JOINT CASE MANAGEMENT STATEMENT filed by Jacob A Appelsmith, Edmund Brown, Jr, William Haraf, Kamala Harris, Traci Stevens, Robert Venchiarutti. (Marcroft, Ryan) (Filed on 2/24/2015)
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Page 1 Case5:11-cv-05496-HRL Document58 Filed02/24/15 Page1 of 11
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KAMALA D. HARRIS
Attorney General of California
MARC A. LEFORESTIER
Supervising Deputy Attorney General
RYAN MARCROFT
Deputy Attorney General
State Bar No. 230952
1300 I Street, Suite 125
P.O. Box 944255
Sacramento, CA 94244-2550
Telephone: (916) 323-5313
Fax: (916) 324-8835
E-mail: Ryan.Marcroft@doj.ca.gov
Attorneys for All Defendants
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IN THE UNITED STATED DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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SAN JOSE DIVISION
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THINK COMPUTER CORPORATION,
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5:11-cv-05496-HRL
Plaintiff, JOINT CASE MANAGEMENT
STATEMENT
v.
Date:
Time:
Courtroom:
Judge:
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ROBERT VENCHIARUTTI, in his official
capacity as Deputy Commissioner of the
California Department of Financial
Institutions; WILLIAM HARAF, in his
official capacity as Commissioner of the
California Department of Financial
Institutions; TRACI STEVENS, in her
official capacity as Acting Secretary of the
California Business, Transportation and
Housing Agency; JACOB A.
APPELSMITH, in his official capacity as
Senior Advisor to the Governor of the State
of California; EDMUND G. BROWN, JR.,
in his official capacity as Governor of the
State of California; and KAMALA
HARRIS, in her official capacity as
Attorney General of the State of California,
March 3, 2015
1:30 p.m.
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The Honorable Howard R. Lloyd
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Defendants.
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Plaintiff THINK COMPUTER CORPORATION and Defendants JAN LYNN OWEN, in
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her official capacity as Commissioner of the Department of Business Oversight, and ROBERT
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VENCHIARUTTI, in his official capacity as Deputy Commissioner of the Department of
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Business Oversight, 1 submit this Joint Case Management Statement pursuant to the Court’s
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December 16, 2014, Order Granting As Modified Motion To Change Time of Initial Case
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Management Conference (Docket No. 55) and the Standing Order for All Judges of the Northern
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District of California, Contents of Joint Case Management Statement.
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1. Jurisdiction and Service
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Plaintiff brings this action on the basis of federal question jurisdiction under 28 U.S.C.
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§§ 1331 and 1343. There are no issues concerning personal jurisdiction, venue or service.
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2. Facts
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According to the First Amended Complaint, Plaintiff Think Computer Corporation is a
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privately-held Delaware corporation that provided money transmission and stored value services.
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(Docket No. 23, FAC ¶¶ 8, 17, 40.) Plaintiff provided these services legally in California prior to
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June 30, 2011 (FAC ¶ 8), but then ceased operations after unsuccessfully attempting to complete
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the application process for a money transmission license (FAC ¶¶ 8, 71-72). Plaintiff did not,
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however, file an application for licensure because Think was told that it would fail to meet the
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unwritten criteria for licensure. (FAC ¶ 72.) Officials of the former California Department of
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Financial Institutions, which was previously responsible for administering and enforcing that law,
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allegedly frustrated the Plaintiff’s attempts to obtain a state license, and then threatened to refer
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Plaintiff to law enforcement for violations of the law. (Id. ¶¶ 4, 46-58.) Nonetheless, the state
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department exempted the Plaintiff’s business operations from the provisions of the Money
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Transmission Act to the extent that the Plaintiff operated outside of California. (Id. ¶ 56.) The
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Plaintiff, however, was still required to comply with the law to the extent it operated within
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California. (Id.) The Plaintiff also avers that it filed tens of complaints with the Department of
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Financial Institutions that colleges, universities, and other companies were not complying with
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Defendants Commissioner of Business Oversight and Deputy Commissioner of Business
Oversight were automatically substituted as defendants in this action. Fed. R. Civ. P. 25(d).
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the Money Transmission Act, to purportedly highlight that the state department was arbitrarily
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singling out Think Computer Corporation for enforcement. (Id. ¶¶ 9-10, 59-72, Sched. A.) Think
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Computer Corporation further alleges a “non-evenhanded and discriminatory” nationwide
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financial regulatory structure that hinders the ability of smaller financial institutions to compete
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against larger entities and banks in providing money transfer services. (Id. ¶¶ 11, 28-39, Sched.
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B.)
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Defendants dispute and deny each substantive allegation in Plaintiff’s First Amended
Complaint.
