*1 This cause is before the Court on Respondent, CITGO Petroleum Corp.’s (“CITGO”) Motion to Hold Petroleum Logistics Service USA, Inc. (“PLS USA”) in Contempt, to Require PLS USA to Submit Devices to a Forensic Examination, and to Designate a Corporate Representative for a Deposition (the “Motion for Contempt”) [ECF No. 18], and on PLS USA's Nunc Pro Tunc Motion for Extension of Time [ECF No. 40]. The Undersigned held a hearing on both motions on January 11, 2023. [ECF No. 42]. For the reasons addressed below, CITGO's Motion is GRANTED IN PART, and PLS USA’ Motion is DENIED AS MOOT.

This matter arises from a lawsuit pending in the United States District Court in the Southern District of Texas in which CITGO has sued Panama-based Petroleum Logistics Service Corp. (“PLS”) for fraud and Racketeer Influenced and Corrupt Organizations Act (“RICO”) claims, among other claims. CITGO Petroleum Corp. v. Petroleum Logistics Service Corp., No. 4:20-cv-01820 (S.D. Tex. Oct. 13, 2021) (“Underlying Action”). Generally, in the Underlying Action, CITGO alleges PLS, and its indirect owner Jose Manuel Gonzalez Testino, PLS's indirect owner, defrauded CITGO in agreements they had entered into in which PLS was to provide CITGO with logistics services and procurement of international equipment.

As part of its effort to calculate its damages in the Underlying Action, CITGO sought non-party discovery from PLS USA, PLS's United States subsidiary. As such, on November 8, 2021, CITGO served Sergio Omana, PLS USA's registered agent, with a subpoena requesting PLS USA produce documents and designate a corporate representative to be deposed. PLS USA, however, failed to produce responsive documents or designate a corporate representative for deposition. When efforts to gain compliance failed, CITGO filed a Motion to Compel in this Court on March 14, 2022. The Undersigned granted the Motion on April 11, 2022.

PLS USA, through attorney Peter Gonzalez, finally produced documents on July 5, 2022. CITGO contends, however, that PLS USA produced only 13 documents, served untimely objections to the subpoena, and failed to designate a corporate representative or provide dates for a deposition to take place.

Consequently, on August 10, 2022, CITGO filed the instant Motion for Contempt, in which it requests this Court: (1) overrule PLS USA's objections to the subpoena; (2) hold PLS USA in contempt and impose a $500 daily fine until it complies with this Court's Order Granting its Motion to Compel; (3) order a third-party forensic examination of PLS USA's electronic devices; (4) order PLS USA to designate a corporate representative for deposition; and (5) order PLS USA to compensate CITGO for the expenses incurred in securing compliance with the subpoena. On October 11, 2022, the Undersigned issued an Order to Show Cause directing PLS USA to explain why the instant Motion should not be granted. See [ECF No. 21]. Additionally, on October 27, 2022, out of an abundance of caution, this Court entered an Amended Order to Show Cause instructing the Clerk of Court to mail a copy of the Amended Order to Show Cause to PLS USA at its corporate address and to counsel Peter Gonzalez by both email and mail. [ECF No. 22]. Further, the Undersigned ordered CITGO's counsel to serve copies of the Amended Order to Show Cause on PLS USA and counsel Gonzalez and to file a Notice of Compliance once it had done so. [Id.]. CITGO filed its Notice of Compliance on October 31, 2022. [ECF No. 24]. The Amended Order to Show Cause required PLS USA to respond by November 6, 2022. [Id.]. No response was filed.

*2 Following several delays, the Undersigned held a hearing on CITGO's Motion for Contempt on January 11, 2023. Just prior to the hearing that day, PLS USA filed its Nunc Pro Tunc Motion for Extension of Time [ECF No. 18] and, at the hearing, Counsel Gonzalez provided an explanation for the many issues and delays in this case. Counsel Gonzalez explained that the beneficial owner of PLS USA, Caracas, Venezuela-based Jose Manuel Gonzalez Hernandez (“Mr. Hernandez”), had died on December 29, 2022. Prior to that, however, Mr. Hernandez had terminated Sergio Omana's employment with PLS USA after learning Omana had fraudulently taken out loans using PLS USA's equipment and assets as collateral. Eventually, PLS USA had sued Omana in Florida state court for conversion, breach of fiduciary duties, and unjust enrichment. See Miami-Dade Circuit Court Case No. 2022-019188. Counsel Gonzalez explained he had just learned of Mr. Hernandez’ death from Mr. Hernandez's son, Alex Gonzalez. Additionally, counsel Gonzalez explained that Omana had been the individual within PLS USA whom he had dealt with, but after Omana's termination, and Mr. Hernandez's recent death, he cannot currently facilitate his client's compliance with the subpoena and this Court's orders.

