In Fed. Ins. Co. v. Tungsten Heavy Powder & Parts, Inc., No.: 21cv1197-W-MDD (S.D. Cal. July 18, 2022), California Magistrate Judge Mitchell D. Dembin denied the plaintiff’s motion to compel a nonparty (one of Defendants’ former customers) to appear for deposition in part because the amended subpoena listed the “Place” of compliance as “VIA ZOOM VIDEO CONFERENCE”, which is not a place per Rule 45(a)(1). As Judge Dembin stated: “To quote M.C. Hammer, this Court simply ‘can’t touch this.’”

Case Discussion

In this insurance coverage dispute concerning Defendants’ claim for loss of business income under a commercial insurance policy, the plaintiff first subpoenaed documents, without deposition testimony, from General Dynamics Ordnance and Tactical Systems (“GD-OTS”) on March 23, 2022. Despite the fact that Plaintiff became aware of GD-OTS’s importance during a December 20, 2019 deposition of a former senior executive at Defendant, Plaintiff did not seek to depose a corporate representative until it served a notice of deposition and subpoena to GD-OTS on April 8, 2022, less than six weeks before discovery closed in this case.

That subpoena was incorrectly directed and ten days later, it advised Plaintiff that the appropriate entity to serve was “General Dynamics Ordnance and Tactical Systems.” Plaintiff served the amended subpoena now at issue to GD-OTS on April 22, 2022 and proceeded to meet and confer with the nonparty about compliance.

At one point, Plaintiff and GD-OTS considered a declaration in lieu of deposition, but those negotiations failed. GD-OTS sent lengthy, written objections to FIC on May 6, 2022. Although GD-OTS ultimately agreed that it would produce documents to FIC by May 16, 2022, GD-OTS refused to appear for the deposition, leading to the motion to compel.

GD-OTS challenged the Court’s jurisdiction to consider the Motion to Compel, arguing that Plaintiff should have filed it in the Middle District of Florida because GD-OTS has its corporate headquarters in St. Petersburg, Florida. GD-OTS argued alternatively that it had an adequate excuse for refusing to attend the May 12, 2022 deposition because the amended subpoena was facially invalid. GD-OTS asks the Court to quash the amended subpoena pursuant to Rule 45(d)(3) because it: (1) failed to provide a reasonable amount of time for GD-OTS to respond; (2) failed to comply with the geographical 100-mile requirements of Rule 45(c)(1)(A); and (3) was unduly burdensome.

Judge’s Ruling

Regarding whether to hold GD-OTS in contempt under Rule 45(g), Judge Dembin stated: “FIC does not dispute that GD-OTS’s principal place of business is Virginia, and its corporate headquarters is Florida. Unquestionably, the Southern District of California is not an optional ‘place of compliance’ under that analysis. To consider the place of compliance identified on the face of the subpoena, the Court looks more closely at the amended subpoena itself.”

Regarding whether the subpoena complied with Rule 45(a)(1)(iii), Judge Dembin stated: “A valid subpoena must list a specific place of compliance, pursuant to Rule 45(a)(1)(A)(iii)”, adding: “The amended subpoena lists the ‘Place’ of compliance as ‘VIA ZOOM VIDEO CONFERENCE.’…A ‘ZOOM VIDEO CONFERENCE,’ however, is not a place.”

Judge Dembin also stated: “In this case, the parties did not agree to a remote, videoconference deposition. To the contrary, GD-OTS objected to that designation and notified FIC that (1) its principal place of business was in St. Petersburg, Florida, and (2) Nevada and California bore no connection to their corporate representatives…The importance of identifying a geographical place of compliance on the face of a subpoena is borne out in this case, where the absence of such details renders the resolution difficult at best, and simply not possible here.”

However, Judge Dembin rejected sanctions for Plaintiff, stating: “This is not the first time in this case that FIC has run afoul of the Court’s expectations, rules, and requirements. Notwithstanding, the Court denies Defendants’ request for sanctions. The Court will not penalize FIC for asserting an innovative, though unmerited, approach to facilitating deposition testimony of a nonparty in a manner that is most expedient and cost-effective for the parties involved. This is just not that place. The Court also will not consider FIC’s use of GD-OTS’s documents at trial or in pretrial motions because that question is not properly raised in this nonparty discovery dispute.”

Finally, in denying Plaintiff’s motion to compel, Judge Dembin stated in finding that “San Diego Is Not Where GD-OTS ‘“’Regularly Transacts Business in Person’”: “the only presence GD-OTS has in this district is an affiliated entity called ‘General Dynamics Motion Control, LLC,’ which the nonparty represents as a ‘completely separate corporate entity’ from GD-OTS that bears no relationship to the current dispute.”

So, what do you think? Have you ever seen a subpoena that specified the location as “VIA ZOOM VIDEO CONFERENCE”? Please share any comments you might have or if you’d like to know more about a particular topic.

Hat tip to Ralph Losey and his excellent e-Discovery Team^® blog for the heads up on this topic and case! Get well soon, Ralph!

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