Opinion
M 18-302(CM)(LMS).
April 19, 2006
DECISION and ORDER
Nonparty-Witnesses Messieurs Hatim el-Gammal and Zouhair Khaliq (herein, "Nonparty-Witnesses"), who were served personally with subpoenas requiring their testimony and the production of documents, move this Court for a modification to those subpoenas pursuant to Federal Rule of Civil Procedure 45(c)(3)(A)(ii) on the grounds that the subpoenas require them "to travel to a place more than 100 miles" from where they both reside, regularly transact business, or are employed. See Docket #207, Nonparty-Witnesses' Memorandum of Law (herein, "Mem.") at p. 1-2. For the following reasons, the Nonparty-Witnesses' motion to modify the subpoenas is granted.
BACKGROUND
In light of the prolific nature of this dispute, familiarity with the underlying facts is presumed.Plaintiffs Estate of Yaron Ungar (herein, "Plaintiffs") caused the aforementioned subpoenas to be served on the Nonparty-Witnesses while those witnesses were physically within the jurisdictional boundaries of the Southern District of New York in September of 2005. The subpoenas require both of the Nonparty-Witnesses to provide (1) certain documents and (2) their own personal testimony at a deposition that was scheduled to be held at the law offices of Plaintiffs' counsel, which is located in New York City, on September 23, 2005, at 10:00 am. See Docket #206, Nonparty-Witnesses' Notice of Motion (herein, "Not. of Motion"), Exhibits A and B.
The Court has not been provided evidence of the service of the subpoenas on the Nonparty-Witnesses. The subpoenas are signed by Plaintiffs' counsel and dated August 30, 2005. The Nonparty-Witnesses have not disputed that they were served.
The Nonparty-Witnesses mounted a challenge to the validity of the subpoenas, which the Honorable Colleen McMahon, United States District Judge, denied on November 7, 2005. See Estate of Yaron Ungar v. Palestinian Authority, et al., 400 F. Supp. 2d 541, 553-54 (S.D.N.Y. 2005). In her November 7th Decision and Order, Judge McMahon concluded that "[t]here are no obvious grounds for quashing, rather than modifying, the subpoenas under Rule 45(c) before this Court. I decline to quash them." Id. at 553-54. The Nonparty-Witnesses have interpreted this to mean that though quashing the subpoenas has been foreclosed, this Court may still modify the subpoenas to ensure they are in compliance with the Federal Rules of Civil Procedure.
This is not the first time the specter of modifying the subpoenas served on the Nonparty —
Witnesses has come before this Court. In an earlier motion made by the Plaintiffs seeking, inter alia, sanctions, contempt, and attorneys' fees for the Nonparty-Witnesses' alleged noncompliance with these subpoenas, the Nonparty-Witnesses argued that sanctions could not be assessed under the Federal Rules of Civil Procedure because FED. R. CIV. PRO. 45(e) provides that a nonparty has an "adequate cause for failure to obey" the dictates of a subpoena when such a subpoena requires a nonparty to travel more than 100 miles to the place of deposition from his or her place of employment, residence or site of regular business transaction. See Docket #190, Memorandum in Opposition to the Estate's Motion to Compel, to Adjudge in Contempt, to Impose a Sanction for Noncompliance, and for Fees and Costs at pp. 5-7. In a Decision and Order dated February 23, 2006, the undersigned denied Plaintiffs' motion for sanctions, contempt, and attorneys' fees, and elected not to address the issue of modifying the subpoenas, which had been raised tangentially by both the Nonparty-Witnesses and the Plaintiffs in their briefs. See Docket #203, Decision and Order dated February 23, 2006, at p. 9. After the issuance of that Decision and Order, the instant motion followed.
The Nonparty-Witnesses have averred that they are non-citizens of the United States — one resides in Egypt, the other resides in Pakistan — and are employed by Orascom Telecom Holdings S.A.E., or one of its subsidiaries, which are companies based outside of the United States. See Not. of Motion, Exhibits C and D. The Nonparty-Witnesses have also averred that they do not conduct business in New York on a regular basis. Id. Based upon this lack of connections with the Southern District of New York, the Nonparty-Witnesses now move this Court to modify the ad testificandum portions of the subpoenas served upon them.
