Pravati Capital LLC et al v. Moore et al

Filing 26

ORDER granting 1 Motion to Quash. The subpoena issued to Plaintiffs by the United States District Court for the Eastern District of New York, in Moore, et al. v. Rubin EDNY Case No. 1:17-CV-06404-BMC, is QUASHED. Plaintiffs may file a Motion for At torney's Fees and Nontaxable Costs within 14 days from the date of entry of judgment. The stay imposed on the Order granting Defendant's counsel's Motion to Withdraw (Doc. 25 ) is LIFTED. The Clerk must mail a copy of this Order to each Defendant/Respondent listed in page 3 of Doc. 24 -1. The Clerk must enter judgment for Plaintiffs and close this case. Signed by Judge Michael T Liburdi on 9/26/24. (DXD)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Pravati Capital LLC, et al.,

No. CV-24-02119-PHX-MTL

Plaintiffs,

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v.

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Amy Moore, et al.,

ORDER
NOT FOR PUBLICATION

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Defendants.

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I

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Plaintiffs move to quash a subpoena duces tecum served on them by Defendants and
their counsel.

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In a civil matter filed in the United States District Court for the Eastern District of

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New York (“EDNY”), Defendants, as plaintiffs there in a sex-trafficking case, prevailed

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against an individual defendant who is not involved in this case. See Moore, et al. v. Rubin

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EDNY Case No. 1:17-CV-06404-BMC (“Rubin”). Plaintiffs in this case, Pravati Capital

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LLC and affiliated entities, financed Defendants’ counsel during the Rubin litigation.

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The District Court in EDNY entered judgment in Defendants’ favor in the Rubin

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case. As the successful party, Defendants sought attorney’s fees against the defendant. In

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the context of that issue uncertainty arose over Defendants’ own attorney’s fees calculation.

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Defendants and their counsel withdrew their application for attorneys’ fees, aligned

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themselves with the defendant in that case, and proceeded to subpoena documents from

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Plaintiffs. Defendants want to recover expenses related to an interest reserve charge on the

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loan to Defendants’ counsel.

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Now the plot thickens. Plaintiffs object to the subpoena on several grounds. They

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argue that Defendants’ counsel has improperly created confusion over the attorney’s fees

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issue in Rubin to subpoena documents that are unrelated to the Rubin suit but might be used

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by counsel to “escape personal liability in an unrelated matter.” (Doc. 20 at 2) According

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to Plaintiffs, that is a “$16 million award against [Defendant’s counsel] and his firm”

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ordered in arbitration between counsel and Plaintiffs concerning a breach of the loan

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agreement. (Id. at 3) Plaintiffs also report that the arbitrator, a retired chief justice of the

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Arizona Supreme Court, concluded that counsel “committed breach of contract in

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connection with his forfeiture of Pravati’s collateral following his conversion of client

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funds, as well as two other breaches.” (Id. at 5) Moreover, the arbitrator made specific

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findings about the interest reserve and the amount held back. (Id.) As part of a pre-award

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meet and confer, Plaintiffs provided counsel with “a detailed breakdown of the damages

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calculation, including an amortization schedule” (Id.) The arbitration award is now the

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subject of a suit in Arizona Superior Court, where Plaintiffs seek a judgment confirming

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the award and counsel has moved to vacate the award. (Doc. 14-11)

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II

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At the request of a party, Federal Rule of Civil Procedure 45 authorizes an issuing

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court to command, from a non-party, the production of “documents, electronically stored

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information, or tangible things.” Fed. R. Civ. P. 45(a)(1)(C). The responding party may

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move to quash the subpoena where, among other things, it “subjects a person to undue

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burden . . . .” Id. 45(d)(3)(A)(iv); see also Orthoflex, Inc. v. Thermotek, Inc., No. 12-MC-

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00013-PHX-JAT, 2012 WL 1038801, at *1 (D. Ariz. Mar. 28, 2012). As the moving party,

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Plaintiffs bear the burden of persuasion. Soto v. Castlerock Farming & Transp., Inc., 282

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F.R.D. 492, 504 (E.D. Cal. 2012). “A subpoena issued to a non-party pursuant to Rule 45

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is subject to Rule 26(b)(1)’s overriding relevance requirement. The party issuing the

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subpoena must demonstrate that the information sought is relevant and material to the

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allegations and claims at issue in the proceedings.” Mizrahi v. Equifax Info. Servs., LLC,

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345 F.R.D. 392, 396 (E.D.N.Y. 2024) (cleaned up). “The test for ‘relevance,’ in the context

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of a Rule 45 subpoena to a non-party, is no different than the test under Rules 26 and 34.”

