Highland Tank & Mfg. Co. v. PS International, Inc.

Citations: 227 F.R.D. 374; 2005 U.S. Dist. LEXIS 8377Docket: Civil Action No. 3:04-100J

Court: District Court, W.D. Pennsylvania; February 17, 2005; Federal District Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

PS International, Inc. (PSI) filed two motions in response to a patent infringement lawsuit initiated by Highland Tank Mfg. Co. The first motion, submitted on November 29, 2004, sought a protective order regarding a subpoena served on Gary Aleck and Aleck Manufacturing, arguing that the subpoena was defective due to improper notice, inadequate time for response, and overreach in document requests beyond the relevant issues of the case. The specific products at issue were identified as the PSR and PSRC Model Rectangular Separators.

On December 23, 2004, Highland Tank amended its complaint to include additional claims against PSI, such as trade secret misappropriation, violations of the Lanham Act, and copyright infringement, based on deposition testimonies from PSI's principals. In response, PSI filed a second motion for a protective order on January 4, 2005, which aimed to protect confidential and privileged information sought by the Plaintiff from various third parties, reiterating similar arguments made in the first motion. 

The court determined it lacked jurisdiction to resolve PSI's motions for protective orders and decided to remit the discovery dispute to the District Court of South Dakota, affirming that jurisdiction was established in the United States District Court for the Western District of Pennsylvania based on federal question jurisdiction under various U.S. patent and copyright laws.

On January 6, 2005, the Court partially granted and partially denied the Defendant's Motion for Protective Order (Document No. 14). The order stipulated that persons served with subpoenas by the Plaintiff in December 2004 and January 2005 would have 30 days to respond. Additionally, PS International, Inc. was allowed to inspect documents produced by these parties for privileged material and was required to provide a privilege log if any documents were withheld or redacted. The Court reserved judgment on the relevance of PSI’s cylindrical separators, clarifying that the subpoenas also encompassed these items as referenced in the Plaintiff's Amended Complaint.

On January 11, 2005, the Defendant filed a Motion to Quash Subpoenas or, alternatively, for a Protective Order (Document No. 17), contesting subpoenas for documents from First National Bank of Sioux Falls and EFS Tank, Power Equipment. The Defendant argued similar defects as previously noted in the earlier subpoenas. An attached order from the Southern District of South Dakota indicated that the Plaintiff had failed to provide the required notice to the opposing party and that the subpoenas were overly broad. It also questioned the appropriateness of issuing a subpoena to a non-party in California from a lawsuit in Pennsylvania. As a result, the Defendant’s Amended Motion to Quash was granted, quashing the subpoenas served on both First National Bank and EFS Tank, Power Equipment. The Court emphasized its intention to thoroughly address the arguments and applicable Federal Rules of Civil Procedure for both parties.

District courts possess the discretion to sua sponte reconsider their rulings as long as they maintain jurisdiction over the case. Specifically, requests to lift or modify protective orders are subject to the trial court's discretion. When exercising this discretion, courts must balance public interests against the interests of the parties involved. In this case, the Court is reconsidering the Defendant’s Motion for Protective Order filed on January 4, 2005, which contended that the Plaintiff's subpoenas were defective due to lack of service on Defendant’s counsel, insufficient notice of intent to seek information from third parties, and undue burden on those parties. The Defendant also claimed that the requested information was privileged and confidential. After reviewing these arguments and relevant Federal Rules of Civil Procedure, the Court modified the subpoenas to address identified defects. Additionally, the Court has revisited its January 7, 2005 Order, focusing on the applicable jurisdictional requirements under Rule 45. Rule 45 permits the issuance of subpoenas to nonparties, but such subpoenas can only compel production of documents within the nonparty's control, even if the court has personal jurisdiction over them.

To ensure the production of documents from a nonparty witness, subpoenas must be issued in the district court where the witness resides or where the witness's headquarters are located. Rule 45 mandates that subpoenas clearly state the name of the district court and the title of the action, along with the name of the individual required to produce documents for inspection and copying. The documents must be adequately described to avoid being deemed overly broad, which could lead to a motion to quash if they impose an undue burden or are irrelevant/protected without an applicable exception or waiver. 

The 1991 amendments to Rule 45 enhanced protections for individuals required to provide information or evidence, clarifying both the obligations of recipients and the responsibilities of attorneys issuing subpoenas. These amendments allowed attorneys, as officers of the court, to issue subpoenas, which are considered commands equivalent to court orders. Noncompliance with an attorney-issued subpoena can result in contempt sanctions. 

Furthermore, attorneys can issue subpoenas from any federal court corresponding to the district where the documents are to be produced, irrespective of where the action is pending, provided all other Rule 45 requirements are met.

