DELL INC. v. DECOSTA et al
MEMORANDUM AND OPINION. Signed by Judge Rosemary M. Collyer on 1/17/2017. (lcrmc3)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
FRANK A. DECOSTA., et al,
Civil Action No. 16-2585 (RMC)
Audio MPEG, Inc., and others, sued Dell, Inc., in the Eastern District of Virginia,
complaining that Dell infringed certain patents. Audio MPEG, Inc. v. Dell, Inc., No. 16-cv-0082
(E.D. Va., filed Dec. 21, 2015) (“Virginia Action”). Dell has advanced various defenses and
counterclaims, most particularly alleging violations of the antitrust laws of the United States.
See Dell Mot. to Compel, Ex. B [Dkt. 1-2] (Dell Ans. in E.D. Va.) ¶ 29. In this Court, Dell seeks
to compel compliance with subpoenas seeking documents and testimony from Defendants Frank
A. DeCosta III and John C. Paul, attorneys with Finnegan, Henderson, Farabow, Garrett &
Dunner LLP (“Finnegan”), the firm that used to represent Audio MPEG on matters involving
patents and intellectual property. The subpoenas were served on July 20, 2016. After months of
discussions without the production of any documents or presentation of any testimony, Dell
moved to compel responses in the jurisdiction in which Messrs. DeCosta and Paul practice law.
The two attorneys, represented by their firm, hotly contest the propriety of the subpoenas as well
as their burden and lack of proportionality, and urge this Court to transfer the matter to Virginia,
where the underlying case is being litigated.
When the petition was filed, fact discovery in the Virginia Action was scheduled
to close on January 17, 2017. Dell suggests in its Reply that the parties have agreed to allow
third-party depositions to take place after this deadline. See Pl. Reply [Dkt. 9] at 2, n.4. The
Court has carefully studied the parties’ briefs. Believing that discovery disputes should be
resolved as quickly as possible, with the least time and expense for the parties, this Court acts
expeditiously to aid the litigation process.
I. FACTUAL BACKGROUND
Defendants DeCosta and Paul “are the longtime licensing counsel to Virginia
Plaintiffs Audio MPEG, Inc. and its parent company Societa Italiana per lo Sviluppo
dell’Elettronica S.p.A. (“Sisvel”) . . . .” Pl. Reply [Dkt 9] at 1. Both attorneys “represent[ed]
Audio MPEG in licensing negotiations with third parties, as well as other business activities.”
Id. Dell asserts:
The facts and circumstances of these licensing negotiations are
relevant to a number of claims and counterclaims in the Virginia
Action, including appropriate damages calculations, Dell’s defense of
patent exhaustion, and Dell’s counterclaims regarding
anticompetitive provisions in certain licensing agreements.
Id. Dell points out that the Virginia Plaintiffs’ disclosures identified Defendant DeCosta as an
individual with discoverable information and Audio MPEG’s past president testified repeatedly
at deposition that Defendant Paul is a source of relevant information. Dell provides no
particulars on the subject matters that were referenced.
Defendant attorneys do not dispute any of the above. Rather, they contend that
Dell’s subpoenas impose an undue burden and expense on Defendants, in violation of the
Federal Rules of Civil Procedure 26 and 45 “regarding relevance, proportionality, burden,
expense and the ability to obtain information from other sources” because the information sought
is available from a more convenient source, namely, Audio MPEG. Def. Opp’n [Dkt. 5] at 15.
Defendants further argue that the subpoeanas risk disclosure of attorney-client privilege or other
protected matters, such as third party confidentiality. Id. at 18.
II. LEGAL STANDARDS
Rule 26 of the Federal Rules of Civil Procedure governs the scope of discovery:
Parties may obtain discovery regarding any nonprivileged matter
that is relevant to any party’s claim or defense and 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 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.
FRCP 26(b)(1). Rule 45 requires that a court must modify or quash a subpoena when, inter alia,
it “requires disclosure of privileged or other protected matter, if no exception or waiver applies”
or “subjects a person to undue burden.” FRCP 45(d)(3)(A)(iii)-(iv). A party issuing “a
subpoena must take reasonable steps to avoid imposing undue burden or expense on a person
subject to the subpoena.” FRCP 45(d)(1).
