Zoobuh v. Better Broadcasting et al

Filing 88

MEMORANDUM DECISION AND ORDER granting 76 Zoobuhs Motion to Compel Compliance with the Subpoena to Bank of Utah; taking under advisement 77 MOTION to Compel Compliance with Subpoena to MSupport. Signed by Magistrate Judge Brooke C. Wells on 4/24/2017. (jds) Modified signature date on 4/24/2017 (jds).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
ZooBuh, Inc., a Utah corporation,

MEMORANDUM DECISION AND ORDER

Plaintiff,
v.

Case No. 2:11-cv-00516 DN

Better Broadcasting, LLC, a Utah limited
liability company; IONO Interactive, a
company doing business in Utah; Does
1-40,

District Judge David Nuffer
Magistrate Judge Brooke Wells

Defendants.

Plaintiff Zoobuh, Inc. (Zoobuh) moves the court to pursuant to Federal Rule of Civil
Procedure 45(d)(2)(B)(i) 1 to compel compliance with subpoenas to produce documents. 2 These
subpoenas were issued in aid of collection for a default judgment in the amount of
$1,608,360.00. 3 They include a subpoena issued to third party Bank of Utah (Bank of Utah
subpeona) and a subpoena issued to third party MSupport, LLC (MSupport subpoena). The
Bank of Utah does not object to the subpoena issued to it, but MSupport objects to both
subpoenas. Under Federal Rule of Civil Procedure 69(a)(2) a judgment creditor “may obtain
discovery from any person” 4 including but not limited to the judgment debtor, in accordance
with the Federal Rules or the state rules where a court is located. Based upon Rule 69 and for
the reasons set forth herein, the court will grant the Motion to Compel Compliance with the

1

Fed. R. Civ. P. 45(d)(2)(B)(i) provides “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.”

2

Docket no. 76, docket no. 77.

3

Judgement in a Civil Case, docket no. 49, filed May 31, 2013.

4

Fed. R. Civ. P. 69(a)(2).

Subpoena to Bank of Utah and take under advisement the Motion to Compel Compliance with
Subpoena to MSupport. 5
BACKGROUND
In May 2013 judgement was entered in favor of Zoobuh and against Defendants Better
Broadcasting, LLC and IONO Interactive for $1,608,360. 6 Nearly three years passed before
Zoobuh, in attempting to collect on the judgment, issued a subpoena to non-party Blair Jackson.
After a series of disputes and court orders, it appears Mr. Jackson and Zoobuh have come to
some sort of resolution on the subpoena and presumably information has been provided. 7
Now in a further attempt to collect on the judgment, Zoobuh has issued a subpoena to
non-parties Bank of Utah and MSupport.
DISCUSSION
Plaintiff Zoobuh moves the court to compel compliance with the subpoena served to
Bank of Utah and the subpoena served on MSupport. The subpoena issued to Bank of Utah
seeks production of “all bank account records for the period beginning September 1, 2010 and
ending September 1, 2013, including without limitation all account statements, all checks (back
and front), and all deposit records, for each and every account belonging to or in the name of
MSupport LLC.” 8
The subpoena issued to MSupport seeks the following:
1. All Documents, including without limitation corporate or LLC books and
records, tax returns and other accounting or financial records, bank records
and any other Documents (including Electronically Stored Information), from
5

Local Rule 69-1(b) provides for a hearing before a magistrate judge. The undersigned finds a hearing is
unnecessary at this time because in its motions Zoobuh is seeking information rather than asking for someone to
“appear in court and answer concerning . . . property or assets.”

6

Judgement in a Civil Case filed May 31, 2013, docket no. 49.

7

See Order Directing the Filing of a New Subpoena dated October 25, 2016, docket no. 74.

8

Motion to Compel Compliance with Subpoena to Bank of Utah p. 10, docket no. 76.