3. Legal Issues
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Plaintiff filed a First Amended Complaint on January 31, 2012. (Docket No. 23.) In three
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claims for relief, Plaintiff alleged violations of the United States Constitution’s Due Process and
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Equal Protection Clauses for allegedly extinguishing the Plaintiff’s right to use property and
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frustrating its efforts at state licensure, and violations of the Commerce Clause for allegedly
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regulating interstate and foreign commerce and burdening interstate commerce. (Id.) In
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response, on February 14, 2012, Defendants filed a motion to dismiss under FRCP 12(b)(1) for
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lack of subject matter jurisdiction and 12(b)(6) for failure to state a claim upon which relief can
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be granted, on the grounds that certain defendants were immune from suit under the Eleventh
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Amendment, Plaintiff’s claims were not ripe for review, Plaintiff did not have a protected
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property right, the challenged laws were rationally related to legitimate government interests, and
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Congress authorized states to license and regulate Plaintiff’s business activities. (Docket No. 24.)
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4. Motions
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As noted, Defendants filed their motion to dismiss on February 14, 2012. (Docket No. 24.)
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The hearing on Defendants’ motion was held on April 17, 2012. (Docket No. 40.) As of the
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filing of this Statement, the Court has not issued a ruling on the motion.
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With respect to anticipated motions, in the event Defendants do not prevail on the pending
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motion to dismiss, Defendants intend to move for summary judgment and/or summary
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adjudication in due course. Both parties reserve the right to file additional motions to the extent
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they deem it necessary.
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5. Amendment of Pleadings
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The First Amended Complaint named defendants Edmund G. Brown, Jr., in his official
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capacity as Governor of the State of California, Kamala Harris, in her official capacity as
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Attorney General of the State of California, Jacob A. Appelsmith, in his official capacity as
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Senior Advisor to the Governor of the State of California, and Traci Stevens, in her official
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capacity as Acting Secretary of the California Business, Transportation and Housing Agency.
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Defendants filed a motion to dismiss Governor Brown, Attorney General Harris, Senior
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Advisor Appelsmith, and Acting Secretary Stevens based on Eleventh Amendment immunity.
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(Docket No. 24.) Plaintiff filed Plaintiff’s Response and Opposition to State Defendants’ Motion
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to Dismiss on March 3, 2012, and did not oppose dismissal without prejudice of Governor
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Brown, Attorney General Harris, and Acting Secretary Stevens. (Docket No. 30, p. 1, fn. 2.)
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With respect to Senior Advisor Appelsmith, Plaintiff stated that “although his name still appears
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in the caption . . . , he was removed from the charging allegations by Plaintiff’s First Amended
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Complaint. The Defendants’ motion to dismiss as to Mr. Appelsmith was unnecessary, and the
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State Defendants’ assertion that he must be dismissed (again) is therefore moot.” (Id.) Because
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Plaintiff does not oppose the dismissal without prejudice of these defendants, Defendants
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anticipate that they will be dismissed upon the Court’s ruling on their motion to dismiss.
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The First Amended Complaint also named defendants William Haraf, in his official
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capacity as Commissioner of the California Department of Financial Institutions, and Robert
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Venchiarutti, in his official capacity as Deputy Commissioner of the California Department of
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Financial Institutions. Effective July 1, 2013, the Department of Financial Institutions and the
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Department of Corporations were merged into the newly-formed Department of Business
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Oversight within the Business, Consumer Services, and Housing Agency, pursuant to the
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Governor’s Reorganization Plan No. 2 of 2012. See Cal. Fin. Code, §§ 300(b), 321(b), 371(b).
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Jan Lynn Owen is the present Commissioner of Business Oversight, the chief public officer of the
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Department of Business Oversight. Cal. Fin. Code, § 320. Robert Venchiarutti is Deputy
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Commissioner for Money Transmission, within the Division of Financial Institutions, which now
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administers the state laws that were, prior to July 1, 2013, under the charge of the Department of
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Financial Institutions. Cal. Fin. Code, §§ 351(b), 371(b). The Commissioner of Business
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Oversight may be substituted as a party in place of the Commissioner of Financial Institutions.
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Cal. Fin. Code, § 321(b); Fed.R.Civ.Pro., Rule 25(d). Defendants recommend that the caption be
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updated to reflect the current official capacity defendants.
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Defendants do not anticipate any substantive amendments to the First Amended Complaint,
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and do not believe any amendments would assist Plaintiff in stating a claim upon which relief
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could be granted.
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Plaintiff reserves the right to seek leave of court to file a second amended complaint should
it determine that doing so is in its best interest.
Defendants’ motion to dismiss is pending. Defendants have not filed an answer to any
complaint.
The Parties suggest that the deadline for amending pleadings occur sixty (60) days prior to
the close of discovery.
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6. Evidence Preservation
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Attorneys for the parties have reviewed the Guidelines for the Discovery of Electronically
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Stored Information and will meet and confer about steps to preserve electronic information.
