Petition for Writ of Certiorari — John Nypl, Petitioner v. JPMorgan Chase & Co., et al.

Supreme Court briefNov 30, 2020

Ask Donna

What actually matters in this document.

Text

No. _____

IN THE

Supreme Court of the United States

_______________

JOHN NYPL,

JPMORGAN CHASE & CO. et al.,

Petitioner,

Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals for the Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

JOSEPH M. ALIOTO

Counsel of Record

JAMIE MILLER

ALIOTO LAW FIRM

One Sansome Street, 35th Floor

San Francisco, CA 94104

(415) 434-8900

jmalioto@aliotolaw.com

Counsel for Petitioner

November 30, 2020

QUESTIONS PRESENTED

Whether this Court should decide an important question of federal law that

has not been, but should be, settled by this Court, with regard to the applicable

burden on a moving-party seeking to quash the subpoena of a non-party witness

under Fed. R. Civ. P. 45(d)(3).

Whether, under Fed. R. Civ. P. 45, the court where subpoena compliance is

required must weigh and/or defer to the opinion of the court where the action is

pending in ruling on a motion to quash the subpoena of a non-party witness.

PARTIES TO THE PROCEEDINGS

Petitioners in this Court, Plaintiffs-Appellants below are:

JOHN NYPL, AN INDIVIDUAL; LISA MCCARTHY, AN INDIVIDUAL;

MAD TRAVEL, INC. A.K.A. TRAVEL LEADERS; VALARIE JOLLY, AN

INDIVIDUAL;

EVERYWHERE,

INC.,

CORPORATION;

WILLIAM

RUBINSOHN DOING BUSINESS AS RUBINSOHN TRAVEL ON BEHALF OF

THEMSELVES AND THOSE SIMILARLY SITUATED.

Respondents in this Court are:

Defendants-Appellees

JP MORGAN CHASE & CO; J.P. MORGAN CHASE BANK, N.A.; BANK OF

AMERICA CORPORATION; BANK OF AMERICA N.A.; HSBC BANK USA, N.A.;

HSBC NORTH AMERICAN HOLDINGS, INC.; CITIGROUP, INC.; CITIBANK,

N.A.; CITICORP.; UBS AG, BARCLAYS PLC; BARCLAYS CAPITAL, INC.; ROYAL

BANK OF SCOTLAND, PLC; and

Real-Party-In-Interest-Appellee

SIMON FOWLES; and

Movant-Appellee:

Wells Fargo.

RULE 29.6 CORPORATE DISCLOSURE STATEMENT

Pursuant to Supreme Court Rule 29.6, no petitioner has a parent company

and no publicly held company owns 10% or more of any petitioner’s stock.

iii

RELATED CASES

Nypl v. JPMorgan Chase & Co., Case No., 19-15293 (9th Cir. Apr. 28, 2020).

Nypl v. JPMorgan Chase & Co., Case No., Case No., 3:18-mc-80209-JCS

(N.D. Cal. Jan. 18, 2019).

Nypl, et al. v. JPMorgan Chase & Co., et al., Case No. :15:cv-9300 (S.D.N.Y.

case is pending).

In re Foreign Exchange Benchmark Rates Antitrust Litigation, 1:13-cv-07789LGS (S.D.N.Y. case is pending).

TABLE OF CONTENTS

QUESTIONS PRESENTED ........................................................................................... i

PARTIES TO THE PROCEEDINGS ............................................................................ ii

RULE 29.6 CORPORATE DISCLOSURE STATEMENT............................................ ii

RELATED CASES ........................................................................................................ iii

TABLE OF AUTHORITIES ......................................................................................... vi

REQUESTED RELIEF .................................................................................................. 1

OPINIONS BELOW ...................................................................................................... 1

JURISDICTION............................................................................................................. 1

STATUTORY PROVISIONS INVOLVED .................................................................... 1

STATEMENT OF THE CASE....................................................................................... 2

REASONS FOR GRANTING THE PETITION .......................................................... 12

THE DECISIONS OF THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT AND THE LOWER

COURT SO FAR DEPART FROM THE ACCEPTED AND

USUAL COURSE OF JUDICIAL PROCEEDINGS AND

PRESENT AN IMPORTANT QUESTION OF FEDERAL LAW

REGARDING THE BURDEN ON THE MOVING PARTY ON A

MOTION TO QUASH THE SUBPOENA OF A THIRD-PARTY

WITNESS ............................................................................................... 12

A. The Ninth Circuit and the Lower Court in this Case Refused

to Give Any Weight to the Decision of the Court Where the

Action is Pending in Contravention to Fed. R. Civ. P. 45 and

the Federal Circuit’s Decision in Truswal .......................................... 16

