IFG Port Holdings, LLC v. Lake Charles Harbor & Terminal Dist.
IFG Port Holdings, LLC v. Lake Charles Harbor & Terminal Dist.
2017 WL 11657336 (W.D. La. 2017)
November 28, 2017

Kay, Kathleen,  United States Magistrate Judge

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Third Party Subpoena
Privacy
Proportionality
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Summary
The court quashed the subpoenas issued to Skyhawk, TPG, and Farmers Rice, finding that they were overly broad and unreasonably burdensome, sought information protected by attorney-client privilege and attorney work-product, and were served for the purpose of harassing the non-parties. With regard to ESI, the court found that Farmers Rice had already responded to IFG's December 28, 2016 subpoena, and that the only other document reviewed by Ann Stone prior to her deposition was a privileged document.
Additional Decisions
IFG PORT HOLDINGS, LLC
v.
LAKE CHARLES HARBOR & TERMINAL DISTRICT
DOCKET NO. 16-cv-00146
United States District Court, W.D. Louisiana, LAKE CHARLES DIVISION
Filed November 28, 2017

Counsel

K. Eric LaFleur, Mahtook & LaFleur, Ville Platte, LA, Laura Adams Alexander, Mahtook & LaFleur, New Orleans, LA, Laura Kay Austin Theunissen, Charles A. Mouton, Mahtook & Lafleur, Lafayette, LA, for IFG Port Holdings LLC.
Michael W. McKay, Long Law Firm, Douglas J. Cochran, Stone Pigman et al., Baton Rouge, LA, Matthew Bond Pettaway, Robichaux Mize et al., Lake Charles, LA, Monette M. Davis, Nicholas John Wehlen, Stone Pigman et al, New Orleans, LA, for Lake Charles Harbor & Terminal District.
Kay, Kathleen, United States Magistrate Judge

MEMORANDUM RULING

*1 Before the court is a Motion to Quash Subpoenas, for Protective Order, and for Attorney's Fees filed by The Powell Group, LLC (“TPG”) and Farmers Rice Milling Company, LLC (“Farmers Rice”). Doc. 168. The motion is opposed by IFG Port Holdings, LLC (“IFG”). For the reasons that follow the motion is GRANTED in part and DENIED in part.
 
I.
Background
IFG issued three subpoenas to (1) TPG; (2) Farmers Rice; and (3) Skyhawk Security, LLC all non-parties to this litigation. TPG is a Louisiana holding company and Farmers Rice is one of its subsidiaries. Doc. 168, att. 6, p. 1. TPG and Farmers Rice contracted with Skyhawk Security, LLC (“Skyhawk”) to provide IT services and hosting services for their email accounts. Id.
 
IFG filed suit against the Lake Charles Harbor & Terminal District (“the Port”) alleging various claims including breach of a 2011 Ground Lease Agreement, negligence, violation of Louisiana Unfair Trade Practices Act (“LUTPA”), abuse of rights, detrimental reliance, and for declaratory relief. Doc. 1. IFG alleges that the information sought by these subpoenas is relevant to its complaint against defendant to show that Farmers Rice is “colluding” with the Port “to engage in unwarranted and unfair trade practices against IFG.” Doc. 171, p. 4.
 
Farmers Rice has responded to two prior subpoenas that were served on it by IFG. Doc. 168, att. 9, pp. 1-11, Doc. 168, att. 10. The topics in items 1 through 8 on the TPG and Skyhawk subpoenas are identical to requests that IFG previously propounded to Farmers Rice and to which Farmers Rice responded. IFG acknowledges that it is not requesting duplication of the same records from three different sources but seeks confirmation that all sources have been searched. Doc. 171, p. 25. According to IFG, one reason that it is requesting that three sources search for documents is because it uncovered an email that was not previously produced by IFG in its previous responses.[1] Doc. 171, p. 1. IFG also maintains that certain emails that current Farmers Rice CEO Ann Stone purportedly referenced in a telephone conference with CEO and General Counsel for IFG Kabir Ahmad have not been produced. Doc. 171, p. 6. Farmers Rice denies the existence of any such emails and Ms. Stone at her deposition also denied the existence of any such emails. Doc. 180, pp. 8-9.
 
*2 Farmers Rice moves to quash the subpoenas because: (1) the subpoenas seek confidential commercial information and trade secrets; (2) the subpoenas seek information beyond the scope of discovery and not relevant or proportional to the needs of the case; (3) the subpoenas are overly broad and unreasonably burdensome and fail to particularly identify the documents sought; (4) the subpoenas seek information protected by attorney-client privilege and attorney work-product, (5) the subpoenas are duplicative, and (6) the subpoenas were served for the purpose of harassing Farmers Rice and TPG. Doc. 168, p. 2, ¶5.
 
