Plaintiffs,
v. Case No. 1:08-cv-00361
Honorable Gordon J. Quist
DEUTSCHE BANK TRUST COMPANY
AMERICAS, f/k/a Banker’s Trust Company, as
Trustee and custodian by: SAXON MORTGAGE
SERVICES, INC., f/k/a Meritech Mortgage
Services, Inc., and DAVID C. LOHR, and
ORLANS ASSOCIATES, PC,
Defendants.
_______________________________________/
Defendants, Saxon Mortgage Services, Inc. and Deutsche Bank Trust Company Americas
(“Saxon”), through counsel, respectfully request that this Court quash the unsigned subpoena
served on Gregory Smallwood on March 3, 2011 because (1) the Court has ruled inadmissible
any reference to the DOJ investigation for which Plaintiffs have suggested Mr. Smallwood’s
testimony would be probative; (2) Mr. Smallwood is not on any party’s witness list; (3) Mr.
Smallwood does not have any personal knowledge of any of the facts of this case because he did
not join Saxon Mortgage Services, Inc. until 2008, and (4) as Saxon Mortgage Services, Inc.’s
Pursuant to Local Rule 7.1, concurrence in the relief sought was requested from
Plaintiffs’ counsel, but denied. Accordingly, Saxon respectfully requests that its motion be
granted, that the subpoena served on Mr. Smallwood be quashed, and that Plaintiffs otherwise be
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precluded from calling Mr. Smallwood as a witness in this case for any purpose. This motion is
Respectfully submitted,
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Plaintiffs,
v. Case No. 1:08-cv-00361
Honorable Gordon J. Quist
DEUTSCHE BANK TRUST COMPANY
AMERICAS, f/k/a Banker’s Trust Company, as
Trustee and custodian by: SAXON MORTGAGE
SERVICES, INC., f/k/a Meritech Mortgage
Services, Inc., and DAVID C. LOHR, and
ORLANS ASSOCIATES, PC,
Defendants.
_______________________________________/
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TABLE OF CONTENTS
ARGUMENT .................................................................................................................................. 1
CONCLUSION ............................................................................................................................... 5
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Should the Court quash the unsigned subpoena handed to Gregory Smallwood on March
3, 2011, and preclude Plaintiffs from calling Mr. Smallwood as a witness in this case for any
purpose, because (1) the Court has ruled inadmissible any reference to the DOJ investigation for
which Plaintiffs have suggested Mr. Smallwood’s testimony would be probative; (2) Mr.
Smallwood is not on any party’s witness list; (3) Mr. Smallwood does not have any personal
knowledge of any of the facts of this case because he did not join Saxon Mortgage Services, Inc.
until 2008, and (4) as Saxon Mortgage Services, Inc.’s general counsel, Mr. Smallwood’s
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CASES
Baxter Travenol Lab. v. Le May, 708 F.2d 721 (6th Cir. 1982)
Crabb v. KFC Nat'l Management Co., No. 91-5474, 1992 U.S. App. LEXIS 38268 (6th Cir. Jan.
6, 1991)
Crenshaw v. Herbert, No. 09-0348-pr, 2011 U.S. App. LEXIS 2155 (2d Cir. N.Y. Feb. 2, 2011)
L.C. v. Cent. Pa. Youth Ballet, 2010 U.S. Dist. LEXIS 66060, 28-29 (M.D. Pa. July 2, 2010)
Spreadsheet Automation Corp. v. Microsoft Corp., 587 F. Supp. 2d 794 (E.D. Tex. 2007)
United States v. Associated Milk Producers, Inc., 534 F.2d 113 (8th Cir. 1976)
RULES
FED. R. CIV. P. 45
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Mortgage Services, Inc.’s (“SMSI”) general counsel. Id. ¶ 1. He resides in Texas. Id. ¶ 2. Mr.
Smallwood did not join SMSI until April 22, 2008. Id. ¶ 3. He has no personal knowledge of
Mr. Smallwood does not appear, nor did he ever appear, on any party’s witness list.
When counsel for SMSI approached Plaintiffs’ counsel about Mr. Smallwood’s subpoena, Mr.
Odom stated that Mr. Smallwood would be a rebuttal witness, not subject to disclosure. On
March 8, 2011, Mr. Odom stated that Mr. Smallwood was involved in negotiations with the
Department of Justice (“DOJ”). The same day, March 8, the Court ruled, twice, that evidence of
ARGUMENT
The Court’s case management order makes clear that no witness whose name does not
appear on the party’s witness list will be permitted to testify for any purpose, except
impeachment. Doc. #114 at 4. Mr. Smallwood does not appear on any party’s witness list.
Moreover, because Mr. Smallwood did not join SMSI until April 2008, he has no knowledge of
the facts relevant to this case. Because he has no personal knowledge of the facts relevant to this
1
Federal Rule of Civil Procedure 45(a)(3) requires that the clerk of the court or an attorney sign
the subpoena as an officer of the court from which the subpoena is issue. Because the subpoena
was not signed, it is a nullity. The Court may quash the subpoena for this reason alone.
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allegations, the only possible reason to call Mr. Smallwood as a rebuttal witness is to explore the
Department of Justice (“DOJ”) investigation. Mr. Smallwood cannot be called for this reason.
The Court ruled twice on March 8, 2011 that the DOJ investigation was not relevant and would
be unfairly prejudicial. And, as the Court has previously ruled, “this case is about what
happened between Plaintiffs and Defendants and any damages Plaintiffs may have suffered.”
Doc. #324 at 6, February 23, 2011 Opinion and Order. Moreover, the Court specifically
prohibited Plaintiffs, including their attorneys, from “suggest[ing] that damages should be
imposed against [Saxon] based upon events having no connection to the facts of this case.” Doc.
