United States District Court, S.D. California
ORDER: (1) DENYING DEFENDANTS REDWOOD INVESTMENTS,
LLC AND CHI KUANG HWANG'S MOTION TO QUASH PLAINTIFFS'
FOUR SUBPOENAS TO THIRD PARTIES (ECF NO. 57); AND (2) ISSUING
Jill L. Burkhardt United States Magistrate Judge
the Court is a motion to quash filed by Defendants Redwood
Investments, LLC and Chi Kuang Hwang (collectively,
"Defendants") regarding four third-party subpoenas
duces tecum issued by Plaintiffs Abdoulaye Diallo
("Diallo") and William Merritt
("Merritt") (collectively, "Plaintiffs")
following the Honorable Janis L. Sammartino's dismissal
of their First Amended Complaint. (ECF No. 57.) Plaintiffs
oppose the motion. (ECF No. 60.)
September 3, 2019, this motion was referred to the
undersigned judge for determination. The Court finds that
this motion is suitable for determination on the papers
submitted without oral argument. See CivLR
7.1(d)(1). For the reasons set forth below, the Court
DENIES the motion to quash, but sua
sponte issues a protective order forbidding Plaintiffs
from using the formal discovery process to conduct
plausibility discovery, effectively quashing the four
third-party subpoenas duces tecum issued by
Riley and Merritt commenced this action on August 3, 2018
against Redwood Investments, LLC, SoCal Metro Holdings, LLC,
Christopher Carnes, and Tonika Miller. (ECF No. 1.) On
October 3, 2018, Merritt and Diallo filed a First Amended
Complaint ("FAC") against Defendants Redwood
Investments, LLC, SoCal Metro Holdings, LLC, Christopher
Carnes, Tonika Miller, and Chi Kuang Hwang. (ECF No. 13.) In
the FAC, Plaintiffs allege that Defendants "engaged in
an illegal and fraudulent transfer of real property commonly
known as 4026 Charles Street, San Diego, California, 91941
('Property')." (FAC at ¶ 1.)
FAC, Plaintiffs brought the following claims: a civil RICO
violation against all Defendants, civil conspiracy to commit
mail fraud and wire fraud against all Defendants, for
cancellation of the fraudulent grant deeds against Defendant
Carnes, constructive fraud against all Defendants, and elder
financial abuse of Merritt against all Defendants. (See
Id. at ¶¶ 127-85.) Defendants thereafter filed
motions to dismiss the FAC. (See ECF Nos. 27, 30,
August 6, 2019, Judge Sammartino dismissed Plaintiffs'
claim for civil conspiracy to commit mail fraud and wire
fraud with prejudice and dismissed Plaintiffs' RICO claim
with leave to amend. (ECF No. 54 at 13-18.) The Court
declined to exercise supplemental jurisdiction over
Plaintiffs' remaining state law claims. (Id. at
18-19.) Accordingly, the Court dismissed all of
Plaintiffs' claims. The Court thereafter gave Plaintiffs
thirty (30) days to file a Second Amended Complaint curing
the deficiencies in their pleading. (Mat 22.)
September 3, 2019, Plaintiffs requested a thirty (30) day
extension of time to file a Second Amended Complaint because
they "require additional time in order to conduct
discovery so as to properly plead the particularity and
continuity elements of the RICO claim." (ECF No. 56 at
3.) Finding good cause, the Court granted this extension of
time. (ECF No. 59.) Accordingly, Plaintiffs' Second
Amended Complaint is now due on or before October 7, 2019.
to Federal Rule of Civil Procedure 26(b)(1), "[p]arties
may obtain discovery regarding any nonprivileged matter that
is relevant to any party's claim or defense and
proportional to the needs of the case . . . ."
Fed.R.Civ.P. 26(b)(1). Federal Rule of Civil Procedure 45
governs discovery of non-parties by subpoena. See
Fed. R. Civ. P. 45(a)(1); Salt v. Corona Reg'l Med.
Ctr., 884 F.3d 1218, 1224 (9th Cir. 2018). The Advisory
Committee Notes to the 1970 Amendments to Rule 45 state that
the "scope of discovery through a subpoena is the same
as that applicable to [Federal Rule of Civil Procedure] 34
and the other discovery rules." Fed.R.Civ.P. 45 advisory
committee notes on 1970 amendments. Under Rule 34, the rule
governing the production of documents between parties, the
proper scope of discovery is as specified in Rule 26(b).
Fed.R.Civ.P. 34; see also Heat & Control, Inc. v.
Hester Indus., Inc., 785 F.2d 1017, 1023 (Fed. Cir.
1986) ("[R]ule 45(b)(1) must be read in light of Rule
26(b)"); Exxon Shipping Co. v. U.S. Dept. of
Interior, 34 F.3d 774, 779 (9th Cir. 1994) (applying
both Rule 26 and Rule 45 standards to a motion to quash
Rule 45, the nonparty served with a subpoena duces
tecum may make objections to the subpoena, but must do
so within 14 days after service or before the time for
compliance, whichever is earlier. Fed.R.Civ.P. 45(d)(2)(B).
On timely motion, the court may quash or modify the subpoena.
Fed.R.Civ.P. 45(d)(3)(A). As a general rule, "a party
has no standing to quash a subpoena served upon a third
party, except as to claims of privilege relating to the
documents being sought." Cal. Sportfishing Prot.
Alliance v. Chico Scrap Metal, Inc., 299 F.R.D. 638, 643
(E.D. Cal. 2014); see also Moon v. SCP Pool Corp.,
232 F.R.D. 633, 636 (CD. Cal. 2005); Clair v.
Schlachter, No. 2:13-cv-804-KJM-EFB P (TEMP), 2016 WL
2984107, at *5 (E.D. Cal. May 23, 2016). "A party's
objection that a subpoena issued to a non-party seeks
irrelevant information or imposes an undue burden on the
non-party is not grounds on which the objecting party has
standing to assert, especially where the non-party, itself,
has not objected." Clair, 2016 WL 2984107, at
*5 (citing Moon, 232 F.R.D. at 636-37).
party may, however, move for a protective order in regard to
a subpoena issued to a non-party if it believes its own
interest is jeopardized by the discovery sought by a third
party and has standing under Rule 26(c) to seek a protective
order regarding subpoenas issued to non-parties which seek
irrelevant information." Clair, 2016 WL
2984107, at *5; see also In re REMEC, Inc. Sec.
Litig., No. 04-cv-1948 JLS (AJB), 2008 WL 2282647, at *1
(S.D. Cal. May 30, 2008).
Defendants' Arguments in Support of ...