II.
Law and Analysis
Federal Rule of Civil Procedure 45(d)(3) governs the issuance of subpoenas to obtain discovery from non-parties. The party issuing the subpoena “must take reasonable steps to avoid imposing an undue burden or expense on a person subject to a subpoena.” Fed. R. Civ. P. 45(d)(1). A court must, on a timely motion, quash or modify a subpoena if it requires disclosure of privileged or other protected matter, or otherwise subjects the subpoenaed person to undue burden.” Fed. R. Civ. P. 45(d)(3)(A)(iii)-(iv)(emphasis added). Additionally, subpoenas under rule 45 to a third party “are discovery devices which, although governed in the first instance by Rule 45, are also subject to the parameters established by Rule 26.” In re Application of Time, Inc., 1999 WL 804090 at *7 (E.D. La. Oct. 6, 1999)(citations omitted).
 
Rule 26(b)(1) defines the scope of discovery. It states, in part, “[p]arties 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.” Fed.R.Civ.P. 26(b)(1). The factors the court should consider when determining proportionality are “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.” Id.
 
It has been noted that:
Rule 45[(d)(1)] affords non-parties a higher protection in terms of the burden that can be imposed upon them and states that the ‘party or attorney responsible for issuing and serving a subpoena must take reasonable steps to avoid imposing undue burden on a person subject to the subpoena.’ Indeed, when analyzing the costs and benefits of a production by a non-party in Guy Chem. Co. v. Romaco AG, [243 F.R.D. 310, 313 (N.D. Ind. 2007)], the court stated that ‘the most crucial factor ... is the fact that [the producing party] is a non-party.’ Although the court eventually ordered production, it was conditioned upon plaintiff paying the entire cost. Other courts have imposed similar conditions based on their reluctance to impose significant costs of litigation onto a non-party. Rule 45 [(d)(1)] also commands the court ‘to enforce this duty [to not impose an undue burden on expense upon a non-party] and impose an appropriate sanction’ upon the requesting party.
E. Laporte and J. Redgrave, A Practical Guide to Achieving Proportionality Under the New Federal Rule of Civil Procedure 26, 9 Fed.Cts.L.Rev. 19, 57 (2015), as quoted in Hume v. Consol. Grain & Barge, Inc., 2016 WL 7385699 at *3 (E.D. La. Dec. 21, 2016). With these precepts in mind we will examine each subpoena.
 
A. The Skyhawk Subpoena
The subpoena issued to Skyhawk requests the IT company to search the Farmers Rice server and back-up servers for 11 numerated items which are identical to the items requested in the TPG subpoena. Doc. 168, att. 5.
 
*3 In its opposition to the motion to quash IFG indicates that it was contacted by someone from Skyhawk who notified them that they were not able to access the Farmers Rice or the TPG server or back-up server. Doc. 171, p. 25. According to IFG, Skyhawk represented that it only has access to the servers to preform specific tasks and is unable to search for any of the information requested. Id.
 
Based on these representations, the court will grant the motion to quash the Skyhawk subpoena.
 
B. The TPG Subpoena
The first 8 items on the TPG subpoena are identical to a subpoena served on Farmers Rice on December 28, 2016 and to which Farmers Rice responded. TPG notes in its memorandum that it will respond to these requests. Doc. 168, att. 1, p. 11, n. 27.
 
Request Number 9 in the subpoena asks TPG to:
Identify and produce all emails (including any attachments) sent or received by Jamie Warshaw (email address jamesw@frmco.com) from January 1, 2015 through June 2016.
Doc. 168, att. 3, p. 9. In the motion to quash TPG argues that this request is overbroad as it makes no attempt to limit the subject matter of the requested emails. Doc. 168, att. 1, p.11. In response IFG asserts that this time period covers the period that IFG and Farmers Rice were “most active in trying to turn up the heat on IFG.”[2] Doc. 171, p. 22. It contends that it purposefully did not set any limiting terms so that TPG could not leave out any discoverable emails during this time period. Doc. 171, p. 20.
 
We agree that this request is overbroad. This request fails to limit the subject matter and is clearly beyond the scope of the claims and defenses in this case. Accordingly Request Number 9 on the subpoena served on TPG is quashed.
 
