Nalco Company v. Turner Designs Inc

Filing 23

MEMORANDUM OPINION AND ORDER GRANTING FED. R. CIV. P. 45(f) TRANSFER OF SUBPOENA-RELATED MOTIONS. (Ordered by Magistrate Judge David L Horan on 6/13/2014) (aaa)

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
CHEM-AQUA, INC.,
Movant,
V.
NALCO COMPANY,
Respondent.

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No. 3:14-mc-71-D-BN

MEMORANDUM OPINION AND ORDER GRANTING FED. R. CIV. P. 45(f)
TRANSFER OF SUBPOENA-RELATED MOTIONS
Chem-Aqua, Inc. has filed a Motion to Quash or Modify Nalco’s Subpoena, or in
the Alternative, Motion for Protection. See Dkt. No. 1. Nalco Company, in turn, has
filed a Motion to Transfer Pursuant to Fed. R. Civ. P. 45(f) [Dkt. No. 8] and a Motion
to Compel Chem-Aqua, Inc. to Produce Documents [Dkt. No. 16] and requests that the
motion to quash and motion to compel be transferred to the United States District
Court of the Northern District of California, see Dkt. No. 8. Chief Judge Sidney A.
Fitzwater has referred all of these motions to the undersigned magistrate judge for
determination under 28 U.S.C. § 636(b)(1)(A). See Dkt. Nos. 4 & 20.
Nalco seeks, under Federal Rule of Civil Procedure 45(f), to transfer the motion
to quash and corresponding motion to compel to the issuing court where the underlying
action is pending, the United States District Court for the Northern District of
California. See Dkt. No. 8; Dkt. No. 16 at 1. Chem-Aqua opposes Nalco’s motion to
transfer. See Dkt. Nos. 10 &19. Nalco has filed a reply. See Dkt. No. 22.
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For the reasons explained below, Nalco’s Motion to Transfer Pursuant to Fed.
R. Civ. P. 45(f) [Dkt. No. 8] is GRANTED.
Legal Standards and Analysis
Federal Rule of Civil Procedure 45(f) provides that, “[w]hen the court where
compliance is required did not issue the subpoena, it may transfer a motion under this
rule to the issuing court if the person subject to the subpoena consents or if the court
finds exceptional circumstances.” Because Chem-Aqua does not consent to transfer, the
Court may only transfer the motion to quash and motion to compel if exceptional
circumstances exist.
“[T]he proponent of transfer bears the burden of showing that such
circumstances are present.” FED. R. CIV. P. 45(f), advisory committee notes (2013
amendments). The Advisory Committee Notes provide the following guidance as to
when transfer of a subpoena-related motion is appropriate:
The prime concern should be avoiding burdens on local nonparties subject
to subpoenas, and it should not be assumed that the issuing court is in a
superior position to resolve subpoena-related motions. In some
circumstances, however, transfer may be warranted in order to avoid
disrupting the issuing court’s management of the underlying litigation,
as when the court has already ruled on issues presented by the motion or
the same issues are likely to rise in discovery in many districts. Transfer
is appropriate only if such interests outweigh the interests of the
nonparty served with the subpoena in obtaining local resolution of the
motion.
Id.
In support of its motion to transfer, Nalco asserts that:

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the discovery dispute in this Court arises because Chem-Aqua objects to
producing a witness for deposition pursuant to Nalco’s subpoena in Nalco
Company v. Turner Designs, Inc., CV-13-02727, pending in the Northern District
of California, see Dkt. No. 8 at 1;

•

that this discovery dispute mirrors a similar dispute that has already been
resolved by the United States District Court for the Northern District of
California, as Chem-Aqua acknowledges in arguing that the Northern District
of California’s ruling in that dispute should govern resolution of its motion to
quash in this Court, see id.;

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that a transfer is needed to avoid inconsistent outcomes on the same issues and
for judicial economy because the issuing court has fully considered a similar
issue and is thoroughly familiar with the disputes, see id.;

