Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-00545/USCOURTS-caed-2_05-cv-00545-12/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:504 Copyright Infringement

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

ODNIL MUSIC LIMITED and FIFTY-SIX

HOPE ROAD MUSIC LIMITED,

No. CIV S-05-0545 WBS EFB

Plaintiffs, 

vs.

KATHARSIS LLC, WILLIAM JOSEPH

SCHECK and NATHANIEL ORDER

CHRISTOPHER SCHECK,

Defendants. 

 /

An examination of judgment debtor William J. Scheck was conducted in the courtroom

of the undersigned on May 16, 2007. Alan Steinberg appeared on behalf of plaintiffs Odnil

Music Limited and Fifty-Six Hope Road Music Limited (“plaintiffs” or “judgment creditors”), 

and William J. Scheck appeared on his own behalf as the judgment debtor to be examined. 

 On that same date, just prior to the examination, the court addressed Mr. Scheck’s

previously filed document styled “Response and Exemptions Claimed.” In that document, Mr.

Scheck asserted that he was not required to produce various documents previously requested by

judgment creditors. The court admonished Mr. Scheck that the purpose of the examination was

for the judgment creditors to ascertain, via the judgment debtor’s sworn testimony, the existence

and location of various assets that may be used to satisfy the judgment. The court explained that

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the examination procedure was neither the time nor place to adjudicate whether certain assets are

exempt from satisfying the money judgment entered against him. Accordingly, the court

instructed Mr. Scheck to answer questions during the examination. Notwithstanding the court’s

admonishments, Mr. Scheck has continued to refuse to produce the documents requested by the

judgment creditors. Accordingly, the judgment creditors have filed a motion to compel

production of those documents, which shall be granted as detailed in this order. 

I. BACKGROUND

Defendants Katharsis, LLC and William J. Scheck (“judgment debtors”) owned and

operated a bar in Roseville known as the Owl Club, where they performed copyrighted musical

works without permission. Plaintiffs prevailed on their copyright infringement claims against

defendants, and judgment was entered against them on July 21, 2006. Since entry of judgment,

judgment creditors have taken steps to satisfy the judgment, including serving judgment debtors

with written discovery concerning the existence and location of assets. Judgment debtors failed

to respond to the requests for written discovery. See Declaration of Alan M. Steinberg in

Support of Judgment Creditors’ Brief (“Steinberg Decl.”), at ¶¶ 3-4. Accordingly, judgment

creditors obtained an order to conduct a judgment debtor examination pursuant to applicable

federal and state rules of procedure. Id., at ¶ 5.

Mr. Scheck refused to produce the requested documents prior to and during the exam,

claiming that the judgment creditors improperly sought private information about various trusts

that were neither defendants in the action nor liable for the judgment. Id., at ¶¶ 9, 10. 

At the examination, Mr. Scheck testified to the following: that the William J. Scheck

Trust owns all assets and property of the Owl Club, and that he is the sole trustee, but not a

beneficiary, of this trust; that the William J. Scheck Trust is in the process of selling the Owl

Club for $975,000, and that escrow on that sale is expected to close in July 2007; that the

William J. Scheck Trust sold real property in December 2006 for $185,000, and that those

proceeds are being held in trust; and, that Mr. Scheck filed a certificate of cancellation of

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Katharsis, LLC prior to trial in this case, that the entity has no assets at this time, and that Mr.

Scheck earns no salary as manager of the Owl Club. Id., at ¶ 13.

During the examination, Mr. Scheck confirmed his possession of documents responsive

to certain document requests propounded by judgment creditors. Id., at ¶ 12. However, Mr.

Scheck continues to withhold those documents, now claiming that they are protected from

discovery on the basis of vaguely articulated privacy concerns, and continuing to assert that they

are irrelevant to the collection proceedings because the trusts are not named defendants in this

action. 

Judgment creditors move the court for an order compelling production of the requested

documents (i.e., all documents related to the sale of the Owl Club and any other pending, current

or past purchases, sales, loans or other form of transfers to or from the Asgard Entertainment

Trusts, the William J. Scheck Trust, and the Joseph W. & Margaret V. Scheck Family Trust). 

They wish to ascertain whether or not any of the assets held by these entities can be used to

satisfy the judgment, and in particular, to determine whether any assets are reachable by virtue of

fraudulent transfers. Judgment creditors also move for sanctions in the amount of $1,600, for

attorney’s fees accrued in obtaining this order to compel production. 

II. ANALYSIS

Rule 69 of the Federal Rules of Civil Procedure provides that the process for enforcing a

judgment is to be conducted in accordance with the procedures of the state in which the district

court is held. That Rule further provides that judgment creditors “may obtain discovery from

any person, including the judgment debtor, in the manner provided by these (Federal) rules or in

the manner provided by the practice of the state in which the district court is held.” Fed. R. Civ.

P. 69(a). 

In California, the procedure for examining a judgment debtor is set forth in Cal. Civ.

Proc. Code § 708.110. The purpose of the examination is “to leave no stone unturned in the

search for assets which might be used to satisfy the judgment.” Troy v. Superior Court, 186 Cal.

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App. 3d 1006, 1014 (Cal. Ct. App. 1986). Judgment creditors are accorded “the widest scope for

inquiry concerning property and business affairs of the debtor.” Young v. Keele, 188 Cal.App.3d

1090, 1093 (Cal. Ct. App. 1987). 

Under California and federal law, judgment creditors may propound discovery to the

judgment debtors, including requests for production and/or inspection of documents. See Fed. R.

Civ. P. 69(a), 33, and 34; Cal. Code Civ. Proc. §§ 708.010, et seq., 2030.010, et seq., and

2031.010, et seq. If the judgment debtor fails to respond to discovery, the court may compel

responses and impose sanctions if the debtor lacked substantial justification for failing to

respond. Fed. R. Civ. P. 34(b), 37(a); Cal. Civ. Proc. Code §§ 2023.010, 2023.030. 

