Massachusetts Nurses Association, v. Radius Specialty Hospital-Boston et al

Filing 53

Magistrate Judge Marianne B. Bowler: ORDER entered. MEMORANDUM AND ORDER Re: Non-Parties' Motion to Quash Non-Party Subpoena (Docket Entry # 43 ). The motion to quash (Docket Entry # 43 ) is ALLOWED as to categories five and six and ALLOWED in part and DENIED in part as to categories two through four. (Patton, Christine)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
MASSACHUSETTS NURSES ASSOCIATION,
Plaintiff,
V.

CIVIL ACTION NO.
14-13686-FDS

RADIUS SPECIALTY HOSPITAL, LLC d/b/a
RADIUS SPECIALTY HOSPITAL,
Defendant.
MEMORANDUM AND ORDER RE:
NON-PARTIES’ MOTION TO QUASH NON-PARTY SUBPOENA
(DOCKET ENTRY # 43)
October 18, 2016
BOWLER, U.S.M.J.
Non-parties Radius Specialty Hospital Corporation (“RSHC”),
Radius Management Services II, Inc. (“RMS”), Radius Management
Services, Inc. (“RMSI”), Radius Specialty Hospital Boston
(“RSHB”) and Radius Specialty Hospital Quincy (“RSHQ”)
(collectively “the non-parties”) move to quash a post-judgment
subpoena issued by plaintiff Massachusetts Nurses Association
(“MNA”) to Santander Bank N.A. (“Santander”).
43).

(Docket Entry #

MNA, a labor organization representing a number of

registered nurses formerly employed at two hospitals, RSHB and
RSHQ, opposes the motion.

(Docket Entry # 51).

After conducting

a hearing on October 13, 2016, this court took the motion (Docket
Entry # 43) under advisement.
BACKGROUND
The subpoena seeks bank statements of all accounts held by

Santander in the name of each of the non-parties and in the name
of defendant Radius Specialty Hospital, LLC d/b/a/ Radius
Specialty Hospital (“defendant”) from January 1, 2013 to the
present.

(Docket Entry # 43-1).

The non-parties submit that the

subpoena seeks confidential and irrelevant financial information.
(Docket Entry # 43).

MNA contends that the non-parties

functioned as “one entity” or as “alter egos” with defendant and
that their financial information “is relevant to whether
[defendant] has the ability to pay the judgment.”
# 51).

(Docket Entry

As set out in the amended complaint, defendant operated

the two hospitals where the registered nurses worked.
Entry # 17).

(Docket

As also stated in the amended complaint, the

hospitals failed to provide 60 days notice to the nurses before
closing the facilities in September 2014 in violation of the
Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§
2101-2109.

(Docket Entry # 17).

A default judgment issued

against defendant in the amount of $1,031,119.95 on February 1,
2016.
DISCUSSION
These post-judgment proceedings arise under the enforcement
jurisdiction of this court.

See U.S.I. Properties Corp. v. M.D.

Const. Co., 230 F.3d 489, 496-497 (1st Cir. 2000).

Under the

court’s post-judgment enforcement jurisdiction, “proceedings can
reach third parties so long as it is necessary to reach assets of

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the judgment debtor under the control of the third party in order
to satisfy the original judgment and thereby guarantee its
eventual executability.”

Id. at 497.

To the extent plaintiff

seeks to impose liability on the non-parties based inter alia on
fraudulent transfers, this court lacks jurisdiction.

See id. at

498-499 (if post-judgment proceedings present new substantive
theory to establish direct liability of third party, federal
court requires independent basis for jurisdiction; discussing
Supreme Court case requiring independent jurisdiction over claim
to impose liability against third party based on piercing
corporate veil).

Substantive state law claims directly against

the non-parties are therefore outside the federal question
jurisdiction of the amended complaint and the parties are not
diverse.

Accordingly, the present proceedings are limited to a

means to obtain assets of defendant held by the non-parties.
“The rules governing discovery in postjudgment execution
proceedings are quite permissive.”

Republic of Argentina v. NML

Capital, Ltd., 134 S.Ct. 2250, 2254 (2014); see Fed.R.Civ.P.
69(a)(2) (judgment creditor “may obtain discovery from any
person”).

Although the scope of post-judgment discovery is

“generously defined, a judgment creditor invoking the rule must
still demonstrate that the discovery sought ‘is relevant to the
judgment debtor’s income and property,’” i.e., the discovery is
“tailored to reveal facts about the judgment debtor’s hidden

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assets.”

