Wilson et al v. Venture Financial Group Inc et al, No. 3:2009cv05768 - Document 80 (W.D. Wash. 2010)
Court Description: ORDER denying 48 Motion to Quash. Signed by Judge Benjamin H. Settle. (MGC)
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Wilson et al v. Venture Financial Group Inc et al Doc. 80 1 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 7 8 9 10 SANDI WILSON and SYNTHIA LISI, individually and on behalf of all others similarly situated, Plaintiffs, 11 12 13 CASE NO. C09-5768BHS v. VENTURE FINANCIAL GROUP, INC., et al., ORDER DENYING THE STATE OF WASHINGTON’S MOTION TO QUASH PLAINTIFFS’ SUBPOENAS 14 Defendants. 15 16 17 18 19 This matter comes before the Court on the State of Washington’s non-party motion to quash subpoenas and motion for protective order (Dkt. 48). The Court has considered the pleadings filed in support of and in opposition to the motion and the remainder of the file and hereby denies the motion for the reasons stated herein. 20 I. FACTUAL AND PROCEDURAL HISTORY 21 This matter involves a challenge to the handling of certain retirement accounts 22 23 24 25 26 27 managed by Defendants (“VFGI”) for the benefit of the Plaintiffs (collectively “Wilson”). For a more complete factual background, see Dkt. 44 (order granting in part and denying in part VFGI’s motion to dismiss). The issue presented within the instant motion involves a challenge by the State of Washington’s (the “State”) objections to certain subpoenas issued by Wilson . See Dkt. 48. 28 ORDER - 1 Dockets.Justia.com 1 On May 27, 2010, the State moved the court to quash “all outstanding subpoenas 2 in this action issued to the State and its officers and its employees acting in their official 3 capacity.” Dkt. 48. On June 2, 2010, Wilson opposed the State’s motion to quash. Dkt. 4 57. On October 7, 2010, the State replied. Dkt. 76. 5 II. DISCUSSION 6 7 8 9 Wilson asserts three alternative bases on to support its motion to quash the subpoenas at issue: (1) sovereign immunity; (2) Fed R. Civ. P. 45(c)(3); or (3) RCW 30.04.075, Washington State’s relevant bank examination confidentiality statutes. See Dkt. 48.1 The Court considers these arguments seriatim. 10 11 12 13 14 A. Sovereign Immunity Wilson seeks to enforce the subpoenas it caused to be issued upon the State, which seek certain bank examination records. See e.g. Declaration of Victor M. Minjares (Minjares Decl.) ¶ 2 (discussing receipt of subpoenas); see also Minjares Decl., Exs. A, B 15 (copies of subpoenas). The State claims sovereign immunity as a means by which to 16 avoid these discovery subpoenas. Wilson asserts that sovereign immunity does not apply 17 when the state is a non-party to the action. See Dkt. 57 at 6-9. 18 The State cites and relies heavily on United States v. James, 980 F.2d 1314 (9th 19 Cir.1992), a case in which the Ninth Circuit found that the district court had properly 20 quashed a subpoena issued to a tribe to produce documents on the basis of tribal 21 22 23 24 25 26 27 28 1 In opposition to the motion to quash, Wilson also contends that the State’s objection to the subpoenas at issue is untimely under Fed. R. Civ. P. 45(c)(2)(B). Dkt. 57 at 4. However, this contention is without merit, given that Wilson’s counsel (Genessa Stout) apparently agreed with the State’s counsel to unconditionally extend the deadline to comply with the subpoenas to May 28, 2010. See, Declaration of Joseph Vincent (citing Declaration of Genessa Stout (Dkt. 58-2), Ex. A at 3-4 (email thread agreeing to the extension); Dkt. 53-3 (copy of second subpoena issued providing deadline of May 28, 2010)). Wilson has supplied no documentation contrary to the State’s claim that the parties agreed to extend the deadline upon which the State was to reply or object to the subpoenas. The State filed its objections on May 27, 2010 (Dkt. 48), one day before the deadline. Therefore, the Court rejects Wilson’s argument that State’s objection to the subpoenas is untimely. ORDER - 2 1 (sovereign) immunity. Although the Ninth Circuit upheld the quashal of subpoenas served 2 upon a non-party in James, the case concerned tribal sovereign immunity, not state 3 sovereign immunity. Indeed, the State does not cite a single published case wherein a 4 court applied James to quash subpoenas issued to a state or state agency, which is the 5 case here. 6 7 8 In contrast, Wilson cites several cases from other Circuits and other district courts within the Ninth Circuit that have each rejected the argument made by the State. See Dkt. 57 at 7-8 (citing In re Missouri Dept’t of Natural Resources, 105 F.3d 434, 436 (9th Cir. 9 1977) (“there is simply no authority for the position that the Eleventh Amendment shields 10 11 12 13 14 government entities from discovery in a federal court”); Barnes v. Black, 544 F.3d 807, 812 (7th Cir. 2008) (Eleventh Amendment not violated by order commanding non-party state official to produce a document because it “does not compromise state sovereignty to a significant degree”); United States v. Juvenile Male 1, 431 F. Supp. 2d 1012, 1016 (D. 15 Ariz. 2006) (“Federal subpoenas routinely issue to state and federal employees to produce 16 official records . . . and are fully enforceable despite any claim of immunity”). 