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In re UBS Financial Services, Inc. of Puerto Rico Sec. Litig.

United States District Court, D. Columbia.

July 9, 2015

In re: UBS FINANCIAL SERVICES, INC. OF PUERTO RICO SECURITIES LITIGATION

For SDM HOLDINGS INC., CARMELO ROMAN, RICARDO ROMAN-RIVERA, Plaintiffs: Julie G Reiser, LEAD ATTORNEY, COHEN MILSTEIN SELLERS & TOLL PLLC, Washington, DC; Deborah Clark-Weintraub, PRO HAC VICE, SCOTTä £, LLP, New York, NY.

For UBS FINANCIAL SERVICES INCORPORATED OF PUERTO RICO, UBS TRUST COMPANY OF PUERTO RICO, UBS FINANCIAL SERVICES INC., CARLOS J. ORTIZ, Defendants: Andrew M. Lawrence, Joshua A. Ellis, LEAD ATTORNEYS, SKADDEN ARPS SLATE MEAGHER & FLOM LLP, Washington, DC; Paul J. Lockwood, PRO HAC VICE, SKADDEN ARPS SLATE MEAGHER & FLOM LLP, Wilmington, DE.

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MEMORANDUM OPINION AND ORDER

Amit P. Mehta, United States District Judge.

I. BACKGROUND

Plaintiffs SDM Holdings Inc., Carmelo Roman, and Ricardo Roman-Rivera and Defendants UBS Financial Services Incorporated of Puerto Rico, UBS Trust Company of Puerto Rico, UBS Financial Services Inc., and Carlos J. Ortiz are engaged in a complex securities lawsuit in the United States District Court for the District of Puerto Rico. Plaintiffs originally filed their case in August 2012. The case has generated a lengthy docket of proceedings over the past three years.

On January 29, 2015, Plaintiffs served on the Securities and Exchange Commission (" SEC" ) in Washington, D.C., a subpoena duces tecum (" the Subpoena" ) issuing from the District of Puerto Rico, demanding the production of nine categories of documents that largely mirror documents sought by the SEC during its investigation of Defendants, which occurred in 2009 and 2010. Before this court is Defendants' Motion to Quash Subpoena. ECF No. 1. Defendants argue that the Subpoena which the Plaintiffs served on the SEC is an attempt to evade the discovery process underway in Puerto Rico. Further, they argue that the Subpoena places an undue burden of production on the SEC. Thus, Defendants ask the court to quash the subpoena, or in the alternative, to stay a decision on this motion or to transfer the motion to the District of Puerto Rico for resolution there.

II. ANALYSIS

According to Federal Rule of Civil Procedure 45:

When the court where compliance [with a subpoena] is required did not issue the subpoena, it may transfer a motion . . . to the issuing court if the person subject to the subpoena consents or if the court finds exceptional circumstances.

Fed. R. Civ. P. 45(f). The Advisory Committee Note regarding the 2013 amendments to Rule 45 provides further explanation. Although it advises courts that " [t]he prime concern should be avoiding burdens on local nonparties subject to subpoenas," it notes that " transfer may be warranted in order to avoid disrupting the issuing court's management of the underlying litigation . . . if such interests outweigh the interests of the nonparty served with the subpoena in obtaining local resolution of the motion." Fed.R.Civ.P. 45(f) advisory committee's notes; see also XY, LLC v. Trans Ova Genetics, L.C., 307 F.R.D. 10 (2014), 2014 WL 4437728, at *1 (D.D.C. Sept. 10, 2014) (highlighting the comments of the advisory committee). The advisory committee also suggests that a federal judge addressing a subpoena in a compliance district should consult with the federal judge in the issuing district to determine whether transfer of a subpoena-related motion is warranted. Fed.R.Civ.P. 45(f) advisory committee's notes.

A court in a compliance district should not " assume[ ] that the issuing court is in a superior position to resolve subpoena-related motions." Judicial Watch, Inc. v. Valle Del Sol, Inc., 307 F.R.D. 30 (2014), 2014 WL 4954368, at *3 (D.D.C. Oct. 3, 2014) (quoting Fed.R.Civ.P. 45(f) advisory committee's notes). Instead, it

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should look to a variety of factors to determine if the judge from the issuing court is " in a better position to rule on the . . . motion . . . due to her familiarity with the full scope of the issues involved as well as any implications the resolution of the motion will have on the underlying litigation." Wultz v. Bank of China, Ltd., 304 F.R.D. 38, 47 (D.D.C. 2014). Among other elements, courts determining whether " exceptional circumstances" exist to warrant transfer have considered " [case] complexity, procedural posture, duration of pendency, and the nature of the issues pending before, or already resolved by, the issuing court in the underlying litigation." Judicial Watch, 2014 WL 4954368, at *3; see also id. (describing the factors analyzed by courts in various transfer cases). Ultimately, " the proponent of ...


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