CITGO raises five main arguments in its Motion for Contempt: (1) that PLS USA should be deemed to have waived all of its objections to the subpoena; (2) that PLS USA should be ordered to designate a corporate representative for deposition; (3) PLS USA should be required to submit its electronic devices for a third-party forensic examination; (4) PLS USA should be held in civil contempt and be required to pay a $500 daily fine until it complies with the subpoena and this Court's orders; and (5) CITGO should be given leave to file a Motion for attorneys’ fees and costs incurred in preparing its Motion for Contempt. See generally [ECF No. 18]. These arguments will be addressed in turn.

A. PLS USA's Objections to the Subpoena Have Been Waived

PLS USA has long ago waived any objections it has to the subpoena. Because it did not raise any objections to the subpoena, or service, for nearly six months the objections are waived.

Federal Rule of Civil Procedure 45(d)(2)(B) requires a party to serve any objections to a subpoena within fourteen days of receipt, or the date of compliance, whichever is earlier. Fed. R. Civ. P. 45(d)(2)(B). Upon objection, “[a]t anytime, on notice to the commanded person, the serving party may move the court for the district where compliance is required for an order compelling production or inspection.” Fed. R. Civ. P. 45(d)(2)(B)(i). For a subpoena seeking production of documents the place of compliance must be within 100 miles of where the recipient “resides, is employed, or regularly transacts business in person.” Fed R. Civ. P. 45(c)(2)(A). As such, subpoena-related motions directed to a non-party must be filed in the court where compliance is required, even if that court did not issue the subpoena, absent a request for transfer under Rule 45(f). See Broidy Cap. Mgmt., LLC v. Muzin, No. 22-MC-20786, 2022 WL 3356588, at *1 (S.D. Fla. Aug. 15, 2022) (noting that “[i]f the court where compliance is required is not the court that issued the subpoena, Rule 45(f) allows the compliance court to transfer the motion to the issuing court ‘if the person subject to the subpoena consents or if the court finds exceptional circumstances.’ ”). A subpoena recipient may also move to quash a subpoena, but must do so in a timely manner, which is typically understood to be prior to the date of compliance. Flynn v. Square One Distribution, Inc., No. 6:16-mc-25-Orl-37TBS, 2016 WL 2997673, at *1 (M.D. Fla. May 25, 2016). Typically, failure to timely serve written objections or move to quash results in the subpoena recipient waiving their objections. Whatley v. World Fuel Servs. Corp., No. 20-20993-MC, 2020 WL 2616209, at *3 (S.D. Fla. May 22, 2020). Objections to improper service of process are subject to waiver. See Grupo Mexico SAB de CV v. SAS Asset Recovery, Ltd., 821 F.3d 573, 575–76 (5th Cir. 2016).

Here, PLS USA was served with the subpoena on January 18, 2022. Counsel Gonzalez was provided a courtesy copy on February 7, 2022. Yet, PLS USA did not serve any written objections to the subpoena until July 5, 2022, and never moved to quash the subpoena. As such, any objections were waived long before July 5, 2022. This is true even for PLS USA's objections to service of the subpoena because it admits that it did in fact receive the subpoena, and only quibbles over the method in which it was served. See Anthony v. FDE Mktg. Grp. LLC, No. 21-mc-23345, 2021 WL 5937683, at *5 (S.D. Fla. Dec. 16, 2021) (quoting TracFone Wireless, Inc. v. SCS Supply Chain LLC, 330 F.R.D. 613, 616 (S.D. Fla. 2019)) (noting that Rule 45 only requires that service of a subpoena be “reasonably calculated to ensure receipt of the subpoena by the witness.”); Rainey v. Taylor, No. 18-24802-MC-SCOLA/TORRES, 2019 WL 1922000, at *2–3 (S.D. Fla. Apr. 30, 2019) (finding that, if the subpoenaed entity or individual actually receives the subpoena, that is sufficient to satisfy Rule 45). Further, PLS USA never indicated that it consented to transfer of the case under Rule 45(f), nor does this Court see any exceptional circumstances which would have warranted transferring CITGO's motion back to the issuing court. Consequently, PLS USA was required to comply with the subpoena and this Court's Order compelling it to do so. As such, PLS USA's objections to the subpoena are waived.

