Citations
- 61 F. Supp. 3d 1
Full opinion text
MEMORANDUM OPINION AND ORDER
ROYCE C. LAMBERTH, United States District Judge.
Before the Court is Defendants’ Motion for a Protective Order for Information Protected by the Irish Data Protection Act [23] (“Defs. Mot.”) and Plaintiffs Motion to Compel Production of Documents and Interrogatory Responses [25] (“PL’s Mot.”). After considering the motions, the memo-randa in support, and the oppositions and replies thereto, the Court will deny Defendants’ motion for a protective order and grant Plaintiffs motion to compel.
I. BACKGROUND
In 2005, the Commodity Futures Trading Commission (“CFTC”) and defendant Trade Exchange Network, Limited (“TEN”), an Irish company, entered into a consent order whereby TEN pledged to cease offering off-exchange binary options on its affiliated websites to U.S. customers. However, the CFTC charges that TEN and its subsidiary, Intrade the Prediction Market Limited (“Intrade”), also an Irish company, did not cease to offer those options. ' Instead, they continued to offer the prohibited products through Intrade until November 2012, when the CFTC filed the instant complaint. The complaint alleges violations of various commodities laws, including the Commodity Exchange Act, 7 U.S.C. §§ 1 et seq. and the CFTC’s regulations promulgated thereunder, 17 C.F.R. §§ 1.1 et seq., as well as the aforementioned consent order.
The CFTC sought discovery from both TEN and Intrade, serving them both with “Plaintiffs First Set of Interrogatories to [Defendants]” (RFIs) [Defs. Mot., Exhs. 1 and 5] and “Plaintiffs First Request for [Defendants] to Produce Documents” (RFPs) [Defs. Mot., Exhs. 2 and 6]. TEN and Intrade responded in part to these requests, but raised several objections to the remainder. Among these objections were that the various requests are duplica-tive, cumulative, or already satisfied, and that they were prohibited from releasing personal identifying information (“PII”) by the Irish Data Protection Act of 1988 (Act No. 1/2008) (Ir.), available at http://www; irishstatutebook.ie/1988/en/act/pub/0025/ index.html, as amended by the Data Protection (Amendment) Act of 2003 (Act No. 6/2003) (Ir.), available at http://www.msh statutebook.ie/2003/en/act/pub/0006/index. html. Defendants pleaded a foreign government compulsion defense, claiming that they could not release any PII because to do so would be to violate Irish law.
Further negotiations between the parties failed to resolve this dispute, and defendants filed the aforementioned motion for protective order [23], asking this Court to preemptively rule that the defendants need not provide any PII to the CFTC. Prior to this Court’s decision on that motion, the CFTC filed a motion to compel cooperation with discovery [25] under Rule 37(a)(3)(B) of the Federal Rules of Civil Procedure, asking that this Court issue an order both requiring the production of any requested PII and also dismissing defendants’ various other objections to the RFPs and RFIs. These motions are now ripe for decision.
II. LEGAL STANDARD
A. Discovery
The scope of a trial court’s discretion in handling discovery matters is considerable. Food Lion Inc. v. United Commercial Workers Int’l Union, 103 F.3d 1007, 1012 (D.C.Cir.1997) (citing Brune v. Internal Revenue Serv., 861 F.2d 1284, 1288 (D.C.Cir.1988)). Under Rule 26 of the Federal Rules of Civil Procedure, parties may obtain discovery on any nonprivileged matter relevant to a claim or defense; anything reasonably calculated to lead to admissible evidence at trial is considered relevant, though what is discovered need not be itself admissible. Fed.R.Civ.P. 26(b)(1). An interrogatory can relate to any matter that fits within the scope outlined in Fed.R.Civ.P. 26(b). Fed.R.Civ.P. 33(b). Additionally, under Fed.R.Civ.P. 34(a) a party may serve on any other party a request for the production of documents so long as the request falls within the scope of Fed.R.Civ.P. 26(b).
