UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SAMUEL ALBERTS, Trustee for :
the DCHC Liquidating Trust, :
:
Plaintiff, : Misc. Case No.: 06-0088 (RMU)
:
v. : Re Document Nos.: 1, 4, 5
:
HCA INC. and GALEN HOSPITAL :
ILLINOIS, INC., :
:
Defendants. :
MEMORANDUM OPINION
DENYING THE PLAINTIFF’S MOTION FOR ATTORNEY’S FEES AND DENYING AS MOOT THE
DEFENDANTS’ CROSS-MOTION TO STRIKE AND THE PLAINTIFF’S MOTION TO QUASH
I. INTRODUCTION
This matter is before the court on various motions arising out of certain non-party
subpoenas issued by the defendants in connection with an adversary proceeding before the
bankruptcy court. 1 The subpoenas were initially issued under the authority of the district court
rather than the bankruptcy court. The plaintiff contends that even after the defendants agreed to
ask the bankruptcy court to resolve the parties’ dispute over the enforceability of the subpoenas,
the defendants neglected to formally withdraw the subpoenas in the district court, forcing the
plaintiff to file a motion to quash. The plaintiff asserts that by forcing him to file an unnecessary
motion, the defendants imposed an undue burden justifying the award of attorney’s fees under
Federal Rule of Civil Procedure 45(c)(1). In opposition, the defendants assert that the plaintiff
failed to comply with the “meet and confer” requirements of Local Civil Rule 7(m), that the
plaintiff lacks standing to seek sanctions under Rule 45(c)(1), and that the defendants’ behavior
1
The adversary proceeding, Alberts v. HCA Inc. et al. (Adv. Proc. No. 04-10366, D.D.C.), is
pending before Judge S. Martin Teel, Jr. in the United States Bankruptcy Court for the District of
Columbia.
did not impose an undue burden. The defendants cross-move to strike the plaintiff’s motion for
non-compliance with Local Civil Rule 7(m). Because the plaintiff failed to comply with Local
Civil Rule 7(m) and because the plaintiff has failed to establish that the defendants imposed an
undue burden, the court denies the plaintiff’s motion for attorney’s fees. Furthermore, the court
denies as moot the defendants’ cross-motion to strike and the plaintiff’s motion to quash as
discussed below.
II. FACTUAL & PROCEDURAL BACKGROUND
On November 19, 2004, the plaintiff – the trustee in a Chapter 11 bankruptcy – initiated
an adversary proceeding to recover a $71 million payment made to the defendants that allegedly
constituted a fraudulent conveyance. Pl.’s Mot. at 2. In January 2006, the defendants informed
the plaintiff that they intended to depose Samuel Alberts (the trustee and plaintiff in the
adversary proceeding), Martin Cohen (a non-party member of the advisory trust committee), and
Neil Demchick (a non-party financial advisor to the trust). Id. The plaintiff vehemently
objected, contending that the defendants had no legitimate reason to depose him and Cohen and
that the deposition of Demchick was not appropriate at this time because he had not yet been
designated as an expert in the underlying actions. Id., Ex. 4. The defendants responded in a
letter dated February 10, 2006, asserting that these individuals possessed relevant non-privileged
information regarding the allegedly fraudulent transfer. Id., Ex. 5. Accompanying that letter
were non-party subpoenas directing Cohen and Demchick to produce documents and appear for
a deposition and a notice of deposition directed to plaintiff Alberts. Id. The subpoenas were
issued out of the district court. Id.
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In response, the plaintiff rejected the justification offered by the defendants for the
disputed discovery and proposed that the dispute be decided by the bankruptcy court handling
the adversary proceeding. Id., Ex. 7. Specifically, the plaintiff asked for the defendants’
agreement that “[his] motion for protective order and motion to quash be heard by the
[Bankruptcy] Court at the March 10, 2006 hearing.” Id. In their response dated February 16,
2006, the defendants agreed that the bankruptcy court should resolve the matter and proposed a
briefing schedule. See id., Ex. 8. Pursuant to that agreement, the plaintiff filed a motion for a
protective order in the bankruptcy court. See id. at 3-4.
On February 17, 2006, the plaintiff sent a one-paragraph letter to the defendants asking
that they confirm that the parties had agreed “to treat the subpoenas as coming from the
Bankruptcy Court.” Id., Ex. 9. On February 24, 2006, after receiving no response from the
defendants and making no further efforts to confer with the defendants, the plaintiff filed a
motion to quash the subpoenas in this court. See id. at 4. In his motion, the plaintiff requested
that this court abstain from ruling until the bankruptcy court had ruled on his pending motion for
a protective order. See Liquidating Trustee’s Mot. to Quash & Request for Abstention at 9. On
March 7, 2006, the defendants withdrew the subpoenas. See Defs.’ Notice of Withdrawal of
Subpoenas & Resp. to the Liquidating Tr.’s Mot. to Quash at 1. On March 10, 2006, the
bankruptcy court ruled on the plaintiff’s motion by authorizing the defendants to depose him but
prohibiting them from deposing Cohen and Demchick. See Defs.’ Opp’n, Ex. I.
