IN RE: Keiko Suzuki
Filing
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ORDER DENYING NON-PARTY KEIKO SUZUKI'S MOTION TO QUASH OR MODIFY SUBPOENAS TO PRODUCE DOCUMENTS, INFORMATION, OR OBJECTS OR TO PERMIT INSPECTION OF PREMISES IN A CIVIL ACTION AS TO KEIKO SUZUKI re: 1 . Signed by JUDGE J. MICHAEL SEABRIGH T on 12/5/2014. (afc)CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
IN RE: KEIKO SUZUKI
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KEIKO SUZUKI,
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Petitioner,
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v.
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SHIGE TAKIGUCHI, ET AL.,
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Respondents.
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_______________________________ )
CIV. NO. 14-00516 JMS-KSC
ORDER DENYING NON-PARTY
KEIKO SUZUKI’S MOTION TO
QUASH OR MODIFY SUBPOENAS
TO PRODUCE DOCUMENTS,
INFORMATION, OR OBJECTS OR
TO PERMIT INSPECTION OF
PREMISES IN A CIVIL ACTION AS
TO KEIKO SUZUKI
ORDER DENYING NON-PARTY KEIKO SUZUKI’S MOTION TO QUASH
OR MODIFY SUBPOENAS TO PRODUCE DOCUMENTS,
INFORMATION, OR OBJECTS OR TO PERMIT INSPECTION OF
PREMISES IN A CIVIL ACTION AS TO KEIKO SUZUKI
I. INTRODUCTION
Before the court is Petitioner Keiko Suzuki’s (“Keiko” or
“Petitioner”) Motion to Quash or Modify Subpoenas (“Motion”) that were issued
under the authority of the United States District Court for the District of Nevada in
Takiguchi, et al. v. MRI International, Inc., et al., Civ. No. 2:13-01183 JAD-VCF
(the “underlying action”), and served on four Hawaii financial institutions where
Petitioner maintains accounts. The subpoenas seek the production of documents in
connection with accounts held in the name of Suzuki Enterprises, Ltd. and/or
members of the Suzuki family -- Keiko, her husband Junzo Suzuki (“Junzo”),
and/or her son Paul Suzuki (“Paul”). Although Keiko is not a party to the
underlying action, Junzo and Paul are named defendants. Keiko moves to quash or
modify the subpoenas to prevent the release or disclosure of her financial
information only. For the following reasons, the Motion is DENIED.
II. BACKGROUND
A.
Factual Background
The Complaint in the underlying action asserts violations of federal
securities laws and supplemental state law claims. See Takiguchi, Civ. No. 2:1301183 JAD-VCF, Doc. No. 1.1 The Nevada district court describes the underlying
action as “a putative class action [arising from] the alleged operation of a Ponzi
scheme.” Doc. No. 6-1, Resp’ts’ Ex. A, Takiguchi v. MRI Int’l, Inc., 2014 WL
4664840, at *1 (D. Nev. Sept. 18, 2014). The court explains that “MRI is alleged
to be a Nevada corporation headquartered in Las Vegas with a branch in Tokyo,
Japan, operated by its president and CEO, Edwin Fujinaga.” Id. And as alleged in
the underlying action, “MRI’s Tokyo operations were controlled by Junzo,” who
“[t]ogether with his son, Paul . . . , marketed and solicited for purchase MRI
securities in Japan.” Id.
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The court takes judicial notice of the filings in the underlying action. See Reyn’s Pasta
Bella v. Visa USA, 442 F.3d 741, 746 n.6 (9th Cir. 2006) (explaining that the court “may take
judicial notice of filings and other matters of public record”).
2
On September 18, 2014, an Order on Motion for Preliminary
Injunction (the “September 18 Order”) was issued in the underlying action
restraining and enjoining Junzo, Paul, “their agents and representatives, and all
persons and entities under the control of or acting in concert with either of them”
from:
A. Directly or indirectly transferring, converting, selling,
concealing, disbursing, spending, withdrawing,
liquidating, encumbering, pledging, assigning, or
otherwise disposing of any assets, wherever located, that
are:
1. Owned or controlled by Junzo Suzuki or Paul
Musashi Suzuki, or their affiliates or by any person
or entity under the control of either of them; or
2. In the actual or constructive possession of
Junzo Suzuki or Paul Musashi Suzuki, or their
affiliates or by any person or entity under the
control of either of them; or
3. Owned, controlled by, or in the actual or
constructive possession of any corporation,
partnership, or other entity directly or indirectly
owned, managed, or controlled by or under
common control with Junzo Suzuki or Paul
Musashi Suzuki;
B. Opening or causing to be opened any safe deposit box
titled in the name of or for the benefit of Junzo Suzuki or
Paul Musashi Suzuki, or their companies, affiliates, or
subsidiaries, or subject to access by any of them;
C. Directly or indirectly destroying, secreting, defacing,
transferring or otherwise altering or destroying any
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documents concerning, evidencing, or relating to the
business, assets, and financial affairs of Junzo Suzuki or
Paul Musashi Suzuki, or of any business or entity
affiliated with either of them or under their control.