2

January 1, 2010 through December 31, 2013, that refer or relate to, name,
discuss or identify Better Broadcasting, Expression Media, or IONO.
2. All Documents that refer to Winterton Properties or that refer or relate to a
lease or leasing relationship in which Winterton Properties is the lessor.
3. All Documents from January 1, 2010 through December 31, 2013 that refer or
relate to account number 1369134 or account number 36590.
4. All Documents from January 1, 2010 through December 31, 2013 that refer or
relate to Veracity Communications, including without limitation all checks
made payable to Veracity Communications. 9

Whether compliance with the subpoenas should be compelled by the court is governed in
large part by the policies underlying Rule 69 of the Federal Rules of Civil Procedure and Local
Rule 69-1. A recent decision from this court explains that:
Under Fed. R. Civ. P. 69(a)(2), a judgment creditor “may obtain discovery from
any person” including, but not limited to the judgment debtor, . . . . [and]
DUCivR 69-1(a) provides that “[a]ny party having a final judgment on which
execution may issue may make a motion to have the judgment debtor or other
person in possession of, or having information relating to, property or other assets
that may be subject to execution or distraint appear in court and answer
concerning such property or assets.” . . .
The rules governing discovery “are to be accorded a broad and liberal treatment.”
This is true whether the discovery is part of pretrial or post judgment proceedings.
The purpose of post judgment discovery is “to learn information relevant to the
existence or transfer of the judgment debtor’s assets.” Thus, when supplemental
proceedings are “an attempt to discover assets by which to satisfy its judgment,
plaintiff is entitled to a very thorough examination of the judgment debtor.” This
thorough examination includes third parties. Indeed, “there is no doubt that third
parties can be examined in relation to the financial affairs” of a judgment
debtor.” 10

9

Motion to Compel Compliance with Subpoena to MSupport LLC. p. 14, docket no. 77.

10

Mountain Dudes, LLC v. Split Rock, Inc., No. 2:08-cv-940, 2013 WL 5435707, *2 (D.Utah Sep. 29, 2013)
(unpublished) (citations omitted, emphasis in original).

3

In addition a court has a duty to not necessarily quash a subpoena, but if it is overbroad it
can reduce the demand to “what is reasonable, considering the discoverer’s needs and the
discoveree’s problems.” 11
(i)

The court will compel production of the subpoena issued to the Bank of Utah
MSupport argues the Bank of Utah subpoena is objectionable because (1) it is overbroad

and places an undue burden upon MSupport; (2) seeks disclosure of confidential commercial
information; (3) is impermissible under Federal Rule of Civil Procedure 26 based upon
principles of relevance and proportionality; and (4) the subpoena fails to meet the “heightened
burden under the case . . . law cited by Plaintiff for obtaining discovery from a nonparty.” 12 The
court finds MSupport’s arguments unpersuasive.
At the outset MSupport misconstrues the standard for discovery as it relates to the
subpoena. As previously noted by Judge Nuffer in this case and by Judge Waddoups in the
Mountain Dudes matter, discovery is still “broad and liberal” in seeking information in aid of a
judgement under Rule 69. “There is no doubt that third parties can be examined in relation to the
financial affairs of the judgment debtor.” 13 Zoobuh has presented evidence—a series of checks
written on MSupport’s account in behalf of Defendant Better Broadcasting—that provide a
nexus to at least one Defendant in this action. 14 The court therefore finds the requested
information is relevant.
Additionally, the subpoena is limited by a time frame beginning on September 1, 2010
and ending September 1, 2013. Thus, Zoobuh is not requesting the expansive assortment of
11

Deithcman v. E.R. Squibb & Sons, Inc., 740 F.2d 556, 560 (7th Cir. 1984); see also Flanagan v. Wyndham Int’l,
Inc., 231 F.R.D. 98, 102 (D.D.C. Oct. 5, 2005) (“The quashing of a subpoena is an extraordinary measure and is
usually inappropriate absent extraordinary circumstances.”)
12

Op. p. 1, docket no. 83.

