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Ht S.R.L. v. Velasco

United States District Court, D. Columbia.

August 28, 2015

HT S.R.L., Petitioner,
v.
LUIS ALEJANDRO VELASCO, Respondent

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          For HT S.R.L., Petitioner: Jeffrey S. Jacobovitz, LEAD ATTORNEY, ARNALL GOLDEN GREGORY, LLP, Washington, DC.

         For LUIS ALEJANDRO VELASCO, Respondent: Rebecca S. LeGrand, LEAD ATTORNEY, KAISER, LEGRAND & DILLON PLLC, Washington, DC.

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         MEMORANDUM OPINION

         ALAN KAY, UNITED STATES MAGISTRATE JUDGE.

         Pending before the Court are Petitioner's Amended Motion to Compel Luis Alejandro Velasco to Comply with Properly-Served Subpoena and Incorporated Memorandum of Law (" Am. Mot. to Compel" ) [3]; Respondent's Memorandum in Opposition to Petitioner's Motion to Compel and in Support of Mr. Velasco's Motion to Quash (" Opp'n to Am. Mot. to Compel" ) [4]; Respondent's Motion to Quash Subpoena (" Mot. to Quash" ) [5]; Petitioner's Reply in Support of Amended Motion to Compel Luis Alejandro Velasco to Comply with Properly-Served Subpoena and Incorporated Memorandum of Law (" Reply in Supp. of Am. Mot. to Compel" ) [6]; Petitioner HT S.R.L.'s Memorandum in Opposition to Respondent's Motion to Quash Subpoena (" Opp'n to Mot. to Quash" ) [9]; and Respondent's Reply in Support of Respondent Luis Alejandro Velasco's Motion to Quash Subpoena (" Reply in Supp. of Mot. to Quash" ) [10]. The Amended Motion to Compel was referred to the undersigned for a resolution. (Order [7]; Referral to Magistrate Judge [8]). For the reasons set forth in this Memorandum Opinion, the Court grants in part and denies in part Petitioner's Amended Motion to Compel and denies Respondent's Motion to Quash.

         I. BACKGROUND

         HT S.R.L. (" Petitioner" ) is an Italian limited liability company with a registered office in Milan, Italy that " provides consultancy and management services for information technology security." (Am. Mot. to Compel 1, Ex. 1B Declaration of Roberto Glavio Tirone (" Tirone Decl." ) [3-1] 25 at ¶ 3, Ex. 1C (" Agreement" ) [3-1] 32). Petitioner's software product, Galileo Remote Control System (" RCS" ), allows " undetected monitoring of computer activities[.]" (Am. Mot. to Compel 3; Agreement 32). On March 1, 2012, Petitioner entered into a consultant agreement (" Agreement" ) with Luis Alejandro Velasco (" Respondent" ), who is self-employed and lives and works in Annapolis, Maryland. (Opp'n to Am. Mot. to Compel 1, 3; Agreement 2).

         The Agreement assigns various responsibilities to Respondent, including promoting RCS and Petitioner. (Am. Mot. to Compel 3; Tirone Decl. ¶ 5; Agreement ¶ ¶ 1.1-1.7). In exchange for Respondent's work as Petitioner's " U.S. marketing consultant and technical assistant," Petitioner compensated Respondent $80,000 each year. (Opp'n to Mot. to Quash 1; Agreement ¶ 4.1). Petitioner drafted the Agreement, which includes a non-compete clause and a confidentiality clause prohibiting Respondent from disclosing confidential information regarding Petitioner's products

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" for the entire duration of [the Agreement] and for a period of one year starting from the termination of [the Agreement.]" (Opp'n to Am. Mot. to Compel 1; Am. Mot. to Compel 3-4; Tirone Decl. ¶ 7; Agreement ¶ ¶ 5.1, 6.1). The Agreement also contains a choice of law clause mandating Italian law governs the Agreement and a choice of forum clause requiring the Court of Milan has exclusive jurisdiction over " any disputes relating to the interpretation or execution of the [Agreement.]" (Agreement ¶ ¶ 12.1, 12.2; Opp'n to Am. Mot. to Compel 1).