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7. Disclosures
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Defendants submit that initial disclosures are not appropriate at this time pending the
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Court’s ruling on their motion to dismiss, and Defendants request that initial disclosures be
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deferred until the pleadings are settled.
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Plaintiff believes that discovery should commence immediately, per Fed. R. Civ. P. 26,
including initial disclosures.
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8. Discovery
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There has been no formal discovery. In the event the case proceeds, Defendants anticipate
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sending a first set of requests for production of documents, followed by a second set of requests
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for production of documents, interrogatories and requests for admission. Once written discovery
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is conducted, Defendants intend to take the deposition of Plaintiff’s President Aaron Greenspan,
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and Christian Calva. As indicated below, discovery should be completed within 16 months from
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denial of the motion to dismiss (by July 1, 2016, counting from the date of the initial Case
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Management Conference).
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Plaintiff anticipates propounding at least one set of requests for production of documents,
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interrogatories, and requests for admission. Plaintiff also anticipates taking several depositions.
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As noted, Defendants request that the Court defer initial disclosures for the time being. To
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the extent electronic records are subject to discovery, and their production is not unduly
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burdensome or oppressive, all parties intend to produce electronic records they possess in a
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format that is satisfactory to all other parties. None of the parties have claimed or alleged a
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waiver of any applicable privileges.
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The Parties do not anticipate any modifications to the applicable discovery rules, but would
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like to reserve their right to propose changes in due course, should the need for any modification
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arise.
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9. Class Actions
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This is not a class action.
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10. Related Cases
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Plaintiff states that as of January 26, 2015, Plaintiff has filed a complaint against the
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Department of Business Oversight and its employee, Michael McQuinn, in small claims court in
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Santa Clara County. The complaint concerns reimbursement for the acquisition of documents
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concerning previous lawsuits involving Robert Venchiarutti that Plaintiff reasonably requested
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through the California Public Records Act, and which the Department of Business Oversight
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refused to turn over with no valid legal basis. The case number is 1-15-SC-059236.
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Defendants dispute Plaintiff’s characterization of this case and do not believe it is related to
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this proceeding.
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11. Relief
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Plaintiff’s First Amended Complaint requests a declaratory judgment that the California
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Money Transmission Act, prior to its amendment in 2013 and again in 2014, violated the United
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States Constitution and was unenforceable; preliminary and permanent injunctions enjoining
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Defendants from implementing or enforcing the California Money Transmission Act against
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Plaintiff; and a judgment for costs and expenses, including attorney fees. (Docket No. 23.)
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12. Settlement and ADR
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This case was assigned to the ADR Multi-Option Program. (Docket No. 4.) Pursuant to
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ADR Local Rule 3-5, Defendants completed the required ADR Certification. (Docket No. 16.)
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The parties filed a Notice of Need for ADR Phone Conference, but have not yet completed the
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phone conference. (Docket No. 17.) The ADR phone conference last scheduled for September
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18, 2012, did not take place due to Defendants’ pending motion to dismiss. Nonetheless, because
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this case involves facial constitutional challenges to state law, Defendants do not believe that it is
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likely amenable to settlement.
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13. Consent to Magistrate Judge For All Purposes
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The Parties have consented to proceed before the Honorable Howard R. Lloyd for all
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further proceedings, including trial and the entry of judgment. (Docket Nos. 19 & 21.)
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14. Other References
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The Parties do not believe that the case is suitable for reference to binding arbitration, a
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special master, or the Judicial Panel on Multidistrict Litigation.
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15. Narrowing of Issues
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As noted, Defendants’ motion to dismiss this action is pending before the Court. In
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addition, Defendants note that the Money Transmission Act was amended after the First
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Amended Complaint was filed, and after the Court heard argument on Defendant’s motion to
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dismiss. Effective January 1, 2015, it was amended to exempt certain payment activities from the
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scope of the act. Cal. Fin. Code, § 2010, subd. (l). The Act was also amended to reduce certain
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licensure requirements at issue in the First Amended Complaint. Cal. Fin. Code, § 2040
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(reducing required initial tangible shareholder equity from not less than $500,000 to between
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$250,000-$500,000, depending upon projected transaction volume). Moreover, the Department
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of Business Oversight is preparing administrative regulations that will further define and clarify
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the Money Transmission Act’s scope, though Plaintiff has reviewed and commented on a draft of
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these regulations and believes that they will have no definitive or clarifying effect. These
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regulations are scheduled to be final no later than July 2015. Defendants believe these statutory
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and regulatory amendments (once enacted) will define and narrow the scope of this action, and
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Defendants recommend supplemental briefing of their motion to dismiss once the regulations are
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final.
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Plaintiff does not believe that any issues in the case can be narrowed at this time, despite
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changes to the Money Transmission Act.
