Angelo, Gordon & Co., L.P. v. MTE Holdings LLC

Filing 9

ORDER granting 1 Motion to Quash. Accordingly, Angelo Gordon's motion to quash the Deposition Subpoena and for attorney's fees is GRANTED. It is ORDERED that by August 27, 2020, Angelo Gordon may file contemporaneous billing records an d other documented expenses in support of an award of fees and costs under Rule 45(d)(1). By September 10, 2020, Debtors shall file any opposition. The Clerk of Court is directed to terminate the motion at ECF No. 1. SO ORDERED. (Signed by Judge Analisa Torres on 8/13/2020) (kv)

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which Riverstone Credit Management LLC (“Riverstone”) serves as an administrative agent.
Siddiqui Decl. ¶ 3, ECF No. 5.
In November 2019, a number of stakeholders, including Riverstone, filed motions for the
appointment of a Chapter 11 trustee. ECF Nos. 5-10, 5-11. The Bankruptcy Court scheduled a
hearing on those motions for January 17, 2020. In re MTE Holdings LLC, No. 19-12269 (Bankr.
D. Del. Dec. 18, 2019), ECF No. 308; id. (Bankr. D. Del. Dec. 19, 2019), ECF No. 322. On
January 9, 2020, Debtors filed notices of intent to serve Angelo Gordon with a subpoena
requiring a representative to testify at a deposition (the “Deposition Subpoena”), and a subpoena
for documents (the “Document Subpoena”). See Deposition Subpoena, ECF No. 5-1; Document
Subpoena, ECF No. 5-6. The Deposition Subpoena required a representative of Angelo Gordon
to sit for a deposition at the offices of Debtors’ counsel in Wilmington, Delaware, on January 14,
2020. Deposition Subpoena at 4. The Document Subpoena required Angelo Gordon to produce
by January 13, 2020 communications and records related to Debtors and Riverstone. Document
Subpoena at 3, 17–18.
On January 10, 2020, Debtors served the subpoenas on Angelo Gordon. Proof of
Service, ECF No. 5-8. That same day, Angelo Gordon’s counsel sent a letter to Debtors’ counsel
claiming that the subpoenas were defective, and demanding their withdrawal. Sawyer Letter,
ECF No. 5-9. Debtors did not withdraw the subpoenas. Debtors also failed to file a response
brief by February 4, 2020 and the February 14, 2020 extension as ordered by this Court. ECF
No. 8.

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DISCUSSION
I.

Legal Standards
Rule 45(d)(3) of the Federal Rules of Civil Procedure provides that on “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 comply beyond the
geographical limits specified in Rule 45(c); . . . or, (iv) subjects a person to undue burden.” Fed.
R. Civ. Proc. 45(d)(3)(A). Rule 45(c), in turn, provides in relevant part that “a subpoena may
command a person to attend a trial, hearing, or deposition only . . . within 100 miles of where the
person resides, is employed, or regularly transacts business in person.” Fed. R. Civ. P. 45(c)(1).
On a motion to quash, “the party issuing the subpoena must demonstrate that the
information sought is relevant and material to the allegations and claims at issue in the
proceedings.” Shaw v. Arena, No. 17 Misc. 448, 2018 WL 324896, at *1 (S.D.N.Y. Jan. 3,
2018) (internal quotation marks, citation, and alteration omitted). Upon establishing relevance,
“the movant bears the burden of demonstrating an undue burden.” Griffith v. United States, No.
M8-85, 2007 WL 1222586, at *2 (S.D.N.Y. Apr. 25, 2007).
In determining whether a subpoena subjects a witness to undue burden, a court must
balance “the interests served by demanding compliance with the subpoena against the interests
furthered by quashing it; this process of weighing a subpoena’s benefits and burdens calls upon
the trial court to consider whether the information is necessary and whether it is available from
any other source.” Aristocrat Leisure Ltd. v. Deutsche Bank Tr. Co. Americas, 262 F.R.D. 293,
300 (S.D.N.Y. 2009).
Finally, Rule 45(d)(1) provides that “[a] party or attorney responsible for issuing and
serving a subpoena must take reasonable steps to avoid imposing undue burden or expense on a

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person subject to the subpoena. The court for the district where compliance is required must
enforce this duty and impose an appropriate sanction—which may include lost earnings and
reasonable attorney’s fees—on a party or attorney who fails to comply.” Fed. R. Civ. Proc.
45(d)(1).
II.

