Precourt et al v. Fairbanks Reconstruction Corp. et al
ORDER granting in part and denying in part 6 Motion to Quash; denying 6 Motion for Protective Order; denying 12 Motion for Reconsideration. Signed by Chief Judge Karen E. Schreier on 5/5/2011. (KC)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
LORI PRECOURT, individually and
as administrator of the estate of
Carolyn Black; and
CORPORATION d/b/a FAIRBANK
FARMS, a foreign corporation;
GREATER OMAHA PACKING
COMPANY, INC., a foreign
SHAW’S SUPERMARKETS, INC., a
On December 29, 2010, Beef Product, Inc. (BPI), a nonparty to the above
entitled action, moved to quash two subpoenas issued by Greater Omaha
Packing Company (GOPAC). The court granted the motion and imposed
attorney fees for BPI as a sanction on GOPAC. GOPAC moves to reconsider the
court’s award of attorney fees to BPI and, alternatively, objects to BPI’s
requested attorney fees. BPI resists the motion. GOPAC’s motion is denied in
part and granted in part.
GOPAC served two new subpoenas on BPI, and BPI moves to quash
these subpoenas. GOPAC resists the motion to quash. BPI’s motion is denied in
part and granted in part.
The pertinent facts to this order are as follows:1 BPI manufactures beef
trim product known as lean fine textured beef (LFTB). BPI is based in Dakota
Dunes, South Dakota, and has processing plants in South Sioux City,
Nebraska; Waterloo, Iowa; Finney County, Kansas; and Amarillo, Texas.
In the fall of 2009, a strain of E. coli bacteria broke out in New England
from beef products. As a result of this outbreak, multiple individuals brought
separate actions against Fairbank and GOPAC, including the underlying action
in this case Lori Precourt v. Fairbank Reconstruction Corp. et. al. (Precourt),
pending in the District of New Hampshire. That action alleges that on
October 1, 2009, Carolyn Black consumed ground beef from Shaw’s
Supermarket, Inc. and two days later become ill with symptoms consistent
with E. coli poisoning. Black was hospitalized and subsequently died on
October 30, 2009.
Various state and federal agencies commenced investigations regarding
the E. coli outbreak. On October 31, 2009, the United States Department of
The facts in this order differ from the facts in the court’s order on BPI’s
first motion to quash (Docket 10) because GOPAC responded to BPI’s second
motion to quash and supplied the court with its version of the facts.
Agriculture’s Food Safety and Inspection Services announced that Fairbank
would voluntarily recall over 500,000 pounds of ground beef that had been
produced at its Ashville facility between September 14 and September 16,
2009. Fairbank admitted that it was the source of the E. coli tainted meat sold
by Shaw’s. The recalled beef was processed by Fairbank using raw beef trim
from other beef manufacturers. GOPAC and BPI supplied product to Fairbank
and one of the central issues in Precourt is who is the source of the E. coli that
was introduced into Fairbank’s product. GOPAC intends to argue that another
manufacturer, such as BPI, and not GOPAC, is the ultimate source of the E.
Before GOPAC issued subpoenas in this case, it twice served subpoenas
on BPI in Long v. Fairbank Farms (Long), a similar action pending in the District
of Maine. BPI did not respond because GOPAC failed to comply with the
procedural rules. On November 24, 2010, GOPAC reissued the subpoena for
documents and commanded BPI to produce documents at the Holiday Inn
Express in Vermillion, South Dakota, on December 10, 2010. GOPAC also
issued a subpoena for a Rule 30(b)(6) deposition for the same time and
location. On November 30, 2010, BPI informed GOPAC that if it effected service
of the subpoenas, BPI would object. On December 1, 2010, the two subpoenas
were delivered to the residence of Rich Jochum, BPI’s corporate administrator
and registered agent, and were served on his wife.
BPI informed GOPAC, in writing, that it objected to the subpoenas on
December 6, 2010, but it offered to voluntarily produce certain documents if
GOPAC would forgo further discovery from BPI. Among the documents BPI
agreed to voluntarily produce were all sale invoices and certificates of
laboratory analysis relating to the BPI products that could have potentially
been part of any product involved in Fairbank’s recall.