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16. Expedited Trial Procedure
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This case does not appear appropriate for the expedited trial procedure.
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17. Scheduling
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In the event the Court denies the pending motion to dismiss, the Parties propose the
following dates:
Event
Date
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Deadline for amendment of pleadings
months from Order on Motion to Dismiss
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Deadline for completion of fact discovery,
including fact witness depositions
56 days after the deadline for amendment of
pleadings
Deadline for disclosure of all expert witnesses
(name, address, qualifications, resume, and
written report)
days from the deadline for completion of
fact discovery, including fact witness
depositions
Deadline for disclosure of all rebuttal witnesses
(name, address, qualifications, resume, and
written report)
days from deadline for disclosure of all
expert witnesses
Deadline for completion of expert discovery,
including expert witness depositions
days from deadline for disclosure of all
rebuttal witnesses
Deadline to object to qualifications or proposed
testimony of expert and file motion to exclude
days from deadline for completion of expert
discovery
Deadline to file any opposition to objections to
qualifications or proposed testimony of expert
or motion to exclude
days from deadline to object to
qualifications or proposed testimony of expert
or motion to exclude
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Deadline to file any reply in support of
objections to qualifications or proposed
testimony of expert or motion to exclude
days from deadline to file any opposition to
objections to qualifications or proposed
testimony of expert or motion to exclude
Deadline to file dispositive motions
56 days from Order on objections to
qualifications or proposed testimony of expert
and motion to exclude
Deadline to file any opposition to dispositive
motions
days from deadline to file dispositive
motions
Deadline to file any reply in support of
dispositive motion
days from deadline to file any opposition to
dispositive motions
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Pretrial Hearing
49 days from Order on dispositive motions
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Trial
days from Pretrial Hearing
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18. Trial
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Plaintiff requested a jury trial in its First Amended Complaint. (Docket No. 23.)
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Defendants have not yet determined whether to request a jury because many of Plaintiff’s
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claims are pure questions of law, and Defendants will not be able to assess this option until it is
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determined what, if any, of Plaintiff’s claims survive Defendants’ motion to dismiss.
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19. Disclosure of Non-party Interested Entities or Persons
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Defendants have not yet filed a Certification of Interested Entities or Persons pursuant to
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Civil Local Rule 3-15. Defendants hereby reconfirm that they are unaware of any entities with an
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interest that could be substantially affected by the outcome of this case.
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Plaintiff has not yet filed a Certification of Interested Entities or Persons pursuant to Civil
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Local Rule 3-15. Plaintiff hereby reconfirms that it is unaware of any entities with an interest that
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could be substantially affected by the outcome of this case.
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20. Professional Conduct
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All attorneys of record have reviewed the Guidelines for Professional Conduct for the
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Northern District of California.
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21. Other
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Defendants’ Statement:
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After Plaintiff filed the present action, it filed a separate action against several alleged
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money transmitter competitors, venture capital funds, and individual investors who, Plaintiff
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contended, either violated the Money Transmission Act or aided others to violate the Act. Think
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Computer Corp. v. Dwolla, Inc, et al., Case No. 5:13-CV-02054-EJD. The action was dismissed
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and judgment was entered for defendants on March 24, 2014. Think Computer Corp. v. Dwolla,
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Inc, et al., Case No. 5:13-cv-02054-EJD, Docket Nos. 158 & 159.
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Dated: February 24, 2015
Respectfully Submitted,
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KAMALA D. HARRIS
Attorney General of California
MARC A. LEFORESTIER
Supervising Deputy Attorney General
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s/ Ryan Marcroft
RYAN MARCROFT
Deputy Attorney General
Attorneys for All Defendants
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ASCHENBRENER LAW, P.C.
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s/Michael Aschenbrener
MICHAEL ASCHENBRENER
Counsel for Plaintiff
Think Computer Corporation
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CERTIFICATE OF SERVICE
Case Name:
Think Computer Corporation v.
Venchiarutti, et al.
No.
5:11-cv-05496-HRL
I hereby certify that on February 24, 2015, I electronically filed the following documents with
the Clerk of the Court by using the CM/ECF system:
JOINT CASE MANAGEMENT STATEMENT
I certify that all participants in the case are registered CM/ECF users and that service will be
accomplished by the CM/ECF system.
I declare under penalty of perjury under the laws of the State of California the foregoing is true
and correct and that this declaration was executed on February 24, 2015, at Sacramento,
California.
