Ecommission Solutions, LLC v. Cts Holdings, Inc

• Court: District Court, District of Columbia
• Decided: August 26, 2016
• Docket: Misc. No. 2016-1793
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ______________________________ ) ECOMISSION SOLUTIONS, LLC, ) ) Plaintiff, ) ) Misc. 16-1793 (EGS) v. ) ) CTS HOLDINGS, INC. and ) CTS SYSTEMS, INC., ) ) Defendants. ) ______________________________)

MEMORANDUM OPINION

Pending before the Court is non-party witness Dell

Marketing, LP’s (“Dell”) Motion to Quash the forthcoming

deposition of Bradley Hughes (“Mr. Hughes”), or in the

alternative, for a Protective Order postponing a decision on

whether Mr. Hughes may be deposed as a non-party witness until

the Court presiding over the underlying action rules on

Defendants’ Motion to Amend its Complaint to add Dell as a

third-party. Dell’s Mem. Supp. Mot. Quash (“Dell’s Mem. Supp”),

ECF No. 1 at 1-2. Upon review of Dell’s Motion, the responses

and replies thereto, and for the reasons discussed below, Dell’s

Motion is GRANTED in part and DENIED in part.

I. Background

Dell and Plaintiff Ecomission Solutions, LLC (“ECS”) were

engaged in a longstanding agreement that expired in March of

2015. Def.’s Mem. Opp. Pl.’s Mot. Quash (“Def.’s Mem. Opp.”),

1 ECF No. 2 at 2. CTS served as Dell’s sub-contractor in relation

to that contract. Id. In 2015, ECS filed suit against Dell in

Texas state court, alleging tort and contract claims. Id.;

Dell’s Mem. Supp. at 2. The Texas lawsuit ended in a settlement

agreement, but CTS was not involved in the Texas litigation or

its resolution. Id.

In March 2015, ECS filed a complaint against CTS in New

York state court. Id. CTS removed the matter to federal court,

where it is currently pending in the Southern District of New

York (“S.D.N.Y.”) Id. CTS alleged in its Answer and Affirmative

Defenses and Counterclaim that Dell (among others) proximately

caused or contributed to ECS’s alleged damages. Def.’s Mem. Opp.

at 3. On July 29, 2016, CTS filed a motion to amend its

complaint to add Dell as a third-party defendant. Dell’s Mem.

Supp. at 2. That interpleader motion is currently pending in the

New York action. Def.’s Mem. Opp. at 3.

On August 11, 2016 CTS served a subpoena on Mr. Hughes to

take his deposition on August 26, 2016 (later changed to August

30, 2016) as a representative of non-party Dell. Def.’s Mem.

Supp. at 3 and 1, n.1.

II. Legal Standard

A party “may obtain discovery regarding any nonprivileged

matter that is relevant to any party’s claim or defense . .

. [or which] appears reasonably calculated to lead to the

2 discovery of admissible evidence.” Fed. R. Civ. P. 26(b)(1).

Limiting discovery and quashing subpoenas pursuant to Rule 26

and/or Rule 45 “goes against courts’ general preference for a

broad scope of discovery.” U.S. Dep’t of the Treasury v. Pension

Benefit Guaranty Corp., 301 F.R.D. 20, 25 (D.D.C. 2014)(quoting

North Carolina Right to Life, Inc. v. Leake, 231 F.R.D. 49, 51

(D.D.C. 2005)). The general policy favoring broad discovery is

particularly applicable where, as here, “the court making

relevance the determination has jurisdiction only over the

discovery dispute, and hence, has less familiarity with the

intricacies of the governing substantive law than does the court

overseeing the underlying litigation.” U.S. Dep’t of the

Treasury, 301 F.R.D. at 25 (citing Jewish War Veterans of the

United States of Am., Inc. v. Gates, 506 F. Supp. 2d 30, 42

(D.D.C. 2007)).

Under Rule 45(d)(3), a Court “must quash or modify a

subpoena that subjects a person to undue burden.” Fed. R. Civ.

