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Fulton v. Foley

United States District Court, N.D. Illinois, Eastern Division

December 5, 2019

DERRELL FULTON Plaintiff,
v.
WILLIAM FOLEY, et al. Defendant.

          MEMORANDUM OPINION AND ORDER

          SUNIL R. HARJANI, UNITED STATES MAGISTRATE JUDGE.

         Plaintiff Derrell Fulton has moved to quash a subpoena issued by Defendant City of Chicago to Momentum Funding, LLC [185]. The question presented in this motion is whether litigation funding documents that were provided by Plaintiff to Momentum in order to obtain third-party funding for the litigation are relevant under Fed.R.Civ.P. 26(b)(1), and whether they are protected by the attorney work product doctrine. For the reasons stated below, the Court grants the motion to quash.

         Background

         Plaintiff Derrell Fulton has filed a complaint alleging that he was wrongfully arrested and convicted of a sexual assault and murder that he did not commit. This lawsuit alleges that the defendants coerced his false confession and fabricated evidence that caused Plaintiff's arrest, conviction, and 23 years of incarceration. Defendants have denied the allegations of the complaint.

         During discovery, Defendant City of Chicago has served a subpoena pursuant to Federal Rule of Civil Procedure 45 on Momentum Funding, LLC for documents relating to the obtention of litigation funding by Plaintiff. The subpoena seeks communications with Plaintiff and his attorneys, summaries and assessments of the case, applications for funding, and all funding agreements and statements of the terms of funding. Plaintiff has moved to quash the subpoena. At the outset, Plaintiff has argued it has standing to bring the motion to quash, and defendant has not challenged the standing issue in its response brief. The Court finds that Plaintiff has standing because it has a legitimate interest in the information as it details private financial information related to funding of the fees and costs associated with this litigation, and disclosure of the documents also impacts the production of attorney work product material. See Allstate Ins. Co. v. Electrolux Home Prod., Inc., No. 16-CV-4161, 2017 WL 5478297, at *3 (N.D. Ill. Nov. 15, 2017). Turning to the substance of Plaintiff's motion to quash, Plaintiff argues that the subpoenaed documents are irrelevant under Rule 26(b)(1) and also seek information protected by the attorney work product doctrine.

         Legal Standard

         Rule 45 of the Federal Rules of Civil Procedure governs the issuance and quashing of subpoenas. Under Rule 45(a), a party may issue a subpoena commanding a person to produce designated documents at a specified time and place. Fed.R.Civ.P. 45(a)(1)(A)(iii). The scope of information discoverable by subpoena is “as broad as what is otherwise permitted under Rule 26(b)(1).” In re Kleimar N.V v. Benxi Iron & Steel Am., Ltd., No. 17-CV-01287, 2017 WL 3386115, at *7 (N.D. Ill. Aug. 7, 2017) (citation omitted). A proper subpoena may therefore call for “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).

         Upon a timely motion, Rule 45(d) mandates that the court quash or modify a subpoena if the subpoena “subjects a person to undue burden” or “requires disclosure of privileged or other protected matter, if no exception or waiver applies.” Fed.R.Civ.P. 45(d)(3)(A)(iii-iv). Rule 45(d) likewise permits a court to quash or modify a subpoena that requires “disclosing a trade secret or other confidential research, development, or commercial information . . . .” Fed.R.Civ.P. 45(d)(3)(B)(i).

         It is up to the moving party to establish the impropriety of the subpoena, CSC Holdings, Inc. v. Redisi, 309 F.3d 988, 993 (7th Cir. 2002. Finally, magistrate judges “enjoy extremely broad discretion in controlling discovery.” Jones v. City of Elkhart, 737 F.3d 1107, 1115 (7th Cir. 2013).

         Discussion

         The requested documents can generally be divided into two categories: (1) the litigation funding documents, which include the terms of the deal and the funding agreements; and (2) the non-funding documents, which include the communications and information provided to Momentum leading up to the securing of funding.

         A. Litigation Funding Agreement Documents

         Rule 26(b)(1) allows “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). Evidence is relevant if it has any tendency to make a fact more or less probable than it would be without the evidence. Fed.R.Evid. 401. However, relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. Fed.R.Civ.P. 26(b)(1). As a general matter, courts across the country that have addressed the issue have held that litigation funding information is generally irrelevant to proving the claims and defenses in a case. In re Valsartan N. Nitrosodimethylamine, 19-2875, 2019 WL 4485702 at *3 (D.N.J. Sept. 18, 2019); Benitez v. Lopez, 17-CV-3827-SJ-SJB, 2019 WL 1578167, at *1 (E.D.N.Y. March 14, 2019); Miller UK Ltd. v. Caterpillar, Inc., 17 F.Supp.3d 711, 742 (N.D. Ill. 2014); Kaplan v. S.A.C. Capital Advisors, L.P., S.A.C., No. 12-CV-9350 (VM)(KNF), 2015 WL 5730101, at *5 (S.D.N.Y. Sept. 10, 2015), aff'd, 141 F.Supp.3d 246 (S.D.N.Y. 2015); Space Data Corp. v. Google LLC, Case No. 16-cv-03260 BLF, 2018 WL 3054797, at *1 (N.D. Cal. June 11, 2018); MLC Intellectual Property LLC v. Micron Technology, Inc., Case No. 14-cv-3657-SI, 2019 WL 118595, at *2 (N.D. Cal. Jan. 7, 2019); Yousefi v. Delta Electric Motors, Inc., No. 13-CV-1632 RSL, 2015 WL 11217257, at *2 (W.D. Wash. May 11, 2015).

         Nevertheless, discovery issues are generally case-specific and deserve individual consideration that require courts to balance the concerns of relevancy and proportionality. Defendant has proffered a number of bases for the alleged relevancy of the ...


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