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Frank Brunckhorst Co., Miscellaneous v. Michael R. Ihm and Sunset Deli Provisions

October 18, 2012


The opinion of the court was delivered by: O'neill, J.


In light of the time constraints in effect in the underlying litigation*fn1 and the fact that both parties here have represented to the Court that they seek resolution of the Motion to Quash on the merits in this Court*fn2 , on October 17, 2012 I vacated my Order of October 12, 2012 transferring nonparty Dietz and Watson's ("D&W's") Motion To Quash Or Modify The Subpoenas Issued To Dietz and Watson and Louis J. Eni, Jr. and For a Protective Order to the United States District Court for the Southern District of California. This Memorandum further explains the reasoning behind my decision to vacate that order and to decide the motion on the merits.


The Motion to Quash was brought in connection with litigation currently pending in the United States District Court for the Southern District of California.*fn3 Plaintiff Frank Brunckhorst Co. is the national distributor for Boars Head Provisions, Co., Inc., which produces delicatessen products. D&W also produces delicatessen products. In the California action, Brunckhorst alleges that the defendants-during their relationship with Brunckhorst-began dealings with, and ultimately entered into a distributorship with, Brunckhorst's competitor D&W. D&W is not a party to the California litigation. On August 19, 2011, Brunckhorst filed a complaint in the United States District Court for the Southern District of California. On September 12, 2011 defendants filed an answer. On December 16, 2011 that Court issued a Scheduling Order governing pretrial deadlines and set a fact discovery deadline of April 16, 2012. On March 2, 2012, that Court granted a protective order governing the parties' exchange of confidential information, and addressing the defendants' concerns about giving Brunckhorst access to sensitive information related to defendants relationship with D&W, Brunckhorst's competitor. See No. 11-1883 (S.D. Cal.), Dkt. No. 24.

The Court in the California litigation has issued numerous rulings regarding discovery disputes and deadlines. On March 9, 2012 that Court issued an Order granting a joint motion for extension of time to file a discovery motion as to all previously issued discovery requests. See No. 11-1883 (S.D. Cal.), Dkt. No. 29. On April 13, 2012 the parties filed another joint motion to extend all pretrial deadlines by five months, asserting that they had good cause for such an extension because "the parties had a dispute over the terms of a protective order governing confidential information, filed a discovery motion on April 9, 2012 and 'have other discovery issues or disputes.'" See No. 11-1883 (S.D. Cal.), Dkt. No. 32. While noting that "discovery disputes are common in modern litigation and do not constitute good cause for the lengthy extension of all pretrial dates," that Court ordered that all fact discovery be completed by July 16, 2012, stating that "Completed" means that all discovery under Rules 30-36 of the Federal Rules of Civil Procedure, and discovery subpoenas under Rule 45, must be initiated a sufficient period of time in advance of the cut-off date, so that it may be completed by the cut-off date. . . . Absent an order of the court, no stipulation continuing or altering this requirement will be recognized by the court.

Id. at 2 (emphasis in original). On April 18, 2012 that Court issued an order denying plaintiff's motion to compel further responses to discovery seeking, inter alia, documents relating to the termination of the business relationship between the parties or "the development of [defendants'] arrangement with D&W" without prejudice because the parties failed to comply with local rules in not conducting an adequate meet and confer. See No. 11-1883 (S.D. Cal.), Dkt. No. 33, ECF p. 1-2 (also noting that defendants initial disclosures did not comply with Rule 26). On May 10, 2012 that Court issued an order granting the parties additional time to file motions to resolve any remaining discovery matters as the defendants had failed to provide additional documents and information as agreed to at the parties' meet and confer held on April 27, 2012, and thus the parties were unable to determine whether another joint motion regarding discovery was necessary. See No. 11-1883 (S.D. Cal.), Dkt. No. 37, ECF p. 1-2.

On September 10, 2012 Brunckhorst filed an amended complaint adding South Shore Deli Provisions, Inc. as a defendant as to all claims on a theory of successor liability. In the interim, between the Court's May 12 Order and the Order permitting Brunckhorst to file an amended complaint, the parties filed three more motions requesting that the California Court resolve discovery disputes and extend deadlines. See No. 11-1883 (S.D. Cal.), Dkt. Nos. 38-40. On September 26, 2012 the Court in the California action issued an order addressing the two Joint Motions for Determination of Discovery Disputes, and directed defendants to produce documents in response to requests that are identical or substantially similar to those requested from D&W in the instant subpoena by October 12, 2012. See Dkt. No. 46, Frank Brunckhorst Co., LLC v. Ihm, No. 11-1883, 2012 WL 684760 (S.D. Cal. Sept. 26, 2012). The September 26, 2012 Order also discussed issues of relevance, confidential and sensitive commercial information, defendants' degrees of compliance with discovery requests, and the underlying causes of action. Id. at ECF p. 5-22. On that same day, the California Court issued a second Order regarding discovery. The Court stated that a discovery "schedule may be modified only for good cause and with the judge's consent." Fed. R. Civ. P. 16(b)(4). The "good cause" requirement of Rule 16 primarily considers the diligence of the party seeking the amendment. Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992). "The district court may modify the pretrial schedule if it cannot reasonably be met despite the diligence of the party seeking the extension." Id. (internal citation and quotation marks omitted). If the party seeking the modification "was not diligent, the inquiry should end" and the motion to modify should not be granted. Id.