Plaintiffs counter that the Nonparty-Witnesses are re-litigating whether the subpoenas served upon them should be quashed — an argument they contend Judge McMahon denied in her November 7, 2005, Decision and Order — and that in any event, the motion now before this Court is untimely, the arguments raised in support of modifying the subpoenas have been waived, that one of the Nonparty-Witnesses, Mr. el-Gammal, admitted to transacting business in New York on a regular basis, and that the Court should order Mr. el-Gammal to appear at a hearing before this Court pursuant to Federal Rule of Civil Procedure 43(e) to examine him on his declaration. See Docket #209, Plaintiffs' Memorandum in Opposition (herein, "Mem. in Opp.").
For the following reasons, I order that the testimonial aspects of the subpoenas served on both of the Nonparty-Witnesses be struck as they require the witnesses, who are non-parties to the underlying cause of action, to travel a distance of greater than 100 miles to the proposed site of deposition from their respective places of residence, employment or regular business transaction.
DISCUSSION
A. Federal Rule of Civil Procedure 45(c)
Federal Rule of Civil Procedure 45 pertains to the issuance, service and compliance with subpoenas for both parties and non-parties in a civil cause of action. In particular, Rule 45(c), which is entitled "Protection of Persons Subject to Subpoenas," places a responsibility on an attorney issuing a subpoena to ensure that the subpoena itself does not impose an undue burden on the person served, see FED R. CIV. PRO. 45(c)(1), and also enumerates the process which a person objecting to the command of a subpoena duces tecum should follow, see FED. R. CIV. PRO. 45(c)(2)(A), (B). Such objections are not before this Court.
Rule 45(c)(3)(A) "identifies those circumstances in which a subpoena must be quashed or modified. . . ." See 9A WRIGHT MILLER, FEDERAL PRACTICE AND PROCEDURE § 2463. Specifically, subsection (ii) directs that upon a timely motion, the court issuing the subpoena shall quash or modify the subpoena if it "requires a person who is not a party or an officer of a party to travel to a place more than 100 miles from the place where that person resides, is employed, or regularly transacts business in person. . . ." FED. R. CIV. PRO. 45(c)(3)(A)(ii); see also In re Matter of the Application for an Order Quashing a December 19, 1997, Deposition Subpoena of Price Waterhouse LLP, 182 F.R.D. 56, 61 (S.D.N.Y. 1998) (citing FED. R. CIV. PRO. 45(c)(3)(A)(ii)).
For the following reasons, I conclude that the Nonparty-Witnesses are within the safe harbor protection of Rule 45(c) as they both reside, are employed, or regularly transact business more than 100 miles from the place of the proposed deposition in New York City, that the other issues raised by the Plaintiffs in opposition to the present motion are without merit, and that therefore the Nonparty-Witnesses' motion to modify the subpoenas should be granted.
1. The Present Motion Does Not Contravene Judge McMahon's November 7, 2005, Decision and Order
Plaintiffs suggest that the Nonparty-Witnesses' present motion is really a motion to quash — masquerading as a motion to modify — the subpoenas Judge McMahon has already upheld as being served validly on the Nonparty-Witnesses in her November 7, 2005, Decision and Order. See Mem. in Opp. at p. 1-3. A careful reading of that Order, however, demonstrates that Judge McMahon determined that the method of personal service of process of the subpoenas on the Nonparty-Witnesses during their visit to the Southern District of New York did not invalidate the subpoenas.Ungar, 400 F. Supp. 2d at 553-54. As both parties have argued, Judge McMahon left open the possibility that the subpoenas could be modified at a later point in time. Id.
In an earlier submission to the Court, the Plaintiffs suggested that the ad testificandum portions of the subpoenas could be modified to allow the depositions of the Nonparty-Witnesses to take place "at a time and place to be agreed upon by the parties." See Docket #199, Reply Memorandum in Further Support of Plaintiffs' Motion to Compel at p. 6. The Plaintiffs and the Nonparty-Witnesses are free, absent intervention from the Court, to agree mutually upon a time and place for depositions to be held. A court order is not required should there be such accord.
