In a recent decision out of Oklahoma (Curtis v. Progressive N. Ins. Co., No. CIV-17-1076-C [W.D. Okla. June 13, 2018]), District Judge Robin J. Cauthron ruled that non-party ESI subpoenaed pursuant to Rule 45 was not subject to the 100 mile-limitation found in the Rule.  Specifically, the Court held there is “no violation of the 100-mile limitation,” as the non-party “subpoena at issue does not require the travel or attendance of any witnesses and Plaintiff is requesting the production of electronic documents.”

Factual Background

After plaintiff was involved in two automobile collisions, Curtis’ insurance company (“Progressive”) engaged Mitchell International, Inc. (“MII”), to create valuations of total loss for its use.  Eventually, Curtis filed the instant lawsuit against Progressive, claiming breach of contract, bad faith, unjust enrichment, and fraud in connection with the valuation of Curtis’ vehicles.  During discovery, Curtis served non-party MII with a subpoena duces tecum requesting the production of documents relating to “the correspondence, purchase, and analysis of the [computer valuation system]” MII used to create valuations of total loss for Progressive (“Subpoena”).  Curtis’ attorneys served the Subpoena upon MII using MII’s Oklahoma registered agent.  MII served written objections to the Subpoena, and meet and confer sessions failed to resolve the impasse reached between MII and Curtis.  And so, Curtis filed a Motion to Compel Compliance with Subpoena (the “Motion”).

MII argued the Court lacked jurisdiction to hear the Motion because MII’s headquarters and principal place of business are located in San Diego, and the Subpoena required compliance more than 100 miles away in Shawnee, Oklahoma.

In response, Curtis argued that her subpoena was valid and enforceable because “a subpoena that commands a person to travel beyond the 100-mile boundary must be quashed however, a Court retains discretion to command compliance with a subpoena for documents which requires production beyond the 100-mile limitation.”

In granting the Motion, Judge Cauthron noted that “Federal district courts enjoy broad discretion over discovery measures” and further stated:

“Here, Plaintiff states—and Mitchell does not dispute—that the information requested can be produced electronically. Mitchell has an Oklahoma registered agent and Progressive Northern Insurance Company continues to use the valuation system licensed and provided by Mitchell in Oklahoma to conduct business. As a result, Mitchell regularly transacts business in Oklahoma. The subpoena at issue does not require the travel or attendance of any witnesses and Plaintiff is requesting the production of electronic documents. This Court finds that there is no violation of the 100-mile limitation for electronic documents…”

This case is a good reminder that the Rule 45 geographic restrictions relates to how far a subpoena-recipient can be compelled to travel in order to comply with a subpoena (see FRCP 45[c]) and that while the geographic limitation applies equally to parties, and party officers, who cannot be commanded to appear for trial outside of the geographic restrictions set forth in the Rule (FRCP 45[c], [d][3][A][ii]), it has no applicability to the production of ESI.

It can hardly be denied that no lawyer wants to apply the wrong legal standard in papers or be criticized by the Judge before whom they are appearing.  Regrettably, just that occurred in Henry v. Morgan’s Hotel Group, (15-cv-1789), and Magistrate Judge Cott (SDNY) was quick to point out defense counsel’s errors.  In doing so, the Judge reminded all practitioners that it is critical to remain abreast of the changes in the law – most relevant here – the amendments to the Federal Rules of Civil Procedure, which took effect December 1, 2015 (“Amendments”).

In one of the first decisions in which the Southern District applied the Amendments and explained the import of them, Magistrate Judge Cott criticized a defense firm for issuing third-party subpoenas to plaintiff’s former employers.  Specifically, Judge Cott indicated that attorneys for Morgan’s Hotel Group ran afoul of civil procedure rules—including the Amendments which were passed, in part, to prevent “fishing expeditions”—when they tried to secure background information on plaintiff Philip Henry.

Background

Plaintiff, Henry, a gay, African American male, worked for two years as a server at the former Isola restaurant in the Mondrian Soho Hotel.  Henry brought a lawsuit against the Morgan Hotel Group for discrimination wherein he alleged that his supervisor Akihide Suzuki subjected him to racial and homophobic abuse.  He further alleged that when he complained to more senior supervisors, Suzuki retaliated and gave Henry fewer, less desirable shifts, more banal tasks and subjected Henry to needless disciplinary measures.  Henry alleged that the restaurant director, Greg Cau, joined in the harassment and disciplined Henry for various unfounded grievances.

On December 24, 2015, defense counsel served subpoenas on third parties—each prior employers of Henry’s—wherein counsel sought all documents and communications relating to Plaintiff “including but not limited to personnel files, disciplinary files or any other employment documents or records.”

Henry’s attorneys moved to quash the subpoenas, and Magistrate Judge Cott granted that motion.  In doing so, Judge Cott stated a number of bases for doing so.  First, Judge Cott found that filing subpoenas on third parties and plaintiff’s counsel at the same time violated Federal Rule of Civil Procedure 45, which requires that plaintiff’s counsel be notified of defendant’s intention to subpoena non-parties.  Judge Cote observed, “[t]he subpoenas were served on Christmas Eve (an arguably sharp tactic to begin with) on both third-party employers and Henry’s counsel” and noted that, “[s]ome courts have quashed subpoenas due to untimely notice” only.

Judge Cott further stated that other courts require in addition to untimely notice, a showing of prejudice to the Plaintiff before they will quash the subpoena.  Here, Judge Cott found, Henry made a showing of prejudice.  Specifically, the subpoenas were sent to restaurant groups that own more than a dozen establishments in New York City and, if Henry were to apply for employment with any of these restaurants/hotels, his chances of securing employment could be compromised.  Judge Cott stated specifically, “the court would hardly be surprised that, if defendant (or any other establishment) knew that an applicant for employment had bought a lawsuit against another restaurant for discrimination, it might take that into account in the hiring process.”

Nonetheless, the Court found the subpoenas could be quashed on other grounds. “The scope of the subpoenas themselves is problematic, to say the least,” he said. “Blanket requests of this kind are plainly overbroad and problematic.”  Moreover, Defendant “mistakenly invoked the ‘reasonably calculated to lead to the discovery of admissible evidence’ standard of the prior version of Rule 26(b)(1)….That rule was amended last year and this language, long relied on by counsel to seek wide-ranging discovery, has now been eliminated.”  Ouch.  Motion to quash granted and a written decision noting defense counsel’s error.

Judge Cott went on to note that the new rule requires proportionality such that the information sought must be “proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to the relevant information, the parties resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.”  The purpose of the Amendments was to discourage overuse of broad reaching discovery by considering “proportionality” before ordering production of the requested material and here Defendant fails the analysis.

The Court noted that “[t]he issue presented here is whether defendant’s actions directed toward Henry were based on valid considerations or violated the discrimination laws.”  Judge Cote noted that “Henry’s prior employment has little if any bearing on this issue.”

So what’s the moral of the story?  If nothing else, the Henry case is important reminder that we must understand and invoke the new federal rules and stay abreast of the case law interpreting those rules.