United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND ORDER
F. ATLAS SENIOR UNTC£0 STATES DISTRICT JUDGE
Quantlab Group, LP and Quantlab Financial, LLC (collectively,
“Quantlab”) filed a Motion to Compel Production
or, in the Alternative, in Camera Inspection of the Privilege
Log Documents (“Motion to Compel”) [Doc. # 57].
By Order [Doc. # 61] entered June 21, 2019, the Court
referred Quantlab's Motion to Compel to United States
Magistrate Judge Dena Palermo pursuant to 28 U.S.C. §
636(b)(1)(A) for determination. Magistrate Judge Palermo
issued her Order on Plaintiffs' Motion to Compel [Doc. #
86], granting in part and denying in part the motion.
case is now before the Court on Non-Parties' Objection
[Doc. # 87], to which Quantlab filed a Response [Doc. # 90].
Defendants Allen Herman Dempster, and Dempster & Dietler,
LLP also filed an Objection [Doc. # 89], to which Quantlab
filed a Response [Doc. # 91]. Quantlab also provided
supplemental information regarding the
Objections. Having reviewed the record and the
applicable legal authorities, the Court
overrules the Objections and requires
compliance with the Magistrate Judge's Order.
filed this lawsuit alleging that Defendant Dempster and his
firm Dempster & Dietler, LLP, served for many years as
Quantlab's attorney and accounting advisor. Plaintiffs
allege that Dempster prepared partnership agreements and a
Voting Trust Agreement that enabled two of Quantlab
Group's minority partners, non-parties Bruce P. Eames and
Andrey Omeltchenko, to attempt to take control of Quantlab
Group and its related companies.
prepared a privilege log, identifying 400 documents as
protected by (1) the attorney-client privilege, (2) the
attorney work product privilege, and (3) the California
Accountancy Act. The documents contain communications between
Dempster, Eames, Omeltchenko, and separate counsel for Eames
and Omeltchenko. After full briefing on the Motion to Compel,
the Magistrate Judge issued her Order. The Magistrate Judge
denied the Motion to Compel to the extent the documents
contained “accounting information relating solely to
Eames or Omeltchenko individually or their related entities,
but not Quantlab.” Order, p. 10. The Magistrate Judge
granted the Motion to Compel in all other respects. See
Eames and Omeltchenko filed an Objection, as did Defendants.
The Objections are now ripe for this Court's review.
RULE 72(a) LEGAL STANDARD
Court reviews a Magistrate Judge's discovery order under
Rule 72(a) of the Federal Rules of Civil Procedure. See
Johnson v. United Airlines, Inc., 2016 WL 7742747, *1
(S.D. Tex. Apr. 14, 2016). Pursuant to Rule 72(a), a
“party” may file objections to a non-dispositive
order issued by a Magistrate Judge, and the district judge
“must consider timely objections and modify or set
aside any part of the order that is clearly erroneous or is
contrary to law.” Fed.R.Civ.p. 72(a); Orthoflex,
Inc. v. ThermoTek, Inc., 990 F.Supp.2d 675, 682-83 (N.D.
Tex. 2013); DAC Surgical Partners P.A. v. United
Healthcare Servs., Inc., 2014 WL 585753, *1 (S.D. Tex.
Feb. 14, 2014). A party appealing a Magistrate Judge's
order “must demonstrate how the order is reversible
under the applicable standard of review - de novo for error
of law, clear error for fact findings, or abuse of discretion
for discretionary matters.” Orthoflex, 990
F.Supp.2d at 683.
factual aspects of the Magistrate Judge's order are
reviewed under the “clearly erroneous” standard,
and the district judge “may not disturb a factual
finding of the magistrate judge unless, although there is
evidence to support it, the reviewing court is left with the
definite and firm conviction that a mistake has been
committed.” Id.; see also Moore v. Ford
Motor Co., 755 F.3d 802, 808 (5th Cir. 2014) (“the
district court's review of the magistrate judge's
factual findings was limited to clear error review”).
“If a magistrate judge's account of the evidence is
plausible in light of the record viewed in its entirety, a
district judge may not reverse it.” Orthoflex,
990 F.Supp.2d at 683.
legal conclusions in the Magistrate Judge's order are
reviewed de novo, and “the district judge
reverses if the magistrate judge erred in some respect in her
legal conclusions.” Id. Matters within the
Magistrate Judge's discretion are reviewed for an abuse
of discretion. Id.
review under Rule 72(a) is “highly deferential.”
Nerium SkinCare, Inc. v. Nerium Int'l, LLC, 2017
WL 9934881, *1 (N.D. Tex. Feb. 6, 2017). Where, as here,
discovery orders are at issue, “the objecting
party's burden is especially ‘heavy.'”
Id. (quoting Hamilton v. First Am. Title Ins.
Co., 2010 WL 791421, *4 (N.D. Tex. Mar. 8, 2010)).