Janice Titgen
Declarant
11665068.doc
s/ Janice Titgen
Signature
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PlainSite Cover Page
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KAMALA D. HARRIS
Attorney General of California
MARC A. LEFORESTIER
Supervising Deputy Attorney General
RYAN MARCROFT
Deputy Attorney General
State Bar No. 230952
1300 I Street, Suite 125
P.O. Box 944255
Sacramento, CA 94244-2550
Telephone: (916) 323-5313
Fax: (916) 324-8835
E-mail: Ryan.Marcroft@doj.ca.gov
Attorneys for All Defendants
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IN THE UNITED STATED DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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SAN JOSE DIVISION
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THINK COMPUTER CORPORATION,
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5:11-cv-05496-HRL
Plaintiff, JOINT CASE MANAGEMENT
STATEMENT
v.
Date:
Time:
Courtroom:
Judge:
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ROBERT VENCHIARUTTI, in his official
capacity as Deputy Commissioner of the
California Department of Financial
Institutions; WILLIAM HARAF, in his
official capacity as Commissioner of the
California Department of Financial
Institutions; TRACI STEVENS, in her
official capacity as Acting Secretary of the
California Business, Transportation and
Housing Agency; JACOB A.
APPELSMITH, in his official capacity as
Senior Advisor to the Governor of the State
of California; EDMUND G. BROWN, JR.,
in his official capacity as Governor of the
State of California; and KAMALA
HARRIS, in her official capacity as
Attorney General of the State of California,
March 3, 2015
1:30 p.m.
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The Honorable Howard R. Lloyd
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Defendants.
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Joint Case Management Statement (5:11-cv-05496-HRL)
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Plaintiff THINK COMPUTER CORPORATION and Defendants JAN LYNN OWEN, in
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her official capacity as Commissioner of the Department of Business Oversight, and ROBERT
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VENCHIARUTTI, in his official capacity as Deputy Commissioner of the Department of
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Business Oversight, 1 submit this Joint Case Management Statement pursuant to the Court’s
5
December 16, 2014, Order Granting As Modified Motion To Change Time of Initial Case
6
Management Conference (Docket No. 55) and the Standing Order for All Judges of the Northern
7
District of California, Contents of Joint Case Management Statement.
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1. Jurisdiction and Service
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Plaintiff brings this action on the basis of federal question jurisdiction under 28 U.S.C.
10
§§ 1331 and 1343. There are no issues concerning personal jurisdiction, venue or service.
11
2. Facts
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According to the First Amended Complaint, Plaintiff Think Computer Corporation is a
13
privately-held Delaware corporation that provided money transmission and stored value services.
14
(Docket No. 23, FAC ¶¶ 8, 17, 40.) Plaintiff provided these services legally in California prior to
15
June 30, 2011 (FAC ¶ 8), but then ceased operations after unsuccessfully attempting to complete
16
the application process for a money transmission license (FAC ¶¶ 8, 71-72). Plaintiff did not,
17
however, file an application for licensure because Think was told that it would fail to meet the
18
unwritten criteria for licensure. (FAC ¶ 72.) Officials of the former California Department of
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Financial Institutions, which was previously responsible for administering and enforcing that law,
20
allegedly frustrated the Plaintiff’s attempts to obtain a state license, and then threatened to refer
21
Plaintiff to law enforcement for violations of the law. (Id. ¶¶ 4, 46-58.) Nonetheless, the state
22
department exempted the Plaintiff’s business operations from the provisions of the Money
23
Transmission Act to the extent that the Plaintiff operated outside of California. (Id. ¶ 56.) The
24
Plaintiff, however, was still required to comply with the law to the extent it operated within
25
California. (Id.) The Plaintiff also avers that it filed tens of complaints with the Department of
26
Financial Institutions that colleges, universities, and other companies were not complying with
27
28
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Defendants Commissioner of Business Oversight and Deputy Commissioner of Business
Oversight were automatically substituted as defendants in this action. Fed. R. Civ. P. 25(d).
2
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the Money Transmission Act, to purportedly highlight that the state department was arbitrarily
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singling out Think Computer Corporation for enforcement. (Id. ¶¶ 9-10, 59-72, Sched. A.) Think
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Computer Corporation further alleges a “non-evenhanded and discriminatory” nationwide
4
financial regulatory structure that hinders the ability of smaller financial institutions to compete
5
against larger entities and banks in providing money transfer services. (Id. ¶¶ 11, 28-39, Sched.
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B.)
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Defendants dispute and deny each substantive allegation in Plaintiff’s First Amended
Complaint.
3. Legal Issues
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Plaintiff filed a First Amended Complaint on January 31, 2012. (Docket No. 23.) In three
11
claims for relief, Plaintiff alleged violations of the United States Constitution’s Due Process and
12
Equal Protection Clauses for allegedly extinguishing the Plaintiff’s right to use property and
13
frustrating its efforts at state licensure, and violations of the Commerce Clause for allegedly
14
regulating interstate and foreign commerce and burdening interstate commerce. (Id.) In
15
response, on February 14, 2012, Defendants filed a motion to dismiss under FRCP 12(b)(1) for
16
lack of subject matter jurisdiction and 12(b)(6) for failure to state a claim upon which relief can
17
be granted, on the grounds that certain defendants were immune from suit under the Eleventh
18
Amendment, Plaintiff’s claims were not ripe for review, Plaintiff did not have a protected
19
property right, the challenged laws were rationally related to legitimate government interests, and
20
Congress authorized states to license and regulate Plaintiff’s business activities. (Docket No. 24.)