CONCLUSION............................................................................................................. 18

INDEX TO APPENDICES

Memorandum in the United States Court of Appeals for the Ninth Circuit

(April 28, 2020) ................................................................................................ App. 1

Order Denying Plaintiff’s Motion for Relief from Magistrate Judge’s NonDispositive Pre-Trial Order in the United States District Court for the

Northern District of California San Jose Division

(February 13, 2019) ......................................................................................... App. 6

Minute Order in the United States District Court for the Northern District of

California San Jose Division (January 18, 2019)........................................... App. 8

Order Denying Rehearing in the United States Court of Appeals for the

Ninth Circuit (July 1, 2020) ............................................................................ App. 9

Transcript of Motion Hearing (January 18, 2019) ............................................ App. 11

TABLE OF AUTHORITIES

Cases

Mount Hope Church v. Bash Back!,

705 F.3d 418 (9th Cir. 2012) ............................................................................. 16

Truswal Systems Corp. v. Hydro-Air Engineering, Inc,

813 F.2d 1207 (Fed. Cir. 1987) ................................................. 14, 15, 16, 17, 18

Virginia Dept. of Corrections v. Jordan,

921 F.3d 180 (4th Cir. 2019) ............................................................................. 12

Wiwa v. Royal Dutch Petroleum,

392 F.3d 812 (5th Cir. 2004) ....................................................................... 15, 16

Statutes

28 U.S.C. § 1254(1) ........................................................................................................ 1

15 U.S.C. § 1 ................................................................................................................... 3

Rules

Fed. R. Civ. P. 26(b)(1) ................................................................................................. 17

Fed. R. Civ. P. 34(a) ..................................................................................................... 16

Fed. R. Civ. P. 45 .......................................................................................... i, 12, 16, 18

Fed. R. Civ. P. 45(c)(1) ................................................................................................. 16

Fed. R. Civ. P. 45(d)(3).............................................................................................. i, 12

Fed. R. Civ. P. 45(d)(3)(B)(i)-(ii) .................................................................................... 1

Fed. R. Civ. P. 45(f) ...................................................................................................... 18

Fed. R. Civ. P. 72(a) ..................................................................................................... 11

REQUESTED RELIEF

Petitioners respectfully pray that a writ of certiorari issue to review the

decision of the United States Court of Appeals for the Ninth Circuit in this case,

that this Court reverse the decision of the Court of Appeals.

OPINIONS BELOW

The opinion of the Court of Appeals is Appendix to Petition for Writ of

Certiorari (“App.” 1-5). The opinions of the district court (App. 7-8 and App. 11-26)

are unreported.

JURISDICTION

The Court of Appeals rendered its decision on April 28, 2020. (App. 1-5). The

court denied a timely Petition for Rehearing En Banc on July 1, 2020. (App. 9-10).

The jurisdiction of this Court is invoked under 28 U.S.C. § 1254(1).

Petitioners now file this Petition for Writ of Certiorari on November 30, 2020.

STATUTORY PROVISIONS INVOLVED

Fed. R. Civ. P. 45(d)(3)(B)(i)-(ii) provides, in pertinent part, as follows:

To protect a person subject to or affected by a subpoena, the court for the

district where compliance is required may, on motion, quash or modify the subpoena

if it requires:

(i) disclosing a trade secret or other confidential research, development, or

commercial information; or

(ii) disclosing an unretained expert’s opinion or information that does not

describe specific occurrences in dispute and results from the expert’s study

that was not requested by a party.

STATEMENT OF THE CASE

The Underlying Action

The Plaintiffs herein filed the underlying action in the United States District

Court for the Northern District of California in May 2015, which was ultimately

transferred to the United States District Court for the Southern District of New

York in November 2015. That case is Nypl v. JP Morgan Chase & Co. et al.,

Southern District of New York Case No. 15-cv-9300 (LGS). (See S.D.N.Y. Dkt. Nos.

1 and 53).

The operative version of Plaintiffs’ Complaint, the Third Amended

Complaint (“TAC”), was filed on August 10, 2017. [Dkt. No. 3 at p. 27].

