Poly-Med, Inc. v. Novus Scientific PTE LTD. et al

Filing 14

ORDER granting in part and denying in part 1 Motion to Enforce Out of District Subpoena. Order to Show Cause Response due by 6/26/2017. Order to Show Cause Reply due by 7/3/2017. Order to Show Cause Hearing set for 7/10/2017 at 9:00 AM before Magistrate Judge William V. Gallo. Signed by Magistrate Judge William V. Gallo on 5/25/2017. (jjg)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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POLY-MED, INC.,

Case No.: 17-CV-649-DMS-WVG
Plaintiff,

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ORDER GRANTING IN PART AND
DENYING IN PART MOTION TO
COMPEL

v.
NOVUS SCIENTIFIC PTE LTD., et al.,
Defendants.

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[ECF No. 1]

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I. INTRODUCTION

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Present before the Court is defendants Novus Scientific PTE LTD, Novus Scientific,

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Inc., and Novus Scientific AB (collectively “Defendants” or “Novus”) unopposed Motion

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to Compel an out of district subpoena. (Def.s’. Mot., ECF No. 1.) This ancillary discovery

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proceeding is related to a subpoena served on nonparty Dr. James Chao (“Chao”) in an

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underlying action pending in the United States District Court for the District of South

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Carolina. See Poly-Med, Inc., v. Novus Scientific PTE LTD, et al, No. 15-CV-1964-JMC

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(D.S.C. filed May 8, 2015). Defendants are seeking a court order to compel compliance

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with the subject subpoena.

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Defendants also seek attorney’s fees that have resulted from filing the present

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Motion. The Court construes this as a motion for contempt sanctions as this is the only

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sanctions remedy allowed under Rule 45. See Fed. R. Civ. P. 45(g); Pennwalt Corp. v.
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Durand-Wayland, Inc., 708 F.2d, 492, 494 n. 4 (9th Cir. 1983); see also Molina v. City of

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Visalia, No. 13-CV-01991-LJO-SAB, 2015 WL 5193584, at *2 (E.D. Cal. Sept. 4, 2015)

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(“The only authority in the Federal Rules of Civil Procedure to sanction a nonparty to an

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action for failure to comply with a subpoena is Rule 45(g).”).

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For the reasons set forth below, the Court GRANTS in part and DENIES in part

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Defendants’ Motion. Additionally, the Court issues an ORDER TO SHOW CAUSE as

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to why Chao should not be held in contempt for his failure to comply with the subpoena.

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II. RELEVANT BACKGROUND

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On May 8, 2015, Plaintiff filed a Complaint in the United States District Court for

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the District of South Carolina alleging breach of contract, tortious interference with

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contract, misappropriation of trade secrets, and unfair trade practices. Poly-Med, Inc., v.

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Novus Scientific PTE LTD, et al, No. 15-CV-1964-JMC, ECF No. 1. On March 14, 2016,

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Defendants each filed their Answers as well as Counterclaims against Plaintiff alleging

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breach of contract, intentional interference with contractual relations, defamation, and

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unfair trade practices. Id., ECF Nos. 82-84.

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On November 13, 2016, Chao was served personally with a subpoena duces tecum

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pursuant to Rule 45. (Mallory Decl., Ex. F at 2.) On November 16, 2016, Chao responded

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by sending an email to Jennifer Mallory, counsel for Defendants. (Id., Ex G at 2.) In this

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email, Chao indicated he was embarking on a trip to China that would last twelve days,

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and that he would not be able to respond at the time proscribed in the subpoena. (Id.) Chao

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further explained he had not yet discussed the matter with his attorney and he requested an

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additional two to three weeks to “properly respond.” (Id.) That same day, defense counsel

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responded and requested Chao direct his attorney to contact defense counsel promptly. (Id.)

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On January 9, 2017, having not received a response from Chao, defense counsel again

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emailed Chao requesting compliance with the subpoena and warned Chao that Defendants

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may seek a motion to compel compliance with the subpoena. (Id., Ex. H at 2.)

