Case 1:20-mc-00008-MJT-ZJH Document1 Filed 10/29/20 Page 1 of 20 PagelD#: 1
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`q
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`“aON
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`o
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`Trevor J, Zink, Esq. (SBN 218860)
`tzink(@omnilawgroup.com
`OMNI LAW GROUP, LLP
`1946 Hamilton Ave
`San Jose, CA 95125
`480.879.8500 (P)
`408.879.8501 (F)
`Attorneyfor Petitioner Trevor Zink, Esq.
`
`Casey Griffith (pre hacforthcoming)
`Casey. Griffith@griffithbarbee.com
`Dallas Flick (pre hacforthcoming)
`Dallas.F lick@eriffithbarbee.com
`GRIFFITH BARBEE PLLC
`1722 Routh St., Ste. 710
`Dallas, Texas 75201
`(214) 446-6020 (main)
`(214) 446-6021 (fax)
`Attorneysfor Petitioners Brian Whiteside
`and Autoficio, LLC
`
`
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`FILEDBYFAX
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`UNITED STATES DISTRICT COURT
`
`
`
`Declarations ofBrian Whiteside, Trevor Zink, and
`Dallas Flick concurrentlyfiled
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`Mag. Judge:
`Hearing Date:
`Time:
`Courtroom:
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`Not Assigned Yet
`Not Set Yet
`Not Set Yet
`Not Set Yet
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`PETITIONERS’ MOTION TO QUASH PEREZ SUBPOENAS
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`VK;
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`NORTHERN DISTRICT OF CALIFORNIA
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`
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`
`
`In re Rule 45 Subpoenas Served on
`Joseph Perez,
`Petitioners
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`BRIAN WHITESIDE’S,
`AUTOFICIO, LLC’S, AND TREVOR
`ZINK’S MOTION TO QUASH, OR
`ALTERNATIVELY, TO STAY
`ENFORCEMENT OF SUBPOENAS TO
`JOSEPH PEREZ; SUPPORTING
`MEMORANDUM OF POINTS AND
`AUTHORITIES
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`

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`Case 1:20-mc-00008-MJT-ZJH Document 1 Filed 10/29/20 Page 2 of 20 PagelD #: 2
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`Boee
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`~~)OotA
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`NOTICE OF MOTION AND MOTION
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`PLEASE TAKE NOTICEthat pursuant to Federal Rule of Civil Procedure 45(d)(3),
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`Petitioners Brian Whiteside, Autoficio, LLC (“Autoficio”), and Trevor Zink (collectively, the
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`“Petitioners”) move this Court to quashor, alternatively, to order a stay of enforcement and for
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`protection from a subpoenas duces feeum and for deposition served by Alvin “Chuck” Allen, Jr. on
`Joseph Perez (the “Subpoenas”) in connection with litigation styled Alvin C. Allen Jr. v. Trevor
`Zink, Brian Whiteside, Autoficio, LLC, and Kapexia LLC, No. 1:20-cv-00045-MIT-ZJH, pending
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`in the United States District Court for the Eastern District of Texas, Beaumont Division(the “Texas
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`Action”).
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`The Court should grant the Motion because the court in the Texas Action lacked subject-
`matter jurisdiction to issue the Subpoenas, rendering them void. Petitioners thus respectfully
`request this Court enter an order (1) quashing the Subpoenas,or,alternatively, staying enforcement
`of the Subpoenas pending the outcome of Whiteside’s and Autoficio, LLC’s motion to dismiss in
`the Texas Action; (2) alternatively, transferring this case to the issuing court, the Eastern District
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`ofTexas, under Rule 45(f) based onthe consent ofPerez to transfer and the presence of exceptional
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`circumstances; and (3) entering an automatic stay of enforcement of the Subpoenas pending the
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`outcomeof Petitioners’ present motion.
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`PETITIONERS’ MOTION TO QUASH PEREZ SUBPOENAS
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`Case 1:20-mc-00008-MJT-ZJH Document 1 Filed 10/29/20 Page 3 of 20 PagelD #: 3
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`wneeBHNO
`OofcsR
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`October 28, 2020
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`Respectfully submitted,
`
`By: s/ Trevor J. Zink
`TrevorJ. Zink, Esq. (SBN 218860)
`tzink@omnilawgroup.com
`
`OMNI LAW GROUP, LLP
`1940 Hamilton Ave
`San Jose, CA 95125
`480.879.8500 (P)
`408.879.8501 (F)
`Attorneyfor Petitioner Trevor Zink, Esq.
