INTRODUCTION

*1 Defendant NutriBullet L.L.C. (“Defendant”) applies ex parte for an Order quashing subpoenas served by Plaintiffs Wendy Littlefield and Darryl Littlefield (“Plaintiffs”) on J.P. Morgan Chase Bank NA and Chase Bank USA NA (collectively, “Chase Bank”)[1] for the financial records of Capital Brands LLC (“Capital Brands”), and for sanctions against Plaintiff’s counsel for Defendant’s costs incurred in bringing the Application. (“Application” or “Appl.,” Dkt. No. 143 at 6-7). The Application is supported by the declaration of Bradley P. Childers. (“Childers Decl.,” Dkt. No. 143-1). Plaintiffs filed an Opposition, (“Opp.,” Dkt. No. 154), supported by the declarations of Derek Chaiken (“Chaiken Decl.,” Dkt. No. 155) and Aaron Lavine. (“Lavine Decl.,” Dkt. No. 156).[2] The Court held a telephonic hearing on January 12, 2018 and a follow up status conference on January 16, 2018.[3]

For the reasons stated below and at the hearing, the Ex Parte Application is GRANTED. The subpoenas served on J.P. Morgan Chase Bank NA and Chase Bank USA NA are hereby QUASHED. The request for sanctions is DENIED.

II.

BACKGROUND INFORMATION

Plaintiffs filed this action on September 14, 2016. The operative Third Amended Complaint followed on May 1, 2017. (Dkt. No. 42). On November 20, 2017, the District Judge issued an Amended Scheduling Order setting December 4, 2017 as the last day to amend pleadings or add parties, and January 5, 2018 as the non-expert discovery cut-off.[4] (Childers Decl., Exh. 1 at 2). On November 29, 2017, Plaintiffs filed a notice captioned “Amendment to Complaint (Fictitious Name)” in which they announced in part that allegations against Doe 1 “wherever referenced in the Third Amended Complaint” should be construed as references to Capital Brands, and identified other “Additional Defendants” to replace other Doe Defendants. (Dkt. No. 101). Plaintiffs then personally served Capital Brands with the Third Amended Complaint on December 22, 2017. (See Dkt. No. 152). Despite the attempt at service, Capital Brands did not respond to or otherwise acknowledge the Third Amended Complaint.

*2 On December 27, 2017, Plaintiff served subpoenas duces tecum by facsimile on Chase Bank through CT Corporation System. (Childers Decl., Exh. 5 at 20; id., Exh. 6 at 26).[5] The subpoenas set January 4, 2018 as the production date. (Id., Exh. 5 at 19; id., Exh. 6 at 25). Concurrently with service of the subpoenas on Chase Bank, Plaintiffs served copies of the subpoenas on Defendant by overnight mail. (Id., Exh. 5 at 22; id., Exh. 6 at 28). Counsel for Defendant states that he did not learn of the subpoenas until December 29, 2017, the same date Defendant filed the instant Application. (Id. ¶ 3).

On January 10, 2018, Defendant filed an ex parte application to strike Plaintiffs’ “Amendment” to the Third Amended Complaint on the ground that Plaintiffs’ purported substitution of newly-named Additional Defendants, including Capital Brands, for Doe Defendants was ineffective. (Dkt. No. 159). On January 16, 2018, Judge Fitzgerald granted the Application and struck the “Fictitious Name Amendment to Complaint” (Dkt. No. 101) and the summonses that were issued as to the Additional Defendants. (Dkt. Nos. 134-37). Judge Fitzgerald explained that the state court procedure by which Plaintiffs attempted to add new defendants was improper in federal court and instructed that to file an amended pleading after the deadline set by the Scheduling Order, Plaintiffs must file a motion to amend the Scheduling Order pursuant to Federal Rule of Civil Procedure 16(b)(4) and seek leave to file a Fourth Amended Complaint, naming the Additional Defendants, pursuant to Rule 15(a)(2). (Dkt. No. 167 at 4-5). The Court further noted that it would be “disinclined” to grant a significant extension because even though “Plaintiffs and their counsel have seemingly been aware of the Additional Defendants for a long time ... [they] waited until the very last minute to bring them into this action,” and have not adequately explained why they believe it is necessary to add the Additional Defendants. (Id. at 4).

