RQ Construction, Inc. v. Ecolite Concrete U.S.A., Inc. et al

Filing 26

ORDER Denying Defendants' Request for Protective Order Quashing or Limiting Scope of the Third Party Subpoenas (Doc. No. 25 ). Signed by Magistrate Judge William V. Gallo on 8/4/2010. (knh)

RQ Construction, Inc. v. Ecolite Concrete U.S.A., Inc. et al

Doc. 26

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Neither subpoena issued from the Southern District of California, but for sake of judicial economy this Court addresses the Defendants' objections.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

RQ CONSTRUCTION, INC., Plaintiff, v. ECOLITE CONCRETE U.S.A., INC., ET AL., Defendants. I. INTRODUCTION

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Civil No. 09CV2728BEN(WVG) ORDER DENYING DEFENDANTS' REQUEST FOR PROTECTIVE ORDER QUASHING OR LIMITING SCOPE OF THIRD PARTY SUBPOENAS (Doc. No. 25)

Defendants' Request for Protective Order Quashing or Limiting Scope of the Third Party Subpoenas (Doc. No. 25) is DENIED. Defendants request a protective order quashing or limiting the scope of Plaintiff's Subpoena Deuces Tecum to Defendants' insurance broker, Lemas & Associates, and to Defendants' insurance provider, Illinois Union Insurance Company. The Court finds the documents requested nonprivileged and relevant to the case at bar. II. BACKGROUND On June 23, 2010, Plaintiff notified Defendants regarding two subpoenas deuces tecum: one directed to their insurance broker, Lemas & Associates, and the other to their insurance carrier, Illinois Union Insurance Company.1 The subpoenas demand compliance no

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later than August 6, 2010.2 Neither insurance broker, nor carrier, object to the subpoenas. Defendants have filed the instant dispute over the subpoenas alleging financial privacy protections under the GrammLeachBliley Act and irrelevance. III. DISCUSSION A subpoena may command a nonparty to produce designated documents, electroni cally stored information, or tangible things in its possession, custody or control. See Fed.R.Civ.P. 45(a)(1)(A)(iii). These items are properly discoverable if they relate to "any nonprivileged matter that is relevant to any party's claim or defense." Fed.R.Civ.P. 26(b). The information sought need not be admissible at the trial if the information sought "appears reasonably calculated to lead to the discovery of admissible evidence." Id. A relevant matter is "any matter that bears on, or that reasonably could lead to other matters that could bear on, any issue that is or may be in the case." Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978). Because discovery is designed to define and clarify the issues, it is not limited to only those specific issues raised in the pleadings. Id. In addition to the discovery standards under Rule 26 incorporated by Rule 45, Rule 45 itself provides that "on timely motion, the court by which a subpoena was issued shall quash or modify the subpoena if it ... subjects a person to undue burden." Rule 45(c)(3)(A)(iv). Of course, "if the soughtafter documents are not relevant, nor calculated to lead to the discovery of admissible evidence, then any burden whatsoever imposed would be by definition `undue.' " Compaq Computer Corp. v. Packard Bell Elec., Inc., 163 F.R.D. 329, 33536 (N.D.Cal.1995). Underlying the protections of Rule 45 is the recognition that "the word `nonparty' serves as a constant reminder of the reasons for the limitations that characterize `thirdparty' discovery." Dart Indus. Co. v. Westwood Chem. Co., 649 F.2d 646, 649 (9th Cir.1980) (citations omitted). Thus, a court determining the propriety of a subpoena balances the relevance of the discovery sought, the requesting party's need, and the potential hardship to the party subject to the ///

The parties' Joint Statement notes a new production date other than the July 30, 2010, deadline noticed on t h e subpoenas.

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subpoena. Heat & Control, Inc. v. Hester Industries, Inc., 785 F.2d 1017, 1024 (Fed. Cir. 1986); Gonzales v. Google, 234 F.R.D. 674, 680 (N.D.Cal.2006); see also Fed. R. Civ. Pro. 45(c)(3)(B)(iii). Defendants assert that the information sought is protected under the GramLeach Bliley Act. This argument is unavailing. The GrammLeachBliley Act requires financial institutions, including insurance companies, to protect the security and confidentiality of their customers' nonpublic personal information. See 15 USC § 6801(a), 15 USC § 6809(3)(A). Regardless, a financial institution does not violate the act if it provides the information in response to judicial process, including civil discovery. 15 USC § 6802(e)(8); see Marks v. Global Mortg. Group, Inc., 218 F.R.D. 492, 496 (S.D. W. Va. 2003); see also William Schwarzer et al., Cal. Prac. Guide Fed. Civ. Pro Before Trial Ch. 11(III)B §1021. Neither the insurance provider, nor broker, subpoenaed in the instant dispute would violate the GrammLeachBliley Act by providing the responsive documents to Plaintiff. Defendants contend that the subpoenas request irrelevant information. Plaintiff explains that the requests aim to elicit potential evidence that Defendants knew of litigation risks or the decreased value of their company. This Court finds Plaintiff with the better argument. Defendants complain that the subpoenas request irrelevant information including insurance applications, expired policies, and reservation of rights letters. However, any representation that Defendants provided to their insurance company may provide evidence to support Plaintiff's fraud claim. The Court declines to modify the scope in light of the relevance of the information sought. Also persuasive is the third parties', Lemas & Associates and Illinois Union's, failure to object to the subpoenas. Thus, in balancing the relevance of the discovery sought, the requesting party's need, and the potential hardship to the party subject to the subpoena, the Court concludes that the subpoenas are appropriate and declines to issue a protective order to quash or modify them. /// /// /// ///

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IV.

CONCLUSION Defendants' Request for Protective Order Quashing or Limiting Scope of the Third

Party Subpoenas (Doc. No. 25) is DENIED. The Court finds the documents requested to be non privileged and relevant to the case at bar. DATED: August 4, 2010

Hon. William V. Gallo U.S. Magistrate Judge

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