Issuing Court

Issuing Court Should Decide Dispute Related to Third Party Subpoena, Says Court: eDiscovery Case Law

In Steel Supplements, Inc. v. Blitz NV, LLC, No. 2:22-cv-00020-GMN-BNW (D. Nev. March 2, 2022), Nevada Magistrate Judge Brenda Weksler granted the plaintiff’s motion to compel non-party Ignite US to comply with subpoenas and to designate a witness to respond to certain questions to be asked during a deposition, with those matters to be resolved in the issuing court in Florida, determining “there is minimal burden to Ignite”.

Case Discussion

In this contract dispute regarding health\athletic nutritional supplements, the plaintiff argued that the discovery sought from Ignite was subject to a previous ruling by the issuing district in Florida on a motion for a protective order and that it required this Court to interpret that court’s temporal scope limitations, that having the Florida court rule on the motion would obviate potentially inconsistent rulings and that the only ties that Ignite has to Nevada is that its counsel and one of its executives (Dan Bilzerian) reside there. In addition, Dan Bilzerian was the sole member of Blitz, the defendant in the underlying suit, and had already appeared in the Florida court in relation to a subpoena issued to him.

ProSearch

Ignite argued the motion should not be transferred to the Florida court because the only reason the plaintiff wanted the motion to be decided in Florida was to avoid Ninth Circuit precedent which, according to Ignite, holds that Ignite’s parent company would not have to comply with the subpoena. Ignite also argued that the Florida court had not made any substantive rulings on this matter and stated it would not. And it argued it would be costly for Ignite to have to hire counsel in Florida given the current counsel for Defendant Blitz can only pro hac on behalf of Blitz.

In its reply, the plaintiff argued the transfer would not impose any undue burden on Ignite, citing FRCP Rule 45(f) in arguing there is no prohibition to Blitz’s counsel appearing on behalf of Ignite in Florida, she is already familiar with the local rules, and that hearings had been taking place telephonically – obviating the costs associated with travel. The plaintiff also took issue with the idea that the Florida court wouldn’t rule on the merits of the instant motion and that Ignite had not demonstrated whether which circuit – Ninth or Eleventh – law would apply.

Judge’s Ruling

Judge Weksler stated: “Although the party that wishes to enforce a subpoena must initially move the court for the district where compliance is required, Fed. R. Civ. P. 45(f) gives the court discretion to transfer subpoena-related motions to the issuing court… Specifically, the rule 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.’”

Continuing, she stated: “Although the Rule itself does not expound on what constitutes ‘exceptional circumstances,’ the advisory notes provide guidance as to the court’s exercise of discretion:

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 that court has already ruled on issues presented by the motion or the same issues are likely to arise in discovery in many districts.”

As a result, Judge Weksler ruled: “The Court finds Plaintiff has demonstrated that exceptional circumstances exist for this motion to be transferred to Florida. First, there is minimal burden to Ignite. Counsel for Ignite has already responded to the substantive arguments regarding the motion to compel, she is familiar with the case as she represents Defendant Blitz in the underlying case, and she will be able to enter an appearance in Florida as counsel for Ignite…In addition, the district court in Florida is in a much better position to rule on the instant motion as it has already entered orders implicating similar relevance and proportionality arguments the court would have to undertake here. Judicial economy is also favored due to the familiarity the issuing court has with the arguments raised in the instant motion. In this same vein, the parties appear to disagree as to the meaning of a temporal limitation imposed in discovery by the issuing court. Thus, transferring this motion to the issuing court would avoid the potential for inconsistent rulings. In short, the circumstances favoring transfer outweigh the interest of the nonparty served with the subpoena in obtaining local resolution of the motion.”

The Florida court subsequently granted the motion to compel and issued several rulings related to Ignite’s failure to “participate fully and robustly in discovery related to the instant subpoena.” Here’s the link to that ruling.

So, what do you think? Do you agree that “exceptional circumstances” were present here to dictate transferring the subpoena-related motion?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant, an Affinity partner of eDiscovery Today.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by my employer, my partners or my clients. eDiscovery Today is made available solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Today should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

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