III.

THE EX PARTE APPLICATION

Ex parte applications are solely for extraordinary relief and should be used with discretion. See Mission Power Eng’g Co. v. Cont’l Cas. Co., 883 F. Supp. 488 (C.D. Cal. 1995). Evidence must show that the moving party’s cause “will be irreparably prejudiced if the underlying motion is heard according to regular noticed motion procedures.” Id. at 492. Moreover, the moving party must establish that it is “without fault in creating the crisis that requires ex parte relief, or that the crisis occurred as a result of excusable neglect.” Id.

Plaintiffs did not serve the subpoenas challenged in this Application until December 27, 2017. In light of the imminent fact discovery cut-off, there was not time for Defendant to bring this matter to the Court as a regularly-noticed motion. Defendant did not create the “crisis” requiring expedited relief. Accordingly, the Court exceptionally finds that this dispute was properly raised in an ex parte application.

IV.

THE PARTIES’ CONTENTIONS

Defendant argues that the subpoenas must be quashed because they are defective for several procedural and substantive reasons. First, Plaintiffs did not personally serve the subpoenas. (Appl. at 4). Second, Plaintiffs improperly served the subpoenas by substitute service upon CT Corporation, “a method which was held not to constitute valid service in Doe v. Hersemann (ND IN 1994) 155 F.R.D. 630, at 630.” (Appl. at 5). Third, Plaintiffs failed to notify counsel for Defendant or Capital Brands of the subpoenas prior to service, in violation of Federal Rule of Civil Procedure 45(a)(4). (Id.). Fourth, the production deadline set forth in the subpoenas was unreasonable, as it was merely eight days after service. (Id.). Fifth, non-party Capital Brand’s financial records are irrelevant and requiring their production would constitute an invasion of privacy. (Id. at 5-6). Finally, Defendant maintains that it is entitled to sanctions in the amount of $796.50 for the time spent bringing the instant Application because Plaintiffs’ counsel “did not act diligently in bringing Capital Brands into this action” and served “improper subpoenas.” (Id. at 6).

*3 Plaintiffs argue that Defendant does not have standing to object to the method of service on Chase Bank, and represent that Chase itself “had no issue” with how the subpoenas were served. (Opp. at 1). Plaintiffs also contend that Defendant does not have standing to object to the substance of the production requests on behalf of Capital Brands under any scenario. (Id.). In support of this argument, Plaintiffs argue that only a non-party, or a party claiming a privilege, may move to quash a subpoena. (Id. at 2). According to Plaintiffs, if Capital Brands is a party (because it was served with the Third Amended Complaint), there is no basis for Defendant to step into its shoes, as Capital Brands may assert its own objections.[6] (Id. at 1). If, however, Capital Brands is a non-party (as Defendant maintains), Defendant’s objections on Capital Brands’ behalf are an admission that Defendant and Capital Brands are functionally the same company, and Defendant’s finances are plainly relevant to Plaintiffs’ punitive damages claims. (Id. at 2-3). Plaintiffs further contend that there is no basis for sanctions because the producing party, Chase Bank, has not alleged that compliance with the subpoenas would be an undue burden. (Id. at 4-5).

V.

STANDARDS FOR MOTION TO QUASH

Federal Rule of Civil Procedure 26(b)(1), as amended on December 1, 2015, provides:

Fed. R. Civ. P. 26(b)(1) (emphasis added). A party seeking discovery from a third party may obtain a subpoena for the evidence pursuant to Rule 45. The standards in Rule 26(b) regarding the permissible scope of discovery “appl[y] to the discovery that may be sought pursuant to Rule 45.” AF Holdings LLC v. Does 1-1,058, 286 F.R.D. 39, 46 (D. D.C. 2012) (citing Watts v. S.E.C., 482 F.3d 501, 507 (D.C. Cir. 2007)).

The right to discovery, even plainly relevant discovery, is not limitless. Discovery may be denied where: “(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or (iii) the proposed discovery is outside the scope permitted by Rule 26(b)(1).” Fed. R. Civ. P. 26(b)(2)(C); Tedrow v. Boeing Employees Credit Union, 315 F.R.D. 358, 359 (W.D. Wash. 2016) (quoting same); see also Watts, 482 F.3d at 509 (limitations set forth in Rule 26(b)(2)(C) apply to discovery served on non-parties by subpoena).