`
`-and-
`
`Casey Griffith (pro hacforthcoming)
`Casey.Griffith@griffithbarbee.com
`Dallas Flick (pro hac forthcoming)
`Dallas.Flick@griffithbarbee.com
`
`GRIFFITH BARBEE, PLLC
`1722 Routh St., Ste. 710
`Dallas, Texas 75201
`(214) 446-6020 (main)
`(214) 446-6021 (fax)
`Attorneysfor Petitioners Brian Whiteside and
`Autoficie, LEC
`
`PETITIONERS’ MOTION TO QUASH PEREZ SUBPOENAS
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`

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`Case 1:20-mc-00008-MJT-ZJH Document 1 Filed 10/29/20 Page 4 of 20 PagelD #: 4
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`TABLE OF CONTENTS
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`TABLE OF CONTENTS....cccccsccsssssssessecscessssessnssstssssesaseagscesssssrsenossnsnnesnensonsasenesnsssaceneeateneasenngagaaesi
`TABLE OF AUTHORITIES......cccscccseccsssesscstsssssssessssssssssssennsnsnassasscnssnsesensanansccssnsneseessenneanenennenesii
`SUMMARYsestsssusnnunnnninnnimnnnnniiinnniiniiiiinnininnnniniiumnnnennnnte 1
`BACKGROUND viesscscsssssscercsseseestsrsrsasecsceesscsnsensssnsscsusnsnrateessecadoucneosenensanennessussuaceussenenaeenensnsnesnegenes 2
`
`1.
`The Texas Actionciccccccscsseeccscecseseesersereenssnsessssssssseseenessessssienssssieesesseasireneeneree 2
`2.
`The Perez Subpoenas ....cccccsccssssseerseceessseenennrnereeteessieene iene seesianenssssseassssrseerenagnens 3
`3.
`Petitioners’ Dealings with Perez ...ccccecescscseseessereeeeerersenesenenessenenensesreersenersenees 4
`LEGAL STANDARDju.....ccsscsssscsseeeensenserscsasssscausscussenssneseearsessssssaassuseessenssessatanssssnaneesenseatenneneeagaes4
`1,
`Rule 45 Subpoenas...ccccccceessesesssseenesenereeetenecscsanranecsssassensnsarseseseeaaaeneenenenety 4
`2.
`Motions to Quash Subpoenas...essssesseseseeeserssssserersessessseenersnnneesnersseneraenes 4
`ARGUMENT...nccssssscccssssssssccssssrsssscscsossssonsnenssesscensccesssssaseeecenssteapenessnasnsessossssssennenesesaesasenecsenseasensaes5
`1.
`Petitioners Have Standing to Move to Quash the Subpoenas........scsseeercrsesrerees 5
`2.
`The Court Must Quash the Subpoenas Because They Are Void .......eee 6
`3.
`If the Court Does Not Quash the Subpoenas, It Should Stay Their
`Enforcement Pending a Ruling on Whiteside’s and Autoficio’s Motion
`tO DISIMiSS ...ccecccecccsccsseessessseseeseeseeseeeeteceeeeeresdasesssesssssceeessssssssssassddedseeseaseedenseesenenes 9
`Alternatively, the Court Should Transfer this Matter to the Eastern
`District Of TexXas......cccssccsccsccscersccsecssecsecsnssererssseeerseserseneeteseseeeenarseenisiiererserstesneas 11
`CONCLUSION...cccccscsssosseccesencnsscesssssasssansossnssenesseseceecasnenasenssssasstensagessesenesasaasacoosoesassnenseneasenss 13
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`4,
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`PETITIONERS’ MOTION TO QUASH PEREZ SUBPOENAS
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`Case 1:20-mc-00008-MJT-ZJH Document 1 Filed 10/29/20 Page 5 of 20 PagelD #: 5
`4
`
`CASES
`
`TABLE OF AUTHORITIES
`
`Acuna v. Brown & Root, Inc.,
`200 F.3d 335 (Sth Cir, 2000)...cecssesesssseseesesesssesesnesessssnsseesssesesrssesestesseeaseeeeennnenenenes 13
`
`Canderm Pharm., Ltd. v. Elder Pharm., Inc.,
`862 F.2d 597 (6th Cir. 1988)...ccceeceseeseeesrsseeeeesensisisserersereenesssesenensneasenrsrrssdeqeaseniiess 9
`
`Costco Wholesale Corp. v. Crane,
`2016 WL 5394115 (N.D. Cal. Sept. 27, 2016)... teree tees esssesecesnereesateenenens 11,12
`
`Dr. JKL Lid. v. HPC IT Educ. Ctr.,
`749 F, Supp. 2d 1038 (N.D. Cal. 2010) .cececeseceeceeneerstenesennesesrerssneseneerssieeneacenenetssaneescenctss 7
`
`Fountain v. Livingston,
`No. 6:14-cv-268, 2015 WL 13707602 (E.D. Tex. June 19, 2015) oo. ceeceeerrereintrersetereeees 10
`
`Inve Dein Host, Inc.,