Id. at *8.
Plaintiffs in the underlying action, who are Respondents to this
Motion, issued and served subpoenas on four financial institutions in Hawaii -Bank of Hawaii, Central Pacific Bank, First Hawaiian Bank, and Merrill Lynch,
Doc. No. 1, Mot. at 2, -- seeking documents and information concerning accounts
held in the name of Junzo, Paul, Keiko, and/or Suzuki Enterprises, Ltd., or in
which Junzo, Paul, or Keiko “is an authorized signer or holds any interest.” Doc.
Nos. 1-3 - 1-6, Pet’r’s Exs. A - D at 2.
B.
Procedural Background
On November 14, 2014, Petitioner filed the instant Motion in this
court seeking to protect her “private, personal, financial and proprietary
information from any release, disclosure or discovery . . . by any of the four
identified financial institutions” in Hawaii. Doc. No. 1, Mot. at 3-4. A status
conference was held on November 17, 2014, after which the court set a briefing
schedule. Doc. No. 5, Entering Order. Respondents filed a Response on
November 21, 2014, Doc. No. 6, and on November 28, 2014, Petitioner filed a
Reply. Doc. No. 8. Pursuant to Local Rule 7.2(d), the court finds this matter
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suitable for disposition without a hearing.
III. STANDARD OF REVIEW
Federal Rule of Civil Procedure 45 governs discovery of non-parties
by subpoena and provides in part:
On timely motion, the court for the district where
compliance is required must quash or modify a subpoena
that: (i) fails to allow a reasonable time to comply;
(ii) requires a person to [travel more than 100 miles];
(iii) requires disclosure of privileged or other protected
matter, if no exception or waiver applies; or (iv) subjects
a person to undue burden.
Fed. R. Civ. P. 45(d)(3)(A).
Further, “[i]t is well established that the scope of discovery under a
subpoena issued pursuant to Rule 45 is the same as the scope of discovery allowed
under Rule 26(b)(1).” Wells Fargo Bank, Nat’l Ass’n v. Iny, 2014 WL 1796216, at
*2 (D. Nev. May 6, 2014); Painters Joint Comm. v. Emp. Painters Trust Health &
Welfare Fund, 2011 WL 4573349, at *5 (D. Nev. Sept. 29, 2011) (collecting
cases). Rule 26(b)(1) provides that “[p]arties may obtain discovery regarding any
nonprivileged matter that is relevant to any party’s claim or defense.” However,
the court must limit such discovery if “the burden . . . of the proposed discovery
outweighs its likely benefit.” Fed. R. Civ. P. 26(b)(2)(C)(iii).
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The party seeking to quash or modify a subpoena “bears the burden of
showing why a discovery request should be denied.” Wells Fargo Bank, Nat’l
Ass’n, 2014 WL 1796216, at *2 (citing Painters Joint Comm., 2011 WL 4573349,
at *5); Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975). But “the
party issuing the subpoena must [first] demonstrate the discovery sought is
relevant.” Chevron Corp. v. Donziger, 2013 WL 4536808, at *4 (N.D. Cal. Aug.
22, 2013); see Refco Grp. Ltd. v. Cantor Fitzgerald, L.P., 2014 WL 5420225, at *6
(S.D.N.Y. Oct. 24, 2014) (“Once the party seeking production of the materials
meets its burden of showing relevance sufficient to justify discovery, the burden
shifts to the movant to show why discovery should not be had.”) (citations,
quotation marks and brackets omitted). And “[w]hile discovery is a valuable right
and should not be unnecessarily restricted . . . , the ‘necessary’ restriction may be
broader when a nonparty is the target of discovery.” Dart Indus. Co. v. Westwood
Chem. Co., 649 F.2d 646, 649 (9th Cir. 1980); see also R. Prasad Indus. v. Flat
Irons Envtl. Solutions Corp., 2014 WL 2804276, at *2 (D. Ariz. June 20, 2014)
(“To obtain discovery from a nonparty, a party must demonstrate that its need for
discovery outweighs the nonparty’s interest in nondisclosure.”).
