Sterling Knight Pharmaceuticals LLC v. United States Postal Service, Office of the Inspector General

Filing 12

ORDER denying 1 Motion to Quash. Signed by Magistrate Judge Anthony E. Porcelli on 5/20/2019. (JMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION

STERLING KNIGHT PHARMACEUTICALS
LLC,
Movant,
v.

Case No. 8:19-mc-27-T-30AEP

UNITED STATES POSTAL SERVICE,
OFFICE OF INSPECTOR GENERAL,
Respondent.
/
ORDER
This cause came before the Court for a hearing upon Movant Sterling Knight
Pharmaceuticals LLC’s (“Sterling”) Motion to Quash Administrative Subpoena Pursuant to the
Right to Financial Privacy Act of 1978 (Doc. 1) and the Respondent United States Postal
Service Office of Inspector General’s (the “OIG”) response in opposition thereto, which the
OIG filed under seal. By the motion, Sterling seeks to quash an administrative subpoena issued
by the OIG, which requests records related to Sterling’s Account No. ___8793 with SunTrust
Bank. Sterling requests such relief pursuant to the Right to Financial Privacy Act (“RFPA”),
12 U.S.C. § 3401 et seq., in accordance with the Customer Notice attached to the administrative
subpoena served upon it by the OIG (Doc. 1, Comp. Ex. A).
Notwithstanding the information provided by the OIG in the Customer Notice, the OIG
contends that the RFPA does not apply to Sterling, as Sterling does not qualify as a “customer”
under the RFPA. The RFPA defines a “customer” as:
any person or authorized representative of that person who utilized or is utilizing
any service of a financial institution, or for whom a financial institution is acting
or has acted as a fiduciary, in relation to an account maintained in the person’s
name.

12 U.S.C. § 3401(5). Under the RFPA, a “person” means “an individual or a partnership of
five or fewer individuals.” 12 U.S.C. § 3401(4). The definitions of “customer” and “person”
do not, however, include limited liability companies. Hohman v. United States, Case No. 16cv-11429, 2017 WL 2954713, at *6 (E.D. Mich. July 11, 2017) (“A limited liability company
is neither an individual nor a partnership of fewer than five individuals. Thus, a limited liability
company is not a ‘person’ under the RFPA, and because such a company is not a ‘person,’ it
cannot be a ‘customer.’”); Flatt v. U.S. Sec. & Exch. Comm’n, No. 10-60073-MC, 2010 WL
1524328, at *3 (S.D. Fla. Apr. 14, 2010) (concluding that a LLC did not meet the definition of
“person” or “customer” under the RFPA).
Indeed, Sterling does not dispute that, as a limited liability company, it does not qualify
as a customer or person under the RFPA. Rather, Sterling argues that the OIG should be
estopped from making such argument given the documentation the OIG provided to Sterling,
which explained the relief available to Sterling under the RFPA. Such argument lacks merit.
Namely, the right to file a motion to quash an administrative subpoena under the RFPA belongs
to customers. 12 U.S.C. § 3410(a). Since Sterling does not qualify as a customer under the
RFPA, it maintains no such right despite any documentation provided to it by the OIG.
Regardless, even if the RFPA applied to Sterling, the motion to quash would still be
denied. In considering a motion to quash an administrative subpoena under the RFPA, courts
apply the following standard:
If the court finds that the applicant is not the customer to whom the financial
records sought by the Government authority pertain, or that there is a
demonstrable reason to believe that the law enforcement inquiry is legitimate
and a reasonable belief that the records sought are relevant to that inquiry, it
shall deny the motion or application, and, in the case of an administrative
summons or court order other than a search warrant, order such process
enforced. If the court finds that the applicant is the customer to whom the
records sought by the Government authority pertain, and that there is not a
demonstrable reason to believe that the law enforcement inquiry is legitimate
and a reasonable belief that the records sought are relevant to that inquiry, or

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that there has not been substantial compliance with the provisions of this chapter,
it shall order the process quashed or shall enjoin
12 U.S.C. § 3410(c). In this instance, the OIG demonstrated the existence of a legitimate law
enforcement inquiry and a reasonable belief that the records sought by the administrative
subpoena are relevant to that inquiry. As a result, the OIG established a basis for denial of
Sterling’s motion to quash. For the foregoing reasons, therefore, it is hereby
ORDERED:
1. Sterling’s Motion to Quash Administrative Subpoena Pursuant to the Right to
Financial Privacy Act of 1978 (Doc. 1) is DENIED.
DONE AND ORDERED in Tampa, Florida, on this 20th day of May, 2019.

cc:

Counsel of Record

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