United States District Court, E.D. Virginia, Richmond Division
LULA WILLIAMS, et al., on behalf of themselves and all individuals similarly situated, Plaintiffs,
BIG PICTURE LOANS, LLC, et al, Defendants.
E. PAYNE SENIOR UNITED STATES DISTRICT JUDGE.
matter is before the Court on the plaintiffs' MOTION FOR
ENTRY OF ORDER (ECF No. 303) (the "Motion").
Ascension Technologies, Inc. ("Ascension") and Big
Picture Loans, LLC ("Big Picture") (collectively
the "Corporate Defendants") responded, and the
Court heard argument on the matter. For the following
reasons, the plaintiffs' MOTION FOR ENTRY OF ORDER (ECF
No. 303) will be granted.
explained in detail in the MEMORANDUM OPINION (ECF No. 146)
(the "Opinion") entered on July 27, 2018, at the
core of this case lie consumer loans bearing interest rates
of more than 600% that are alleged to violate Virginia's
usury laws and a lending scheme (implemented through a
convoluted corporate maze) that is alleged to violate the
Racketeer Influenced and Corrupt Organizations Act
("RICO"). The corporate structure and the lending
schemes were set up by the Corporate Defendants and the
individual defendant, Matt Martorello, in an effort to escape
the reach of state usury laws and federal credit regulating
laws by trying to put the Corporate Defendants within the
sovereign immunity of the Lac Vieux Desert Band of Lake
Superior Chippewa Indians (the "Tribe"). For the
reasons set forth in the Opinion, the Corporate
Defendants' motion to dismiss this case for lack of
jurisdiction under a claim of sovereign immunity was
rejected. That decision is on appeal to the United States
Court of Appeals for the Fourth Circuit.
the Corporate Defendants appealed from the decision holding
that they were not entitled to the Tribe's sovereign
immunity, the case was set for trial on the claims against
Martorello, and class and merits discovery was allowed to
proceed as to the case 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 (ECF No. 323), the Corporate Defendants have thwarted
the discovery efforts of both the plaintiffs and Martorello
by interposing rather farfetched notions of sovereign
immunity to oppose the plaintiffs' efforts to obtain
information from non-parties and from employees of the
Corporate Defendants who formerly were employed by entities
owned or controlled by Martorello.
of their discovery of non-parties, the plaintiffs issued a
subpoena duces tecum to TranDotCom Solutions, LLC
("TranDotCom"), a company that maintains Big
Picture's data relating to the allegedly usurious loans
such as loan amounts, origination dates, and payments.
TranDotCom refused to comply because of its contract with Big
Picture and its concerns about whether production was
prohibited by the Gramm-Leach-Bliley Act, 15 U.S.C. §
6801, et. seq. However, TranDotCom has not filed
objections to producing the documents requested in the
subpoena. Instead, the plaintiffs and TranDotCom negotiated a
resolution that required a Court order to sanction the
resolution. TranDotCom and the plaintiffs informed Big
Picture of the subpoena and the agreement. After that
agreement was reached, the Corporate Defendants, who had been
informed of the subpoena but had done nothing to oppose it,
filed a pleading titled SPECIALLY APPEARING DEFENDANTS BIG
PICTURE LOANS, LLC'S AND ASCENSION TECHNOLOGIES,
LLC'S RESPONSE TO PLAINTIFFS' MOTION FOR ORDER (ECF
No. 318), in which they object to entry of the order to which
the plaintiffs and TranDotCom agreed.
Motion, the Court is asked to enter an order declaring that
TranDotCom's transfer of Big Picture's data in
response to the subpoena does not violate the
Gramm-Leach-Bliley Act so that TranDotCom will provide the
requested data without fear of violating the statute. The
Court agrees that the transfer of Big Picture's data does
not violate the Gramm-Leach-Bliley Act because a subpoena
falls within the judicial-process exception to the Act. See
15 U.S.C. § 6802(e)(8) (stating that a financial
institution may provide nonpublic personal information to a
nonaffiliated third party when the financial institution is
responding to "judicial process"). Further, the
Court rejects the other reasons advanced by the Corporate
Defendants for denying the motion: (1) that the subpoena must
be served in Georgia rather than in Virginia under Rule 45
and (2) that the motion should be quashed, because the
subpoena does not satisfy Rule 45's balancing
test.Each argument will be addressed in turn.
The Gramm-Leach-Bliley Act Does Not Prevent
plaintiffs argue that the Gramm-Leach-Bliley Act is not a bar
to production here because a subpoena for discovery falls
squarely within the *judicial process" exception of the
Act, 15 U.S.C. § 6802(e) (8) . Their view relies on
district court opinions from outside of this district. See
RQ Const., Inc. v. Ecolite Concrete U.S.A., No.
09-CV-2728, 2010 WL 3069198, at *2 (S.D. Cal. Aug. 4, 2010)
("[A] financial institution does not violate the act if
it provides the information in response to judicial process,
including civil discovery."); Marks v. Glob. Mortg.
Grp., Inc., 218 F.R.D. 492, 496 (S.D. W.Va. 2003)
("The court FINDS that 15 U.S.C. § 6802(e)(8)
permits a financial institution to disclose the non-public
personal financial information of its customers to comply
with a discovery request.").
Corporate Defendants say that neither the federal courts nor
Congress have set a bright-line rule governing whether an
answer to a civil subpoena is "judicial process,"
ECF No. 318 at 8 n.4, but they rely on a district court case
from Louisiana, saying that court "stated a subpoena for
monetary gain is notxjudicial process.'"
Id. (citing Landry v. Union Planters Corp.,
No. CIV.A. 02-3617, 2003 WL 21355462 (E.D. La. June 6,
2003)). That, however, is not what the Landry court
held; instead, that court held that the information sought
M[id] not implicate the provisions of the [Gramm-Leach-Bliley
Act] ." Landry, 2003 WL 21355462 at *6.
Further, the Corporate Defendants argue that the information
should not be produced because 15 U.S.C. § 6802(b) says
that a financial institution cannot disclose nonpublic
personal financial information absent a notification for
customers to be able to opt-out. ECF No. 318 at 9. This
argument lacks merit because § 6802(e)(8) explicitly
says, "Subsections (a) and (k) shall not
prohibit the disclosure of nonpublic personal
information ... to respond to judicial process."
in short, the plaintiffs are correct that the
Graham-Leach-Bliley Act allows the production of the
information in TranDotCom's possession under the
The Corporate Defendants' Other Arguments Lack
Corporate Defendants further argue that the subpoenas should
be quashed because: (1) under Rule 45, the plaintiffs must
first file a motion to compel in Georgia where TranDotCom is
located rather than in Virginia; and (2) the subpoenas do not
satisfy the Rule 45 balancing test, because ...