*1 This matter is before the Court on Nonparty Titan Communications Group, LLC's Motion to Quash Subpoena and for Protective Order. [ECF No. 85]. Having heard from the parties and reviewed the record, the Court GRANTS IN PART AND DENIES IN PART Nonparty Titan Communications Group, LLC's Motion to Quash Subpoena. [ECF No. 85].

Plaintiffs David Feingold and Michael Dazzo and Defendant Richard Cardinale were co-managing members of six special purpose investment funds collectively known as the Alternative Global Companies. [ECF No. 4 at 4]. Plaintiffs allege in the Second Amended Complaint that the business relationship began in July 2019 when Cardinale asked Feingold and Dazzo to co-manage his hedge fund, L3 Capital Income Fund, LLC. [ECF No. 102 at ¶ 12]. Feingold and Dazzo allegedly rejected the offer because they did not specialize in managing hedge funds. [ECF No. 102 at ¶ 12]. Plaintiffs claim they were only looking for funding to invest in certain ventures, including real estate and merchant cash advances. [ECF No. 102 at ¶ 15]. Plaintiffs instead proposed that their businesses could borrow money from Cardinale's fund, the L3 Capital Income Fund, and that the businesses would pay above market interest rate if the funds were lent on a nonrecourse and unsecured basis. [ECF No. 102 at ¶ 14, 15].

Cardinale allegedly accepted these terms, but with the condition that he become equal equity owner in any borrowing business entity so he could earn revenue generated by the entities. [ECF No. 102 at ¶ 16]. These borrowing business entities eventually became the Alternative Global Companies. [ECF No. 102 at ¶ 16; 47-1 at 1]. Plaintiffs allege that they agreed to these terms if Cardinale and his hedge fund, L3 Capital Income Fund, provided all record keeping, reporting, and “complete back-office services” for the Alternative Global Companies. [ECF No. 102 at ¶ 18]. These services were to be billed as administrative expenses. [ECF No. 102 at ¶ 18].

According to the Second Amended Complaint, Cardinale billed the Alternative Global Companies more than $1.3 million dollars over the course of two years. [EC No. 102 at ¶ 27]. Plaintiffs allege they paid these amounts believing they were paying Cardinale for administrative expenses, including bookkeeping and reporting services. [ECF No. 102 at ¶ 27]. Plaintiffs realized, however, that Cardinale was not performing as promised. [ECF No. 102 at ¶ 28]. Thus, Plaintiffs withdrew from the companies in January 2022 and demanded the fair value of their membership interests in the Alternative Global Companies from Cardinale. [ECF No. 102 at ¶ 43]. Plaintiffs allege they have not received their interest in the companies and Cardinale is liable for payment of fair value, breach of fiduciary duty, conversion, fraudulent misrepresentation, conspiracy to commit fraud, and civil conspiracy. [ECF No. 102 at 26–37].

Defendants moved to dismiss the Complaint, and that motion is pending before the district court. [ECF No. 120]. Defendants also served Rule 45 subpoenas on several nonparty entities directly or indirectly related to the Alternative Global Companies, such as Davick Capital, LLC (“Davick Capital”) and Titan Communications Group, LLC (“Titan”). [ECF No. 30, 34]. In support of the subpoena served on Davick Capital, Defendants claimed that the Alternative Global Companies transferred funds to Samson Funding LLC, which in turn transferred funds to Davick Capital—an entity managed by Plaintiff Feingold. Davick Capital filed a motion to quash the subpoena, which this Court granted in late 2022. [ECF No. 63]. This Court explained that “the requested discovery was of such indirect relevance that the burden occasioned by the subpoena outweighed the ordinary presumption in favor of broad disclosure.” [ECF No. 63].