Analysis
A. Procedural Deficiencies
The Court concludes that the Deposition Subpoena is facially defective on at least two

grounds—the time provided to comply and the lack of requisite witness fees—and, therefore,
must be quashed.
First, although Rule 45 does not define a “reasonable time to comply,” courts in this
circuit have found fourteen days to be “presumptively reasonable,” whereas notice of a week or
less has generally been considered unreasonable. Brown v. Hendler, No. 09 Civ. 4486, 2011 WL
321139, at *2 (S.D.N.Y. Jan. 31, 2011) (collecting cases); see also, e.g., Arch Ins. Co. v.
Centerplan Constr. Co., LLC, No. 3:16 Civ. 1891, 2017 WL 4998645, at *1 (D. Conn. Nov. 2,
2017) (“Courts within this circuit have ruled the service of a subpoena five to nine days in
advance of a hearing is not reasonable time to comply.” (internal quotation marks and citation
omitted)). Here, Debtors served the Deposition Subpoena on Angelo Gordon on January 10,
2020, with an appearance date of January 14, 2020. See Deposition Subpoena at 3; Proof of
Service. Four days’ notice did not afford Angelo Gordon a reasonable time to comply.
Second, Rule 45 states that a subpoena must be accompanied by “fees for 1 day’s
attendance.” Fed. R. Civ. Proc. 45(b)(1). “This requirement is strictly enforced,” and “courts in
this [d]istrict as well as this [c]ircuit have deemed subpoenas invalid and granted motions to
quash where a party failed to tender a witness fee with service of the subpoena.” KOS Bldg.

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Grp., LLC v. R.S. Granoff Architects, P.C., No. 19 Civ. 2918, 2020 WL 1989487, at *3
(S.D.N.Y. Apr. 24, 2020). Angelo Gordon asserts that Debtors failed to provide witness fees,
and the proof of service does not indicate such fees were tendered. See Angelo Gordon Mem. at
6; Proof of Service.
B. Undue Burden
In addition to the Deposition Subpoena’s procedural faults, the Court concludes that it is
unnecessary, duplicative, and seeks information readily available from other sources and, as a
result, should be quashed as unduly burdensome on Angelo Gordon. The “process of weighing a
subpoena’s benefits and burdens calls upon the trial court to consider whether the information is
necessary and whether it is available from any other source.” Aristocrat, 262 F.R.D. at 300. The
topics designated in the Deposition Subpoena are substantially similar to the topics in the
subpoena for Riverstone. Compare Deposition Subpoena at 16–18, with ECF No. 5-3 at 11–12.
The topics include Angelo Gordon’s communications with Riverstone, MTE Holdings LLC, and
Natixis, all parties already involved in the underlying action. See Deposition Subpoena at 16–18.
As the issuer of the subpoena, MTE Holdings LLC would be seeking information about
communications involving itself, making the subpoena at least partially redundant and the
information sought readily available from other sources. Id. at 17.
In addition, Debtors’ need to obtain the information urgently is low compared to its
potential value. Debtors had ample time to properly serve Angelo Gordon along with other
parties, such as Riverstone, but instead chose to do so only days before the hearing. See
Deposition Subpoena at 5; ECF No. 5-3 at 2-3. Further, Debtors also failed to file a response
brief to the motion to quash by February 4, 2020, even with an extension by this Court to
February 14, 2020. ECF No. 8. Accordingly, the Court has been presented with no justification

