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Nocal, Inc. v. Sabercat Ventures


November 15, 2004


The opinion of the court was delivered by: James Larson United States Magistrate Judge

ORDER GRANTING DEFENDANT'S MOTION TO QUASH SUBPOENA AND FOR PROTECTIVE ORDER (Docket #s 52 and 42 respectively); denying without prejudice Defendants' motion for sanctions (Docket # 54) and denying with prejudice Plaintiff's motion for sanctions (Docket #49)


Before the Court is Defendants' motion to quash the subpoena that seeks to compel the testimony of Defendants' attorney, the motion for protective order and the parties' countermotions for monetary sanctions. These motions were referred by the district court (Hon. Phyllis J. Hamilton) as provided by Civil Local Rule 72 and 28 U.S.C. §636(b). This court finds the subpoena: (1) subjects the attorney-witness to harassment, (2) is unduly burdensome, and (3) seeks irrelevant and privileged information. The Court hereby quashes the subpoena and grants a protective order protecting the witness from further discovery attempts and harassment. The Court denies without prejudice Defendants' motion for monetary sanctions pending Plaintiff's further conduct. The Court denies with prejudice Plaintiff's motion for monetary sanctions.

Procedural History

Plaintiff G.C. & K.B. Investments, Inc. (GCKB) and its attorney Barry Schlom served a subpoena upon Defendant Andersen-Draper Investments (AD) and attorney Terrence Beard on September 23, 2004. The subpoena seeks to compel Beard to appear at a deposition and to produce documents on November 16, 2004.

On October 14, 2004 Schlom served another subpoena upon Beard which resulted in another round of meet and confer letters between Beard, Beard's attorney Goebel, and Schlom. The meet and confer letters complied with Local Rule 37-1(a) were filed by Goebel in connection with the motion to quash. On November 4, 2004 the Court granted an order shortening the time for briefing and hearing.

Factual Background

Beard represented the franchisees of SpeeDee Oil Change & Tune Up System (SpeeDee) in various litigation matters for over a decade. The original lawsuit ignited a flurry of related lawsuits in both federal and state courts. Schlom has represented SpeeDee in various litigation matters involving Beard's clients since 1994. In June 1995, Beard drafted a Business Management Agreement (BMA) between Jon Andersen of AD, and Daniel Wittern of Sabercat Ventures, Inc. (Sabercat). The BMA provided that Beard represented neither of the parties involved with the agreement. In July 2003 Andersen's SpeeDee Local Franchise Agreement (LFA) was assigned to Sabercat. Since 1995, Sabercat has been sold twice and is now owned by Scott Scarlett.

In the amended complaint filed in November 2003, Scarlett made no allegations in reference to Beard's role with the BMA. At this point, Schlom began discovery and served Beard with the first of the subpoenas seeking to compel Beard's testimony at deposition, as well as propounding document requests. Schlom contends that no one is better able to testify to the parties' intent in the BMA than Beard, its drafter. He does not contend that the parties are unavailable to testify to their own intent.

Brief History of the Attorneys' Relationship

Beard argues that growing antipathy in his personal relationship with Schlom motivated Schlom to serve the subpoenas with the purpose of harassment. Beard and Schlom have had many interactions since 1994. In January 2003, GCKB filed an injunction in federal court seeking to prevent Beard from representing any SpeeDee franchises in the future. Subsequently, Schlom filed a complaint against Beard with the State Bar of California. The federal action was dismissed pursuant to a SLAPP motion, and Plaintiff was ordered to pay attorney's fees. After Beard responded to the State Bar complaints, the State Bar took no further action.

Legal Analysis

The main issues in this case are: 1) whether Defendant's attorney-witness is presumptively entitled to an order to quash a subpoena that seeks to compel his testimony; 2) whether Plaintiff's subpoena that requires the disclosure of privileged or otherwise protected information, where no waiver or exception applies, can be quashed; 3) whether Plaintiff's subpoena aims to harass and subject the witness to undue burden by seeking documents that are overbroad, irrelevant, privileged, and requiring excessive expense of both money and time; 4) whether Defendant's attorney-witness is entitled to a protective order; 5) whether Defendant is entitled to monetary sanctions against Plaintiff and its attorney for abusive discovery methods or whether Plaintiff is entitled to its expenses for filing this motion.


The Supreme Court of the United States alluded to a presumption that trial counsel should not be forced to testify because doing so compromises the standards of the legal profession. Hickman v. Taylor, 329 U.S. 495, 513 (1947). Moreover, the Court in Hickman and members of the bar do not anticipate that the discovery rules permit an attorney's adversaries to access all of the attorney's files and mental processes. Id. at 514. In Shelton v. American Motors Crop., the Eighth Circuit Court of Appeals relied upon the Hickman presumption in order to fashion a three-prong test to protect a standard against forcing trial counsel to testify as witnesses, and to preserve the adversarial nature of the system. Shelton v. American Motors Corp., 805 F.2d 1323, 1327-28 (8th Cir. 1986). Even though the defendant's attorney is not absolutely immune from deposition, a court should order an attorney's deposition only in limited situations where the party seeking the deposition can show: "(1) no other means exist to obtain the information than to depose opposing counsel, see, e.g., Fireman's Fund Insurance Co. v. Superior Court, 72 Cal. App. 3d 786, 140 Cal. Rptr. 677, 679 (1977); (2) the information sought is relevant and non-privileged; and (3) the information is crucial to the preparation of the case." Massachusetts Mut. Life Ins. Co. v. Cerf, 177 F.R.D. 472 (N. D. Cal. 1998) (citing Shelton v. American Motors Corp., 805 F.2d 1323, 1327-28 (8th Cir. 1986)).