The plaintiff subsequently brought this motion for attorney’s fees under Federal Rule of
Civil Procedure 45(c)(1) seeking to recover the costs incurred in bringing the motion to quash in
this court. The plaintiff’s motion to quash and motion for attorney’s fees, together with the
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defendants’ cross-motion to strike, are the only matters related to this dispute brought before this
court. 2
III. ANALYSIS
A. Local Civil Rule 7(m)
1. Legal Standard for Local Civil Rule 7(m)
Local Civil Rule 7(m) provides that “[b]efore filing any nondispositive motion in a civil
action, counsel shall discuss the anticipated motion with opposing counsel, either in person or by
telephone, in a good-faith effort to determine whether there is any opposition to the relief sought
and . . . to narrow the areas of disagreement.” LCvR 7(m) (emphasis added). “The purpose of
the Local Rule is to promote the resolution of as many litigation disputes as possible without
court intervention, or at least to force the parties to narrow the issues that must be brought to the
court.” Ellipso, Inc. v. Mann, 460 F. Supp. 2d 99, 102 (D.D.C. 2006). Failure to comply with
the rule will result in denial of the motion. See, e.g., Abbott GmbH & Co. KG v. Yeda Research
& Development, Co., 576 F. Supp. 2d 44, 48 (D.D.C. 2008) (denying motion under Local Civil
Rule 7(m) where the movant waited until the day of filing to call opposing counsel regarding the
motion); U.S. ex rel. K&R Ltd. P’ship v. Mass. Hous. Fin. Agency, 456 F. Supp. 2d 46, 52
(D.D.C. 2006) (denying a motion to strike for failure to comply with Local Civil Rule 7(m));
Ellipso, 460 F. Supp. 2d at 102 (denying discovery motions absent “any hint that [the parties]
discussed the motions in person or by phone as required”).
2. Rule 7(m) Applies to the Plaintiff’s Motion for Attorney’s Fees
The defendants argue that the court should deny and strike the plaintiff’s motion because
the plaintiff failed to comply with Local Civil Rule 7(m). Defs.’ Opp’n at 4-5. They note that
2
Because the defendants withdrew their subpoenas, the plaintiff’s motion to quash is moot.
4
“[a]t no point prior to filing his Motion to Quash or his Motion for Attorney’s Fees did Plaintiff
discuss the substance of the motions with the Defendants’ counsel, either in person or by
telephone.” Id. at 5. The plaintiff responds that he was not required to meet and confer prior to
filing because this motion is a “dispositive” motion to which Local Civil Rule 7(m) does not
apply. Pl.’s Reply at 2. The plaintiff suggests that the court should treat the instant motion as
dispositive because of its relationship to the motion to quash, which he contends was a
dispositive motion in that its resolution would dispose of all matters in dispute before this court.
Id.
There is no dispute that the plaintiff failed to discuss the instant motion with opposing
counsel “in person or by telephone” prior to filing. Following the parties’ agreement to litigate
this matter in the bankruptcy court, the only communication regarding the subpoenas was the
plaintiff’s one paragraph letter of February 17, 2006, which requested only that the defendants
confirm their understanding that the subpoenas should be treated as coming from the bankruptcy
court. See Pl.’s Mot., Ex. 9. At no point did the letter indicate that the plaintiff intended to seek
any affirmative relief or sanctions in this court. See id. While the court is sensitive to the fact
that the defendants failed to respond, the defendants’ silence does not excuse the plaintiff from
making any effort to confer with the defendants in person or by telephone as required by the
Local Civil Rule.
The court is not persuaded by the plaintiff’s argument that his motion for attorney’s fees
is a dispositive motion to which Local Civil Rule 7(m) does not apply. The plaintiff asks this
court to sanction the defendants pursuant to Federal Rule of Civil Procedure 45(c) for abusing
the subpoena power. See FED. R. CIV. P. 45(c)(1) (authorizing the court to award reasonable
attorney’s fees as “an appropriate sanction” for issuing unduly burdensome subpoenas). Courts
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in this jurisdiction have held that motions for discovery-related sanctions are nondispositive
motions for purposes of Local Civil Rule 7(m). See U.S. ex rel. Tenn. Valley Marble Holding
Co. v. Grunley Constr., 433 F. Supp. 2d 104, 111-12 (D.D.C. 2006) (observing that “it is clear
that a motion for sanctions is a nondispositive motion” and therefore subject to the meet and
confer requirements of the Local Civil Rules); Sokos v. Hilton Hotels Corp., 283 F. Supp. 2d 42,
55 (D.D.C. 2003) (denying the plaintiff’s motion for sanctions because of the plaintiff’s failure
to comply with Local Civil Rule 7(m)).
