In Re: Lincoln National COICase transferred to the Eastern District of Pennsylvania.
Filing
18
ORDER TO TRANSFER CASE to Eastern District of Pennsylvania. This case is TRANSFERRED to the United States District Court for the Eastern District of Pennsylvania. The motion by the Lincoln entities to compel non-parties MyrtisMartindale, Laurette Pow ell, Suzanne Hill, and Janet Shofner to comply with the subpoenas should be docketed in the underlying case, In re Lincoln National COI Litigation, No 2:16-cv-06605 (ED Pa). The Clerk of Court shall give any notice necessary to effectuate this transfer. The hearing scheduled for November 19, 2021 is CANCELED.(Signed by Judge Charles Eskridge) Parties notified.(jengonzalez, 4)
Case 4:21-mc-02150 Document 18 Filed on 11/18/21 in TXSD Page 1 of 4
United States District Court
Southern District of Texas
ENTERED
November 18, 2021
Nathan Ochsner, Clerk
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE: SUBPOENAS
TO MYRTIS
MARTINDALE,
LAURETTE POWELL,
SUZANNE HILL, and
JANET SHOFNER
§ CIVIL ACTION NO.
§ 4:21-mc-02150
§
§
§ JUDGE CHARLES ESKRIDGE
§
§
§
ORDER TRANSFERRING DISCOVERY DISPUTE
The motion by Lincoln National Life Insurance
Company and Lincoln National Corporation to transfer
this matter to the United States District Court for the
Eastern District of Pennsylvania is granted. Dkt 1.
1. Background
Lincoln National Life Insurance Company and Lincoln
National Corporation are referred to together here as
Lincoln. They are defendants in a putative class action
pending in the United States District Court for the Eastern
District of Pennsylvania that challenges increases in
insurance rates for certain life insurance policies. Dkt 1 at
4. One of the policies at issue there was purchased in 2003
by Loucille Martindale and then sold in 2005 to Vespers
LLC. When purchased, Loucille allegedly represented that
the net worth of the Martindale Land & Cattle Company
was between $50 and $80 million. Id at 7–8. Lincoln
believes that the policy was likely obtained by fraud or
misrepresentation. Id at 9–10.
Loucille is now 102 years old and no longer a
shareholder of MLC. Lincoln issued subpoenas to
nonparties Myrtis Martindale, Laurette Powell, Suzanne
Hill, and Janet Shofner. They are Loucille’s daughters and
daughter-in-law and are referred to together here as the
Case 4:21-mc-02150 Document 18 Filed on 11/18/21 in TXSD Page 2 of 4
Daughters. They still hold shares in the company. Id at 4;
Dkt 16 at 2–3. Lincoln requested a range of documents
including those concerning the assets of MLC. Dkt 1 at 8;
see also Dkts 1-8 (Hill subpoena); 1-9 (Shofner subpoena);
1-10 (Powell subpoena); 1-11 (Martindale subpoena). The
Daughters largely fulfilled the requests, but they’ve
refused to disclose MLC’s 2005 tax return. Dkt 1 at 11.
Lincoln now seeks to transfer this discovery dispute to
the Eastern District of Pennsylvania. Alternatively, it asks
that the Daughters be compelled to produce the tax return
at issue. Dkt 1.
2. Legal Standard
Rule 45(f) of the Federal Rules of Civil Procedure
states:
When the court where compliance is
required did not issue the subpoena, it may
transfer a motion under this rule to the
issuing court if the person subject to the
subpoena consents or if the court finds
exceptional circumstances.
The party requesting transfer bears the burden of showing
that exceptional circumstances exist. FRCP 45(f), advisory
committee notes.