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On March 30, 2017, Defendants brought the present Motion. On April 14, 2017, the

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Court issued an order setting a briefing schedule requiring: (1) Defendants to effect service
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on Chao on or before April 21, 2017; (2) Chao to file an opposition to Defendants’ Motion

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on or before May 12, 2017; and (3) staying compliance with the subject subpoena pending

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the Court’s ruling on the subject motion. (ECF No. 7.) The scheduling order also granted

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Defendants leave to file a reply on or before May 19, 2017. (Id.) Chao did not file an

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opposition to the motion. On May 19, 2017, Defendants timely filed a Reply. (Def.s’ Reply,

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ECF No. 11.)

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III. MOTION TO COMPEL

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Under Rule 45(a)(1)(C), a nonparty to a civil suit may be subpoenaed for documents

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relevant to the suit. A nonparty served with the subpoena duces tecum may serve the

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propounding party with a written objection within fourteen days after service or before the

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time of compliance, if less than fourteen days. Fed. R. Civ. P. 45(d)(2)(B). “A nonparty’s

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failure to timely make objections to a Rule 45 subpoena generally requires the court to find

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that any objections have been waived.” Moon v. SCP Pool Corp., 232 F.R.D. 633, 636

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(C.D. Cal. 2005).

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Chao has raised no objections to the subject subpoena. Rather, Chao requested

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additional time to consult with counsel before replying to the subpoena. That occurred over

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five months ago. Chao was then ordered to respond to this motion to compel - another

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opportunity to explain why he has failed to respond to the subpoena. Chao disregarded the

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Court’s order and offered no explanation for his unresponsiveness nor any objections to

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the subpoena. Thus, Chao has waived any objections he may have had with the subject

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subpoena.
Therefore, Defendants’ Motion to Compel is GRANTED.

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IV. ORDER TO SHOW CAUSE

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A. Properly Issued and Served Subpoena

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A subpoena served pursuant to Federal Rule of Civil Procedure 45 shall “command

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each person to whom it is directed to … produce designated documents, electronically

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stored information, or tangible things in that person’s possession, custody, or control.” Fed.

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R. Civ. P. 45(a)(1)(A)(iii). A subpoena also must the state the court from which it issued,

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the title of the action and its civil number, and set out the text of Rule 45(d) and (e). Fed.

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R. Civ. P. 45(a)(1)(A)(i), (ii), and (iv). Serving a subpoena requires “delivering a copy to

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the named person,” which is often interpreted to mean personal service. Fed. R. Civ. P.

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45(b)(1); see Prescott v. Cnty. of Stanislaus, No. 10–cv–00592 JLT, 2012 WL 10617, at

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*3 (E.D.Cal. Jan. 3, 2012) (a majority of courts interpreting “delivering” to require personal

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service).

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It is undisputed that Chao was served with a subpoena commanding him to produce

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certain documents and that he failed to comply with the subpoena. The subpoena served

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on Chao complied with the substantive requirements of Rule 45. The subpoena indicated

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it was issued by the United States District Court for the District of South Carolina, stated

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the title of the action along with the civil action number, and set out the text of Rule 45(d)

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and (e). The subpoena commanded Chao to produce the requested documents to Jennifer

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Mallory at 3579 Valley Centre Dr., Suite 300, San Diego, California, a place within 100

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miles of Chao’s residence. (Id., Ex. E at 5.) The subpoena was served personally on Chao

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on November 13, 2016. (Id., Ex. F at 2.) Chao acknowledge service of the subpoena in an

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email to defense counsel. (Id., Ex. G at 2.) Chao has not properly complied with or objected

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to the subpoena to date. (Def.s’ Reply at 2.)

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B. Contempt Proceedings for Non-Compliance with a Valid Subpoena

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Pursuant to Rule 45(g), a court may “hold in contempt a person who, having been

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served, fails without adequate excuse to obey the subpoena or an order related to it.” Fed.

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R. Civ. P. 45(g). “[A] subpoena duces tecum is itself a court order, and noncompliance may

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warrant contempt sanctions.” Pennwalt Corp. v. Durand-Wayland, Inc., 708 F.2d 492, 494
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n. 5 (9th Cir. 1983).

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A contempt charge against a nonparty may be either of a criminal or a civil nature.

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See Falstaff Brewing Corp. v. Miller Brewing Co., 702 F.2d 770, 778 (9th Cir. 1983). “The

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primary purpose of criminal contempt is to punish past defiance of a court’s judicial

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authority, thereby vindicating the court. Id. (citing Shillitani v. United States, 384 U.S. 364,

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369 86 S.Ct. 1531, 16 L.Ed.2d 622 (1966); see also Gompers v. Bucks, 221 U.S. 418, 441,

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31 S.Ct. 492, 55 L.Ed. 797 (1911). It may include fines payable to the court and it also may

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include jail time. See, e.g., Shillitani, 384 U.S. at 368.

