr. Wicks has not responded and
has not shown any substantive reason why the discovery should not be had.
See Docket No. 21.
DISCUSSION
A.

Meet and Confer Requirement
Both the Federal Rules of Civil Procedure and this district’s local rules of

procedure require that parties meet and confer in an attempt to resolve
discovery disputes before filing any discovery motions with the court. See Fed.
R. Civ. P. 37(a)(1); DSD LR 37.1. A certification must be part of any discovery
motion and the certification must show that a good-faith effort was made to
resolve disputes with the opposing party before filing the motion. Id.
Government counsel asserted in his original brief in support of his motion to
compel that he had complied with both the Federal and local rules requiring
the parties to try to work out discovery differences between themselves prior to
filing a motion to compel. Thus, the court may properly consider the
government’s motion to compel because it has demonstrated compliance with
the applicable conditions precedent.
Mr. Wicks, however, has not. He has not asserted that he contacted
government counsel in an attempt to work out Mr. Wicks’ objection to the

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government’s discovery. Nor does he assert facts from which the court could
infer that he had met his obligations.
Ordinarily, a movant’s failure to comply with the meet and confer
requirement would dictate denial of his motion. However, in this case the
subject of the government’s motion and the subject of Mr. Wicks’ motion are
the same. Thus, when the government satisfied the meet and confer
requirement, it achieved the goal of the requirement for both motions–making
sure that discovery motions are not brought before the court that the parties
could have resolved informally between themselves. Under these unique
circumstances, the court will entertain Mr. Wicks’ motion as well as the
government’s, despite Mr. Wicks’ failure to satisfy the meet and confer
requirement. Mr. Wicks should take note of and comply with the meet and
confer requirement should any other discovery disputes arise between he and
the goverment.
B.

Scope of Discovery in a Civil Case
The scope of discovery is governed by Fed. R. Civ. P. 26. The scope

described by that rule is as follows:
Unless otherwise limited by court order, the scope of discovery is
as follows: Parties may obtain discovery regarding any
nonprivileged matter that is relevant to any party’s claim or
defense–including the existence, description, nature, custody,
condition, and location of any documents or other tangible things
and the identity and location of persons who know of any
discoverable matter. For good cause, the court may order
discovery of any matter relevant to the subject matter involved in
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the action. Relevant information need not be admissible at the
trial if the discovery appears reasonably calculated to lead to the
discovery of admissible evidence. All discovery is subject to the
limitations imposed by Rule 26(b)(2)(C).
See Fed. R. Civ. P. 26(b)(1).
This scope of discovery under subsection (b)(1) is limited by subsection
(b)(2)(C). That subsection provides that:
On motion or on its own, the court must limit the frequency or
extent of discovery otherwise allowed by these rules or by local rule
if it determines that:
(i) the discovery sought is unreasonably cumulative or
duplicative, or can be obtained from some other source that
is more convenient, less burdensome, or less expensive;
(ii) the party seeking discovery has had ample opportunity to
obtain the information by discovery in the action; or
(iii) the burden or expense of the proposed discovery
outweighs its likely benefit, considering the needs of the
case, the amount in controversy, the parties’ resources, the
importance of the issues at stake in the action, and the
importance of the discovery in resolving the issues.
See Fed. R. Civ. P. 26(b)(2)(C).
A party may move for a protective order from discovery upon a
demonstration of good cause in order to protect themselves from annoyance,
embarrassment, oppression, or undue burden or expense. See Fed. R. Civ. P.
26(c)(1). If a motion for protective order is denied, the court may order that the
party provide or permit discovery. Id. at (c)(2). The court may award attorneys

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fees and expenses in connection with a motion for protective order. Id. at (c)(3);
Fed. R. Civ. P. 37(a)(5).
The scope of discovery under Rule 26(b) is extremely broad. See 8
Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure § 2007 (2d
ed. 1994) (hereinafter "Wright & Miller"). The reason for the broad scope of
discovery is that "[m]utual knowledge of all the relevant facts gathered by both
parties is essential to proper litigation. To that end, either party may compel
the other to disgorge whatever facts he has in his possession." 8 Wright &
Miller, § 2007, 96 (quoting Hickman v. Taylor, 329 U.S. 495, 507-08, 67 S. Ct.
385, 392, 91 L. Ed. 2d 451 (1947)). The Federal Rules distinguish between
discoverability and admissibility of evidence. Id. at 95; see also Fed. R. Civ. P.
26(b), 32, and 33. Therefore, the rules of evidence assume the task of keeping
out incompetent, unreliable, or prejudicial evidence at trial. These
considerations are not inherent barriers to discovery, however.
The advisory committee’s note to the 2000 amendments to Rule 26(b)(1)
provide guidance on how courts should define the scope of discovery in a
particular case:
Under the amended provisions, if there is an objection that
discovery goes beyond material relevant to the parties’ claims or
defenses, the court would become involved to determine whether
the discovery is relevant to the claims or defenses and, if not,
whether good cause exists for authorizing it so long as it is relevant
to the subject matter of the action. The good-cause standard
warranting broader discovery is meant to be flexible.

