UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

STATE FARM MUTUAL AUTOMOBILE

INSURANCE COMPANY,

Plaintiff, Case No. 14-cv-11700

Paul D. Borman

v. United States District Judge

Stephanie Dawkins Davis

United States Magistrate Judge

POINTE PHYSICAL THERAPY, LLC,

et al., 

Defendants.

_______________________________________/

OPINION AND ORDER:

(1) OVERRULING NON-PARTY MCM SOLUTIONS, INC.’S OBJECTION

(ECF NO. 299) TO MAGISTRATE JUDGE DAVIS’S NOVEMBER 3, 2017

OPINION AND ORDER GRANTING PLAINTIFF’S MOTION TO COMPEL;

(2) AFFIRMING MAGISTRATE JUDGE DAVIS’S ORDER (ECF NO. 295); and

(3) ORDERING MCM TO FULLY COMPLY WITH THE TERMS OF THE

SUBPOENA WITHIN FOURTEEN DAYS OF THE DATE OF THIS ORDER

OR FACE SANCTIONS FOR NON-COMPLIANCE

On November 3, 2017, Magistrate Judge Davis issued an Opinion and Order

(ECF No. 295) granting Plaintiff State Farm Mutual Automobile Insurance

Company’s (“State Farm”) motion to compel non-party MCM Solutions, Inc.

(“MCM”) to comply with a third party subpoena for documents served on MCM by

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State Farm on July 20, 2017. On November 13, 2017, MCM filed an Objection to the

Magistrate Judge’s November 3, 2017 Opinion and Order, which is presently before

the Court. (ECF No. 299, Objection.) For the reasons that follow, the Court

OVERRULES MCM’s Objection, AFFIRMS the Magistrate Judge’s November 3,

2017 Opinion and Order, and ORDERS MCM to comply fully with the terms of the

subpoena within fourteen (14) days of the date of this Order or face sanctions for

noncompliance.

II. STANDARD OF REVIEW

28 U.S.C. § 636(b)(1)(A) and Federal Rule of Civil Procedure 72(a) both

provide that a district judge must modify or set aside any portion of a magistrate

judge’s non-dispositive pretrial order found to be “clearly erroneous or contrary to

law.” 28 U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a). The United States Supreme

Court and the Sixth Circuit Court of Appeals have stated that “a finding is ‘clearly

erroneous’ when although there is evidence to support it, the reviewing court on the

entire evidence is left with the definite and firm conviction that a mistake has been

committed.” United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948) (explaining

the clearly erroneous standard under Rule 52(a)); Hagaman v. Comm'r of Internal

Revenue, 958 F.2d 684, 690 (6th Cir. 1992) (quoting U.S. Gypsum Co.). See also

United States v. Mandycz, 200 F.R.D. 353, 356 (E.D. Mich. 2001) (explaining the

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standard under Rule 72(a)). 

This standard does not empower a reviewing court to reverse the Magistrate

Judge’s finding because it would have decided the matter differently. Anderson v.

City of Bessemer City, N.C., 470 U.S. 564, 573 (1985) (interpreting the clearly

erroneous standard in Rule 52(a)). The Sixth Circuit has noted that: “[t]he question

is not whether the finding is the best or only conclusion that can be drawn from the

evidence, or whether it is the one which the reviewing court would draw. Rather, the

test is whether there is evidence in the record to support the lower court’s finding, and

whether its construction of that evidence is a reasonable one.” Heights Cmty. Cong.

v. Hilltop Realty, Inc., 774 F.2d 135, 140 (6th Cir. 1985). 

“The ‘clearly erroneous’ standard applies only to the magistrate judge’s factual

findings; his legal conclusions are reviewed under the plenary ‘contrary to law’

standard. . . . Therefore, [the reviewing court] must exercise independent judgment

with respect to the magistrate judge’s conclusions of law.” Haworth, Inc. v. Herman

Miller, Inc., 162 F.R.D. 289, 291 (W.D. Mich.1995) (citing Gandee v. Glaser, 785 F.

Supp. 684, 686 (S.D. Ohio 1992)). “‘An order is contrary to law when it fails to apply

or misapplies relevant statutes, case law, or rules of procedure.’” Mattox v. Edelman,

No. 12-13762, 2014 WL 4829583, at *2 (E.D. Mich. Sept. 29, 2014) (quoting Ford

Motor Co. v. United States, No. 08–12960, 2009 WL 2922875, at *1 (E.D. Mich.

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Sept. 9, 2009)).

III. ANALYSIS

State Farm alleges that the “undisputed evidence” produced in this case

suggests that Defendant Amale Bazzi secretly owns and/or controls MCM (allegedly

owned “on paper” by Bazzi’s son-in-law Youssef Bakri) and has utilized MCM, and

other third-party entities, to conceal her role in the fraudulent scheme at the heart of

State Farm’s Complaint. State Farm now seeks documents from non-party MCM,

including communications and other business records of MCM, to enable State Farm

to establish MCM’s role in the alleged fraudulent scheme. 

The Magistrate Judge, after hearing oral argument on State Farm’s motion,

correctly concluded that MCM’s corporate records sought in State Farm’s subpoena

are not protected by Fifth Amendment privilege. MCM, a corporate entity, “may not

. . . disregard [its] choice to incorporate, claim Fifth Amendment protection, and shield

[its] business records from production.” In re Grand Jury Subpoena (John Doe, Inc.),

991 F. Supp. 2d 968, 976 (E.D. Mich. 2014). MCM’s speculation that there may at

some time be a criminal investigation involving Mr. Bakri, MCM’s “incorporator,”

(Objection at 4, PgID 12694), does nothing to alter the correctness of this conclusion. 

MCM has no valid claim of Fifth Amendment privilege and must produce the

requested documents. 

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As the Magistrate Judge noted, State Farm has explained in great detail the

relevance of the subpoenaed documents to the fraudulent scheme alleged in the

Complaint and MCM’s role in the alleged scheme. The Magistrate Judge correctly

observed that “[d]ocuments regarding the ownership of MCM and its employees will

establish who actually owns MCM and purportedly works there, which is critical to

unraveling the relationships between Defendants and third parties involved in the

scheme.” (ECF No. 295, Order at 6, PgID 12145.) The Magistrate Judge adequately

supported her finding of proportionality and MCM fails to proffer any argument to

establish undue burden related to complying with the subpoena.

III. CONCLUSION

The Court concludes that Magistrate Judge Davis’s November 3, 2017 Order

is neither factually erroneous nor contrary to law. Accordingly, the Court

OVERRULES MCM’s Objection, AFFIRMS the Magistrate Judge’s November 3,

2017 Order, and ORDERS MCM to fully comply with State Farm’s subpoena within

fourteen (14) days of the date of this Order or face sanctions for noncompliance.

IT IS SO ORDERED.

s/Paul D. Borman 

Paul D. Borman

United States District Judge

Dated: November 27, 2017

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CERTIFICATE OF SERVICE

The undersigned certifies that a copy of the foregoing order was served upon each

attorney or party of record herein by electronic means or first class U.S. mail on November 27,

2017.

s/Deborah Tofil 

Case Manager

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