Plaintiffs John Nypl, et al. (“Plaintiffs”) brought suit on behalf of a

nationwide putative class of purchasers and end-users of foreign currency

transactions from banks at benchmark exchange rates fixed, rigged, and

manipulated by Bank of America Corporation, Bank of America, N.A. (collectively

“Bank of America”), JP Morgan Chase & Co, J.P. Morgan Bank, N.A., JP Morgan

Chase Bank, N.A., (collectively “Chase”), HSBC Bank USA, N.A., HSBC North

American Holdings (collectively “HSBC”), Citigroup, Inc., Citicorp, Citibank, N.A.,

(collectively “Citibank”), UBS AG (“UBS”), Barclays PLC, Barclays Capital, Inc.,

(collectively “Barclays”), Royal Bank of Scotland, PLC (“RBS”), and other unnamed

co-conspirators, pursuant to a conspiracy, combination and agreement to fix, rig and

manipulate foreign currency benchmark exchange rates in violation of section 1 of

the Sherman Act (15 U.S.C. § 1). [Dkt. No. 3 at p. 27; TAC at p. 1]. The Nypl

Plaintiffs seek injunctive relief and monetary damages, including treble damages, to

compensate them for overcharge damages caused by reason of the unlawful

conspiracy. (Id.).

The TAC references, attaches, and incorporates factual allegations derived

from guilty pleas entered into by the defendant banks and other documents. [Dkt.

No. 3 at pp. 39-42, 58-138; TAC, ¶¶ 43- 56]. The unlawful conduct described in the

TAC and its attachments allege that between December 2007 and January 2013,

euro-dollar traders at defendant banks and other unnamed co-conspirators– selfdescribed members of “The Cartel” – used an exclusive electronic chat room and

coded language to manipulate benchmark exchange rates. [Dkt. No. 3 at pp. 37, 6061, 63-64, 89-95, 110, 127-128]. Those rates are set through, among other ways, two

major daily “fixes,” the 2:15 p.m. European Central Bank fix and the 4:00 p.m.

World Markets/Reuters fix. [Dkt. No. 3 at p. 41, 63-64, 89-91, 125-127]. Third

parties collect trading data at these times to calculate and publish a daily “fix rate,”

which in turn is used to price orders for many large customers. Id. “The Cartel”

traders coordinated their trading of U.S. dollars and euros to manipulate the

benchmark rates set at the 2:15 p.m. and 4:00 p.m. fixes in an effort to increase

their profits. Id. The traders also used their electronic chats to manipulate the

euro-dollar exchange rate in other ways. Members of “The Cartel” manipulated the

euro-dollar exchange rate by agreeing to withhold bids or offers for euros or dollars

to avoid moving the exchange rate in a direction adverse to open positions held by

co-conspirators. Id. By agreeing not to buy or sell at certain times, the traders

protected each other’s trading positions by withholding supply of or demand for

currency and suppressing competition in the FX market. Id.

While the TAC identifies specific defendant banks, it further alleges that,

“various persons, firms, corporations, organizations, and other business entities,

some unknown and others known, have participated as co-conspirators in the

violations alleged and have performed acts in furtherance of the conspiracies.

Plaintiffs may seek leave to amend this complaint to add the co-conspirators, known

and unknown as Defendants.” [Dkt. No. 3 at p. 37; TAC, ¶ 37].

Fowles’ Complaint

On April 11, 2018, Appellee Simon Fowles filed a Complaint against Wells

Fargo Bank in San Francisco Superior Court, which was removed to the Northern

District of California and then later remanded to Superior Court. [Dkt. No. 3 at pp.

140- 152]. Fowles’ Complaint alleges, inter alia:

Simon Fowles [the subpoenaed deponent] joined ... Wells Fargo, Inc ...

in April 1996 as a Senior Foreign Exchange (FX)Trader. In 1998 he

was promoted to Head of FX Trading in San Francisco. During [Mr.

Fowles] twenty-one year and seven-month tenure with Wells Fargo, he

was promoted to Executive Vice President, managed a global team of

up to 65 traders, and was part of the FX senior management team.

***

Plaintiff had made repeated, strident, clear and unambiguous

complaints to many members of the Well[s] Fargo’s upper level

management team about the significant risks of illegal activity, mail

and wire fraud, unlawful profiteering, and regulatory violations that

would inevitably and certainly result from the compensation plan used

by Wells Fargo to compensate members of the FX Sales and Trading

Teams.

