IFG Port Holdings, LLC v. Lake Charles Harbor & Terminal Dist.
IFG Port Holdings, LLC v. Lake Charles Harbor & Terminal Dist.
2018 WL 11388132 (W.D. La. 2018)
July 9, 2018
Kay, Kathleen, United States Magistrate Judge
Summary
TPG and FRM filed a motion to quash a subpoena issued by IFG to FRM's bank, Louisiana Land Bank, seeking information related to IFG's unfair trade practices claim. The court granted the motion to quash, finding that the sensitive financial information between third parties was not proportional to the needs of the case. The court declined to award attorney's fees.
Additional Decisions
IFG PORT HOLDINGS, LLC.
v.
LAKE CHARLES HARBOR & TERMINAL DISTRICT, d/b/a THE PORT OF LAKE CHARLES
v.
LAKE CHARLES HARBOR & TERMINAL DISTRICT, d/b/a THE PORT OF LAKE CHARLES
DOCKET NO. 16-cv-00146
United States District Court, W.D. Louisiana, LAKE CHARLES DIVISION
Filed July 09, 2018
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 Third Party Subpoena and Motion for Sanctions filed by The Powell Group, LLC (“TPG”) and Farmers Rice Milling Company, LLC (“FRM”). Doc. 199. The motion is opposed by IFG Port Holdings, LLC (“IFG”). For the reasons that follow the motion is GRANTED.
I.
Background
IFG issued a subpoena to FRM's bank, Louisiana Land Bank, seeking information it contends is “probative of the collusion between FRM and the Lake Charles Harbor and Terminal District d/b/a the Port of Lake Charles.” Doc. 213, p. 1. IFG claims that the information sought is relevant to its unfair trade practices claim against the Port. Id. at pp. 3-5. IFG alleges that after the Port issued default letters to IFG, Capital Farm Credit (IFG's lender), received an unsolicited offer from Nanette Noland of FRM to purchase IFG's debt. Id. at p. 2. IFG seeks all communications between any employee of Louisiana Land Bank and Nanette Noland and/or any other person with FRM which relates to:
a. IFG Port Holdings, LLC
b. The Export grain terminal located at the Port of Lake Charles
c. Mr. Kabir Ahmad
d. Capital Farm Credit
e. Contacting Capital Farm Credit to inquire about the purchase of any debt owed by IFG Port Holdings, LLC
f. Any response received from Capital Farm Credit and communicated to Ms. Noland about the purchase of any debt owed by IFG Port Holdings, LLC
g. Any bulk grain export facility at the Port of Lake Charles
Doc. 214, att. 1, p. 13.
TPG and FRM move to quash the third party subpoena because they maintain that the information requested is private, confidential, and sensitive business correspondence. Doc. 199, att. 1, pp. 2-3. They point out that the Right to Financial Privacy Act protects “any record held by a financial institution pertaining to a customer's relationship with the financial institution.” 12 U.S.C. § 3401(2). Id.
IFG opposes the motion and argues that it is not seeking sensitive business information or proprietary information related to FRM's business. Rather, it contends that it is only requesting “communications relating to IFG.” Doc. 213, p. 2.
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.
*2 As aptly noted in Hume v. Consol. Grain & Barge, Inc., 2016 WL 7385699 at *3-4 (E.D. La. Dec. 21, 2106),
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.
Id. citing 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).
We are persuaded by FRM's argument. We conclude that sensitive financial information between third parties — a bank and its customer — is not proportional to the needs of this case. Rule 45(d)(3) allows the court to quash a subpoena that requires disclosure of “privileged or protected matter.”
III.
Attorney Fees
TPG and FRM move for an award of attorney fees associated with the filing of this motion. 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. Fed.R.Civ.P. 45(d)(1).
IV.
Conclusion
Accordingly,
IT IS ORDERED that the Motion to Quash [Doc. #199] is GRANTED. The Motion for Attorney's Fees is DENIED.
THUS DONE AND SIGNED in Chambers this 9th day of July, 2018.