B. Counsel Gonzalez Shall Coordinate the Deposition of Non-Party Witnesses

*3 As discussed at the January 11, 2023, hearing, counsel Gonzalez cannot feasibly produce a corporate representative for deposition until he can determine who will be handling the corporation's business affairs. The troubles of PLS USA, however, is not CITGO's fault, and it should not be deprived of its right to take discovery because of PLS USA's issues. Counsel Gonzalez proposed that by January 31, 2023, he would reach out to Omana and former PLS USA employee Javier Aurrecoechea to try and coordinate their depositions. While certainly not ideal, given the unique issues of this case, it seems the best route. These depositions may enable CITGO to discover how and where PLS USA stored its corporate documents. Additionally, counsel Gonzalez will work during this time to discover who PLS USA's corporate representative will be going forward. While this approach is the best practical step at this point, counsel Gonzalez must take steps to keep CITGO apprised of his efforts to identify the corporate representative and coordinate the depositions.

C. PLS USA Shall Turn Over Electronic Devices for Third-Party Forensic Examination

Given PLS USA's apparent crises, and its contention that it has no corporate documents or emails, and complete lack of cooperation with discovery, and it's counsel's belief that the business in no longer in operation, CITGO's request for a forensic examination of whatever business records can be located is appropriate and necessary in this case.

“Generally speaking, courts do not require a forensic analysis in the absence of consent unless there has been significant non-compliance with discovery obligations.” Procaps S.A. v. Patheon Inc., No. 12-24356-CIV, 2014 WL 11498061, at *3 (S.D. Fla. Dec. 30, 2014) (internal citation omitted). Courts may compel “a party to turn over its computers for a forensic analysis only where there is a strong showing that the party (1) intentionally destroyed evidence, or (2) intentionally thwarted discovery.” In re Furstenberg Fin. SAS, No. 16-CV-60266, 2018 WL 11256048, at *3 (S.D. Fla. Oct. 22, 2018). As to the “intentionally destroyed evidence” prong “a party is found to have intentionally destroyed evidence when it purposefully destroys evidence it has a duty to produce.” Procaps S.A., 2014 WL 11498061, at *3. For the second prong, “a party intentionally thwarts discovery by violating court orders to produce, purposefully hides responsive documents and fails to initiate a reasonable process to search for, collect and produce responsive [electronically stored information].” Id.

Here, CITGO contends forensic examination is appropriate under both tests. They are half right. Although CITGO points to statements PLS USA made that might indicate that it destroyed evidence, that is insufficient to meet the first prong. There is no doubt, however, that PLS USA has intentionally thwarted discovery.

CITGO explains that that PLS USA informed it that since March 2022 PLS USA does not maintain business records—despite having been served with the non-party subpoena on January 18, 2022. [ECF No. 18 at 11]. CITGO therefore reasons that “PLS USA has effectively admitted it destroyed documents subsequent to the receipt of the subpoena,” and therefore a forensic examination is appropriate under the first test. [Id.]. While this information provides a strong indication that there has been spoilation, it is not enough to meet the first test because there is no proof that any documents have actually been destroyed.

Notably, PLS USA's filing in its litigation against Omana states that the company “provides logistical support to oil and gas companies in the Western Hemisphere, including leasing and selling industrial equipment and parts.” [ECF No. 40, Exh. 1]. When taken into consideration with the absence of any indication PLS USA has made any real effort to comply with the subpoena, and the fact that it was recently an on-going business involved in suing its corporate officer, and its implausible claim that it has no corporate or financial documents, it becomes clear PLS USA has intentionally thwarted discovery.

*4 Because of its internal issues, PLS USA cannot make the claim that it has undertaken any good faith effort to comply with the subpoena or this Court's orders. See In re Furstenberg Fin. SAS, 2018 WL 11256048, at *3 (quoting Playboy Enters. v. Welles, 60 F. Supp. 2d 1050, 1051 (S.D. Fla. 1999)) (noting that A party, or non-party in this instance, “does not intentionally thwart discovery where it undertakes a reasonable, good faith process to locate and produce documents.”). In fact, Omana's actions that gave rise to his termination and PLS USA's lawsuit against him, create the plausible inference that he may have hid PLS USA's electronic devices and other documents because they could possibly be used against him by PLS USA. As such, a forensic examination of PLS USA's electronic devices—assuming they can be found—is appropriate. PLS USA shall turn them over to CITGO so that a forensic examination of these devices can be conducted by a third-party vendor of CITGO's choosing.

