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Xstrata Canada Corp. v. Advanced Recycling Technology

November 5, 2010


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


Presently pending is the motion of defendant Advanced Recycling Technology, Inc. ("ART") and non-parties Artnxt Global Trading Group ("AGTG"), SLC Corporate Services, Inc. ("SLC"), Advanced Catalytic Recycling ("ACR"), and Thomas Delia ("Delia") pursuant to Fed. R. Civ. P. 45 to quash subpoenas issued to them by plaintiff Xstrata Canada Corporation ("Xstrata") and for costs, disbursements, and attorney's fees in connection therewith. Dkt. No. 40. Xstrata opposes the motion. Dkt. No. 43. For the reasons which follow, the motion is granted in part and denied in part.

I. Background

Xstrata is a Canadian corporation principally located in Toronto, Ontario which mines and, inter alia, refines various metals. Compl. (Dkt. No. 1) at ¶ 2. ART is a New York corporation principally located in Hudson, New York which recycles industrial waste and byproducts. Id. at ¶3. On November 7, 2006, Xstrata contracted to purchase from ART a quantity of slag believed to contain gold, silver, copper, and other metals. Id. at ¶ 6. On December 23, 2008, Xstrata commenced this action alleging that ART breached the contract and misrepresented the quantity of metals contained in the slag and sought damages totaling $1.5 million. Compl. On January 12, 2010, ART advised that it would not be defending this action, Xstrata moved for a default judgment, the motion was granted, and a judgment against ART in favor of Xstrata for $1.5 million was entered on April 19, 2010. Dkt. entry dated 1/12/10; Dkt. Nos. 32, 34, 35.

Xstrata then sought to collect its judgment. On August 27, 2010, subpoenas duces tecum were issued to ART, AGTG, SLC, ACR, and Delia and a subpoena ad testificandum was issued to Delia.*fn1 Freeman Aff. (Djkt. No. 40-2) at ¶ 6 & Ex. A; Rose Aff. (Dkt. No. 43-1) at ¶ 7 & Ex. F. The subpoenas were returnable on September 14 and 28, 2010 in Kingston, New York. Freeman Aff. (Djkt. No. 40-2) at ¶ 6 & Ex. A; Rose Aff. (Dkt. No. 43-1) at ¶ 7 & Ex. F. ART, AGTG, SLC, ACR, and Delia then filed the present motion. Dkt. No. 40.

II. Discussion

Fed. R. Civ. P. 45 authorizes the issuance of subpoenas to non-parties for testimony and the production of documents. Under that rule, a subpoena must be served in a specified manner, may not impose an undue burden, may not require undue travel, and requires that witnesses be tendered certain fees and expenses. Subpoenas which violate these provisions may be quashed or modified. Fed. R. Civ. P. 45(c)(3). Movants seek relief on the grounds that (A) the subpoenas the subpoenas were not properly served, (B) the subpoenas impose an undue burden on the non-parties and seek irrelevant information, (C) the subpoenas require the responding individual to travel more than 100 miles, and (D) Xstrata failed to tender to Delia the required witness fees and costs for his subpoena ad testificandum. Movants Mem. of Law (Dkt. No. 40-1) at 1-2.*fn2

A. Service

ART, AGTG, SLC, and ACR are all located at 41B Cross Street, Hudson, New York 12534. Rose Aff. at ¶ 6 & Ex. E. Delia is the President and Chief Executive Officer (CEO) of ART, the President, Secretary, Treasurer, and Director of AGTG, and the President of SLC. Id. at ¶ 5 & Exs. A, B. ART has a joint venture in ACR. Id. at ¶ 5 & Ex. A. On August 30, 2010, a process server sought to serve Delia with the subpoenas at the Hudson address. Id. at ¶ 8. While Delia's car was present, the process server was advised that Delia was not and would be unavailable for thirty days. Id. & Ex. G. The process server then affixed copies of the subpoenas to the door of the building. Id.*fn3 Copies were also mailed to the Hudson address and faxed to the fax number for ART. Id. at ¶¶ 8, 9 & Exs. G, H. On September 1, 2010, Xstrata served ART through the New York Secretary of State, but similar attempted service on AGTG and SLC was unsuccessful because the secretary of State had no record of those entities. Id. at ¶ 10 & Exs. I, J. On September 3, 2010, a process server went to Delia's residence in Craryville, New York. Rose Aff. at ¶ 11. Copies of the subpoenas for Delia and the four entities were left with Alex Delia, who identified himself as Delia's son. Id. & Ex. L.*fn4