`835 F.2d 402 (18 Cir, 1987) .ccescsesseesssecesescesesneseeeseeenssasssssdeensesescsersessssrsesesesecenanaaneenenennas 8
`
`Inre Verifone, Inc.,
`No. 18-mc-80087-VKD,2018 WL 3532761 (N.D. Cal. July 23, 2018) oer renee 10
`
`Kauffman v. Dreyfus Fund, Inc.,
`A34 F.2d 727 (3d Cit. 1970).cccccsscscsscsneenreseseeneeaeeneneseneneneressssseenseessssseassenererenseatensenneneaey 8
`
`Landis v. N. Am. Co.,
`299 US. 248 (1936) vecccccsceeereecestsessressssassenenssssssnenesenensessteesnevevevaananenrarssseseseneasananengens 10
`
`Landry v. All Am. Assur. Co.,
`688 F.2d 381 (Sth Cir, 1982)...sseessssesssssseeeeeseseeneneseseessneanarerseseesssssssseensasarensnserseeaasens 9
`
`Lockyer v. Mirant Corp.,
`398 F.3d 1098 (9th Cir, 2005)...cccseeseseeeeeeseeceeerereteneettieeseasseneerenesdesseeeenenrenneneneey 10
`
`Lowe v. Eltan, B.Y.,
`No. 9:05-cv-38, 2013 WL 1196436 (E.D. Tex. Feb. 21, 2013)...cect teeerees 7,8
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`Moon Mtn. Farms, LLCv. Rural Cmty. Ins. Co., 301 F.R.D. 426 (ND. Cal. 2014)... ee il
`
`Phillips v. Tobin,
`548 F.2d 408 (2d Cir. 1976) ccccccscssssssessseessseesecsssssseecsstessessssssseessessncesseessensssessessssssessen D
`
`PETITIONERS’ MOTION TO QUASH PEREZ SUBPOENAS
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`Case 1:20-mc-00008-MJT-ZJH Document 1 Filed 10/29/20 Page 6 of 20 PagelD #: 6
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`1|Pinnavaia v. Moody-Stuart,
`
`|
`No. C 09-03803 CW, 2009 WL 4899218 (N.D. Cal. Dec. 11, 2009)...eeeeteeersesseseeneens7
`,
`3|Schaffer v, Univ, Rundle Corp.,
`397 F.2d 893 (Sth Cir, 1968)... cece reresssseseeessereresnsrerenenerensesvenesestssnererensiessesesceeeterneaties 9
`
`
`
`Steel Co. v. Citizensfor a Better Env't,
`523 US. 83 (1998) ccccccccesssseseseseseseevescscsseeesssssssesenssessasansnseacesssessessnssetecssseseneasesnennenenenenenaneas 12
`
`Superior MRI Servs., Inc. vy. All Healthcare Servs., Inc.,
`778 F.3d 502 (Sth Cir. 2015).ccccsscsesscccccssssnsssseessseceesssssssssnsseesessssssssteesseceeecenssnseqcssenneeseeeseessn 7
`
`U.S. Catholic Conferencev.
`Abortion Rights Mobilization, Inc., 487 U.S. 72 (1988)... scsssssseeseeesnesseaserssstententeneeneneey 7,9
`
`4 5
`
`6
`
`7
`
`8
`
`10|Woodwardv. Victory Records, Inc.,
`11
`No. CV 14-490, 2014 WL 12569342 (C.D. Cal. Mar. 12, 2014)ccs 11,12
`
`12
`
`13
`
`14
`
`STATUTES
`
`QE ULS.C. § 1654 ccccccccsssssssesseesseeeeesstseerssssstensssescessseeeeneneeeenensssatensssssauansacasaueseessnenssesaerensacerensnags 7
`
`15|OTHER AUTHORITIES
`
`16FFRED. R. CIV. P. AS (f) ccccccececccereeeeteeeterecscneesersssssesseneeessenerserendssentnnceeneneeaesenssnangaeeaeesececenentas 1]
`
`17|CuarLes ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND
`1
`PROCEDURE §2463,.) cccccsscccssessesssesecssssssseseesesessssererensesesecsenersssssesanausecacsesesanseneauraesstaneenevereses 12
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`PETITIONERS’ MOTION TO QUASH PEREZ SUBPOENAS
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`Case 1:20-mc-00008-MJT-ZJH Document 1 Filed 10/29/20 Page 7 of 20 PagelD #: 7
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`SUMMARY
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`OocsSsN
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`In continuation of his wrongful litigation, Alvin “Chuck” Allen has issued subpoenas on
`Joseph Perez to obtain document production and oral deposition testimony (the “Subpoenas”).
`Specifically, Allen seeks sensitive financial and business information from Perez relating to
`Petitioners Brian Whiteside, Autoficio, LLC (“Autoficio”), and Trevor Zink (collectively, the
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`“Petitioners”), as well as their investments in Allen’s failed business, Cimbie Corporation
`(“Cimble”). However, in the underlyinglitigation givingrise to this motion, Alvin C. Allen Jr. v.