Plaintiffs accuse the Nonparty-Witnesses of "making the nonsensical argument that when the Court's February 23 decision stated that any `motion to modify' by the [Nonparty-Witnesses] would have to be filed separately, it was using the phrase `motion to modify' to refer to [a] motion which would quash the sole remaining prong of the subpoenas. . . . It hardly seems likely that this is what the Court meant to say, at the least."See Mem. in Opp. at p. 2-3. Quite the contrary: this Court purposefully left open the possibility of modifying the ad testificandum portions of the subpoenas in its February 23rd Decision and Order.
Black's Law Dictionary, 8th edition, defines "quash" as "to annul or make void; to terminate." Webster's II New Riverside University Dictionary defines "modify" as "to change in form or character; to qualify or limit the meaning of." Using the plain meaning of these words, granting the Nonparty-Witnesses' motion to limit the application of one portion of the subpoenas — the subpoenas' commands to produce documents is not being challenged presently — does not terminate the subpoenas in their entirety; it simply qualifies or limits their commands.
Plaintiffs argue that if the Court grants the Nonparty-Witnesses' motion to eliminate the testimonial aspects of the subpoenas, the Court will "effectively eliminate" the subpoenas' operative effect in toto. Plaintiffs draw this conclusion based upon their own dissatisfaction with the responses provided by the Nonparty-Witnesses to the subpoenas' commands for document production; they reason that if the Nonparty-Witnesses' poor responses to the document requests were to be combined with a Court-ordered modification eliminating the testimonial portions of the subpoenas, this Court would be quashing, rather than modifying, the subpoenas. See Mem. in Opp. at p. 2-3.
The fact that the Plaintiffs are not satisfied with the Nonparty-Witnesses' responses to the commanded document production, itself, does not counsel in favor of subjecting the Nonparty-Witnesses to attend a deposition that the Federal Rules of Civil Procedure direct they need not attend. Thus, limiting the subpoenas to document production only does not annul the subpoenas, but rather curtails them, and ensures that they are in compliance with the directives of the Federal Rules of Civil Procedure.
Thus, despite Plaintiffs' urging, granting the Nonparty-Witnesses' motion to modify the subpoenas does not contravene Judge McMahon's November 7, 2005, Decision and Order, and does not accomplish what Judge McMahon has already decided against.
2. The Nonparty-Witnesses' Motion to Modify is Timely and The Arguments Contained Therein Have Not Been Waived
Rule 45(c)(3) requires that a nonparty opposing a subpoena compelling his or her testimony at a locale more than 100 miles from his or her place of residence, employment or regular business activity do so in a "timely" fashion. See FED. R. CIV. PRO. 45(c)(3)(A) ("[o]n timely motion, the court by which a subpoena was issued shall quash or modify the subpoena if . . ."). Plaintiffs allege that the current motion is not timely and that the arguments the Nonparty-Witnesses now elect to make have been waived because they did not assert such arguments sooner. A review of the reams of submissions made by the Plaintiffs and the Nonparty-Witnesses discloses otherwise.
Plaintiffs cite to Nova Biomedical Corp v. i-Stat Corp., 182 F.R.D. 419, 422 (S.D.N.Y. 1996) for the proposition that in order for an objection to a subpoena to be timely pursuant to Rule 45(c)(3)(A), such an objection must be mounted before the subpoena's return date. Plaintiffs contend that the Nonparty-Witnesses failed to mount such an objection prior to September 23, 2005, the date of deposition selected by Plaintiffs' counsel. See Mem. in Opp. at p. 5 ("The instant motion seeking to quash the depositions on the basis of the 100-mile rule should therefore have been filed before September 23, 2005 — but was not.").
