Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_16-cv-00029/USCOURTS-caed-2_16-cv-00029-1/pdf.json

Parties Involved:
General Electric Capital Corporation
Plaintiff
Rhino Business Systems, Inc.
Defendant

Document Text:

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

1

UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF CALIFORNIA 

GENERAL ELECTRIC CAPITAL 

CORPORATION, a Delaware Corporation, 

Plaintiff, 

v. 

RHINO BUSINESS SYSTEMS, INC., a 

California Corporation, 

Defendant. 

No. 2:16-cv-00029-KJM-CMK 

ORDER 

Plaintiff GE Electric Capital Corporation (GE Capital) has filed an unopposed 

Motion for an Order Expediting Discovery to (1) allow GE Capital to depose the principal of 

defendant Rhino Business Systems, Inc. (Rhino), Scott McFadden, and (2) allow additional 

discovery for the purpose of documenting the flow of funds from any disposition of Rhino’s 

customers’ accounts and assets. Mot., ECF No. 8. Rhino’s customers are those persons or 

entities who purchased or leased office equipment from Rhino and for whom GE Capital 

provided financing. 

On January 1, 2016, GE Capital filed the complaint against Rhino, alleging breach 

of contract. See generally ECF No. 1. GE Capital seeks no less than $477,527.23 for Rhino’s 

breach of their Strategic Alliance Agreement (Agreement). ECF No. 1, Ex. A. Rhino was 

Case 2:16-cv-00029-KJM-CMK Document 20 Filed 04/14/16 Page 1 of 3
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

2

subsequently served with the complaint and a summons to appear on January 20, 2016, but has 

yet to respond to the complaint, or to appear. ECF No. 6. GE Capital argues in its separate 

Motion for Right to Attach Order and Writ of Attachment that Rhino has either sold or intends to 

sell substantially all its assets to a company called Ray Morgan RMC, Inc. (Morgan). ECF No. 7 

at 3. GE Capital further argues Morgan has informed certain persons or entities who had 

previously entered into financial arrangements with GE Capital that they no longer need to satisfy 

their obligations to GE Capital. Id. At the hearing for the Motion for Right to Attach Order and 

Writ of Attachment held on March 25, 2016, GE Capital argued that time is of the essence 

because Rhino is out of business, and its assets may have already been sold to Morgan or 

otherwise dissipated. GE Capital noted the opaque nature of Rhino and its actions at this time, 

and the possible existence of other parties it will seek to join to this action. 

GE Capital seeks expedited discovery in an effort to promptly resolve all claims 

against Rhino and identify other potential parties so that only a single proceeding is necessary. 

Generally, Rule 26(d) of the Federal Rules of Civil Procedure provides that “[a] 

party may not seek discovery from any source before the parties have conferred as required by 

Rule 26(f), except . . . when authorized by these rules, by stipulation, or by court order.” 

Fed. R. Civ. P. 26(d). Courts apply a “good cause” standard in considering motions to expedite 

discovery, and parties seeking expedited discovery in advance of a Rule 26(f) conference have the 

burden of showing good cause. New Sensations, Inc. v. Does 1-306, No. 12-1885 GEB EFB, 

2012 WL 5031651, at *2 (E.D. Cal. Oct. 17, 2012); Semitool, Inc. v. Tokyo Electron Am., Inc., 

208 F.R.D. 273, 276 (N.D. Cal. 2002). 

“Good cause may be found where the need for expedited discovery, in 

consideration of the administration of justice, outweighs the prejudice to the responding party.” 

Id. In determining whether good cause justifies expedited discovery, courts commonly consider 

factors including: “(1) whether a preliminary injunction is pending; (2) the breadth of the 

discovery requests; (3) the purpose for requesting the expedited discovery; (4) the burden on the 

defendants to comply with the requests; and (5) how far in advance of the typical discovery 

///// 

Case 2:16-cv-00029-KJM-CMK Document 20 Filed 04/14/16 Page 2 of 3
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

3

process the request was made.” American LegalNet, Inc. v. Davis, 673 F. Supp. 2d 1063, 1067 

(C.D. Cal. 2009). 

In this case though there is no preliminary injunction pending, there is a pending 

early Motion for Right to Attach Order and Writ of Attachment by which GE Capital seeks to 

attach a potentially diminishing pool of assets. GE Capital seeks fairly narrow discovery from 

Rhino, requesting only the deposition of Mr. McFadden and limited discovery to document the 

stream of revenue from the equipment GE Capital helped finance. The possible sale of all or 

substantially all Rhino assets to Morgan and the barrage of customer complaints GE Capital avers 

it has received provides a reasonable basis for the request. Because Rhino has not yet appeared or 

responded, it cannot claim to be unduly burdened. Lastly, GE Capital cannot reasonably proceed 

with this lawsuit without ascertaining the proper parties and claims. The court finds GE Capital’s 

motion is supported by good cause. 

Accordingly, IT IS HEREBY ORDERED that: 

(1) GE Capital’s Motion to Expedite Discovery is granted and

(2) A subpoena commanding Scott McFadden to appear for deposition may issue. 

IT IS SO ORDERED. 

DATED: April 13, 2016. 

Case 2:16-cv-00029-KJM-CMK Document 20 Filed 04/14/16 Page 3 of 3