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for such a far-reaching demand on such short notice. The Court concludes, therefore, that the
information the Deposition Subpoena seeks is unnecessary, duplicative, and readily available to
Debtors without the need to subpoena Angelo Gordon. Id.
C. Attorney’s Fees
The Court finds reimbursement of attorney’s fees appropriate here. “Sanctions are
properly imposed and attorney’s fees are awarded where, as here, the party improperly issuing
the subpoena refused to withdraw it, requiring the non-party to institute a motion to quash.”
Night Hawk Ltd. v. Briarpatch Ltd., L.P., No. 03 Civ. 1382, 2003 WL 23018833, at *9 (S.D.N.Y.
Dec. 23, 2003). Here, Angelo Gordon’s counsel informed Debtors’ counsel of the deficiencies in
the subpoena and requested its withdrawal without success. Sawyer Letter. Those flaws were
patent: it is obvious that four days is not a reasonable time to comply with a deposition subpoena,
and Debtors had no excuse for waiting until the eleventh hour to seek deposition testimony. See
Saint-Jean v. Emigrant Mortg. Co., No. 11 Civ. 2122, 2015 WL 13735434, at *5 (E.D.N.Y. Oct.
7, 2015) (“Even if the Subpoenas might arguably have produced some new information relevant
to Emigrant’s statute of limitations defense, Emigrant and its counsel could have sought such
information earlier in the discovery process, rather than one week before the close of
discovery.”). Indeed, in changing the notice requirement of Rule 45 from ten days to fourteen
days, the intent of the 1991 advisory committee was to allow parties more time to object to such
subpoenas, . See In re Rule 45 Subpoena Issued to Cablevision Sys. Corp. Regarding IP Address
69.120.35.31, No. 08 Misc. 347, 2010 WL 2219343, at *5 (E.D.N.Y. Feb. 5, 2010), report and
recommendation adopted in part, 2010 WL 1686811 (E.D.N.Y. Apr. 26, 2010).
When deciding whether sanctions should be imposed, the court must determine whether
the “subpoena imposed an undue burden,” and, if so, what “reasonable steps” the issuing party

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took to “avoid imposing such a burden.” Molefi v. Oppenheimer Tr., No. 03 Civ. 5631, 2007
WL 538547, at *2 (E.D.N.Y. Feb. 15, 2007). As the Court has explained, the burden created by
the subpoena was significant. And Debtors did not demonstrate any measures taken to mitigate
the burden on Angelo Gordon. They failed to provide the acceptable fourteen days to respond,
or mandatory witness fees, and took no steps to modify the subpoena upon notice of its
deficiencies. Deposition Subpoena at 5–6. Moreover, Debtors caused Angelo Gordon to bring
the instant motion because of Debtors’ refusal to withdraw, and then failed to file a response
brief to justify the subpoena. See Molefi, 2007 WL 538547, at *3 (“When a subpoena should not
have been issued, literally everything done in response to it constitutes undue burden or expense
within the meaning of [Rule] 45(c)(1).” (internal quotation marks and citation omitted)).
Because Debtors have needlessly wasted Angelo Gordon’s and the Court’s resources in resolving
this motion, Angelo Gordon is entitled to reimbursement of expenses, including reasonable
attorney’s fees, incurred in pursuing the motion.
CONCLUSION
Accordingly, Angelo Gordon’s motion to quash the Deposition Subpoena and for
attorney’s fees is GRANTED. It is ORDERED that by August 27, 2020, Angelo Gordon may
file contemporaneous billing records and other documented expenses in support of an award of
fees and costs under Rule 45(d)(1). By September 10, 2020, Debtors shall file any opposition.
The Clerk of Court is directed to terminate the motion at ECF No. 1.
SO ORDERED.
Dated: August 13, 2020
New York, New York

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