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Thermo Credit, LLC v. ICOE


July 25, 2008


The opinion of the court was delivered by: Ambrose, Chief District Judge



In this action, Meridian seeks reconsideration of an Order granting Thermo Credit's Motion to Enforce Subpoena. The Order was based on Meridian's failure to respond. Presently, the parties do not contest my reconsideration of that Order, and consent to my assessing Meridian's substantive argument.

For the following reasons, the Motion for Reconsideration is granted, and my previous Order vacated. Meridian shall be directed to comply with the subpoena, consistent with the following Opinion.



Briefly, this Motion arises out of several actions pending in federal courts elsewhere: Thermo Credit, LLC v. ICOE, Ltd., et al., No. 7-3734 (E.D. La.), ("Thermo Credit action"), and PNC Bank v. ICOE, Ltd., No. 1:07-cv-992 (S.D. Ind.) ("PNC action"). Thermo Credit, a Defendant in the PNC action, is in the business of "factoring" accounts receivable -- that is, purchasing such accounts at a discount to their face value. In the Thermo Credit action, Thermo Credit brings claims arising out of accounts receivable factored by Thermo Credit for ICOE. In the PNC action, PNC claims that it has a security interest in certain accounts receivable factored by Thermo Credit on behalf of ICOE, because ICOE purchased them from OCMC, a borrower of PNC that is located in Indiana, without PNC's permission. In a third action, captioned PNC Bank v. OCMC, Inc., No. 1:06-cv-755 (S.D. Ind.) ("OCMC action"), the court appointed Meridian as Receiver for OCMC.

Presently, Thermo Credit seeks to enforce a subpoena duces tecum issued from this Court and directed to Meridian, seeking specified documents from OCMC, in the Thermo Credit action pending in Louisiana. Meridian is located in Pittsburgh, Pennsylvania. The parties do not dispute that OCMC's paper documents are warehoused in Indiana, and that electronically stored information exists as well. Meridian asserts that the warehoused paper documents number in the hundreds of thousands. Meridian asserts that it has advised Thermo Credit that the paper and electronic information is available to Thermo Credit for inspection. Thermo Credit, in turn, claims that Meridian has not provided information responsive to the subpoena. Meridian makes the unsupported assertion, and Thermo Credit does not contest, that it now has, and has made available, the documents as they were kept in the usual course of business. Meridian also claims that it has provided Thermo Credit with an index of warehoused items.


The parties expend a fair amount of ink raising and responding to several issues, all of which I reject as grounds for denying enforcement of the subpoena.*fn1 Thermo Credit is palpably frustrated with counsel's exchanges regarding compliance with the subpoena. Nevertheless, at the core of this dispute is the simple question of whether Meridian, a non-party to the action in which the subpoena issued, may comply with the subpoena by making documents and electronically stored material available to Thermo Credit for inspection.

Fed. R. Civ. P. 45(d)(1) expressly authorizes a person to produce documents for inspection as they are kept in usual course of business, or to organize and label them to correspond to the categories in a demand. By using the disjunctive "or," the Rule excuses the producing non-party from the obligation of organizing documents to correspond to categories of documents requested. Calvert v Reinisch, 218 F.R.D. 497, (W.D. Tex. 2004); see also Broadway Delivery Corp. v United Parcel Service, Inc., No. 75-1280, 1979 U.S. Dist. LEXIS 14478, at **6-7 (S.D. N.Y. Feb. 13, 1979).

Along with this Rule, I am cognizant of the general principle that non-parties are to be protected, by the Court and the party seeking discovery, from undue burden and expense. Fed. R. Civ. P. 45; Garner Constr., Inc. v. Int'l Union of Operating Eng'rs, Local 302, 2007 U.S. Dist. LEXIS 92522, at **3-4 (W.D. Wash. Dec. 4, 2007).

As mentioned, Meridian claims that it has made or will make available for inspection documents as they were kept in the usual course of business. Thermo Credit has not proffered any authority or argument that would require Meridian to organize those documents in any particular manner. Thermo Credit's unsupported assertions that Meridian is not neutral, is cooperating with a party in related litigation, or is paying high-priced attorneys, does not supply such authority. In other words, Meridian claims that it will comply with Rule 45(d)(1), and Thermo Credit offers no reason for deeming this assertion either untrue or improper.


The Motion to Reconsider my Order enforcing the subpoena will be granted. I reject Meridian's arguments seeking to be excused from complying with the subpoena. I also find, however, that Meridian may fulfill its obligations by making the documents and electronically stored material available for inspection by Thermo Credit, if done in accordance with applicable Rules.*fn2 I will not award counsel fees at this time.


AND NOW, this 25th day of July, 2008, it is hereby ORDERED, ADJUDGED, and DECREED that Meridian's Motion for Reconsideration is GRANTED, and my Order dated June 10, 2008 is VACATED. Meridian must comply with the subpoena, in accordance with applicable rules. There will be no award of counsel fees at this juncture.

Donetta W. Ambrose Chief U.S. District Judge

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