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The Committee intends that the parties and the court focus on the
actual claims and defenses involved in the action. The dividing
line between information relevant to the claims and defenses and
that relevant only to the subject matter of the action cannot be
defined with precision. A variety of types of information not
directly pertinent to the incident in suit could be relevant to the
claims or defenses raised in a given action. For example, other
incidents of the same type, or involving the same product, could be
properly discoverable under the revised standard. ... In each case,
the determination whether such information is discoverable
because it is relevant to the claims or defenses depends on the
circumstances of the pending action.
The rule change signals to the court that it has the authority to
confine discovery to the claims and defenses asserted in the
pleadings, and signals to the parties that they have no entitlement
to discovery to develop new claims or defenses that are not already
identified in the pleadings. ... When judicial intervention is
invoked, the actual scope of discovery should be determined
according to the reasonable needs of the action. The court may
permit broader discovery in a particular case depending on the
circumstances of the case, the nature of the claims and defenses,
and the scope of the discovery requested.
See Fed. R. Civ. P. 26(b)(1) advisory committee’s note.
The same advisory committee’s note further clarifies that information is
discoverable only if it is relevant to the claims or defenses of the case or, upon
a showing of good cause, to the subject matter of the case. Id. “Relevancy is to
be broadly construed for discovery issues and is not limited to the precise
issues set out in the pleadings. Relevancy ... encompass[es] ‘any matter that
could bear on, or that reasonably could lead to other matter that could bear on,
any issue that is or may be in the case.’ ” E.E.O.C. v. Woodmen of the World
Life Ins. Society, 2007 WL 1217919 at *1 (D.Neb. March 15, 2007) (quoting

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Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978)). The party
seeking discovery must make a “threshold showing of relevance before
production of information, which does not reasonably bear on the issues in the
case, is required.” Id. (citing Hofer v. Mack Trucks, Inc., 981 F.2d 377, 380 (8th
Cir. 1993)). “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.” Id. (citing Cervantes v. Time, Inc., 464 F.2d 986, 994 (8th Cir. 1972)).
Discoverable information itself need not be admissible at trial; rather,
“discovery of such material is permitted if reasonably calculated to lead to the
discovery of admissible evidence.” See Fed. R. Civ. P. 26(b)(1) advisory
committee’s note.
Once the requesting party has made a threshold showing of relevance,
the burden shifts to the party resisting discovery to show specific facts
demonstrating that the discovery is not relevant, or how it is overly broad,
burdensome, or oppressive. Penford Corp. v. National Union Fire Ins. Co., 265
F.R.D. 430, 433 (N.D. Iowa 2009); St. Paul Reinsurance Co. v. Commercial
Financial Corp., 198 F.R.D. 508, 511 (N.D. Iowa 2000). The articulation of
mere conclusory objections that something is “overly broad, burdensome, or
oppressive,” is insufficient to carry the resisting party’s burden–that party must
make a specific showing of reasons why the relevant discovery should not be

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had. Cincinnati Ins. Co. v. Fine Home Managers, Inc., 2010 WL 2990118, *1
(E.D. Mo. 2010); Burns v. Imagine Films Entertainment, Inc., 164 F.R.D. 589,
593 (W.D.N.Y. 1996).
C.