Rule 26(c) provides that “a party or any person from whom discovery is sought may move for a protective order.” Fed. R. Civ. P. 26(c)(1). Pursuant to the Rule, the court “may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense ....” Id.; see also Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1130 (9th Cir. 2003) (court may enter a protective order only upon a showing of good cause).

“In addition to the discovery standards under Rule 26 that are incorporated by Rule 45, Rule 45 itself provides that ‘on timely motion, the court for the district where compliance is required must quash or modify a subpoena that ... subjects a person to undue burden.’ ” In re Subpoena of DJO, LLC, 295 F.R.D. 494, 497 (S.D. Cal. 2014) (quoting Fed. R. Civ. P. 45(d)(3)(A)(iv)). In determining whether a subpoena poses an undue burden, courts “ ‘weigh the burden to the subpoenaed party against the value of the information to the serving party.’ ” Moon v. SCP Pool Corp., 232 F.R.D. 633, 637 (C.D. Cal. 2005) (quoting Travelers Indem. Co. v. Metropolitan Life Insur. Co., 228 F.R.D. 111, 113 (D. Conn. 2005)). “[C]oncern for the unwanted burden thrust upon non-parties is a factor entitled to special weight in evaluating the balance of competing needs” in a Rule 45 inquiry. Cusumano v. Microsoft Corp., 162 F.3d 708, 717 (1st Cir. 1998)); see also Misc. Docket Matter No. 1 v. Misc. Docket Matter No. 2, 197 F.3d 922, 927 (8th Cir. 1999) (quoting same); Dart Industries Co., Inc. v. Westwood Chemical Co., 649 F.2d 646 (9th Cir. 1980) (“While discovery is a valuable right and should not be unnecessarily restricted, the ‘necessary’ restriction may be broader when a nonparty is the target of discovery.”).

*4 Whether a subpoena imposes an undue burden on a particular witness is a “case specific inquiry.” Thayer v. Chiczewski, 257 F.R.D. 466, 469 (N.D. Ill. 2009) (internal quotation marks and citations omitted). In addition to the need of the requesting party for the information and the burden on the non-party in complying with the subpoena, other factors a court should consider include the relevance of the requested information and the breadth or specificity of the discovery request. See Moon, 232 F.R.D. at 637. Courts are particularly reluctant to require a non-party to provide discovery that can be produced by a party. See Precourt v. Fairbank Reconstruction Corp., 280 F.R.D. 462, 467 (D. S.D. 2011) (“If the party seeking information can easily obtain the same information without burdening the non-party, the court will quash the subpoena.”).

VI.

DISCUSSION

A. NutriBullet’s Standing

“ ‘Ordinarily a party has no standing to seek to quash a subpoena issued to someone who is not a party to the action, unless the objecting party claims some personal right or privilege with regard to the documents sought.’ ” Crispin v. Christian Audigier, Inc., 717 F. Supp. 2d 965, 973–74 (C.D. Cal. 2010) (quoting 9A Charles Wright & Arthur Miller, Federal Practice & Procedure, § 2459 (3d ed. 2008)); see also California Sportfishing Prot. All.v. Chico Scrap Metal, Inc., 299 F.R.D. 638, 643 (E.D. Cal. 2014) (“The general rule ... is that a party has no standing to quash a subpoena served upon a third party, except as to claims of privilege relating to the documents being sought.”). “Personal rights claimed with respect to bank account records give a party sufficient standing to challenge a third party subpoena served upon financial institutions holding such information.” Schmulovich v.1161 Rt. 9 LLC, 2007 WL 2362598, *2 (D. N.J. Aug. 15, 2007); see alsoArias–Zeballos v. Tan, 2007 WL 210112, *1 (S.D. N.Y. Jan. 25, 2007)(same).