*2 In support of the subpoena served on Titan, Defendants argued that the requested discovery would show that the amounts Cardinale received from the Alternative Global Companies were for services rendered by Titan that benefitted the Alternative Global Companies, and that Plaintiffs approved these payments. [ECF No. 47]. Specifically, the requested documents would justify at least $700,000.00 of the $1.3 million Cardinale claims he was properly owed from the Alternative Global Companies. According to Defendants, Titan was a financial consultant that secured investors in the L3 Capital Income Fund. [ECF No. 47]. In turn, L3 Capital provided funding for the Alternative Global Companies. [ECF No. 47-1 at 1]. Defendants argue that Titan invoiced the L3 Capital Fund for those consultation services and that those invoices were “passed on” or in other words billed to the Alternative Global Companies. [ECF No. 47].

The subpoena sought production of communications between Todd Sanders—Titan's manager—and Plaintiffs Feingold and Dazzo regarding investments received from the L3 Capital Income Fund, the Alternative Global Companies, and other related entities. [ECF No. 34-1]. The subpoena also sought information regarding the “disposition of investments made by the L3 entities” and “[p]ayments received by Titan from [Plaintiffs] David Feingold [and] Michael Dazzo, Davick Capital, LLC (including its affiliates) and/or Broad Street Global Fund[1] ....” [ECF No. 34-1 at 4].

Titan moved the Court to quash the nonparty subpoena on grounds that the request was overbroad and sought irrelevant information, including Titan's communications with its clients [ECF No. 34]. Titan also argued that the subpoena imposed an undue burden and sought privileged information. After hearing from Titan and the parties, this Court granted Titan's motion to quash without prejudice so Defendants could serve a narrower a subpoena. [ECF No. 64]. This Court found that although Defendants had sufficiently tethered their discovery request to their defense that administrate expenses paid to Cardinale were not “fraudulent”, the subpoena was overbroad and contained no time limitations. At best, Defendants were entitled only to information and transactions relevant to the period that Defendants and Plaintiffs had an ongoing business relationship, that is, from July 2019 to January 2022. [ECF No. 64]. The order stated: “Defendants may subpoena evidence from Titan Communications; however, the requests must be narrowly tailored to Defendant's stated defense regarding pass through payments to Titan Communications.” [ECF No. 64 at 6].

Defendants then served a second subpoena on Titan, seeking the production of certain documents and the deposition of Titan's representative. [ECF No. 85-1]. Titan has now filed a second motion to quash, arguing: (1) Defendants failed to properly serve the subpoena; (2) the subpoena breaches the arbitration agreement between Titan and L3 Capital Income Fund's affiliate; (3) the subpoena seeks confidential information; and (4) the subpoena is not narrowly tailored to Defendant's defense as this Court instructed. [ECF No. 85]. Defendants respond in relevant part that the second subpoena complies with the permitted purpose in the order, and the requested documents would substantiate Titan invoices that were issued to L3 Capital Management and passed on to Alternative Global Management as administrative expenses. [ECF No. 94 at 6].

The Court heard from the parties and Titan and finds that despite Defendants’ efforts to narrow the subpoena, the request places an undue burden on nonparty Titan. Thus, the Court must quash the second subpoena. The Court GRANTS IN PART AND DENIES IN PART Titan's Motion to Quash the Nonparty Subpoena for the reasons discussed below.

*3 In deciding the matter at issue, the Court must first note that neither Titan nor L3 Capital Income Fund, the company Titan contracted with, are parties in this case. The question posed here is whether Defendants are entitled under Rule 45 to subpoena several years of documents and financial information from Titan and depose a Titan representative to support Defendants’ claimed defense that monies they withdrew from Alternative Global Companies (an entity owned jointly by Plaintiffs and Defendants) were properly approved reimbursements of services rendered by Titan. If the question sounds convoluted, that is because the circumstances involved here are.

Federal Rule of Civil Procedure 45(d)(3) specifies when a court should, or must, quash a subpoena to a third-party. “The applicable legal standard depends on the nature of the documents called for by the subpoena.” In re Subpoena Dated June 18, 2020, No. 20-MC-82327-BER, 2021 WL 7540812, at *3 (S.D. Fla. Apr. 14, 2021). A Court must quash or modify a subpoena that “requires disclosure of privileged or other protected matter, if no exception or waiver applies” or “subjects a person to undue burden.” Fed. R. Civ. P. 45(d)(3)(A)(iii)–(iv). A Court may quash or modify a subpoena if it requires “disclosing a trade secret or other confidential research, development, or commercial information.” Fed. R. Civ. P. 45(d)(3)(B)(i).

