IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

MALBCO HOLDINGS, LLC, 

a Washington limited liability company, 

Plaintiff, 

v. 

BHUPENDRA PATEL and NILA PA TEL; 

HEETAN PATEL and HEETAL PATEL-MANANI; 

and MUKESH PATEL, 

Defendants. 

6: l 4-cv-00947-PK 

OPINION AND ORDER 

PlaintiffMalbco Holdings, LLC ("Malbco") brings this diversity action against 

defendants alleging fraudulent transfer in violation of Oregon law. Now before the couti are 

three disputes: (1) Defendants' motion to quash or, in the alternative, substantially narrow 

Malbco's discovery requests ("Motion to Quash"); (2) the Pmiies' dispute over the language and 

breadth of a Proposed Protective Order ("Protective Order Dispute"); and (3) Malbco's motion to 

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compel interrogatory answers ("Motion to Compel"). I have reviewed the letters and exhibits 

filed by the pm1ies. For the reasons discussed below, Defendants' Motion to Quash is denied, 

the Protective Order Dispute is resolved as described below, and Malbco's Motion to Compel is 

granted. 

BACKGROUND 

As the parties are familiar with the history of this case, I adopt the facts set forth in my 

previous Opinion and Order ( #41 ). 

Defendants Bhupendra and Nila Patel ("the Patel Parents") addressed a June 9, 2015, 

letter to the court ("Patel Parents' Letter") describing the number of subpoenas submitted by 

Malbco and characterizing those subpoenas as overly broad and unduly burdensome and 

requesting the com1 to quash or narrow the subpoenas accordingly. The Patel Parents also 

requested the court to adopt revisions to a proposed Protective Order introduced by Heetan and 

Heetal Patel ("the Patel Children"). 

That same day, the Patel Children addressed a letter to the court ("Patel Childrens' 

Letter") objecting to the scope of financial information sought by Malbco in support of the 

Motion to Quash and addressing the Protective Order Dispute. 

On June 16, 2015, Malbco provided a letter to the court ("Malbco' s Letter") opposing 

Defendants' Motion to Quash, addressing the Protective Order Dispute, and asserting a Motion 

to Compel answers to interrogatories, to which this court has already ordered responses from 

Defendants (#51 ). Malbco claims, however, that responses filed by the Patel Parents to date 

have been insufficient. 

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LEGAL STANDARD 

I. Scope of Permissible Discovery 

Federal Rule of Civil Procedure ("Rule") 26(b) provides for the scope of discovery as 

follows: "[p ]arties may obtain discovery regarding any non-privileged matter that is relevant to 

any pmty's claim or defense ... and appears reasonably calculated to lead to the discovery of 

admissible evidence." Fed. R. Civ. P. 26(b)(1). "All discovery is subject to the limitations 

imposed by Rule 26(b )(2)(C)." Id Under Rule 26(b )(2)(C) the cou1t, on motion or on its own, 

must limit the frequency or extent of discovery ifit determines any of the following: (i) the 

discovery sought is umeasonably cumulative or duplicative, or can be obtained from some other 

source that is more convenient, less burdensome, or less expensive; (ii) the patty seeking 

discovery has had ample opportunity to obtain the information by discovery in the action; or (iii) 

the burden or expense of the proposed discovery outweighs its likely benefit, considering the 

needs of the case, the amount in controversy, the parties' resources, the importance of the issues 

at stake in the action, and the imp01tance of the discovery in resolving the issues. Fed. R. Civ. P. 

26(b )(2)(C). 

Rule 45 governs the issuance of subpoenas to nonparties in order to obtain 

documents. Fed R. Civ. P. 45(a)(l)(A)(iii). A court must quash a subpoena when it "subjects a 

person to an undue burden." Fed. R. Civ. P. 45(d)(3)(A)(iv). Parties do not have standing 

to quash a subpoena issued to a nonparty unless they are able to claim "some personal right or 

privilege with regard to the documents sought." Crispin v. Christian Audigier, Inc., 717 F. Supp 

2d 965, 973-74 (C.D. Cal. 2010). 

If a pmty has standing to object, the moving patty has the "burden of persuasion." lvfoon 

v. SCP Pool Cmp., 232 F.R.D. 633, 637 (C.D. Cal. 2005). In evaluating whether or not 

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a subpoena is unduly burdensome, comis look to "relevance, the need of the pmiy for the 

documents, the breadth of the document requested, the time period covered by it, the 

pmiicularity with which the documents are described, and the burden imposed." Id. (internal 

quotations and citations omitted). 

DISCUSSION 

I. JVIotion to Quash I Objections to Discovery Requests: 

Defendants' Motions to Quash generally object to 21 subpoenas served by Malbco 

against "three classes of common targets: (1) entities in which one or more of the defendants 

may have at one time held an ownership interest; (2) certain banks; and (3) other third-parties." 

