Moller

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

KATHLEEN MOLLER CIVIL ACTION

VERSUS NO. 24-228

c/w 24-781

MARTIAN SALES, INC., ET AL. SECTION: D (2)

ORDER AND REASONS

Before the Court is Plaintiffs’ Motion to Review Magistrate Judge’s Order and

Objections, filed by Kathleen Moller.1 Defendants, Martian Sales, Inc., Jopen, LLC,

LP Ind., LLC, CAG Holdings, LLC, and RMH Holdings, LLC oppose the Motion,2 and

Plaintiff has filed a Reply.3 After careful consideration of the parties’ memoranda

and the applicable law, the Motion is DENIED.

I. FACTUAL AND PROCEDURAL BACKGROUND

This is an action for the wrongful death of Harmony Moller, who died on

February 6, 2023, allegedly as the result of the ingestion of OPMS brand kratom.4

On January 24, 2024, plaintiff, Kathleen Moller, filed a Complaint in this Court

against Martian Sales, Inc., Jopen, LLC, Johnson Foods, LLC, LP IND, LLC, CAG

1 R. Doc. 103.

2 R. Doc. 110.

3 R. Doc. 113. At the time the Opposition brief was filed, Johnson Foods, LLC was the only other

defendant that had made an appearance in the case. Johnson Foods, LLC did not join in the opposition.

4 According to Plaintiff, “Kratom is the name given to botanical products derived from the leaves of the

Mitragyna Speciosa tree, which grows in Southeast Asia.” R. Doc. 100 at ¶ 34. Plaintiff alleges that,

“Kratom contains dozens of psychoactive compounds or alkaloids,” and that, “[t]he two most-studied

alkaloids are mitragynine and 7-hydroxymitragynine. These two alkaloids bind to the same opioid

brain receptors as morphine. Like opiates, these compounds can lead to analgesia (release of pain),

euphoria, and sedation.” Id. at ¶ 36. Plaintiff alleges that, “[b]oth of these alkaloids were found in the

whole blood extracted from the decedent on February 7, 2023, and reported in the decedent’s autopsy

report.” Id.

Holdings, LLC, RMH Holdings, LLC, and Olistica Life Sciences Group, alleging that

these defendants are liable for the death of her daughter, Harmony, because they

import, package, distribute, and/or sell dangerous kratom products to Louisiana

residents, including Harmony.5 Plaintiff appears to assert a wrongful death claim

under Louisiana Civil Code article 2315.26 and two products liability claims under

Louisiana’s Products Liability Act, La. R.S. 9:2800.51, et seq., asserting that the

kratom product consumed by Harmony was unreasonably dangerous due to a failure

to warn and a design defect.7

At the Court’s request, Plaintiff filed a Second Amended Complaint on

February 6, 2024, to clarify her allegations regarding diversity jurisdiction under 28

U.S.C. § 1332.8 The Second Amended Complaint is identical to the original

Complaint, except that Olistica Life Sciences Group is not named as a defendant.9 In

the Second Amended Complaint, Plaintiff alleges that, “[a]ll defendants named

herein are alter egos of one another and operate as a single business enterprise

through a secretive web of affiliates, individuals, shell companies, alter egos, business

names, assumed names, and/or trade names,”10 and that, “OPMS kratom is imported,

packaged, distributed, and sold through a complex web of companies that includes

Defendants. This web is referred to herein as the OPMS enterprise.”11 Plaintiff

5 R. Doc. 1 at ¶¶ 13–51.

6 Id. at ¶ 51.

7 Id. at ¶¶ 45–50.

8 R. Doc. 7.

9 Compare R. Doc. 1 at ¶ 12 to R. Doc. 7 at ¶ 12.

10 R. Doc. 7 at ¶ 12.

11 Id. at ¶ 41.

alleges that the OPMS enterprise “is one of the largest kratom distributors in the

United States, including Louisiana.”12

Plaintiff further asserts that, “the OPMS enterprises’ evasive tactics and abuse

of corporate forms has been highlighted by recent investigative reports, as well as

public filings in multiple lawsuits,”13 and that, “[t]hrough its various alter egos and

agents, the OPMS enterprise has supported the import, distribution, and sale of three

of the most popular kratom brand names on the market,” including “the OPMS

product at issue in this case.” 14 Plaintiff claims that, “OPMS Kratom is

manufactured, packaged, distributed, and sold by the OPMS defendants via the

stream of commerce throughout the United States to herbal stores, gas stations,

corner stores, and smoke shops where it is primarily marketed as an herbal medicine

or supplement to treat a variety of ailments,” and that it constitutes a product under

Louisiana’s Products Liability Act (the “LPLA”).15 Plaintiff further alleges that the

defendants are “manufacturers” under the LPLA, that Harmony’s ingestion of kratom

was a “reasonably anticipated use of the product” under the LPLA, and that kratom

is unreasonably dangerous as a matter of law due to its failure to adequately warn

users of the risks of sudden death by heart failure, among other things.16 Plaintiff

also alleges that the kratom consumed by Harmony was unreasonably dangerous and

defective in design under the LPLA because there are alternative products with the

12 Id. at ¶ 42.

13 Id. at ¶ 43.

14 Id. at ¶ 44.

15 Id. at ¶ 45.

16 Id. at ¶¶ 46–48.

same or similar alleged benefits that are capable of preventing injury and death to

users, and the likelihood of injury or death outweighed the burden of adopting such

alternative design or use of different products.17 In addition to the LPLA claims,

Plaintiff seeks damages for her grief, loss of companionship and consortium, love,

affection, and support due to Harmony’s wrongful death under La. Civ. Code art.

2315.2.18

On May 9, 2024, LP IND, LLC, CAG Holdings, LLC, RMH Holdings, Inc.,

Martian Sales, Inc., and Jopen, LLC (collectively, “Defendants”) filed a Motion to

Dismiss, asserting that the Second Amended Complaint should be dismissed for lack

of personal jurisdiction under Fed. R. Civ. P. 12(b)(2) and for failure to state a claim

under Fed. R. Civ. P. 12(b)(6).19 On May 28, 2024, Johnson Foods, LLC filed a Motion

to Dismiss, also asserting that the Second Amended Complaint should be dismissed

for lack of personal jurisdiction and for failure to state a claim under Rules 12(b)(2)

and 12(b)(6).20 Plaintiff opposed both Motions,21 and Reply briefs were filed.22 The

Court discussed the two motions during a Telephone Status Conference held on July

16, 2024.23 As a result of that discussion, and without objection from defense counsel,

the Court issued an oral Order denying the motions without prejudice.24 The Court,

however, also issued an oral Order granting Plaintiff’s request to conduct

17 Id. at ¶ 50.

18 Id. at ¶ 51.

19 R. Doc. 32.

20 R. Doc. 45.

21 R. Doc. 48.

22 R. Docs. 50 & 51.

23 See R. Doc. 54 at pp. 2–3.

24 Id. at p. 2.

jurisdictional discovery, set forth in her Opposition brief to the two motions,25 and

gave Plaintiff until January 27, 2025, to conduct jurisdictional discovery.26 The Court

also set a follow-up telephone status conference for January 29, 2025.27 On January

9, 2025, however, Plaintiff filed an opposed Motion for Extension of Time to Conduct

Jurisdictional Discovery,28 which the Court addressed during a Telephone Status

Conference held on January 17, 2025.29 After a lengthy discussion with counsel,

Plaintiff’s counsel advised that Plaintiff was seeking the financial records of non-

parties, Mark Jennings, Mark Riley, Payton Palaio, Eyal Gabbay, and CCUS

Holdings as part of her jurisdictional discovery.30 Counsel for the defendants offered

to provide a declaration “which the parties will confer about.”31 As such, the Court

issued an oral Order denying Plaintiff’s Motion for Extension of Time, but the Court

clarified that any outstanding discovery requests from the Plaintiff must be answered

by the defendants.32

On February 28, 2025, Plaintiff moved for leave to file a Third Amended

Complaint to “clarify ownership of certain Defendant entities and to name additional

defendants.”33 Several defendants opposed the motion,34 and Plaintiff filed a Reply.35