`TrevorZink, Brian Whiteside, Autoficio, LLC, and Kapexia LLC, No. 1:20-cv-00045-MJT-ZJH
`(E.D. Tex.) (the “Texas Action”), Allen—a pro se plaintiff—brings claims that belong only to
`Cimble, not him personally. Because the claims are not his own, and because heis operating in a
`pre se capacity, Allen lacks standing to bring his claims. As a result, the court in the Texas Action
`lacks subject-matterjurisdiction over Allen’s claims, and it ultimately lacked jurisdiction to issue
`the Subpoenas to Perez. The Court should quash the Subpoenas because they are void and
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`unenforceable.
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`To the extent the Court declines to quash the Subpoenasto Perez, Petitioners respectfully
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`ask the Court to enter a temporary stay of enforcement of the Subpoenas pending the ruling of
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`Whiteside’s and Autoficio’s motion to dismiss in the Texas Action. Petitioners further respectfully
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`request the Court transfer this matter to the Eastern District of Texas, as Perez consents to the
`transfer of the Motion, and transfer would mitigate any risk of a result inconsistent with the Texas
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`Action. Lastly, Petitioners request the Court enter an automatic stay of enforcement of the
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`Subpoenas pending the outcomeof this Motion.
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`PETITIONERS’ MOTION TO QUASH PEREZ SUBPOENAS
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`Case 1:20-mc-00008-MJT-ZJH Document 1 Filed 10/29/20 Page 8 of 20 PagelD #: 8
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`1,
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`The Texas Action.
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`BACKGROUND
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`Allen initiated the Texas Action in a pro se capacity on February 6, 2020, bringing claims
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`against Zink, Whiteside, Autoficio, and Kapexia, LLC (“Kapexia”) for common law fraud,
`statutory fraud, negligent misrepresentation, and conspiracy. See Texas Action, Dkt. # 1; i¢., Dkt.
`
`# 22 (Allen’s live pleading).
`Allen’s claims purportedly stem from the agreement(the “Kapexia-Cimble Agreement’)
`between his now-defunct company, Cimble Corporation (“Cimble”), and Kapexia, wherein
`Kapexia agreed to purchase 7.14% of Cimble in exchange for $300,000, along with an additional
`$125,000 loan to further Cimble’s development of a product for Kapexia to bring to market. See
`id, Dkt. # 27, at 2-3. Whiteside and Autoficio were the investors in the Kapexia-Cimble
`Agreement, and the parties to the Agreement understood Whiteside and Autoficio would provide
`the funds to invest in and loan to Cimble. See id. Zink and Perez were members of Kapexia and
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`were involved in facilitating the Kapexia-Cimble Agreement. See id. The Kapexia-Cimble
`Agreementultimately collapsed because Cimblefailed to provide Kapexia a completed marketable
`product—Cimblewasloaned over $480,000 and gave back nothing in return. See id.
`Allen contends the Kapexia-Cimble Agreementresulted from a scheme by Petitioners to
`defraud Cimble. See generally Texas Action, Dkt. # 22. However, Allen initiated the Texas Action
`to salvage what he can from his failed business venture, Cimble. In fact, Allen makes the same
`baseless allegations in the Texas Action he does in a lawsuit brought by Whiteside and Autoficio
`in the Sherman Division of the Eastern District of Texas, which is currently awaiting trial. See
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`Autoficio, LLC etal. v. Cimble Corp. et al., Case No. 4:17-cv-404-KPJ (E.D. Tex.) (the “Sherman
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`Action’).
`On July 22, 2020, Whiteside and Autoficio filed a motion to dismiss in the Texas Action
`pursuant to Rules 12(b)(1) and 12(b)(6) ofthe Federal Rules of Civil Procedure. See Texas Action,
`Dkt. #27. The motion to dismiss spotlights Allen’s lack of standing to bring his claims in the
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`Texas Action because they belong solely to Cimble, not Allen personally. Allen has no standing
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`PETITIONERS’ MOTION TO QUASH PEREZ SUBPOENAS
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`to bring the claimsderivatively on behalf of Cimble as a pro se litigant. Thus, the court in the
`Texas Action lacks subject matter jurisdiction. The parties in the Texas Action have completed
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`briefing on the motion to dismiss, which is currently pending.
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`2.
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`The Perez Subpoenas.
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`On October 9, 2020, Allen served on Petitioners notices for the Subpoenas directed to
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`Joseph Perez, a third-party witness in the Texas Action. The Subpoenas were directed to Perez at
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`his residence in Santa Rosa, California. The first of the Subpoenas commands Perez to appearfor
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`oral deposition on October 23, 2020,at 9:00 a.m. in Santa Rosa, California. The date forthe oral
`deposition has since been moved to October 30, 2020, at 9:00 a.m. See Declaration of Trevor Zink,
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`Ex. B (herein “Zink Declaration’),
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`The second of the Subpoenas commandsPerez to produce documents to Allen directly in
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`Liberty, Texas, on October 19, 2020. See Zink Decl., Ex. A. Allen has yet to enforce compliance
`for Perez’s production ofdocuments. See Declaration of Dallas Flick, Ex. A (herein “Flick Decl.”).