Koon Chun Hing Kee Soy & Sauce Factory, LTD. v. Star

Mark Mgmt., Inc., 2010 WL 3780275, at *1 (E.D.N.Y. Sept. 22,
2010); Fed.R.Civ.P. 69(a)(2) (judgment creditor “may obtain
discovery . . . as provided in these rules”); see Fed.R.Civ.P.
26(b)(1).
Here, plaintiff makes a sufficient showing, as evidenced by
David Rousch’s deposition and other exhibits attached to its
opposition, that the bank statements may reveal fraudulently
conveyed transfers of defendant’s property, namely its funds, to
RSHC, RMS and/or RMSI.

See U.S.I. Properties Corp. v. M.D.

Const. Co., 230 F.3d at 498 (citing Thomas, Head & Greisen
Employees Trust v. Buster, 95 F.3d 1449, 1454 (9th Cir. 1996)).
As aptly pointed out by the non-parties, however, Santander is
unlikely to have bank records under the name of either of the two
hospitals because the hospitals were only “doing business as”
names of defendant.

See Fried v. Wellesley Mazda, 2010 WL

1139322, at *1 (Mass.App.Div. 2010) (“use of the designation
‘doing business as’ does not create a separate legal entity . . .
that may be made a party defendant”) (citation omitted).
Categories five and six in the subpoena are therefore stricken.
The non-parties also correctly assert that the subpoena is
overbroad, particularly with respect to the time period at issue.
See generally Lucas v. Jolin, 2016 WL 5844300, at *4 (S.D. Ohio
Oct. 6, 2016) (“limits on post-judgment discovery from a

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non-party by a judgment creditor are the limits that apply
generally to all discovery requests to a non-party, including
such concerns as relevancy and proportionality (or undue
burden)”); Noel v. The Bank of New York Mellon, 2011 WL 3279076,
at *2 (S.D.N.Y. July 27, 2011) (whether “subpoena imposes an
‘undue burden’ depends on factors including relevance, the need
of the party for the documents, the breadth of the document
request, the time period covered by it, . . . and the burden
imposed’”) (emphasis added); BSN Med., Inc. v. Parker Med.
Associates, LLC, 2011 WL 197217, at *2 (S.D.N.Y. Jan. 19, 2011)
(“Rule 45 should be read in conjunction with the limitations of
discovery found” in Rule 26 and court “must balance the burden of
production against the need for the requested documents”);
Fed.R.Civ.P. 26(b).

The time period is therefore confined to the

two months immediately before and after the February 1, 2016
default judgment.

Because defendant did not lodge an objection

to the request for its bank statements, category one sets out a
category of documents subject to production.1

Presumably,

Santander has already produced the records in category one2 or
will do so in the near future.

Bank statements produced in

1

Represented by counsel, the non-parties (as opposed to
the non-parties and defendant) filed the motion to quash
objecting to categories two through six. (Docket Entry # 43).
2

At the hearing, counsel for the non-parties likewise
assumed production of defendant’s bank statements.
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response to category one may evidence transfers to the three nonparty entities in categories two through four (RSHC, RMS and
RMSI) outside the December 1, 2015 to April 1, 2016 time period
covered in categories two through four.

See Fed.R.Civ.P.

26(b)(2)(C); Terry v. Richland School District Two, 2016 WL
687521, at *1 (D.S.C. Feb. 19, 2016) (“court must limit a
plaintiff’s discovery requests if the documents sought from the
non-party are ‘cumulative or duplicative, or can be obtained from
some other source that is more convenient, less burdensome, or
less expensive’”); Tresona Multimedia, LLC v. Legg, 2015 WL
4911093, at *3 (N.D.Ill. Aug. 17, 2015) (“non-party subpoena
seeking information that is readily available from a party
through discovery may be quashed as duplicative or cumulative”);
Noel v. The Bank of New York Mellon, 2011 WL 3279076, at *2.
As a final matter, albeit not raised by the parties, the
non-parties have standing to move to quash the subpoena served on
their bank, Santander.

See Pain Center of SE Indiana, LLC v.

Origin Healthcare Sols. LLC, 2015 WL 2166708, at *2 (S.D.Ind. May
8, 2015); Enargy Power (Shenzhen) Co. Ltd. v. Xiaolong Wang, 2014
WL 2048416, at *2 n.4 (D.Mass. May 16, 2014); Solow v. Conseco
Inc., 2008 WL 190340, at *4 (S.D.N.Y. Jan. 18, 2008); Catskill
Development, L.L.C. v. Park Place Entertainment Corp., 206 F.R.D.
78, 93 (S.D.N.Y. 2002).

In light of confidentiality concerns

(Docket Entry # 43, p. 1), the parties should confer to attempt

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to craft a protective order for the records prior to production.
CONCLUSION
In accordance with the foregoing discussion, the motion to
quash (Docket Entry # 43) is ALLOWED as to categories five and
six and ALLOWED in part and DENIED in part as to categories two
through four.
/s/ Marianne B. Bowler
MARIANNE B. BOWLER
United States Magistrate Judge

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