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Gould Inc. v. Mitsui Mining & Smelting Co.

decided: August 3, 1987.

GOULD INCORPORATED, PLAINTIFF-APPELLANT,
v.
MITSUI MINING & SMELTING CO., LTD., A COMPANY OF JAPAN, MIYAKOSHI MACHINE TOOLS CO., LTD., A COMPANY OF JAPAN, PECHINEY UGINE KUHLMANN, A COMPANY OF FRANCE, AND TREFIMETAUX, A COMPANY OF FRANCE, DEFENDANTS-APPELLEES



Appeal from an order of the United States District Court for the Southern District of New York (Stanton, Judge) quashing deposition subpoena served upon a non-party witness.

Mansfield,*fn* Van Graafeiland and Mahoney, Circuit Judges.

Author: Mahoney

MAHONEY, Circuit Judge:

This is an appeal from an order of the United States District Court for the Southern District of New York (Louis L. Stanton, Judge) quashing a deposition subpoena duces tecum served by appellant Gould, Inc. ("Gould") upon the law firm of Wender Murase & White ("WMW"). We vacate and remand.

BACKGROUND

Dale C. Danver, formerly employed by Gould, left the latter's employ in 1983 to form his own international consulting business in the field of copper foil technology. Gould contacted prospective Danver clients, and claimed that Danver was violating "his contract," Brief of Appellee at 3, presumably referring to an employment agreement containing restrictive convenants. Gould threatened litigation should these clients close any deals with Danver. Gould then sued Danver in the United States District Court for the Northern District of Ohio, alleging Danver's theft of Gould's trade secrets. In August, 1985, this suit was settled, and all claims against Danver were dismissed with prejudice. During the course of the suit, however, Gould assertedly learned that Danver had dealt with four foreign companies regarding the trade secrets: Mitsui Mining & Smelting Co., Ltd. ("Mitsui") and Miyakoshi Machine Tools Co., Ltd. ("Miyakoshi") of Japan and two French concerns, Pechiney Ugine Kuhlmann and Tretimetaux.

Gould further asserts that it ascertained during its action against Danver that Danver offered Gould's technical data to Mitsui, but Mitsui "ostensibly" declined the offer. Thereafter, according to Gould, Danver contracted to supply the data to Miyakoshi on behalf of an undisclosed Miyakoshi client, and did in fact supply the information. Gould suggests, based on the evidence produced in the terminated action, that Mitsui was actually the undisclosed Miyakoshi client. Gould protested; thereafter, Miyakoshi, represented by WMW, negotiated a termination agreement with Danver.

In October, 1985, Gould commenced a second action in the United States District Court for the Northern District of Ohio against Mitsui, Miyakoshi and the two French companies (the "Ohio action"). Gould alleged, inter alia, a conspiracy among the defendants to obtain Gould's trade secrets from Danver. At the heart of Gould's case is its claim that Miyakoshi was a mere alter ego of Mitsui; therefore, any of Danver's contacts with Miyakoshi could be imputed to Mitsui. Mitsui appeared in the action. Miyakoshi defaulted.

WMW is Mitsui's counsel in the Ohio action, and has represented Mitsui for a number of years, dating back prior to the time of the incidents complained of by Gould. Further, WMW represented Miyakoshi briefly early in 1985, to prepare the documents necessary to sever the consulting arrangement which then existed between Miyakoshi and Danver. Gould claims that WMW has associate Japanese lawyers who currently represent Miyakoshi in a suit brought there against Gould.

In mid-April, 1986, Gould served a notice of deposition and deposition subpoena on WMW seeking documents relating to Miyakoshi and its representation by WMW in connection with Miyakoshi's dealings with Danver.*fn1 On April 18, WMW objected to Gould's document request on several grounds, including the attorney/client and attorney work product privileges. WMW appeared at the deposition and gave testimony to develop an evidentiary record to support its claims of privilege; responsive documents were withheld. Gould indicated its intention to seek a ruling on the issue of privilege. See Joint Appendix at 20. Gould made no effort to acquire the relevant documents directly from Mitsui or Miyakoshi. Brief of WMW at 10. Nor did Gould undertake to narrow the scope of its subpoena. Id. Approximately nine weeks after the WMW deposition was closed, Gould moved before Judge Stanton pursuant to Fed. R. Civ. P. 45(d)(1) to enforce the deposition subpoena.

On August 12, 1986, Gould's motion came on to be heard before Judge Stanton, who had before him (1) the subpoena; (2) WMW's objections thereto; (3) the transcript of the deposition of WMW's designated witness together with the exhibits thereto; and (4) affidavits and memoranda of law submitted by both sides. Oral arguments were heard. The district court denied enforcement of the subpoena and ordered it quashed in a memorandum endorsement which stated: "Enforcement denied. Subpoena quashed. Question of sanctions deferred to trial court at conclusion of trial." Gould appeals, and we vacate and remand.

Discussion

We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291 (1982). See Glendale Fed. Savings and Loan Ass'n v. Republic Ins. Co. (In Re Sur. Ass'n of Am.), 388 F.2d 412, 414 (2d Cir. 1967); Republic Gear Co. v. Borg-Warner Corp., 381 F.2d 551, 554 (2d Cir. 1967); see also 8 C. Wright & A. Miller, Federal Practice and Procedure § 2287 (1970) (party seeking discovery may appeal quashal of subpoena directed to nonparty in action pending in district outside that in which compliance with subpoena is sought); 9 id. § 2463 (same).

At the outset, we note the contention by WMW in footnote 4 at page 10 of its brief that Gould made no motion to compel production "before or during the taking of the deposition" of WMW, in the language of Fed. R. Civ. P. 45(d)(1). Since that deposition was "closed" on May 6, 1986, and Gould's motion was not served or filed ...


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