B. Evaluation of Foreign Law
Federal court examination of foreign law is governed by Rule 44.1 of the Federal Rules of Civil Procedure. Rule 44.1 makes it very clear that a party wishing to raise an issue about foreign law must give notice in writing. Fed.R.Civ.P. 44.1. To make its decision regarding foreign law, a court may use any relevant material or source, and is not limited to the parties’ pleadings. Id. Determinations of foreign law are questions of law, not fact. Id.
The Court is permitted to conduct its own research into foreign law, out of a concern that “[t]he court may have at its disposal better foreign law materials than counsel have presented, or may wish to reexamine and amplify material that has been presented by counsel in partisan fashion or insufficient detail.” Fed.R.Civ.P. 44.1, 1966 advisory committee’s note. “There is no requirement that the court give formal notice to the parties of its intention to engage in its own research on an issue of foreign law,” though “the court should inform parties of material it has found diverging substantially from the material which they have presented.” Id.
III. ANALYSIS
A. Defendants’ Objections to Individual Requests for Production
Defendants objected to a total of nine document requests: RFP Nos. 1, 2, 3, 4, 9, 10, 12, 13, and 14. See Defendant’s Opposition. to Plaintiffs Motion to Compel [29] (“Defs.’ Opp.”) at 8-14. The Court will deal with each of those objections individually.
1. RFP No. 1
RFP No. 1 requests documents identifying TEN and Intrade’s U.S. customers and their contact information; defendants object on the grounds that (1) compliance would violate Irish law and (2) TEN had no customers during the relevant period. Defs.’ Opp. at 8. The Court deals with the Irish DPA-related claims more fully in § III.C, infra, and concludes that the Irish DPA does not prohibit disclosure here. As to TEN’S claims that it had no customers at all during the relevant period — the Court shares the CFTC’s doubts about this assertion. See Pl.’s Mot. at ¶ 15-16. However, if TEN truly had no customers during the relevant period, then obviously no documents can be produced. TEN must provide farther clarification as to why it had no customers during the relevant period if it truly had none; otherwise, it must produce those documents. A conclusory assertion that TEN had no customers during the relevant period does not suffice.
2. RFP No. 2
RFP No. 2 requests documents identifying former high-level officers, directors, etc. of TEN and/or Intrade. Defendants first make an Irish DPA-based objection which, as stated above, 'has no validity, and then refuse to provide addresses for some of those individuals because those individuals are no longer “friendly” with defendants and because their addresses are publicly available. Defs.’ Opp. at 8-9. Those objections simply have no bearing on whether defendants need to provide the requested information. Parties from whom documents are requested must produce those documents if the request is otherwise unobjectionable and the documents are within those parties’ “possession, custody, or control.” Fed.R.Civ.P. 34(a)(1). Defendants make no complaints under Fed.R.Civ.P. 26(b) that the requested discovery is irrelevant, unreasonably cumulative, or duplicative; therefore, they can only escape their production responsibilities if the requested information is not in their possession. They make no such claim here, and thus must produce.
3. RFP No. 3
RFP No. 3 requires TEN/Intrade to produce all documents reflecting communication between TEN and/or Intrade and U.S. customers related to binary option accounts, contracts or trades. Defs.’ Opp. at 9. Defendants initially objected to this request as overbroad in that it requested irrelevant information — the CFTC’s complaint is only concerned with a specific subset of option contracts, not all option contracts, but this request on its face concerns all option contracts. Id. However, the CFTC and defendants have met and conferred about this request, and that defendants are well aware that the CFTC seeks only those documents related to the contracts at issue in its complaint. See Plaintiffs Reply in Support of Its Motion to Compel [30] (“Pl.’s Rep.”) at 7. And, as the CFTC correctly points out, even if defendants had not received clarification on which documents to produce, they would still have been required to produce documents for those parts of the RFP to which they did not object. Id.; see also Fed.R.Civ.P. 34(b)(2)(C) (“An objection to part of a request must specify the part and permit inspection of the rest.”); Fed.R.Civ.P. 26, 1993 advisory committee’s note (“If a broad discovery request is made ... and the responding party believes in good faith that the production of [some documents] would be unduly burdensome, it should make its objection to the breadth of the request and ... produce the [unobjectionable] documents.”) Here, however, defendants know exactly what the CFTC wants, despite their weak protestations to the contrary, and are attempting to use deliberate misunderstanding as a shield to production. The Court will not allow this.
