Orix USA Corporation v. Armentrout
Filing
10
MEMORANDUM OPINION AND ORDER: The Court DENIES Movant ORIX USA Corporation's Rule 45 Motion to Compel Compliance with Subpoena [Dkt. No. 1 ] without prejudice to ORIX's re-urging its motion if the representation required above is not made by August 12, 2016. (Ordered by Magistrate Judge David L Horan on 8/1/2016) (mcrd)
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
ORIX USA CORPORATION,
Petitioner,
V.
MARC ARMENTROUT,
Respondent.
§
§
§
§
§
§
§
§
§
No. 3:16-mc-63-N-BN
MEMORANDUM OPINION AND ORDER1
Movant ORIX USA Corporation (“ORIX”) has filed a Rule 45 Motion to Compel
Compliance with Subpoena [Dkt. No. 1] (the “MTC”), seeking an order compelling
non-party Marc Armentrout to comply with a January 29, 2016 document subpoena
issued pursuant to Federal Rule of Civil Procedure 45 in connection with the
underlying action pending in the Texarkana Division of the United States District
Court for the Eastern District of Texas, ORIX USA Corp. v. Preston Hollow Capital,
LLC, 15-CV-00170-RWS (E.D. Tex.) (the “Underlying Action”).
United States District Judge David C. Godbey has referred this motion to the
undersigned United States magistrate judge for determination under 28 U.S.C. §
636(b). See Dkt. No. 2.
Under § 205(a)(5) of the E-Government Act of 2002 and the definition of “written
opinion” adopted by the Judicial Conference of the United States, this is a “written
opinion[] issued by the court” because it “sets forth a reasoned explanation for [the]
court's decision.” It has been written, however, primarily for the parties, to decide
issues presented in this case, and not for publication in an official reporter, and should
be understood accordingly.
1
-1-
After the Court declined to transfer the MTC pursuant to Federal Rule of Civil
Procedure 45(f), see Dkt. No. 7, Armentrout filed a response to the MTC, see Dkt. No.
8, and ORIX filed a reply, see Dkt. No. 9.
For the reasons and to the extent explained below, the Court DENIES ORIX’s
Rule 45 Motion to Compel Compliance with Subpoena [Dkt. No. 1].
Legal Standards
“Federal Rule of Civil Procedure 45 ‘explicitly contemplates the use of subpoenas
in relation to non-parties’ and governs subpoenas served on a third party, such as
[Armentrout], as well as motions to quash or modify or to compel compliance with such
a subpoena.” Am. Fed’n of Musicians of the United States & Canada v. Skodam Films,
LLC, 313 F.R.D. 39, 42 (N.D. Tex. 2015) (quoting Isenberg v. Chase Bank USA, N.A.,
661 F. Supp. 2d 627, 629 (N.D. Tex. 2009)).
Under Rule 45, “[a] subpoena may command: (A) production of documents,
electronically stored information, or tangible things at a place within 100 miles of
where the person resides, is employed, or regularly transacts business in person.” FED.
R. CIV. P. 45(c)(2)(A); see also FED. R. CIV. P. 45(a)(1)(C) (“A command to produce
documents, electronically stored information, or tangible things or to permit the
inspection of premises ... may be set out in a separate subpoena.”). Rule 45(a)(1)(C)
further provides that “[a] subpoena may specify the form or forms in which
electronically stored information is to be produced.” FED. R. CIV. P. 45(a)(1)(C).
Rule 45(d)(2)(B) requires that “[a] person commanded to produce documents or
tangible things or to permit inspection may serve on the party or attorney designated
-2-
in the subpoena a written objection to inspecting, copying, testing or sampling any or
all of the materials or to inspecting the premises – or to producing electronically stored
information in the form or forms requested” – and that “[t]he objection must be served
before the earlier of the time specified for compliance or 14 days after the subpoena is
served.” FED. R. CIV. P. 45(d)(2)(B). “‘The serving party may agree to extend the
deadline to respond to a subpoena, including the deadline to serve written objections.’”
Am. Fed’n, 313 F.R.D. at 43 (quoting Shaw Group, Inc. v. Zurich Am. Ins. Co., Civ. A.
No. 12-257-JJB-RLB, 2014 WL 1783955, at *4 (M.D. La. May 5, 2014)).
“If an objection is made, the following rules apply: (i) At any time, on notice to
the commanded person, the serving party may move the court for the district where
compliance is required for an order compelling production or inspection. (ii) These acts
may be required only as directed in the order, and the order must protect a person who
is neither a party nor a party’s officer from significant expense resulting from
compliance.” FED. R. CIV. P. 45(d)(2)(B). Timely serving written objections therefore
suspends the non-party’s obligation to comply with a subpoena commanding production
of documents, pending a court order. See FED. R. CIV. P. 45(d)(2)(B)(ii); Am. Fed’n, 313
F.R.D. at 44.