Here, the subpoenas were directed to Chase Bank, which alone has standing to object to alleged defects in the method of service and form of the subpoenas. See, e.g., Ireh v. Nassau Univ. Med. Ctr., 2008 WL 11322922, at *2 (N.D. Ga. Mar. 4, 2008) (plaintiff’s “standing to challenge the subpoena ... does not extend to procedural or technical matters relating to the form of the subpoena or its service”); Windsor v. Martindale, 175 F.R.D. 665, 668 (D. Colo. 1997) (defendant lacks standing to move to quash third-party subpoena on grounds of defective service); Bell v. U.S. Dep’t of Interior, 2013 WL 4482907, at *6 (E.D. Cal. Aug. 19, 2013) (“[P]laintiff does not have standing to object to the method of service as the subpoena was directed to a third party ....”); Deployment Med. Consultants, Inc. v. Pipes, 2011 WL 811579, at *2 (S.D. Cal. Mar. 2, 2011) (plaintiff lacks standing to move to quash third-party subpoenas based on “procedural objections” to the manner in which documents were required to be produced); Donahoo v. Ohio Dep’t of Youth Servs., 211 F.R.D. 303, 306 (N.D. Ohio 2002)(defendant lacks standing to oppose third-party subpoena on the ground that it did not allow for a reasonable time to respond).

Accordingly, neither Defendant nor Capital Brands has standing to challenge the subpoenas served on Chase Bank on the technical/procedural grounds that (1) the subpoenas were not personally served; (2) service was made upon CT Corporation; or (3) the production deadline was unreasonable. (Appl. at 4-5).

However, Defendant does have standing to object to the subpoenas on the ground that Rule 45’s prior notice requirement was not met. (Appl. at 5). Rule 45(a)(4) provides:

*5 Fed. R. Civ. P. 45(a)(4) (emphasis added). The Advisory Committee Notes to Rule 45(a) explain that because parties serving subpoenas “frequently” appeared to overlook the provision requiring notice to other parties, the Rule was amended in 2013 “to move[ ] the notice requirement to a new provision” with the intent “to achieve the original purpose of enabling the other parties to object or to serve a subpoena for additional materials.” Advisory Committee Notes, 2013 Amendment, Fed. R. Civ. P. 45(a).

Some courts insist on strict compliance with the notice requirement in Rule 45(a)(4). See, e.g., Bronson v. Henry Ford Health Sys., 2016 WL 3197555, at *2 (E.D. Mich. June 9, 2016) (granting motion to quash despite Plaintiff’s service of “notice to Defendant the same day she served the subpoenas” because the failure to give notice prior to service constituted a “violation of Rule 45(a)(4)”); Solais v. Vesuvio’s II Pizza & Grill, Inc., 2015 WL 6110859, at *15 (M.D. N.C. Oct. 16, 2015) (“Because Defendants failed to comply with Rule 45(a)(4)’s prior notice requirement, the Court will quash the nonparty subpoenas.”) (collecting cases); Mirra v. Jordan, 2014 WL 2511020, at *3 (S.D. N.Y. May 28, 2014) (quashing subpoenas for failure to comply with Rule 45(a)(4) on the ground that “the notice provision is mandatory and failure to abide by this requirement constitutes grounds to quash a subpoena”). However, other courts have taken a less literal approach and will not quash a subpoena where the opposing party has received notice of the subpoena in time to raise objections and has not been prejudiced by the violation. See, e.g., Bofi Federal Bank v. Erhart, 2016 WL 1644726, at *5 (S.D. Cal. Apr. 26, 2016) (service of notice of subpoena concurrently with service of the subpoena “fulfills the purpose of Rule 45(a)(4) to notify all parties of the subpoena”); Francis v. US Airways, Inc., 2015 WL 12778642, at *2 (S.D. Fla. Sept. 30, 2015) (declining to grant motion to quash based on defendants’ failure to comply with Rule 45(a)(4)where plaintiff “ultimately received” the subpoenas and “was able to timely submit his objections to Defendants and this Court”); Bonzani v. Shinseki, 2014 WL 2521849, at *3 (E.D. Cal. June 4, 2014) (denying motion to quash based on failure to comply with Rule 45(a)(4) where defendant cured the defect by re-serving the subpoenas).

The Court finds the approach taken by the latter courts more persuasive. Defendant was not prejudiced by Plaintiffs’ concurrent service of the subpoenas on Chase Bank and Defendant. Accordingly, the Court declines to quash the subpoenas for Plaintiffs’ failure to strictly comply with Rule 45(a)(4).