Request Number10 asks TPG to:
Identify and produce all emails (including any attachments) sent or received by Jamie Warshaw (email address jamesw@frmco.com) and any other person or entity relating in any way to IFG Port Holdings LLC, Kabir Ahmad, Louisiana rice farmers, any export rice facility located at the port of Lake Charles, the Port of Lake Charles’ Bulk Teminal #2 facility or the export of bulk rice at the Port of Lake Charles from January 1, 2008 through June 30, 2016.
Doc. 168, att. 3, p. 12. TPG argues that, while this request attempts to place limits on the subject matter, the request is nevertheless unduly broad. Doc. 168, att. 1, pp. 11-12. The request, according to TPG, goes back to three years before the Port–IFG lease was executed. Further TPG argues that the request for all emails to, for example, “Louisiana rice farmers” is unduly broad because it would include any rice farmer in the State of Louisiana. Id. Additionally, TPG asserts, responding to this request would give IFG access to confidential and highly sensitive information regarding Farmers Rice's negotiations, prices, and relationships with the Louisiana farmers from whom both Farmers Rice and IFG compete to obtain rough rice. Id.
 
*4 IFG, in response, maintains that this information would show that Farmers Rice and the Port colluded to exert pressure on IFG because “IFG and its operations were the cause of this price jump [the increase in the price of local farmer's rough rice].” Doc. 171, p. 20. IFG also suggests that, to the extent any of the information requested is confidential, a confidentiality agreement regarding proprietary information could be executed. Id. at 17.
 
The court agrees that this request is overbroad (IFG asks for all emails sent or received by Jamie Warshaw and any other person or entity relating in any way to IFG Port Holdings LLC, etc.) and will likely require Farmers Rice to disclose confidential information. Rule 45 (d)(3)(B)(i) allows the court to quash the subpoena if it requires disclosure of a “trade secret or other confidential research, development, or commercial information.” Accordingly Request Number 10 on the subpoena served on TPG is quashed.
 
Request Number 11 asks TPG to:
Identify and produce all emails or other written correspondence, between the FRMC/Powell personnel (including FRMC's and/or Powell's legal counsel) and the Port personnel (including Port's legal counsel the Port's outside counsel, Robichaux, Mize, Wadsack & Richardson, LLC) from May 1, 2017 to September 1, 2017. Please include any handwritten notes, exchanged or shared during the Deposition between Mathew Mize and Philip Devilbiss and between Mathew Mize and Jeff Peters.
Doc. 168, att. 3, p. 13. TPG asserts that this request seeks privileged post-litigation communications between Farmers Rice, the Port, and their legal counsel, including mental impressions of attorneys for the Port and Farmers Rice. Doc. 168, att. 1, p. 12.
 
In response, IFG argues that it is not seeking any information that is protected by privilege, however, it asserts that to the extent any document is protected by attorney client privilege or the attorney work product doctrine, TPG should produce a privilege log and/or redacted versions of the documents. Doc. 171, p. 23.
 
This request clearly infringes on the privileges asserted by TPG and Farmers Rice. The time frame is after the IFG lawsuit was filed and it clearly asks for communications between counsel/clients for both entities. Accordingly Request Number 11 on the subpoena served on TPG is quashed.
 
C. The Farmers Rice Subpoena
The first 3 items on the Farmers Rice subpoena are identical to Request Numbers 9, 10, and 11 on the TPG subpoena which we have discussed and ruled on above. Request Number 4 on the Farmers Rice subpoena asks it to:
Identify and produce any and all notebook or notebooks as described on page 59-61 of Ann Stone's July 12, 2017 deposition transcript (excerpt attached hereto).
Doc. 168, att. 4, p. 12. Farmers Rice objects to this request as overbroad. Doc. 168, att. 1, p. 13. It explains that Ann Stone has worked at Farmers Rice for many years and the subpoena demands her notebooks without any attempt to limit the information to topics relevant to this lawsuit. Id. Farmers Rice further maintains that production of these notebooks would give IFG access to every note ever taken which would include confidential information. Id.
 
IFG argues that Ann Stone admitted taking notes of important calls and business meetings with IFG and the Port. IFG states that it does not seek any notebook prior to August of 2016 and that it intentionally did not include limiting terms because it has no confidence in Farmers Rice's ability to produce that which should be produced. Doc. 171, p. 24.
 
*5 We conclude that this request, as written, is indeed overly broad and impermissible. The request fails to include any temporal or subject matter limitation. Accordingly Request Number 9 on the subpoena served on Farmer's Rice is quashed.
 