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IV. DISCUSSION
Keiko seeks to quash or modify the subpoenas to prevent disclosure of
her private, personal, financial and/or proprietary information. More specifically,
she seeks to exclude from production
any and all information or documents relating to [her]
personal financial accounts, any joint accounts in which
she is one of the account holders, and any personal trust
accounts in the name of her Trust, and including deposit
accounts, bank accounts, investment accounts, brokerage
accounts, safe deposit accounts, security deposits, lines
of credit and mortgages.
Doc. No. 1, Mot. at 4. Keiko contends that the subpoenas should be quashed or
modified with respect to her financial information because (1) the information
sought is not discoverable where she is not a party or named witness to the
underlying action and the information is personal to Keiko; and (2) she is protected
from the banks’ disclosure of her private and personal financial information
without her consent under the Gramm-Leach-Bliley Act of 1999 (“GLBA”).2 See
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Although not clear, Keiko may also be arguing that the subpoenas must be quashed
pursuant to Rule 45(d)(3)(A)(iii) because her financial records are “privileged or other protected
matter.” To the extent she is making that argument, the court disagrees. “[F]ederal law of
privilege applies” where, as here, “there are federal question claims and pendant state law
claims.” Agster v. Maricopa Cnty., 442 F.3d 836, 839 (9th Cir. 2005); see also Fed. R. Evid.
501. Under federal common law, “[i]t is well settled that there is no privilege between a bank
and a depositor.” Reiserer v. United States, 479 F.3d 1160, 1165 (9th Cir. 2007); see also Hecht
v. Pro-Football, Inc., 46 F.R.D. 605, 606 (D.D.C. 1969) (explaining that confidential financial
information “is not privileged matter in the legal sense of the term”). Nor does the Constitution
provide a privilege or even a privacy interest in such records. See United States v. Miller, 425
(continued...)
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Doc. No. 1-1, Mem. at 5. Assuming that Keiko has standing to challenge the
subpoenas,3 the court rejects Keiko’s arguments.
A.
Keiko’s Subpoenaed Financial Documents Are Relevant and
Discoverable
In general, a party is entitled to discovery “regarding any
nonprivileged matter that is relevant to any party’s claim or defense,” and
“[r]elevant information need not be admissible at the trial if the discovery appears
reasonably calculated to lead to the discovery of admissible evidence.” Fed. R.
Civ. P. 26(b)(1). However, the court must limit such discovery if
2
(...continued)
U.S. 435, 440 (1976) (no constitutional privacy interest in bank records). And, as explained
below, to the extent Keiko may rely on the GLBA for such privilege, she is mistaken.
3
Generally, pursuant to Rule 45(d)(3), “a party lacks standing to challenge a subpoena
issued to a non-party unless the party claims a personal right or privilege with respect to the
documents requested in the subpoena.” Wahoo Int’l, Inc. v. Phix Doctor, Inc., 2014 WL
3573400, at *2 (S.D. Cal. July 18, 2014); see also 9A Charles Alan Wright & Arthur R. Miller,
Federal Practice & Procedure § 2459 (3d ed. 2008) (same). Courts are split, however, as to
whether the “personal right or privilege” exception to the general rule applies to a non-party such
as Keiko. See, e.g., R. Prasad Indus. v. Flat Iron Envtl. Solutions Corp., 2014 WL 2804276, at
*3 (D. Ariz. June 20, 2014) (collecting cases). And assuming that the “personal right or
privilege” exception does apply to a non-party, courts are further split as to whether individuals
have such a personal right to their financial and banking records sufficient to establish standing.
See Wells Fargo Bank, N.A. v. Iny, 2014 WL 1796216, at *2 (D. Nev. May 6, 2014) (collecting
cases). Absent clear guidance from the Ninth Circuit, and because the court’s ruling does not
depend upon resolution of this issue, the court will assume that Keiko has standing and will
address the Motion on its merits. See R. Prasad Indus., 2014 WL 2804276, at *3 (“[T]he Court
assumes without deciding that, for the purposes of this Order, [the movant] has standing, in
general, to move to quash the subpoena issued to [the movant’s bank].”); see also Wells Fargo
Bank, 2014 WL 1796216, at *2; Doe v. Verizon Online, 2010 WL 2035332, at *2 n.* (D.D.C.
May 21, 2010).
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the burden . . . of the proposed discovery outweighs its
likely benefit, considering the needs of the case, the
amount in controversy, the parties’ resources, the
importance of the issues at stake in the action, and the
importance of the discovery in resolving the issues.
Fed. R. Civ. P. 26(b)(2)(C)(iii).