During a December 8, 2010, telephone conversation, BPI’s counsel again
offered to voluntarily disclose the above-mentioned documents to GOPAC’s
counsel. GOPAC’s counsel refused the offer and stated that GOPAC would
serve new subpoenas on BPI. Because discovery closed in Long on
December 20, 2010, GOPAC stated that the new subpoenas would be served in
On December 14, 2010, GOPAC served two subpoenas on BPI by leaving
the subpoenas with Jochum’s wife at his home. One subpoena commanded BPI
to produce certain requested documents at the Holiday Inn Express in
Vermillion, South Dakota, on December 29, 2010, (document subpoena). The
other subpoena directed BPI to attend a deposition on the same date at the
same location (deposition subpoena). See Dockets 1-1 and 1-2.
On December 17, 2010, Fairbank served a document subpoena on BPI
seeking limited documents. BPI fully complied with the subpoena and most of
the documents produced to Fairbank would have been voluntarily produced to
GOPAC if GOPAC had accepted BPI’s offers on December 6 or 8. On
December 22, 2010, BPI advised GOPAC in writing that its service of the
December 14 subpoenas was ineffective. In this letter, BPI indicated that it had
responded to Fairbank’s subpoena and produced all documents related to BPI’s
sale, shipment, and laboratory analysis of product sent to Fairbank during the
relevant time frame.
On December 28, 2010, BPI’s counsel had a telephone conference call
with GOPAC’s counsel. GOPAC’s attorney acknowledged that he had not
reviewed BPI’s production in response to Fairbank’s subpoena, but he believed
it was insufficient. GOPAC’s attorney further indicated that court intervention
would be necessary to resolve the dispute. Later that day, BPI filed its motion
to quash, for a protective order, and for sanctions. GOPAC never responded to
the motion. The court granted BPI’s motion to quash, denied the motion for a
protective order, and granted sanctions in the form of attorney fees to BPI on
January 28, 2011. In that order, the court gave BPI’s attorney 14 days to
submit an affidavit detailing the fees incurred in preparing the motion to
quash, and gave GOPAC 14 days after that order to object to the requested
GOPAC served new subpoenas on BPI on January 6, 2011. The parties
attempted to negotiate what documents would be produced under the new
subpoenas and what topics the Rule 30(b)(6) deposition would cover. The
negotiations failed on January 21, 2011, and the parties filed the pending
Motion to Quash
BPI moves under Rules 26(c) and 45(c)(3)(A) to quash GOPAC’s second
set of subpoenas. The document subpoena orders that certain documents be
produced at the Holiday Inn Express in Vermillion, South Dakota, on
January 31, 2011. The deposition subpoena orders an appearance for a
deposition at the same location on the same date. BPI seeks numerous forms of
BPI asks the Court to quash the Subpoena . . . BPI also asks the
Court to quash the Rule 30(b)(6) deposition of BPI . . . .
Additionally, BPI asks the Court to enter a protective order
pursuant to Federal Rule of Civil Procedure 26(c) prohibiting
GOPAC from seeking documents from BPI other than those BPI
has produced or offered to produce; limiting any Rule 30(b)(6)
deposition of BPI to matters related to the BPI product that was
used by Fairbank Farms in the recalled product; and permitting
BPI to designate documents and information as confidential or
attorneys’ eyes only, if appropriate.
Docket 6 at 2.
Discovery may be obtained “regarding any nonprivileged matter that is
relevant to any party’s claim or defense . . . .” Fed. R. Civ. P. 26(b)(1). While
discovery is not a fishing expedition, the relevancy standard is broader for
discovery than for admissibility of evidence. Hofer v. Mack Trucks, Inc., 981
F.2d 377, 380 (8th Cir. 1992) (citations omitted). “Some threshold showing of
relevance must be made before parties are required to open wide the doors of
discovery and to produce a variety of information which does not reasonably
bear upon the issues in the case.” Id. The party seeking discovery bears this
burden. See id. “ ‘Even if relevant, discovery is not permitted where no need is
shown, or compliance would be unduly burdensome, or where harm to the
person from whom discovery is sought outweighs the need of the person
seeking discovery of the information.’ ” Miscellaneous Docket Matter #1 v.
Miscellaneous Docket Matter #2, 197 F.3d 922, 925 (8th Cir. 1999) (quoting
Micro Motion, Inc. v. Kane Steel Co., 894 F.2d 1318, 1323 (Fed. Cir. 1990)).
“A party or attorney responsible for issuing and serving a subpoena must
take reasonable steps to avoid imposing undue burden or expense on a person
subject to the subpoena. The issuing court must enforce this duty and impose
an appropriate sanction.” Fed. R. Civ. P. 45(c)(1). A court “must quash or
modify a subpoena that . . . subjects a person to undue burden.” Id. Some
courts utilize a six-factor test for determining if an undue burden exists:
“ ‘(1) relevance of the information requested; (2) the need of the party for the
documents; (3) the breadth of the discovery request; (4) the time period covered
by the request; (5) the particularity with which the party describes the
requested documents; and (6) the burden imposed.’ ” Glenford Yellow Robe v.