[Dkt. No. 3 at pp. 140-141; Fowles Complaint, ¶¶ 1, 3]. Fowles continued to allege

that:

In mid-September of 2017, [Fowles] made it very clear to upper

management that he intended to inform federal regulators of the

significant ethical, legal, and regulatory issues he had noted and been

complaining about concerning the FX Sales teams’ use of the cashbased incentive program...”

[Dkt. No. 3 at pp. 146-147].

Mr. Fowles was terminated by Wells Fargo Bank, along with other FX

executives on October 16, 2017.

[Dkt. No. 3 at pp. 141 and 146-148, Fowles

Complaint, ¶¶ 2, and 24-26].

The First Subpoena

When Plaintiffs discovered the Fowles Complaint, Plaintiffs’ counsel made

multiple meet and confer telephone calls to Mr. Fowles’ attorney, Daniel Feder,

receiving assurances from Mr. Feder’s secretary that Mr. Feder would return the

telephone calls, but he never did. [Dkt. No. 11 at p. 2; Winters Decl. ¶ 4]. As a

result, on October 12, 2018, Plaintiffs were obliged to serve Mr. Fowles with a

subpoena at his residence in Petaluma, California, near San Francisco with notice

to all Defendants for the taking of Mr. Fowles’ deposition on November 28, 2018 at

10:00 a.m. at the Offices of Nypl Plaintiffs’ counsel in San Francisco, California.

[Dkt. No. 11 at pp. 2 and 6-19; Winters Decl. ¶ 4 and Exhibit A].

The subpoena at issue sought testimony and documents from whistleblower

Simon Fowles, a resident of the Northern District of California, and the former

Head of FX (“foreign currency”) trading at Wells Fargo Bank, N.A. The subpoena

sought the following information from Mr. Fowles:

Schedule A. Topics of Deposition - Topic No. 1: “The reasons given by

Mr. Simon Fowles in support of his complaint filed on April 11, 2018.”

Schedule B. Requests for Documents and Things - Request No. 1 - “any

and all documents, things, communications, and information that

support his allegations, including notes, memoranda, or other

documents.”

[Dkt. No. 11 at pp. 16-17].

The Southern District of New York Compelled the Deposition of Mr. Fowles and

then Rescinded Its Order Because the New York Court Believed it Did not Have

Jurisdiction to Compel Mr. Fowles’ Deposition in California

October 22, 2018, Mr. Feder sent Plaintiffs’ counsel an e-mail objecting to the

Subpoena, claiming that, Fowles has no knowledge of the cartel chatroom and that

“Plaintiff has no knowledge, documentation, communications, information, etc., that

relates to FX benchmark rate fixing within the FX market.” [Dkt. No. 11 at p. 23;

Winters Decl., Exhibit B, at p. 3]. On October 24, 2018, Mr. Feder served Plaintiffs’

counsel an Objection to the Subpoena to Simon Fowles, containing, for the most

part, boilerplate objections. [Dkt. No. 11 at pp. 26-28; Winters Decl. Exhibit C]. Mr.

Fowles’ Objection did not contain a declaration or sworn affidavit, and no such

document from Mr. Fowles exists in the record.

In the face of Fowles’ objection, on November 13, 2018, Plaintiffs’ counsel

filed and serve a pre-conference motion in the underlying action to enforce the

subpoena seeking testimony and documents from Mr. Fowles. [Dkt. No. 11 at pp.

30- 35; Winters Decl., Exhibit D]. On November 14, 2018, the Court entered an

order requiring Plaintiffs to submit a declaration with the facts outlined in its preconference motion.

[Dkt. No. 11 at p. 40; Winters Decl. Exhibit E].

In that

declaration, Plaintiffs established that:

Discovery in the Nypl action has revealed hundreds of pages of

documents that show that Wells Fargo Bank per Thomas Kiefer was

an active participant in the FX chat rooms with competitor banks in

which the manipulation and price-fixing of foreign exchange rates took

place. (A sample of some of the beginning Bates numbers for these

documents are RBS_NYPL,0030046 etc., RBS_NYPL-0030099 etc.,

RBS_NYPL-0031417 etc.).

[Dkt. No. 11 at p. 4; Winters Decl. ¶ 8].

On November 19, 2018, counsel for Mr. Fowles, Daniel Feder filed a letter on

behalf of Mr. Fowles claiming Fowles has no personal knowledge related to the

Plaintiffs’ claims. [S.D.N.Y. Dkt. No. 374]. Notwithstanding Mr. Fowles’ claims, on

November 20, 2018, the New York Court issued an order granting Plaintiffs’ Motion

to Compel the deposition of Fowles and further ordered Mr. Fowles to produce the

documents requested in Schedule B of the Subpoena. [Dkt. No. 3 at p. 154]. The

Court ordered Mr. Fowles to submit a letter with his objections, including any

claims of privilege, to the deposition or subpoena duces tecum on or before

November 23, 2018. Id.

