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Larry Snider v. Russell v. Lugli and Northwestern Consultants

November 4, 2011

LARRY SNIDER, PLAINTIFF,
v.
RUSSELL V. LUGLI AND NORTHWESTERN CONSULTANTS, INC., DEFENDANTS.



The opinion of the court was delivered by: A. Kathleen Tomlinson, Magistrate Judge:

I. PRELIMINARY STATEMENT

ORDER

Plaintiff Larry Snider ("Snider") brought this suit against Defendants Russell V. Lugli ("Lugli") and Northwestern Consultants, Inc. ("Northwestern") over an alleged breach of a joint venture agreement (the "Agreement") regarding the development of a property located in Bay Shore, New York. In addition to the breach of contract claim, Plaintiff also asserts claims against Defendants for breach of fiduciary duty and fraud. On June 3, 2011, Defendants served a subpoena on non-party witness Elizabeth Bloom requiring her not only to provide testimony at a deposition but also to produce "Bank account statements for any account of Elizabeth Bloom (individually or jointly with another) which show deposits from Harry Feingold or Savannah Development Corp. during the period of January 2006 to December 2009." Presently before the Court is Elizabeth Bloom's motion to quash the subpoena pursuant to Rule 45(c)(3) of the Federal Rules of Civil Procedure and/or for a protective order under Rule 26(c).

For the reasons set forth in detail below, Elizabeth Bloom's motion to quash is hereby DENIED.

II. PARTIES'CONTENTIONS

According to Elizabeth Bloom, she has no direct or indirect involvement in this pending action. Bloom asserts that she did not know any of the parties named in this action and has not had any involvement in the Agreement at issue, including the negotiations, drafting or execution of the same. Likewise, Bloom contends that she has no knowledge of any of the facts or circumstances surrounding any breach of the Agreement or any information pertaining to any potential damages suffered by the Plaintiff. It is Elizabeth Bloom's view that the only remote connection between her and this action is that her husband, Eliot Bloom, is a defendant in an unrelated federal case*fn1 brought by Lugli and Northwestern. Elizabeth Bloom represents that in the Northwestern Consultants action, Lugli and Northwestern allege that an agent of Northwestern misappropriated funds by transferring them to a bank account belonging to Elizabeth Bloom, for Eliot Bloom's benefit.*fn2

In response, Defendants maintain that Eliot Bloom, Defendants' former attorney and husband to Elizabeth Bloom, has put his wife in the middle of his disputes, including the present action. Defendants assert that Elizabeth Bloom has information directly relevant to this action, namely that a good portion of the money paid by Plaintiff to become a co-venturer was paid to an account in the name of Elizabeth Bloom over a three-day period. Defendants also claim that Elizabeth Bloom used her bank account as a conduit for her husband's illicit activities. Therefore, it is the Defendants' position that Elizabeth Bloom's testimony and statements will implicate her in this matter and bear on Eliot Bloom's culpability.

III. Applicable Standard

A. Motion to Quash Under Rule 45

Under Rule 45 of the Federal Rules of Civil Procedure, "[o]n timely motion, the issuing court must quash or modify a subpoena that . . . requires disclosure of privileged or other protected matter, if no exception or waiver applies; or subjects a person to undue burden." Fed. R. Civ. P. 45( c)(3)(A)(iii)-(iv). "The party issuing the subpoena must demonstrate that the information sought is relevant and material to the allegations and claims at issue in the proceedings." Night Hawk Ltd. v. Briarpatch Ltd., 03 Civ. 1382, 2003 WL 23018833, at *8 (S.D.N.Y. Dec. 23, 2003); see also Salvatore Studios Int'l v. Mako's Inc., 01 Civ. 4430, 2001 WL 913945, at *1 (S.D.N.Y. Aug. 14, 2001) ("Rule 26(b)(1) of the Federal Rules of Civil Procedure restricts discovery to matters relevant to the claims and defenses of the parties. Here, the burden is on Mako's [who issued the subpoena] to demonstrate relevance."). "Once the party issuing the subpoena has demonstrated the relevance of the requested documents, the party seeking to quash the subpoena bears the burden of demonstrating that the subpoena is over-broad, duplicative, or unduly burdensome." Kingsway Fin. Servs., Inc. v. Pricewaterhouse-Coopers LLP, No. 03 Civ. 5560, 2008 WL 4452134, at *4 (S.D.N.Y. Oct. 2, 2008).

B. Motion for Protective Order Under Rule 26

Rule 26(c) of the Federal Rules of Civil Procedure provides that: any person from whom discovery is sought may move for a protective order in the court where the action is pending--or as an alternative on matters relating to a deposition, in the court for the district where the deposition will be taken. The motion must include a certification that the movant has in good faith conferred or attempted to confer with other affected parties in an effort to resolve the dispute without court action. The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense . . . . Fed. R. Civ. P. 26(c)(1). A protective order may only be issued, however, after the movant demonstrates that good cause exists for the protection sought. See In re Agent Orange Prod. Liab. Litig., 821 F.2d 139, 145 (2d Cir. 1987). "To show good cause, particular and specific facts must be established rather than conclusory assertions." AMW Material Testing, Inc. v. Town of Babylon, 215 F.R.D. 67, 72 (E.D.N.Y. 2003). If the movant "establishes good cause for protection, the court may balance the countervailing interests to determine whether to exercise discretion and grant the order." Hasbrouck v. BankAmerica Hous. Servs., 187 F.R.D. 453, 455 (N.D.N.Y. 1999).

IV. DISCUSSION

Before addressing the specific arguments raised in Elizabeth Bloom's motion, the Court is compelled to first address her contention that subpoenaing her is merely an attempt by the Defendant to relitigate the Northwestern Consultants action "which is not before this court and not joined to this case." As an initial matter, the Court notes that both matters are pending before this Court. In addition, the Northwestern Consultants case is in its infancy, with no discovery conducted thus far. At the same time, however, the allegations contained in Northwestern Consultants are of no significance to the issue of whether certain discovery will be allowed in this action. The Court notes that Defendants were free to bring a Third Party Action in this case. Instead, Defendants decided to bring a separate action (i.e., the Northwestern Consultants case) against Eliot and Elizabeth Bloom, among others. Once discovery commences in the Northwestern Consultants action, Defendants will have the opportunity to obtain whatever party discovery from Eliot and Elizabeth ...


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