Mr. Wicks’ Motion is Moot
Mr. Wicks’ sole objection to the government’s discovery request is that it

was premature. There was some basis for this objection–at the time Mr. Wicks
made the objection.
Federal Rule of Civil Procedure 26(d)(1) provides that “a party may not
seek discovery from any source before the parties have conferred as required by
Rule 26(f), except in a proceeding exempted from initial disclosure under Rule
26(a)(1)(B), or when authorized by these rules, by stipulation, or by court
order.” The conference referred to under Rule 26(f) is the Form 52 conference.
In this case, the government served Mr. Wicks with its discovery requests
in October, 2011. The parties did not hold their planning conference until
January 26, 2012. Mr. Wicks was correct in pointing out that the government
served its discovery prior to the time permissible for doing so under
Rule 26(d)(1). The government makes no argument under Rule 26(d)(1) that
this case is one exempted from initial disclosures. Similarly, the government
does not argue that its early discovery was authorized by rule, by stipulation,
or by court order.

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However, it is now May 3, 2012, over four months past the date of the
parties’ planning meeting. Mr. Wicks’ objection that the government’s
discovery requests were premature is now moot because those discovery
requests are now permissible for the government to serve. The court will not
elevate form over substance by requiring the government to re-serve the same
discovery requests again with a date post-dating the Form 52 conference.
Mr. Wicks makes no substantive objection to the discovery. It is his
burden to demonstrate the appropriateness of a protective order. He has failed
in doing so. Accordingly, the court denies his request for a protective order.
D.

The Government’s Motion to Compel Should be Granted
It is the government’s burden to make an initial threshold showing that

the discovery it seeks is relevant. The government has satisfied this burden.
The government believes that the Freda Johnson Trust is a sham. The
discovery requests made are intended to secure evidence that would tend to
make that supposition more or less likely.
Since the government has succeeded in making a threshold showing of
relevance, the burden is on Mr. Wicks to show some reason why the discovery
should not be had. Other than to argue that the discovery was prematurely
requested, Mr. Wicks makes no substantive argument against the discovery.
Accordingly, the court grants the government’s motion to compel.

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E.

Sanctions
Under Fed. R. Civ. P. 37(a)(5), the court “must” grant sanctions against a

party who refused to provide relevant requested discovery, necessitating the
opposing party’s filing of a motion to compel. Sanctions may include the
attorney’s fees incurred by the opposing party in making the motion to compel
as well as any out-of-pocket expenses incurred by that party. Exceptions to
this are cases where the movant did not comply with the meet and confer
requirement, cases where the position of the party resisting discovery was
substantially justified, and cases where other circumstances make an award of
expenses unjust. See Fed. R. Civ. P. 37(a)(5)(A).
Here, the court will not sanction Mr. Wicks because, at the time he filed
his motion, he was correct in pointing out that the government’s discovery
request was premature. However, by the time the government filed its own
motion to compel–February 15, 2012–the parties had had their planning
meeting and Mr. Wicks should have provided the government with the
discovery it requested (or lodge a valid substantive objection thereto). The
court cautions Mr. Wicks to read the discovery rules in the Federal Rules of
Civil Procedure (Rules 26 through 37) and to read this district’s local rules of
civil procedure, which can be found at the court’s web site under “Forms”:
www.sdd.uscourts.gov. If there are future motions in this case that the court

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must resolve, the court will expect that Mr. Wicks has read these rules and
that he abides by them.
CONCLUSION
Based on the foregoing, it is hereby
ORDERED that defendant Dennis Wicks’ motion for a protective order
[Docket No. 16] is denied as moot. It is further
ORDERED that the government’s motion to compel Mr. Wicks to provide
the requested discovery [Docket No. 21] is granted. Mr. Wicks shall serve the
government’s counsel with his answers to the discovery requests served on
him. Mr. Wicks’ responses shall be served on the government no later than 14
days from the date of this order.
NOTICE OF RIGHT TO APPEAL
Pursuant to 28 U.S.C. § 636(b)(1)(A), any party may seek reconsideration
of this order before the district court upon a showing that the order is clearly
erroneous or contrary to law. The parties have fourteen (14) days after service
of this order to file written objections pursuant to 28 U.S.C. § 636(b)(1)(A),
unless an extension of time for good cause is obtained. See Fed. R. Civ. P.
72(a); 28 U.S.C. § 636(b)(1)(A). Failure to file timely objections will result in
the waiver of the right to appeal questions of fact. Id. Objections must be
timely and specific in order to require review by the district court. Thompson

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v. Nix, 897 F.2d 356 (8th Cir. 1990); Nash v. Black, 781 F.2d 665 (8th Cir.
1986).
Dated May 3, 2012.
BY THE COURT:

/s/

Veronica L. Duffy

VERONICA L. DUFFY
UNITED STATES MAGISTRATE JUDGE

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