P. 45(d)(3). “The individual or entity seeking relief from

subpoena compliance bears the burden of demonstrating that a

subpoena should be modified or quashed.” Sterne Kessler Goldtein

& Fox, PLLC v. Eastman Kodak Co., 276 F.R.D. 376, 379 (D.D.C.

2011) (citations omitted). The quashing of a subpoena is an

“extraordinary measure” and courts should be loath to grant such

relief where “other protection of less absolute character is

3 possible.” U.S. Dept. of the Treasury v. Pension Benefit

Guaranty Corp., 301 F.R.D. 20, 25 (D.D.C. 2014).

Under Rule 26(c), a “party or any person from whom

discovery is sought may move for a protective order . . . on

matters relating to a deposition, in the court for the district

where the deposition may be taken.” Fed. R. Civ. P. 26(c).

Courts may grant protective orders where the moving party has

demonstrated good cause and demonstrated the need to protect a

party from “annoyance, embarrassment, oppression, or undue

burden or expense . . . .” Id. The moving party carries a “heavy

burden” of showing extraordinary circumstances based on

“specific facts” that would justify a protective order. Eidos

Display, LLC v. Chunghwa Picture Tubes, Ltd., 296 F.R.D. 3, 6

(D.D.C. 2013)(citing United States v. Kellogg Brown & Root

Servs. Inc., 285 F.R.D. 133, 134 (D.D.C. 2012)).

III. Analysis

Dell’s primary argument is that Mr. Hughes’ deposition

should be postponed until CTS’s Motion to Add Dell is ruled on

by the S.D.N.Y. so that Dell “will not face the prospect of Mr.

Hughes potentially being called to testify both as a non-party

and again later as a party witness.” Dell Mem. Supp. at 5. CTS

contends that if the Court grants Dell’s Motion on this basis,

it will “be prejudiced if it is denied this deposition and the

4 New York court denies its application to implead Dell, leaving

CTS without this required deposition.” Def.’s Mem. Opp. at 7.

CTS’s argument is not persuasive. Issuance of a protective

order preventing Mr. Hughes’ deposition until CTS’s interpleader

motion is ruled on in the New York matter will both eliminate

the risk that Mr. Hughes will be deposed twice (once as a non-

party and once as a party), while preserving CTS’s ability to

depose Mr. Hughes as a non-party if CTS’s motion to interplead

Dell is denied. Notably, the only case with similar facts, as

cited by Dell, reasoned that:

Given that [the deponent]’s status as either a percipient witness or a named defendant awaits the district judge’s ruling on Plaintiff’s motion for leave to amend, the Court is persuaded that a protective order postponing [the deponent]’s deposition is appropriate. [The deponent] is entitled to answer questions when he knows whether he is a defendant in this case.

Doe v. City of San Diego, Civ. No. 12-0689, 2013 WL 3989193, at

*7 (S.D. Ca. Aug. 1, 2013). CTS cites no contrary authority. 1

Dell has demonstrated good cause for issuance of a protective

order postponing Mr. Hughes deposition until the S.D.N.Y rules

on CTS’s Motion for Interpleader pending in the underlying

action. As in Doe, these specific facts demonstrate an undue

1 Arguments by Dell and CTS relating to whether Mr. Hughes’ deposition is duplicative or necessary are superfluous until CTS’s Motion to Interplead Dell is resolved in the New York matter. 5 burden on Dell that can be avoided by the least burdensome

remedy of a protective order postponing Mr. Hughes’ deposition

rather than quashing the subpoena at issue.

IV. Conclusion

For the reasons discussed above, Dell’s Motion to Quash, or

in the alternative, for a Protective Order is GRANTED in part

and DENIED in part. To the extent Dell seeks to Quash Mr.

Hughes’ subpoena, the Motion is DENIED; to the extent Dell seeks

a Protective Order postponing Mr. Hughes’ deposition until CTS’s

Motion to Interplead Dell is ruled on is GRANTED. An appropriate

order accompanies this Memorandum Opinion.

SO ORDERED.

Emmet G. Sullivan United States District Court August 26, 2016