17 Furthermore, courts have rejected as irrelevant the State’s argument for applying a 18 state’s sovereign immunity because “no judgment or other relief of any kind is sought 19 against” the state, which would invoke Eleventh Amendment protections. Allen v. 20 Woodford, 544 F. Supp. 2d 1074, 1079 (E.D. Cal., 2008) (rejecting an Eleventh 21 Amendment argument to avoid compliance with a third-party subpoena for records held 22 by a state wherein the state is not a party). 23 24 25 26 Based on the foregoing, the Court concludes that, while James may remain good law within the Ninth Circuit as it pertains to tribal sovereign immunity, it has no force with respect to the case at bar. Therefore, barring some other exception to compliance, the State must turn over the requested documents. However, Wilson will work with the State 27 to reduce the scope of the documents requested to the extent the Court’s prior order on 28 ORDER - 3 1 VFGI’s motion to dismiss (Dkt. 44) affects the relevant scope of the requested 2 documents. 3 B. Rule 45(c)(3) 4 Alternatively, the State contends that the subpoenas should be quashed under Fed. 5 R. Civ. P. 45(c)(3). The Court may quash subpoenas that are unreasonable or oppressive. 6 7 8 Ariel v. Jones. The State contends that the subpoenas at issue are both unreasonable and oppressive. Dkt. 48 at 7. In support of this proposition, the State rests its argument on (1) the economic emergency facing Washington State, (2) that having to review and produce 9 20,000 pages of potentially relevant material is overly burdensome and onerous on its 10 11 12 13 14 15 face, (3) that producing the documents would violate the State’s bank examination confidentiality statutes, and (4) the subpoenas seek duplicative information already held by the FDIC. See id. at 7-11 1. Economic Emergency The Court is not persuaded by the State’s unsupported “economic emergency” 16 argument. While there is no doubt the economy has affected the State, it does not mean it 17 is no longer obligated to abide by the rules governing federal subpoena power. Therefore, 18 the Court rejects this inadequately supported argument on its face. 19 2. Overly Broad or Unduly Burdensome 20 The Court is also not persuaded by the “number of documents” argument. 20,000 21 pages is insignificant compared to other complex litigation cases involving millions of 22 documents where courts have rejected application of Rule 45(c)(3). See, e.g., F.D.I.C. v. 23 Garner, 126 F.3d 1138, 1146 (9th Cir. 1997) (rejecting the “overbroad or unduly 24 25 26 burdensome” argument in a case involving a demand for more than one million documents). In Garner, the Ninth Circuit held that a party seeking to avoid a subpoena, such as those issued in this case, requires the party to “enunciate how these subpoenas 27 constitute a ‘fishing expedition.”’ As was the case in Garner, the State has not articulated 28 ORDER - 4 1 how Wilson ’s subpoenas constitute a fishing expedition; therefore this argument is 2 rejected. 3 3. 4 In its opening motion to quash the subpoenas at issue, the State contended that 5 6 7 8 Bank Examination Confidentiality Statues Washington State’s Revised Code makes privileged and confidential certain examination reports. See, e.g., Dkt. 48 at 10 (quoting RCW 30.04.075(1)). In doing so the State argued that RCW 30.04.075 is binding upon it and that there is an in-camera review process that must be followed regarding the documents requested by Wilson . See id. (Citing RCW 9 30.04.075(6). 10 11 12 13 14 Wilson concedes these statutes prevent it from obtaining the examinations, themselves, but that they are not prevented from obtaining the remainder of the documents they seek. See Dkt. 57 at 12-13. Wilson further contends that the State agrees that “the proper procedure is for Wilson and the [State] to work out which documents 15 should be produced, and which documents may necessitate . . .” an in camera review 16 pursuant to RCW 30.04.075(6). Wilson agrees to participate in such a process. 17 In its reply, the State did not address Wilson’s response on this issue. This failure 18 to reply regarding this issue permits the Court to deem Wilson’s position as meritorious 19 (see Local Rule CR 7(b)(2)); thus, the State has either agreed or abandoned this argument 20 in support of its motion to quash. Therefore, the Court agrees with Wilson that the 21 subpoenas are proper to the extent Wilson complies with the applicable laws, including 22 RCW 30.04.075(6). 23 24 25 26 4. Duplicative Requests Finally, the State contends that the documents sought through these subpoenas are duplicative of those already held by the FDIC and that the subpoenas would be better directed to that agency. See Dkt. 48 at 11. However, this “duplicative” argument was 27 rejected in Garner because the party failed to identify what documents were duplicative. 28 ORDER - 5 1 Garner, 126 F.3d at 1146. As in Garner, the State has also failed to identify the 2 duplicative documents. Therefore, this argument is rejected. III. ORDER 3 4 Therefore, it is hereby ORDERED that 5 (1) The State’s motion to quash is DENIED, 6 (2) The State WILL COMPLY with the subpoenas at issue as discussed 7 8 herein. (3) 9 this order to determine how and on what basis the documents requested will 10 11 The State and Wilson WILL MEET AND CONFER within 14 days of be disclosed; such disclosure is to be consistent with the order herein. DATED this 2nd day of November 2010. 12 13 A 14 15 BENJAMIN H. SETTLE United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDER - 6
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