United States District Court, W.D. Arkansas, Fort Smith Division
OPINION AND ORDER
HOLMES, III U.S. DISTRICT JUDGE
the Court is a motion (Doc. 2) to quash a subpoena, filed by
Kimberly McClung and John McClung. No. response has been
filed, but a response is unnecessary. The motion will be
August 23, 2018, the United States District Court for the
Central District of California entered judgment against John
McClung in an action initiated by Signature Financial, LLC.
Signature Fin., LLC v. John McClung, No. 2:16-CV-03621, Doc.
127 (C.D. Cal. Aug. 23, 2018). Signature Financial, LLC is
now attempting to execute on John McClung's assets to
satisfy that judgment. “In aid of the judgment or
execution, the judgment creditor or a successor in interest
whose interest appears of record may obtain discovery from
any person-including the judgment debtor-as provided by these
rules or by the procedure of the state where the court is
located.” Fed.R.Civ.P. 69(a)(2).
April 4, 2019, the United States District Court for the
Central District of California issued a subpoena (Doc. 2, pp.
18-23) under Federal Rule of Civil Procedure 45 commanding
Bank Ozk, successor in interest to Summit Bank, to produce in
Fort Smith, Arkansas:
1. Documents identifying the source of funding used by [John
and/or Kimberly] McClung to pay the obligations secured by
the Deed of Trust [executed by John and Kimberly McClung in
favor of Investors Note Servicing, Inc.], including but not
limited to, copies of checks or proof of wire transfers.
2. Documents identifying the payor of the obligations owed to
[Investors Note Servicing Inc.] and secured by the Deed of
Trust, including but not limited to, copies of checks or
proof of wire transfers.
3. Documents identifying the current balance of the
obligations secured by the Deed of Trust.
(Doc. 2, p. 23). The deadline for compliance is May 15, 2019.
(Doc. 2, p. 18).
14, 2019, in accordance with Rule 45(d)(3), the McClungs
moved in this Court to quash the subpoena on the grounds that
despite the requirements of Rule 45(a)(4), no preservice
notice was given to all parties (Doc. 2, pp. 4-5); that the
subpoena demands financial information of Kimberly McClung,
who is a nonparty to the California lawsuit (Doc. 2, pp.
5-6); that any documents possessed by Bank Ozk are irrelevant
to the lawsuit (Doc. 2, p. 6); and that the subpoenaed
documents may include information protected by the marital
privilege, privacy rights protected by the United States
Constitution or the constitutions of the States of Texas,
Oklahoma, and California, or federal statutes protecting
personal bank records (Doc. 2, pp. 7-9).
are permitted to conduct discovery, including under Rule 45,
into “any nonprivileged matter that is relevant to a
party's claim or defense and proportional to the needs of
the case.” Fed.R.Civ.P. 26(b)(1). The Court is required
to quash or modify a Rule 45 subpoena that “(i) fails
to allow a reasonable time to comply; (ii) requires a person
to comply beyond the geographical limits specified in Rule
45(c); (iii) requires disclosure of privileged or other
protected matter, if no exception or waiver applies; or (iv)
subjects a person to undue burden.” Fed.R.Civ.P.
45(d)(3)(A). The Court may also quash or modify a Rule 45
subpoena “if it requires: (i) disclosing a trade secret
or other confidential research, development, or commercial
information; or (ii) disclosing an unretained expert's
opinion or information that does not describe specific
occurrences in dispute and results from the expert's
study that was not requested by a party.” Fed.R.Civ.P.
45(d)(3)(B). Rule 45 subpoenas may also properly be quashed
when preservice notice requirements are not met.
Firefighter's Inst. for Racial Equal. ex rel.