The assigned United States Magistrate Judge ultimately granted the motion on

25 See R. Doc. 48.

26 R. Doc. 54 at p. 2.

27 Id.

28 R. Docs. 63 & 64.

29 See R. Docs. 65 & 67.

30 R. Doc. 67 at p. 2.

31 Id.

32 Id.

33 R. Doc. 85.

34 R. Doc. 93.

35 R. Doc. 95.

March 21, 2025,36 and the Third Amended Complaint was filed into the record that

same day.37 The Third Amended Complaint names as additional defendants Nuza,

LLC, Calibre Manufacturing, LLC, FMK Group, Inc., PNW Holdings, LLC, CC US

Holdings, LLC, Peyton Shea Palaio, Mark Jennings, Eyal David Gabbay, and Mark

Daniel James Reilly.38 Plaintiff alleges that the additional entities are associated

with the OPMS kratom brand, while Palaio is “the ringleader and mastermind behind

several Defendant entities, including MARTIAN SALES.; [sic] LP; FMK; PNW; and

CC US,” Jennings is the chief executive officer of Olistica Life Sciences Group,

Gabbay is the owner and operator of Jopen, and Reilly is the owner and operator of

Martian Sales.39 The Third Amended Complaint is otherwise identical to the Second

Amended Complaint and is the operative complaint in the matter.40

On February 24, 2025, Plaintiff filed a Motion to Compel Discovery from

Martian Sales, Inc., Jopen, LLC, LP IND, LLC, CAG Holdings, LLC, and RMH

Holdings, Inc. (collectively, “Defendants”),41 seeking an order compelling them to

produce documents in response to two requests for production that sought, “all

balance sheets and income statements” for the entity “from formation to present,”

and “all U.S. Federal Income Tax Returns” for the entity “from formation to

present.”42 Plaintiff claimed that these financial records were essential to her single

36 R. Doc. 99.

37 R. Doc. 100.

38 Id. at ¶¶ 6–24.

39 See Id. at ¶¶ 16–24.

40 Compare R. Doc. 100 to R. Doc. 7.

41 The Court notes that Johnson Foods, LLC was the only defendant not named in the Motion to

Compel.

42 R. Doc. 82. See R. Doc. 82-1 at p. 1; R. Doc. 82-2 at pp. 3–4; R. Doc. 82-3 at pp. 3–4; R. Doc. 82-4 at

pp. 3–4; R. Doc. 82-5 at pp. 3–4; R. Doc. 82-6 at pp. 3–4.

business enterprise (“SBE”) allegations.43 Defendants opposed the Motion, asserting

that Plaintiff cannot show that the financial information sought is relevant or that

there is a compelling need for the information.44 In response, Plaintiff maintained

that the documents sought are relevant and necessary for “the alter ego and single

business enterprise claims, as pursuant to the adage ‘follow the money.’”45

The Magistrate Judge held a hearing on the Motion to Compel on March 12,

2025, during which she pointed out that under Fifth Circuit authority a party must

have a compelling need to discover tax returns and financial records, and that the

information must not be “otherwise readily obtainable” through alternative forms of

discovery.46 The Magistrate Judge found that Plaintiff “was unable to articulate

what particular information he [sic] seeks in the tax returns and financial records

that is not available through other forms of discovery.”47 As such, the Magistrate

Judge ordered Plaintiff to file a supplemental memorandum identifying the

particular information needed in the tax returns and financial statements, and gave

Defendants an opportunity to file a response to the supplemental memorandum.48

Plaintiff filed a Supplemental Memorandum, along with a letter from a retained

Certified Public Accountant (“CPA”), who indicated that Defendants’ tax returns

would provide reliable information regarding where distributions from entities are

43 R. Doc. 82-1 at pp. 2–3.

44 R. Doc. 88 at pp. 8–9 (citing Nat. Gas Pipeline Co. of Am. v. Energy Gathering, Inc., 2 F.3d 1397,

1411 (5th Cir. 1993)).

45 R. Doc. 91 at p. 2.

46 R. Doc. 94 at p. 1 (citing F.D.I.C. v. LeGrand, 43 F.3d 163, 172 (5th Cir. 1995); Nat. Gas Pipeline Co.,

2 F.3d at 1411).

47 R. Doc. 94 at p. 1.

48 Id.

paid, the owners of each business, and would make it possible to trace money flowing

from business entities to individuals.49 In response, Defendants assert that the CPA

letter is not responsive to the court’s request, that Plaintiff failed to specify what

information she would obtain from the tax documents that is relevant to her SBE

theory, and that Plaintiff failed to show that she cannot obtain the information

through any other means.50

On March 21, 2025, the Magistrate Judge issued an Order and Reasons,

granting in part and denying in part Plaintiff’s Motion to Compel.51 The Magistrate

Judge determined that “Plaintiff seeks to obtain Defendants’ financial documents and

tax returns to support their arguments for attribution of Defendants’ minimum

contacts to one another under theories of alter ego/SBE/veil piercing” for personal

jurisdiction purposes.52 The Magistrate Judge pointed out that, “the factors used to

determine alter-ego relationships for liability purposes are different than the relevant

factors for purposes of imputing personal jurisdiction.”53 The Magistrate Judge then

explained that the Fifth Circuit in Hargrave v. Fibreboard Corporation identified the

following seven factors as useful in assessing whether an entity’s contacts may be

attributed to another entity for jurisdictional purposes under veil piercing/alter

ego/single business enterprise theories: (1) the amount of stock owned by the parent

of the subsidiary; (2) separate headquarters; (3) common officers and directors; (4)

49 R. Doc. 96. See R. Doc. 96-1 at p. 2.

50 R. Doc. 97.

51 R. Doc. 98.

52 Id. at p. 9.

53 Id. (citing Licea v. Curacao Drydock Co., 952 F.3d 207, 212, 213 n.2 (5th Cir. 2015)). The Magistrate

Judge noted that, “[t]he test for jurisdictional veil piercing is less stringent than that for imposing

liability. R. Doc. 98 at p. 9, n.22 (citing; Savoie v. Pritchard, 122 F.4th 185, 192 (5th Cir. 2024)).

observance of corporate formalities; (5) separate accounting systems; (6) whether the

parent exercised complete authority over general policy; and (7) whether the

subsidiary exercised complete authority over daily operations.54 The Magistrate

Judge found that while tax returns contain information that may be relevant to

liability and/or post-judgment collection efforts, in light of the extensive discovery

that had already occurred, there was no compelling need for the information to justify

the production of Defendants’ tax returns.55 The Magistrate Judge further found that

Defendants’ tax returns “would reflect only very limited information relevant to the

jurisdictional issue, and that the information appeared cumulative and duplicative of

information already provided.”56 The Magistrate Judge reasoned that alternative

sources can more readily be used to obtain information relevant to the Hargrave

factors, and that Plaintiff had failed to demonstrate “how other discovery methods

fail to reveal the information relevant to the relevant jurisdictional alter ego/SBE/veil

piercing issue or how any particular item of information in the tax returns is not

54 R. Doc. 98 at p. 10 (citing Fielding v. Hubert Burda Media, Inc., 415 F.3d 419, 428 (5th Cir. 2005);

Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1160 (5th Cir. 1983)). The Magistrate Judge also pointed

out that Louisiana courts consider similar factors in assessing liability under the single business

enterprise theory, including: (1) common ownership; (2) common directors and officers; (3) common

employees; (4) common offices; (5) unified administrative control; (6) similar or supplementary

business functions; (7) one corporation financing the other; (8) inadequate capitalization; (9) one

corporation’s creation of the other; (10) one corporation paying the salaries, expenses, or losses of the

other corporation; (11) one corporation receiving no business other than that given to it by the affiliated

corporation; (12) shared property; (13) noncompliance with corporate formalities; (14) services

rendered by the employees of one corporation on behalf of another corporation; (15) centralized

accounting; (16) undocumented transfer of funds between corporations; (17) unclean allocation of

profits and losses between corporations; and (18) excessive fragmentation of a single enterprise into

separate corporations. R. Doc. 98 at p. 10, n.25 (citing Green v. Champion Ins. Co., 577 So.2d 249,

257–58 (La. App. 1 Cir. 1991); accord. Jackson v. Tanfoglio Giuseppe, S.R.L., 615 F.3d 579, 587 (5th

Cir. 2010)).