Plaintiff fails to satisfy any of the three prongs of the test in Shelton. First, Plaintiff cannot demonstrate that no other means exist to obtain the discovery because Plaintiff has yet to attempt to depose other parties. Plaintiff proposes to begin discovery with Beard, and has not demonstrated any other efforts to identify the information.

Second, Plaintiff's claim seeks declaratory relief from the Court to determine whether the BMA agreement is in fact a lease. Information relevant to this issue is undisputed and already in Plaintiff's possession. Plaintiff already has access to all of the non-privileged relevant information Beard could offer arising from the BMA negotiations. That information is in the possession of the parties to the BMA. Any other information sought by Plaintiff is protected by AD's long established attorney-client privilege through its at least ten-year relationship with Beard subsequent to the date of the BMA.

Third, Plaintiff has not demonstrated that any other non-privileged information is crucial to the case. The only non-privileged information is the BMA itself, which is already in Plaintiff's possession. The court in the Shelton case devised the three-pronged test to determine when and if a party can rebut the Hickman presumption enjoyed by opposing party's attorneywitness. Defendant attorney Beard is entitled to a presumption against compelling his deposition testimony because Plaintiff fails to satisfy the Shelton test.


"A subpoena may command production only of documents and other things that are 'not privileged' and 'relevant to the claim or defense of any party.'" Fed. R. Civ. Pro. 26(b)(1). Moreover, "[on] timely motion, the court...shall quash or modify the subpoena if it requires disclosure of privileged or other protected matter and no exception or waiver applies." Fed. R. Civ. Pro. 45(c)(3)(A)(iii).

Plaintiff, in the instant case, made four requests for documents subject to the attorneyclient privilege. Defendant's attorney Beard has expressly asserted the attorney-client privilege and in no way waived that privilege. Plaintiff's subpoena seeks both privileged and non-privileged information. As before, the non-privileged information has already been disclosed and is in Plaintiff's possession. While Beard offers no developed explanation as to the privileged information, Beard maintains that the documents sought by Plaintiff are indeed privileged. The requests sought communications and documents between AD and Beard. However, resolution of the issues put before the court by this motion need not focus upon a determination of whether the documents were privileged, but focuses instead upon an analysis of undue burden.


The court shall quash or modify a subpoena upon a finding that it subjects the witness to undue burden. Fed. R. Civ. Pro. 45(c)(3)(A)(I). Additionally, the court may limit the number of documents requested when "the burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues." Fed. R. Civ. Pro.26(b)(2)(iii).

In the instant case, the burden of production outweighs the benefits of the subpoena because Beard and AD's attorney-client and work product privileges and the Hickman presumption, outweigh the benefits of allowing Plaintiff access to documents which are either already within its possession or irrelevant. Moreover, the categories of documents requested by the subpoena are overly broad and irrelevant because they seek the entire litigation history of People v. SpeeDee. Beard believes the search for responsive documents would require hundreds of hours and thousands of dollars to review decades of documents and prepare privilege logs to ultimately produce documents which the Plaintiff already has.

The subpoena seeks to invade the attorney-client and work product privileges because it seeks direct communications between Beard and AD. Beard expressly asserted the privileges and in no way waived those rights.


"Upon motion by a party or by the person from whom discovery is sought, accompanied by a certification that the movant has in good faith conferred or attempted to confer with other affected parties in an effort to resolve the dispute without court action...the court...on matters relating to a deposition...may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense..." Fed. R. Civ. Pro. 26(c). Beard and AD attempted to resolve the subpoena discovery issues with Schlom in a meet and confer. However, Schlom persisted with the subpoena and made no substantial changes to its demands. Beard fears that without the protective order, he will be subject to continued harassment and undue burden. It is within the discretion of this Court to determine whether a protective order is proper in the instant case under the Federal Rules of Civil Procedure.


"If the [motion to compel Beard's testimony via subpoena] is denied, the court may enter any protective order authorized under Rule 26(c) and shall, after affording an opportunity to be heard, require the moving party or the attorney filing the motion or both of them to pay to the party or deponent who opposed the motion the reasonable expenses incurred in opposing the motion, including attorney's fees, unless the court finds that the making of the motion was substantially justified or that other circumstances make an award of expenses unjust." (emphasis added) Fed. R. Civ. Pro. 37(a)(4)(B). This Court denies without prejudice the motion for sanctions pending Plaintiff's further conduct but will schedule the matter for hearing if necessary.


The Court grants Defendant's motion to quash the subpoena to compel the testimony of Defendant's attorney Terrence Beard. The motion is granted because the subpoena subjects counsel to harassment, is unduly burdensome, and seeks irrelevant and privileged information without showing the extraordinary circumstances required by the decision in the Shelton case. The Court also grants a protective order to Defendant protecting the witness from further discovery attempts and harassment. The Court denies without prejudice Defendants' motion for monetary sanctions and denies with prejudice Plaintiff's motion for monetary sanctions.



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