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Csx Transportation, Inc. v. Auburn Thirty Six, LLC

United States District Court, S.D. Illinois

July 21, 2015

CSX TRANSPORTATION, INC., Plaintiff,
v.
AUBURN THIRTY SIX, LLC and MICHAEL GOLDSTEIN, Defendants.

ORDER

PHILIP M. FRAZIER, Magistrate Judge.

Before the Court is the Motion to Compel filed by plaintiff CSX Transportation, Inc. ("CSX"). CSX's motion to compel is hereby GRANTED. Defendants' objections that assert the privilege against self-incrimination under the Missouri Constitution are OVERRULED. Defendants' objections that assert the privilege against self-incrimination under the Fifth Amendment to the United States Constitution are also OVERRULED. However, the Defendants may reassert the Fifth Amendment privilege by submitting the documents in question to the Court within 14 days for in camera review. The Court will defer ruling on the CSX's request for attorney's fees so as to allow the defendants to reassert the Fifth Amendment privilege.

BACKGROUND

CSX initially filed suit against defendants Auburn Thirty Six, LLC ("Auburn") and Michael Goldstein ("Goldstein") in the United States District Court for the Eastern District of Missouri on October 24, 2012. See CSX Transp., Inc. v. Auburn Thirty Six, LLC, No. 4:12-CV-1984-JAR, 2014 WL 2480610 (E.D. Mo.). Auburn had entered into an agreement with CSX where Auburn purchased a number of railroad cars on credit. Goldstein is the president and owner of Auburn and he personally guaranteed the agreement. Auburn failed to pay CSX for the railcars and CSX filed a breach of contract suit in the Eastern District of Missouri. The matter proceeded under the court's diversity jurisdiction pursuant to 28 U.S.C. § 1332. On June 3, 2014 a judgment was entered in favor of CSX and against Auburn and Goldstein in the amount of $820, 423.64. The judgment was later amended on July 8, 2014 to award CSX attorney's fees, costs and prejudgment interest, for total of $973, 990.55.

CSX then initiated efforts to collect the judgment. CSX states in its motion to compel that it soon became aware that Goldstein transacted business within the geographic territory encompassed by the Southern District of Illinois. Specifically, Goldstein opened bank accounts with Liberty Bank, a financial institution headquartered in Alton, Illinois. On November 5, 2014 the amended judgment from the Eastern District of Missouri was registered in the Southern District of Illinois (Doc. 1) and CSX began to conduct proceedings in aid of execution in this district pursuant to Rule 69 of the Federal Rules of Civil Procedure.

On May 4, 2015 CSX served Goldstein with a request for production, along with a notice of deposition to Goldstein and his son. On June 4, 2015 Goldstein responded to the request for production by refusing to answer any of the requests. Goldstein raised several objections to the requests, including that he was asserting his right against self-incrimination under Article 19 of the Missouri Constitution, that he was asserting his right against self-incrimination under the U.S. Constitution and that venue is improper in the Southern District of Illinois. Goldstein also objected that the requests are vague, ambiguous, overly broad and unlikely to lead to the discovery of assets upon which the plaintiff may execute.

On June 10, 2015 CSX filed its motion to compel and on June 24, 2015 Goldstein filed his response in opposition.

ANALYSIS

Goldstein argues that he is entitled to assert the privilege against self-incrimination as set forth in the Missouri Constitution. The underlying judgment in this case was originally entered in the Eastern District of Missouri and registered in the Southern District of Illinois pursuant to 28 U.S.C. § 1963. Under 28 U.S.C. § 1963,

A judgment in an action for the recovery of money or property entered in any... district court... may be registered by filing a certified copy of the judgment in any other district... when the judgment has become final by appeal or expiration of the time for appeal or when ordered by the court that entered the judgment for good cause shown.... A judgment so registered shall have the same effect as a judgment of the district court of the district where registered and may be enforced in like manner.

28 U.S.C. § 1963. Rule 69(a) of the Federal Rules of Civil then sets forth the proceedings for collecting the judgment,

A money judgment is enforced by a writ of execution, unless the court directs otherwise. The procedure on execution-and in proceedings supplementary to and in aid of judgment or execution-must accord with the procedure of the state where the court is located, but a federal statute governs to the extent it applies... 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 in these rules or by the procedure of the state where the court is located.

Fed. R. Civ. P. 69(a).

Pursuant to Rule 69(a), supplemental proceedings must accord with the procedure of the state where the court is located. Therefore, Goldstein is not entitled to the privilege against self-incrimination as set forth in the Missouri Constitution because this matter is currently proceeding in the Southern District of Illinois. Illinois procedural rules apply to this supplemental proceeding and Goldstein does not city any Illinois conflict of law standards that would justify applying Missouri constitutional protections. Goldstein argues that this is a "blatant exercise of forum shopping." However he does not provide any authority to support the proposition that CSX is prohibited from entering the underlying judgment or engaging in supplemental proceedings in the Southern District of Illinois. In fact, other federal district courts have held that a judgment creditor may engage in supplemental proceedings in multiple districts. See, Symons Int'l Grp., Inc v. Cont'l Cas. Co., No. ...


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