55 R. Doc. 98 at p. 11.

56 Id.

available from other sources.”57 Based upon the information already provided and

Defendants’ acknowledgement that they will provide affidavits confirming that they

do not file consolidated tax returns with one another, the Magistrate Judge concluded

that there was no compelling need at this time for Plaintiff to obtain the tax returns.58

The Magistrate Judge further found that Plaintiff had failed to establish that

“a wholesale production of all balance sheets and income statements from formation

to present” was necessary to obtain information regarding the seven Hargrave

factors.59 Because Plaintiff’s daughter died in 2023, the Magistrate Judge ruled that

Defendants must produce the following documents from their financial statements

for the years 2022 to 2024, marked confidential and subject to the Protective Order,60

to the extent the information had not already been provided in Defendants’ document

production:

(1) redacted balance sheets or other financial statements reflecting ownership

of stock of any other defendant;

(2) financial documents reflecting the identity of any common officers, directors

or employees shared by Defendants;

(3) financial documents reflecting any joint bank accounts shared with any

other defendant;

(4) financial documents/checks/redacted bank statements reflecting transfers

between Defendants;

57 Id. (citing Asset Funding Grp., LLC v. Adams & Reese, LLP, Civ. A. No. 07-02965, 2008 WL 927937,

at *9 (E.D. La. Apr. 4, 2008) (Roby, M.J.)).

58 R. Doc. 98 at p. 11.

59 Id. at p. 12.

60 See R. Docs. 62 & 168.

(5) financial documents reflecting any shared offices or headquarters with any

other defendant; and

(6) financial documents reflecting any shared account systems with any other

defendant.61

The Magistrate Judge concluded that the production of these limited financial

documents balances Defendants’ interests in the privacy of their financial

information and Plaintiff’s need to obtain evidence relevant to the Hargrave factors

for jurisdictional purposes.62

Plaintiff filed a Motion to Review Magistrate Judge’s Order and Objections on

April 1, 2025, seeking review of the Magistrate Judge’s partial denial of her Motion

to Compel.63 Plaintiff seeks review of the Order and Reasons to the extent the

Magistrate Judge denied the production of Defendants’ tax records, omitted any

discussion of the adequacy of unaudited financial statements that were ordered

produced, did not order the production of audited financial statements, and did not

order the production of tax returns in the event any or all of the Defendants did not

have audited financial records.64 Plaintiff maintains that she is entitled to the

production of Defendants’ tax returns because she has alleged that various

defendants are members of a single business enterprise, and the CPA report

submitted in support of her Motion to Compel shows that tax records and financial

statements “comprise customary documents underlying analysis of SBE and alter ego

in these kinds of cases.”65 While the Magistrate Judge found that the information in

61 R. Doc. 98 at p. 13.

62 Id.

63 R. Doc. 103.

64 R. Doc. 103-1 at pp. 2–3.

65 Id. at pp. 2 & 3.

Defendants’ tax returns would be cumulative of information already produced by

Defendants, Plaintiff contends that shielding the production of these documents

prevents both Plaintiff and the Court from knowing whether the documents are

actually cumulative.66 Plaintiff points out that while tax documents are sensitive,

there is a Protective Order in place and the documents are not being requested as a

pre-judgment inquiry into the financial means of Defendants to pay a judgment.67

According to Plaintiff, “there was good cause to produce these documents given the

single business enterprise and alter ego allegations, and therefore further inquiry

into the financial records of these entities is merited.”68

Plaintiff further claims that accurate financial records and corporate structure

records are essential to a single business enterprise analysis, and that her CPA report

shows that the documents and information provided by Defendants to date do not

meet the criteria required by generally accepted accounting principles.69 Plaintiff

asserts that the Magistrate Judge failed to address this issue, or the difference

between audited and unaudited financial documents.70 Plaintiff contends that the

Magistrate Judge should have ordered the production of tax returns and audited

financial statements or, if audited versions were not available, then unaudited

financial statements and tax returns.71 Plaintiff claims that by side stepping these

issues, the Magistrate Judge’s ruling “kneecaps” her ability to establish facts and

66 Id. at p. 4.

67 Id. at p. 5.

68 Id. at p. 6 (footnote omitted).

69 Id. (citing R. Doc. 96-1).

70 R. Doc. 103-1 at p. 7.

71 Id.

evidence to support the elements of the single business enterprise or alter ego

theory.72 Finally, Plaintiff asserts that the Magistrate Judge failed to provide any

justification for limiting the time period for the document production to 2022 to

2024. 73 Plaintiff argues that because information regarding the intertwined

relationships between Defendants is a “moving target,” the Magistrate Judge should

have ordered the production of documents for the five-year window from 2020 to 2025,

at a minimum, if not for the entire existence of each corporation.74

Defendants assert that a Magistrate Judge’s decision regarding a discovery

dispute is reversed only for an abuse of discretion and that Plaintiff failed to show

that the Magistrate Judge abused her discretion in partially denying the Motion to

Compel.75 Defendants claim that Plaintiff raises three issues in her Motion: (1) the

Magistrate Judge’s denial of her request to compel the production of Defendants’ tax

returns; (2) the fact that the Magistrate Judge did not specifically reference “audited”

financial documents when requiring the production of certain financial information;

and (3) the fact that the Magistrate Judge limited production of financial information

to the years 2022 to 2024.76 Defendants assert that Plaintiff has not, and cannot,

show that the Magistrate Judge abused her discretion in concluding that Plaintiff

failed to show a compelling need for Defendants’ tax returns.77 Defendants assert

that they have already provided the information that Plaintiff’s CPA claims is

72 Id.

73 Id.

74 Id.

75 R. Doc. 110 at p. 1 (citing Falkins v. Goings, Civ. A. No. 21-1749, 2022 WL 17414295, at *2 (E.D. La.

Dec. 5, 2022) (Barbier, J.)).

76 R. Doc. 110 at p. 4.

77 Id. at pp. 5–6.

contained in their tax returns, which is purportedly relevant to Plaintiff’s single

business enterprise theory under Louisiana law.78 Defendants further assert that, to

the extent they exist, Defendants will produce audited financial documents that are

responsive to the categories of documents the Magistrate Judge ordered them to

produce.79 Finally, Defendants argue that Plaintiff has failed to allege any error on

the Magistrate Judge’s part in limiting production to the time period of 2022 to 2024,

and further assert that Plaintiff failed to demonstrate how the wholesale production

of financial information was relevant to the Hargrave factors.80

In response, Plaintiff asserts that the Magistrate Judge abused her discretion

by not ordering the production of Defendants’ tax returns because they are

“objectively not cumulative or duplicative as they contain information only obtainable

through the returns.”81 Plaintiff claims that only some of the defendant-entities have

produced information identifying ownership, pointing out that Martian Sales

provided testimony that Mark Reilly is its only owner, but that the remaining

defendants appear to be owned by trusts with unknown beneficiaries or limited

liability companies with unknown members.82 Plaintiff asserts that the interrelation

of the defendants remains opaque and that it is unclear who receives distributions

from revenue.83 Plaintiff asserts that Defendants’ tax returns are relevant to the

litigation based upon the single business enterprise and alter ego allegations, and

78 Id. (citing R. Doc. 96-1; R. Doc. 88 at pp. 5–7; R. Doc. 97 at pp. 3–5).

79 R. Doc. 110 at pp. 7–8.

80 Id.

81 R. Doc. 113 at pp. 1–2.

82 Id. at p. 3 (citing R. Docs. 113-1 & 113-2).

83 R. Doc. 113 at pp. 3–4 (citing R. Doc. 113-2).

that there is a compelling need for the tax returns because they contain information

that is only reliably known through those tax returns.84 Plaintiff maintains that

there is no justification for limiting the time period required for production to 2022 to