Patel Childrens' Letter, 1. Defendants Bhupendra and Nila Patel ("the Patel Parents") generally 

object to the "extraordinarily broad scope of [the] subpoenas" and to Malbco's requests for 

specific documents, including meeting minutes. Id. at 5; Patel Parents' Letter, 1. Accordingly, 

Defendants move for an order "limiting the scope ofMalbco's [discovery] requests to the general 

financial data" requested by Malbco thus far, including "loan statements, personal and business 

financial statements (including balance sheets and income statements), tax returns, or related 

conespondence transmitting or discussing draft or final version of such documents." Patel 

Childrens' Letter, 2. 

Malbco has served 540 document requests-225 of which were served on the Patelsand at least 33 subpoenas, containing a total of 316 document requests, have been served to 

third-parties. Patel Parents' June 9, 2015, Letter, 1-2. Malbco initially served approximately 93 

document requests to an array of third-parties and received thousands of documents in response. 

More recently, Malbco served 18 new subpoenas containing 223 document requests. Defendants 

now seek the Court's assistance by way of moving to quash aspects of the following subpoenas: 

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The Patel Children: Airport OMRS, LLC; Best Western Sandy Inn OMRS, LLC; 

Boomerang Management Corp.; HMB Hospitality Group, LLC; 

The Patel Parents: 

Mukesh Patel: 

Bank of America N.A.; Budget Inn OMRS, LLC; Eide Bailly LLP; 

Janak and Pravin, LLC; KeyCorp Finance Inc.; Om Namah Laxmi, 

LLC; Om Shiv Ganesh, LLC; Om Clackamas, LLC; OMRS, Inc.; 

Umpqua Bank; Wells Fargo, N.A.; Val-U-Inn Shree Raj, LLC 

Motschenbacher & Blattner LLP; McLaughlin Lodging Co., LLC 

Defendants assert that the court should look to the relevance of the infonnation requested, which 

bears on the detennination of whether discovery is necessary. Wood v. Vista lvfanor Nursing 

Ctr., 2007 WL 832933 at *3 (N.D. Cal. 2007). 

Malbco argues that, because this case involves transfers of three ditlerent companies, 

granting of various security interests in the Patels' assets, and at least six transfers of cash, 

"[ e Jach of those transfers needs to be evaluated" and, "[g]iven the complexity of the lawsuit, the 

discovery requests to date are not unreasonable." Malbco's Letter, 1. Malbco further argues that 

the Defendants are generally attempting to evade and purposefully delay discovery and cites to a 

litany of such delays in suppo1i of that assertion. 1 

Insolvency is directly at issue in a claim brought under ORS 95 .240, and Malbco 

provides that determining the Patel Parents' solvency before and after the alleged transfers drives 

the breadth of these discovery requests. Beyond that, the value of the transferred hotelsAirports OMRS, LLC and Best Western OMRS, LLC-are directly relevant. The pmiies do not 

dispute that Malbco' s requests for balance sheets and income statements from the relevant time 

period are discoverable and relevant. See Patel Parents' Letter, 5. Rather, Defendants argue that 

1 This includes (I) 600 pages produced in response to an August 14, 2014, RFP followed later by an 

additional 1500 pages produced the morning ofHeetan Patel's deposition, which was continued; (2) the 

night before the continuation of that deposition the Patel Children produced another 1800 pages of 

documents and during the break of the continuation, the Patel Children produced another 72 pages of 

documents; (3) the Patel Childrens' failure to confer and arrive at depositions; ( 4) approximately 650 "I 

don't know" and "!don't remember" answers by the Patel Children and Mukesh Patel as well as a 

statement by Mukesh Patel stating "[counsel] doesn't want me to ... " respond to an inquiry. 

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Malbco's requests for "any and all Communications referring to any of those balance sheets and 

income statements," among an anay of other requests, "goes too far." Id. 

In resolving this set of discovery disputes I apply the factors articulated in }vfoonrelevance, necessity, breadth, time period, particularity, and burden-to determine 

discoverability. 1Vfoon v. SCP Pool Corp., 232 F.R.D. at 637. Accordingly, I find that Malbco's 

requests seek relevant documents in relation to the Patel Parents' insolvency allegedly rendered 

as a result of the transfers at issue; the complicity of all Defendants and their various companies, 

in which they are sole members, in the transfers at issue; and issues of fraudulent intent. Further, 

Malbco clearly has a need for such documents due to that relevance and the apparent difficulty it 

has had with Defendants in discovery compliance to date. The timeline of these requests is 

tailored to the period leading to the date of transfers, as that date is separately alleged by the 

parties, and after the transfers took place. The documents requested are not simply foimalized 

balance sheets, but items related to the formation of those balance sheets, and Malbco provides 

particularized requests where not otherwise clear. Finally, in response to the sheer number of 

subpoenas, particularly to companies for which Defendants act as representatives and sole 

members, I agree with Malbco that it should not be prevented from seeking discovery simply 

because Defendants' business holdings are highly diversified. Malbco' s subpoenas and 

discovery requests may well be a burden, but that does not render them an undue burden given 

the complexity and breadth of this case. For all of these reasons, Defendants' Motion to Quash 

is denied. 

