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Moon Mountain Farms, LLC v. Rural Community Insurance Co.

United States District Court, N.D. California

July 10, 2014

MOON MOUNTAIN FARMS, LLC, Plaintiff,
v.
RURAL COMMUNITY INSURANCE COMPANY, Defendant.

ORDER GRANTING MOTION TO TRANSFER

SAMUEL CONTI, Sr., District Judge.

I. INTRODUCTION

Now pending before the Court are three motions: (1) Plaintiff Moon Mountain Farms, LLC's ("MMF") motion to compel; (2) MMF's motion to transfer; and (3) nonparty Wells Fargo & Company's ("Wells Fargo") motion to disqualify counsel. These motions all relate to a subpoena issued from this District in October 2013 for an action pending before the District of Arizona (Case No. 2:13-cv-00349-DJH). All three motions are fully briefed[1] and suitable for decision without oral argument per Civil Local Rule 7-1(b). For the reasons set forth below, the Court GRANTS MMF's motion to transfer and TRANSFERS all pending motions to the District of Arizona.

II. BACKGROUND

These motions arise out of an insurance dispute between MMF and Defendant Rural Community Insurance Company (RCIC). MMF alleges that RCIC erroneously denied an insurance claim that MMF made in 2007. The claim was arbitrated, and the arbitrator found that RCIC was required to indemnify MMF. MMF brought suit in Arizona, alleging that RCIC acted with bad faith in handling the insurance claim and subsequent arbitration. MMF Mots. at 3. It is that lawsuit, currently being heard before the United States District Court for the District of Arizona, to which the subpoena at issue in these motions relates.

In January 2014, Judge Bolton, who was then presiding over the Arizona case, [2] granted MMF's motion to compel discovery of (1) RCIC's post-denial claims file, (2) RCIC's counsel's coverage opinion, and (3) communications between RCIC and its consulting experts. Case No. 2:13-cv-00349-DJH ECF No. 73 ("Production Order"), at 2, 7. The order to compel RCIC's counsel's opinion was premised on a finding that RCIC had impliedly waived attorney-client privilege. Id. at 5. RCIC has disclosed approximately fifteen pages of discovery. MMF Mots. Ex. A ("Axel Decl.") ΒΆΒΆ 33, 38, Ex. 12. The parties disagree as to whether RCIC has complied with the order, and MMF argues that Wells Fargo, which is RCIC's parent company, possesses discoverable documents. As a result, MMF issued a subpoena from this District in October 2013. Wells Fargo objected, and MMF now brings this motion to compel.

Wells Fargo has also brought a motion to disqualify counsel for MMF. Wells Fargo argues that lawyers for MMF currently represent certain Wells Fargo subsidiaries, which creates an impermissible conflict of interest. DQ Mot. at 1-2. MMF has requested that the Court transfer the motion to compel, along with the related motion to disqualify counsel, to the District of Arizona for resolution. MMF Mots. at 8; DQ Opp'n at 4. Wells Fargo has also requested judicial notice of a transcript of proceedings before Judge Bolton in the underlying Arizona action. ECF No. 29. MMF has opposed the request. ECF No. 31.

III. LEGAL STANDARD

Federal Rule of Civil Procedure 45, which governs the use of subpoenas, was significantly amended last year. The amendments were adopted in April 2013 but did not take effect until December 1, 2013. The subpoena at issue here was issued in October, prior to the effective date of the amendments. However, the amended version of the Rules applies to proceedings after the effective date in pending cases unless the Supreme Court specifies otherwise, or applying them would be infeasible or work an injustice. Fed.R.Civ.P. 86(a)(2). The amended version of Rule 45 requires that subpoenas be issued from the court where the action is pending. Fed.R.Civ.P. 45(a)(2). If compliance is required elsewhere, the amended rule permits the compliance court to "transfer a motion under this rule to the issuing court if the person subject to the subpoena consents or if the court finds exceptional circumstances." Fed.R.Civ.P. 45(f).

The Advisory Committee notes provide some guidance as to when exceptional circumstances may be found:

The prime concern should be avoiding burdens on local nonparties subject to subpoenas, and it should not be assumed that the issuing court is in a superior position to resolve subpoena-related motions. In some circumstances, however, transfer may be warranted in order to avoid disrupting the issuing court's management of the underlying litigation, as when that court has already ruled on issues presented by the motion or the same issues are likely to arise in discovery in many districts. Transfer is appropriate only if such interests outweigh the interests of the nonparty served with the subpoena in obtaining local resolution of the motion.

Fed. R. Civ. P. 45 advisory committee's note.

IV. DISCUSSION

Wells Fargo opposes transfer of the motion to compel to the District of Arizona. Consequently, the Court may only transfer the motions related to this subpoena to the District of ...


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