2024, and that a five-year window from 2019 to 2024, at a minimum, is reasonable.85

II. LEGAL STANDARD

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

a party can appeal a magistrate judge’s ruling on a nondispositive pretrial motion to

the district judge for review. “A magistrate judge is afforded broad discretion in

resolving such motions, and the standard of review is deferential.”86 “The district

judge in the case must consider timely objections and modify or set aside any part of

the order that is clearly erroneous or is contrary to law.”87 Under this standard,

“factual findings are reviewed for clear error, which is present when the reviewing

court upon examination of the entire evidence is left with the definite and firm

conviction that a mistake has been committed.”88 “A legal conclusion is contrary to

84 R. Doc. 113 at p. 4 (citing R. Doc. 98 at p. 8, n.15).

85 R. Doc. 113 at p. 4.

86 Falkins v. Goings, Civ. A. No. 21-1749, 2022 WL 17414295, at *2 (E.D. La. A. Dec. 5, 2022); Lemann

v. Midwest Recovery Fund LLC, Civ. A. No. 15-3329, 2016 WL 3033622, at *2 (E.D. La. May 27, 2016)

(Barbier, J.). See A.M. Castle & Co. v. Byrne, 123 F. Supp. 3d 895, 898 (S.D. Tex. 2015) (“A magistrate

judge is permitted broad discretion in resolving nondispositive pretrial motions.”).

87 Fed. R. Civ. P. 72(a). See 28 U.S.C. § 636(b)(1)(A) (“A judge of the court may reconsider any pretrial

matter under this subparagraph (A) where it has been shown that the magistrate judge’s order is

clearly erroneous or contrary to law.”).

88 Ambrose-Frazier v. Herzing Inc., Civ. A. No.15-1324, 2016 WL 890406, at *2 (E.D. La. Mar. 9, 2016)

(Morgan, J.) (citing authority) (citation modified). See United States v. U.S. Gypsum Co., 333 U.S. 364,

395 (1948) (“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.”).

law when the magistrate judge fails to apply or misapplies relevant statutes, case

law, or rules of procedure.”89

“For issues that are committed by law to a judge’s discretion, such as the

resolution of discovery disputes, the magistrate’s rulings are reviewed for abuse of

discretion.”90 Because Plaintiff seeks review of the Magistrate Judge’s ruling on her

Motion to Compel, the ruling will be reviewed for an abuse of discretion. Courts

consider this to be a “high standard.”91

III. ANALYSIS

A. Defendants’ tax returns

Plaintiff first seeks review of the portion of the Magistrate Judge’s ruling in

which she denied Plaintiff’s request to compel the production of Defendants’ tax

returns after finding that there was no compelling need to justify their production in

light of the extensive discovery already obtained.92 Plaintiff seems to suggest that

the Magistrate Judge erred in finding that the information contained in the tax

89 Lemann, Civ. A. No. 15-3329, 2016 WL 3033622 at *2 (quoting Ambrose-Frazier, Civ. A. No.15-1324,

2016 WL 890406 at *2) (citation modified).

90 Edwards v. Barbier, Civ. A. No. 24-619, 2024 WL 3859954, at *2 (E.D. La. Aug. 19, 2024) (Morgan,

J.) (quoting Energy Intelligence Grp., Inc. v. Canal Barge Co., Civ. A. No. 12-2107, 2014 WL 201698,

at *1 (E.D. La. Jan. 17, 2014) (Zainey, J.)) (citation modified). See Falkins, Civ. A. No. 21-1749, 2022

WL 17414295 at *2 (citing Ambrose-Frazier, Civ. A. No.15-1324, 2016 WL 890406 at *2; Kresefky v.

Panasonic Commc’ns & Sys, Co., 169 F.R.D. 54, 64 (D.N.J. 1996)) (same).

91 J.M. Smith Corp. v. Ciolino Pharm. Wholesale Distrib., LLC, Civ. A. No. 14-2580, 2015 WL 6454457,

at *3 (E.D. La. Oct. 26, 2015) (Zainey, J.). See Quantlab Group, LP v. Dempster, Civ. A. No. H-18-

2171, 2019 WL 7037653, at *2 (S.D. Tex. Dec. 20, 2019) (Atlas, J.) (quoting Nerium SkinCare, Inc. v.

Nerium Int’l, LLC, Civ. A. No. 3:16-CV-1217-B, 2017 WL 9934881, at *1 (N.D. Tex. Feb. 6, 2017) (Boyle,

J.)) (citation modified) (“Where, as here, discovery orders are at issue, the objecting party’s burden is

especially heavy.”). See 12 Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal

Practice and Procedure § 3069 (3d ed. 2014) (“In sum, it is extremely difficult to justify alteration of

the magistrate judge's nondispositive actions by the district judge.”).

92 R. Doc. 103-1 at pp. 2–4.

returns would be cumulative and duplicative of information already provided.93

Plaintiff argues that, “there was good cause to produce these documents given the

single business enterprise and alter ego allegations, and therefore further inquiry

into the financial records of these entities is merited.”94

In the Third Amended Complaint, Plaintiff alleges that, “[a]ll Defendants

named herein are alter egos of one another and operate as a single business

enterprise through a secretive web of affiliates, individuals, shell companies, alter

egos, business names, assumed names, and/or trade names . . . .”95 In her briefing on

Defendants’ prior motions to dismiss, Plaintiff argued that the Court has personal

jurisdiction over Defendants based upon her allegation that they are alter egos of one

another and operate as a single business enterprise.96 The Fifth Circuit has made

clear that, “[g]enerally, the proper exercise of personal jurisdiction over a nonresident

corporation may not be based solely upon the contacts with the forum state of another

93 Id. at pp. 4–5.

94 Id. at pp. 4–5 & 6.

95 R. Doc. 100 at ¶ 25. The Court agrees with Defendants that Plaintiff seems to conflate the single

business enterprise theory of liability with the alter ego theory in her Motion to Compel briefing. See

R. Doc. 88 at pp. 9–10. As explained by one Louisiana appellate court, “[t]he single business enterprise

theory of liability is distinguishable from the alter ego theory in several ways. The most important

distinction is who may be held liable under each theory.” Hill Int’l, Inc. v. JTS Realty Corp., 2021-

0157 (La. App. 1 Cir. 10/20/22), 370 So.3d 16, 30. “As opposed to alter ego doctrine, which pierces the

corporate veil to reach the members of an LLC, the single business enterprise doctrine is a theory for

imposing liability on two or more business entities when they act as one.” Id. (citing Brown v. ANA

Ins. Grp., 2007-2116 (La. 10/14/08), 994 So.2d 1265, 1266 n.2) (emphasis in original). “The single

business enterprise doctrine permits multiple companies to be treated as a single entity–but still an

entity separate from its human owners–as if all of the different companies within an affiliated group

had been organized as just one, all-encompassing corporation or LLC.” Hill Int’l, 2021-0157, 370 So.3d

at 30. Stated another way, “[w]hile the alter ego theory provides a basis to impose liability on the

individual members of a business entity, single business enterprise provides a basis to impose liability

on any affiliated business entities operating as one.” Hill Int’l, 2021-0157, 370 So.3d at 30 (emphasis

in original).

96 R. Doc. 48 at p. 3.

corporate entity with which the defendant may be affiliated.”97 As the Fifth Circuit

explained, “[t]his principle, however, is not inviolate.”98 “Rather, the presumption of

institutional independence of related corporate entities may be rebutted by clear

evidence, which requires a showing of something beyond the mere existence of a

corporate relationship between a resident and nonresident entity to warrant the

exercise of jurisdiction over the nonresident.” 99 As such, Fifth Circuit cases

“generally demand proof of control by one corporation over the internal business

operations and affairs of another corporation to make the other its agent or alter ego,

and hence fuse the two together for jurisdictional purposes.”100

As the Magistrate Judge correctly pointed out, the alter-ego or veil-piercing

test for purposes of attribution of contacts (i.e., personal jurisdiction) is different and

less stringent than that for liability.101 The Magistrate Judge correctly applied the

law that, “[i]n determining whether the plaintiff has overcome the presumption of

corporate separateness such that the corporations may be fused for jurisdictional

purposes,” courts consider the following seven Hargrave factors: (1) the amount of

stock owned by the parent of the subsidiary; (2) whether the entities have separate

headquarters, directors, and officers; (3) whether corporate formalities are observed;

(4) whether the entities maintain separate accounting systems; and (5) whether the

97 Diece-Lisa Indus., Inc. v. Disney Enter., Inc., 943 F.3d 239, 251 (5th Cir. 2019) (quoting

Freudensprung v. Offshore Tech. Services, Inc., 379 F.3d 327, 346 (5th Cir. 2004)) (citation modified).

