United States District Court, D. Arizona
Douglas L. Rayes United States District Judge
Before the Court is Petitioners Venus Medical Inc. and Michael Howe’s Motion for Contempt for Failure to Comply with Subpoenas. (Doc. 1.) The motion relates to two subpoenas for production of documents issued from the Northern District of Georgia to nonparties David G. Roberts, an Arizona resident, and David G. Roberts & Associates, Inc., an Arizona corporation. (Doc. 1-1). The motion is fully briefed, and neither party requested oral argument. For the reasons stated below, the motion is transferred to the Northern District of Georgia.
The following facts are undisputed unless otherwise noted. On November 3, 2014, the Northern District of Georgia issued two subpoenas on behalf of Venus to David G. Roberts and David G. Roberts & Associates, Inc. (collectively referred to as “Respondents”). The subpoenas relate to a breach of contract action before Judge Mark H. Cohen, see Venus Medical, Inc. v. Skin Cancer & Dermatology Center, P.C., No. 1:12-cv-4425-MHC, to which Respondents are not parties. Roberts, however, is an employee of the defendant in the underlying action.
The subpoenas directed Respondents to produce all “business, practice management or financial reports, recommendations or analyses you have prepared or provided to [the defendants] between April 2010 and the present.” (Doc. 1-1 at 28 (alterations added).) In addition, Respondents were to produce all “analyses, mark-ups, drafts, memoranda, communications or other documents that evidence, refer or relate to negotiation of the 2010 Restructured Agreement.” (Id.) Respondents never challenged the subpoenas, and they ultimately produced 118 documents by December 1, 2014.
Nearly eight months later, on June 30, 2015, Roberts was deposed in connection with the underlying action. (Doc. 1-3 at 2.) At the deposition, it was discovered that Roberts did not disclose a February 24, 2010 memorandum created by his wife detailing meeting notes (the “meeting notes”) of negotiations regarding the contract at issue. Venus also discovered that multiple versions of the meeting notes existed, some with changes material to the issues in the underlying case. When asked why he did not disclose the document, Roberts stated that he did not think the subpoena was directed at his wife and that it was in his wife’s filing cabinet. (Id. at 13-14.)
Venus also discovered that Roberts did not disclose a financial document referred to as a “monitor, ” which was prepared by Roberts for the defendant in the underlying action. Roberts ultimately produced the monitor, but did not disclose the financial documents on which they were based. Roberts claims the monitors were in the custody of another employee of the defendant and were disclosed to Venus by the defendant. (Doc. 8 at 11.)
As a result of these alleged deficiencies, Venus issued a Request for Entry Upon Land for Inspection for the computers of Roberts and his wife in order to conduct a forensic computer search for all documents and correspondence related to the meeting notes. (Doc. 1-4.) Roberts retained counsel and refused the inspection. He then sent his computers to an independent forensic examiner, Brian Chase. Venus ultimately consented to Chase performing the search of the computers.
The search revealed multiple versions of the meeting notes and disclosed that Roberts had sent and received multiple versions of the meeting notes via email, some of which were dated after the underlying action had commenced. (Doc. 1-6.) In an email dated May 10, 2013, Roberts indicated that he placed the meeting notes in his own correspondence file. (Id. at 5.)
After receiving the report, Venus discovered that the forensic examiner did not conduct a broader search for documents that merely “discussed” the meeting notes. The examiner allegedly only searched for the meeting notes themselves and any emails to which they were attached. Venus also raises other alleged deficiencies in Roberts’ production under the subpoenas.
On October 2, 2015, Venus filed the instant motion requesting the Court to transfer to motion to the Northern District of Georgia, or alternatively, to hold Roberts and his company in contempt for failing to comply with the subpoenas and order a complete forensic search of the computers.
Subpoenas served on nonparties are governed by Fed.R.Civ.P. 45, which requires that “a subpoena must be issued by the court where the underlying action is pending, but challenges to the subpoena are to be heard by the district court encompassing the place where compliance with the subpoena is required.” Woods ex rel. United States v. SoutherCare, Inc., 303 F.R.D. 405, 406 (N.D. Ala. 2014). “When the court where compliance is required did not issue the subpoena, it may transfer a motion under this rule to the issuing court if the person subject to the subpoena consents or if the court finds exceptional circumstances.” Fed.R.Civ.P. 45(f). The Advisory Committee note further explains the relevant considerations underlying the exceptional circumstances standard:
In the absence of consent, the court may transfer in exceptional circumstances, and the proponent of transfer bears the burden of showing that such circumstances are present. The prime concern should be avoiding burdens on local nonparties subject to subpoenas, and it should not be assumed that the issuing court is in a superior position to resolve subpoena-related motions. In some circumstances, however, transfer may be warranted in order to avoid disrupting the issuing court’s management of the underlying litigation, as when that court has already ruled on issues presented by the motion or the same issues are likely to arise in discovery in many ...