A review of the Nonparty-Witnesses' submissions, however, demonstrates otherwise. As noted by the Nonparty-Witnesses, the issue of whether the subpoenas were in compliance with Rule 45(c)(3)(A) was raised initially before Judge McMahon in a September 26, 2005, responsive memorandum of law filed with the Court. See Docket #210, Reply Memorandum of Law (herein, "Reply") at pp. 5-6 (arguing that a violation of Rule 45(c)(3)(A)(ii) had been raised in a prior motion). In the September 26th submission, the Nonparty-Witnesses suggested that the subpoenas were violative of Rule 45(c)(3)(A)(ii). See Docket #179, Orascom Telecom's Reply in Support of its Motion to Quash Nonparty Subpoenas at p. 9. The Nonparty-Witnesses' September 26th reply memorandum also "incorporates by reference" some of the other motions made on behalf of other nonparty witnesses who were served similar subpoenas to those being challenged here. Id. Although Judge McMahon did not address specifically this challenge in her November 7, 2005, Decision and Order, it is clear that the Nonparty-Witnesses raised such an argument prior to the subpoenas' September 23, 2005, return date.
The Nonparty-Witnesses also suggest that they challenged the subpoenas' validity under Rule 45(c)(3)(A)(ii) in their initial Motion to Quash the Nonparty Subpoenas, Docket #157, which was filed on September 11, 2005. See Reply at 5. A review of that submission, however, only illustrates that a broad challenge to the subpoenas' validity under the "undue burden" provision of Rule 45(c)(3)(A)(iv) was asserted, and that the subpoenas were not challenged specifically under the 100 mile provision of subsection (ii). The Nonparty-Witnesses are correct, however, that the 100 mile argument was raised in their reply memorandum of law. See Docket #179.
Moreover, as noted in my February 23, 2006, Decision and Order, shortly after Judge McMahon's ruling, the Nonparty-Witnesses embarked on a search for their own legal counsel. See Decision and Order dated February 23, 2006, at p. 6-7. On December 27, 2005, not satisfied with the responses of the Nonparty-Witnesses' then-legal counsel that the Nonparty-Witnesses were in the process of retaining personal legal counsel, Plaintiffs filed a motion for sanctions, contempt, and the imposition of attorneys' fees with this Court. See Docket #185, Notice of Motion and Plaintiffs' Memorandum of Law in Support of Plaintiffs' Motion to Compel, to Adjudge in Contempt, to Impose a Sanction for Noncompliance and for Fees and Costs. Plaintiffs' motion stayed compliance with the subpoenas. In my February 23, 2006, Decision and Order, I declined to modify the subpoenas sua sponte without an appropriate motion seeking a modification or the appropriate declarations establishing the facts required for a decision on such a motion. This motion followed a little under two weeks thereafter.
Given that the Nonparty-Witnesses raised the 100 mile argument before the return date of the subpoenas, and that a little less than two months elapsed between Judge McMahon's November 7th Decision and Order and the Plaintiffs' motion for sanctions and contempt, which was filed on December 27, 2005, and that the present motion followed very close in time after my February 23rd Decision and Order, I conclude that the current motion to modify the subpoenas is timely under Rule 45(c)(3)(A). This same analysis also leads me to conclude that the Nonparty-Witnesses have not waived the arguments contained in their motion to modify.
3. Plaintiffs Have Not Refuted Nonparty-Witness el-Gammal's Showing That He Does Not Regularly Transacts Business in the Southern District of New York
Plaintiffs cite to Regents of the University of California v. Kohne, 166 F.R.D. 463 (S.D. Cal. 1996) for the proposition that the moving party, in this case the Nonparty-Witnesses, bear the burden of proof to establish that they are not required to comply with the subpoenas because the subpoenas contravene Rule 45(c)(3)(A)(ii). A review of the submissions in this case, along with a full reading of Kohne, demonstrate that the Nonparty-Witnesses have presented sufficient evidence to establish, and sufficient evidence for this Court to conclude, that the Nonparty-Witnesses do not reside, work, or transact business regularly within 100 miles of New York City.