`Allen seeks several categories of documents from Perez relating to Petitioners, including:
`¢
`[Alll documents and communications between or among You and any one or more of
`Allen, Barrett, Ronshausen, Conley, Dupler, Whiteside or Zink related to Cimbie from
`January 1, 2014 to present;
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`e
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`*
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`¢
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`[Alt documents and communications between or among You and any one or more of
`Allen, Barrett, Ronshausen, Conley, Dupler, Whiteside or Zink related to Whiteside
`from January 1, 2014 to present;
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`[All documents that refer or relate to Whiteside or Autoficio; and
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`[D]ocumentssufficient to identify all payments or other monies you have received from
`Kapexia, Whiteside, Autoficio, Cimble, Allen, or Barrett.
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`See Zink Decl., Ex. A, [ 3-5, 9. It also seeks documents and communications relating to the
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`valuation of Cimble, an element of the Cimble-Kapexia Agreement that heavily involved
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`Petitioners. See id., | 6.
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`Notably, on February 27, 2020, Perez sat for a deposition as a third-party witness in the
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`Sherman Action. See Flick Decl., | 2. Allen was in attendance for that deposition and had every
`opportunity to ask questions about the issues relevant to his claims in the Texas Action. See id.
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`PETITIONERS’ MOTION TO QUASH PEREZ SUBPOENAS
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`Case 1:20-mc-00008-MJT-ZJH Document 1 Filed 10/29/20 Page 10 of 20 PagelD #: 10
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`we&Wewe
`Oososy
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`Rather than take the opportunity to question Perez at that time, Allen chooses to use the improper
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`Texas Action as pretense for additional discovery to salvage his claims.
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`3.
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`Petitioners’ Dealings with Perez.
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`Perez had significant
`involvement with Petitioners relating to the Cimble-Kapexia
`Agreement, Perez introduced Whiteside to Cimble as a potential investment opportunity. See
`Declaration of Brian Whiteside, § 3 (herein “Whiteside Decl.”); Zink Decl., § 5. He was a founding
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`member of Kapexia, and he was heavily involved in discussions between Kapexia and Cimble to
`negotiate the terms of the Cimble-Kapexia Agreement. See Whiteside Decl., J] 3-5; Zink Decl.,
`14. Whiteside and Zink communicated with Perez throughoutthe negotiations process regarding
`the valuation of Cimble, whether an investment in Cimble would be wise, the potential risk on
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`return from an investment, and the ultimate terms of the Agreement. See Whiteside Deci., {] 5-6;
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`Zink Decl., 4 6. Perez has access to documents and communications received from Allen and
`Cimble relating to Whiteside or the Agreement. In essence, Perez has access to extensive
`information relating to the Cimble-Kapexia Agreement and Petitioners involvement
`in the
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`Agreement.
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`1.
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`Rule 45 Subpoenas.
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`LEGAL STANDARD
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`Rule 45 of the Federal Rules of Civil Procedure governs subpoenas served on third parties
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`like Perez, as well as motions to quash or modify those subpoenas. Handloser v. HCL America,
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`Inc., No. 19-cv-10242-LHK, 2020 WL 4700989, at *3 (N.D. Cal. Aug. 13, 2020). Under Rule 45,
`a subpoena may command a third party to attend a deposition and produce documents within 100
`miles of wherethe third party resides, is employed, or regularly transacts business. FED. R. Cv,P.
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`45(c).
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`2.
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`Motions to Quash Subpoenas.
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`Eitherin lieu of orin addition to serving written objections, persons—-whether a party or a
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`third party—affected by the subpoena may file a motion to quash the subpoena before the
`compliance date. FED. R. Civ. P. 45(d)(2){B); see Handloser, 2020 WL 4700989, at *4; Cone v.
`PETITIONERS’ MOTION TO QUASH PEREZ SUBPOENAS
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`SSBWWwSPWDNH
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`OooO
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`Vortens, Inc., No. 4:17-cv-1, 2018 WL 295417, at *1 (E.D. Tex. Jan. 4, 2018); Assoc. of Am.
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`Physicians & Surgeons, Inc. v. Tex. Med. Bd., No. 5:07-cv-191, 2008 WL 2944671, at *1 (E.D.
