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

United States District Court

For the Northern District of California 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

SUSSEX FINANCIAL ENTERPRISES, 

INC., 

Plaintiff, 

v. 

BAYERISCHE HYPO-UND VEREINSBANK 

AG, et al., 

Defendants. 

)

)

)

)

)

)

)

)

)

)

)

)

Case No. 08-4791 SC 

ORDER DENYING PLAINTIFF'S 

OBJECTIONS TO MAGISTRATE'S 

ORDER; GRANTING IN PART 

DEFENDANTS' MOTION FOR 

RELIEF FROM THE STATUS 

CONFERENCE ORDER 

 

 Now before the Court is Plaintiff's Objection to a discovery 

order entered by a magistrate in this matter -- the second such 

objection filed by Plaintiff in less than a month. Docket No. 171 

("Objection"). By an Order dated March 2, 2010, the magistrate to 

whom all discovery matters have been assigned granted Defendants' 

motion to compel two further depositions, and to require Plaintiff 

to produce documents related to its finances and tax information. 

Docket No. 170 ("Magistrate's Order"). 

 Also before the Court is Defendants' Motion for Relief from 

the Status Conference Order ("Motion"), Docket No. 172, to which 

Plaintiff has filed an Opposition, Docket No. 178. Having 

considered all of the papers submitted by both parties, this Court 

concludes that the issues presented by Plaintiff's Objection and 

Defendants' Motion are appropriate for determination without oral 

argument. 

Case 3:08-cv-04791-SC Document 180 Filed 03/17/10 Page 1 of 3
2 

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

United States District Court

For the Northern District of California 

 As to Plaintiff's Objection, the Court AFFIRMS the 

Magistrate's Order and adopts it in full. The Magistrate's Order 

fairly and persuasively explains the relevance of the material that 

Defendants seek to compel, and the role that it could plausibly 

play in establishing a defense to Plaintiff's claims. Because 

Plaintiff is claiming that it was innocent and unaware of the fraud 

that it alleges Defendants were perpetrating upon Plaintiff and its 

clients, Plaintiff's tax information and the tax information of its 

two sole shareholders is highly probative as to whether Plaintiff 

was aware of the admittedly wrongful activity at the time it 

occurred. 

 Plaintiff's Objection is based on legal arguments that this 

Court finds spurious. For example, Plaintiff argues that this 

Court lacks original jurisdiction in this matter, and assumes 

jurisdiction solely on the basis of the parties' diversity. 

Objection at 2-3. However, as noted in the Magistrate's Order, 

this Court has original jurisdiction based upon Plaintiff's RICO 

claims. Plaintiff cites case law that establishes that such claims 

"may" be heard in state court as well as federal court, however 

this is simply not a reasonable basis for arguing that a federal 

court does not have original jurisdiction over RICO claims, 

especially where RICO's provisions explicitly state that any 

aggrieved party "may sue therefor in any appropriate United States 

district court . . . ." 18 U.S.C. § 1964(c). The existence of 

concurrent jurisdiction by the state courts does not destroy 

original jurisdiction in this Court. 

 Similarly, Plaintiff presents novel arguments, not presented 

to the magistrate, that state law should control this discovery 

Case 3:08-cv-04791-SC Document 180 Filed 03/17/10 Page 2 of 3
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

United States District Court

For the Northern District of California 

dispute because "Defendant's discovery was directed to Plaintiff's 

state law fraud claims." Objection at 4. Even if this Court were 

to entertain this argument, Plaintiff is incorrect in that its RICO 

questions are invariably intertwined with its fraud-based claims. 

Plaintiff is seeking treble damages that are ultimately premised 

upon these state law claims, as predicates to its RICO claim, and 

this Court cannot reasonably discount federal law in reaching the 

discovery issues that surround them. 

 The Court is therefore convinced that the Magistrate's Order 

was correct in its reasoning and conclusion. The Court is also 

persuaded that counsel for Plaintiff was not faultless in its delay 

in providing the contested information, and it concludes that there 

would be no harm in allowing the parties additional time to prepare 

their summary judgment motions in light of the new evidence that 

Defendants seek. For this reason, the final hearing date for 

motions is extended to June 25, 2010. All motions must be filed in 

accordance with Civil Local Rule 7-2. However, this Court is not 

persuaded that this development warrants further delay in the 

previously established trial date. All other dates, including the 

final deadline for trial briefs and pretrial statements, the 

pretrial conference, and the trial date of August 2, 2010, remain 

undisturbed by this Order. Defendants' Motion to Shorten Time, 

Docket No. 174, is DENIED as moot. 

IT IS SO ORDERED. 

Dated: March 17, 2010 

UNITED STATES DISTRICT JUDGE

Case 3:08-cv-04791-SC Document 180 Filed 03/17/10 Page 3 of 3