In Request Number 5 IFG asks Farmers Rice to:
Identify and produce all folders, files and the entire contents of those folders and files discussed on pages 36-42 of Ann Stone's July 12, 2017 deposition transcript (excerpt attached hereto), including but not limited to Jamie Warshaw's Port of Lake Charles folder and any folders related to the price of rice or rice pricing.
Doc. 168, att. 4, p. 12. Farmers Rice objects to this request because it seeks confidential information about Farmers Rice pricing strategies and negotiations with its suppliers. Doc. 168, att. 1, p. 13. As a competitor with IFG, Farmers Rice maintains that providing this proprietary information would be detrimental to its business. Id. IFG argues that this information is relevant because it relates to Farmers Rice's motive to collude with the Port against IFG. Doc. 171, p. 24.
 
We agree that this request would require disclosure of sensitive business information and do not find the information sought proportional to the needs of this case. Under Rule 45 (d)(3)(B)(i) the court is allowed to quash a subpoena that requires disclosure of a trade secret or commercial information. Accordingly Request Number 5 on the subpoena served on Farmer's Rice is quashed.
 
In Request Number 6 IFG asks Farmers Rice to:
Identify and produce all documents reviewed by Ann Stone in preparation of her July 12, 2017 deposition.
Doc. 168, att. 4, p. 12. Farmers Rice submits that the documents Ann Stone reviewed prior to her deposition were previously produced in its response to IFG's December 28, 2016 subpoena. Doc. 168, att. 1, pp. 13-14. The only other document that Ann Stone reviewed, according to Farmers Rice, is a document entitled “What to Expect in a Deposition” which it maintains is privileged. Id.
 
IFG notes that it does not seek a copy of the privileged document “What to Expect in a Deposition” but rather any other documents reviewed in preparation for her deposition. Doc. 171, pp. 24-25.
 
As Farmers Rice maintains that it has previously responded to this request, there is nothing further for this court to consider. For these reasons the subpoena served on Farmers Rice should be quashed.
 
D. Request for Attorney's Fees
TPG and Farmers Rice move for an award of attorney's fees associated with the filing of this motion and to cover the future expenses associated with complying with the subpoenas should they not be quashed. We do not find that IFG failed to take reasonable steps to “avoid imposing undue burden or expense” and decline to award attorney's fees at this time. Further, since we determine that the subpoenas should be quashed, no attorney's fees for future expenses will be awarded.
 
III.
Conclusion
Accordingly,
 
IT IS ORDERED that the Motion to Quash [Doc. #168] is GRANTED in the following respects: the Skyhawk subpoena is quashed in its entirety; Request Numbers 9-11 on the TPG subpoena are quashed; and the Farmers Rice subpoena is quashed in its entirety. In all other respects the Motion to Quash is DENIED. The Motion for Attorney's Fees is DENIED.
 
*6 THUS DONE AND SIGNED in Chambers this 28th day of November, 2017.

Footnotes
IFG refers to an email dated March 28, 2011 from Farmers Rice CEO Jamie Warshaw to Executive Director of the Port Bill Rase and a reply email from Bill Rase to Jamie Warshaw dated March 29, 2011. These emails were sent before the lease between IFG and the Port was executed. The substance of the first email reads, “I have not been able to come up with a workable scenario whereby FRM [Farmers Rice Mill] would guarantee tonnage to the new Bulk terminal. I am still giving thought to this and have not given up on the fact that there may be a way to make it work. But for now and before your full board meeting, which I think is tonight, I wanted to convey to you that at this time we are not in a position to make any guarantees to the port or IFG.” The reply email states, “Got your message and appreciate your efforts, as well as, all. I also will continue thinking and scheming.” Doc. 171, att. 1, p. 47.
The phrase “turn up the heat” is taken from the minutes of the Board of Commissioners of the Lake Charles Harbor and Terminal District meeting held on November 16, 2015. Doc. 177, att. 1, pp. 56-62. At that meeting Jamie Warshaw, the CEO of Farmers Rice was allowed to address the Board. Id. at 56. At that meeting Mr. Warshaw was expressing his frustration with not being able to use the IFG facility to ship his company's rice. Id. at 56-57. He stated that he met with Kabir Ahmad, CEO of IFG to discuss the issue but felt as though they were at a “stalemate.” Id. Mr. Warshaw asked the Port for help to “push this ball along.” He further commented that he “does not know of any other answers that can kind of turn the heat up.” Id.