Allender, No. 09-5040-JLV, 2010 WL 1780266, at *5 (D.S.D. Apr. 30, 2010)
(quoting Jade Trading, LLC v. United States, 65 Fed. Cl. 188, 190 (Fed. Cl.
2005)). The party moving to quash the subpoena bears the burden to prove
that the subpoena would create an undue burden. Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure, § 2459 (3d ed. 2008).
When a nonparty is subpoenaed, the court is particularly mindful of Rule
45's undue burden and expense cautions. Wright & Miller, at § 2459; see also
Alberts v. HCA Inc., 405 B.R. 498, 503 (D.D.C. 2009) (reasoning that a “blatant
abuse of the subpoena power is a common thread running through decisions in
which sanctions have been awarded under Rule 45(c)(1),” such as seeking
information from a nonparty to use in a different court action). To protect a
nonparty from undue burden or expense, the court can modify the subpoena’s
scope or shift the financial burden of retrieving the information to the
requesting party. Wright & Miller, at § 2459. If the party seeking the
information can easily obtain the same information without burdening the
nonparty, the court will quash the subpoena. See In re Cantrell, No. 09-mc0158-CV-W-GAF, 2009 WL 1066011, at *2 (W.D. Mo. Apr. 21, 2009) (quashing
a nonparty document subpoena because a party in the action had the
information). If the subpoena seeks the nonparty’s confidential information, the
court can find that the party serving the subpoena engaged in “overzealous
discovery,” quash the subpoena, and award costs to the nonparty. Haworth Inc.
v. Herman Miller, Inc., 998 F.2d 975, 978-79 (Fed. Cir. 1993).
A. Document Subpoena
Government Inspection Records
In subpart A of the document subpoena, GOPAC seeks production by BPI
of “all governmental inspection records relating in any way to any inspection of
BPI by the United States Department of Agriculture and/or the Federal Food
Safety Inspection Services (collectively the “FSIS”) between January 1, 2009
and the present.” Docket 8-1 at 7 (emphasis in original). GOPAC has defined
“the present” as January 6, 2011, the date GOPAC proposed for the deposition.
Docket 16 at 12.
The information sought by GOPAC is relevant. Throughout their briefs,
GOPAC and BPI make substantial arguments as to why the other
manufacturer is the source of the E. coli that was introduced into Fairbank’s
product. This is a factual issue to be decided by the Precourt court in New
Hampshire, not by this court. Instead, the issue before this court is whether
GOPAC’s subpoenas served on nonparty BPI are proper under Rule 45. GOPAC
intends to argue in Precourt that another manufacturer, such as BPI, and not
GOPAC, was the E. coli source. Government inspection records are public
documents and would tend to prove or disprove that BPI was the source of the
E. coli bacteria. Thus, subpart A seeks relevant information.
BPI contends that the subject matter is too broad and that the time
frame is not sufficiently limited. On BPI’s subject matter concern, GOPAC
agreed to limit discovery to safety inspections of BPI’s manufacturing or testing
process at BPI’s South Sioux City plant. Attorney David Nolan’s Affidavit,
Docket 18 at ¶ 3 (“In a telephone conversation with Mr. Shattuck, in January,
2011, I had indicated a willingness . . . to limit production to the South Sioux
City facility of BPI.”); Docket 16 at 12 (same).
On BPI’s time limit concern, GOPAC contends that “[a]s shown by the
February 2010 Notice of Intended Enforcement, government inspections
months later may reveal systematic problems in a manufacturing process that
were in place in August of 2009. GOPAC should be able to perform additional
discovery to find out what additional investigations were completed by the
government.” Docket 16 at 11. While a two-year time frame for discovery of
public records is a reasonable time limit, BPI may be burdened in gathering all
the requested government records. To reduce the burden on BPI in producing
all FSIS inspection records for BPI’s South Sioux City plant from January 1,
2009, to January 6, 2011, GOPAC will pay BPI’s reasonable expenses incurred
in complying with subpart A. If the parties are unable to reach an agreement
on the amount to be paid for reasonable expenses, GOPAC should file a motion
seeking court resolution of this issue.
