United States District Court, D. Arizona
R. Prasad Industries, a Guyanese company, Plaintiff,
Flat Irons Environmental Solutions Corporation (aka/dba
ORDER RE: THIRD PARTY'S MOTION TO QUASH SUBPOENA
JAMES A. TEILBORG, District Judge.
Currently pending before the Court is a Motion to Quash Subpoena (Doc. 102) filed by third party, Michela Di Carlo, and her business, MPP Consulting (collectively, "Di Carlo"). Plaintiff R. Prasad Industries ("Prasad") has also filed a Response (Doc. 106) in opposition to the motion, and Di Carlo has filed a Reply (Doc. 108). The Court now rules on the motion.
Prasad brought the Complaint (Doc. 1) against Defendants Flat Irons Environmental Solutions Corporation ("Flat Irons"), Gary Miller, Jane Doe Miller, Robert Carlile, and Jane Doe Carlile (collectively "Defendants"), alleging a breach of contract (and related claims) stemming from the failed purchase of large quantities of fertilizer. More specifically, Prasad alleges that, beginning on or about August 29, 2012, Prasad negotiated a contract to purchase 5, 000 metric tons of urea fertilizer from Defendants. (Doc. 1 ¶¶ 17, 19). On September 19, 2012, Prasad wired $525, 000 to Defendants but never received any fertilizer. ( Id. ¶¶ 31, 56).
At the time it received the payment from Prasad, Flat Irons had only $3, 895.55 in its sole bank account. (Doc. 104 at 164). In the following months, defendants Robert Carlile and Gary Miller, the two sole officers and shareholders of Flat Irons, wrote over 35 checks to themselves totaling more than $196, 000. ( Id. at 179-219). On November 19, 2012, Flat Irons also wired $190, 000 from its bank account to Di Carlo's account with Union Bank of California ("UBOC"). (Doc. 106-1 at 2, 6). During discovery, on March 7, 2014, Prasad issued a Rule 45 subpoena duces tecum to UBOC, commanding the bank to produce "signature cards, corporate board authorization minutes or partnership resolutions or articles of organization for the entity/dba MPP Consulting... [and] copies of any and all incoming/outgoing wires, cancelled checks, deposits and withdrawals for 2012-13." (Doc. 102 at 9). The subpoena required that the documents be submitted to Prasad's counsel in Scottsdale, Arizona, by March 28, 2014. ( Id. ). The branch of UBOC used by Di Carlo, and to which Plaintiff's counsel issued the subpoena, is located in Burbank, California. ( Id. ).
UBOC notified Di Carlo of the subpoena in a letter dated March 17, 2014. ( Id. at 8-9). On March 25, 2014, Di Carlo sent a letter to Prasad requesting that the subpoena be cancelled immediately because the information sought constituted her private financial records and she was not a party to the litigation. ( Id. at 14). Along with the letter, Di Carlo provided a copy of her November 2012 UBOC account statement that showed only receipt of the wire transfer from Flat Irons for $190, 000 and a total for deposits during the month of $190, 222.97, with information regarding all other transactions redacted. ( Id. at 15-17). Di Carlo provided no other information requested by the subpoena. ( Id. ). On March 26, 2014, Di Carlo filed the instant Motion to Quash Subpoena. (Doc. 102).
II. LEGAL STANDARD
Federal Rule of Civil Procedure 45(d)(3) governs motions to quash or modify a subpoena. More specifically, Rule 45(d)(3)(A) identifies circumstances in which a court is required to grant a motion to quash or modify the subpoena. This contrasts with Rule 45(d)(3)(B), which "identifies circumstances in which a subpoena should be quashed unless the party serving the subpoena shows a substantial need and the court can devise an appropriate accommodation to protect the interests of the witness." Fed.R.Civ.P. 45(c)(3)(B) advisory committee's note to the 1991 Amendment (emphasis added). Rule 45(d)(3)(A) provides in pertinent part:
(A) On timely motion, the issuing court must quash or modify a subpoena that
(ii) requires a person to comply beyond the geographical limits specified in Rule 45(c);
(iii) requires disclosure of privileged or other protected matter, if no exception or waiver applies; or
(iv) subjects a person to undue burden
Fed. R. Civ. P. 45(d)(3)(A)(ii)-(iv). The pertinent part of Rule 45(c) states: "A subpoena may command: production of documents, electronically stored information, or tangible things at a place within 100 miles of where the person resides, is employed or regularly transacts business in person." Fed.R.Civ.P. 45(c)(2)(A).
Federal Rule of Civil Procedure 26 is also relevant here because it defines the permissible scope of discovery, and a Rule 45 subpoena is subject to that same scope. Fed.R.Civ.P. 45(d)(a) advisory committee's note to the 1970 Amendment. See also, e.g., Transcor, Inc. v. Furney Charters, Inc., 212 F.R.D. 588, 591 (D. Kan. 2003) (in considering a motion to quash a subpoena duces tecum, the court must also consider whether the subpoena "is overly broad or seeking irrelevant information under the same standards set forth in Rule 26(b)"). Rule 26(b) provides for a broad scope of discovery: "Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense.... Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Fed.R.Civ.P. 26(b)(1).
This mere "relevance" standard, however, does not apply to nonparties. See Dart Indus. Co. v. Westwood Chem. Co., 649 F.2d 646, 649 (9th Cir. 1980) ("While discovery is a valuable right and should not be unnecessarily restricted..., the necessary' restriction may be broader when a nonparty is the target of discovery."); see also, e.g., Laxalt v. McClatchy, 116 F.R.D. 455, 458 (D. Nev. 1986) ("The standards for nonparty discovery... require a stronger showing of relevance than for simple party discovery."). To obtain discovery from a nonparty, a party must demonstrate that its need for discovery outweighs the nonparty's interest in nondisclosure. See, e.g., Slater Steel, Inc. v. Vac-Air Alloy Corp., 107 F.R.D. 246, 248 (W.D.N.Y. 1985) (granting a nonparty's motion for a protective order against discovery involving entry upon land of nonparty in a fraud and contract action because the nonparty demonstrated that the information sought is highly confidential commercial matter and that disclosure would cause it significant harm). Furthermore, Rule 26(b)(2)(C) also requires courts to limit discovery where "the discovery sought is unreasonably cumulative or ...