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`Tex. July 25, 2008). Such a motion is appropriate from a party “however minimalor ‘exceedingly
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`small’” the parties’ interests are—the party “need only have ‘somepersonalright orprivilege in
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`the information sought’ to have standing to challenge a subpoenato a third party.” See Malibu
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`Media, LLC v. Does 1-25, No. 12-cv-362, 2012 WL 2367555, at *2 (S.D. Cal. June 21, 2012)
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`(quoting Third Degree Films, Inc. vy. Does 1-108, No. C 12-3858 EMC, 2012 WL 669055, at *2
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`(D. Md. Feb. 28, 2012)). Where, as here, a subpoena seeks a party’s confidential or sensitive
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`records, the party has standing to quash the subpoena. See MAP Co.v. Lebanese Arak Co., No. 16-
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`05039, 2017 WL 10434017, at *3 (C.D. Cal. Oct. 26, 2017) (“Defendant has standing because of
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`its interest in securing the confidentiality of its business and financial information in the requested
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`documents{.]”); DAC Surgical Partners P.A. v. United Healthcare Servs., Inc., 2014 WL 585750,
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`at * (S.D. Tex. Feb. 14, 2014) (“Becausethe [parties] have a significant interest in the sensitive
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`financial information which is sought by the subpoenas, they have standing to make a motion to
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`quashj.]”’).
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`ARGUMENT
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`1.
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`Petitioners Have Standing to Move to Quash the Subpoenas.
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`Petitions have standing to move to quash the Subpoenasissued to Perez, as the documents
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`and testimony Allen seeks relate to Petitioners’ involvement with the Cimble-Kapexia Agreement
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`and the subsequent business relationship involving Cimble, Kapexia, Autoficio, and Whiteside.
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`Allen’s requests seek documentsrelating to Whiteside and Autoficio, including documentsrelating
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`to their involvement with the Cimble-Kapexia Agreement. See generally Zink Decl., Ex. A. Allen
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`will likely seek deposition testimony from Perez regarding the Cimble-Kapexia Agreement. See
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`id. (written questions).! These are sensitive topics relating to Petitioners’ prior business dealings
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` !
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`The Subpoenasinitially sought written deposition answers from Perez, along with oral
`deposition testimony. See Zink Decl., Ex. A. Allen has since informed Petitioners that Perez
`will not be providing written deposition answers. Presumably, in licu of written deposition
`answers, the same topics will be addressed during Perez’s oral deposition.
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`PETITIONERS’ MOTION TO QUASH PEREZ SUBPOENAS
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`Case 1:20-mc-00008-MJT-ZJH Document1 Filed 10/29/20 Page 12 of 20 PagelD #: 12
`t
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`wDooNSDBWw&BBNe
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`with Allen and Cimble—thus, they would fall within the Agreed Protective Order in the Texas
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`Action. See Whiteside Decl., {f 6-9; Texas Action, Dkt. # 40, at 1. The Agreed Protective Order
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`defines “Confidential Material” to include “confidential proprietary and business information”—
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`documents in Perez’s possession relating to Petitioners will fall within those categories. MAP
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`Company, 2017 WL 10434017, at *3 (“Defendant has standing because .
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`.
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`.
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`the requested
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`documents are likely to encompass information that would qualify as ‘Protected Material’ under
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`the parties’ stipulated protective order|.]”). Thus, Petitioners have standing to moveto quashthe
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`Subpoenas.
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`Separately, Whiteside has his own interest in the documents and information soughtby the
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`Subpoenas. Whiteside is an experienced and accredited investor, and his process of analyzing and
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`evaluating investment opportunities is a critical part of his work. See Whiteside Decl., ff] 6-9.
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`Whiteside applied this process to develop the Cimble-Kapexia Agreement, which required
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`exchanges of information and analysis with Perez, Whiteside’s business partner and a central
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`figure in the Agreement’s negotiations. See id; Zink Decl., {J 4-6. Perez’s documents and
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`testimony will include Whiteside’s confidential business information and insights, which are
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`valuable to his investment business. Perez will also know the details of Whiteside’s resources and
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`investment capacity, which is also highly valuable and sensitive information. See In re Matter of
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`Application ofFrates, No. M8-85, 1985 WL 2752,at *1-2 (S.D.N.Y. Sept. 25, 1985) ("The court
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`also finds that the expert, proprietary nature of the [confidential] information sought. .
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`. rendersit
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`unreasonable .
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`.
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`. [petitioner] is an investment organization whose analyses and valuations of
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`companies are its stock in trade.”). Accordingly, Whiteside has an additional, separate basis for
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`standing to move to quash the Subpoenas.
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`2.
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`The Court Must Quash the Subpoenas Because They Are Void.
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`The Subpoenasare void because the court in the Texas Action lacked jurisdiction to issue
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`them. “[T]he subpoena powerof a court cannot be more extensive than its jurisdiction.It follows
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`that if a district court does not have subject-matter jurisdiction over the underlying action, and the
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`process wasnotissued in aid of determining that jurisdiction, then the process is void....° U.S.
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`PETITIONERS’ MOTION TO QUASH PEREZ SUBPOENAS
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`6
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`Case 1:20-mc-00008-MJT-ZJH Document1 Filed 10/29/20 Page 13 of 20 PagelD #: 13
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`Oo8“SPBRrHBeWwBe
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`Catholic Conference v. Abortion Rights Mobilization, Inc., 487 U.S. 72, 76 (1988). The court in
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`the Texas Action lacks subject-matterjurisdiction because Allen lacks standing to bring his claims.