On the other hand, “[t]he failure to serve written objections to a subpoena within
the time specified by Rule [45(d)(2)(B)] typically constitutes a waiver of such objections,
as does failing to file a timely motion to quash.” Am. Fed’n, 313 F.R.D. at 43 (internal
quotation marks omitted).
-3-
And “a non-party’s Rule 45(d)(2)(B) objections to discovery requests in a
subpoena are subject to the same prohibition on general or boiler-plate [or
unsupported] objections and requirements that the objections must be made with
specificity and that the responding party must explain and support its objections.” Id.
at 46 (citing Heller v. City of Dallas, 303 F.R.D. 466, 483 (N.D. Tex. 2004), and
adopting “the explanations in Heller of what is required to make proper objections and
how to properly respond to discovery requests”). Just as, “[a]lthough [Federal Rule of
Civil Procedure] 34 governs document discovery from a party and not a non-party, see
FED. R. CIV. P. 34(c),” “Rule 34(b)(1)’s reasonable particularity requirement should
apply with no less force to a subpoena's document requests to a non-party,” so too “a
non-party’s Rule 45(d)(2)(B) objections to those requests should be subject to the same
requirements facing a party objecting to discovery under Rule 34.” Id. at 44, 46.
This means that a non-party is subject to the requirements that an objection to
a document request must, for each item or category, state with specificity the grounds
for objecting to the request, including the reasons, and must state whether any
responsive materials are being withheld on the basis of that objection; that an objection
to part of a request must specify the part and permit inspection of the rest; that
“general or so-called boilerplate or unsupported objections are improper under Rule
45(d)(2)(B)”; and that the explanations in Heller v. City of Dallas, 303 F.R.D. 466 (N.D.
Tex. 2014), of what is required to make proper objections and how to properly respond
to discovery requests apply equally to non-parties subject to a Rule 45 subpoena. See
id. at 46; FED. R. CIV. P. 34(b)(2)(B)-(C).
-4-
Analysis
ORIX properly filed its motion to compel in this Court, which, as required by
Rule 45(d)(2), is the court in the district where compliance with the Subpoena is
required. See Dkt. No. 1-1.
In support of its MTC, ORIX asserts that the Subpoena seeks documents that
are plainly relevant to the Underlying Action in five straightforward requests; that
Armentrout was employed by ORIX until he was terminated for insubordination and
acting as an agent for the defendant in the Underlying Action, Preston Hollow Capital,
LLC (“PHC”), while still employed by ORIX but that Armentrout now works for PHC;
that Armentrout did not object within the time permitted by Rule 45(d)(2)(B), waiving
any objections, and also did not file a motion to quash or to modify the Subpoena by the
date of compliance, waiving his rights to relief under those procedural mechanisms.
ORIX contends that, where Armentrout sent an unsigned letter to ORIX’s
counsel four weeks after the Subpoena was served attempting to lodge untimely (and
deficient) objections and then produced only 48 pages in response to the Subpoena,
ORIX has reason to believe that this production is woefully deficient. According to
ORIX, despite what Armentrout states was a complete search of his personal devices
and records, the production at best dwells in the outer reaches of responsiveness, and,
at worst, Armentrout’s response and production intentionally shirks his responsibility
to comply with the Subpoena in blatant disregard of the Federal Rules of Civil
Procedure.
-5-
ORIX explains that the Subpoena seeks production of documents: (1) relating
to communications between Armentrout and thirteen former employees of ORIX, each
of whom began working for PHC, relating to the Underlying Lawsuit; (2)
communications with three other individuals who have sued ORIX and who are
persons with knowledge of relevant facts in the Underlying Lawsuit; (3)
communications between Armentrout and five other PHC employees who are persons
with knowledge of relevant facts in the Underlying Lawsuit; (4) communications with
PHC employees related to ORIX’s business, operations, or employees; and (5)
communications with the attorneys for PHC’s executives (who were former ORIX
executives). ORIX reports that Armentrout’s production included four documents: (1)
one email to Andy Lester (a CPA who shares office space with PHC) containing
Armentrout’s 2015 tax preparation forms (45 pages); (2) two undated, untimed text
messages from an unidentified sender to unidentified recipients (2 pages); and, (3) a
document with a document ID number titled “Voicemail transcription” that purports
to transcribe a voicemail from Mike Cousins to an unidentified “Marc” that presumably
is Armentrout (1 page).
ORIX contends that, while Armentrout produced only two text messages in
response to the Subpoena, ORIX has been informed by PHC’s counsel that text
messages exist between PHC and Armentrout, and communications between
Armentrout and PHC employees are relevant to ORIX’s case. ORIX requests that the
Court compel Armentrout’s compliance with the Subpoena.
