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Dell Inc. v. Decosta

United States District Court, District of Columbia

January 17, 2017

DELL INC, Plaintiff,
v.
FRANK A. DECOSTA., et al, Defendants.

          MEMORANDUM OPINION

          ROSEMARY M. COLLYER United States District Judge

         Audio MPEG, Inc., and others, sued Dell, Inc., in the Eastern District of Virginia, complaining that Dell infringed certain patents. Audio MPEG, Inc. v. Dell, Inc., No. 16-cv-0082 (E.D. Va., filed Dec. 21, 2015) (“Virginia Action”). Dell has advanced various defenses and counterclaims, most particularly alleging violations of the antitrust laws of the United States. See Dell Mot. to Compel, Ex. B [Dkt. 1-2] (Dell Ans. in E.D. Va.) ¶ 29. In this Court, Dell seeks to compel compliance with subpoenas seeking documents and testimony from Defendants Frank A. DeCosta III and John C. Paul, attorneys with Finnegan, Henderson, Farabow, Garrett & Dunner LLP (“Finnegan”), the firm that used to represent Audio MPEG on matters involving patents and intellectual property. The subpoenas were served on July 20, 2016. After months of discussions without the production of any documents or presentation of any testimony, Dell moved to compel responses in the jurisdiction in which Messrs. DeCosta and Paul practice law. The two attorneys, represented by their firm, hotly contest the propriety of the subpoenas as well as their burden and lack of proportionality, and urge this Court to transfer the matter to Virginia, where the underlying case is being litigated.

         When the petition was filed, fact discovery in the Virginia Action was scheduled to close on January 17, 2017. Dell suggests in its Reply that the parties have agreed to allow third-party depositions to take place after this deadline. See Pl. Reply [Dkt. 9] at 2, n.4. The Court has carefully studied the parties' briefs. Believing that discovery disputes should be resolved as quickly as possible, with the least time and expense for the parties, this Court acts expeditiously to aid the litigation process.

         I. FACTUAL BACKGROUND

         Defendants DeCosta and Paul “are the longtime licensing counsel to Virginia Plaintiffs Audio MPEG, Inc. and its parent company Societa Italiana per lo Sviluppo dell'Elettronica S.p.A. (“Sisvel”) . . . .” Pl. Reply [Dkt 9] at 1. Both attorneys “represent[ed] Audio MPEG in licensing negotiations with third parties, as well as other business activities.” Id. Dell asserts:

The facts and circumstances of these licensing negotiations are relevant to a number of claims and counterclaims in the Virginia Action, including appropriate damages calculations, Dell's defense of patent exhaustion, and Dell's counterclaims regarding anticompetitive provisions in certain licensing agreements.

Id. Dell points out that the Virginia Plaintiffs' disclosures identified Defendant DeCosta as an individual with discoverable information and Audio MPEG's past president testified repeatedly at deposition that Defendant Paul is a source of relevant information. Dell provides no particulars on the subject matters that were referenced.

         Defendant attorneys do not dispute any of the above. Rather, they contend that Dell's subpoenas impose an undue burden and expense on Defendants, in violation of the Federal Rules of Civil Procedure 26 and 45 “regarding relevance, proportionality, burden, expense and the ability to obtain information from other sources” because the information sought is available from a more convenient source, namely, Audio MPEG. Def. Opp'n [Dkt. 5] at 15. Defendants further argue that the subpoeanas risk disclosure of attorney-client privilege or other protected matters, such as third party confidentiality. Id. at 18.

         II. LEGAL STANDARDS

         Rule 26 of the Federal Rules of Civil Procedure governs the scope of discovery:

Parties 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, 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.

FRCP 26(b)(1). Rule 45 requires that a court must modify or quash a subpoena when, inter alia, it “requires disclosure of privileged or other protected matter, if no exception or waiver applies” or “subjects a person to undue burden.” FRCP 45(d)(3)(A)(iii)-(iv). A party issuing “a subpoena must take reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena.” FRCP 45(d)(1).

         Whether a subpoena imposes an “undue burden” depends on the specific facts of the case and courts “‘must balance the interests served by demanding compliance with the subpoena against the interests furthered by quashing it.'” In re Ex Parte Application of Kleimar N.V., No. 16-MC-355, 2016 WL 6906712 at *3 (S.D.N.Y. Nov. 16, 2016) (quoting Anwar v.Fairfield Greenwich Ltd., 297 F.R.D. 223, 226 (S.D.N.Y. 2013)). In balancing the interests served by demanding compliance, courts should consider “‘relevance, the need of the party for the documents, the breadth of the document request, the time period covered by it, the particularity with which the documents are described and the burden imposed.'” American Elec.Power Co., Inc. v. United States, 191 F.R.D. 132, 136 (S.D. Ohio 1999) (quoting Concord Boat Corp. v. Brunswick Corp., 169 F.R.D. 44, 53 (S.D.NY. 1996)).

         III. ...


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