Defendant’s remaining argument is that the subpoenas served on Chase Bank violate Capital Brand’s privacy rights, which also raises a standing issue. (Appl. at 6). Plaintiffs claim that “Nutribullet is a wholly-owned subsidiary of Capital Brands, [and] the two will be represented by the same counsel [at trial], have access to the same documents, and are intertwined financially.” (Opp. at 1). Whatever the relationship between Capital Brands and NutriBullet, Defendant NutriBullet’s privacy rights are not directly threatened by a subpoena for non-party Capital Brand’s financial information. However, to the extent that NutriBullet and Capital Brands are closely related, as Plaintiffs contend, the Court will assume that counsel for NutriBullet is appearing specially on behalf of Capital Brands for the limited purpose of asserting Capital Brands’ privacy rights over the financial records sought by the subpoenas. Because Capital Brands plainly has standing to protect its own right to privacy, the Court will address this objection.

B. Capital Brands’ Right To Privacy

*6 Jurisdiction in this matter is based on diversity. Accordingly, the Court looks to the substantive law of the forum state, California, to resolve the assertion of Capital Brands’ privacy rights. See Downing v. Abercrombie & Fitch, 265 F.3d 994, 1005 (9th Cir. 2001); see also Fed. R. Evid. 501 (“[I]n a civil case, state law governs privilege regarding a claim or defense for which state law supplies the rule of decision.”). “Where the state supreme court has not ruled on a question in issue, [a federal court sitting in diversity] look[s] to other state-court decisions, well-reasoned decisions from other jurisdictions, and any other available authority to determine the applicable state law.” Home Indem. Co. v. Lan Powell Moss & Miller, 43 F.3d 1322 1326 (9th Cir. 1995) (internal quotation marks omitted).

“The extent of any privacy rights of a business entity” under California law is “unsettled.” S.B.C.C., Inc. v. St. Paul Fire & Marine Ins. Co., 186 Cal. App. 4th 383, 396 n.6 (2010). “While corporations do have a right to privacy, it is not a constitutional right. The corporate right to privacy is a lesser right than that held by human beings and is not considered a fundamental right.” SCC Acquisitions, Inc. v. Superior Court, 243 Cal. App. 4th 741, 756 (2015). “Because the corporate privacy right is not constitutionally protected,” determining whether a discovery request “infringe[s] that right is resolved by a balancing test. The discovery’s relevance to the subject matter of the pending dispute and whether the discovery ‘appears reasonably calculated to lead to the discovery of admissible evidence’ is balanced against the corporate right of privacy.” Id. (quoting Hecht, Solberg, Robinson, Goldberg & Bagley LLP v. Superior Court, 137 Cal. App. 4th 579, 595 (2006)). “Doubts about relevance generally are resolved in favor of permitting discovery.” SCC Acquisitions, 243 Cal. App. 4th at 756; see also Hecht, 137 Cal. App. 4th at 595 (assuming the existence of a corporation’s right to privacy in its financial information, but finding that the right is not an absolute bar to discovery of internal financial records).

The subpoenas served on Chase Bank broadly require production of “[a]ll bank records for Capital Brands, L.L.C., including all lines of credit, loans, other instruments of indebtedness, and related documents including all applications; all financial statements [and] related documents, including loss statements, balance sheets and cash flow statements.” (Childers Decl., Exh. 5 at 19; id., Exh. 6 at 25).[7] The current record before the Court does not conclusively establish that NutriBullet and Capital Brands are alter egos without genuinely independent corporate existences or that their finances are so intertwined that NutriBullet’s net worth cannot be determined without examining Capital Brands’ financial information. It is also likely that the broad universe of Capital Brands’ financial information sought by the subpoenas would encompass information that is irrelevant to NutriBullet’s financial condition. Because it is questionable whether or to what degree Capital Brands’ financial information may even be relevant to Plaintiffs’ prayer for punitive damages, Capital Brands’ privacy interests shall be granted more weight in the Court’s balancing analysis.

*7 However, even assuming that Capital Brands' financial information has some degree of relevance here, the Court must also consider Plaintiffs’ need for the information as well as whether alternative sources of the information exist. SCC Acquisitions, 243 Cal. App. 4th at 756.