         On March 17, 2015, Petitioner brought a civil suit (" Italian Proceeding" ) against Respondent in the Court of Milan, Italy (" Court of Milan" ) alleging Respondent violated the non-compete clause of the Agreement. (Am. Mot. to Compel 1, 4, Ex. 1D (" Italian Complaint" ) [3-1] 39-64; Tirone Decl. ¶ 9). The Italian Complaint alleges that Respondent represented competitors and collaborated in developing, marketed, and sold a competitor's software while under contract with Petitioner, thus violating the Agreement.[1] (Am. Mot. to Compel 4; Tirone Decl. ¶ ¶ 10-14). On April 10, 2015, Petitioner filed an ex parte Application for an Order Pursuant to 28 U.S.C. § 1782 to Conduct Discovery for Use in a Foreign Proceeding in the United States District Court for the District of Maryland. (Am. Mot. to Compel Ex. 1 (" Application" ) [3-1] 2-23). The proposed subpoena commanding Respondent to testify at a deposition and produce documents was attached. (Am. Mot. to Compel Ex. 1A [3-1] 12-23). On April 17, 2015, the Honorable J. Frederick Motz granted the Application, authorizing the issuance of the subpoena. (Am. Mot. to Compel Ex. 2 (" Order" ) [3-2]).

         On April 20, 2015, Petitioner issued the subpoena, commanding Respondent to testify at a deposition on May 11, 2015 at 10:00 a.m. at Petitioner's counsel's office in Washington, D.C. and produce documents at the deposition.[2] (Am. Mot. to Compel Ex. 3 (" Subpoena" ) [3-3]). Respondent was served on April 23, 2015. (Am. Mot. to Compel Ex. 4 (" Affidavit of Service" ) [3-4]). On May 5, 2015, Respondent personally called Petitioner and requested to reschedule the deposition due to a family graduation requiring his attendance. (Am. Mot. to Compel 5; Opp'n to Am. Mot. to Compel 3). That afternoon, Respondent personally e-mailed Petitioner acknowledging the acceptance of his request to reschedule and agreeing to appear for his deposition on May 21, 2015 (Am. Mot. to Compel Ex. 5 [3-5], Ex. 11 [3-11]; Opp'n to Am. Mot. to Compel Ex. D [4-1] 23). Petitioner responded that evening accepting the request to reschedule and informing Respondent he was still obligated to produce documents by the date set forth in the Subpoena, May 11, 2015. (Am. Mot. to Compel Ex. 11; Opp'n to Am. Mot. to Compel Ex. D). On May 6, 2015, Respondent replied that he also needed additional

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time for the production and objected pursuant to Fed.R.Civ.P. 45(d)(2)(B) that the document " request is questionable and overly broad and overly burdensome." [3] (Am. Mot. to Compel Ex. 11; Opp'n to Am. Mot. to Compel Ex. D).

         Respondent retained counsel on May 11, 2015 and she assumed responsibility of communicating with Petitioner. (Opp'n to Am. Mot. to Compel 3). Respondent served correspondence on May 15, 2015, elaborating on his objections and explaining why the discovery was improper. (Am. Mot. to Compel Ex. 6 [3-6]; Opp'n to Am. Mot. to Compel 3 Ex. E [4-1] 25-27). On May 19, 2015, the parties exchanged a series of e-mails. (Am. Mot. to Compel 6; Opp'n to Am. Mot. to Compel 3-4). Petitioner explained that the objections were untimely pursuant to Fed.R.Civ.P. 45(d)(2)(B), offered to accommodate Respondent by deposing him in Annapolis, Maryland, and proposed a meet and confer half an hour before the deposition. (Am. Mot. to Compel Ex. 7 [3-7]; Opp'n to Am. Mot. to Compel 3 Ex. F [4-1] 29-30). Petitioner also warned that if Respondent failed to appear for his deposition, Petitioner would file a motion to compel and move for attorneys' fees and costs. (Am. Mot. to Compel Ex. 7; Opp'n to Am. Mot. to Compel 3, Ex. F 30). Respondent replied, disagreeing with Petitioner's position on timeliness of the objections and indicating a new subpoena would be required if the location of the deposition changed. (Am. Mot. to Compel Ex. 8 [3-8]). Petitioner responded that the deposition would go forward in the District of Columbia as set forth in the Subpoena and reiterated availability to meet and confer before the deposition. (Am. Mot. to Compel Ex. 9 [3-9]). Respondent replied that Respondent would not appear for the deposition and counsel was open to discussing the discovery Petitioner sought. (Am. Mot. to Compel Ex. 10 [3-10]; Opp'n to Am. Mot. to Compel 3, Ex. G [4-1] 34).