Movants contend that such service was insufficient. Rule 45(b)(1) provides in pertinent part that "[s]ubject to Rule 45(c)(3)(A)(ii), a subpoena may be served at any place . . . (C) within the state of the issuing court if a state statute or court rule allows service at that place of a subpoena issued by a state court of general jurisdiction sitting in the place specified for the deposition, hearing, trial, production, or inspection . . ." The rule thus incorporates procedures authorized under the applicable state law, which, here, is that of New York. For service on an individual such as Delia, New York law provides at least three alternate methods of service: (1) personally handing the subpoena to the individual; (2) delivering the subpoena to a person of suitable age and discretion at the actual place of business, dwelling place or usual place of abode of the subpoena recipient and by mailing a copy of the subpoena to the recipient to his home or actual place of business; and (3) when service cannot be made pursuant to (1) or (2) above after due diligence, by affixing the process to the door or either the actual place of business, dwelling place or usual abode and by mailing the process to such person at his last known residence, or to his actual place of business [hereinafter "nail-and-mail"]. N. Y. C.P.L.R. 308(1), (2) & (4) (McKinney 2010)[hereinafter "CPLR"]; see also Fed. r. Civ. P. 4.

Service of the subpoenas on Delia was completed under CPLR 308(2) when the process server (a) delivered the subpoenas to Delia's son at Delia's residence and mailed copies to Delia at his place of business. Xstrata has demonstrated that Delia's son was of suitable age and discretion. See Rose Aff., Ex. L (Dkt. No. 43-2) at 129-34 (Delia's son approximately 20-25). See Roldan v. Thorpe, 117 A.D.2d 790, 791-92 (2d Dep't 1986) (collecting cases in which the following persons were found to be of "suitable age and discretion" under CPLR 308(2): 20-year old college student; teen-age children; doctor's receptionist-secretary; employee; apartment house doorman), appeal dismissed, 68 N.Y.2d 663 (1986). Thus, the manner of the service of the subpoenas on Delia was sufficient under CPLR 308(2).*fn5

For service on a corporation, such as ART, AGTG, SLC, and ACR, New York law provides that a corporation may be served through "an officer, director, managing or general agent, or cashier or cashier's agent or to any other agent authorized by appointment or by law to receive service." CPLR 311(a)(1). A corporation may also be served by service on the New York Secretary of State under N.Y. Bus. Corp. Law § 306 (McKinney 2003) [hereinafter "BCL"). The Secretary of State is the agent of every domestic corporation upon whom process against a corporation may be served. BCL 304. Under federal rules, service of a subpoena is made upon a corporation by serving "[a]n officer, a managing or general agent, or [] any other agent authorized by appointment or by law to receive service..." Fed. R. Civ. P. 4(d)(3). The Secretary of State is considered an agent of a corporation for purposes of effecting service. See Ultradent Prods., Inc. v. Hayman, No. M8-85 RPP, 2002 WL 31119425, at *2 (S.D.N.Y. Sept. 24, 2002). The requirements for service should not be unduly restrictive by must be reasonably calculated to provide actual notice to the subpoena recipient. See Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co. Americas, 262 F.R.D. 293, 304 (S.D.N.Y. 2009).

Under these provisions, ART was served through the Secretary of State. As to the other three entities, service upon them through the Secretary of State was ineffective as none were on record with the Secretary of State. However, service on a corporation is sufficient when completed on "an officer, director, managing or general agent." CPLR 311(a)(1). Xstrata has demonstrated that Delia was such a responsible person for AGTG and SLC as well as for ART. It has made no such showing as to ACR. As discussed supra, the service of the subpoenas on Delia at his home through his son and subsequent mailing to the Hudson address sufficed to effect service on Delia and did so both as to the subpoenas for his document production and testimony and for document production by ART, AGTG, and SLC,.

Accordingly, the motion to quash the subpoenas to ART, AGTG, SLC, and Delia on the grounds that the methods of service were insufficient is denied ...

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