See No. 11-1883 (S.D. Cal.), Dkt. No. 47, ECF p. 2. It found that "the parties have not established good cause for another lengthy extension of all case management dates." Id. However, in light of its other Order issued the same day regarding pending discovery production, the Court extended the fact discovery deadline until November 13, 2012 "but only for the purpose of completing depositions. The parties have had plenty of time to complete written discovery. Accordingly, no more written discovery requests may be served in this case without leave of Court." See No. 11-1883 (S.D. Cal.), Dkt. No. 47.

On or after August 14, 2012, Brunckhorst served two subpoenas seeking the deposition testimony of D&W and D&W's President Louis J. Eni, Jr. These subpoenas were accompanied by requests that various documents be produced in connection with the depositions. D&W filed its Motion to Quash on August 28, 2012.

On October 12, 2012, I issued an Order in response to D&W's Motion To Quash transferring the motion to the United States District Court for the Southern District of California.

See No. 12-0217 (E.D. Pa.), Dkt. No. 9. On October 15, 2012 D&W filed a motion to stay the transfer so that D&W could petition the Court of Appeals for a writ of mandamus. See No. 12-0217 (E.D. Pa.), Dkt. No. 10. Brunckhorst filed an opposition to D&W's motion as well as its own motion for reconsideration of my October 12 Order. See No. 12-0217 (E.D. Pa.), Dkt. Nos. 12-13.On October 17, 2012, after receiving submissions from both D&W and Brunckhorst which requested that I decide the motion to quash on the merits*fn4 , I vacated the October 12 Order. See No. 12-0217 (E.D. Pa.), Dkt. No. 14.

In its motion to stay, D&W argues that I "had no statutory or other authority to transfer the Discovery motion to the California District Court." See No. 12-0217 (E.D. Pa.), Dkt. No. 10, ECF p. 4. D&W contends that the reasoning in my order fails to account for "a sea change in the law in 1998," the year in which the United States Court of Appeals for the District of Columbia Circuit decided In re Sealed Case. Id. at ECF p. 2. In that case, the Court concluded that "the idea that a district court may transfer a motion to quash a subpoena rests on a misreading of a nonauthoritative source that relates to a different rule. The Rules of Civil Procedure themselves do not provide any basis for such authority, and district courts have no inherent powers to transfer." In re Sealed Case, 141 F.3d 337, 343 (D.C. Cir. 1998); No. 12-0217 (E.D. Pa.), Dkt. No. 10, ECF p. 2. D&W asserts that the Court's reasoning in In re Sealed Case, namely that a transferee court not only would lack statutory authority to quash or enforce another court's subpoena, but would often lack personal jurisdiction over the nonparty, is especially pertinent here because one of the individuals Brunckhorst seeks to depose is D&W's president. See In re Sealed Case, 141 F.3d at 343 (D.C. Cir. 1998); No. 12-0217 (E.D. Pa.), No. 12-0217 (E.D. Pa.), Dkt. No. 10, ECF p. 3. D&W argues that since In re Sealed Case was decided a "virtually every court to consider the issue has held that a District Court that issued a subpoena lacks the power to transfer a non-party's motion to quash that subpoena to the District Court in which the 'underlying action' is pending." No. 12-0217 (E.D. Pa.), Dkt. No. 10, ECF p. 3, citing Highland Tank & Mfg. Co. v. PS Int'l, Inc., 227 F.R.D. 374, 380 (W.D. Pa. 2005)("any controversies regarding the production of documents from nonparty witnesses shall be decided in the court which issued the subpoena, unless the nonparty consents to determination elsewhere")). D&W requests that this Court stay the transfer for a reasonable period of time so that they may present a petition for mandamus to the Court of Appeals.

Brunckhorst argues that I should reconsider my order transferring the motion and adjudicate the merits of D&W's motion to quash. See No. 12-0217 (E.D. Pa.), Dkt. No. 13, ECF p. 6. Brunckhorst advances two reasons for this. First, "the benefits to be gained from consideration of the California court's greater familiarity with the facts relevant to the underlying dispute, and of the California court's previous rulings on closely related matters, can be realized without resort to transfer." Id. at 7. Brunckhorst acknowledges that the California Court has more extensive and detailed knowledge of the underlying case (and thus of the appropriateness of the discovery that Brunckhorst seeks from D&W and the degree to which relevant information might be proprietary or confidential) and that it would be "appropriate for this Court, in addressing its subpoena, to have the benefit of the California's court's experience, knowledge and prior decisions on related issues" but contends that this "can be accomplished without transfer" as the California court ruled on the same averments of confidentiality at issue here. Id. at 8. Indeed, Brunckhorst states that "because this Court has access to the analysis of the California court with regard to the issues being raised here, it can defer to the California court without transferring the case." Id.

Second, Brunckhorst argues that "reconsideration and vacation of the Order of October 12 would affirmatively further the ends of justice by avoiding what would otherwise be protracted collateral proceedings in district courts and courts of appeals in both this and the Ninth Circuit" causing unnecessary delay and expense and "most significantly, . . . would create a very serious risk that Brunckhorst would be denied a just adjudication of its underlying claim, citing the November 13, 2012 discovery deadline in the California action. Id. at 7. Brunckhorst asserts that it is quite ...

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