The objecting party bears the burden of establishing that (1) the requested materials are privileged, otherwise legally protected, or confidential research, development, or commercial information or that (2) compliance would entail an undue burden. Id.; McNamara v. Gov't Employees Ins. Co., 8:17-CV-3060-T-23CPT, 2018 WL 8193869, at *2 (M.D. Fla. Dec. 21, 2018). But although the objecting party must establish it is entitled to the relief, Rule 45(d)(3) explicitly places the burden on the party serving the subpoena to show a substantial need for the materials that cannot otherwise be met without undue hardship. See In re Subpoena, No. 20-MC-82327-BER, 2021 WL 7540812, at *3.

“With regard to the burden imposed on non-parties in responding to discovery requests, courts consider the following factors: relevance, the requesting party's need for the documents, the breadth of the document request, and the time period covered by the request.” Great Am. Ins. Co. v. Veteran's Support Org., 166 F. Supp. 3d 1303, 1310 (S.D. Fla. 2015) (quoting Ubiquiti Networks, Inc. v. Kozumi USA Corp., 295 F.R.D. 517, 521 n. 2 (N.D. Fla. 2013)). “In balancing the need for discovery against the burden imposed on the person from whom documents are sought ‘the status of a person as a non-party is a factor that weighs against disclosure.’ ” Id.

Although Rule 45 does not identify irrelevance or overbreadth as grounds for quashing a subpoena, courts treat the scope of discovery under a subpoena the same as the scope of discovery under Rule 26. Coleman v. Lennar Corp., No. 18-MC-20182, 2018 WL 3672251 (S.D. Fla. June 14, 2018). Under Rule 26, “[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). When discovery appears relevant on its face, “the party resisting the discovery has the burden to establish facts justifying its objections by demonstrating that the requested discovery (1) does not come within the scope of relevance as defined under Fed. R. Civ. P. 26(b)(1) or (2) is of such marginal relevance that the potential harm occasioned by discovery would outweigh the ordinary presumption in favor of broad disclosure.” Wagner v. Viacost.com, No. 06-81113-CIV, 2007 WL 1879914, at *1 (S.D. Fla. June 29, 2007). But “when relevancy is not apparent, the burden is on the party seeking discovery to show the relevancy of the discovery request.” Am. Fed'n of State, Cnty. & Mun. Emps. (AFSCME) Council 79 v. Scott, 277 F.R.D. 474, 477 (S.D. Fla. 2011) (quoting Dean v. Anderson, 2002 WL 1377729, at *2 (D. Kan. June 6, 2002)).

*4 In this case, Defendants have served a Rule 45 subpoena with the intent of deposing Titan's representative about consultation services that Titan—a nonparty— provided to L3 Capital Income Fund's affiliates—L3 Capital Advisors LLC and L3 Capital Management, LLC. (collectively “L3 Entities”) [ECF No. 85-1 at 9]. Defendants attached to the second subpoena several exhibits, including invoices that Titan sent to L3 Capital Management sometime between July 2019 and January 2022. Defendants essentially argue they were entitled to reimbursement for payments made by the L3 Capital Management to Titan. This is so, they say, because part of the consultation services billed to L3 Capital Management were actually provided to the Alternative Global Companies, and Plaintiffs approved such payments.