Microbiological Testing Records
In subpart B, GOPAC seeks production of “all microbiological testing
records relating in any way to any environmental, carcass, production and/or
product testing performed by BPI, on behalf of BPI, or otherwise performed at
BPI, between January 1, 2009 and December 31, 2009.” Docket 8-1 at 7.
GOPAC agreed to narrow the time frame from August 1 through
September 30, 2009. BPI responded that it would produce all microbiological
testing records from August 1, 2009, to September 16, 2009, which is the last
date that Fairbank recalled its tainted product. The central issue in Precourt is
which manufacturer supplied the tainted product to Fairbank and, thus, BPI’s
testing results are only relevant during the time period that it could have
supplied product to Fairbank that could have been used to prepare the ground
beef that was sold to Shaw’s. Accordingly, subpart B is modified to the time
period of August 1 to September 16, 2009.
The remaining requests in the document subpoena, subparts C–J, as
currently written, seek potentially voluminous records from BPI:
[Subpart C seeks] all pre-operational production and operational
plans, in effect between June 1, 2009 and September 30, 2009,
relating in any way to the slaughter of cattle and production of beef
products by BPI. . . . [Subpart D seeks] all daily production and
operational records, between June 1, 2009 and September 30,
2009, relating in any way to the daily production of beef products
by BPI. . . . [Subpart E seeks] all procurement and distribution
records relating in any way to the beef products produced and
distributed by BPI between June 1, 2009 and September 30, 2009
(unless otherwise indicated below). . . . [Subpart F seeks] all
operational audits, including but not limited to any e-mails,
correspondence, memos, reports, findings, conclusions and/or any
other records which in any way relate to or concern any audit or
inspection of your establishments (whether performed by you, any
governmental agency, or any third-party or customer) between
January 1, 2009 and the present. . . . [Subpart G seeks] all
customer complaint records, including but not limited to any
emails, correspondence, memos, reports, findings, conclusions
and/or any other records which in any way relate to or concern
any alleged food-borne illness complaint BPI received from any
party between January 1, 2009 and the present. . . . [Subpart H
seeks] any and all Record Reviews for the calendar year 2009,
including but not limited to any e-mails, correspondence, memos,
reports, findings, conclusions and/or any other records which in
any way relate to or concern any Record Reviews. . . . [Subpart I
seeks] all organizational charts, or other diagrams or descriptions,
of the management structure of your company and establishments.
. . . [Subpart J seeks] all records of communication or activity
between your company/establishments and any locations or
representatives of Fairbank Farms, Inc., Fairbank Reconstruction
Corp., AFA Foods, afa Foods or related entities relating to any
provisions of the American Foodservice Corporation Domestic Beef
Raw Materials Specifications (“Specifications[”]) including but not
limited to: audits, Acceptable Quality Level inspections,
determinations of exceeding any of the action levels as set forth in
the Specifications; microbiological trend data; “intensive sampling”
as provided for in Attachment No. 3 to the Domestic Beef Raw
Materials Specifications, for the timeframe between January 1,
2009 and the present.
Docket 8-1 at 7-8.
With the exception of subpart I, BPI resists these requests for a myriad of
reasons, including that the requests are vague, the information sought is
irrelevant, unduly burdensome, and some of the information is proprietary
trade secret information protected by Rule 26(c)(1)(G).
Some or all of BPI’s objections may be valid reasons to prevent disclosure
of the documents requested in subparts C–J, exclusive of subpart I. After the
parties have completed discovery on subparts A and B concerning E. coli tests
and government inspection records, if GOPAC believes that it has good cause to
request the additional information sought in subparts C–J, exclusive of subpart
I, it may move for oral argument and the court will take up the remaining
document requests at that time.
Regarding subpart I, BPI contends that it “has no documents responsive
to this request as modified.” Docket 7 at 24. GOPAC agrees that no other
documents are required for subpart I: “BPI states that there are no documents
responsive to this request. Based upon that statement, GOPAC is not
requesting additional information on this topic provided that GOPAC can
confirm this response under oath at the Rule 30(b)(6) deposition.” Docket 16 at
16. Thus, BPI’s motion to quash the document subpoena on subparts C–J is
B. Deposition Subpoena
GOPAC also served a deposition subpoena on BPI that includes, but is
not limited to, twelve enumerated topics. BPI does not object to a deposition
but rather to the scope of certain topics.
Topics 1-3 concern testing of product, incoming raw material, and LFTB
from August 1 to September 30, 2009. Docket 8-1 at 6. As stated above, the
more relevant time period for questioning is August 1 through September 16,
2009, which is the last date that Fairbank recalled the tainted product.