98 Freudensprung, 379 F.3d at 346.

99 Id. (quoting Dickson Marine, Inc. v. Panalpina, Inc., 179 F.3d 331, 338 (5th Cir. 1999)) (citation

modified).

100 Freudensprung, 379 F.3d at 346 (quoting Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1160 (5th

Cir. 1983) (collecting cases)) (citation modified).

101 Savoie v. Pritchard, 122 F.4th 185, 192 (5th Cir. 2024) (quoting Stuart v. Spademan, 772 F.2d 1185,

1198, n.12 (5th Cir. 1985)) (citation modified).

parent exercises complete control over the subsidiary’s general policies or daily

activities.”102

As to Plaintiff’s request for the production of Defendants’ tax records, the Fifth

Circuit has held that, “[i]ncome tax returns are highly sensitive documents; courts

are reluctant to order their routine disclosure as a part of discovery.”103 In the context

of post-judgment discovery, which is “very broad,” the Fifth Circuit in F.D.I.C. v.

LeGrand held that the party seeking the production of tax returns must show their

relevance, then the burden shifts to the party opposing production to show that other

sources exist from which the information contained in the tax returns may be readily

obtained.104 As the Magistrate Judge pointed out, in the context or pretrial discovery,

some district courts place the burden on the requesting party to demonstrate both

relevance and a compelling need for the tax returns,105 while other courts require the

party opposing the production to show that other sources exist from which the

information contained in the tax returns may be readily obtained.106 In LeGrand,

102 Diece-Lisa Indus., Inc., 943 F.3d at 251 (quoting Freudensprung, 379 F.3d at 346) (citation

modified). See Hargrave, 710 F.2d at 1160.

103 Nat. Gas Pipeline Co. of America v. Energy Gathering, Inc., 2 F.3d 1397, 1411 (5th Cir. 1993) (citing

SEC v. Cymaticolor, 106 F.R.D. 545, 547 (S.D.N.Y. 1985)).

104 F.D.I.C. v. LeGrand, 43 F.3d 163, 172 (5th Cir. 1995).

105 R. Doc. 98 at pp. 10–11. See Ins. Safety Consultants LLC v. Nugent, Civ. A. No. 3:15-CV-2183-B,

2017 WL 10701817, at * (N.D. Tex. Mar. 21, 2017) (Stickney, M.J.); U.S. ex rel Univ. Loft Co. v. AGS

Enters., Inc., Civ. A. No. SA-14-CA-528-OLG, 2016 WL 9462335, at *9 (W.D. Tex. June 29, 2016)

(Mathy, M.J.) (quoting Landry v. Haye, Civ. A. No. 12-2766, 2013 WL 6157920, at *2 (W.D. La. Nov.

21, 2013) (Kay, M.J.) (citing Reed v. Tokio Marine and Nichido Fire Ins. Co., Ltd., Civ. A. No. 3:09-CV-

00676, 2010 WL 420921, at *1 (W.D. La. Feb. 1, 2010) (Hayes, M.J.))); Butler v. Exxon Mobil Refining

& Supply Co., Civ. A. No. 07-386-C-M2, 2008 WL 4059867, at *2 (M.D. La. Aug. 28, 2008) (Noland,

M.J.) (citing Nat. Gas Pipeline, 2 F.3d at 1411); Asset Funding Grp., LLC v. Adams & Reese, LLP, Civ.

A. No. 07-02965, 2008 WL 927937, at *9 (E.D. La. Apr. 4, 2008).

106 LBC Fixed Income Fund I 2020, LLC v. Watkins Healthcare Group, LLC, Civ. A. No. 2024-008, 2024

WL 3317758, at *2 (E.D. La. June 21, 2024) (Dossier, M.J.); Nguyen v. Amer. Com. Lines, LLC, Civ. A.

No. 11-1799 c/w 11-2705, 2024 WL 2958589, at *5 (E.D. La. June 12, 2024) (Lemelle, J.); Select Oilfield

Services, LLC v. Total Marine Services of Jefferson, Inc., Civ. A. No. 23-2431, 2024 WL 1701941, at *10

(E.D. La. Apr. 19, 2024) (Currault, M.J.); Matter of GH Storm Cat, LLC, Civ. A. No. 20-3085, 2022 WL

however, the Fifth Circuit made clear that the party seeking the tax returns does not

have to prove both prongs of the test; rather, once he shows that the tax returns are

relevant, the burden shifts to the party opposing production to show that the

information can be readily obtained from other sources.107 As such, this Court will

apply the burden-shifting framework set forth in LeGrand by first considering

whether Plaintiff has shown that the tax returns are relevant to the subject matter

of the action. If the Court determines that Plaintiff has shown that they are relevant,

the Court will then consider whether Defendants have shown that other sources exist

from which the information contained in the tax returns can be readily obtained.

Applying these legal principles to the facts of this case, the Court finds that

Plaintiff has failed to show that Defendants’ tax returns are relevant to the subject

matter of the litigation. Louisiana federal courts have found tax information relevant

where a party has placed the subject of his income or earning capacity at issue in the

litigation by seeking damages for lost wages or lost earning capacity.108 “Courts have

1699002, at *4 (E.D. La. Mar. 9, 2022) (Currault, M.J.); Lozada-Leoni v. MoneyGram International,

Inc., Civ. A. No. 4:20CV68-RWS-CMC, 2020 WL 10046089, at *15 (E.D. Tex. July 8, 2020) (Craven,

M.J.); Molina v. Transocean Deepwater, Inc., Civ. A. No. H-08-3361, 2009 WL 10736478, at *2 (S.D.

Tex. Dec. 28, 2009) (Rosenthal, J.).

107 LeGrand, 43 F.3d at 172 (citing United States v. Bonanno, 119 F.R.D. 625, 627 (E.D.N.Y. 1988))

(emphasis in original) (“Roughton misreads Bonanno as requiring the party seeking the documents to

prove both prongs of the test.”) (emphasis in original). The Court notes that Bonanno involved pretrial

discovery, and that the Bonanno court held that, “[w]hile the party seeking discovery of the tax returns

bears the burden of establishing relevance, the party resisting disclosure should bear the burden of

establishing alternative sources for the information.” Bonanno, 119 F.R.D. at 627 (citing authority).

108 Tate v. DG Louisiana LLC, 653 F. Supp. 3d 316, 321 (E.D. La. 2023) (citing Butler, Civ. A. No. 07-

386-C-M2, 2008 WL 4059867 at *2 & n.5; Campos v. Zurich Am. Ins. Co., Civ. A. No. 2:21-CV-3923,

2022 WL 3647722, at *6 (W.D. La. Aug. 24, 2022) (Kay, M.J.); Equal Emp. Opportunity Comm’n v.

Columbia Sussex Corp., Civ. A. No. 07-701-JJB-DLD, 2009 WL 10679322, at *4 (M.D. La. Aug. 3, 2009)

(Dalby, M.J.); Thai v. Miller Truck Lines, Inc., Civ. A. No. 05-1958, 2006 WL 2349605, at *1 (W.D. La.

