Sea Tow International, Inc. v. Pontin

Citations: 246 F.R.D. 421; 2007 U.S. Dist. LEXIS 86806; 2007 WL 3409416Docket: No. CV-06-3461 (SJF)(ETB)

Court: District Court, E.D. New York; November 8, 2007; Federal District Court

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Plaintiff Sea Tow International, Inc. filed a motion to quash a subpoena issued by defendants Duke Pontin and his businesses, arguing that the requested information from plaintiff's attorney, Mitchell A. Stein, is protected by attorney-client privilege and attorney work product. The defendants claim Stein is a necessary witness due to his critical personal knowledge relevant to their defenses and counterclaim. The case involves allegations of trademark infringement and breach of contract stemming from the termination of defendants' licensing agreement to use Sea Tow trademarks. Defendants seek to depose Stein and review related documents, asserting his knowledge is essential for their case.

The court granted the motion to quash, emphasizing that Stein's knowledge is limited to information obtained during his representation of Sea Tow, and that defendants have not exhausted less intrusive means to obtain the information. The memorandum also outlines the legal standards governing discovery under the Federal Rules of Civil Procedure, noting that discovery can be limited if it is duplicative, obtainable from other sources, or if the burden of discovery outweighs its benefits. The court retains discretion to limit discovery to protect parties from undue burden or expense. Oral arguments on this motion took place on October 10, 2007.

Under Federal Rule of Civil Procedure 45, a court may quash or modify a subpoena that requires disclosure of privileged information or imposes an undue burden. The movant bears the burden of persuasion in such motions. In the Second Circuit, depositions of opposing counsel are generally disfavored due to their potential to disrupt the attorney-client relationship and impede litigation. However, these depositions are not outright prohibited; rather, they require a balancing of the necessity for the deposition against the potential oppression and burden on the adversary process. 

District courts in New York follow guidance from the Second Circuit's decision in In re Friedman, which critiques the rigid standards set by the Eighth Circuit in Shelton v. Am. Motors Corp. Instead, the Second Circuit promotes a flexible approach, considering the circumstances of each case, including the necessity of the deposition, the lawyer's role, potential privilege issues, and prior discovery efforts. The fact that a proposed deponent is a lawyer does not automatically exempt them from deposition but is a factor to consider.

In the context of this case, defendants argue for the necessity of deposing plaintiff's attorney, Stein, claiming his extensive experience provides crucial insights relevant to the litigation, including knowledge of business operations, contract issues, and alleged violations pertaining to Sea Tow. This information is asserted to be vital for the defenses presented in their Answer and Counterclaim.

Defendants argue that Stein's testimony in the Florida Action indicates he has "personal knowledge" of the Licensing Agreement and alleged violations, making him a necessary witness in the current litigation. They cite Duke Pontin's declaration, asserting that he has had extensive conversations with Stein that provided significant insights into issues central to both the Florida and New York cases. In contrast, the plaintiff contends that Stein lacks personal knowledge of Sea Tow's operations outside of his role as counsel, which is protected by attorney-client privilege. Stein himself testified in the Florida Action that he has no personal knowledge regarding Pontin's business, except for an email concerning Pontin’s expired captain's license, which he witnessed and discussed with the Coast Guard. However, this information could easily be obtained from Pontin or Coast Guard representatives. The court concludes that defendants have not shown a specific need to depose Stein, as the information sought could be acquired through other means. Consequently, the court finds in favor of the plaintiff, as defendants failed to demonstrate the necessity for Stein's deposition, aligning with precedents where alternative means for obtaining information were available.

Stein has served as general counsel for Sea Tow since 1984 and is involved in the current litigation regarding a Licensing Agreement. The defendants argue that Stein possesses personal knowledge of the Licensing Agreement beyond his role as counsel, positioning him as a fact witness. However, Stein claims he was not involved in negotiating or drafting the agreement, aside from one boilerplate paragraph. The defendants contend that Stein's previous testimony in a Florida action was as a corporate representative, where he allegedly provided personal knowledge. In contrast, plaintiffs argue that his testimony stemmed from being a named party in that action and that it was limited to his legal interpretation of the Licensing Agreement, not factual assertions. 

Evidence from Stein's testimony in the Florida action indicates that he was acting in his capacity as general counsel, despite not formally representing Sea Tow in that instance. He provided legal opinions on the Licensing Agreement and its alleged violations but repeatedly stated he could not speak on behalf of Sea Tow or about its knowledge. Stein asserted attorney-client privilege and noted that specific inquiries should be directed to a corporate representative. His only claim to personal knowledge came from listening to a tape recording. Overall, it is concluded that Stein's role in both the current and Florida actions was that of counsel for Sea Tow, not as a fact witness, supporting Sea Tow's position.

The potential risks of deposing opposing counsel, particularly concerning attorney-client privilege and the work product doctrine, are significant. The plaintiff claims all communications between Stein and Sea Tow are privileged, made in confidence to protect Sea Tow’s interests. Conversely, defendants argue the sought information is not privileged, citing Stein's prior testimony in a related Florida Action, although this testimony included instances where he invoked the attorney-client privilege. The court recognizes Stein's role as counsel for Sea Tow, implying that most of his potential testimony would likely be protected by privilege. Additionally, defendants have not specified what personal knowledge Stein possesses, leading to uncertainties regarding the topics of deposition that may invoke privilege. Thus, this factor favors the plaintiffs.

Regarding the extent of discovery already conducted, both parties acknowledge that while several depositions and document exchanges have occurred, several more depositions, particularly of Sea Tow representatives, remain. Discovery is set to close on November 30, 2007, making this factor neutral between the parties.

The court concludes that allowing the deposition of Stein would impose a substantial burden on the plaintiff without sufficient purpose, particularly as the discovery phase nears its conclusion. Furthermore, the ongoing motion to disqualify Stein as Sea Tow's counsel raises concerns that the defendants’ request is an attempt to use the deposition to undermine Stein’s role in the litigation. Consequently, the plaintiffs' motion to quash the subpoena for Stein's deposition is granted.

The subpoena also seeks a broad range of documents from Stein, including communications with the plaintiff regarding claims and operations. This request is deemed overly broad and likely to include privileged materials.

Plaintiffs' motion to quash the subpoena for documents is granted due to the overbroad and unduly burdensome nature of the requests, as established by precedent cases such as Nova Biomedical Corp. v. i-STAT Corp. and United States v. Pelaez. The court references the concern of subpoenas serving as "fishing expeditions." Additionally, plaintiffs' motion to quash the subpoena directed at their counsel, Mitchell A. Stein, is also granted. In related litigation initiated by Pontin in Florida in 2001, defendants allege multiple claims including breach of contract and fraud, linked to the same Licensing Agreement. A temporary injunction was obtained by defendants against the plaintiffs from the Florida court on August 26, 2006, which invalidated the plaintiff's Notice of Termination of the Licensing Agreement issued on June 24, 2006; this matter is currently under appeal in Florida. The case of Friedman is noted, where an attorney's deposition prior to the Second Circuit’s opinion rendered the appeal moot, making further discussion on the merits non-binding. During oral arguments, Stein confirmed he reviewed a tape recording in his role as counsel for Sea Tow, supporting his position.