13

Caisson Corp. v. Cty. W. Bldg. Corp., 62 F.R.D. 331, 335 (E.D. Pa. 1974)

14

See Zoobuh’s Mem. in Supp. of Subpoena to Invictus and Jackson Ex. 6, docket no. 71.

4

information MSupport alleges and there are no violations of proportionality. 15 This same limited
time frame also undermines MSupport’s objections concerning the subpoena being overbroad
and unduly burdensome. The court has also reviewed the subpoena and finds it is not facially
overbroad. 16 MSupport also fails to provide any “’strong showing’” that the information sought
by Zoobuh is confidential commercial information. 17 Thus that argument fails.
Last and perhaps most important to the Bank of Utah subpoena, the subpoena is not
directed to MSupport but to Bank of Utah, which has not objected to it. In U.S. v. Continental
Bank & Trust Co. 18 the Tenth Circuit concluded that the bank, which was contesting a summons
requesting a customer’s deposits and cancelled checks drawn on their account, had no
expectation of privacy in the bank account records. Even the customer, i.e. the account holder,
had “no proprietary interest in the bank’s records.” 19 With no “bank-depositor privilege” the
records were not restricted and the court stated a customer is “not entitled even to notice of the
proposed examination of the bank's records . . . .” 20
Given this precedent, there are serious questions regarding MSupport’s standing to
contest production of these records. Any heightened burden arguments are undermined by such
questions and a lack of standing precludes MSupport’s opportunity to even challenge the
subpoena. Regardless of the standing concerns, however, the court finds no reason on the facts

15

See e.g., Mountain Dudes, 2013 WL 5435707, *2; British Intern. Ins. Co., Ltd. v. Seguros La Rupublica, S.A.,
200 F.R.D. 586, 589 (W.D.Tex. 2000).
16

See British Intern., 200 F.R.D. at 591 (“Although undue burden can be found when a subpoena is facially
overbroad, the Court cannot agree that requests 3 and 6 are such.”)

17

See Gonzales v. Google, Inc., 234 F.R.D. 674, 684 (N.D.Cal. 2006) (quoting Compaq Computer Corp. v. Packard
Bell Elec., Inc., 163 F.R.D. 329, 338 (N.D.Cal. 1995)).

18

503 F.2d 45 (10th Cir. 1974).

19

Id. at 49.

20

United States v. Cont'l Bank & Trust Co., 503 F.2d at 49; See also Galbraith v. United States, 387 F.2d 617, 618
(10th Cir. 1968) (holding the records were property of the bank and the customer lacked an interest in the records).

5

before it that the subpoena to Bank of Utah should not be enforced. The undersigned will grant
the motion to compel.
(ii)

The court will order MSupport to provide further quantification regarding its
burden
MSupport raises the same objections to the subpoena issued to it as it does to the Bank of

Utah Subpoena. The MSupport subpoena is objectionable because (1) it is overbroad and places
an undue burden upon MSupport; (2) seeks disclosure of confidential commercial information;
(3) is impermissible under Federal Rule of Civil Procedure 26 based upon principles of relevance
and proportionality; and (4) the subpoena fails to meet the “heightened burden under the case . . .
law cited by Plaintiff for obtaining discovery from a nonparty.” 21
The undersigned finds much of the same reasoning set forth earlier with respect to the
Bank of Utah subpoena applies equally to the MSupport subpoena. This includes the standard
for discovery, the availability of discovery from third parties and the limited time frame of the
requests. Such reasoning rejects MSupports arguments regarding impermissibility under Rule
26.
In addition, there is no need to apply a “heightened burden” to the subpoena. MSupport
misconstrues Judge Waddoups’ decision which noted a “somewhat heightened” standard is
appropriate to requests for “disclosure concerning the assets of a nonparty . . . .” 22 Here Zoobuh
does not request MSupport to disclose information about its own assets. Thus the court rejects
MSupport’s heightened burden arguments.

