NuVasive, Inc. v. Absolute Med., LLC
NuVasive, Inc. v. Absolute Med., LLC
2019 WL 12517009 (M.D. Fla. 2019)
January 31, 2019
Kelly, Gregory J., United States Magistrate Judge
Summary
NuVasive sent subpoenas to Bank of America and Verizon Wireless requesting documents related to accounts held by Soufleris and subscriber information for the cell phones of Soufleris, Hawley, and Miller. The court denied the motion to quash the Bank of America subpoena, and granted the motion to quash the Verizon subpoena in part, modifying the subpoena to exclude the content of the communications.
Additional Decisions
NUVASIVE, INC., Plaintiff,
v.
ABSOLUTE MEDICAL, LLC; GREG SOUFLERIS; DAVE HAWLEY; ABSOLUTE MEDICAL SYSTEMS, LLC; and RYAN MILLER; Defendants
v.
ABSOLUTE MEDICAL, LLC; GREG SOUFLERIS; DAVE HAWLEY; ABSOLUTE MEDICAL SYSTEMS, LLC; and RYAN MILLER; Defendants
Case No. 6:17-cv-2206-Orl-41GJK
United States District Court, M.D. Florida
Filed January 31, 2019
Counsel
Christopher W. Cardwell, Pro Hac Vice, Marshall Thomas McFarland, Pro Hac Vice, Mary Taylor Gallagher, Pro Hac Vice, Gullet Sanford Robinson & Martin PLLC, Nashville, TN, Diana Nicole Evans, Robert Craig Mayfield, Bradley Arant Boult Cummings LLP, Tampa, FL, for Plaintiff.Bryan E. Busch, Pro Hac Vice, Busch Slipakoff Mills & Slomka, PLLC, Atlanta, GA, Christopher Young Mills, Busch Mills & Slomka LLP, West Palm Beach, FL, for Defendants.
Kelly, Gregory J., United States Magistrate Judge
Order
*1 This cause came on for consideration without oral argument on the following motion:
MOTION: DEFENDANT GREG SOUFLERIS’ MOTION TO QUASH OR, IN THE ALTERNATIVE, MOTION FOR PROTECTIVE ORDER AS TO NUVASIVE, INC.’S SECOND SUBPOENA TO PRODUCE DOCUMENTS TO BANK OF AMERICA, N.A. (Doc. No. 134)
FILED: December 5, 2018THEREON it is ORDERED that the motion is DENIED.MOTION: DEFENDANTS’, GREG SOUFLERIS, DAVE HAWLEY, AND RYAN MILLER, AMENDED MOTION TO QUASH, OR, IN THE ALTERNATIVE, MOTION FOR PROTECTIVE ORDER AS TO NUVASIVE, INC.’S SUBPOENA TO PRODUCE DOCUMENTS TO VERIZON WIRELESS (Doc. No. 137)
FILED: December 6, 2018THEREON it is ORDERED that the motion is GRANTED IN PART AND DENIED IN PART.
On June 8, 2018, NuVasive, Inc., filed the “First Amended Complaint for Injunctive Relief and Damages” against Absolute Medical, LLC (“Absolute Medical”); Absolute Medical Systems, LLC (“AMS”); Greg Soufleris; Dave Hawley; and Ryan Miller. Doc. No. 68. NuVasive alleges that it entered into exclusive sales agreements with Absolute Medical for Absolute Medical to sell NuVasive's products. Id. at ¶¶ 8, 32. It claims that Absolute Medical breached the agreements by doing the following:
a. attempting to terminate the contract between it and NuVasive without cause;
b. failing to maintain sufficient personnel to service its sales territory;c. failing to inform NuVasive that it is distributing competitive products;d. failing to comply with its reasonable non-compete and non-solicit obligations; ande. failing to ensure that its former sales representatives comply with their reasonable non-compete and non-solicit obligations.
Id. at ¶ 2. Soufleris testified that in the summer of 2017 Absolute Medical was losing money selling NuVasive's products. Doc. No. 101-2 at 31. He further testified that in November 2017, Absolute Medical's business of selling NuVasive's products was not sustainable. Id. at 32.
NuVasive alleges that AMS is the successor in interest to Absolute Medical, which was dissolved in February 2018. Doc. No. 68 at ¶¶ 11, 16-24. Both Absolute Medical and AMS are limited liability companies with Soufleris as their single member, president, and registered agent. Id. at ¶¶ 7, 13, 16. Hawley and Miller were sales representatives for Absolute Medical. Id. at ¶¶ 19, 21.
On November 2, 2018, NuVasive sent a subpoena to Bank of America, N.A. (“BOA”) asking it to produce the following on December 7, 2018: “All documents related to any accounts held individually or jointly by Gregory Tabeling Soufleris, including without limitation, documents evidencing deposits, credits, withdrawals, transfers, and/or communications, for the time period of January 1, 2016, through the present” (the “BOA Subpoena”). Doc. No. 137-1 at 2. On December 5, 2018, Soufleris filed a motion to quash, or in the alternative, motion for protective order as to the BOA Subpoena (the “BOA Motion to Quash”). Doc. No. 134. On December 6, 2018, the Court stayed enforcement of the BOA Subpoena pending a ruling on the BOA Motion to Quash. Doc. No. 135. On December 19, 2018, NuVasive filed its response to the BOA Motion to Quash (the “BOA Response”). Doc. No. 140.