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Wells Fargo Bank NA v. Wyo Tech Inv. Grp. LLC, 385 F. Supp. 3d 863, 873 (D. Ariz.

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2019). Non-parties who are entitled to a subpoena are entitled to “extra protection from the

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courts” and must not be subject to an “undue burden or expense.” Soto, 282 F.R.D. at 504

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(quoting High Tech Med. Instrumentation v. New Image Indus., 161 F.R.D. 86, 88 (N.D.

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Cal. 1995), Fed. R. Civ. P. 45(d)(1)).

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III

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Plaintiffs primarily argue [i] that the subpoena is untimely because discovery in the

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underlying litigation has closed long ago and [ii] it does not seek information relevant to

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that case. Defendants maintain that the subpoena is necessary to help resolve the post-trial

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attorney’s fees issue. They also attack Plaintiffs’ cited authorities because they hold only

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that third-party merits discovery cannot proceed after discovery closes. The cases do not

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apply to discovery conducted on a post-trial issue.

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First, the Court finds that the subpoena is untimely. “Rule 45 does not authorize a

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party to issue a subpoena after discovery closes . . . .” Moore v. USC Univ. Hosp., Inc., No.

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CV-07-7850-PA (Ex), 2019 WL 1751817, at *1 (C.D. Cal. Feb. 12, 2019) (quoting

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Niemeyer v. Ford Motor Corp., No. 2:09-CV-2091 JCM PAL, 2012 WL 6644622, at *1

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(D. Nev. Dec. 20, 2012)). Discovery has closed in the Rubin litigation and therefore a Rule

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45 subpoena is no longer available. Defendants themselves admit in their response brief

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that the subpoena is unrelated to merits discovery in the Rubin litigation.

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Second, the Court finds that the information sought is not relevant to Defendants’

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claims in the Rubin litigation. Plaintiffs issued a loan to Defendants’ counsel, not to

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Defendants themselves. The loan was available to counsel for any purpose, not just

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covering counsel’s attorney’s fees.

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Finally, even if the issue is relevant to the Rubin attorney’s fees issue, Defendants’

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counsel already has the information sought. In the breach-of-contract dispute, the arbitrator

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already found that the interest reserve exists, and Plaintiffs provided him with the

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calculation information.

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For these reasons, the Court concludes that responding to the subpoena would
therefore unduly burden Plaintiffs. The Court will grant Plaintiff’s Motion to Quash.*

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IT IS THEREFORE ORDERED that Plaintiffs’ Motion to Quash (Doc. 1) is

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GRANTED. The subpoena issued to Plaintiffs Pravati Capital LLC, Pravati Investment

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Fund III, LP, and Pravati Investment Fund IV, LP, by the United States District Court for

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the Eastern District of New York, in Moore, et al. v. Rubin EDNY Case No. 1:17-CV-

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06404-BMC, is QUASHED.

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IT IS FURTHER ORDERED that Plaintiffs may file a Motion for Attorney’s Fees

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and Nontaxable Costs pursuant to Federal Rule of Civil Procedure 54(d) and LRCiv 54.2

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within 14 days from the date of entry of judgment. The Court expresses no position on the

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merits of any such motion in this Order.

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IT IS FURTHER ORDERED that the stay imposed on the Order granting
Defendant’s counsel’s Motion to Withdraw (Doc. 25) is LIFTED.

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IT IS FURTHER ORDERED that the Clerk of Court must mail a copy of this
Order to each Defendant/Respondent listed in page 3 of Docket No. 24-1.

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IT IS FINALLY ORDERED that the Clerk of Court must enter judgment for
Plaintiffs and close this case.

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Dated this 26th day of September, 2024.

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The Court need not resolve Plaintiffs’ remaining objections.
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