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Officer of tribal entity must testify.

Byline: Virginia Lawyers Weekly

A tribal entity officer could not quash a subpoena to testify about his employment before he began working for the tribal entity, even if the prior employment was related to his current position.

Background

Plaintiff Lula Williams filed a complaint on behalf of herself and those similarly situated, alleging that corporate defendants Big Picture Loans LLC and Ascension Technologies Inc., along with individual defendant Martorello, violated the federal Racketeering Influenced Corrupt Organizations Act and Virginia's state usury laws.

The defendants set up a convoluted corporate structure to entitle them to the protection of tribal immunity while violating state usury laws. Big Picture Loans and Ascension previously moved to dismiss this action based on lack of jurisdiction. This court denied their motion to dismiss after finding that neither entity is an arm of the tribe known as the Lac Vieux Desert Band of Lake Superior Chippewa Indians. The defendants' appeal of that decision is now pending before the Fourth Circuit.

After the corporate defendants filed their appeal, the case against individual defendant Martorello was set for trial. However, discovery against the corporate defendants remains stayed while the appeal is pending. As a result, discovery was sought from employees of Bellicose Capital LLC, an entity controlled by Martorello but acquired by the tribe in 2015. As part of the plan to cloak the lending operation of Martorello, Ascension and Big Picture Loans in sovereign immunity, Bellicose's assets were then assigned to Ascension and its liabilities were assigned to Big Picture Loans, and the company ceased to exist.

Simon Xu Liang is the controller of Ascension and a former employee of Bellicose. He is also part owner of Eventide Credit Acquisitions LLC, which provided the initial loan 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.

Liang was served with a subpoena to testify at a deposition which he now moves to quash.

Analysis

A court must quash or modify a subpoena that subjects a person to undue burden or requires the disclosure of privileged or other protected matter. The burden to establish that a subpoena ad testificandum imposes an undue burden is on the party opposing its command.

Liang argues that he should not have to testify while the corporate defendants' appeal is pending because he shares the same immunity as the Tribe and, thus, cannot be deposed by third-party subpoenas. This argument, however, is unpersuasive as it pertains to Liang's employment at Bellicose and in his role as part owner of Eventide.

Liang has failed to provide a single case in which a court has held that an officer of a tribal entity is protected by his employer's sovereign immunity from being questioned about his employment before working for the tribal entity. Notably, the Supreme Court has held that tribal employees may be sued in their individual capacity for torts committed by the individual employee. If they can be sued in their individual capacity, they can likewise be subpoenaed for depositions as individuals. Thus, Liang can be deposed about all activities in his role as an officer or employee or shareholder of Bellicose and Eventide, the operation of Bellicose, the reasons for Bellicose's sale to the Tribe, and the structure of the Bellicose sale. However, prudence dictates that Liang should not be asked about his role at Ascension during the pendency of the appeal.

Nevertheless, because of the various discovery delays caused by the immunity claims, this case is now out of kilter. There is a pending class action certification that should be decided before any deposition of Liang. Accordingly, the deposition, while allowed, will not be scheduled until after a decision on class certification has been issued.

Motion denied in part and granted in part.

Williams v. Big Picture Loans LLC, Case No. 3:18-mc-12, Feb. 11, 2019. EDVA at Richmond (Payne). VLW 019-3-066. 9 pp.

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Title Annotation:Williams v. Big Picture Loans LLC, U.S District Court for the Eastern District of Virginia
Publication:Virginia Lawyers Weekly
Date:Mar 8, 2019
Words:664
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