In Kohne, the District Judge vacated the Magistrate Judge's finding that a nonparty witness did not transact business regularly within 100 miles of the federal courthouse. 166 F.R.D. at 465. The Magistrate Judge had inferred that the nonparty-witness did not transact business on a regular basis within 100 miles of the courthouse because he did not reside or work within 100 miles of the courthouse. Id. Upon a challenge to the Magistrate Judge's ruling, the District Judge reasoned that there was no correlation between not working or residing within 100 miles of the courthouse and not transacting business on a regular basis within 100 miles of the courthouse absent an affirmative statement by the nonparty-witness. The Kohne court explained that the Magistrate Judge's finding could have been upheld had the nonparty-witness submitted "even a conclusory affidavit . . . providing factual information from which to make this determination . . . ." Id. Upon such a representation by the nonparty-witness, the non-moving party then would have shouldered the burden of disproving the nonparty's declaration. Id.
In the present case, the Nonparty-Witnesses have submitted declarations stating that both Nonparty-Witnesses do not reside, work or transact business regularly within 100 miles of the place of deposition in New York City. See Not. of Motion, Exhibits C and D. Upon this showing, the Plaintiffs, not the Nonparty-Witnesses, bear the burden of disproving the application of Rule 45(c)(3)(A)'s safe harbor provision. See Kohne, 166 F.R.D. at 465.
Plaintiffs do not challenge Nonparty-Witness Khaliq's declaration that he does not reside, work or transact business regularly within 100 miles of New York City. Plaintiffs argue, however, that Nonparty-Witness el-Gammal admitted to conducting business on a regular basis in the New York area, and that accordingly, Nonparty-Witness el-Gammal must comply with the ad testificandum portion of the subpoena served on him. See Mem. in Opp. at p. 11-12. In support of this thesis, Plaintiffs devise a mathematical argument comparing Nonparty-Witness el-Gammal's admitted contact with New York to two situations discussed in In re Matter of the Application for an Order Quashing Deposition Subpoenas dated July 16, 2002, M8-85, 2002 WL 1870084 (S.D.N.Y. Aug. 14, 2002) (herein, "Nissan Fire"), one of which was held not to meet the "regularly transacts business" standard, and the other which "may or may not" have met that standard. See Mem. in Opp. at p. 11 (quoting Nissan Fire). Plaintiffs' mathematical postulation is not convincing.
The court in Nissan Fire relied upon Kohne's pronouncement that "`regularly' does not mean ten times in seven years" when deciding whether the nonparty-witness subpoenaed to testify, who lived and worked in Japan, regularly transacted business in the United States. See Nissan Fire, 2002 WL 1870084, at *3 (quotingKohne, 166 F.R.D. at 465). The Nissan Fire court noted that the only contact the nonparty-witness in its case had with the United States was six trips he had taken to North Carolina, not New York, over a period of ten months. Id. at n. 3. In dicta, the court stated that "[w]hile those contacts may or may not support the conclusion that [the nonparty-witness] regularly transacts business in person in North Carolina . . . they are simply irrelevant to whether he does so in New York." Id. Plaintiffs rely on this equivocation as the benchmark for what constitutes a "regular transaction of business" for purposes of Rule 45(c)(3)(A)(ii).
Assuming, arguendo, that the Nissan Fire court set the parameters for what qualifies as "regularly transacts business" — which, by the tone of the Court's musing, this Court doubts — the Plaintiffs still have not refuted Nonparty-Witness el-Gammal's declaration that he does not transact business regularly in New York. Plaintiff applies Nonparty-Witness el-Gammal's admission in his declaration that he "make[s] approximately three to four visits, of short duration, to the New York area each year," see Not. of Mot., Exhibit C, Declaration of Hatim el-Gammal, to the factual scenario in Kohne, which found that visiting a locale ten times in seven years does not establish regular conduct. Based upon this comparison, Plaintiffs conclude that Nonparty-Witness el-Gammal "over a seven year period . . . would have made 21 to 28 visits [to New York] — more than twice the number held insufficient" in Kohne. Plaintiff reasons that Nonparty-Witness el-Gammal's admission "easily satisfies Rule 45(c)(3)(A)(ii)." See Mem. in Opp. at p. 12. The Court disagrees with the Plaintiffs' syllogism.
