*1 On November 12, 2020, third-party HSBC Bank USA, National Association (“HSBC”) filed a Motion (“Motion” or “Mot.”) to quash the third-party subpoena served on it by defendants on October 29, 2020, along with an “Attempted Joint Stipulation” (“AJS”), and the declarations of its counsel Michael W. Brown (“Brown Decl.”) with exhibits, and its Legal Paper Regulatory Specialist, Michael T. LoVullo (“LoVullo Decl.”) with exhibits. In the alternative, HSBC seeks an order shifting the cost associated with compliance with the subpoena to one or both of the parties in this action. (Mot. at 1). While the Motion was just filed, and thus neither party has had the opportunity to respond, the Court has determined that regardless of the parties' positions concerning the accuracy of each detail contained therein, the resolution set out herein would likely remain unchanged. Thus, in the interest of judicial economy as well as concern over the costs of this litigation, the Court will rule at this time.

By way of background, on October 14, 2020, the Court issued an Order relating to the issuance of the subpoena at issue herein (“Subject Subpoena”). (ECF No. 117). In that Order, the Court ordered defendants to “immediately notify the Banks [including HSBC] that the existing subpoenas are being modified as set forth herein and provide them with a copy of this Order.” (Id. at 9 (emphasis added)). Nevertheless, according to HSBC, HSBC was not served with a copy of the Order; additionally, defendants did not serve the revised Subject Subpoena until October 29, 2020, leaving HSBC only twenty days (including weekends and the Veteran's Day bank holiday) in which to process and produce the requested documents. (AJS at 3).

HSBC initially tried to resolve the dispute on its own, without success. (Id. (citing Brown Decl. ¶ 8; LoVullo Decl. ¶ 24)). At that point, outside counsel for HSBC became involved, at which time there was insufficient time to fully comply with the Joint Stipulation procedures of Local Rule 37-1 before the documents were due to be produced. (Id. (citing Brown Decl. ¶ 27)). Counsel for HSBC thus prepared the AJS, setting forth its position, as well as its understanding of the meet and confer conversations it had with counsel for plaintiff and defendants on the issues raised in the Motion. (Id. (citing Brown Decl. ¶¶ 26-67)).

HSBC notes the numerous discovery disputes already reflected on the Court's docket, and states that it has already responded to “six prior subpoenas in this matter.” (Id. at 4 (citing LoVullo Decll. ¶ 16)). It also notes that the Subject Subpoena seeks records “for seven separate accounts, for a period of time of 36 months and requires all transactions to be redacted, except for those involving one or more of 209 specifically-listed individuals or entities.” (Id. (emphases in original) (citing LoVullo Decl. ¶¶ 5, 16, & Exs. 1, 2)). HSBC explains the difficulties it will face in timely responding to this subpoena, exacerbated by the fact that it was not served with the revised subpoena until October 29, 2020, and was not ever served with a copy of the October 14, 2020, Order. (Id. at 4-5 (citations omitted)). It also notes that it “wants to be as cautious and careful as humanly possible in making certain that only the appropriate transactions listing one or more of the 209 names in question are disclosed,” in light of the fact that its inadvertent production of one page that did not comply with the requirements of one of the six previous subpoenas served on it “apparently caused or contributed to causing a motion for sanctions to be filed wherein each side filed hundreds of pages of documents and argued about that one single page ....” (Id. at 6 (citing LoVullo Decl. ¶¶ 17-18)). HSBC also remarks on the “intensity of th[is] litigation,” and “the significant expense involved” in producing documents responsive to the Subject Subpoena in light of the fact that it involves seven accounts, 36 months, and 209 names, that will require “a human being ... go[ing] through each and every page to make sure that the appropriate transactions are disclosed while other transactions are not disclosed.” (Id. (citing LoVullo Decl. ¶ 15)).

*2 On November 12, 2020, HSBC timely served Objections to the Subject Subpoena, “thus eviscerating the requirement to comply by the November 18th date and putting the burden on the Defendants as the party issuing the subpoena to file a Motion to Compel.” (Id. (citing Brown Decl. ¶¶ 19-20, 24 & Exs. 1, 2)). It states that it filed this Motion “only out of an abundance of caution.” (Id. at 10 (citing Brown Decl. ¶ 24)). HSBC also observes that plaintiff has “easy access to all of the documents encompassed within the Subject Subpoena,” and asserts that it “is being asked to bear the burden of the time and expense involved in reviewing and redacting such documents in response to the Subject Subpoena based on the apparent lack of trust between the parties.” (Id. at 7 (citing LoVullo Decl. para 20)). It asserts that it is not opposed to producing redacted documents, but is opposed to having to incur the significant time and expense associated with the tasks involved in production. (Id.). HSBC represents that prior to engaging counsel, it proposed two cost-shifting alternatives to the parties, which were rejected, and that it has now proposed two new and different scenarios for the production and cost shifting “and has not received a response” from either party as of the filing of the Motion. (Id. (citing LoVullo Decl. ¶ 22; Brown Decl. ¶¶ 19-22 & Exs. 1-4)).

HSBC reports that when it contacted plaintiff's counsel about the issues herein, plaintiff's counsel insisted that “the response to the Subject Subpoena carefully follow” the Court's Order, and expressed concern regarding the prejudice to plaintiff with respect to the one-page document inadvertently produced by HSBC in response to an earlier subpoena. (Id. at 7-8 (citing Brown Decl. ¶¶ 9, 11-12)). Plaintiff's counsel did not respond to HSBC's request to advise it “as to what options might be feasible and acceptable to Plaintiff.” (Id. at 8).