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that, although the issuing court in the Northern District of California entered
an order in the underlying litigation on similar disputes as to a similar
subpoena served on another third party, that court later agreed to reconsider
the decision, but, during further discussions ordered by the court, the parties
reached an agreement and the requested documents were produced, see id. at
3;

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that Nalco has also served subpoenas on a number of other third parties in other
districts to obtain evidence of direct infringement, and so similar discovery
disputes may arise with some of those third parties which should all be decided
consistently by the issuing court, which is presiding over the underlying
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litigation and is most familiar with the issues in that litigation, see Dkt. No. 22
at 2; and
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that transferring the matter to the Northern District of California poses
minimal burden on Chem-Aqua, because Chem-Aqua has already stipulated
regarding confidentiality of documents under a protective order in the Northern
District of California, has counsel who can appear in the Northern District of
California, and can likely appear telephonically (without objection by Nalco) if
the court in the Northern District of California elects to hold a hearing on these
issues, see id. at 4.

According to Nalco, “[t]ransfer would also eliminate the need for this Court to review
from scratch a dispute that is very similar to one that has already been presented and
ruled upon by another court,” Dkt. No. 8 at 2, where “the California court is in the best
position to apply its own reasoning to similar issues presented by Chem-Aqua’s motion
to quash,” Dkt. No. 22 at 1.
Chem-Aqua opposes transfer because:
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it would be inconvenient and burdensome to require Chem-Aqua to seek
protection in California against Nalco’s third-party subpoena, see Dkt. No. 19 at
1;

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transfer in light of Nalco’s continued abuse of the discovery process would fly in
the face of the Advisory Committee on Civil Rules’s edict that Rule 45(f) was
added “to protect local nonparties” so that “[t]he prime concern should be
avoiding burden on local nonparties subject to subpoenas,” id.;
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Nalco has not demonstrated the “exceptional circumstances” required for a Rule
45(f) transfer over Chem-Aqua’s objection, see id.; and

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Nalco has not shown that its interest in a transfer outweighs Chem-Aqua’s
interest in local enforcement of its Motion to Quash, see id. at 1-2; see also Dkt.
No. 10.

Chem-Aqua asserts that “there is no danger of disrupting the Northern District of
California’s management of the underlying litigation, because that court has issued a
written order regarding the issues presented by the instant Motion, and that order is
available as guidance to this Court” and “the Northern District of California will not
issue subsequent rulings with regard to the issues presented, as the ‘parties [to that
dispute] have agreed to a stipulation that resolves the dispute.’” Dkt. No. 10 at 3; see
also Dkt. No. 19 at 6. Chem-Aqua contends that, where it “is not a party to the
Northern District of California action,” where it does not “have any relationship with
the parties in that action other than being their direct competitor,” and where
“Chem-Aqua and its counsel both reside in this District,” “litigating the instant Motion
in the Northern District of California [would be] much more burdensome and expensive
for non-party Chem-Aqua than in this District.” Dkt. No. 10 at 3; Dkt. No. 19 at 7.
Chem-Aqua argues that “transfer would not only be prejudicial and unduly
burdensome, but would also affirmatively contribute to Nalco’s continued use of the
subpoena power to harass nonparties.” Dkt. No. 19 at 6.
Nalco replies that “Chem-Aqua fails to show that it would suffer any real burden
or prejudice by a transfer” and “does not (and cannot) cite any cases where a third
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party dispute was not transferred where the underlying court had already heard
similar discovery disputes.” Dkt. No. 22 at 3. Nalco also contends that “Chem-Aqua
paints an incorrect picture of the resolution of the dispute with” the other third party
in the underlying litigation, where “[t]he California court reconsidered its original
order after reviewing additional evidence, the motion was heard telephonically by the
Court, and with the court’s guidance, the parties resolved the issue consistent with the
court’s guidance.” Id. at 3.
The Court is persuaded that transfer is appropriate here based on exceptional
circumstances. Nalco has made a sufficient showing that transfer is warranted to avoid
disrupting the issuing court’s management of the underlying litigation where that
court has already ruled on issues presented by the motion to quash and motion to
compel or the same issues may arise in discovery in many districts. Cf. Wultz v. Bank
of China, Ltd., No. 13-1282(RBW), ___ F. Supp. 2d ____, 2014 WL 2257296, at *7-*8
(D.D.C. May 30, 2014).
In particular, the Court is concerned that the very decision on which Chem-Aqua
bases much of its motion to quash may have been subject to reconsideration by the
issuing court, as reflected by the parties’ submissions. See Dkt. No. 3-1 at App. 74-78,
159-169; Dkt. No. 9-1, Exs. D & E. Chem-Aqua asserts that the documents do not
clearly show what Nalco contends, but Chem-Aqua never actually denies that the
issuing court was considering a request to reconsider the decision on which Chem-Aqua
wants this Court to rely. See Dkt. No. 10 at 2 n.2; Dkt. No. 19 at 4-5. Further, where
the issuing court has already considered similar issues as to one other similar third-6-