Moreover, even if the court were to consider the motion to quash a dispositive motion,
the fact remains that Local Civil Rule 7(m) “clearly states that it applies to ‘any nondispositive
motion,’ and provides no exception for motions relating to dispositive motions.” Niedermeier v.
Office of Baucus, 153 F. Supp. 2d 23, 26 (D.D.C. 2001) (rejecting the plaintiff’s effort “to read
into [Local Civil Rule 7(m)] an exception for motions that are ‘closely intertwined’ with
dispositive motions”). Thus, the relationship between the motion for attorney’s fees and the
motion to quash in no way transforms the former application into a dispositive motion.
Accordingly, the court concludes that the plaintiff’s motion to award attorney’s fees to
the plaintiff as discovery sanctions under Federal Rule of Procedure 45(c)(1) is a nondispositive
motion to which Local Civil Rule 7(m) applies. Because, however, the plaintiff’s motion for
attorney’s fees fails on the merits, the court denies as moot the defendants’ motion to strike. See
Ciralsky v. CIA, 355 F.3d 661, 674 (D.C. Cir. 2004) (noting a preference for resolving disputes
on the merits).
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B. The Court Denies the Plaintiff’s Motion for Attorney’s Fees
1. Legal Standard For Imposing Sanctions Under Rule 45(c)(1)
Federal Rule of Civil Procedure 45(c)(1) provides that a party issuing a subpoena has a
duty “to take reasonable steps to avoid imposing undue burden or expense” on the person subject
to the subpoena, and that “the issuing court must enforce this duty and impose an appropriate
sanction – which may include lost earnings and reasonable attorney’s fees – on a party or
attorney who fails to comply.” FED. R. CIV. P. 45(c)(1). Whether an undue burden has been
imposed must be determined according to the facts of the case. See Linder v. Dep’t of Defense,
133 F.3d 17, 24 (D.C. Cir. 1998).
Courts have identified undue burden in certain circumstances in which a party’s refusal to
withdraw a subpoena compels the filing of a motion to quash. See Night Hawk Ltd. v.
Briarpatch Ltd., L.P., 2003 WL 23018833, at *9 (S.D.N.Y. Dec. 23, 2003) (imposing sanctions
for refusing to withdraw a subpoena issued for the improper purpose of obtaining information for
a parallel state court proceeding). The mere fact, however, that a disputed subpoena is ultimately
deemed unwarranted does not, standing alone, demand the imposition of sanctions. See Scott v.
Burress, 2008 WL 585072, at *6-7 (E.D. Mich. Mar. 3, 2008) (holding that the magistrate judge
improperly awarded sanctions despite the fact that the subpoenas were improper because “there
is no indication in his memorandum opinion that he found [the] subpoena to have been issued in
bad faith”); Builders Ass’n of Greater Chi. v. City of Chicago, 215 F.R.D. 550, 554 (N.D. Ill.
2003) (vacating the magistrate judge’s award of sanctions under Rule 45(c)(1) absent a
determination that the quashed subpoenas were issued in bad faith); Alexander v. FBI, 186
F.R.D. 188, 196-97 (D.D.C. 1999) (holding that sanctions were not warranted despite the fact
that the court ultimately deemed irrelevant the documents sought in the subpoena because the
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“plaintiffs’ subpoenaing of this subject matter was not overbroad or improper” and the plaintiffs’
motion to compel was “not brought in bad faith”).
2. The Plaintiff Has Failed to Demonstrate that the
Defendants’ Behavior Imposed an Undue Burden
The plaintiff contends that by neglecting to formally withdraw the subpoenas in the
district court, the defendants forced him to incur the unnecessary cost of filing a motion to quash
in this court. Pl.’s Mot. at 5-6. The defendants respond that the plaintiff, as a party rather than
the recipient of the subpoena, lacks standing to seek sanctions under Rule 45(c)(1). Defs.’ Opp’n
at 5-6. Furthermore, the defendants assert that their behavior did not impose an undue burden on
the plaintiff, as the defendants had already consented to having the bankruptcy court decide the
enforceability of the subpoenas. See id. at 7-9.
As to the defendants’ argument that the plaintiff lacks standing, the court notes that
nothing in the language of the rule compels a categorical bar prohibiting parties from seeking
sanctions under Rule 45(c)(1). See FED. R. CIV. P. 45(c)(1). Indeed, courts have found it
appropriate under certain circumstances to award sanctions to parties under Rule 45(c)(1). See
Kenney, Becker LLP v. Kenney, 2008 WL 681452, at *3 (S.D.N.Y. Mar. 6, 2008) (awarding
attorney’s fees and costs to the defendant “[i]n light of the obvious impropriety of the subpoena,
the unwarranted burden it imposed on a third party, and these plaintiffs’ particular history of
vexatious conduct”); Anderson v. Gov’t of the Virgin Islands, 180 F.R.D. 284, 291-92 (D.V.I.