         On May 20, 2015, the parties exchanged e-mails and scheduled a telephonic meet and confer. (Opp'n to Am. Mot. to Compel 3 Ex. G 32-33). Respondent did not appear for his deposition on May 21, 2015 or produce the documents requested in the Subpoena. (Am. Mot. to Compel 6). At about 2:00 p.m. on May 21, 2015, the parties had a telephonic meet and confer but were unable to resolve their dispute. (Am. Mot. to Compel 6). Respondent proposed two alternatives to the Subpoena: (1) waiting to see whether the Court of Milan ordered discovery or (2) both parties " agree to engage in discovery beyond what is available under Italian law, to allow Mr. Velasco to similarly issue document requests to HT and take depositions of key HT employees." (Opp'n to Am. Mot. to Compel 4 Ex. H [4-1] 39).

         The following day, Petitioner filed a Motion to Compel Compliance with the Subpoena.[4] Respondent notified Petitioner that the Motion to Compel contained " demonstrably false statements" because

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Petitioner failed to disclose the fact that Respondent personally objected to the document request on May 6, 2015. (Opp'n to Am. Mot. to Compel Ex. I [4-1] 41-42).[5] Petitioner then filed the instant Amended Motion to Compel requesting an order (1) directing Respondent to produce all documents requested in the Subpoena, (2) establishing a date for Respondent to provide deposition testimony and (3) instructing Respondent to pay Petitioner's costs, including attorneys' fees, related to compelling Respondent's compliance with the Subpoena. (Am. Mot. to Compel 2). Respondent filed a Motion to Quash requesting attorneys' fees and costs incurred as a result of the Subpoena and Motion to Compel. (Mot. to Quash). This Court held a hearing on both motions on August 10, 2015.

         II. LEGAL STANDARD

         A. Compelling Compliance with a Subpoena

         Pursuant to Fed.R.Civ.P. 45 (d)(2)(B), a party receiving a subpoena to produce documents or tangible things may object to the subpoena " before the earlier of the time specified for compliance or 14 days after the subpoena is served." Upon receiving objections, the serving party may then move the court for an order compelling production after noticing the commanded party. Id. The motion must be filed in " the court for the district where compliance is required[.]" Fed.R.Civ.P. 45(d)(2)(B)(i).

         B. Enforcing a Subpoena Issued Pursuant to 28 U.S.C. § 1782(a)

         Pursuant to 28 U.S.C. § 1782(a), a district court has discretion to " order [a person residing in its district] to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal[.]" This statute authorizes a broad scope for federal courts to assist foreign proceedings, but it does not require discovery assistance. See Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 247-48, 264, 124 S.Ct. 2466, 159 L.Ed.2d 355 (2004) (citing 28 U.S.C. § 1782(a)) (noting that the 1948 amendments to 28 U.S.C. § 1782(a) " substantially broadened the scope of assistance" ). Thus, the court must first determine whether it has the authority to permit or enforce the request and then whether it should exercise its discretion to permit or enforce the request. See Lazaridis v. Int'l Ctr. for Missing & Exploited Children, Inc., 760 F.Supp.2d 109, 112 (D.D.C. 2011) (citing Norex Petroleum Ltd. v. Chubb Ins. Co. of Canada, 384 F.Supp.2d 45, 49 (D.D.C. 2005)).

         C. Quashing a Subpoena

         Pursuant to Fed.R.Civ.P. 45 (d)(3), the court where compliance is required may quash or modify a subpoena. If the commanding party " timely" moves the court, the court " must quash or modify a subpoena that: (i) fails to allow a reasonable time to comply; (ii) requires a person to comply beyond the geographical limits specified in Rule 45(c); (iii) requires disclosure of privileged or other protected matter, if no exception or waiver applies; or (iv) subjects a person to undue burden." Fed.R.Civ.P. 45 (d)(3)(A). Quashing or modifying a subpoena is permitted when a subpoena requires " (i) disclosing a trade secret or

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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." Fed.R.Civ.P. 45 (d)(3)(B).

         III. ANALYSIS

         Petitioner argues that this Court should compel Respondent to comply with the Subpoena. (Am. Mot. to Compel 7). First, Judge Motz of the District Court of Maryland reviewed the relevant issues set forth in the Application; Judge Motz granted the Application, authorizing the issuance of the Subpoena; and Respondent subsequently agreed to appear at his deposition. (Am. Mot. to Compel 7; Reply in Supp. of Am. Mot. to Compel 5). Second, Petitioner argues that Respondent's objections set forth in the May 15, 2015 correspondence are meritless. (Am. Mot. to Compel 7-8). Third, Petitioner argues that Respondent did not timely file his Motion to Quash[6] or file a motion for a protective order, thus failing to take " appropriate steps to excuse compliance[.]" (Am. Mot. to Compel 7; Opp'n to Mot. to Quash 4). Lastly, the Motion to Quash does not comply with Local Civil Rule 7(m) and does not propound arguments sufficient to justify quashing a subpoena pursuant to Fed.R.Civ.P. 45(d)(3)(A). (Opp'n to Mot. to Quash 3-5).