party subpoena, transfer to the issuing court is appropriate where the same or
substantially similar issues may arise in discovery disputes in many districts in which
compliance with Nalco’s subpoenas to other third parties is required.
The Court finds that the interests in having the issuing court resolve the
discovery issues presented by the pending subpoena-related motions outweigh ChemAqua’s interests in obtaining local resolution of the motions in this Court. And the
Court agrees with Nalco’s contention that “Chem-Aqua will suffer minimal burden, if
any, in litigating its discovery dispute before the California court,” where
“Chem-Aqua’s only burden argument is an unsupported statement that litigating in
California would be ‘burdensome and expensive.’” Dkt. No. 22 at 4. Almost any
subpoenaed party could make the same undue burden arguments that Chem-Aqua
makes here. And yet a Rule 45(f) “transfer to the court where the action is pending is
sometimes warranted,” such as where the issuing court “has already ruled on issues
presented by the motion.” FED. R. CIV. P. 45(f), advisory committee notes (2013
amendments).
Further, as Nalco points out (and Chem-Aqua does not dispute), Chem-Aqua
may be allowed to make a telephonic appearance at any hearing in California. To be
sure, this possibility – which the Advisory Committee Notes encourage judges to
permit “to minimalize the burden a transfer imposes on nonparties,” id. – cannot weigh
decisively in favor of transfer in every instance. But neither can the fact that the
subpoenaed party and its counsel are (unsurprisingly) located in the district where

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compliance is required and not in the issuing district weigh decisively against transfer
to the issuing court in the face of other exceptional circumstances favoring transfer.
Finally, Chem-Aqua asserts that “Nalco has repeatedly abused the discovery
process throughout the course of its underlying lawsuit, and its present subpoenas to
Chem-Aqua, as well as the instant Motion to Transfer, are additional steps in
furtherance of Nalco’s continued harassment.” Dkt. No. 19 at 2. But, if that is so, it
would weigh in favor of transferring these motions to the issuing court that is presiding
over the underlying litigation and that is better positioned to assess Nalco’s overall
discovery conduct and what, if any, bearing that conduct should have on resolving
Chem-Aqua’s motion to quash and Nalco’s motion to compel.
Conclusion
Nalco Company’s motion [Dkt. No. 8] seeking transfer of Chem-Aqua, Inc.’s
Motion to Quash or Modify Nalco’s Subpoena, or in the Alternative, Motion for
Protection [Dkt. No. 1] and Nalco Company’s Motion to Compel Chem-Aqua, Inc. to
Produce Documents [Dkt. No. 16] to the United States District Court of the Northern
District of California is GRANTED.
Chem-Aqua, Inc.’s Motion to Quash or Modify Nalco’s Subpoena, or in the
Alternative, Motion for Protection [Dkt. No. 1] and Nalco Company’s Motion to Compel
Chem-Aqua, Inc. to Produce Documents [Dkt. No. 16] are hereby remitted to the
United States District Court of the Northern District of California, San Francisco
Division for determination in connection with the underlying litigation, Nalco
Company v. Turner Designs, Inc., CV-13-02727 (N.D. Cal.).
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SO ORDERED.
DATED: June 13, 2014

_________________________________________
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE

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