1998) (awarding sanctions to the defendant because the subject subpoenas were not properly
served and contained numerous other defects). Accordingly, the court declines to hold that the
plaintiff lacks standing to seek sanctions under Rule 45(c)(1).
The circumstances of this case, however, do not warrant sanctions, as underscored by
Night Hawk Ltd. v. Briarpatch Ltd., the principal authority on which the plaintiff relies. See
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Night Hawk, 2003 WL 23018833, at *9. The court in Night Hawk imposed sanctions after a
party refused to withdraw a subpoena that sought information regarding an entity that was no
longer a party to the case and which was issued for the patently improper purpose of obtaining
information for a separate state court proceeding. See id. This type of blatant abuse of the
subpoena power is a common thread running through decisions in which sanctions have been
awarded under Rule 45(c)(1). See id.; Kenney, 2008 WL 681452, at *2 (imposing sanctions after
determining that “the subpoena issued by plaintiff’s counsel was blatantly improper for
numerous reasons, all of which suggest that plaintiffs had no proper basis for the subpoena and
were acting in bad faith”); Am. Int’l Life Assurance Co. of N.Y. v. Vazquez, 2003 WL 548736, at
*3 (S.D.N.Y. Feb. 25, 2003) (awarding sanctions because “[t]he sweeping subpoena seeking
‘[a]ny and all records pertaining to the [AIG interpleader]’ was prima facie improper”).
The defendants’ behavior simply does not rise to this level. As an initial matter, there is
little evidence that the subpoenas themselves were patently improper. The defendants have
maintained that Cohen, a member of the trust steering committee, and Demchick, a financial
advisor for the trust, both possessed relevant non-privileged information concerning the allegedly
fraudulent transfer at the center of the underlying dispute. See Pl.’s Mot., Ex. 5. While this
justification seems somewhat dubious based on the limited factual presentation to this court,
there is nothing to indicate the type of blatant abuse of the subpoena power present in Night
Hawk or other cases in which sanctions were awarded. 3 Although the bankruptcy court
ultimately issued a protective order as to Cohen and Demchick, the court permitted the
defendants to depose the plaintiff and declined to award attorney’s fees to the plaintiff. Defs.’
Opp’n at 4.
3
Indeed, the plaintiff objected to the deposition of Demchick only on the grounds that it was
premature because he had not yet been designated as an expert. See Pl.’s Mot., Ex. 6.
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Nor has the plaintiff demonstrated that the defendants’ failure to withdraw the subpoenas
reflects blatantly improper conduct by the defendants. As a matter of professional courtesy, the
defendants might have responded to the plaintiff’s February 17 letter requesting confirmation
that the subpoenas were to be treated as coming from the bankruptcy court. It is, however,
significant that just one day prior, the defendants had consented to the plaintiff’s request to have
the bankruptcy court hear the plaintiff’s “motion for protective order and motion to quash.” Pl.’s
Mot., Ex. 7 (emphasis added). This consent lends credence to the defendants’ contention that it
was unnecessary to formally withdraw the subpoenas because they had already consented to the
bankruptcy court’s jurisdiction over the issued subpoenas. While this fact does not entirely
excuse the defendants’ behavior, the defendants’ good faith belief that they had already complied
with the plaintiff’s request militates against the imposition of sanctions. See Alexander, 186
F.R.D. at 196-97 (holding that sanctions were not warranted because the subpoenas were not
plainly overbroad and there was no evidence of bad faith). Indeed, it is likely that had the
plaintiff complied with Local Civil Rule 7(m) and sought to confer with the defendants in person
or by telephone regarding the status of the subpoenas, it would not have been necessary to file
the motion to quash.
Given the absence of bad faith, the reasonableness of the defendants’ conduct, and the
minimal burden imposed, 4 the plaintiff has not demonstrated that the defendants’ behavior
imposed an undue burden on him. Accordingly, Rule 45(c)(1) sanctions are not warranted under
the circumstances of this case.
4
The plaintiff’s motion to quash was substantively identical to the motion for a protective order
submitted to the bankruptcy court four days earlier.
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IV. CONCLUSION
For the foregoing reasons, the court denies the plaintiff’s motion for attorney’s fees. In
addition, the court denies as moot the defendants’ cross-motion to strike the plaintiff’s motion to
quash. An order consistent with this Memorandum Opinion is issued this 19th day of May,
2009.
RICARDO M. URBINA
United States District Judge
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