Instead, on November 23, 2018, Wells Fargo, not Fowles, filed a letter

objection. In that objection, Wells Fargo contended that, “the Federal Rules do not

authorize this Court to compel compliance in another federal judicial district.” [Dkt.

No. 3 at p. 157]. Wells Fargo also claimed that the information sought was not

relevant to the proceedings and purportedly implicated sensitive and confidential

information of Wells Fargo. [Dkt. No. 3 at pp. 158-159].

On November 26, 2018, Judge Schofield of the Southern District of New York,

apparently persuaded by Wells Fargo’s arguments, rescinded her November 20,

2018, Order, because, “In this case, the appropriate district to bring a motion to

compel is the Northern District of California.”

[Dkt. No. 3 at p. 162].

The

November 20 Order was not rescinded on the basis that the Subpoena sought

irrelevant information.

The Second Subpoena

On November 27, 2018, the Nypl Plaintiffs served a second subpoena on

Simon Fowles setting his deposition at Nypl Plaintiffs’ counsel’s office in San

Francisco, California, within 100 miles of his residence in Petaluma, California, at

10:00 a.m. on December 19, 2018, with Notice thereof served on all Nypl

Defendants. The Subpoena listed the following deposition topics and requested the

following documents:

Schedule A. Topics of Deposition-Topic No. 1: The reasons given by Mr.

Simon Fowles in support of his complaint filed on April 11, 2018.

Schedule B. Requests for Documents and Things - Request No. 1 - “any

and all documents, things, communications, and information that

support his allegations, including notes, memoranda, or other

documents.”

[Dkt. No. 11 at pp. 58-70].

Appellees’ Motion to Quash and Plaintiffs’ Motion to Compel

On November 28, 2018, Wells Fargo, joined by Fowles, filed a Motion to

Quash the Subpoena in the United States District Court for the Northern District of

California, Case No. 18-mc-80209-JCS. [Dkt. No. 1 at pp. 1-13; Dkt. No. 2 at pp. 13; Dkt. No. 3 at pp. 1-175]. On December 5, 2018, the Nypl Plaintiffs filed an

Opposition to the Motion to Quash and a Motion to Compel the deposition of Fowles

and the production of the requested documents. [Dkt. No. 6 at pp. 1-10; Dkt. No. 11

at pp. 1-70]. On December 17, 2018, Fowles joined in Wells Fargo’s Opposition to

Plaintiffs’ Motion to Compel and in Wells Fargo’s Motion to Quash. [Dkt. No. 15].

On December 19, 2018, Wells Fargo filed its Opposition to Plaintiffs’ Motion to

Compel and its Reply in Support of its Motion to Quash. [Dkt. Nos. 17 and 18]. On

December 21, 2018, Plaintiffs filed a Reply Brief in Support of their Motion to

Compel. [Dkt. No. 18 at pp. 1-5].

The Ruling of the Magistrate Judge

A hearing was held before Magistrate Judge Joseph C. Spero on January 18,

2019. [App. 11-27; 1/28/19 Hrg. Tr.]. Magistrate Judge Spero granted the Motion to

Quash and made no reference to Plaintiffs’ Motion to Compel, holding that:

The subpoena issue is very simple in scope. It seeks topics -- it seeks to

have a deposition of Mr. Fowles about the – a basis for his allegations

in his April 11th, 2011 wrongful termination complaint against the

bank and documents that support those allegations.

The topic of the Southern District action, the Nypl action, is a claim of

price fixing in the benchmark exchange rates for foreign currency, the

FX benchmarks. The allegation is that the conspirators coordinated

their trades in connection with the two daily fixes and another action

in connection with the two daily fixes like withholding bids in order to

manipulate that price. The topic of the Fowles complaint has nothing

to do with that. The topic of the Fowles complaint is wrongful

termination and retaliation for opposing alleged illegal conduct by the

bank.

The allegation is that the compensation plan for the foreign exchange

sales persons -- can’t remember exactly what they were called, but -was based on revenue which would result in significant risk of illegal

conduct such as not adhering to a customer’s spread agreement or

overcharging the client of the bank on FX transactions, illegally

increasing the spreads, and customers at year-end to -- so they can

make their numbers, and the Department of Justice has been asking

questions about one particular transaction, whether it generated

revenue for the bank that should have been shared with the customers.