21
4. Motions
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As noted, Defendants filed their motion to dismiss on February 14, 2012. (Docket No. 24.)
23
The hearing on Defendants’ motion was held on April 17, 2012. (Docket No. 40.) As of the
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filing of this Statement, the Court has not issued a ruling on the motion.
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With respect to anticipated motions, in the event Defendants do not prevail on the pending
26
motion to dismiss, Defendants intend to move for summary judgment and/or summary
27
adjudication in due course. Both parties reserve the right to file additional motions to the extent
28
they deem it necessary.
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5. Amendment of Pleadings
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The First Amended Complaint named defendants Edmund G. Brown, Jr., in his official
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capacity as Governor of the State of California, Kamala Harris, in her official capacity as
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Attorney General of the State of California, Jacob A. Appelsmith, in his official capacity as
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Senior Advisor to the Governor of the State of California, and Traci Stevens, in her official
6
capacity as Acting Secretary of the California Business, Transportation and Housing Agency.
7
Defendants filed a motion to dismiss Governor Brown, Attorney General Harris, Senior
8
Advisor Appelsmith, and Acting Secretary Stevens based on Eleventh Amendment immunity.
9
(Docket No. 24.) Plaintiff filed Plaintiff’s Response and Opposition to State Defendants’ Motion
10
to Dismiss on March 3, 2012, and did not oppose dismissal without prejudice of Governor
11
Brown, Attorney General Harris, and Acting Secretary Stevens. (Docket No. 30, p. 1, fn. 2.)
12
With respect to Senior Advisor Appelsmith, Plaintiff stated that “although his name still appears
13
in the caption . . . , he was removed from the charging allegations by Plaintiff’s First Amended
14
Complaint. The Defendants’ motion to dismiss as to Mr. Appelsmith was unnecessary, and the
15
State Defendants’ assertion that he must be dismissed (again) is therefore moot.” (Id.) Because
16
Plaintiff does not oppose the dismissal without prejudice of these defendants, Defendants
17
anticipate that they will be dismissed upon the Court’s ruling on their motion to dismiss.
18
The First Amended Complaint also named defendants William Haraf, in his official
19
capacity as Commissioner of the California Department of Financial Institutions, and Robert
20
Venchiarutti, in his official capacity as Deputy Commissioner of the California Department of
21
Financial Institutions. Effective July 1, 2013, the Department of Financial Institutions and the
22
Department of Corporations were merged into the newly-formed Department of Business
23
Oversight within the Business, Consumer Services, and Housing Agency, pursuant to the
24
Governor’s Reorganization Plan No. 2 of 2012. See Cal. Fin. Code, §§ 300(b), 321(b), 371(b).
25
Jan Lynn Owen is the present Commissioner of Business Oversight, the chief public officer of the
26
Department of Business Oversight. Cal. Fin. Code, § 320. Robert Venchiarutti is Deputy
27
Commissioner for Money Transmission, within the Division of Financial Institutions, which now
28
administers the state laws that were, prior to July 1, 2013, under the charge of the Department of
4
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Financial Institutions. Cal. Fin. Code, §§ 351(b), 371(b). The Commissioner of Business
2
Oversight may be substituted as a party in place of the Commissioner of Financial Institutions.
3
Cal. Fin. Code, § 321(b); Fed.R.Civ.Pro., Rule 25(d). Defendants recommend that the caption be
4
updated to reflect the current official capacity defendants.
5
Defendants do not anticipate any substantive amendments to the First Amended Complaint,
6
and do not believe any amendments would assist Plaintiff in stating a claim upon which relief
7
could be granted.
8
9
10
11
12
13
Plaintiff reserves the right to seek leave of court to file a second amended complaint should
it determine that doing so is in its best interest.
Defendants’ motion to dismiss is pending. Defendants have not filed an answer to any
complaint.
The Parties suggest that the deadline for amending pleadings occur sixty (60) days prior to
the close of discovery.
14
6. Evidence Preservation
15
Attorneys for the parties have reviewed the Guidelines for the Discovery of Electronically
16
Stored Information and will meet and confer about steps to preserve electronic information.
17
7. Disclosures
18
Defendants submit that initial disclosures are not appropriate at this time pending the
19
Court’s ruling on their motion to dismiss, and Defendants request that initial disclosures be
20
deferred until the pleadings are settled.