21

Op. p. 1, docket no. 82.

22

Mountain Dudes 2013 WL 5435707 *2.

6

Next, the court is not convinced that the information sought should not be disclosed even
if it is “confidential business information.” 23 Local Rule 26-2 24 concerning the standard
protective order is still applicable in this case and the standard protective order will protect any
commercially sensitive information to the extent it exists.25 MSupport argues that disclosing the
information “especially in the form requested by Plaintiff will invariably harm the party that had
to disclose the information.” 26 MSupport fails to support this assertion and fails to establish that
the information sought is of such important proprietary information, in accordance with Fed. R.
Civ. P. 45(d)(3)(B), that it should not be disclosed under any circumstances. The undersigned
therefore rejects these arguments against production.
The court does share some concern with the overbreadth and potential undue burden of
the MSupport subpoena. First, in accordance with the other requests found in the subpoena the
court finds it appropriate to limit the request for documents that refer to “Winterton Properties”
to the same time frame as the other requests – January 1, 2010 through December 31, 2013. This
will reduce the overbroad request for all documents without any time limitation.
Next, it is well settled that the party seeking to quash or object to a subpoena “bears the
burden of showing that it subjects [them] to undue burden.” 27 MSupport argues the burden is
excessive and “it would be extremely costly for MSupport to comply with the demands of the
[MSupport subpoena].” 28 Indeed, it “may cost thousands of dollars to obtain documents, review

23

Op. p. 3, docket no. 82.

24

See http://www.utd.uscourts.gov/documents/rules.html#DUCivR26-2.

25

See NOTICE FORM THE COURT, docket no. 46.

26

Op. p. 4, docket no. 82.

27

Flanagan v. Wyndham Int'l Inc., 231 F.R.D. 98, 102 (D.D.C. 2005).

28

Op. p. 2, docket no. 82.

7

them for privilege and other commercially confidential information, and to redact them
appropriately . . . .” 29
When arguments regarding undue burden are made “courts generally employ a balancing
test, weighing the burdensomeness to the moving party against the [other party’s] need for, and
the relevance of, the information being sought.” 30 The burden here is on MSupport to show that
the subpoena imposes an undue burden. 31 Zoobuh argues the balancing test “favors requiring
compliance with the subpoena.” 32 That argument is premature, however, because undue burden
cannot be established or even properly weighed without some quantification from MSupport of
the material in its possession that is responsive. 33
Accordingly with the date limitation set forth previously, the court will order MSupport
to search for documents that are responsive and provide to the court and Zoobuh an accounting
of the material that is responsive. If needed MSupport is also to file a detailed privilege log in
accordance with Rule 45. Upon completion the parties are ordered to meet and confer regarding
the responsive materials. Once this is complete the parties are to notify the court and then the
court may if necessary properly balance and narrow the scope of information or exclude
privileged documents.
ORDER
IT IS HEREBY ORDERED that Zoobuh’s Motion to Compel Compliance with the
Subpoena to Bank of Utah is GRANTED. MSupport’s objections to that subpoena are
overruled.
29

Id. at p. 3.

30

Flanagan, 231 F.R.D. at 102

31

See id.

32

Motion to Compel Compliance with Subpoena to MSupport LLC. p. 4, docket no. 77 (emphasis omitted).

33

See Order Sustaining Objection to Magistrate Judge’s Order p. 5, docket no. 68.

8

IT IS FURTHER ORDERED that MSupport is to quantify the material sought in the
MSupport subpoena and provide further documentation with the court and Zoobuh within thirty
(30) days from the date of this order.
The court takes UNDER ADVISEMENT the Motion to Compel Compliance with
Subpoena to MSupport pending further documentation from MSupport and the parties
completing their meet and confer requirements.
IT IS FURTHER ORDERED that all requests for attorney fees and costs are DENIED.
Each side shall bear its own costs on the motions.

DATED this 24 April 2017.

Brooke C. Wells
United States Magistrate Judge

9