Robbins & Myers, Inc v. JM Huber Corporation, et al
Filing
375
DECISION and ORDER granting 362 Motion to Compel. Plaintiff shall produce the E&Y Documents to Defendants within 14 days of this Decision and Order. Defendants shall file their affidavit of expenses in connection with this motion within 14 days; Plaintiff may file its opposition within 14 days thereafter; Defendants may reply within 5 days; oral argument shall be at the court's discretion; Thompson Hine shall pay $1,000 to the Clerk of Court within 14 days of this D&O.. Signed by Hon. Leslie G. Foschio on 8/3/2011. (SDW)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
ROBBINS & MYERS, INC.,
Plaintiff,
v.
J.M. HUBER CORPORATION and
H. MILTON HOFF,
DECISION
and
ORDER
01-CV-201S(F)
Defendants,
Counter-Claimants and
Third-Party Plaintiffs,
ROBBINS & MYERS ENERGY SYSTEMS, INC.,
Third-Party Defendant.
APPEARANCES:
THOMPSON, HINE LLP
Attorneys for Plaintiff and Third-Party Defendant
LESLIE W. JACOBS,
MATTHEW E. LIEBSON, of Counsel
3900 Key Center
127 Public Square
Cleveland, Ohio 44114-1291
HODGSON RUSS LLP
Attorneys for Plaintiff and Third-Party Defendant
ROBERT J. LANE, JR.,
JEFFREY C. STRAVINO, of Counsel
The Guaranty Building, Suite 100
140 Pearl Street
Buffalo, New York 14202-4040
DAY PITNEY, LLP
Attorneys for Defendants and Third-Party Plaintiffs
DENNIS R. LaFIURA,
PAUL R. MARINO,
DAVID S. SAGER, of Counsel
Post Office Box 1945
Morristown, New Jersey 07962-1945
PHILLIPS LYTLE LLP
Attorneys for Defendants and Third-Party Plaintiffs
EDWARD S. BLOOMBERG, of Counsel
3400 HSBC Center
Buffalo, New York 14203
By papers filed June 21, 2011 (Doc. No. 362), Defendants moved to compel, and
for sanctions, Plaintiff’s response to Defendants’ Fifth Request for Production of
Documents served on Plaintiff April 12, 2011, Exh. D to Declaration of Edward
Bloomberg filed in Support of Defendants’ motion (“Bloomberg Declaration”)
(“Defendants’ Request”). Defendants’ Request seeks documents responsive to
Defendants’ four prior document requests and more particularly, “all documents
reflecting, referring, or relating to” the closures at issue in this case.
After serving the Defendants’ Request, Defendants also served, on April 19,
2011, Plaintiff’s auditor, Ernst and Young (“E&Y”), with a subpoena, pursuant to
Fed.R.Civ.P. 45, seeking documents pertaining to Plaintiff’s reserves for warranty or
products liability claims relating to the closures to the extent E&Y had not previously
provided such documents to Defendants. Bloomberg Declaration Exh. A at 4. It is not
disputed that Plaintiff advised E&Y to refuse production on the ground that Defendants’
subpoena was untimely as outside the time period permitted by this court within which
to undertake additional discovery as provided in the court’s March 21, 2011 Decision
and Order overruling Plaintiff’s assertion of attorney-client privilege regarding 31
documents relevant to Plaintiff’s issuance on March 1, 2011 of a so-called Public
Service Announcement (“PSA”) (Doc. No. 325) (“the D&O”). Robbins & Myers, Inc. v.
J.M. Huber Corporation, 274 F.R.D. 63 (W.D.N.Y. 2011).
Plaintiff admits it informed E&Y that because the subpoena was not specifically
authorized in the D&O, D&O at 90-91; Robbins & Myers, Inc., 274 F.R.D. at 104,
Defendants’ subpoena was untimely. Opposition of R&M to Defendants’ June 21, 2011
Motion to Compel Discovery and For Sanctions (Doc. No. 368) (“Plaintiff’s Opposition”)
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at 2 (noting that after E&Y “finally became aware of the procedural posture of the
litigation” E&Y turned over the E&Y Documents to Thompson, Hine, Plaintiff’s
attorneys). Plaintiff contends Defendants’ Request is subject to the same objection, as
well as the fact that both the subpoena and Defendants’ Request seek information
beyond the scope of the PSA-related subject matter addressed in the D&O. Id. To
reduce inconvenience to E&Y, Plaintiff arranged with E&Y to obtain custody of certain
documents E&Y ascertained are subject to the subpoena (“the E&Y Documents”).