Aug. 11, 2006) (Hornsby, M.J.)). See Nguyen, 2024 WL 2958589 at *5 (citing same authority)

(“Louisiana federal courts have found tax returns relevant for wage loss claims.”).

largely declined to compel the disclosure of such financial information, however,

where Plaintiff does not seek economic damages.”109 Unlike in the cases cited by

Plaintiff, where courts ordered the production of tax returns, this case does not

involve post-judgment discovery or a plaintiff who has placed his income or earning

capacity at issue in the litigation by seeking damages for lost wages or lost earning

potential.110 In the Third Amended Complaint, Plaintiff asserts two LPLA claims,

which does not allow recovery of punitive damages, 111 and Plaintiff seeks

compensatory damages for the wrongful death of her daughter.112 The Court

therefore agrees with the Magistrate Judge that Plaintiff has not placed her income

or earning capacity at issue in the litigation and cannot argue that the tax returns

are relevant on that basis.113

109 Tate, 653 F. Supp. 3d at 321 (citing authority).

110 R. Doc. 103-1 at p. 6, n.3; R. Doc. 113 at p.4, n. 3 (citing LeGrand, 43 F.3d 163) (finding that, in the

context of postjudgment discovery, “relevance of the tax returns to a judgment creditor is virtually

presumed” because they “can verify the information provided by the judgment-debtor concerning his

assets and income, and it can reveal a judgment-debtor’s attempts to hide assets.”); In re Norplant

Contraceptive Prods. Liab. Litig., 170 F.R.D. 153, 153–54 (E.D. Tex. 1996) (ordering the production of

tax returns to fill in “gaps in the employment history of one or more of the 5 bellwether plaintiffs” that

could “lead to relevant information regarding the Plaintiffs’ daily work activities, performance, and

attendance”); Lozada-Leoni v. MoneyGram Int’l, Inc., Civ. A. No. 4:20CV68-RWS-CMC, 2020 WL

10046089 at *15 (ordered the production of tax returns, finding they were relevant to plaintiff’s claim

for “back pay (lost wages and benefits)”)). See also Nguyen, Civ. A. No. 11-1799 c/w 11-2705, 2024 WL

2958589 at *5 (ordering the production of plaintiffs’ tax returns, finding that they were “manifestly

relevant” based upon plaintiffs’ claim for “loss of profits or impairment of earning capacity”); Select

Oilfield Services, LLC, Civ. A. No. 23-2431, 2024 WL 1701941 at *10 (ordering the production of

plaintiff’s tax returns because they are relevant to plaintiff’s claim for loss of use damages for certain

equipment that was lost or stolen); Butler, Civ. A. No. 07-386-C-M2, 2008 WL 4059867 at *2 (ordering

the production of plaintiff’s tax returns because he placed his income/earning capacity at issue by

seeking past and future lost wages and benefits and damages for loss of earning capacity).

111 Bladen v. C.B. Fleet Holding Co., 487 F. Supp. 2d 759, 770 (W.D. La.2007) (citing La. R.S.

9:2800.51–9:2800.59 (2007)); Pierre v. Medtronic, Inc., Civ. A. No. 17-12196, 2018 WL 1911829, at *5

(E.D. La. Apr. 23, 2018) (Lemelle, J.) (citing authority).

112 See R. Doc. 100.

113 R. Doc. 98 at p. 7.

While Plaintiff claims that Defendants’ tax returns are “clearly relevant”

based upon the report submitted by her CPA,114 her only argument in support of that

position is that, “there was good cause to produce these documents given the single

business enterprise and alter ego allegations, and therefore further inquiry into the

financial records of these entities is merited.”115 In her Reply brief, Plaintiff likewise

asserts that information contained in Defendants’ tax returns “is relevant to the

subject matter of this action given the single business enterprise and alter ego

allegations and the inevitable analysis of those allegations that will soon come before

the Court.”116 Plaintiff, however, fails to cite any legal authority to support her

contention that tax records are relevant based solely upon alter ego and single

business enterprise allegations.117

The Court recognizes that Plaintiff cited two cases in her Reply In Support of

her Motion to Compel wherein tax returns were ordered produced because they were

relevant to a plaintiff’s alter ego allegations. 118 Those cases, however, are

distinguishable from the facts of this case. First, those cases did not involve

jurisdictional discovery and whether the contacts of one entity could be attributed to

another for personal jurisdiction purposes.119 Second, neither case recognized that

114 R. Doc. 103-1 at p. 4 (citing R. Doc. 96-1).

115 R. Doc. 103-1 at p. 6.

116 R. Doc. 113 at p. 4.

117 See, generally, R. Docs. 103 & 113.

118 R. Doc. 91 at p. 3 (citing Mack Energy Co. v. Red Stick Energy, LLC, Civ. A. No. 16-1696, 2019 WL

3403369, at *5 (W.D. La. July 26, 2019) (van Meerveld, M.J.); Whale Capital, L.P. v. Ridgeway, Civ.

A. No. 22-2570, 2023 WL 7220560, at *6–7 (E.D. La. Nov. 2, 2023) (Currault, M.J.) reconsideration

denied, Civ. A. No.22-2570, 2024 WL 894866 (E.D. La. Mar. 1, 2024) (Currault, M.J.)).

119 Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327, 346 (5th Cir. 2004) (citing Hargrave v.

Fibreboard, 710 F.2d 1154, 1160 (5th Cir. 1983)).

income tax returns are “highly sensitive documents” and subject to a different

standard for disclosure, namely the two-part test set forth in F.D.I.C. v. LeGrand.120

Finally, one of the cases involved an unopposed motion to compel.121 Importantly,

those two cases, which involved orders from Magistrate Judges, do not necessarily

support the conclusion that the Magistrate Judge’s ruling in this case was clearly

erroneous or contrary to the law. Further, the law relied on in both of those cases is

not contrary to the law relied on by the Magistrate Judge in this matter.122 As such,

the Court does not find that those two cases support Plaintiff’s position that

Defendants’ tax records are relevant based solely on the allegations in the Third

Amended Complaint. To the extent Plaintiff asserts that, “[t]his Court had already

recognized the relevance and discoverability of this type of information when it

ordered Johnson Foods, LLC to produce them,”123 the document Plaintiff cites to

support that claim is a minute entry issued by the Magistrate Judge on Plaintiff’s

Motion to Compel Discovery from Defendant Johnson Foods, LLC, which did not

120 43 F.3d 163, 172 (5th Cir. 1995).

121 Whale Capital, Civ. A. No. 22-2570, 2023 WL 7220560 at *6–7 (“Plaintiff argues that it seeks the

information to determine whether Defendants have conducted sham transactions to deprive it of

security under the guaranty agreement and/or alter ego issues. Defendant bears the burden to

establish that the information sought could have ‘no possible relevance’ to any claim in this case.

Having failed to respond to the motion, Defendant has not satisfied this burden.”).

122 Notedly, the Magistrate Judge in Whale Capital is the same one in the instant case, and she cited

and relied on much of the same law in that matter, including Rule 26, Rangel v. Gonzalez Mascorro,

274 F.R.D. 585, 590 (S.D. Tex. 2011), Dotson v. Edmonson, Civ. A. No. 16-15371, 2017 WL 11535244,

at *3 (E.D. La. Nov. 21, 2017), F.T.C. v. Turner, 609 F.2d 743, 745 (5th Cir. 1980), Liebmann v. Goden,

629 F. Supp. 3d 314, 331 (D. Md. 2022), Rullan v. Goden, Civ. A. No. 22-2099, 2023 WL 4787463 (4th

Cir. July 27, 2023), Dickson v. Nat’l Maint. & Repair of Ky., Inc., Civ. A. No. 08-8, 2011 WL 2610195,

at *2 (W.D. Ky. July 1, 2011).

123 R. Doc. 103-1 at p. 6 (citing R. Doc. 78).

concern the discovery of tax returns.124 As such, the Court rejects Plaintiff’s assertion

as baseless.