The allegations of that complaint do not concern price fixing of the

benchmark rate for foreign exchange currency. Period.

The unlawful conduct that’s referred in the Fowles’ complaint is

unrelated to that -- that matter of the benchmark price and is not

related to a price-fixing conspiracy.

The fact that -- just as an aside -- that another employee other than

Mr. Fowles -- I think his name is Keefer (ph) -- participated in the chat

room where non -- employees of other banks engaged in price fixing,

not this particular bank – Wells Fargo -- it does not make the

deposition or the documents relevant. First of all, it’s not Mr. Fowles

and it’s not a topic of Mr. Fowles’ complaint, more particularly, which

is all you have subpoenaed. And there’s no connection between Mr.

Fowles and the chat room and, you know, we’re not here to discuss

whether Mr. Keefer can be deposed, but there’s not even an effort to

show that what Mr. Keefer did in the chat room had anything to do

with illegal activity.

***

All right. Tentative is confirmed. Motion is granted. The subpoena is

quashed.

[App. 14:10-5:25 and 23:21-22] [emphasis added].

Objection to the Magistrate Judge’s Ruling

On February 1, 2019, pursuant to Fed. R. Civ. P. 72(a) and Civil Local Rule

72-2, the Nypl Plaintiffs filed a Motion for Relief from Non-Dispositive Pretrial

Order of a Magistrate Judge. [Dkt. Nos. 23; 23-1; 23-2; 23-3]. On February 13,

2019, that Motion was denied by District Judge Beth Labson Freeman on the

following grounds:

Judge Spero noted that “[t]he topic of the Fowles complaint has

nothing to do with [Plaintiff’s action].” See Hearing Transcript at 4:21–

22. Judge Spero thoroughly explained how and why the respective

actions are different. See id. at 4:15–5:13. Judge Spero therefore

reasoned that deposition of Simon Fowles was not warranted because

“[t]he allegations of [the Fowles] complaint do not concern [the

allegations of Plaintiff’s complaint].” See id. at 5:9–10. In other words,

Judge Spero found that “just because [Fowles is] involved in the

exchange rate business and he blew the whistle on Wells Fargo with

respect to an aspect of the exchange rate business [has nothing] to do

with price fixing [as alleged by Plaintiff].” See id. at 7:19–23. This

Court agrees with Judge Spero’s conclusion that Plaintiff’s counsel did

not demonstrate the relevance of the Fowles deposition and show that

it was more than a fishing expedition. See id. at 14:19–15:4.

[App. 6-7].

On February 15, 2019, Plaintiffs filed a Notice of Appeal. [Dkt. No. 25].

On April 28, 2020, the Ninth Circuit affirmed the decision of the lower court.

[App. 1-15]. The Ninth Circuit denied Plaintiffs’ Petition for rehearing on July 1,

2020. [App. 9].

REASONS FOR GRANTING THE PETITION

THE DECISIONS OF THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT AND THE LOWER

COURT SO FAR DEPART FROM THE ACCEPTED AND USUAL

COURSE OF JUDICIAL PROCEEDINGS AND PRESENT AN

IMPORTANT QUESTION OF FEDERAL LAW REGARDING

THE BURDEN ON THE MOVING PARTY ON A MOTION TO

QUASH THE SUBPOENA OF A THIRD-PARTY WITNESS

The primary basis for the Respondents’ Motion to Quash was that it posed

an “undue burden” because the subpoena sought information irrelevant to the

underlying proceedings. [Dkt. No. 1 at p. 9]. Under Fed R. Civ. P. 45, on a

motion to quash, the moving party bears the burdens of proof and persuasion, not

the requesting party. 1

See Fed. R. Civ P. 45(d)(3) and Virginia Dept. of

Corrections v. Jordan, 921 F.3d 180, fn.2. (4th Cir. 2019) (“We do not mean to

imply that, on a motion to quash, the requesting party bears the burdens of proof

and of persuasion. The moving party bears those burdens.” emphasis added.)

At the hearing, the lower court turned that burden on its head:

1 At the hearing, the lower court ruled only on the Motion to Quash filed by Wells Fargo and joined

by Fowles. [App. 14:10-0015:25 and 23:21-22; Tr. p. 4:10-5:25 and 13:21-22]. It never explicitly ruled

on Plaintiffs’ pending Motion to Compel.