Plaintiff’s Opposition at 5; Bloomberg Declaration Exh. C at 2-4. Plaintiff does not
contend that the E&Y Documents are irrelevant for discovery purposes under
Fed.R.Civ.P. 26(b)(1).
Based on Plaintiff’s failure to timely supplement its prior document production in
response to Defendants’ earlier requests, which encompassed the PSA as a form of
communication to Plaintiff’s customers regarding the asserted risks of closure failure as
alleged by Plaintiff in this action, Bloomberg Declaration Exh. D (Exh. C - Defendants’
Third Request for Documents, dated March 7, 2008 ¶ 14), the court allowed
Defendants an additional 90 days within which to conduct further discovery relating to
the purpose and drafting of the PSA, related communications with customers, and
Rigot’s credibility regarding the PSA’s casting of Defendants as responsible for
inconvenience and potential losses resulting from possible failure of the closures. D&O
at 90-91; Robbins & Myers, Inc., 274 F.R.D. at 104. While the court’s emphasis in the
D&O was on extending discovery to permit depositions of several key participants in
Plaintiff’s preparation and issuance of the PSA, the court also specifically permitted
document production related to such depositions. Id. at 91; Robbins & Myers, Inc., 274
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F.R.D. at 104.
Defendants contend that the E&Y Documents will reveal whether Plaintiff
provided to E&Y information concerning the PSA which, in contrast to Plaintiff’s earlier
communications to E&Y that, with the passage of time, Plaintiff’s exposure to potential
claims arising from the risk of failure of the closures has decreased, implied such risk
presently requires immediate inspection and remediative action. Defendants’
Memorandum at 2. Plaintiff does not deny Defendants’ assertion that such information
is included in the E&Y Documents. Although, in addressing Defendants’ motion to
compel in the D&O, the court was not specifically informed that Defendants may seek
additional discovery from third-parties in preparation for the additional depositions
authorized by the court, it can hardly be denied, as Plaintiff now argues, that the
indisputedly relevant E&Y Documents are within the 90-day period for additional
document production authorized by the D&O. Plaintiff’s refusal to produce is therefore
grounded on an unreasonably restrictive interpretation of the scope of additional
discovery authorized by the D&O. As such, Plaintiff is required to produce documents
responsive to Defendants’ Fifth Request including, particularly, the E&Y Documents.
Based on these factors, it is difficult to understand on what basis Plaintiff could
reasonably have believed that the E&Y Documents, directly relating to the information
regarding the supposed risks presently posed by the closures as recently described and
promulgated by Plaintiff in the PSA, could be withheld for the reasons relied upon by
Plaintiff as communicated by Plaintiff’s attorneys to E&Y, and in opposition to
Defendants’ motion. The court therefore concludes that Plaintiff’s refusal to produce
was not substantially justified thereby warranting sanctions pursuant to Fed.R.Civ.P.
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37(a)(5)(A). Accordingly, Plaintiff shall reimburse Defendants’ reasonable expenses,
including attorneys fees, incurred in connection with this motion.
Moreover, but for Plaintiff’s improper interference with E&Y’s compliance with
Defendants’ subpoena on the asserted ground that the subpoena was impermissible
under the D&O, the requested information would have been provided by E&Y, obviating
the instant motion. See Teri v. Oxford Mgmt. Servs., Inc., No. 05-2777, 2008 U.S. Dist.
LEXIS, *24 (E.D.N.Y. Sep’t. 30, 2008), adopted by, No. 05-2777, 2009 U.S. Dist. LEXIS
107807, *13 (E.D.N.Y. Nov. 19, 2009) (sanctioning defendants for, inter alia,
defendants’ interference with plaintiff’s subpoena of documents in possession of
defendant’s outside accountant and stating that defendant’s “proper course should
have been a motion to quash” raising defendant’s objections); Fox Industries, Inc. v.
