Free Order on Motion to Quash - District Court of Arizona - Arizona

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

Estate of Joseph J. Studnek, by and) through its Personal Representative,) ) Joseph M. Studnek, ) ) Plaintiff, ) ) vs. ) ) Ambassador of Global Missions UN) ) Limited his Successors, et al., ) ) Defendants. _________________________________ ) ) Ambassador of Global Missions UN) ) Limited His Successors, ) ) Counterclaimant, ) ) vs. ) ) Estate of Joseph J. Studnek, ) ) Counterdefendant. ) )

No. CIV-04-0595-PHX-MHM ORDER

Defendants El Shaddai Ministries, Second Chance Ministries and Michael Cambra 25 have filed a motion to quash or for protective order re document subpoena to Wells Fargo, 26 N.A. (Doc. 112). These Defendants have requested expedited consideration of the motion 27 to quash or for protective order. (Doc. 113). Plaintiff has filed a response (Doc. 116) and 28
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Defendants have filed a reply. (Doc. 117). The Court held a hearing on Defendants' motion to quash or for protective order on May 11, 2006 and now enters this Order. Documents attached to the motion to quash show that Plaintiff served a deposition for records notice on Wells Fargo on April 17, 2006. The deposition notice and document production was set for May 3, 2006 at 1:00 p.m. The documents that have been requested are financial documents relevant to Defendants El Shaddai Ministries, Second Chance Ministries and Mr. Cambra, as well as to other named Defendants, including Global Missions and Joseph Williams. The subpoena and deposition notice direct Wells Fargo to provide copies of the following records relevant to El Shaddai Ministries, Second Chance Ministries and Mr. Cambra: bank statements, cancelled checks and deposits, certificates of deposit, loans, notes, contracts, negotiable instruments, accounts receivable, financial statements, expense records, balance sheets, profit and loss statements, documents reflecting interests in partnerships and businesses, and corporate resolutions and minutes for all checking and savings accounts from January 2001 through the present date, which is a period of approximately five years. Defendants El Shaddai, Second Chance and Mr. Cambra contend that they have pending motions to dismiss the second amended complaint which raise meritorious arguments, that is, that this Court lacks personal jurisdiction over them and the second amended complaint fails to state a cognizable claim for relief against them. These Defendants contend it is premature for Plaintiff to seek discovery as to them, citing Fed.R.Civ.P. 26(d). Plaintiff has filed a response opposing the Defendants' motion to quash or for protective order. Plaintiff contends that these Defendants lack standing to quash the subpoena, they lack a privacy right or privilege as to the documents requested, and that the documents requested are key to this litigation as they show the financial relationship of all Defendants. Plaintiff states that the documents will show that the Defendants were acting in concert as to the fraud alleged in the second amended complaint. Plaintiff asserts that the requested financial information is key to the Court's ruling on Defendants' pending motions to dismiss for lack of personal jurisdiction and for failure to state a claim for relief. -2Case 2:04-cv-00595-MHM Document 120 Filed 05/23/2006 Page 2 of 4

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In their filed reply, Defendants do not appear to dispute various of the issues raised by Plaintiff but contend that they are simply seeking to stay the requested discovery until the Court has ruled on their motions to dismiss. Defendants urge the Court to take a "preliminary peek" at the motions to dismiss to determine if the grounds appear to be meritorious. Defendants further contend that Plaintiff will not be prejudiced by a stay of discovery pending resolution of the motions to dismiss. The Court has preliminarily reviewed the motions to dismiss filed by Defendants El Shaddai, Second Chance and Mr. Cambra. These Defendants have set forth a factual discussion in support of their argument that they have not had sufficient contacts with the State of Arizona on which to base personal jurisdiction. Plaintiff has filed a response which asserts an alter ego theory involving these Defendants and Defendants Williams and Global Missions. Plaintiff has argued in the alternative that the Court may consider the pending motions to dismiss as motions for summary judgment and that Plaintiff should be permitted to pursue discovery on the relationship of the Defendants and the alleged fraud. At the hearing, counsel for Defendants expressed concern over the delays in this case and Plaintiff's alleged conclusory argument based on an alter ego theory, noting that Plaintiff has filed a response to the motions to dismiss but has not previously requested discovery on the issue of personal jurisdiction. The Court has determined that Plaintiff should be permitted limited access to any documents that are the subject of the subpoena to Wells Fargo that bear on the issue of personal jurisdiction of Defendants El Shaddai Ministries, Second Chance Ministries and Mr. Cambra. The Court notes in this regard that Defendants Global Missions and Mr. Williams have not objected to the records subpoena issued as to Wells Fargo. Counsel for Defendants El Shaddai, Second Chance and Mr. Cambra also represents Defendant Global Missions. Plaintiff has made a request for discovery, in the alternative, in its response to the motions to dismiss. In the case of a plaintiff asserting an alter ego theory as to named defendants, jurisdictional discovery is often appropriate where the record has not been fully developed.

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See Harris Rutsky & Co. Insurance Services, Inc. v. Bell & Clements Limited, 328 F.3d 1122, 1134-35 (9th Cir. 2003). Counsel for Plaintiff and Defendants El Shaddai, Second Chance and Mr. Cambra are directed to meet and confer as necessary, and without undue delay, in an effort to reach an agreement on the terms of a proposed protective order regarding the documents that have been subpoenaed from Wells Fargo. The limited jurisdictional discovery should be completed within 30 days of the filing date of this Order. Meanwhile, Wells Fargo should comply with the subpoena regarding any request for documents to which there has been no objection by any other named Defendant who has been properly served with the summons and complaint, or any amended complaint, in this case. Defendants' motions to dismiss for lack of personal jurisdiction and failure to state a claim for relief remain under consideration by the Court. Accordingly, IT IS ORDERED that the motion to quash or for protective order (Doc. 112) filed by Defendants El Shaddai Ministries, Second Chance Ministries and Michael Cambra is granted in part and denied in part as set forth in this Order. IT IS FURTHER ORDERED that Defendants' motion to quash is denied to the extent that limited discovery on the issue of personal jurisdiction of Defendants El Shaddai Ministries, Second Chance Ministries and Michael Cambra shall be permitted and shall be completed within 30 days of the filing date of this Order. IT IF FURTHER ORDERED that Defendants' motion to quash or for protective order is granted to the extent that discovery related to non-personal jurisdiction matters shall not be permitted at this time. IT IS FURTHER ORDERED that Defendants' motion for expedited consideration (Doc. 113) is denied as moot. DATED this 19th day of May, 2006.

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