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Playstudios, Inc. v. Centerboard Advisors, Inc.

United States District Court, D. Nevada

May 6, 2019

PLAYSTUDIOS, INC., Plaintiffs,
CENTERBOARD ADVISORS, INC., et al., Defendants.

          ORDER (DOCKET NO. 51)


         Pending before the Court is Plaintiff's motion to quash Defendants' March 1, 2019, non-party subpoenas. Docket No. 51. The Court has considered Plaintiff's motion, Defendants' response, and Plaintiff's reply. Docket Nos. 51, 59, 60.[1] The Court finds the motion is properly resolved without a hearing. See Local Rule 78-1. For the reasons discussed below, the motion to quash is hereby DENIED.

         I. Background

         The instant case involves a dispute over a business agreement between Plaintiff and Defendants, whereby Defendants agreed to perform consulting services and Plaintiff agreed to pay for those services. Docket No. 1-1 at 5. The agreement stipulated that Defendants would provide Plaintiff, a mobile games company, with services related to various business objectives such as opening or acquiring an off-shore development studio, servicing products and features, and establishing infrastructure required to host a team of off-shore developers. Id.

         The motion currently before the Court involves subpoenas served by Defendants on 27 non-party individuals. Docket Nos. 51-2-51-28. The subpoenas require the production of certain documents no later than March 14, 2019. Id. Plaintiff's counsel submits that it has been retained not only to represent Plaintiff and its current employees, but also to represent seven other individuals served with subpoenas; six former employees and one individual who shares office space with Plaintiff. Docket No. 51 at 2. Plaintiff's counsel certifies that it has conferred in good faith with Defendants regarding the issues at hand, including numerous telephone conversations between March 11, 2019, and March 18, 2019. Docket No. 51-1 at 2-3. Plaintiff objects to Defendants' subpoenas on the grounds that: (i) there is no legitimate basis for the breadth and scope of the subpoenas; (ii) there are significant personal privacy interests of non-party individuals at stake that need judicial protection; and (iii) it is impossible to gather and deliver the sheer volume of documents requested in the time given to comply. Docket No. 51 at 2.

         II. Standards

         “[B]road discretion is vested in the trial court to permit or deny discovery.” Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002); see also Crawford-El v. Britton, 523 U.S. 574, 598 (1998). Parties are entitled to discover non-privileged information that is relevant to a party's claim or defense and is proportional to the needs of the case, including consideration of the importance of the issues at stake in the action, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Fed.R.Civ.P. 26(b)(1); see also ATS Prods., Inc. v. Champion Fiberglass, Inc., 309 F.R.D. 527, 530 (N.D. Cal. 2015) (the scope of third-party discovery is subject to the same limitations). The discovery process should be cooperative and largely unsupervised by the court. Sali v. Corona Reg. Med. Ctr., 884 F.3d 1218, 1219 (9th Cir. 2018).

         Rule 45 governs the issuance of subpoenas requiring non-parties to produce designated documents. See Fed. R. Civ. P. 45(a)(1)(A)(iii). A court must grant a timely motion to quash or modify a subpoena that fails to allow reasonable time to comply, requires a person to comply beyond the geographical limits, requires disclosure of privileged or other protected matter, if no exception or waiver applies, or subjects a person to undue burden. See Fed. R. Civ. P. 45(d)(3)(A). The movant seeking to quash a subpoena bears the burden of persuasion. Green v. Baca, 226 F.R.D. 624, 653 (C. D. Cal. 2005). Whether a subpoena is unduly burdensome depends on the facts of each specific case. Id. Additionally, “courts have incorporated relevance as a factor when determining motions to quash a subpoena, particularly when considering whether there is an undue burden.” Bird v. PSC Holdings I, LLC, 2013 WL 12108107, at *1 (S. D. Cal. Nov. 20, 2013) (internal quotations and citation omitted).

         There is a general rule that only the party to which a subpoena is directed has standing to challenge that subpoena. E.g., Paws Up Ranch, LLC v. Green, 2013 WL 6184940, *2 (D. Nev. Nov. 22, 2013). The undersigned has noted that there is a split of authority whether an exception exists to this rule when the movant has a personal right or privilege in the information sought. See id.; see also Wells Fargo Bank, N.A. v. ANC Vista I, LLC, 2015 WL 557069, *2 n.6 (D. Nev. Feb. 11, 2015); Wells Fargo Bank, N.A. v. Iny, 2014 U.S. Dist. Lexis 62381, *3-4 (D. Nev. May 6, 2014).

         Some judges in this District have interpreted the plain language of Rule 45 as dictating that “only the party subject to the subpoena may bring a motion to quash.” In re: Rhodes Cos., 475 B.R. 733, 740-41 (D. Nev. 2012) (expressly declining to adopt a “personal right or privilege” standing rule) (Pro, J.); see also Salem Vegas, L.P. v. Guanci, 2013 WL 5493126, *2-3 (D. Nev. Sept. 30, 2013) (Hoffman, J.).

         On the other hand, several judges have recognized an exception to the general standing rule when the movant has a personal right or privilege in the subpoenaed material. See, e.g., Dinkins v. Schinzel, 2017 WL 4183115 (D. Nev. Sept. 19, 2017) (Foley, J.); In re MGM Mirage Securities Litig., 2014 WL 6675732, *9 (D. Nev. Nov. 25, 2014) (Ferenbach, J.); Painters Joint Committee v. Employee Painters Trust Health & Welfare Fund, 2011 WL 4573349, *4 (D. Nev. Sept. 29, 2011) (Leen, J.), amended on other grounds, 2011 WL 5854714 (D. Nev. Nov. 21, 2011); Copper Sands Home Owners Ass'n, Inc. v. Copper Sands Realty, LLC, 2011 WL 112146, *2 (D. Nev. Jan. 13, 2011) (Leavitt, J.); Diamond State Ins. Co. v. Rebel Oil Co., 157 F.R.D. 691, 695 (D.Nev.1994) (Johnston, J.).

         In addition, even assuming there is an exception to the standing rule when the movant has a personal right or privilege in the subpoenaed materials, courts are split on whether the exception allows the movant to advance only objections directly corresponding to that personal right or privilege. Compare Diamond State, 157 F.R.D. at 695, with Copper Sands, 2011 WL 112146, at *2.

         III. Analysis

         Defendants subpoenaed current and former employees, as well as Playstudios' executives Paul Mathews and Andrew Pascal, to produce documents and communications in response to seven requests. Docket Nos. 51-2-51-28. These subpoenas seek a variety of documents and communications related to any exchanges between the individuals and Plaintiff's executives, as well as documents or communications related to a variety of topics, including Plaintiff's business targets, ...

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