While BPI agrees that questioning about its E. coli and pH testing in
general is relevant, BPI contends that questioning outside these two areas is
overly broad. GOPAC responds that “BPI should also have to testify about any
other microbacterial or food safety testing.” Docket 16 at 17. Because the issue
in Precourt is the source of the E. coli bacteria, questioning on all microbacterial
or food safety testing is overly broad, especially for a nonparty. Thus, topics 1-3
are modified to only include testing of product, incoming raw material, and
LFTB for E. coli and general pH levels from August 1 through September 16,
BPI does not object to topic 4, the “nature of all products sent to
Fairbank Farms Ashville plant during the period of August 1, 2009 through
September 30, 2009." Docket 8-1 at 6. Thus, GOPAC may depose BPI on
topic 4 without modification.
Topics 5-7 concern Notices of Intended Enforcement, Food Safety
Assessments, and “STEPS” notifications that BPI received from January 1,
2009, through the present from FSIS. Docket 8-1 at 6. BPI argues that the time
period is too broad and that the information is irrelevant. GOPAC responds
that it takes months for the government to complete its investigations and,
thus, the time period is not too broad. As stated above, government inspection
records are public documents and relevant to this case. Because the time
period is not overly burdensome, GOPAC may depose BPI on topics 5-7 without
Topic 8 would question BPI about “[a]ny E.COLI event at the BPI plant,
including E.COLI 0157.H7 during the period of August 1, 2009 through
September 30, 2009 . . . .” Docket 8-1 at 6. While BPI questions the definition
of “E.COLI event,” it agrees to be deposed about “E.COLI event[s]” that occurred
between August 1 and September 16, 2009. This is a reasonable modification
and topic 8 is modified to the time frame between August 1 and September 16,
In topics 9-10, GOPAC seeks to question BPI about how the company
uses ammonia to process LFTB. BPI contends that it “employs a proprietary
process whereby it injects ammonia into certain products to prevent E. coli
contamination,” and resists discussing this confidential business information
other than “product ammonia and pH levels in general.” Docket 24 at 17.
GOPAC responds that the information is relevant because GOPAC suspects
that BPI reduced the amount of ammonia in treating its product due to
palpability concerns. See Michael Moss, Safety of Beef Processing Method is
Questioned, N.Y. Times (Dec. 31, 2009), Docket 17-3 (discussing BPI’s
When proprietary or trade secret information is sought, “the party
opposing discovery must show that the information is a trade secret or other
confidential research, development, or commercial information . . . and that its
disclosure would be harmful to the party’s interest in the property.” In re
Remington Arms Co., 952 F.2d 1029, 1032 (8th Cir. 1991) (quotation omitted).
“The burden then shifts to the party seeking discovery to show that the
information is relevant to the subject matter of the lawsuit and is necessary to
prepare the case for trial.” Id. (citations omitted). “If the party seeking discovery
shows both relevance and need, the court must weigh the injury that
disclosure might cause to the property against the moving party’s need for the
information.” Id. (citing Coca-Cola Bottling Co. v. Coca-Cola Co., 107 F.R.D. 288,
293 (D. Del. 1985)).
GOPAC does not dispute that the information it seeks concerns
proprietary information but rather argues that the information is relevant to
show that BPI reduced its ammonia levels which in turn could have led to E.
coli bacteria in BPI’s LFTB product. Even if the information is relevant, it could
potentially reveal proprietary information. BPI is not a party in Precourt and
risks public release of its potentially propriety information if GOPAC is allowed
to depose BPI on these topics. While GOPAC offers to treat the documents as
confidential documents, GOPAC and BPI are competitors and GOPAC could
gain intimate knowledge of BPI’s ammonia processes, some of which may be
protected by patents. See Moss, Safety of Beef Processing Method is Questioned,
Docket 17-3 (stating that BPI has “obtained patents for over two dozen pieces
of equipment and methods used in processing beef.”). The subpoenas’ subject
matter is narrow because GOPAC is only trying to determine if BPI was the
source of E. coli that allegedly caused Black’s death. As stated above, if the
results from the E. coli tests or government inspection records during the
relevant time period, from August 1 to September 16, 2009, raise questions on
BPI’s ammonia processes and GOPAC has good cause to inquire into BPI’s
proprietary information, then GOPAC can move for oral argument on
deposition topics 9 and 10.