ALIOTO: Well, they’ve done none of that, so Your Honor has nothing

in front of the Court by them except their lawyer’s argument – no

affidavit, no disclaimer, no document, no document offered.

THE COURT: Well, of course the burden’s on you, not them.

MR. ALIOTO: The burden on me is to ask for discovery.

THE COURT: No.

MR. ALIOTO: And –

THE COURT: That’s not -- that’s not the burden. The burden is cause.

You have to tell me why this is relevant and not overburdensome and

just a fishing expedition with respect to a non-party. That’s your

burden.

MR. ALIOTO: A fishing expedition, Your Honor?

THE COURT: Uh-huh.

[App. 24:10-25:4; (1/18/19) Hrg. Tr. 14:10-15:4].

Rule 45(d)(3) authorizes parties and non-parties to file “timely” motions to

quash subpoenas that “subject[] a person to an undue burden.”

Below, the

Petitioners argued that the subpoena presented an undue burden because it

requested information irrelevant to the underlying action. [Dkt. No. 1 at p. 10]. By

claiming that a subpoena subjects a person to an undue burden because it seeks

irrelevant information, a moving party cannot shift its burden to the requesting

party. Yet, that is precisely the approach the Ninth Circuit sanctioned here. The

lower court conducted an erroneous relevance analysis and stopped the inquiry

there.

Rather, the lower court should have employed a balancing test to

determine, as a whole, whether the subpoena of Fowles was unduly burdensome.

The Federal Circuit case, Truswal Systems Corp. v. Hydro-Air Engineering,

Inc, 813 F.2d 1207 (Fed. Cir. 1987) conflicts with the Ninth Circuit’s decision. In

Truswal, Hydro-Air, a non-party, moved to quash a subpoena served on it by the

plaintiff Truswal under Rule 45, on similar grounds to those here, that

“the

information sought is not reasonably calculated to lead to the discovery of

admissible evidence in the pending litigation, and that the discovery of such

information would be unreasonable, unduly oppressive and burdensome.” Id. at

1208. The Truswal court explained that in moving to quash, Hydro-Air, “thus

undertook the burden of showing that the subpoena is unreasonable and

oppressive. ‘The burden is particularly heavy to support a ‘motion to quash as

contrasted to some more limited protection. (citations omitted.)’”

Id. at 1210.

Truswal articulated a balancing test on a motion to quash as follows: “The district

court must balance ‘the relevance of the discovery sought, the requesting party’s

need, and the potential hardship to the party subject to the subpoena.’ Heat &

Control, Inc., 785 F.2d at 1024, 228 USPQ at 931 (citing Deitchman v. E.R. Squibb

& Sons, Inc., 740 F.2d 556, 560, 564 (7th Cir.1984)); 5A Moore’s Federal Practice, ¶

45.05[3], at 45–44.”

The court in Truswal reversed the lower court’s ruling

quashing the subpoena, explaining that:

Nothing in the order indicates that any balancing was done between

relevancy of and Truswal’s need for the information sought, on the one

hand, and Hydro-Air’s potential hardship on the other hand. Nor did

the district court say whether it considered the subpoena

“unreasonable or oppressive.” Fed.R.Civ.P. 45(b)(1). Nor did the

district court refer to payment of costs. Fed.R.Civ.P. 45(b)(2). Nor did

the district court articulate any of the concerns expressed in Rule

26(b)(1)(i), (ii), or (iii). Nor does the order refer at any point to the

potential for use of a protective order under Rule 26(c).

Id. at 1211. Similarly, here no balancing test was ever undertaken before the lower

court quashed the subpoena. Further, just as in Truswal, the lower court did not

say that it considered Plaintiffs’ Subpoena to be unduly burdensome or point to a

potential use of a protective order. Instead, the lower court required Plaintiffs to

establish that the Subpoena was not a “fishing expedition” while, at the same time,

holding that the Respondents were not required to submit any affidavits or evidence

whatsoever averring that they did not possess information relevant to the claims in

Plaintiffs’ TAC. The analysis undertaken by the court in this case conflicts with

Truswal.

The Fifth Circuit in Wiwa v. Royal Dutch Petroleum, 392 F.3d 812, 818 (5th

Cir. 2004) has adopted a similar standard to that of Truswal:

The moving party has the burden of proof to demonstrate “that

compliance with the subpoena would be ‘unreasonable and oppressive.’