Defendants also claim that they have in fact produced documents responsive to this request in the form of a spreadsheet of data they took from a master customer database. Defs.’ Opp. at 10. This misunderstands the role of the party from whom discovery is requested under the Federal Rules of Civil Procedure. It is not up to the party from whom documents are requested to pick and choose how to present relevant information; instead, the requesting party is entitled to source documentation. Defendants’ argument that they can simply pull the relevant data out of a database and hand it over in a spreadsheet is the equivalent of asserting that a request for emails can be met by a Microsoft Word documents summarizing the contents of those emails. The CFTC is entitled to source documentation, and defendants even admit this is so — they note that “but for [the Irish DPA], defendants were prepared to give plaintiff unfettered access to the data base [sic] of information.” Defs.’ Opp. at 10, n. 5. Given that the Irish DPA does not operate as a bar here, defendants must give the CFTC that unfettered access.
4. RFP No. 4
RFP No. 4 seeks documents regarding TEN and Intrade’s bank accounts; defendants object on the grounds that (a) this request will not lead to admissible evidence, (b) they have already provided a sworn interrogatory response on this same topic, and (c) they do not know what documents “sufficient to identify” means. These objections are generally baseless. The request clearly could lead to admissible evidence — as plaintiffs point out in' their reply, this information is directly relevant to their prayer for relief. Pi’s Rep. at 10. Even though this may not directly lead to admissible evidence, civil discovery in the U.S. court system is designed to be broad, and is certainly broad enough to encompass this. See generally Fed.R.Civ.P. 26 advisory committee’s notes (re--péatedly emphasizing that discovery is meant to be broad). The fact that defendants have provided a sworn response to an interrogatory is irrelevant; again, plaintiffs are entitled to source documentation, so that they can draw their own conclusions. Finally, the Court feels that defendants’ claims not to understand what “sufficient” means in the context of the request are deliberate obfuscation. Defendants, as far as can be seen, do not claim that “sufficient” was so unclear that they had ho idea what to produce — rather, they seem to claim that they could not be sure they adequately met their production responsibilities. As stated above, such an objection brings with it an obligation' to produce what is unobjectionable, which defendants have not done.
5. RFP No. 9
This request asks for all communications between the defendants and the CFTC- from January 1, 2006, to the present. Defs.’ Opp. at 11. Defendants appear to object to this as cumulative because the CFTC already has those documents in their own records, but then undermine this objection by stating that they are “undertaking further searches to determine whether they have any documents responsive to this request and will produce them.” Id. at 12. Obviously, defendants have documents responsive to this request; to be perfectly clear, the fact that the CFTC also may have these documents is irrelevant to defendants’ production obligations.
6: RFP No. 10
RFP No. 10 requests document related to the 2005 Consent Order; defendants aver, rather unbelievably, that they have no responsive documents. Id. However, they also state that if they locate any non-privileged documents,' they will produce them. Id. Obviously if TEN and Intrade truly have no responsive documents to this request that they cannot produce anything responsive to this request. But it stretches credulity past its breaking point to assert that TEN has no documents regarding a Consent Order that TEN itself entered into — this Court simply cannot believe that without further explanation. TEN must produce all non-privileged documents responsive to this request.
7. RFP No. 12
RFP No. 12 asks for documentation regarding fees or commissions TEN or Intrade charged to U.S. customers. Again, defendants repeat their assertion that TEN had no customers during the relevant period, which must be backed up by something more to satisfy this Court. Id. Defendants also claim that the requested information is contained in the database discussed supra in § III.A.3. Id. As discussed there, Intrade must provide the CFTC source access to this database, which will presumably also give the CFTC access to information responsive to this request.
8. RFP N