Plaintiffs have failed to adequately demonstrate a need for such a vast amount of highly sensitive information. The requests are not narrowly tailored, but seemingly would require production of every document and data file that Chase Bank has relating to Capital Brands. Furthermore, it is far from clear that Defendant’s net worth cannot be determined through less intrusive means, particularly in light of Defendant’s promised supplemental production of financial information in response to recent requests for production directed to Defendant. Therefore, even if Defendant and Capital Brands were functionally the same entity, there is no clear showing that Plaintiffs actually need any, much less all, of the information requested in the subpoenas.

The Court is also concerned by the last minute service of the subpoenas. Plaintiffs have known of Capital Brands and its connection to NutriBullet for many months. Nonetheless, Plaintiffs waited until the week before New Year’s day -- just days before the close of the discovery period on January 5, 2018 -- to pursue this information. Plaintiffs' delay in seeking the information weakens the persuasiveness of any argument that Plaintiffs truly need this information to pursue their claims. Accordingly, the Court GRANTS the Ex Parte Application and QUASHES the subpoenas served on Chase Bank.

C. Sanctions

Rule 37 provides in relevant part:

Fed. R. Civ. P. 37(a)(5)(A). Conversely, if the discovery motion is denied, the court must require the movant, the attorney filing the motion, or both to pay the party who opposed the motion its reasonable expenses, including attorney’s fees, incurred in opposing the motion. Id. 37(a)(5)(B). Finally, if the motion is granted in part and denied in part, the court “may, after giving an opportunity to be heard, apportion the reasonable expenses for the motion.” Id. 37(a)(5)(B). However, if the non-prevailing party can demonstrate “substantial justification” for its motion, nondisclosure, or opposition, Rule 37 provides that the court must deny sanctions. Fed. R. Civ. P. 37(a)(5)(A)(ii).

Plaintiffs were substantially justified in opposing the Application because Defendant lacked standing to raise many of the grounds asserted for quashing the subpoenas. Accordingly, Defendant’s request for sanctions is DENIED.

VII.

CONCLUSION

The Ex Parte Application is GRANTED. The subpoenas served on J.P. Morgan Chase Bank NA and Chase Bank USA NA are hereby QUASHED. The request for sanctions is DENIED. The parties shall provide copies of this Order to J.P. Morgan Chase Bank NA and Chase Bank USA NA within two days of the date of this Order.

The caption of the Application indicates that Defendant is also moving to quash a subpoena served on “J.P. Morgan Chase National Corporate Services.” (Appl. at 1). However, no further mention of that entity is made in the Application, and the body of the Application clearly states that Plaintiffs served only “two subpoenas ... on J.P. Morgan Chase Bank NA and Chase Bank USA NA.” (Appl. at 3). Accordingly, the Court will disregard the reference in the caption to “J.P. Morgan Chase National Corporate Services.”

The copies of the Chaiken and Lavine declarations filed simultaneously with the Opposition at Dkt. Nos. 155 and 156 appear to supersede the substantively identical copies of the declarations filed at Dkt. No. 153 the day before the Opposition was docketed. Accordingly, the Court will consider only the declarations filed with the Opposition. (Dkt. Nos. 155 & 156).

During the January 16 status conference, Defendant stated that it would serve supplemental written responses and produce documents responsive to Plaintiffs’ production requests for NutriBullet’s financial information by Monday, January 22, 2018.

The Amended Scheduling Order also set February 5, 2018 as the “[l]ast date to hear discovery motions.” (Childers Decl., Exh. 1 at 2).

The exhibits to the Childers are not consecutively paginated. Accordingly, the Court will cite to specific pages within the exhibits by reference to the CM/ECF page number at the top of the page as docketed.

Judge Fitzgerald’s January 16, 2018 Order clarified that Capital Brands is not currently a party to this litigation, thus mooting this argument.

Chaiken states in his declaration that he spoke to counsel for Chase Bank on the date the subpoenas were served. (Chaiken Decl. ¶ 2). According to Chaiken, Chase Bank “wanted minor revisions to the subpoena[s],” and “would accept the revised version via facsimile.” (Id.). Plaintiffs do not state whether a revised version of the subpoenas, if any, has been served, or whether the revisions affect the scope of the materials requested.