-6-
Armentrout responds that the MTC should be denied for the simple reason that
Respondent has produced all responsive documents in his possession, custody, and
control, to the extent that such documents exist. Armentrout asserts that his
compliance has been communicated more than once to ORIX’s attorneys, and, his
“existing objections notwithstanding, [Armentrout] affirmatively attests that, after
searching his personal email accounts, his cellular phone, and paper records, he has
produced all responsive documents in his possession, custody and control and he is not
withholding any documents.” Dkt. No. 8 at 7. According to Armentrout, “[t]o the extent
[ORIX] believes any documents or communication has not been produced, such
documents or communications either do not exist or are not in [Armentrout’s]
possession custody and control.” Id.
Armentrout further contends that, even if this were not the case, the MTC
should also be denied because it has been made in bad faith and part of ORIX’s
campaign of harassment and abuse toward Armentrout. Armentrout asserts that ORIX
has lodged unsupported allegations at Armentrout, terminated his employment under
a pre-textual circumstances, and attempted to improperly evade the strictures and
protections of the Federal Rules of Civil Procedure and the orders of the court in the
Underlying Action as part of a “scorched earth” litigation strategy to defend itself from
having to pay equity options to former ORIX executives, including Armentrout.
Armentrout argues that, while the Court need not reach ORIX’s arguments
regarding waiver, assuming that Armentrout’s objections were untimely under the
14-day deadline, they were served within the deadline for compliance and that,
-7-
furthermore, under the three-part test announced in American Federation of Musicians
v. Skodam Films, LLC, 313 F.R.D. 39, 43 (N.D. Tex. 2015), Armentrout’s untimely
objections should be excused.
And Armentrout contends that, contrary to ORIX’s argument that Armentrout’s
objections lack specificity, a review of his objection letter shows that he clearly made
specific objections to each and every request.
ORIX replies that Armentrout’s cell phone bill was paid by ORIX as part of his
benefits and that the records reveal that Armentrout had numerous texts and
telephone calls with PHC employees, including Jim Thompson, the former CEO of
ORIX and the current CEO of PHC, as well as Managing Director Cliff Weiner. ORIX
reports that PHC has produced texts that Armentrout has failed to produce and that
the phone records demonstrate Armentrout had 9 texts messages between himself and
Thompson in the two weeks leading up to the date that the Subpoena was served.
ORIX contends that, while Armentrout’s lawyers claim he has produced all
responsive documents, Armentrout’s sworn declaration is conspicuously void of any
such representation. According to ORIX, Armentrout either wrongfully deleted the text
messages or has failed to produce all responsive documents, even though he was
specifically requested not to destroy any documents in the request attached to the
Subpoena. ORIX notes that Armentrout’s counsel have not taken ownership of his
production but instead asks the Court to deny ORIX’s MTC based on a statement that
the documents “do not exist, are not obtainable, or have already been produced.” But,
ORIX notes, the very same page of the response shows that it was only Armentrout
-8-
(not his counsel) who searched “his personal email accounts, his cellular phone, and
paper records” and that this all allegedly occurred while Armentrout acted pro se, and
nothing in the Response shows how (or if) Armentrout’s counsel took any steps to
confirm the completeness of the production.
ORIX explains that, despite counsel representing that Armentrout “affirmatively
attests” that the production is complete, Armentrout’s declaration attached to the
response makes no representation whatsoever regarding any actions taken by
Armentrout to search for, preserve, review, and produce documents and declines to
state that anything was produced, much less that production is complete. ORIX
therefore requests that the Court further order Armentrout to affirm in under oath at
a hearing before this Court or in a deposition or otherwise that he has produced all
documents responsive to the Subpoena – given the evidence presented that
demonstrates Armentrout’s responses are incomplete – or explain when and how
documents were destroyed. ORIX contends that, if all documents have been produced,
Armentrout’s counsel could supplement or amend Armentrout’s objections – signed
pursuant to Federal Rule of Civil Procedure 26(g) – and state that all responsive
documents have been produced, but, ORIX notes, the response appears on its face to
stand on Armentrout’s objections.
ORIX further replies that Armentrout, while technically pro se at the time he
untimely responded to the Subpoena, should not be allowed to circumvent the clear
direction that he received on the back of the Subpoena that a “person commanded to
produce documents ... may serve on the other party ... a written objection to inspecting,
-9-
copying or testing.... The objection must be served before the earlier of the time
specified for compliance or 14 days after the subpoena is served.” ORIX contends that
Armentrout’s untimely objection is riddled with citations and legal jargon, indicating
his knowledge of the law, or that a lawyer was assisting behind the scenes. ORIX
therefore asserts that Armentrout’s untimely objections should be overruled and that
he should be ordered to fully and completely respond to the Subpoena.