Whether a subpoena imposes an “undue burden” depends on the specific facts of
the case and courts “‘must balance the interests served by demanding compliance with the
subpoena against the interests furthered by quashing it.’” In re Ex Parte Application of Kleimar
N.V., No. 16-MC-355, 2016 WL 6906712 at *3 (S.D.N.Y. Nov. 16, 2016) (quoting Anwar v.
Fairfield Greenwich Ltd., 297 F.R.D. 223, 226 (S.D.N.Y. 2013)). In balancing the interests
served by demanding compliance, courts should consider “‘relevance, the need of the party for
the documents, the breadth of the document request, the time period covered by it, the
particularity with which the documents are described and the burden imposed.’” American Elec.
Power Co., Inc. v. United States, 191 F.R.D. 132, 136 (S.D. Ohio 1999) (quoting Concord Boat
Corp. v. Brunswick Corp., 169 F.R.D. 44, 53 (S.D.NY. 1996)).
A. The Subpoenas
Dell’s requests for document production are, as Defendants assert, overbroad and
unduly burdensome. Dell asked Defendants for, inter alia, “[a]ll documents . . . that refer or
relate to any license, proposed license, settlement agreement, proposed settlement agreement, or
negotiations regarding any license or settlement agreement related to the Patents-in-Suit . . . in
which any or all of the Counter-Defendants have included or considered including a provision
regarding or referencing Dell.” Mot. to Compel, Ex. C [Dkt. 1-2] at 7 (Subpoena). Such open
document requests, served on prior counsel, would impose an undue and disproportionate burden
on Defendants to prepare a privilege log 1 of the thousands of documents that Defendants could
reasonably be expected to “possess” after a decade of Audio MPEG representation but most of
which would be protected by the attorney-client privilege or attorney work-product doctrine.
The Court will limit Dell document requests, in each category, to: (1) documents
as they originated outside Finnegan; and (2) all communications between one or both Defendants
or anyone acting at their direction and any “Licensee.” “Licensee” shall have the meaning given
in paragraph 23 and “Communication” shall have the meaning given in paragraph 5 of
Attachment A to the Subpoena to each Defendant. See Subpoena at ¶¶ 5, 23.
Rule 45 requires that a person withholding subpoenaed information under a claim that it is
privileged or subject to a protection must “describe the nature of the withheld documents,
communications, or tangible things in a manner that, without revealing information itself
privileged or protected will enable the parties to assess the claim.” FRCP 45(e)(2)(ii). “The rule
is obviously mandatory” and “[f]ailure to comply with it ‘is deemed to waive the underlying
privileged claim.’” GFL Advantage Fund, Ltd. V. Colkitt, 216 F.R.D. 189, 195 (D.D.C. 2003)
(quoting In re Grand Jury Subpoena, 274 F.3d 563, 567 (1st Cir. 2001)).
B. The Deposition Notices
In contrast, Dell’s notices of deposition for each of the Defendants here does not
suffer from the same infirmities. Defendants can assert the attorney-client privilege or the
attorney work-product doctrine if either of them believes in good faith that it applies to the
answer to any question. All parties will be ordered to conduct themselves in a civil and
professional manner which should be customary to them all as officers of the Court. The fact of
Defendants’ prior roles as licensing counsel to Audio MPEG and Sisvil has no bearing on each
Defendant’s testimony concerning their correspondence or dealings with non-client outside
parties (which does not, of course, include internal strategy sessions and/or the lawyer’s mental
Without providing a specific reason, Defendants suggest that if the Court fails to
agree that they should not be subject to depositions, Dell should be limited to “a lawyer” for two
hours. The Court believes such a limitation would unfairly and without good purpose limit
Dell’s ability to discover information held specifically by these Defendants according to their
former client. It will require each Defendant to sit for a deposition of the general duration
applicable to all fact witnesses in the Virginia Action or for seven (7 hours), whichever is longer.
For the reasons stated, Dell’s motion to compel will be granted in part and denied
in part. A memorializing order accompanies this memorandum opinion.
Date: January 17, 2017
ROSEMARY M. COLLYER
United States District Judge
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