21
22
Plaintiff believes that discovery should commence immediately, per Fed. R. Civ. P. 26,
including initial disclosures.
23
8. Discovery
24
There has been no formal discovery. In the event the case proceeds, Defendants anticipate
25
sending a first set of requests for production of documents, followed by a second set of requests
26
for production of documents, interrogatories and requests for admission. Once written discovery
27
is conducted, Defendants intend to take the deposition of Plaintiff’s President Aaron Greenspan,
28
and Christian Calva. As indicated below, discovery should be completed within 16 months from
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denial of the motion to dismiss (by July 1, 2016, counting from the date of the initial Case
2
Management Conference).
3
Plaintiff anticipates propounding at least one set of requests for production of documents,
4
interrogatories, and requests for admission. Plaintiff also anticipates taking several depositions.
5
As noted, Defendants request that the Court defer initial disclosures for the time being. To
6
the extent electronic records are subject to discovery, and their production is not unduly
7
burdensome or oppressive, all parties intend to produce electronic records they possess in a
8
format that is satisfactory to all other parties. None of the parties have claimed or alleged a
9
waiver of any applicable privileges.
10
The Parties do not anticipate any modifications to the applicable discovery rules, but would
11
like to reserve their right to propose changes in due course, should the need for any modification
12
arise.
13
9. Class Actions
14
This is not a class action.
15
10. Related Cases
16
Plaintiff states that as of January 26, 2015, Plaintiff has filed a complaint against the
17
Department of Business Oversight and its employee, Michael McQuinn, in small claims court in
18
Santa Clara County. The complaint concerns reimbursement for the acquisition of documents
19
concerning previous lawsuits involving Robert Venchiarutti that Plaintiff reasonably requested
20
through the California Public Records Act, and which the Department of Business Oversight
21
refused to turn over with no valid legal basis. The case number is 1-15-SC-059236.
22
Defendants dispute Plaintiff’s characterization of this case and do not believe it is related to
23
this proceeding.
24
11. Relief
25
Plaintiff’s First Amended Complaint requests a declaratory judgment that the California
26
Money Transmission Act, prior to its amendment in 2013 and again in 2014, violated the United
27
States Constitution and was unenforceable; preliminary and permanent injunctions enjoining
28
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Defendants from implementing or enforcing the California Money Transmission Act against
2
Plaintiff; and a judgment for costs and expenses, including attorney fees. (Docket No. 23.)
3
12. Settlement and ADR
4
This case was assigned to the ADR Multi-Option Program. (Docket No. 4.) Pursuant to
5
ADR Local Rule 3-5, Defendants completed the required ADR Certification. (Docket No. 16.)
6
The parties filed a Notice of Need for ADR Phone Conference, but have not yet completed the
7
phone conference. (Docket No. 17.) The ADR phone conference last scheduled for September
8
18, 2012, did not take place due to Defendants’ pending motion to dismiss. Nonetheless, because
9
this case involves facial constitutional challenges to state law, Defendants do not believe that it is
10
likely amenable to settlement.
11
13. Consent to Magistrate Judge For All Purposes
12
The Parties have consented to proceed before the Honorable Howard R. Lloyd for all
13
further proceedings, including trial and the entry of judgment. (Docket Nos. 19 & 21.)
14
14. Other References
15
The Parties do not believe that the case is suitable for reference to binding arbitration, a
16
special master, or the Judicial Panel on Multidistrict Litigation.
17
15. Narrowing of Issues
18
As noted, Defendants’ motion to dismiss this action is pending before the Court. In
19
addition, Defendants note that the Money Transmission Act was amended after the First
20
Amended Complaint was filed, and after the Court heard argument on Defendant’s motion to
21
dismiss. Effective January 1, 2015, it was amended to exempt certain payment activities from the
22
scope of the act. Cal. Fin. Code, § 2010, subd. (l). The Act was also amended to reduce certain
23
licensure requirements at issue in the First Amended Complaint. Cal. Fin. Code, § 2040
24
(reducing required initial tangible shareholder equity from not less than $500,000 to between
25
$250,000-$500,000, depending upon projected transaction volume). Moreover, the Department
26
of Business Oversight is preparing administrative regulations that will further define and clarify
27
the Money Transmission Act’s scope, though Plaintiff has reviewed and commented on a draft of
28
these regulations and believes that they will have no definitive or clarifying effect. These
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regulations are scheduled to be final no later than July 2015. Defendants believe these statutory
2
and regulatory amendments (once enacted) will define and narrow the scope of this action, and
3
Defendants recommend supplemental briefing of their motion to dismiss once the regulations are
4
final.
5
Plaintiff does not believe that any issues in the case can be narrowed at this time, despite
6
changes to the Money Transmission Act.
7
16. Expedited Trial Procedure
8
This case does not appear appropriate for the expedited trial procedure.
