Frio Energy Partners, LLC v. Finance Technology Leverage, LLC

Background

Frio Energy Partners, LLC moved under Federal Rule of Civil Procedure 37(a)(1) to compel discovery from Finance Technology Leverage, LLC (FTL). The motion addressed three matters: documents allegedly sent or received by FTL’s principals in their roles as principals of FTL Energy, documents held by FTL Energy, and answers to an interrogatory about the Structuring Deposit. The parties also asked the court to resolve the starting time for the deposition of FTL’s chief executive officer, Giarrusso, in London.

Documents Held by FTL Energy

Under Rule 34, a party must produce documents in its possession, custody, or control. Control can include the legal right or practical ability to obtain documents held by another entity. The fact that FTL’s principals were also principals of FTL Energy did not by itself establish that FTL controlled FTL Energy’s documents.

Frio argued that FTL had practical ability to obtain the documents because the two companies had the same principals, used the same email addresses and domain, and stored documents on the same cloud service. But Frio submitted no evidence supporting those assertions. FTL denied possessing, having custody of, or controlling FTL Energy’s documents. Because Frio did not provide evidence sufficient to overcome that denial, the court denied without prejudice Frio’s motion to compel production of those documents. The ruling allowed Frio to renew the request upon submitting evidence.

Interrogatory About the Structuring Deposit

The interrogatory asked FTL to identify the current location of the Structuring Deposit, including the financial institution holding it, the remaining amount, the account name, and details about any use of the deposit. FTL argued that the request exceeded the limits of Local Civil Rule 33.3 and sought irrelevant information.

The court ruled that the request for the identity of the financial institution holding the Structuring Deposit was within the information permitted by Local Rule 33.3 and was relevant. That portion of Frio’s motion was granted, and the information was to be provided. The motion was denied with respect to the remainder of the request.

Deposition Schedule

The parties agreed that Giarrusso’s deposition could occur in London and that Frio’s counsel could participate remotely. FTL offered July 26, 2023, at 9:30 a.m. London time, while Frio requested a noon start. FTL would agree to noon only if it received payment for defense counsel’s one-night hotel stay so the deposition could take place over two days. The court stated that it was not unreasonable for United States counsel to request a noon start time and granted Frio’s motion. The clerk was directed to close Dkt. No. 37.