The Court further finds that Plaintiff failed to address how Defendants’ tax

returns are relevant to the issue for which she sought jurisdictional discovery – to

show that the contacts of one or more of the defendant-entities can be attributed to

the other defendant-entities based upon her allegation that Defendants “are alter

egos of one another and operate as a single business enterprise”125 Specifically,

Plaintiff did not mention the Hargrave factors in her Motion or Reply brief,126 and

therefore did not address whether Defendants’ tax returns would provide information

relevant to the factors that are used to determine whether an entity’s contacts may

be attributed to another entity for jurisdictional purposes under veil piercing, alter

ego, and single business enterprise theories.127 Those factors, as correctly set forth

by the Magistrate Judge, include the amount of stock owned by the parent of the

subsidiary, whether the entities have separate headquarters, directors, and officers,

whether corporate formalities are observed, whether the entities maintain separate

accounting systems, and whether the parent exercises complete control over the

subsidiary’s general policies or daily activities.128

124 See R. Docs. 70, 76, 77, & 78.

125 R. Doc. 100 at ¶ 25.

126 See R. Docs. 103 & 113.

127 Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1160 (5th Cir. 1983). See Cormier v. Scribe Media,

LLC, Civ. A. No. 1:23-cv-647-DAE, 2024 WL 4719641, at *3 (W.D. Tex. Sept. 11, 2024) (Howell, M.J.)

(applying the Hargrave factors to determine whether the defendants “are alter egos or operate as a

single-business enterprise” for purposes of personal jurisdiction).

128 Freudensprung v. Offshore Tech. Servs, Inc., 379 F.3d 327, 346 (5th Cir. 2004) (citing Hargrave, 710

F.2d at 1160).

Instead of addressing the Hargrave factors, Plaintiff points to a CPA report she

submitted in further support of her Motion to Compel and seems to take the position

that Defendants’ federal income tax returns are relevant because they will include

information regarding where distributions are paid, the owners of the business and

the corporate officers, corporate ownership in other corporations, as well as the

business address, the date of incorporation, and the number of partners or

shareholders in each business. 129 While some of that information, including

information regarding the business owners, corporate officers, and corporate

ownership of other corporations, seems pertinent to the Hargrave factors, Defendants

have already provided information and documents regarding their corporate

ownership, their organizational structure, their subsidiary and parent companies,

and their relationships to each other.130 And, importantly, the Magistrate Judge

applied the correct law in her analysis. Thus, the Magistrate Judge did not abuse

her discretion in refusing to compel the production of Defendants’ tax returns on the

basis that some of the information contained in Defendants’ tax returns would be

duplicative of information already provided by Defendants. That finding was not

clearly erroneous. Plaintiff has failed to show that any additional information

contained in Defendants’ tax returns is relevant to the Hargrave factors or the

personal jurisdiction issue. To the extent the Magistrate Judge may have implicitly

found that Plaintiff carried her burden of proving that Defendants’ tax returns were

129 R. Doc. 96-1 at pp. 2–3.

130 R. Doc. 88 at pp. 5–7 (citing R. Docs. 88-2, 88-3, 88-4, 88-5, 88-6, 88-7, 88-8, 88-9, 88-10, 88-11, 88-

12, 88-13, 88-14, & 88-15); R. Doc. 88 at p. 11; R. Doc. 97 at pp. 3–5 (citing R. Doc. 88 at pp. 5–7).

relevant to the litigation before considering whether there was a compelling need for

their production,131 that finding was contrary to Fifth Circuit precedent set forth in

LeGrand.

For the same reason, the Court also finds that it was erroneous for the

Magistrate Judge to conclude that, “Plaintiff has not demonstrated how other

discovery methods fail to reveal the information relevant to the relevant jurisdictional

alter ego/SBE/veil piercing issue or how any particular item of information in the tax

returns is not available from other sources.”132 As previously discussed, the Fifth

Circuit in LeGrand made clear that the party seeking the production of tax returns

only has to prove their relevance and does not also bear the burden of proving that no

other sources exist from which the information contained therein may be readily

obtained.133 That said, pursuant to LeGrand, the Court finds that because Plaintiff

failed to carry her burden of proving that Defendants’ tax returns are relevant to the

litigation, the Court need not determine whether Defendants carried their burden of

proving that other sources exist from which the information contained in the income

tax returns may be readily obtained. Therefore, any error by the Magistrate Judge

seemingly finding that Plaintiff had the burden of proof was harmless.

131 While the Magistrate Judge did not make a specific finding as to the relevance of Defendants’ tax

returns, the fact that the Magistrate Judge addressed the second factor of the two-part test in

determining whether the tax returns should be produced – whether there was a compelling need for

the documents – suggests that the Magistrate Judge found that the tax returns were relevant. See R.

Doc. 98 at pp. 7–11.

132 R. Doc. 98 at p. 11 (citing Asset Funding Grp., LLC v. Adams & Reese, LLP, Civ. A. No. 07-02965,

2008 WL 927937, at *9 (E.D. La. Apr. 4, 2008)).

133 See F.D.I.C. v. LeGrand, 43 F.3d 163, 172 (“Roughton misreads Bonanno as requiring the party

seeking the documents to prove both prongs of the test.”) (citing United States v. Bonanno, 119 F.R.D.

625, 627 (E.D.N.Y. 1988)) (emphasis in original).

Nonetheless, the Court points out that information regarding several of the

Hargrave factors could have been obtained “by propounding alternative discovery

inquiries, such as focused interrogatories.”134 In fact, Plaintiff attempted to obtain

some of the information, including about Defendants’ organizational structure,

through interrogatories135 and Fed. R. Civ. P. 30(b)6) corporate depositions.136

Plaintiff’s failure to obtain information relevant to the Hargrave factors through

written discovery and deposition testimony, however, does not provide support for

her request to compel the production of Defendants’ income tax returns.

B. Discussion of the adequacy of unaudited financial statements

Plaintiff next seeks review of the Magistrate Judge’s omission of any discussion

of the adequacy of unaudited financial statements that were ordered produced, the

Magistrate Judge’s failure to order the production of audited financial statements,

and the Magistrate Judge’s failure to order the production of tax returns in the event

that any or all of the defendants did not have audited financial records.137 Relying

on the report from her CPA, Plaintiff claims that the deposition testimony and

documents produced by Defendants to date do not “meet the criteria required by the

Statement on Standards for Forensic Services issued by the American Institute of

Certified Public Accountants or generally accepted accounting principles (GAAP).”138

Plaintiff asserts that, “[u]naudited financial records not verified by a third party are

134 Asset Funding Group, LLC, Civ. A. No. 07-02965, 2008 WL 927937 at *9.

135 See R. Docs. 88-3 at pp. 4–5; R. Doc. 88-5 at pp. 4–5; R. Doc. 88-6 at pp. 4–5; R. Doc. 88-8 at pp. 4–

6; R. Doc. 88-10 at pp. 4–6.

136 See R. Docs. 88-21 through 88-24.

137 R. Doc. 103-1 at pp. 2–3.

138 Id. at p. 6 (citing R. Doc. 96-1). See R. Doc. 113 at p. 2 (citing R. Doc. 96-1 at p. 2).

essentially worthless as someone could create financial statements that say

anything.”139 Plaintiff further claims that the Magistrate Judge made no distinction

between audited or unaudited financial documents in ordering Defendants to produce

redacted balance sheets and other financial statements reflecting ownership of stock,

and Plaintiff seems to suggest that the Magistrate Judge erred by not requiring that

tax returns be produced if Defendants only have unaudited financial documents.140

Defendants point out that the Magistrate Judge ordered the production of

certain categories of financial records that she concluded were relevant to the

Hargrave factors and relevant to determining whether an entity’s contacts may be

attributed to another entity for jurisdictional purposes under a veil piercing/alter

ego/single business enterprise theory. 141 Defendants assert that Plaintiff’s

arguments regarding audited versus unaudited financial statements “is a non-issue”

because they will produce any audited financial statements that are responsive to the

categories of documents that were ordered to be produced.142 In response, Plaintiff

asserts that this concession “does not resolve the issue” because Defendants may not

have audited financial documents “and income tax returns remain the gold standard

against which any form of internal financials are to be judged.”143

The Court finds that Plaintiff has failed to show that the Magistrate Judge

abused her discretion by not requiring Defendants to produce audited financial

139 R. Doc. 103-1 at p. 6 (citing R. Doc. 96-1). See R. Doc. 96 at p. 3 (citing R. Doc. 96-1 at pp. 1–2).

140 R. Doc. 103-1 at p. 7.

141 R. Doc. 110 at pp. 6–7.

142 Id. at p. 7.

143 R. Doc. 113 at p. 2 (citing R. Doc. 96-1 at p. 2).

documents. As Defendants correctly point out, the Magistrate Judge ordered the

production of certain financial documents, including redacted balance sheets and

other financial statements, that contain information relevant to the Hargrave factors.