II. Protective Order Dispute 

Defendants next dispute the proper form and contents of a Protective Order. The Patel 

Childrens' counsel proposes language regarding restrictions of the use of items discovered in the 

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current case in future litigation. Patel Childrens' Letter, 7. Malbco resists these restrictions and 

further argues that two of the proposals improperly shift privilege burdens. 

The first issue with the proposed Protective Order is a clawback provision proposed by 

Defendants that Malbco argues directly conflicts with Rule 26(b)(5), which allows a party to 

clawback inadvertently disclosed documents that are privileged. The language proposed in the 

order requires that the receiving party may not, under any circumstances, use or disclose 

information regarding or derived from clawback material in the action. I resolve this dispute by 

ordering the patiies to refer to the model protective orders made available by this comi. 2 I find 

that no additional inadvertent disclosure or clawback provisions are necessary in this case, and I 

therefore reject the relevant additions to the protective order offered by Defendants. 

Second, Malbco argues that the protective order should not limit Malbco's ability to use 

discovery obtained in this case in ancillary proceedings. Malbco would like the order to specify 

that it may use discovery in this proceeding in three additional instances: 

1. Any proceeding to enforce or collect on a judgment obtained in this case; 

2. Any proceeding to enforce or collect on the Idaho judgment; and 

3. Any bankruptcy filed by any of the parties to this case. 

Malbco cites cost-efficiency and the burden related to a protective order barring the use of 

discovery in this case from other cases. There is no clear prohibition against using discovery 

items obtained in the course of one case in another case, and Malbco argues that allowing such 

reuse promotes efficiency and avoids waste. I agree with this conditional allowance of the use of 

discovered material in this case in the three types of ancillary proceedings listed above. 

Based on the foregoing, I resolve the Protective Order Dispute as follows: (1) regarding 

the proposed clawback and waiver provisions proposed by Defendants, the parties shall draft the 

2 I refer the patties to the Model Single-Tier Protective Order, ii 11, and the Model Two-Tier Protective 

Order, ii 12, available at https://www.ord.uscomts.gov/index.php/filing/fonns/civil-forms. 

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Protective Order consistent with the model protective order provided by this com1; (2) the parties 

shall include in the Protective Order a provision specifying the re-use of discovered materials in 

the three types of ancillary proceedings listed above. 

III. Motion to Compel Interrogatory Answers 

Finally, Malbco moves the court to compel the Patel Parents to provide adequate answers 

to six inte1rngatories provided to them in October 13, 2014, pursuant to a March 3, 2015, Order 

from this com1 (#51). The Patel Parents have complied with that Order in part, providing 

requested exhibits and signatures on the interrogatory answers, but have failed to comply with 

that Order by providing answers to six of the interrogatories merely stating that they "will 

produce business records" sufficient to answer the inte11'ogatories. See Malbco's Letter, Ex. 3, 

2-6. Malbco argues that those answers are insufficient, and therefore lodges a third motion to 

compel sufficient answers to those interrogatories. 

Patties may refer to records in order to answer interrogatories, but they must do so "in 

sufficient detail to enable the inte1rngating pmty to locate and identify them as readily as the 

responding party could." Rainbow Pioneer v. Hawaii-Nevada Inv. Corp., 711 F.2d 902, 906 (9th 

Cir. 1983). Accordingly, to the extent the Patels do not specify by category and location the 

records from which answers to the interrogatory questions can be derived, they have failed to 

comply with discovery requirements. I therefore grant Malbco's Motion to Compel adequate 

answers to the six interrogatories at issue. The Patel Parents must provide sufficient answers 

within fomteen (14) days of the date of this Order. I deny Malbco's request for sanctions under 

Rule 37(a) at this time, but I will reconsider that request ifl find further discovery violations in 

this case. 

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CONCLUSION 

For the foregoing reasons, I resolve the pmties' three current discovery disputes, which 

were inf01mally submitted to the comt in Defendants' June 9, 2015, letters and Malbco's June 

16, 2015, letter, as follows: 

1. Defendants' Motion to Quash is denied; 

2. Protective Order Dispute is resolved as follows: (1) regarding the proposed clawback 

and waiver provisions proposed by Defendants, the parties shall draft the Protective 

Order consistent with the model protective orders provided by this comt, (2) the 

pmties shall include in the Protective Order a provision specifying the re-use of 

discovered materials in the three types of ancillary proceedings listed above; 

3. Malbco' s Motion to Compel adequate answers to the six specified intenogatories 

submitted to Defendants Bhupendra and Nila Patel on October 13, 2014, is granted 

and those defendants are ordered to provide sufficient answers within fourteen (14) 

days of this order. 

Dated this 12th day of August, 2015. 

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