Although Defendants have indeed limited their request to a three-year period, the second subpoena appears to request confidential financial and commercial information that would likely entail an undue burden to Titan and falls short in establishing relevance and substantial need. And factors such as Titan's nonparty status weigh against disclosure. First, the subpoena and exhibits on their face do not appear relevant to Defendants’ defense that the Titan invoices support at least $700,000 of the disputed $1.3 million. The Titan invoices make no mention of the Alternative Global Companies. A review of Composite Exhibit 1 indicates the Titan invoices were issued by Titan to Richard Cardinale at L3 Capital Management. [ECF No. 85-1 at 14–27]. Similarly, the letter of agreement signed by Todd Sanders names L3 Capital Advisors as the party receiving the consultation services and not the Alternative Global Companies. [ECF No. 85 at 66]. The information requested from Titan is only relevant to the extent that Titan knew of any agreements between Plaintiffs and Defendant that Defendant would be reimbursed for Titan's work. While Titan's knowledge or understanding of the parties’ agreement would be relevant, Titan's development of and communications with its clients would clearly fall under “trade secret or other confidential research, development or commercial information” as defined in Rule 45(d)(3)(A). As such, Defendants must show a substantial need for the materials that could not be otherwise be met without undue hardship.

The Court finds that compliance with the subpoenaed documents would impose an undue burden on nonparty Titan. Thus, this Court must quash or modify the subpoena. See Fed. R. Civ. P. 45(d)(3)(A)(iii)–(iv). The need for “back up material supporting the Titan invoices” is not apparent because L3 Capital Management, as the entity purportedly making payments on behalf of the Alternative Global Companies, is already privy to this information. Per the subpoena, Defendants already possess several invoices and letters of agreements, and yet they want Titan to “confirm” or support the transactions by providing their own documentation. This is simply duplicative. If L3 Capital Management was invoiced for these services, it follows that Cardinale would have the evidence to establish that investments procured by Titan were received by Alternative Global Companies. And most importantly, that he was entitled to reimbursement of the amounts paid to Titan out of Alternative Global Companies’ funds.

As this Court has noted before, Titan's status as a nonparty militates in favor of nondisclosure. See [ECF Nos. 64, 63]. The Eleventh Circuit has noted that in determining whether a subpoena imposes an undue burden, courts may consider the expense and inconvenience to a nonparty. See Jordan v. Comm'r, Mississippi Dep't of Corr., 947 F.3d 1322 (11th Cir. 2020). After reviewing the second subpoena and the attached documentation, it is clear to this Court that requiring Titan to produce duplicative documents is inconvenient and unnecessary. In other words, the Court has balanced Defendants’ and Titan's interests and finds that the second subpoena imposes an undue burden.

*5 The Court acknowledges that any information that Titan may have regarding Defendants’ purported agreement with Plaintiffs regarding reimbursement of Titan's invoices would be entirely relevant to Defendants’ defense. And, Defendants point to a string of text messages purportedly showing that Plaintiff Michael Dazzo approved payments directed to Titan and a set of wire transfers purportedly made to Todd Sanders by “Alternative Global Mgt.” [ECF No. 85-1 at 44, 110]. But the Court cannot ascertain from these vague references that the Titan invoices represent consultation services to the Alternative Global Companies. The documents attached to the subpoena indeed contain references to Titan, L3 Capital Management, and the Alternative Global Companies, but Defendants cannot explain how these documents are linked at all.

The only deposition topic that appears to be relevant and not overbroad to nonparty Titan would be the information included in Deposition Topic No. 7: “Communications with Dazzo or Feingold Relating to the Titan Invoices, the Titan Wire Transfers, the Exemplar Titan Approvals, the Titan Contract, the Titan-Amaniera Contract, and the Titan-Sanders Contract.” Furthermore, Topic No. 7 may be explored only to extent that the responses are non-privileged communications and non-privileged documents that establish or relate to any purported agreement that Plaintiffs Dazzo or Feingold would reimburse Defendant Cardinale or the L3 Capital Income Fund for Titan's invoices or wire transfers. In sum, outside of this narrow area of inquiry, Defendants have failed to satisfy their burden that the requested discovery is relevant. See Fed. R. Civ. P. 26.

For these reasons, the Court GRANTS IN PART AND DENIES IN PART Nonparty Titan Communications Group, LLC's Motion to Quash Subpoena. [ECF No. 85]. The Court modifies the subpoena as set forth in the previous paragraph.

DONE AND ORDERED in Chambers at Miami, Florida this 24th day of April 2023.