A party or non-party “cannot produce what it does not have.” Solorzano v. Shell
Chem. Co., No. Civ. A.99-2831, 2000 WL 1145766, at *7 (E.D. La. Aug. 14, 2000). And,
so, “[c]learly, the court cannot compel [a party or non-party] to produce non-existent
documents.” Beasley v. First Am. Real Estate Info. Servs., Inc., No. 3:04-cv-1059-B,
2005 WL 1017818, at *4 (N.D. Tex. Apr. 27, 2005).2
See also Payne v. Forest River, Inc., No. Civ. A. 13-679-JJB-RLB, 2015 WL 1912851,
at *4 (M.D. La. Apr. 22, 2015) (“The court cannot order the production of documents
that no longer exist or, despite a diligent search, cannot be found in the possession,
custody, or control of a party.”); Gordon v. Greenville Indep. Sch. Dist., No.
3:13-cv-178-P, 2014 WL 6603420, at *2 (N.D. Tex. Nov. 20, 2014) (“Although Plaintiff
is not satisfied with this response, he fails to point to anything that suggests such
reports actually exist. The Court cannot compel GISD to produce documents that do
not exist.”); Seahorn Investments, L.L.C. v. Fed. Ins. Co., 1:13CV320-HSO-RHW, 2014
WL 11444117, at *4 (S.D. Miss. Oct. 16, 2014 (“In response to the motion to compel,
Plaintiff affirms that all responsive documents have been produced. The Court will
therefore require no further response….”); Butler v. La. Dep’t of Pub. Safety & Corr.,
No. Civ. A. 12-420-BAJ-RLB, 2014 WL 3867552, at *1 (M.D. La. Aug. 6, 2014) (“[The
Court] cannot compel Defendant to produce documents that do not exist.”); Bailey v.
Monitronics Int’l, Inc., No. 3:09-CV-158-HTW-LRA, 2014 WL 3867498, at *7 (S.D. Miss.
Aug. 6, 2014) (“This court cannot compel Monitronics to produce documents that it does
not have.”); York v. Tropic Air, Ltd., No. Civ. A. V-10-55, 2011 WL 1654418, at *5 (S.D.
Tex. Apr. 28, 2011) (denying motion to compel to the extent responsive documents do
not exist, are not in the possession custody or control or respondent, or have already
been produced); McElwee v. Wallantas, No. Civ. A. L-03-CV-172, 2005 WL 2346945, at
*3 (S.D. Tex. Sept. 26, 2005) (“[T]he Court cannot order the Defendants to produce
2
-10-
Here, Armentrout’s counsel states that Armentrout has affirmatively attested
that, after searching his personal email accounts, his cellular phone, and paper
records, that he has produced all responsive documents in his possession, custody, and
control, and that he is not withholding any documents based on his objections or
otherwise. The Court need not address Armentrout’s objections and whether they have
been waived where he represents to the Court that he is not withholding any
production based on those objections.
But, under the circumstances here, ORIX is entitled to an unequivocal
representation, under oath, that Armentrout has produced all documents that are
responsive to the requests in the Subpoena (as summarized in Movant ORIX USA
Corporation’s Rule 45 Motion to Compel Compliance with Subpoena [Dkt. No. 1]) and
that are in his possession, custody, and control and that he is not withholding any
responsive documents based on his objections or otherwise.
Armentrout must, by August 12, 2016, file a supplemental response attaching
such a statement, under oath, by Armentrout or, alternatively, attaching a
supplemental or amended response to the Subpoena, signed by Armentrout’s counsel,
stating that all documents responsive to the requests in the Subpoena (as summarized
documentation that does not exist. Therefore, unless the Plaintiff can provide proof
that the documents exist, rather than mere speculation, the Court will not entertain
motions to compel the Defendants to produce documentation whose existence is
nothing more than theoretical.”); Henderson v. Compdent of Tenn., Inc., No. Civ. A.
97-617, 1997 WL 756600, at *1 (E.D. La. Dec. 4, 1997) (“The Court cannot compel
production of what does not exist. Of course, if defendants have or acquire evidence
that the response is incomplete or that the affidavit is false, other remedies may be
sought by motion.”).
-11-
in ORIX’s MTC) and in Armentrout’s possession, custody, and control have been
produced and that Armentrout is not withholding any responsive documents based on
his objections or otherwise.
Conclusion
The Court DENIES Movant ORIX USA Corporation’s Rule 45 Motion to Compel
Compliance with Subpoena [Dkt. No. 1] without prejudice to ORIX’s re-urging its
motion if the representation required above is not made by August 12, 2016.
SO ORDERED.
DATED: August 1, 2016
_________________________________________
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE
-12-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?