Respondents comprise a class of “more than 8,000 Japanese investors
[who invested with MRI] more than a billion dollars.” Takiguchi, 2014 WL
4664840, at *1. Through the subpoenas, Respondents seek, in part, the discovery
of Keiko’s financial information following the issuance of the September 18 Order
freezing all assets “owned or controlled by ‘Junzo [or Paul] Suzuki, their agents
and representatives, and all persons and entities under the control of or acting in
concert with either of them.’” Doc. No. 6, Opp’n at 2 (quoting Takiguchi, 2014
WL 4664840, at *8). Supporting the issuance of the preliminary injunction,
Takaguchi found that:
the Suzukis began taking immediate steps, as soon as
MRI’s fraud was uncovered, to divest themselves from
some of their assets. A reasonable inference can be
drawn that the Suzukis are likely to dissipate or conceal
other assets and property paid for, at least in part, with
commissions received from MRI.
2014 WL 4664840 at *6. Takaguchi further found that evidence of a transfer of
proceeds from a “life insurance policy . . . on the life of Keiko” to an account
owned by an entity controlled by the Suzukis “is highly suggestive of an attempt to
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secret assets,” and that “the fact that the holder and insured . . . are not defendants
is irrelevant; both are closely related to -- and in the case of [the entity], controlled
by -- the Suzukis.” Id.
Given these findings, discovery regarding Keiko’s accounts is
“reasonably calculated to lead to the discovery of admissible evidence.” Indeed, in
the underlying action Respondents allege that over three million dollars was
transferred from MRI to Keiko between 2009 and 2011, Doc. No. 6, Opp’n at 7 n.2
(citing Takiguchi, Civ. No. 2:13-01183 JAD-VCF, Doc. No. 134), and Keiko’s
banking information will certainly answer whether she was improperly transferred
funds and is relevant to the claims, remedies, and resolution of the underlying
action.
In opposition, Keiko argues that because she is not a party or named
witness in the underlying action, her personal financial information is not relevant,
and her privacy interest and/or personal right in her financial information
outweighs the need for discovery. Keiko’s conclusory argument, without more, is
insufficient to show that she would suffer any specific harm or burden as a result of
the disclosure of her financial information. See Wells Fargo Bank, Nat’l Ass’n,
2014 WL 1796216, at *3 (“While defendants assert vaguely that some of their
banking records may contain ‘sensitive’ information, . . . they have failed to make
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a showing of the harm or prejudice sufficient to deny the discovery.”). And
although Keiko certainly has some privacy interest in her financial information,
that interest is outweighed by the importance of this discovery to the allegations
that Junko and Paul have dissipated Respondents’ monies. See Painters Joint
Comm., 2011 WL 4573349, at *5-6 (denying motion to quash subpoena of bank
records after weighing “the competing needs and interests of the parties affected by
the discovery”).
The court therefore finds that Keiko’s financial information sought by
the subpoenas is highly relevant and discoverable.
B.
The GLBA Does Not Bar Disclosure of Keiko’s Financial Information
Keiko argues that the GLBA protects her from the banks’ disclosure
of her private and personal financial information without her consent. This
argument is without merit.
The GLBA, codified at 15 U.S.C. § 6801, et seq., generally prohibits a
financial institution from “disclos[ing] to a nonaffiliated third party any nonpublic
personal information” “[e]xcept as otherwise provided.” 15 U.S.C.
§ 6802(a). One such exception is “to comply with Federal . . . and other applicable
legal requirements; to comply with a properly authorized civil . . . subpoena . . . , or
to respond to judicial process[.]” 15 U.S.C. § 6802(e); see also Sohai v. Fed.
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Home Loan Mortg. Corp., 2012 WL 4113721, at *3 (N.D. Cal. Sept. 18, 2012)
(“GLBA authorizes the disclosure of otherwise protected information for court
proceedings.”); City of Kenner, La. v. Durham Auctions, Inc., 2008 WL 4279594,
at *7 (S.D. Miss. Sept. 12, 2008) (“[T]he production of any documents consistent
with . . . [a] subpoena duces tecum shall not violate the [GLBA].”).
Keiko does not suggest, nor does the record show, that the subpoenas
are not properly authorized. Thus, Keiko’s financial information is not protected
by the GLBA from disclosure in compliance with those subpoenas.
V. CONCLUSION
Based on the foregoing, the court DENIES Petitioner’s Motion to
Quash or Modify Subpoenas to Produce Documents, Information, or Objects or to
Permit Inspection of Premises in a Civil Action as to Keiko Suzuki.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, December 5, 2014.
/s/ J. Michael Seabright
J. Michael Seabright
United States District Judge
Suzuki v. Takiguchi, et al., Civil No. 14-00516 JMS-KSC, Order Denying Non-Party Keiko
Suzuki’s Motion to Quash or Modify Subpoenas to Produce Documents, Information, or Objects
or to Permit Inspection of Premises in a Civil Action as to Keiko Suzuki
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