A subpoena must be issued from the district where a non-party deposition is being taken, regardless of where the main case is pending. For instance, if a case is in federal court in Pennsylvania but a deposition occurs in New York, the subpoena must originate from New York. A district court cannot compel a non-party to produce documents located in another district. Non-parties can only be required to produce documents within a specific geographic range, typically no more than 100 miles from their location. Disputes regarding document production from non-parties are to be resolved in the court that issued the subpoena unless the non-party consents to a different jurisdiction.

In a specific case, the Defendant filed a Motion for Protective Order on January 4, 2005, seeking to protect alleged privileged and confidential information from third parties. The Court noted that the subpoenas issued by the Plaintiff were improperly directed, as one sought documents from K. L Steel, based in Idaho, while being issued under the District Court of South Dakota. The Court determined the subpoenas were defective because they did not comply with the geographic limitations set by Rule 45 of the Federal Rules of Civil Procedure, which requires subpoenas to be issued from the court corresponding to where the documents are located. As a result, the Court ruled that it could not enforce the Plaintiff's subpoena due to improper issuance and jurisdictional issues.

Rule 45 does not allow for the service of a subpoena in South Dakota for document production in Idaho, nor does it grant this Court the authority to enforce or modify subpoenas from the District Court of South Dakota. Relevant case law supports that this Court lacks jurisdiction over the Plaintiff's subpoena at Document No. 14. Consequently, the Court vacates the Order from January 7, 2005, and remands the discovery dispute to the District Court of South Dakota, which is better positioned to address the merits of the subpoenas linked to the Defendant’s Motion for Protective Order filed on January 4, 2005.

On November 29, 2004, the Defendant submitted a Motion for Protective Order against a subpoena served by the Plaintiff on Mr. Gary Aleck and Aleck Manufacturing. The Defendant objected on grounds of relevancy and undue burden to the non-party witness. The Court noted that the Plaintiff's subpoena, while issued correctly within the District of South Dakota, improperly directed Aleck to produce documents in the Western District of Pennsylvania, exceeding the geographic limits set by Rule 45. The identified defects support quashing the subpoena, but due to jurisdictional limitations, the Court remits this dispute to the District Court of South Dakota.

Regarding the Defendant's Motion for Protective Order filed on January 11, 2005, the Court again remits the matter to the District Court of South Dakota, which has already addressed a related subpoena in Highland Tank MFG. Co. v. PS International, Inc. Any objections to that ruling should be directed to the District Court of South Dakota. The underlying case involves allegations that the Defendant company was formed using proprietary information unlawfully obtained from McTighe Industries, as testified by two principals in deposition.

In 2003, the Plaintiff acquired assets from McTighe, including engineering designs and drawings, and subsequently sought to amend its complaint, asserting that its new claims are closely related to the existing patent infringement allegations involving PSI's alleged copying of designs and disregard for proprietary rights. The Court granted the Plaintiff leave to amend the complaint under Federal Rule of Civil Procedure 15. The Defendant, represented by counsel, filed a similar Motion to Quash in South Dakota, citing Federal Rule of Civil Procedure 45(c)(3)(A), which requires such motions to be filed in the court where the subpoena was issued. 

The Court noted the importance of the timing of motions under the Federal Rules, particularly Rule 59, which mandates that motions to alter or amend judgments be filed within ten business days, or else the court may lose jurisdiction to revisit the ruling. Conversely, Rule 60(b) allows for motions to be made within a reasonable time, up to one year after the judgment. The Court concluded that its January 7, 2005, order did not relinquish jurisdiction to reconsider its ruling on the Defendant’s Motion for Protective Order. 

Under Rule 45(c)(3)(A), a district court must quash or modify a subpoena if it does not allow reasonable time for compliance. The Court recognized that Rule 45 subpoenas are the sole means for obtaining document inspections from non-parties, and commented that while the relevance and undue burden arguments presented by the Defendant are not properly before the Court, discovery standards under Rule 26 require that information sought must be relevant and admissible. Any objections based on relevance must be specifically justified by the objecting party.

A party may object to document production due to undue burden under Rule 26, which allows the court to limit discovery if it finds that the requested information is: (i) unreasonably cumulative or obtainable from a more convenient source; (ii) within the reasonable discovery opportunities of the requesting party; or (iii) overly burdensome compared to its benefits. Additionally, under Rule 45, a court can quash or modify a subpoena if it fails to provide reasonable compliance time or imposes undue burden on a witness. General objections based on undue burden are insufficient; the objecting party must demonstrate specific flaws in each request, as established in McLeod, Alexander, Powel, Apffel v. Quarles. Attorneys have heightened responsibilities and can face sanctions for misuse of subpoenas. Rule 45 emphasizes the need for subpoenas to be issued from the court where records are to be produced, to protect nonparty witnesses and uphold the court’s interest in enforcement. The Plaintiff's failure to consider the convenience of the nonparty witness, K. L Steel, by directing production to the Western District of Pennsylvania is noted, as is the District Court of South Dakota's discretion to remit matters to the court handling the underlying case for ruling on subpoenas.