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Zinter Handling, Inc. v. General Electric Company

November 16, 2006


The opinion of the court was delivered by: David R. Homer U.S. Magistrate Judge


Presently pending is the joint motion of plaintiff Zinter Handling, Inc. ("Zinter Handling") and non-party Saratoga Crane & Monorail, Inc. ("Saratoga Crane") for an order quashing two subpoenas served by defendants General Electric Company and Joseph DeConno (collectively "GE"). Docket No. 50. GE opposes the motion. Docket No. 55.*fn1 For the reasons which follow, the motion is denied.

I. Background

Zinter Handling conducts a business located in Saratoga Springs, New York specializing in the movement of materials using various types of cranes. Compl. (Docket No. 1) at ¶¶ 4, 5, 12, 13. Zinter Handling commenced this action against GE and other defendants seeking recovery for lost profits and related items of damage in eight causes of action alleging trademark infringement, unfair competition, breach of contract, tortious interference, conversion, fraud, and defamation. Compl. at ¶¶ 66-139. Saratoga Crane provides services similar to those provided by Zinter Handling. Reynolds Decl. (Docket No. 55(2)) at ¶ 5.

Given what it contends are the close ties between Zinter Handling and Saratoga Crane, GE sought "to determine whether revenues or losses may have been shifted between the two related companies" to enhance the damages claimed by Zinter Handling. Reynolds Decl. at ¶ 8. On August 17, 2006, GE served subpoenas duces tecum pursuant to Fed. R. Civ. P. 45 on AGT Services, Inc. (AGT") and Sicilia & Associates, P.C. ("Sicilia"), both returnable on August 31, 2006. Id. at ¶ 2; Berger Affirm. (Docket No. 50(2)) at Exs. A, B. On August 18, 2006, GE served copies of the two subpoenas on Zinter Handling by electronic mail. Reynolds Decl. at ¶ 2; Berger Affirm. at ¶ 9.

AGT is an engineering services company and a customer of Zinter Handling.

Reynolds Decl. at ¶ 3; Berger Decl. at ¶ 10. The subpoena to AGT directed the production of "[a]ll documents relating or referring to drawings, contracts, purchase orders or invoices supplied to AGT Services by or otherwise relating to Zinter Handling . . . , Saratoga Crane . . . , and/or any subsidiary, parent, or otherwise related business entity thereof, from 1999 to the present." Berger Affirm. at Ex. A. Sicilia, an accounting firm, prepared the Zinter Handling financial statements produced to GE during discovery. Reynolds Decl. at ¶ 4. The subpoena to Sicilia directed production of "[a]ll federal and local tax returns, including any accompanying schedules and other supporting documentation, . . . [and] [a]ll financial statements, including annual, quarterly, monthly, or other periodic statements, including work paper files and other supporting documentation" for the years 1996 through the present for Zinter Handling, Saratoga Crane, and any subsidiary, parent, or related business entity. Berger Affirm. at Ex. B.

On August 24, 2006, Zinter Handling advised GE that it objected to those portions of the subpoenas seeking the records of Saratoga Crane as Saratoga Crane was a separate entity from Zinter Handling and not a party to this action. Reynolds Decl. at Ex. G. Zinter Handling advised GE that if GE did not agree to limit its subpoenas to Zinter Handling by August 28, 2006, a motion to quash would be filed. Id,. On August 25, 2006, five days before the return date of the subpoena, AGT sent its response to GE by electronic mail. Reynolds Decl. at ¶ 7. The response consisted of fourteen pages of documents, all of which related to Zinter Handling and none of which related to Saratoga Crane. Id. at ¶ 7.*fn2

By letter dated August 29, 2006, GE advised Zinter Handling that it would not voluntarily limit the scope of its subpoenas. Id. at ¶ 8. The instant motion was filed on August 30, 2006. Docket No. 50.*fn3

II. Discussion

A. Preliminary Matters

1. Prior Notice

Movants contend that the subpoenas should be quashed because GE failed to give Zinter Handling notice of the subpoenas prior to their service as required by Fed. R. Civ. P. 45(b)(1), which requires that "[p]rior notice of any commanded production of documents and things . . . before trial shall be served on each party . . . ." Although disputed by GE, the law appears well-settled that "prior" service means prior to the service of the subpoena, not prior to its return date. See Cootes Drive, LLC v. Internet Law Library, Inc., No. 2002 WL 424647, at *1 (S.D.N.Y. Mar. 19, 2002); Schweizer v. Mulvehill, 93 F. Supp. 2d 376, 411 (S.D.N.Y. 2000); Biocore Med. Tech., Inc. v. Khosrowshahi, 181 F.R.D. 660, 667 (D. Kan. 1998). Among other purposes, the requirement of notice prior to service allows opposing parties the opportunities to object before service and to move to quash if necessary.

However, such untimely notice under Rule 45(b)(1) does not automatically trigger quashing a subpoena without a consideration of prejudice to the aggrieved party. See Biocore Med. Tech., Inc., 181 F.R.D. at 667-68 (refusing to quash subpoena for violation of Rule 45(b)(1) where aggrieved party failed to show prejudice from the violation); Seewald v. IIS Intelligent Info. Sys., Ltd., No. 93 CV 4258 (FB), 1996 WL 612497, at *5 (E.D.N.Y. Oct. 16, 1996) (denying preclusion where no prejudice shown). Factors assessed in determining prejudice include the period of delay in providing notice, any pattern of noncompliance ...

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