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`Underfederal law, “in all courts of the United States the parties may plead and conduct their own
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`cases personally or by counselas, by the rules of suchcourts, respectively, they are permitted to
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`manage and conduct cases therein.” 28 U.S.C. § 1654, Courts have uniformly held 28 U.S.C.
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`§ 1654 prohibits corporations from appearing in federal court other than through a licensed
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`attorney. See Lowe v. Eltan, B.V., No. 9:05-cv-38, 2013 WL 1196436, at *6 (E.D. Tex. Feb. 21,
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`2013) (citing cases); Dr. JKL Lid. v. HPC IT Educ. Ctr., 749 F. Supp. 2d 1038, 1046 (N.D. Cal.
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`2010), “Therefore, a corporation is not permitted to appearpro se.” See Lowe, 2013 WL 1196436,
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`at *6; Dr. JKL Ltd, 749 F. Supp. 2d at 1046. Further, “[bJecause a corporation may not appear
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`before the Court except through an attorney, [a] representative shareholderlikewise cannot appear
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`withoutan attorney in a derivative suit.” Lowe, 2013 WL 1196436,at *6. (citing Phillips v. Tobin,
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`548 F.2d 408, 411-15 (2d Cir. 1976)); see Pinnavaia v. Moody-Stuart, No. C 09-03803 CW, 2009
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`WL 4899218, at *3 (N.D. Cal. Dec. 11, 2009) (citing Phillips 548 F.2d at 411) ([Tjhe substantive
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`right to bring a shareholder’s derivative suit is that of the corporation.”). The court in the Texas
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`Action previously held in Lowe it may properly dismiss claims filed by a corporation not
`represented by counsel. See Lowe, 2013 WL 1196436, at *6. If the corporation or shareholder
`bringing suit derivatively on the corporation’s behalffails to retain counsel, the Court may strike
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`the corporation’s pleadings ordismiss the claims with prejudice. Seeid.
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`In the Texas Action, Allen filed his claims on behalf of Cimble, rather than on his own
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`behalf. Allen seeks leave from the Court to bring the claims derivatively (See Texas Action, Dkt.
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`10), and heattached a certificate stating he is doing so despite filing pro se. See id, {11
`#22,
`(referencing Allen’s Certification of his Original Complaint and his Capacity to Sue, Dkt. # 6-1).
`Allen has notplead any claims wherein he wasinjured in his personal capacity. Instead, the claims
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`are based solely on alleged injuries to Cimble. Allen’s injury, if any, was incidental and based on
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`his being a shareholder in Cimble, whichis not sufficient to establish standing, See Lowe, 2013
`WL 1196436, at *8; see also Superior MRI Servs., Inc. v. All Healthcare Servs., Inc., 778 F.3d
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`502, 504 (5th Cir. 2015) (“[A] plaintiff generally must assert his own legal rights and interests,
`PETITIONERS’ MOTION TO QUASH PEREZ SUBPOENAS
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`Case 1:20-mc-00008-MJT-ZJH Document1 Filed 10/29/20 Page 14 of 20 PagelD #: 14
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`wm&WwNM
`OoFfsR
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`and cannotrest his claim to relief on the legal rights or interests of third parties.”). With respect to
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`each claim, Allen attempts to position himself as an injured party, but in reality, the SAC solely
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`alleges injuries to Cimble, over which Allen had sole decision-making authority. See, e.g., Texas
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`Action, Dkt. # 22, § 95 (“Allen did rely on them and as a consequence, was injured and his $4.2M
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`dollar technology company destroyed.”); id., | 98 (“Allen’s reliance on the false representations,
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`failure to disclose material facts, and false promises to perform, caused injury of $4.2M to Allen.”),
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`The Lowe decision succinctly encapsulates this issue and explains why dismissal will be necessary
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`in the Texas Action:
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`. that the plaintiffs’ claims are brought derivatively, not
`.
`In this case, it is clear .
`individually. The only connection between the plaintiff sharcholders and the
`defendants is by virtue of the corporation—Antelope, the nominalplaintiff. An
`individual cause of action does not exist for the plaintiffs in this case because they
`are based oninjuries to them as shareholders of Antelope, and therefore they are
`only incidental to the injury to Antelope, the corporation .. .
`[the plaintiffs] have
`pled no direct, individual causes of action—theirrequestedrelief flows through and
`goes to the corporation. The substantive rights at issue in the causes of action pled
`by the shareholder plaintiffs belong to the corporation, not
`the plaintiffs
`individually. See Lowe, 2013 WL 1196436,at *8.