D. CITGO's Request that PLS USA be Held in Civil Contempt and be Required to pay a $500 Daily Fine Until It Complies with the Subpoena

Under the circumstances of this case, if PLS USA continues to fail in meeting its discovery obligations, holding it in civil contempt and imposing a coercive daily fine until it does comply would be appropriate. There are three ways in which this Court can hold PLS USA in contempt of court: (1) Federal Rule of Civil Procedure 45; (2) Rule 37; or (3) its inherent authority. Here, Rule 45 is the most appropriate.

Civil contempt includes “those penalties designed to compel future compliance with a court order, are considered to be coercive and avoidable through obedience, and thus may be imposed in an ordinary civil proceeding upon notice and an opportunity to be heard. Neither a jury trial nor proof beyond a reasonable doubt is required.” Int'l Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821, 827 (1994). Civil contempt often employs “a per diem fine imposed for each day a contemnor fails to comply with an affirmative court order... and once the jural command is obeyed, the future, indefinite, daily fines are purged.” Id. at 829. In determining the appropriate amount of the fine, the Court must “consider the character and magnitude of the harm threatened by the continued contumacy, and the probable effectiveness of any suggested sanction bringing about the result desired.” In re Chase & Sanborn Corp., 872 F.2d 397, 400-01 (11th Cir. 1989) (internal citations omitted). A party requesting the court to hold another in contempt must establish by clear and convincing evidence that “(1) the allegedly violated order was valid and lawful; (2) the order was clear, definite and unambiguous; and (3) the alleged violator had the ability to comply with the order.” McGregor v. Chierico, 206 F.3d 1378, 1383 (11th Cir. 2000). If the requesting party satisfied this requirement “the burden shifts to the alleged contemnor to produce detailed evidence explaining why he cannot comply.” Gomez, 2014 WL 11706434, at *2 (citing Chairs v. Burgess, 143 F.3d 1432, 1436 (11th Cir. 1998)).

Rule 45(g) provides that “[t]he court for the district where compliance [with a non-party subpoena] is required ... may hold in contempt a person who, having been served, fails without adequate excuse to obey the subpoena or an order related to it.” Fed. R. Civ. P. 45(g). A non-party's failure to comply with a lawful subpoena is itself grounds for the non-party to be found in contempt. Gomez v. Mylooks, Inc., No. 13-62244-CV, 2014 WL 11706434, at *2 (S.D. Fla. June 25, 2014), report and recommendation adopted, No. 13-62244-CIV, 2014 WL 11721414 (S.D. Fla. July 28, 2014). Where a non-party has been ordered to comply with a subpoena and fails to do so “there can be little question but that the non-party is exposed to civil contempt under Rule 45(g).” Whatley v. World Fuel Servs. Corp., No. 20-20993-MC, 2020 WL 4818924, at *2 (S.D. Fla. Aug. 19, 2020) (internal quotation marks and citation omitted).

*5 Here, PLS USA has failed to comply with a lawful subpoena. Additionally, this Court's Order granting CITGO's Motion to compel was clear and unambiguous. PLS USA was to “promptly produce documents responsive to Petitioner's subpoena, designate a corporate representative to appear for deposition on PLS USA's behalf, and promptly coordinate a date for the deposition to take place.” [ECF No. 11 at 11]. PLS USA has provided no reasonable explanation for its failure to comply or argued that it is unable to do so on April 11, 2022, when the Order granting CITGO's Motion to Compel was issued.

Notwithstanding, given PLS USA's current lack of leadership, holding it in contempt and beginning a per diem fine as of the date of this Order would not produce the intended effect—compliance with the subpoena. As addressed above, counsel Gonzalez will work to remedy this situation, request PLS USA designate a corporate representative and schedule depositions of its present and/or former corporate officers with information regarding the company's books and records, and turn over the corporate electronic devices to CITGO for forensic examination. That will take time. With this in mind, the Court grants Counsel Gonzalez’ request on behalf of PLS USA at the hearing for an extension of time to comply with the subpoena and this Court's orders until March 1, 2023. Counsel shall file a report on or before March 1, 2023, stating whether PLS USA has complied. If by that date PLS USA fails to comply, it will be held in civil contempt in accordance with Rule 45(g), and a $500 daily fine to be paid into the Court's registry shall accrue until it purges its contempt through compliance by: (1) designating a corporate representative to be deposed; (2) producing responsive documents; and (3) turning over its electronic devices for forensic examination.

For the foregoing reasons, CITGO's Motion for Contempt [ECF No. 18] is GRANTED IN PART, and it is ORDERED AND ADJUDGED as follows:

DONE AND ORDERED in Chambers at Miami, Florida this 17th day of January 2023.