Topic 11 seeks to depose BPI about “all suppliers to BPI including but
not limited to stockyards and feed lots for the period of August 1, 2009 through
September 30, 2009 . . . . ” Docket 8-1 at 6. BPI argues that this information is
irrelevant. Because GOPAC makes no counterargument to BPI’s objections,
GOPAC may not depose BPI on Topic 11.
In Topic 12, GOPAC desires to depose BPI on “HACCP plans for all BPI
plants.” Docket 8-1 at 6. The USDA requires meat and poultry plants under
federal inspection to have HACCP plans, also known as Hazard Analysis and
Critical Control Point plans, which are plans to reduce the contamination of
meat and poultry with pathogenic bacteria. USDA, Guidebook for the
Preparation of HACCP Plans, at 3 (Sept. 1999), available at
BPI agrees to generally testify about its HACCP plans as they existed in
August of 2009. The relevant time period in this case, as established above, is
from August 1 to September 16, 2009, and the appropriate subject matter is
any E. coli bacteria in BPI’s South Sioux City plant. Thus, GOPAC may depose
BPI about its HACCP plans for containing E. coli in effect from August 1 to
September 16, 2009, at the South Sioux City plant.
A. Motion for Reconsideration
In granting BPI’s first motion to quash, the court awarded reasonable
attorney fees and costs for BPI’s attorney as a sanction under Rule 45(c)(1).
Docket 10. GOPAC moves for reconsideration of this sanction award.
The federal rules do not provide for a motion for reconsideration.
Needham v. White Lab., Inc., 454 U.S. 927, 930 n.1 (1981) (“Such a motion is
not recognized by any of the Federal Rules of Civil Procedure.”); Sanders v.
Clemco Indus., 862 F.2d 161, 168 (8th Cir. 1988) (warning about “the dangers
of filing a self-styled ‘motion for reconsideration’ that is not described by any
particular rule of federal civil procedure.”). A party moving for reconsideration
“leave[s] the characterization of the motion to the court’s somewhat
unenlightened guess . . . .” Sanders, 862 F.2d at 168. Courts will scan the
federal rules to recast the relief sought to conform to the rules. Id. Courts
typically characterize motions to reconsider as motions made under either Rule
59(e) or 60(b). Spinar v. S.D. Bd. of Regents, 796 F.2d 1060, 1062 (8th Cir.
The differences between Rules 59(e) and 60)(b) are technical. See
Sanders, 862 F.2d at 168-69 (discussing the differences between the two rules);
Baker v. John Morrell & Co., 266 F. Supp. 2d 909, 918-920 (N.D. Iowa 2003)
(same). But when a party moves for reconsideration of an order that is also a
judgment within 10 days of that judgment, the motion for reconsideration is
properly made under Rule 59(e). Campbell v. Bartlett, 975 F.2d 1569, 1580
n.15 (10th Cir. 1992) (citing Van Skiver v. United States, 952 F.2d 1241, 1243
(10th Cir. 1991)). A judgment includes “ ‘an order from which an appeal lies.’ ”
Auto Servs. Co, Inc. v. KPMG, LLP, 537 F.3d 853, 856 (8th Cir. 2008) (quoting
Fed. R. Civ. P. 54(a)).
On January 28, 2011, the court quashed the document and deposition
subpoenas and awarded attorney fees to BPI as a sanction on GOPAC. The sole
matter before this court is whether and to what extent BPI must respond to
GOPAC’s subpoenas and, thus, GOPAC could have appealed the January 28
order. Instead, GOPAC moved for reconsideration on February 5, 2011.
Because GOPAC moved for reconsideration fewer than 10 days after the court
issued its judgment, GOPAC’s motion is properly made under Rule 59(e).
“Rule 59(e) motions serve the limited function of correcting ‘manifest
errors of law or fact or to present newly discovered evidence.’ ” United States v.
Metro. St. Louis Sewer Dist., 440 F.3d 930, 933 (8th Cir. 2006) (quoting
Innovative Home Health Care v. P.T.-O.T. Assoc. of the Black Hills, 141 F.3d
1284, 1286 (8th Cir. 1998)). “ ‘Such motions cannot be used to introduce new
evidence, tender new legal theories, or raise arguments which could have been
offered or raised prior to entry of judgment.’ ” Id. (quoting Innovative Home
Health Care, 141 F.3d at 1286). The “district court has broad discretion in
determining whether to grant or deny a motion to alter or amend judgment
pursuant to Rule 59(e) . . . .” Id.