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Civil contempt, on the other hand, is meant to “compel obedience with a court order,

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or to compensate the contemnor's adversary for the injuries resulting from the non-

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compliance.” Falstaff Brewing Corp., 702 F.2d at 778 (internal citation omitted). “The

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district court has wide latitude in deciding whether there has been contemptuous defiance

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of one of its orders.” Stone v. City of San Francisco, 968 F.2d 850, 856 (9th Cir.1992).

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To establish civil contempt, Defendants must show by clear and convincing evidence

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that Chao violated a specific order of the court. If Defendants satisfy that burden, the

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burden shifts to Chao to show that he took every possible step to comply with the subpoena

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and to articulate reasons why compliance was not possible. See FTC v. Enforma Natural

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Products, Inc., 362 F.3d 1204, 1211 (9th Cir. 2004) (“In a civil contempt action, the

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moving party has the burden of showing by clear and convincing evidence that the

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contemnors violated a specific and definite order of the court. The burden then shift to the

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contemnors to demonstrate why they were unable to comply.”); see also Donovan v.

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Mazzola, 716 F.2d 1226, 1240 (9th Cir. 1983) (to satisfy this burden a contemnor is

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required to show categorically and in detail why they were unable to comply with the

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court’s previous order). In considering the contemnor's reasons why compliance was not

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possible, the court may consider a history of noncompliance and a failure to comply despite

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the pendency of a contempt motion. See Stone, 968 F.2d at 856–57. If a contemnor has

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“performed all reasonable steps within [his] power to insure compliance with the court’s

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orders” he should not be held in contempt. Id. at 856. However, “[i]ntent is irrelevant to a
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finding of civil contempt” and thus “good faith is not a defense.” Id.

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Defendants have established that Chao violated a specific and definite order of the

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court by failing to comply with the subject subpoena, as well as failing to comply with the

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Court’s Order to file a Response to Defendants’ present motion. Accordingly, the Court

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issues an Order to Show Cause why contempt sanctions should not issue. See Morutia-

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Johnson v. City of Fresno, No. 14-CV-00127-LJO-SKO, 2015 WL 1021123, at *3 (proper

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procedure for nonparty subpoena compliance is to issue an order to show cause); see also

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Peterson v. Highland Music, Inc., 140 F.3d 1313, at 1325 (9th Cir. 1998) (finding that a

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district court should not impose contempt sanctions solely on the basis of affidavits unless

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those affidavits are uncontroverted).
Defendants’ request for sanctions is, at this point, premature and is thus DENIED.

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V. CONCLUSION

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For the reasons set forth above, IT IS HEREBY ORDERED:

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1. Defendants’ unopposed Motion to Compel is GRANTED. Chao shall comply

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with the subject subpoena on or before June 14, 20171.

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2. Defendant’s Motion for sanctions is DENIED as premature.

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3. Chao is ORDERED to personally appear on July 10, 2017 at 9:00 a.m. before

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United States Magistrate Judge William V. Gallo, United States Courthouse,

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Courtroom 2A, Second Floor, 221 West Broadway, San Diego, California to SHOW

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CAUSE why he should not be held in contempt for his failure to comply with the

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subpoena.

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4. Chao shall file a Declaration in response to this Order explaining his failure to

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comply with the subpoena on or before June 26, 2017. This Declaration shall not

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exceed five pages, excluding exhibits.

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5. Defendants shall file a Reply to the Declaration that includes their attorney’s fees

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related to the filing of the present motion and responding to this Order on or before

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This Order lifts the stay that was emplaced by the Court’s scheduling order. (See ECF No. 7 at 2.)
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July 3, 2017. The Reply shall not exceed five pages, excluding exhibits. Defendants

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must appear at the OSC hearing.

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6. Failure to comply with this Order may subject Chao to contempt sanctions,

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including monetary sanctions; and

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7. Defendants shall personally serve this Order on Chao on or before May 31, 2017,

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and file proof of service forthwith.

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IT IS SO ORDERED.

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Dated: May 25, 2017

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