*2 Also on November 2, 2018, NuVasive sent a subpoena to Verizon Wireless (the “Verizon Subpoena”) asking it to produce the following on December 7, 2018: “All subscriber information, billing information, features, original/outgoing calls, terminating/incoming calls, and SMS/MMS/text/data for the following telephone numbers: [redacted] for the period January 1, 2017, through the present.” Doc. No. 141-1. The redacted telephone numbers are the numbers for Soufleris's, Hawley's, and Miller's (collectively, “Defendants”) cell phones. Doc. No. 137 at 3. On December 6, 2018, Defendants filed a motion to quash the Verizon Subpoena (the “Verizon Motion to Quash”). Doc. No. 137. On December 7, 2018, the Court stayed enforcement of the Verizon Subpoena pending a ruling on the Verizon Motion to Quash. Doc. No. 139. On December 20, 2018, NuVasive filed its response to the Verizon Motion to Quash (the “Verizon Response”). Doc. No. 141.
Defendants argue that the BOA and Verizon Subpoenas are overbroad. Doc. Nos. 134, 137. Regarding the Verizon Motion to Quash, NuVasive argues that Defendants do not have standing to quash the Verizon Subpoena, as they have not identified a personal right to the documents NuVasive seeks. Doc. No. 141 at 4. Defendants assert that “they have a personal interest in the privacy of their cell phone records.” Doc. No. 137 at 4.
“Numerous courts ... have held that parties have a personal interest in their financial and telephone records sufficient to confer standing to challenge a subpoena directed to a third-party.” Mancuso v. Fla. Metro. Univ., Inc., No. 09-61984-CIV, 2011 WL 310726, at *1 (S.D. Fla. Jan. 28, 2011); Keim v. ADF Midatlantic, LLC, No. 12-80577-CIV, 2016 WL 720967, at *2 (S.D. Fla. Feb. 22, 2016) (finding that party had standing to challenge subpoena to his telephone carrier). Defendants therefore have standing to challenge the Verizon Subpoena.
“The scope of discovery under a Rule 45 subpoena is the same as the scope of discovery under Rule 26.” Woods v. On Baldwin Pond, LLC, No. 6:13-CV-726-ORL-19DAB, 2014 WL 12625078, at *1 (M.D. Fla. Apr. 2, 2014). Rule 26(b)(1) provides the following:
Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.
The request in the Verizon subpoena is limited to the period of January 1, 2017, to the present. As Soufleris testified that Absolute Medical began losing money in the summer of 2017, Doc. No. 101-2 at 31, five months before Absolute Medical began losing money is a reasonable time period.
Although the Verizon subpoena could be construed as requesting the content of Defendants’ communications, in the response to the Verizon Motion to Compel, Plaintiff asserts that “Verizon Wireless does not produce (or even retain) the content of text message communications in response to a subpoena duces tecum.” Doc. No. 141 at 4. When construed as excluding the content of the communications, the Verizon Subpoena does not unnecessarily infringe on privacy rights.
The allegations against Defendants, Absolute Medical, and AMS necessarily require review of their communications with third parties, as NuVasive alleges that they violated non-competition and non-solicitation agreements. Defendants’ privacy interests must yield to the extent proportional to the needs of the case. NuVasive's response to the Verizon Motion to Compel is construed as an acknowledgment that it is not seeking the content of Defendants’ communications through the Verizon Subpoena. With this and the temporal limitation, the Verizon Subpoena is sufficiently limited to relevant information that is proportional to the needs of the case. Therefore, the Verizon Motion to Quash is granted in part and denied in part. The motion is granted only to the extent that the Verizon subpoena could be construed as requesting the content of the Defendants’ communications. In all other respects, the Verizon Motion to Quash is denied.
*3 Although the request in the BOA Subpoena is broad, NuVasive demonstrates that it is also proportional to the issues in the case and thus not overly broad. The BOA Subpoena requests all documents related to any accounts held by Soufleris, either individually or jointly, from January 1, 2016, to the present. Doc. No. 134-1 at 2.
NuVasive claims that AMS, of which Soufleris is the single member, president, and registered agent, is a successor in interest to Absolute Medical, and that, “as part of the process of dissolving Absolute Medical, Soufleris transferred significant amounts of money from Absolute Medical's accounts into other businesses, including, without limitation, AMS.” Doc. No. 68 at ¶ 7, 13, 15, 16. NuVasive also alleges that Soufleris transferred Absolute Medical's assets to his companies. Id. at ¶ 112. Soufleris answered interrogatories on Absolute Medical's behalf, and in doing so, asserted that Absolute Medical “had very little assets on November 27, 2017, which was limited to old IKEA furniture that was left behind when it vacated its office space. Absolute Medical did not have any cash on hand.” Doc. No. 140-4 at 6, 8. Absolute Medical's bank account statement from BOA for November 2017 showed that on November 24 and November 30, 2017, Absolute Medical had $18,650.69 in its account. Doc. No. 140-5 at 1, 4. On November 21, 2017, an online banking transfer out of the account was made for $50,000. Id. at 3. This information appears to contradict the answer to the interrogatory that Soufleris swore to. NuVasive sufficiently demonstrates that the BOA Subpoena regarding Soufleris's accounts is appropriately tailored and proportional to the needs of the case, which include determining whether Soufleris transferred money from Absolute Medical to his companies.
Based on the forgoing, it is ORDERED as follows:
1. The BOA Motion to Quash (Doc. No. 134) is DENIED;2. The stay of the enforcement of the second subpoena directed to BOA is lifted;3. The Verizon Motion to Quash (Doc. No. 137) is GRANTED IN PART AND DENIED IN PART as follows:
a. The Verizon Subpoena is modified to exclude the content of the communications;b. In all other respects, the Verizon Motion to Quash is DENIED; andc. The stay of the enforcement of the Verizon Subpoena is lifted.
DONE and ORDERED in Orlando, Florida, on January 31, 2019.