Gurovich, 2006 WL 2882580, *10 (E.D.N.Y. Oct. 6, 2006) (sanctioning defendant’s
attorney $1,000 for each letter to recipient of plaintiff’s subpoena directing recipient not
to comply with subpoena as attempt to “thwart the litigation process” and constituting an
“usurpation of judicial authority”).
Here, the record supports finding that Plaintiff’s attorneys, Thompson Hine LLP,
(“Thompson Hine”) were responsible for causing E&Y’s non-compliance with
Defendants’ subpoena. Bloomberg Declaration Exh. C at 2, 4, 6. Specifically, the
record indicates that the reasons for E&Y’s initial refusal to comply as stated by E&Y in
its May 12, 2011 letter response to Defendants’ subpoena, Bloomberg Declaration Exh.
B, did not include the grounds asserted by Plaintiff in opposition to Defendants’ motion,
i.e., that the subpoena was untimely and beyond the scope of the D&O, which were
raised for the first time by Plaintiff’s attorneys in a series of emails with Defendants’
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attorneys only after E&Y consulted with Plaintiff’s attorneys following its letter to
Defendants objecting to the subpoena. Id. at 4. In particular, E&Y’s June 15, 2011
email to Defendants’ attorney states that E&Y does not object to producing the
requested documents “if discovery is still open,” an objection not stated in its initial May
10, 2011 response to Defendants concerning the subpoena, and that E&Y “needs to”
allow Plaintiff to “pursue the matter” but that E&Y then had “not been informed of
[Plaintiff’s] final decision on what to do at this time.”). Bloomberg Declaration, Exh. C at
4 (underlining added). Thus, the record supports a finding that but for Thompson
Hine’s advice to E&Y that Defendants’ subpoena should be dishonored as unauthorized
by the D&O, E&Y would have timely complied without the necessity of the instant
motion to compel.
Contrary to Plaintiff’s disingenuous assertion that Defendants’ attorney duped
E&Y into delivery of the documents subject to the subpoena to Thompson Hine,
Plaintiff’s Opposition at 3 (Defendants “attempted to fool” E&Y into producing
documents), thereby demonstrating Defendants’ awareness the subpoena was invalidly
issued under the D&O, the emails between E&Y’s attorney and Defendants’ attorney
establish that this arrangement was intended to enable Plaintiff to physically control the
E&Y documents relieving E&Y of the need to respond to the subpoena, as E&Y
unambiguously indicated it intended to follow Thompson Hine’s directions, Bloomberg
Declaration, Exh. C at 4, a proposal to which E&Y and Thompson Hine agreed. Id. at
203, 4. As Mr. Liebson’s email of June 16, 2011 stated: “This [agreement to take
custody of the E&Y Documents] does not, of course, change our position that discovery
is closed, that the subpoena was inappropriate, and that Huber is not entitled to any
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documents from E&Y at this point.”). Id. at 2 (bracketed material and underlining
added). As such, Thompson Hine should be fined $1,000 as a penalty for such
improper interference. See Fox Industries, Inc., 2006 WL 288250, *10 (sanctioning
attorney who advised recipient of non-party subpoena not to comply by imposing fine of
$1,000 for each letter attorney sent to recipient).
CONCLUSION
Based on the foregoing, Defendants’ motion (Doc. No. 362) is GRANTED.
Plaintiff shall produce the E&Y Documents to Defendants within 14 days of this
Decision and Order. Defendants shall file their affidavit of expenses in connection with
this motion within 14 days; Plaintiff may file its opposition within 14 days thereafter;
Defendants may reply within 5 days; oral argument shall be at the court’s discretion;
Thompson Hine shall pay $1,000 to the Clerk of Court within 14 days of this D&O.
SO ORDERED.
/s/ Leslie G. Foschio
________________________________
LESLIE G. FOSCHIO
UNITED STATES MAGISTRATE JUDGE
Dated: August 3, 2011
Buffalo, New York
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