Here, Mr. Scheck has repeatedly failed to respond to the judgment creditors’ requests for

discovery. Initially, he provided no responses to the requests for production propounded by

plaintiffs on February 21, 2007. See Steinberg Decl., at ¶¶ 3-4. Mr. Scheck continued in his

refusal to respond to plaintiffs’ discovery requests, even after the judgment debtor examination

on May 16, 2007. However, as discussed below, he has failed to provide any compelling legal or

factual reasons to justify his refusal to produce the requested documents. 

Although Mr. Scheck claims that certain property is exempt from satisfying the

judgment, “exemption” is not yet at issue, and such claims do not constitute an objection

justifying non-disclosure. See Cal. Civ. Proc. Code § 703.100 Legislative Committee Comment

(“the question of exemptions does not arise until the judgment creditor has sought to apply the

judgment debtor’s property toward the satisfaction of the judgment.”). Here, the judgment

creditors are merely seeking information regarding the judgment debtor’s assets in order to

determine whether or not they can be applied toward satisfaction of the judgment. This

information is relevant, as judgment creditors seek to determine the nature of the trusts and

whether or not certain assets were moved there in order to avoid paying the judgment. See Cal.

Prob. Code §§ 15304 and 18200 (where settlor is a beneficiary of the trust or has the power to

revoke any part of the trust, the trust property could be subject to creditors’ claims); see also Cal.

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 In his reply to judgment creditors’ motion, Mr. Scheck mentions his Fifth Amendment

privilege as a basis for refusing to produce documents, but provides no legal or factual analysis

in support of this argument. Even if this objection was proper, debtor has waived it, as discussed

above. Brown v. Superior Court, 180 Cal. App. 3d 701, 705 (Cal. Ct. App. 1986) (failure to

early assert Fifth Amendment privilege as an objection to interrogatories within the 30-day

period prescribed by Cal. Civ. Proc. Code § 2030 constitutes waiver). Furthermore, for the

privilege to apply, it must be “evident from the implications of the question, in the setting in

which it is asked, that a responsive answer to the question or an explanation of why it cannot be

answered might be dangerous because injurious disclosure could result.” Troy v. Superior

Court, 186 Cal. App. 3d 1006, 1010-1011 (Cal. Ct. App. 1986) (quoting Brunswick Corp. v.

Doff, 638 F.2d 108, 110 (9th Cir. 1981)). Here, debtor does not identify which particular

document requests he believes will elicit incriminating responses, let alone how a response

would result in “injurious disclosure.” 

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Civ. Code Proc. § 3439.04 (any assets fraudulently transferred to a trust may be the subject of a

creditor’s claim). The judgment creditors are entitled to seek such information pursuant to the

Federal and California Rules of Civil Procedure. See, e.g., Fed. R. Civ. P. 26(b)(1) (“Parties may

obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of

any party, including the existence, description, nature, custody, condition and location of any . . .

documents.”). Their initial efforts to do so were met with no response from Mr. Scheck. Their

continued efforts have been met with inapplicable objections to the requested discovery. 

In his response to judgment creditors’ motion, Mr. Scheck seems to make numerous

objections to production on the basis of vaguely articulated privacy concerns, citing the First,

Third, Fourth, Fifth, and Ninth Amendments. However, those objections, even if applicable, are

untimely, and are therefore waived. Richmark Corp. v. Timber Falling Consultants, 959 F.2d

1468, 1473 (9th Cir. 1992) (failure to make timely objections to the originally propounded

document requests constitutes a waiver of all objections thereto, including claims of privilege

and work product).1

 Accordingly, the court grants judgment creditors’ motion and orders

judgment debtor, William J. Scheck, to produce all documents related to the sale of the Owl Club

and any other pending, current or past purchases, sales, loans or other form of transfers to or

from the Asgard Entertainment Trusts, the William J. Scheck Trust, and the Joseph W. &

Margaret V. Scheck Family Trust. 

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 Counsel for judgment creditors request that the sanctions be paid directly to their client. 

Upon receipt of payment from debtor, counsel shall reimburse their clients as appropriate.

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Pursuant to Fed. R. Civ. P. 37(a), the court grants judgment creditors’ request for

sanctions and orders Mr. Scheck to pay them $1,600, for attorney’s fees accrued in making this

motion. Mr. Steinberg stated in his declaration that his hourly rate is $200 per hour and that he

spent over eight hours preparing the motion to compel. See Steinberg Decl., at ¶ 18. The court

finds the fee and time expended to be reasonable. 

III. CONCLUSION

In accordance with the foregoing, IT IS ORDERED that: 

1. The judgment creditors’ motion to compel is granted; 

2. Judgment debtor, William J. Scheck, is ordered to produce the requested documents to

the judgment debtors either within ten (10) days of the date of service of this order, or at a

continued debtor examination if the parties choose to schedule one; 

3. If the parties desire to schedule a continued debtor examination, they may do so in

accordance with applicable rules of procedure, and by contacting Courtroom Deputy, Nic

Cannarozzi, at (916) 930-4172;

4. Judgment debtor, William J. Scheck, is ordered to pay sanctions in the amount of

$1,600 to judgment creditors’ counsel2

, for attorney’s fees accrued by judgment creditors in

making this motion. Such payment shall be made within thirty (30) days and judgment debtor

shall file with the court notice that such sanctions have been paid; and, 

5. Judgment debtor is advised that failure to comply with this order may be grounds for

sanctions, including an order of contempt. Bingman v. Ward, 100 F.3d 653 (9th Cir. 1996).

DATED: June 8, 2007.

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