GOPAC argues that it “did not respon[d] to the First Motion to Compel
because it erroneously assumed that the service of the new subpoenas mooted
the issues. . . . Because of this mistake, GOPAC requests the Court reconsider
its sanction award and instead decide the issue in conjunction with BPI’s
Second Motion to Quash.” Docket 12 at 2. GOPAC further contends that
“[b]ecause GOPAC was attempting in good faith to resolve the disputes relating
to the first subpoena without the Court having to address the First Motion to
Quash” that the court should “vacate its original attorney’s fees order . . . .”
Docket 13 at ¶ 4. For support, GOPAC relies on Alberts v. HCA, Inc., 405 B.R.
498 (D.D.C. 2009) and Tiberi v. CIGNA Insurance Co., 40 F.3d 110 (5th Cir.
In Tiberi, the district court refused to accept facsimile transmissions from
an attorney stating that he had, in good faith, attempted to negotiate the
parameters of the subpoenas and awarded sanctions in the form of attorney’s
fees. 40 F.3d at 110-11. The appellate court reversed because it found that the
district court committed an evidentiary error in not admitting the facsimile
affidavits. Id. Here, GOPAC did not inform the court of its attempt to negotiate
the subpoenas while BPI’s first motion to quash was pending.
In Alberts, the court denied a motion for attorney’s fees because the party
serving the subpoenas, the defendants, “had consented to the plaintiff’s
request to have the bankruptcy court hear the plaintiff’s . . . motion to quash.
This consent lends credence to the defendants’ contention that it was
unnecessary to formally withdraw the subpoenas.” 405 B.R. at 504 (internal
quotation omitted). Alberts is factually distinguishable because the party
serving the subpoenas responded to the motion to quash by agreeing to have
the bankruptcy court hear the motion. GOPAC failed to respond here.
BPI is a nonparty and nonparties are entitled to Rule 45's full protection.
GOPAC never responded to BPI’s motion to quash. Before GOPAC served the
first set of subpoenas in Precourt on BPI, GOPAC had twice served BPI with
subpoenas in Long. BPI’s counsel repeatedly informed GOPAC and its counsel
that its subpoenas were procedurally defective but that BPI would voluntarily
disclose certain documents. GOPAC refused to review BPI’s voluntarily
disclosed documents before serving BPI with more subpoenas. Instead, GOPAC
served the first set of subpoenas in Precourt on December 14. BPI’s counsel
wrote a letter to GOPAC stating that BPI disclosed to Fairbank all relevant
documents concerning E. coli for the relevant time period. GOPAC refused to
review BPI’s disclosure to Fairbanks before reissuing the subpoenas. On
December 28, BPI’s attorney called GOPAC’s counsel to discuss the subpoenas.
GOPAC refused to withdraw the subpoenas and BPI filed the motion to quash.
As noted in Alberts, “[c]ourts have identified undue burden in certain
circumstances in which a party’s refusal to withdraw a subpoena compels the
filing of a motion to quash.” Id. at 502-03 (citing Night Hawk Ltd. v. Briarpatch
Ltd., L.P., No. 03-Civ-1382-RWS, 2003 WL 23018833, at *9 (S.D.N.Y. Dec. 23,
2003); Scott v. Burress, No. 06-13916, 2008 WL 585072, at *6-7 (E.D. Mich.
Mar. 3, 2008)). In this case, GOPAC’s refusal to withdraw its procedurally
defective subpoenas caused BPI to incur the expense of filing a motion to
GOPAC did not respond to BPI’s motion even though the local rules
require parties to respond to all motions brought against them. See, e.g.,
D.S.D. Civ. LR 7.1B (“On or before 21 calendar days after service of a motion . .
. all opposing parties shall serve and file with the clerk of court a responsive
brief . . . .”). Failing to respond to a motion to quash is not an exceptional
circumstance and sanctions may be appropriate when a party fails to respond
to a discovery motion. See, e.g., St. Paul Reins. Co. v. Hristov, 155 Fed. App’x.
249, 250 (8th Cir. 2005) (upholding a district court’s award of sanctions in
discovery when the sanctioned party failed to respond to the discovery motion).
If the court found exceptional circumstances because GOPAC consciously
chose not to respond to BPI’s motion, then a party could escape its duty to
respond to motions, cause the diligent party needless expense in moving for
sanctions, occupy significant court resources, and then move for
reconsideration under Rule 59(e). Such a scenario would essentially render the
rules meaningless. At a minimum, GOPAC should have responded to BPI’s
motion stating that it believed BPI’s motion was mooted when it served the new
subpoenas on January 6, 2011. Because GOPAC has not met its burden to
prove that exceptional circumstances exist, GOPAC’s motion for
reconsideration is denied.