A court shouldn’t simply assume that the issuing court
“is in a superior position to resolve subpoena-related
motions,” but still, “transfer may be warranted in order to
avoid disrupting the issuing court’s management of the
underlying litigation.” Ibid; McGriff Insurance Services
Inc v South Texas Educational Technologies Inc, 2020 WL
10817489, *2 (SD Tex). “The prime concern should be
avoiding burdens on local nonparties subject to
subpoenas.” FRCP 45(f), advisory committee notes. A court
should also consider “the complexity, procedural posture,
duration of pendency, and the nature of the issues pending
before, or already resolved by, the issuing court in the
underlying litigation.” CSS Inc v Herrington, 354 F Supp
3d 702, 707 (ND Tex 2017) (quotation marks and citation
omitted). “Transfer is appropriate only if such interests
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outweigh the interests of the nonparty served with the
subpoena in obtaining local resolution of the motion.”
FRCP 45(f), advisory committee notes.
3. Analysis
Transfer is appropriate. As an initial matter, the
Daughters concede that transfer wouldn’t burden them so
long as their counsel may participate in hearings remotely.
Dkt 13 at 13. And Lincoln contends that “all disputes
presented to the Special Master have been decided either
with consent of the parties on the papers or after telephonic
oral argument when requested by the parties.” Dkt 1 at 14.
Thus, the “prime concern” of Rule 45(f) is allayed.
The other factors plainly weigh in favor of transfer. The
underlying case has been pending for five years, and a
Special Master has overseen discovery disputes since 2019.
Lincoln is thus quite right to note that the Special Master
is “very familiar with the facts of these cases, the type of
discovery Lincoln has sought from parties and non-parties
that is similar to that at issue here, and the relevance of
that discovery to the claims and Lincoln’s affirmative
defenses.” Dkt 1 at 12. Consequently, the Special Master is
uniquely positioned to handle this dispute. See McGriff
Insurance, 2020 WL 10817489 at *2.
Transfer also avoids the risk of inconsistent rulings.
The Special Master “has already issued multiple orders on
discovery disputes which bear upon the instant matter,”
including a dispute between the Plaintiffs and Lincoln as
to whether Lincoln may pursue “documents relating to the
status of the insurance policies in question as so-called
‘STOLI’ policies, and/or whether there was any fraud or
misrepresentation in connection with the issuance of the
Policies and/or whether, if shown, Plaintiffs were aware of
the same.” Dkt 1 at 14; Dkt 1-15 at 7. The Daughters
suggest that this dispute didn’t involve any non-parties,
but that’s beside the point. Dkt 13 at 12. What’s pertinent
is that the court in the underlying dispute has already
ruled on similar issues and “the same issues are likely to
arise in discovery” again. FRCP 45(f), advisory committee
notes.
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The procedural posture also weighs in favor of transfer.
Fact discovery concluded on July 27, 2021, and class
briefing will conclude on December 8, 2021. Dkt 1-16.
Transfer will allow the Special Master to resolve the
dispute in conformity with this timetable, thereby avoiding
disruption of “the issuing court’s management of the
underlying litigation.” FRCP 45(f), advisory committee
notes.
In sum, transfer will impose little burden on the
Daughters, and Lincoln has demonstrated that the other
factors outweigh their interests in obtaining local
resolution of the motion. Ibid.
4. Conclusion
The motion by Lincoln National Life Insurance
Company and Lincoln National Corporation to transfer
this matter to the court in which the underlying litigation
is pending is GRANTED. Dkt 1.
This case is TRANSFERRED to the United States District
Court for the Eastern District of Pennsylvania. The motion
by the Lincoln entities to compel non-parties Myrtis
Martindale, Laurette Powell, Suzanne Hill, and Janet
Shofner to comply with the subpoenas should be docketed
in the underlying case, In re Lincoln National COI
Litigation, No 2:16-cv-06605 (ED Pa).
The Clerk of Court shall give any notice necessary to
effectuate this transfer.
The hearing scheduled for November 19, 2021 is
CANCELED.
SO ORDERED.
Signed on November 18, 2021, at Houston, Texas.
Hon. Charles Eskridge
United States District Judge
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