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`Allen insists his claims are brought “[because] of what happened te Cimble Corp., and for
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`alleged frauds and omissions which were executed on Plaintiff Allen personally, while selling his
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`100% personal property Cimble Corp., to Kapexia L.L.C.[.]” See Texas Action, Dkt. # 25, at 2;
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`Dkt. # 22, (f 11, 71-72. Allen’s position is misguided. On the face of the pleadings, the alleged
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`wrongdoing was directed toward Cimble, not Allen personally, See, e.g., Texas Action, Dkt. # 22,
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`{ 33 (“The entire deal between all parties imploded caused Allen to lose the $4.2M proceeds of
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`the transaction and it killed his company Cimble in the following scam.”); id, {57 (“The acts
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`complained of herein .
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`.
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`. would eventually result
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`in the destruction of Allen’s company
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`Cimble[.]’). In this situation, only the entity itself, or a shareholder in a derivative capacity, can
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`bring suit to redress the injury. See, e.g., Imre Dein Host, Inc., 835 F.2d 402, 406 (Ist Cir. 1987)
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`(quoting Kauffman v. Dreyfus Fund, Inc., 434 F.2d 727, 732 (3d Cir. 1970)) (“A stockholder...
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`does not acquire standing to maintain an action in his ownright, as a shareholder, when the alleged
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`injury is inflicted upon the corporation and the only injury to the shareholderis the indirect harm
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`PETITIONERS’ MOTION TO QUASH PEREZ SUBPOENAS
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`Case 1:20-mc-00008-MJT-ZJH Document1 Filed 10/29/20 Page 15 of 20 PagelD #: 15
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`i
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`‘
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`which consists in the diminution in value of his corporate shares resulting from the impairment of
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`corporate assets .. . the primary wrong is to the corporate body .
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`.
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`. the shareholder, experiencing
`
`no direct harm, possesses no primary right to sue.’”); Landry v. All Am. Assur, Co., 688 F.2d 381,
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`391 (Sth Cir. 1982) (“[It is] well established than an action to redress injuries to a corporation. .
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`.
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`cannot be maintained by a stockholder in his own name but must be brought in the name ofthe
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`corporation[.]”). This well-established rule does not change when the individual has 100% control
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`or ownership ofthe injured entity. See, e.g., Canderm Pharm., Lid. v. Elder Pharm., Inc., 862 F.2d
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`597, 602-03 (6th Cir. 1988) (“An action to redress injuries to a corporation cannot be maintained
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`by a stockholder in his own name... The general rule is applicable in cases where the individual
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`is the sole stockholder.”); Schaffer v. Univ. Rundle Corp., 397 F.2d 893, 896 (Sth Cir, 1968)
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`(same). Because Allen’s presently seeks to bring the claims on Cimble’s behalfpro se, he lacks
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`standing to continue.
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`Notably, on two separate occasions, the Court in the Sherman Action admonished Allen
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`that he could not defend claims against Cimble in a pro se capacity and ordered him to retain
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`counsel, See Autoficio, LLC, Dkt. # 35 (Oct. 23, 2017); id., Dkt. #25 (Sept. 13, 2017). Allen now
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`improperly brings the claims in the Texas Action as a pro se litigant—despite the fact the claims
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`belong to Cimble.
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`Because Allen cannot bring the claims at issue in the underlying lawsuit derivatively
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`through Cimble,
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`the court
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`in the Texas Action does not have subject-matter jurisdiction.
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`Accordingly, the court in the Texas Action lacked jurisdiction to issue the Subpoenas. See U.S.
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`Catholic Conference, 487 U.S. at 76 (1988). And this Court must quash the Subpoenas because
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`they are void and unenforceable.
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`3.
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`if the Court Does Not Quash the Subpoenas,It Should Stay Their Enforcement Pending
`a Ruling on Whiteside’s and Autoficio’s Motion to Dismiss.
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`If the Court does not quash the Subpoenas, it should stay enforcement of the Subpoenas
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`pending the outcome of Whiteside’s and Autoficio’s motion to dismiss in the Texas Action.In
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`determining whether such a stay is appropriate, the Court need only consider certain competing
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`interests, including:
`PETITIONERS’ MOTION TO QUASH PEREZ SUBPOENAS
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`OofonNHBAFSFYWWY™
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`[T]he possible damage which mayresult from the granting of a stay, the hardship
`or inequity which a party maysufferin being required to go forward, and the orderly
`course of justice measured in terms of the simplifying or complicating of issues,
`proof, and questions of law which could be expectedto result froma stay.
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`Lockyerv. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005) (quoting Landis v. N. Am. Co., 299
`U.S. 248, 254 (1936)); see In re Verifone, Inc,, No. 18-mc-80087-VKD, 2018 WL 3532761, at *6
`(N.D. Cal. July 23, 2018) (granting stay of enforcement of subpoenas based on factors outlined in
`Landis and Lockyer); Fountain v. Livingston, No. 6:14-cv-268, 2015 WL 13707602, at *5-6 (E.D.
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`Tex. June 19, 2015) (applying the Landis factors and recommendinga stay of discovery pending
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`the result