HSBC also reports that in its similar discussion with defendants' counsel Ronald Valenzuela, Mr. Valenzuela stated he did not have the authority to agree with HSBC's suggestion that its attorneys at Hemar, Rousso & Heald, LLP (“HRH”) perform the tasks required to prepare the documents for production. (Id. at 8-9 (citing Brown Decl. ¶¶ 14-15)). Mr. Valenzuela did suggest that a third-party vendor could be sent the unredacted documents to perform the tasks of reviewing, redacting, and producing them, as this “would be much less expensive than paying attorneys to perform said tasks.” (Id. at 9 (citing Brown Decl. ¶ 16)).

HSBC notes that counsel for plaintiff and defendants both expressed that they “understood that HSBC had no say or participation in the Court's Minute Order of October 14, 2020.” (Id. at 8 (citing Brown Decl. ¶ 13), 9 (citing Brown Decl. ¶ 18)). It states that when it served its Objections on defendants, it also requested that defendants' counsel advise “as to what options might be feasible and acceptable to Defendants.” (Id. (citing Brown Decl. ¶¶ 19-20 & Exs. 1, 2)). Defendants' counsel responded “that he would meet and confer” with plaintiff's counsel. (Id. (citing Brown Decl. ¶ 21 & Ex. 3)). At the time the Motion was finalized, HSBC had not received a further response from defendants. (Id.).

HSBC submits that the “sole and only issue in dispute here is the Subject Subpoena to HSBC and specifically, how to accomplish the production, and who should bear the costs and expense associated with responding.” (Id. at 10). It represents that it is “prepared to further meet-and-confer with counsel for the Defendants and counsel for the Plaintiff to discuss the subject Subpoena, the objections stated herein, and a potential resolution.” (Id. at 22). It proposes two options:

(Id.).

Discussion

The District Judge has recently agreed to extend the non-expert discovery cut-off date to August 9, 2021 (ECF No. 126); thus, there is no looming deadline.

The Court fully understands the difficult position that HSBC is in with respect to the Subject Subpoena (as well as with respect to the six other subpoenas to which it has previously responded), given the exceedingly contentious nature of this litigation and the volume of records being requested. Nevertheless, in light of the fact that the discovery cut-off date is now far in the future, the Court will not rule on the merits of this Motion at this time. Instead, it will deny this Motion without prejudice should the parties fail -- after meeting and conferring in good faith with HSBC with respect to the issues raised by HSBC in this Motion -- to arrive at an agreement with HSBC regarding the production of documents pursuant to the Subject Subpoena.

*3 Accordingly, HSBC's Motion (ECF No. 128) is denied without prejudice and HSBC's response to the subpoena is hereby stayed pending resolution of the issues raised herein -- whether resolved by HSBC and the parties without Court intervention, or by Court order if a Motion is still necessary after the parties and HSBC have met and conferred.

That being said, the Court notes that on March 9, 2020, it ordered all counsel of record to read parts A, B, and C of the Central District's Civility and Professionalism Guidelines and to submit a declaration to the Court stating that he/she has completely read and agrees to fully abide by all of its terms. (ECF No. 59). Counsel, at that time, complied with that Order. (ECF Nos. 63, 64, 65, 66, 67, 68). Since that date, however, the Court has been presented with numerous additional discovery motions or discovery-related requests. (See, e.g., ECF Nos. 70, 73, 80, 87, 89, 92, 106, 118). Indeed, as the Court observed in its November 2, 2020, Order with respect to the parties' then-pending request to the District Judge to continue the trial and related dates:

(ECF No. 127 at 19). In the face of the instant Motion, the Court is dismayed to again conclude that, despite its several attempts to inform counsel of the Court's expectations, the parties continue to fail to fully cooperate with each other, with this Court's Orders, and now with third-party entities. The nature of this Motion is such that it should have been easily resolved through meeting and conferring in good faith, and in the absence of an agreement, should have been presented to the Court in a Joint Stipulation, not an “Attempted” Joint Stipulation. It thus still appears to this Court that the parties are not meeting their obligations relating to the Central District's Civility and Professionalism Guidelines, the Central District Local Rules, and/or the Federal Rules of Civil Procedure. The Court will not hesitate to award sanctions in this matter should it, in any future motion, be presented with reason and a sufficient evidentiary basis to do so.

Additionally, the Court provides the parties with some of its preliminary observations with respect to the issues raised in the instant Motion (while recognizing that as of now it has been presented with only one side of the issue):

(1) Defendants did not comply with the Court's October 14, 2020, Order to immediately provide the banks, including HSBC, with a copy of that Order;

(2) Defendants did not serve the Subject Subpoena until October 29, 2020;

(3) The parties and HSBC are expected to meet and confer in good faith with respect to the issues raised by HSBC in this Motion. The Court fully expects -- especially in light of the length of time remaining before the discovery cut-off date -- that the parties will be able to arrive at an agreement with each other and HSBC regarding the production of documents pursuant to the Subject Subpoena without the need for further Court intervention; and

*4 (4) The Court has already ordered that in responding to the Subject Subpoena, “the costs, if any, associated with the Banks' duplication of the production, and the reasonable costs associated with its service on plaintiff's counsel, shall be borne by defendants.” (ECF No. 117 at 10). The Court is inclined to agree with HSBC that the costs of reviewing, redacting, and producing documents in response to the Subject Subpoena (whether it be done by HSBC personnel, HSBC's outside counsel, or by a third-party vendor) should be borne, in whole or in large part, by defendants.

IT IS SO ORDERED.