         Respondent opposes Petitioner's Amended Motion to Compel and moves this Court to Quash the Subpoena. (Mot. to Quash; Opp'n to Am. Mot. to Compel). First, Petitioner failed to " make a good faith effort to resolve this dispute, or even review basic facts[.]" (Opp'n to Am. Mot. to Compel 4). Second, Petitioner's original Motion to Compel " falsely stated" Respondent failed to object within fourteen days of service pursuant to Fed.R.Civ.P. 45. (Opp'n to Am. Mot. to Compel 5). Third, Petitioner filed the Amended Motion to Compel in response to Respondent's correspondence[7] informing Petitioner of this error. (Opp'n to Am. Mot. to Compel 4, Ex. I). Additionally, Respondent argues that the factors to consider with a 28 U.S.C. § 1782(a) request weigh against allowing discovery because (1) the discovery sought is unavailable under Italian law, (2) failing to disclose the aforementioned factor in the Application[8] was an attempt to " circumvent foreign proof-gathering restrictions," (3) Respondent " is a participant in the foreign proceeding," and (4) Petitioner is " 'jump[ing] the gun' on discovery in the foreign suit" by seeking discovery prior to " the appropriate stage" in the Italian Proceeding.[9] (Reply in Supp. of Mot. to Quash 3-5, (citations omitted); Opp'n to Am. Mot. to Compel 6). With respect to Petitioner's contentions regarding the Motion to Quash, Respondent asserts that he attempted to confer with Petitioner repeatedly,

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he did not unreasonably delay filing his Motion to Quash, and the Subpoena imposes an undue burden. (Reply in Supp. of Mot. to Quash 1-3).

         A. Amended Motion to Compel

         1. Compliance with Local Civil Rule 7(m) and Fed.R.Civ.P. 37(a)(1).

         As a preliminary matter, the Court notes that the Amended Motion to Compel complies with Fed.R.Civ.P. 37 and the Local Rules of the United States District Court for the District of Columbia. Local Civil Rule 7(m) sets forth a " duty to confer" with opposing counsel in a good-faith effort when a party anticipates filing a nondispositive motion to determine whether there is opposition and whether the scope can be narrowed. The motion must include " a statement that the required discussion occurred, and a statement as to whether the motion is opposed." Id. Similarly, Fed.R.Civ.P. 37(a)(1) requires a motion for an order compelling disclosure or discovery to include a certification that the movant has in good faith conferred or attempted to confer with the person or party failing to make disclosure or discovery in an effort to obtain it without court action. Courts have held that conferring with the opposing party is a prerequisite to any successful motion to compel. See U.S. ex rel. Pogue v. Diabetes Treatment Ctrs. of Am., Inc., 235 F.R.D. 521, 529-30 (D.D.C. 2006) (denying motion to compel for failure to attempt to meet and confer in good faith prior to filing). Here, the Amended Motion to Compel includes a certification that the parties " conferred in good faith via telephone on May 21, 2015" but were unable to reach a resolution. (Am. Mot. to Compel 1, 12). Petitioner subsequently filed a Motion to Compel the following day.

         Respondent does not refute that the parties conferred on May 21, 2015, but he asserts that Petitioner failed to " make a good faith effort to resolve this dispute" because Petitioner rejected Respondent's May 21, 2015 proposed alternatives to the Subpoena and rushed to file a motion to compel.[10] (Opp'n to Am. Mot. to Compel 4, Ex. H). Despite rejecting these proposals, Petitioner had previously attempted to accommodate Respondent in good faith.[11] (Am. Mot. to Compel Ex. 5, Ex. 7, Ex. 11; Opp'n to Am. Mot. to Compel 3, Ex. D, Ex. F). Respondent's May 21, 2015 proposals attempted to sidestep the court-authorized Subpoena after Petitioner had attempted to accommodate Respondent repeatedly in good faith. Thus, the Court finds that Petitioner's rejections of Respondent's ...


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