B. Objection to the Amount of Attorney’s Fees
As ordered by the court, BPI’s attorney, Tim R. Shattuck, submitted an
affidavit and summary of fees with a description of his services performed on
the first motion to quash. Shattuck spent 49.7 hours on the motion and seeks
$12,871.05, consisting of $12,142.50 in fees and $728.55 in tax.
In determining whether requested attorney fees are reasonable, courts
utilize the lodestar method. See, e.g., Jorstad v. IDS Realty Trust, 643 F.2d
1305, 1312-13 (8th Cir. 1981) (utilizing the lodestar calculation for determining
reasonable attorney fees); Walitalo v. Iacocca, 968 F.2d 741, 747-48 (8th Cir.
1992) (remanding a case for the district court to use the lodestar method in
calculating attorney fees). Under the lodestar method, “the district court
multiplies a reasonable number of hours for the work performed by a
reasonable hourly rate.” Farmers Co-op Co. v. Senske & Son Transfer Co., 572
F.3d 492, 500 (8th Cir. 2009) (citing H.J., Inc. v. Flygt Corp., 925 F.2d 257,
259-60 (8th Cir. 1991)). “Next, the court may adjust the amount based upon
the particular circumstances of the case.” Id. (citing Blum v. Stenson, 465 U.S.
886, 888 (1984)).
GOPAC does not dispute the hourly rates charged by Shattuck and a
senior associate, Cheri Raymond. Docket 22 at 2 (“GOPAC is not objecting to
the hourly rates in the Fee Affidavit.”). Instead, GOPAC argues that the amount
of time expended in drafting the motion to quash is unreasonable.
Shattuck and Raymond spent 49.7 hours in researching the motion to
quash, drafting the motion to quash, drafting letters to GOPAC’s counsel, and
having phone conversations with GOPAC’s attorneys in an attempt to negotiate
the subpoenas without the court’s intervention. There are complex issues in
this case, including intricate relevancy determinations and whether the
information sought by GOPAC is BPI’s proprietary information.
Notwithstanding the complexity of the issues, 49.7 hours is an unreasonable
amount of time to prepare a motion to quash. A reduction in the number of
hours, to 20 hours, yields a more reasonable number of hours worked on this
Shattuck worked approximately 80 percent of the hours on the motion to
quash, or 16 hours under the court’s reduced hours calculation, while
Raymond worked the remaining 20 percent, or 4 hours, on the motion.
Shattuck’s hourly rate is $275, for a total of $4,400. Raymond’s hourly rate is
$225, for a total of $900. With a 6 percent sales tax rate, GOPAC’s counsel
owes BPI’s counsel $5,618. This award is consistent with other courts’ awards
for attorney’s fees incurred in drafting a motion to quash. See, e.g., Mapes v.
Wellington Capital Group, No. 8:07-CV-77, 2008 WL 2487795, at *1 (D. Neb.
May 9, 2008) (decreasing the requested amount of fees by one-third for a total
of $6,009 in attorney fees for drafting a motion to quash); see also Night Hawk,
2004 WL 1375558, at *3 (imposing attorney fees in the amount of $4,000 for
drafting discovery motions).
BPI moves to quash GOPAC’s document and deposition subpoenas dated
January 6, 2011. BPI’s motion is granted in part and denied in part. If, after
completing the discovery as explained above, GOPAC believes that it has good
cause to seek the preliminarily denied documents or depose BPI on the
preliminarily denied topics, GOPAC may move for oral arguments on its
subpoenas. GOPAC moves to reconsider the award of sanctions that the court
granted for BPI’s first motion to quash GOPAC’s subpoenas. Because GOPAC
has not shown exceptional circumstances, GOPAC’s motion is denied. GOPAC
also objected to BPI’s attorney’s fees. The court reduced the amount of fees that
GOPAC owes BPI’s counsel to $5,618. Accordingly, it is
ORDERED that nonparty Beef Product, Inc.’s second motion to quash
(Docket 6) is granted in part and denied in part. Defendant Greater Omaha
Packing Company, Inc.’s motion for reconsideration (Docket 12) is denied. Beef
Product, Inc. is awarded a judgment for attorney’s fees in the amount of
Dated May 5, 2011.
BY THE COURT:
/s/ Karen E. Schreier
KAREN E. SCHREIER
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