9
17. Scheduling
10
11
12
In the event the Court denies the pending motion to dismiss, the Parties propose the
following dates:
Event
Date
13
Deadline for amendment of pleadings
14 months from Order on Motion to Dismiss
14
Deadline for completion of fact discovery,
including fact witness depositions
56 days after the deadline for amendment of
pleadings
Deadline for disclosure of all expert witnesses
(name, address, qualifications, resume, and
written report)
28 days from the deadline for completion of
fact discovery, including fact witness
depositions
Deadline for disclosure of all rebuttal witnesses
(name, address, qualifications, resume, and
written report)
28 days from deadline for disclosure of all
expert witnesses
Deadline for completion of expert discovery,
including expert witness depositions
28 days from deadline for disclosure of all
rebuttal witnesses
Deadline to object to qualifications or proposed
testimony of expert and file motion to exclude
28 days from deadline for completion of expert
discovery
Deadline to file any opposition to objections to
qualifications or proposed testimony of expert
or motion to exclude
28 days from deadline to object to
qualifications or proposed testimony of expert
or motion to exclude
15
16
17
18
19
20
21
22
23
24
25
26
27
28
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Deadline to file any reply in support of
objections to qualifications or proposed
testimony of expert or motion to exclude
21 days from deadline to file any opposition to
objections to qualifications or proposed
testimony of expert or motion to exclude
Deadline to file dispositive motions
56 days from Order on objections to
qualifications or proposed testimony of expert
and motion to exclude
Deadline to file any opposition to dispositive
motions
28 days from deadline to file dispositive
motions
Deadline to file any reply in support of
dispositive motion
21 days from deadline to file any opposition to
dispositive motions
10
Pretrial Hearing
49 days from Order on dispositive motions
11
Trial
28 days from Pretrial Hearing
2
3
4
5
6
7
8
9
12
13
18. Trial
14
Plaintiff requested a jury trial in its First Amended Complaint. (Docket No. 23.)
15
Defendants have not yet determined whether to request a jury because many of Plaintiff’s
16
claims are pure questions of law, and Defendants will not be able to assess this option until it is
17
determined what, if any, of Plaintiff’s claims survive Defendants’ motion to dismiss.
18
19. Disclosure of Non-party Interested Entities or Persons
19
Defendants have not yet filed a Certification of Interested Entities or Persons pursuant to
20
Civil Local Rule 3-15. Defendants hereby reconfirm that they are unaware of any entities with an
21
interest that could be substantially affected by the outcome of this case.
22
Plaintiff has not yet filed a Certification of Interested Entities or Persons pursuant to Civil
23
Local Rule 3-15. Plaintiff hereby reconfirms that it is unaware of any entities with an interest that
24
could be substantially affected by the outcome of this case.
25
20. Professional Conduct
26
All attorneys of record have reviewed the Guidelines for Professional Conduct for the
27
Northern District of California.
28
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1
21. Other
2
Defendants’ Statement:
3
After Plaintiff filed the present action, it filed a separate action against several alleged
4
money transmitter competitors, venture capital funds, and individual investors who, Plaintiff
5
contended, either violated the Money Transmission Act or aided others to violate the Act. Think
6
Computer Corp. v. Dwolla, Inc, et al., Case No. 5:13-CV-02054-EJD. The action was dismissed
7
and judgment was entered for defendants on March 24, 2014. Think Computer Corp. v. Dwolla,
8
Inc, et al., Case No. 5:13-cv-02054-EJD, Docket Nos. 158 & 159.
9
10
Dated: February 24, 2015
Respectfully Submitted,
11
KAMALA D. HARRIS
Attorney General of California
MARC A. LEFORESTIER
Supervising Deputy Attorney General
12
13
14
15
s/ Ryan Marcroft
RYAN MARCROFT
Deputy Attorney General
Attorneys for All Defendants
16
17
18
19
ASCHENBRENER LAW, P.C.
20
21
s/Michael Aschenbrener
MICHAEL ASCHENBRENER
Counsel for Plaintiff
Think Computer Corporation
22
23
24
25
26
27
28
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CERTIFICATE OF SERVICE
Case Name:
Think Computer Corporation v.
Venchiarutti, et al.
No.
5:11-cv-05496-HRL
I hereby certify that on February 24, 2015, I electronically filed the following documents with
the Clerk of the Court by using the CM/ECF system:
JOINT CASE MANAGEMENT STATEMENT
I certify that all participants in the case are registered CM/ECF users and that service will be
accomplished by the CM/ECF system.
I declare under penalty of perjury under the laws of the State of California the foregoing is true
and correct and that this declaration was executed on February 24, 2015, at Sacramento,
California.
Janice Titgen
Declarant
11665068.doc
s/ Janice Titgen
Signature
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