Plaintiffs assume that Nonparty-Witness el-Gammal visited the New York area consistently for the past seven years. There is nothing in the record supporting such an assumption. Even assuming Nonparty-Witness el-Gammal visited New York over a period of seven years, such an assumption does not aid the Plaintiffs' argument. The analysis of whether Nonparty-Witness el-Gammal transacts business in New York on a regular basis should be compared to the situations Plaintiffs set as the high and low watermarks for "regularly transacts business" by using fractions, not by multiplying arbitrarily the number of visits Nonparty-Witness el-Gammal admitted to by a number of years that was relevant in another case. Through the use of fractions, enlarging Nonparty-Witness el-Gammal's admission to a period of seven years is irrelevant.
There is no clearly defined formula for establishing whether an individual "regularly transacts business in person" within 100 miles of the place of deposition. The common sense formula employed in this Decision uses the number of visits an individual makes to an area as a numerator, and the number of months during which those visits occurred as a denominator. Thus, the formula for assessing whether an individual regularly transacts business can be represented as a fraction, ( Number of Visits)/(Number of Months), which yields a "score." Pursuant to this formula, as the "score" approaches 1, it is more likely the individual regularly transacts business in a given locale.
Assuming, arguendo, that visiting a locale six times over a ten month period is sufficient to establish that a non-party witness "regularly transacts business" in an area — which has not been ruled categorical — this fraction, six times in ten months, 6/10, establishes a score of (.6), which represents a "sufficient" amount of contact with an area to establish regular contact. On the other hand, visiting an area ten times in seven years, or ten times in eighty-four months, 10/84, establishes a score of (.119), representing insufficient contact with an area to establish regular business contact. Hence, (.6) is a sufficient amount of contact, and (.119) equates to an insufficient amount of contact.
I emphasize again that the determination that visiting a locale six times in ten months constitutes regular business activity was placed in doubt by the very opinion that dealt with this factual scenario. See Nissan Fire, 2002 WL 1870084, at *3 n. 3.
According to Nonparty-Witness el-Gammal's statement, he visits the New York area three or four times every twelve months, either 3/12 or 4/12, giving his contact with New York scores of either (.25) or (.333). Averaging these scores, Nonparty-Witness el-Gammal's score representing the amount of contact he has with New York is (.2915). Nonparty-Witness el-Gammal's "score" is closer to the "insufficient" contact score than the dubious "sufficient" score. Thus, using simple math, and the demarcation proposed by the Plaintiffs, Nonparty-Witness el-Gammal does not transact business in New York on a regular basis so as to place him outside of the safe harbor provisions of Rule 45(c)(3)(A)(ii).
Even if these scores were not averaged, and Nonparty-Witness el-Gammal was held to his concession that he visited New York four times a year, this frequency of contact still would not support a finding that he regularly transacts business within 100 miles of New York City.
4. Rule 43(e) Hearing is Not Appropriate in this Case
Lastly, Plaintiffs suggest that the Court should exercise its discretion and order Nonparty-Witness el-Gammal to appear before this Court and provide oral testimony on his declaration pursuant to FED. R. CIV. PRO. 43(e). See Mem. in Opp. at p. 12-13. To bolster this claim, Plaintiffs suggest that they are being denied their constitutionally recognized property interest in the default judgment entered by the District Court of Rhode Island, and registered subsequently in this District. See Mem. in Opp. at p. 13-14.
Plaintiffs do not make clear in their Memorandum in Opposition whether they believe that both of the Nonparty-Witnesses, or just Nonparty-Witness el-Gammal, should be ordered to testify at a hearing pursuant to Rule 43(e).
Rule 43(e) provides that "[w]hen a motion is based on facts not appearing of record the court . . . may direct that the matter be heard wholly or partly on oral testimony or deposition." Rule 43(e), however, is not a surrogate that allows the Plaintiffs to accomplish what they cannot achieve via the subpoenas they have served pursuant to Rule 45. Plaintiffs' proposal that the Court order the Nonparty-Witnesses to appear before it in a hearing pursuant to Rule 43(e) is denied.
The Plaintiffs' impassioned argument that they are being denied their 5th and 14th Amendment procedural due process rights is unpersuasive as the United States is not a named party to this lawsuit.
CONCLUSION
For the following reasons, the Nonparty-Witnesses' motion to modify the subpoenas by striking the ad testificandum portions is GRANTED.