#324 at 6, February 23, 2011 Opinion and Order. Accordingly, the Court’s rulings prohibit
Plaintiffs from basing their claim to damages on allegations of other alleged SCRA violations
subject to DOJ inquiry, and precluded Plaintiffs from using Mr. Smallwood to explore the
Even if the Court’s previous rulings did not already prohibit references or evidence of the
DOJ investigation, it would nevertheless be inadmissible under Federal Rules of Evidence 401,
402, 403, and 408. See, e.g., Crenshaw v. Herbert, No. 09-0348-pr, 2011 U.S. App. LEXIS
2155 (2d Cir. N.Y. Feb. 2, 2011) (“even if evidence of a prior substantiated excessive force
investigation existed, on the facts of the particular case before us such evidence would be
inadmissible to show that Bartkowiak acted violently in this instance.”); Doc. #241, December
17, 2010 Opinion at 12 (“The existence of another case involving similar facts, without more, is
Likewise, the fact that Saxon may be negotiating a settlement of the investigation is also
inadmissible. See, e.g., Reynolds v. Roberts, 202 F.3d 1303, 1318 (11th Cir. 2000)
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(representations min the course of negotiating the terms of a DOJ consent decree were
inadmissible under Federal Rule of Evidence 408); United States v. Associated Milk Producers,
Inc., 534 F.2d 113, 117 (8th Cir. 1976) (a consent decree “is the equivalent of a nolo contendere
plea and is inadmissible in other suits” involving the same alleged violations); L.C. v. Cent. Pa.
Youth Ballet, 2010 U.S. Dist. LEXIS 66060, 28-29 (M.D. Pa. July 2, 2010) (“consent decrees are
not adjudications of guilt. Therefore, the consent decree entered into by Karl Moll cannot
materially substantiate the claims Plaintiffs have asserted against him in the action at bar,
Microsoft Corp., 587 F. Supp. 2d 794, 801 (E.D. Tex. 2007) (“evidence of consent decrees,
settlements, and licenses made under the threat of litigation would not be proper evidence of
Plaintiff’s damages to present to the jury.”); Dodson v. CBS Broad. Inc., 423 F. Supp. 2d 331,
334 (S.D.N.Y. 2006) (The “limited probative value of” an EEOC suit and settlement “is
substantially outweighed by the burden that the admission of this evidence would place on
[defendant] to explain the circumstances at issue in [the EEOC’s lawsuit and its settlement], by
the waste of time that would accompany such explanations, and by the danger that admission of
this evidence will create unfair prejudice against [defendant].” (citations omitted)).
Further, even if the DOJ investigation were relevant to the facts of this case, which they
are not, any reference to the investigation, the negotiation of a consent decree, or the allegations
that are the basis for that investigation, would also be unfairly prejudicial to Saxon. Under Rule
403, even relevant evidence may be excluded if its probative value is substantially outweighed
by the danger of unfair prejudice, confusion of the issues, or misleading the jury. FED. R. EVID.
403. Thus, even if the DOJ investigation could be deemed relevant, the danger of unfair
prejudice, confusion of the issues, and misleading the jury is extreme. It is difficult to imagine
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evidence that would be more unfairly prejudicial than putting Saxon on trial for unproven
allegations by non-parties not before the Court. Plaintiffs have no justification for introducing
such evidence or making such references in this case – other than for the purpose of gaining an
unfairly prejudicial advantage and misleading the jury. Accordingly, at a minimum, such
In addition to being irrelevant and unfairly prejudicial, the introduction of evidence of, or
reference to, the DOJ investigation would result in a monumental waste of time. As discussed,
the DOJ investigation is merely a preliminary investigation based on unproven allegations, for
which no liability or wrongdoing has been found. Moreover, Plaintiffs would have to prove the
factual predicate of each, unrelated allegation, leading to a waste of the Court’s and the jury’s
Even if Mr. Smallwood had any knowledge of the facts underlying the claims in this
case, any communication Mr. Smallwood had with SMSI employees, or outside counsel, would
be protected by the attorney-client privilege because he is SMSI’s general counsel. See United
States v. Roxworthy, 457 F.3d 590 (6th Cir. 2006); Crabb v. KFC Nat'l Management Co., No.
91-5474, 1992 U.S. App. LEXIS 38268 (6th Cir. Jan. 6, 1991) (and cases cited therein); Baxter
Travenol Lab. v. Le May, 708 F.2d 721 (6th Cir. 1982). Pursuant to FED. R. CIV. P.
45(c)(3)(A)(iii), the issuing court “must quash” a subpoena that “requires disclosure of
privileged or other protected matter . . . .” The unsigned subpoena requiring SMSI’s general
Finally, FED. R. CIV. P. 45(c)(3)(A)(i) also requires the issuing court to quash a subpoena
that fails to allow a reasonable time to comply. As stated above, Mr. Smallwood was handed an
unsigned subpoena on March 3, which required his attendance on March 3. The utter lack of
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time to comply with the subpoena falls far short of the “presumptive” fourteen days Plaintiffs,
just one and half weeks ago, argued was the required notice period before a witness could be
compelled to testify. Doc. #320 at 7. Accordingly, the Court should quash the unsigned
CONCLUSION
For the reasons stated, Saxon respectfully requests that the Court quash the unsigned
subpoena handed to Gregory Smallwood by Plaintiffs’ counsel on March 3, 2011, and preclude
Plaintiffs from calling Mr. Smallwood as a witness in this case for any purpose.
Respectfully submitted,
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CERTIFICATE OF SERVICE
I hereby certify that on December March 8, 2011, I electronically filed the foregoing
paper with the Clerk of the Court using the ECF system, which will send notification of such
Respectfully submitted,
KERR, RUSSELL AND WEBER, PLC
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EXHIBIT A
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