Specifically, the Magistrate Judge ordered Defendants to produce financial

documents reflecting the ownership of stock of any other defendant, the identity of

any common officers, directors, or employees shared by Defendants, any joint bank

accounts shared with any other defendant, checks or bank statements reflecting

transfers between Defendants, any shared offices or headquarters with any other

defendant, and any shared account systems with any other defendant.144 These

categories mirror the Hargrave factors, which are appropriately considered by a

Court in determining whether an entity’s contacts may be attributed to another entity

for jurisdictional purposes and whether Plaintiff has overcome the presumption of

corporate separateness.145 Plaintiff cites no legal authority, and the Court has found

none, to suggest either that courts must order the production of audited, rather than

unaudited, financial documents, or that the Hargrave factors must be supported by

audited financial documents. In ordering the production of these documents, the

Magistrate Judge concluded that, “[p]roduction of these limited financial documents

balances Defendants’ interests in the privacy of their financial information and

Plaintiff’s need to obtain evidence relevant to the Hargrave jurisdictional attribution

inquiry.”146 Plaintiff has failed to show that this was an abuse of discretion.

144 R. Doc. 98 at p. 12.

145 See Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327, 346 (5th Cir. 2004) (citing Hargrave

v. Fibreboard, 710 F.2d 1154, 1160 (5th Cir. 1983)).

146 R. Doc. 98 at p. 12.

C. The time period imposed for the documents ordered to be produced

Finally, Plaintiff asserts that there is no justification for the Magistrate Judge

limiting the production of financial documents to the time period of 2022 to 2024

based upon the 2023 death of Plaintiff’s daughter.147 Plaintiff contends that

information regarding Defendants’ intertwined relationships “are a ‘moving target’

with new corporations being formed dynamically.”148 As such, Plaintiff asserts in her

Motion that the Court should require the production of financial documents for at

least the five-year window from 2020 to 2025,149 if not for the entire existence of each

defendant-entity.150

Defendants argue that Plaintiff cannot demonstrate that the Magistrate Judge

abused her discretion in limiting the time period for the production of financial

records to 2022 through 2024, as Plaintiff fails to set forth any alleged error on the

part of the Magistrate Judge.151 Defendants claim that, as the Magistrate Judge

noted, Plaintiff had the burden to demonstrate how the wholesale production of

financial information was relevant to the Hargrave factors and failed to do so.152 In

response, Plaintiff maintains that there is no justification for the time period imposed

by the Magistrate Judge, and asserts that a five-year window, if not the entire

existence of each entity-defendant, is reasonable because ownership of Defendants

has changed over time.153

147 R. Doc. 103-1 at p. 7.

148 Id.

149 In her Reply brief, Plaintiff suggests a five-year window from 2019 to 2024. See R. Doc. 113 at p. 4.

150 R. Doc. 103-1 at p. 7.

151 R. Doc. 110 at p. 7.

152 Id. at p. 8 (citing R. Doc. 98 at p. 12).

153 R. Doc. 113 at p. 4.

The Court finds that Plaintiff has failed to demonstrate that the Magistrate

Judge abused her discretion in ordering Defendants to produce financial documents

for the years 2022 through 2024. The death of Plaintiff’s daughter, which is the

impetus for this lawsuit, occurred in 2023. Plaintiff fails to cite any legal authority

to support her position that the Magistrate Judge erred or abused her discretion by

not ordering the production of financial documents for the five-year period of 2019 to

2024 or 2020 to 2025, or for the entire existence of each defendant-entity. While

several courts in this Circuit have determined that a temporal scope of ten years is

reasonable in the context of jurisdictional discovery in cases involving alter ego

claims,154 other courts have imposed temporal limitations ranging from four to ten

years for the production of tax returns in the context of lost wage and lost earning

capacity claims.155 With these variations, Plaintiff has failed to show that the

154 Neal Technologies, Inc. v. Innovative Performance Research, LLC, Civ. A. No. 4:16-CV-00746, 2017

WL 590298, at *2 (E.D. Tex. Feb. 14, 2017) (Mazzant, J.) (“The Court determines that Plaintiff should

be entitled to jurisdictional discovery dating back to 2007 for both Defendants. Plaintiff’s motion to

compel is aimed at gathering evidence from 2007 to establish whether the Court could exercise

personal jurisdiction over the Defendants. This request is based on more than a hunch that discovery

might yield jurisdictionally relevant facts.”); Monroe’s Estate v. Bottle Rock Power Corp., Civ. A. No.

03-2682, 2004 WL 737463, at *9 (E.D. La. Apr. 2, 2004) (Knowles, M.J.) (“Unquestionably, the

plaintiffs should be accorded the opportunity to conduct discovery over a sufficiently lengthy period of

time so as to determine whether defendants contacts with Louisiana are sufficient for personal

jurisdiction purposes . . . . Ten years, while not generous, is sufficient and not reasonably subject to

serious dispute.”). See United States v. Emergency Staffing Solutions, Inc., Civ. A. No. 3:19-cv-01238-

E, 2024 WL 4920769, at *2 (N.D. Tex. June 20, 2024) (Rutherford, M.J.) (in a case involving an alter

ego claim but not jurisdictional discovery, the court “granted a motion for protective order filed by

Defendants and limited the temporal scope of permissible discovery to ‘January 1, 2015 through the

present,’ unless otherwise agreed by the parties in writing or ordered by the court.”).

155 See Campos v. Zurich Am. Ins. Co., Civ. A. No. 2:21-CV-3923, 2022 WL 3647722, at *3–4 (W.D. La.

Aug. 24, 2022) (ordering the production of tax returns for the prior four years for a lost wage claim);

Equal Emp. Opportunity Comm’n v. Columbia Sussex Corp., Civ. A. No. 07-701-JJB-DLD, 2009 WL

10679322, at *4 (M.D. La. Aug. 3, 2009) (ordering the production of tax returns for four years for a

claim for lost past and future wages); Butler v. Exxon Mobil Refining and Supply Co., Civ. A. No. 07-

386-C-M2, 2008 WL 4059867, at *3 (M.D. La. Aug. 28, 2008) (ordering the production of tax returns

for four year period for claims of past and future wages and lost earning capacity); Thai v. Miller Truck

Lines, Inc., Civ. A. No. 05-1958, 2006 WL 2349605, at *2 (W.D. La. Aug. 11, 2006) (ordering the

Magistrate Judge abused her discretion in ordering Defendants to produce

financial documents for the time period of 2022 to 2024.156

IV. CONCLUSION

For the foregoing reasons, IT IS ORDERED that Plaintiffs’ Motion to Review

Magistrate Judge’s Order and Objections, filed by Kathleen Moller, 5” is DENIED.

New Orleans, Louisiana, December 3, 2025.

United States District Judge

production of tax returns for the last ten years based upon claims for loss of earning capacity and lost

future wages); Nguyen v. Amer. Commercial Lines, LLC, Civ. A. No. 11-1799 e/w 11-2705, 2024 WL

2958589, at *1 & 5 (E.D. La. June 12, 2024) (ordering the production of tax returns for two years in an

oil spill case).

156 The Court notes that Louisiana federal courts that have compelled the discovery of financial

information for purposes of punitive damages have limited the temporal scope of said documents to

three years. See Thibodeaux v. T.H. Marine Supplies, LLC, Civ. A. No. 21-443-BAJ-SDJ, 2023 WL

218935, at *4 (M.D. La. Jan. 17, 2023) (Johnson, M.J.) (citing authority).

187 R, Doc. 108.