Anderson v. City of St. Louis, 220 F.3d 898, 903 (8th
is no basis in the record for the Court to suspect that the
subpoena fails to allow Bank Ozk a reasonable time to comply,
requires compliance beyond the geographical limits of Rule
45(c), subjects a person to undue burden, commands production
of an unretained expert's opinion or the results of an
unretained expert's study, or commands production of a
trade secret or other confidential research, development, or
McClungs' argument for quashing the subpoena for lack of
preservice notice is rejected. The preservice notice
requirement of Rule 45(a)(4) applies to a “subpoena
that commands the production of documents, electronically
stored information, or tangible things or the inspection of
premises before trial.” Fed.R.Civ.P. 45(a)(4)
(emphasis added). The Rule elsewhere describes subpoenas for
the production of documents, electronically stored
information, or tangible things or the inspection of premises
without including the “before trial” modifier.
Fed.R.Civ.P. 45(a)(1)(A)(iii), (a)(1)(C), (a)(1)(D), (c)(2),
and (d)(2)(A). Because of its inclusion in Rule 45(a)(4), and
not in those other subsections, the phrase “before
trial” must have some meaning, and the McClungs
identify no reason to give the phrase any meaning but its
ordinary one. The preservice notice requirement applies when
the subpoena commands compliance before trial. The time for
trial in the California lawsuit has passed, this is a
postjudgment subpoena, compliance is not commanded
“before trial, ” and so the preservice notice
requirement of Rule 45(a)(4) does not apply to this subpoena.
McClungs' argument for quashing or modifying the subpoena
on the basis of relevance is rejected. Judgment has been
entered against John McClung, who was at one time married to
Kimberly McClung. The authorities this Court has reviewed are
in near-universal agreement that the scope of postjudgment
discovery “is very broad, as it must be if the
procedure is to be of any value, ” and may encompass
information about nonparties. 12 Charles Alan Wright &
Arthur Miller, Fed. Practice & P. Civ. §
3014 (3d ed. Apr. 2019); see Republic of Arg. v. NML
Capital, Ltd., 573 U.S. 134, 138 (2014) (“The
rules governing discovery in postjudgment execution
proceedings are quite permissive.”), aff'g
695 F.3d 201, 207 (2d Cir. 2012) (“The scope of
discovery under Rule 69(a)(2) is constrained principally in
that it must be calculated to assist in collecting on a
judgment.”); ClearOne Commc'ns, Inc. v.
Chiang, 276 F.R.D. 402, 404 (D. Mass. 2011) (“The
presumption is in favor of full discovery of any matters
arguably related to the creditor's efforts to trace the
debtor's assets and otherwise to enforce its
judgment.”) (quotation omitted).
information subpoenaed from Bank Ozk might relate to
nonparties to the California action or might be out of date
does not make it irrelevant-at best, this is an argument that
the information sought is not “proportional to the
needs of the case, considering the importance of the issues
at stake in the action, the amount in controversy, the
parties' relative access to relevant information, the
parties' resources, the importance of the discovery in
resolving the issues, and whether the burden or expense of
the proposed discovery outweighs its likely benefit.”
Fed.R.Civ.P. 26(b)(1). Again, the McClungs' argument is
rejected. John McClung lost on the merits of the California
lawsuit, which involved payment default on a 2013 oilfield
lease agreement between Signature Financial, LLC's
predecessor in interest and JM Oilfield, with John McClung
(JM Oilfield's president and sole shareholder) acting as
personal guarantor. Signature Fin., LLC v. John
McClung, No. 2:16-CV-03621, Doc. 102 (C.D. Cal. Oct. 6,
2018). The United States District Court for the Central
District of California entered judgment against John McClung
in the amount of $1, 269, 679.65. Signature Fin., LLC v.
John McClung, No. 2:16-CV-03621, Doc. 127 (C.D. Cal.
Aug. 23, 2018). At this stage, the most important issue at
stake in the action is allowing Signature Financial, LLC to
collect its judgment. The amount of the judgment is high
enough to justify a somewhat intrusive search into the
financial information not only of John McClung but of
nonparties who might be in possession of John McClung's
assets. John McClung has not shown that he has paid $1, 269,
679.65 into the registry of the United States District Court
for the Central District of California, this Court, or any
other. He has not shown that he has identified assets
sufficient to satisfy the judgment against him. He has not