“ ”Whether a burdensome subpoena is reasonable ‘must be determined

according to the facts of the case,’ such as the party’s need for the

documents and the nature and importance of the litigation.” To

determine whether the subpoena presents an undue burden, we

consider the following factors: (1) relevance of the information

requested; (2) the need of the party for the documents; (3) the breadth

of the document request; (4) the time period covered by the request;

(5) the particularity with which the party describes the requested

documents; and (6) the burden imposed.

The analysis set forth in Wiwa was never undertaken by either court in this case.

Further, the recent Ninth Circuit case, Mount Hope Church v. Bash Back!,

705 F.3d 418 (9th Cir. 2012) also conflicts with the approach undertaken by the

Court in this case. In Mount Hope Church, the Ninth Circuit analyzed the undue

burden sanction provisions contained within Fed. R. Civ. P. 45(c)(1). In conducting

that analysis, the Ninth Circuit noted that the test it was employing was similar to

that used by, “[s]ome courts…to determine whether an undue burden exists, usually

in the context of modifying or quashing a subpoena under Rule 45(c)(3)’s identical

‘undue burden’ language. Wiwa v. Royal Dutch Petroleum Co., 392 F.3d 812, 818

(5th Cir.2004); Precourt v. Fairbank Reconstruction Corp., 280 F.R.D. 462, 467

(D.S.D.2011) (citations omitted).” Id. at 425, fn.8. In analyzing identical undue

burden language in Rule 45, the Ninth Circuit implemented a test “similar” to that

of Wiwa. Thus, the Ninth Circuit’s holding in Mount Hope suggests that it should

have, but did not, adopt an analysis similar to that of Wiwa—an analysis that was

not undertaken by the lower court in this case. Thus, the Ninth Circuit’s decision in

this case conflicts with its own authority.

The Ninth Circuit and the Lower Court in this Case

Refused to Give Any Weight to the Decision of the Court

Where the Action is Pending in Contravention to Fed. R.

Civ. P. 45 and the Federal Circuit’s Decision in Truswal

The scope of the discovery that can be requested through a subpoena

under Rule 45 is the same as the scope under Rule 26(b). Fed. R. Civ. P. 45 Advisory

Comm.’s Note (1970) (“[T]he scope of discovery through a subpoena is the same as

that applicable to Rule 34 and other discovery rules.”); Fed. R. Civ. P. 34(a) (“A

party may serve on any other party a request within the scope of Rule 26(b).”). Rule

26(b) allows a party to obtain discovery concerning any nonprivileged matter that is

relevant to any party’s claim or defense and that is “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.” Fed.

R. Civ. P. 26(b)(1).

Even though a “district court whose only connection with a case is

supervision of discovery ancillary to an action in another district should be

‘especially hesitant to pass judgment on what constitutes relevant evidence

thereunder, (citations omitted)’” here, the lower court expressed no such hesitance.

Truswal Systems, 813 F.2d at 1211–12. “Where relevance is in doubt ... the court

should be permissive.” Id. This is especially so under the circumstances here where

the District Judge in the underlying action previously compelled the deposition and

production of documents but rescinded that order on the grounds that it lacked the

authority to issue that order.

The lower court judge acknowledged that Judge

Schofield, the District Judge overseeing the consolidated benchmark exchange rate

price fixing cases in the Southern District of New York, found Plaintiffs’ Subpoena

to seek relevant testimony and documents but rescinded her order for other reasons:

THE COURT: Well, I don’t know that. That’s not entirely correct. If

she [Judge Schofield] thought it was irrelevant, they wouldn’t have

issued the first order so, you know, this is an excellent judge in New

York. She doesn’t do things without thinking about them. She

obviously thought about it and knows this is a nonparty and thought it

was relevant. And she may have been persuaded afterwards that

someone else should make that decision, and I respect that.

[App. 26:5-12; (1/18/19) Hrg. Tr. at p. 16:5-12]. Thus, even though the lower court

acknowledged that Judge Schofield found the Subpoena to seek testimony relevant

to the Nypl Plaintiffs’ claims, the lower court gave the determination of the District

Judge overseeing the antitrust conspiracy proceedings no weight. 2 This decision

conflicts with Fed. R. Civ. P. 45 and Truswal.

CONCLUSION

Petitioners respectfully pray that a writ of certiorari issue to review the

decision of the United States Court of Appeals for the Ninth Circuit in this case,

reverse and remand, and order the deponent to comply with the subpoena.

Respectfully submitted,