United States District Court, E.D. Virginia, Richmond Division
E. Payne, Senior United States District Judge
matter is before the Court on Brian McFadden's AMENDED
MOTION TO QUASH PLAINTIFFS' SUBPOENA TO BRIAN MCFADDEN TO
TESTIFY AT DEPOSITION IN A CIVIL ACTION (ECF No.
For the following reasons, the AMENDED MOTION TO QUASH
PLAINTIFFS' SUBPOENA TO BRIAN MCFADDEN TO TESTIFY AT
DEPOSITION IN A CIVIL ACTION (ECF No. 4) will be granted in
part and denied in part.
Williams v. Big Picture Loans, LLC, 329 F.Supp.3d
248 (E.D. Va. 2018),  the Court set out the basis for this
litigation and the efforts of the two corporate defendants,
Ascension Technologies, Inc. ("Ascension") and Big
Picture Loans, LLC ("Big Picture Loans")
(collectively the "Corporate Defendants") to escape
the reach of this case by trying to come within the sovereign
immunity of the Lac Vieux Desert Band of Lake Superior
Chippewa Indians (the "Tribe"). For the reasons set
forth in the Memorandum Opinion, the Corporate
Defendants' motion to dismiss this case for lack of
jurisdiction under a claim of sovereign immunity was
rejected. That decision is pending before the United States
Court of Appeals for the Fourth Circuit.
plaintiffs' Complaint against the Corporate Defendants
and Martorello alleges two violations of the federal
Racketeering Influenced Corrupt Organizations Act, 18 U.S.C.
§§ 1962(c) and 1962(d), as well as violation of
Virginia's usury laws, a claim for unjust enrichment, and
a plea for declaratory judgment.
facts that give rise to these claims are outlined in the
Memorandum Opinion, Williams, 329 F.Supp.3d at
253-66. As explained in the Memorandum Opinion, the corporate
structures here are convoluted and somewhat difficult to
follow. In sum, the Memorandum Opinion recites a structure
that was manipulated principally for the purpose of affording
Martorello and his related entities the protection of tribal
immunity while violating usury laws when, in fact, the
applicable test shows that neither Ascension nor Big Picture
Loans is an arm of the tribe, and that, therefore, neither
are entitled to immunity. The fundamental purpose of the
corporate arrangements was to permit the defendants to evade
the usury laws of the states, including those of Virginia,
and to allow the making of consumer loans at rates
approximating 699% per annum, with the overwhelming share of
the yield of the repayment of those loans going to Martorello
or corporations controlled by him and a very small portion
going to the Tribe.
the Corporate Defendants appealed from the decision denying
them protections of sovereign immunity, the case was set for
trial on the claims against Martorello. The case against
Martorello was set for trial to begin on March 18, 2019, but
as explained in the Memorandum Order entered on January 23,
2019, Williams, No. 3:17-cv-461, ECF No. 323, the
Corporate Defendants thwarted the discovery efforts of the
plaintiffs and Martorello to adequately prepare for trial. It
therefore became necessary to continue the trial against
Martorello generally, because, in part, of the need to take
the deposition of Brian McFadden and others who are employed
by Ascension but were formerly employed by Bellicose Capital,
LLC ("Bellicose"). As explained in the Memorandum
Opinion, Bellicose was controlled by Martorello, but
Bellicose was acquired by the Tribe in 2015.
Williams, 329 F.Supp.3d at 259. Bellicose's
assets were assigned to Ascension and its liabilities were
assigned to Big Picture Loans, and Bellicose ceased to exist.
Id. at 261. This restructuring (which saw Ascension
and Big Picture Loans take on lending operations of
Bellicoise and another Martorello company) was part of a plan
by Martorello, Ascension, and Big Picture to clothe a lending
operation-which the United States District Court for the
Southern District of New York said could be regulated under
New York's non-discriminatory anti-usury laws-in the
Tribe's sovereign immunity. Id. at 257-259;
see also Otoe-Missouria Tribe of Indians v. N.Y. State
Dep't of Fin. Servs., 974 F.Supp.2d 353, 360-61
(S.D.N.Y. 2013); aff'd, 769 F.3d 105 (2d Cir.
that in mind, and precluded from conducting discovery against
the Corporate Defendants because of their appeal, the
plaintiffs sought to obtain information from former Bellicose
employees about Bellicose and its operations as well as the
transformation of Bellicose and affiliated entities into
Ascension and Big Picture Loans. That evidence was intended
to help them prove their merits case against Martorello.
Although Martorello did not initiate the depositions against
the former Bellicose employees, he has said he needs
information from the to aid in his defense.
is the President of Ascension. McFadden was formerly the
president of Bellicose Capital ("Bellicose"), and
he is a part owner of Eventide Credit Acquisitions, LLC
("Eventide"). Eventide provided the initial loan of
$300M that was to fund the lending operations to be conducted
by Ascension and Big Picture Loans after Bellicose became
what is now Ascension and Big Picture Loans.
plaintiffs from Williams, No. 3:17-cv-461, served
McFadden with two subpoenas ad testificandum, one under
Federal Rule of Civil Procedure 30(b)(1) and the other under
Federal Rule of Civil Procedure 45. After the Corporate
Defendants filed their appeal, McFadden's counsel and
plaintiffs' counsel discussed the subpoenas, and
plaintiffs' counsel made clear that they planned to
proceed with a deposition of McFadden under the Rule 45
who is represented by the same law firm as the Corporate
Defendants, filed the AMENDED MOTION TO QUASH PLAINTIFFS'
SUBPOENA TO BRIAN MCFADDEN TO TESTIFY AT DEPOSITION IN A
CIVIL ACTION (ECF No. 4) . The plaintiffs responded to that
motion (ECF No. 6), and McFadden replied (ECF No. 10). The
parties presented oral argument.
the AMENDED MOTION TO QUASH PLAINTIFFS' SUBPOENA TO BRIAN
MCFADDEN TO TESTIFY AT DEPOSITION IN A CIVIL ACTION (ECF No.
4) was ripe, but before the Court had a hearing on the
motion, the Court decided the Corporate Defendants'
motion to stay in Williams. See No.
3:17-cv-461, ECF No. 323. Relevant here, the Court confirmed
that neither Matt Martorello (the third defendant in the
case) nor the plaintiffs could serve discovery directly on
the Corporate Defendants, because the Corporate
Defendants' appeal to the Fourth Circuit must be
respected. Id. at 7, 9. But, the Court also held
that the case against Matt Martorello would not be stayed
even though the trial had to be moved because of the delayed
discovery caused by expansive assertions of sovereign
immunity of which the assertion by Liang is but a part.
Id. at 6. Thus, discovery may proceed against Matt
Martorello, because the Court is divested only "over
[the] aspects of the case involved in the appeal."
Id. at 8-9 (quoting Griggs v. Provident Consumer
Disc. Co., 459 U.S. 56, 58 (1982)). Martorello's
trial date has been continued generally.
must quash or modify a subpoena that "subjects a person
to undue burden" or that "requires disclosure of
privileged or other protected matter." Fed.R.Civ.P.
45(d)(3)(A). Additionally, the "party or attorney
responsible for issuing and serving a subpoena must take
reasonable steps to avoid imposing undue burden or expense on
a person subject to the subpoena." Fed.R.Civ.P.
45(c)(1). The burden to establish that a subpoena imposes an
undue burden is on the person opposing its command. See
Singletary v. Sterling Transp. Co., 289 F.R.D. 237,