Meisel v. F.B.I.

• Decision Date: 23 May 2002
• Docket Number: No. M8-85 (VM).,M8-85 (VM).
• Citation: 204 F.Supp.2d 684
• Parties: Louis MEISEL and the Louis Meisel Gallery, Petitioners, v. FEDERAL BUREAU OF INVESTIGATION, Defendant.
• Court: U.S. District Court — Southern District of New York

204 F.Supp.2d 684

Louis MEISEL and the Louis Meisel Gallery, Petitioners, v. FEDERAL BUREAU OF INVESTIGATION, Defendant.

No. M8-85 (VM).

United States District Court, S.D. New York.

May 23, 2002.

DECISION AND ORDER

MARRERO, District Judge.

Petitioner Louis K. Meisel and The Louis K. Meisel Gallery (collectively, "Meisel") filed the instant application as a miscellaneous motion to compel the Federal Bureau of Investigation (the "FBI"), as a third party, to produce its current and former agents for depositions in a state court proceeding (the "Application"). The FBI objected to the procedure and opposed Meisel's application. For the foregoing reasons, the Court denies the Application without prejudice.

I. BACKGROUND

The Application presents a discrete legal issue. Nevertheless, the Court's ruling can only be understood against the backdrop of this matter's unique procedural posture. Accordingly, the following is a detailed summary of the uncontested factual and procedural background. This summary is taken from Meisel's Application, the Declaration of Danna Drori, dated May 13, 2002, and their attachments.

In 1998, Edward Blumenfeld ("Blumenfeld") filed a complaint in the Supreme Court of the State of New York, New York County, against Meisel (the "State Litigation"). In that case, Blumenfeld alleges that Meisel committed fraud by selling mobiles it purported were created by the artist Alexander Calder ("Calder"), knowing such mobiles were fakes. Meisel deposed an expert witness for Blumenfeld, Alexander Rower ("Rower") who is the grandson of Calder and often employed to authenticate works attributed to Calder. Rower stated that he visited Meisel in 1989, saw a mobile attributed to Calder there (the "Mobile") and informed Meisel that he did not believe the Mobile was genuine. He stated that he also informed FBI agents Margo Dennady ("Dennady") and Catherine Begley ("Begley") of his opinion.

Meisel apparently "has reason to doubt" Rower's testimony and decided to seek information from the FBI that might refute it. (See Application, at ¶ 11.) The instant petition is one more step in the forced march Meisel must take to obtain the information it seeks.

The first step Meisel took was to serve a subpoena duces tecum on the FBI on July 19, 2001 (the "July Subpoena") seeking documents relating to communications between Rower and Begley or other FBI agents that relate to the Mobile. The FBI did not comply with the July Subpoena on the ground that it, inter alia, violated the sovereign immunity of the United States.

Meisel's second step was to file a miscellaneous motion in this Court to compel the production of the documents contained in the July Subpoena. Before the matter was heard by Judge Sand, sitting in Part I, the FBI and Meisel entered into a stipulated dismissal pursuant to which the FBI agreed to produce documents. In addition, Meisel reserved its "right to make further application for depositions to authenticate the FBI Documents as needed." Stipulation and Order of Settlement, M18-303, slip. op. at 2 (S.D.N.Y. Mar. 5, 2002) (the "Stipulation").

The FBI first complied with the Stipulation by providing Meisel with one document. Meisel objected because it found the document to be irrelevant and unresponsive to its needs. The FBI provided Meisel with two additional documents. Unsatisfied, Meisel sought further assistance from Judge Sand pursuant to Local Rule 5(a), which provides that: "When a modification or further action on such determination is sought, it shall be referred to the judge who made the original determination even though said judge is no longer sitting in Part I." Judge Sand found that the FBI had complied fully with the Stipulation. He instructed that Meisel's "request for depositions is a new application which [Meisel is] free to make `as the rules permit.'" Memorandum and Order, M18-303, slip op. at 3 (S.D.N.Y. Apr. 4, 2002).

Meisel's third step was, on April 5, 2002, to issue two more subpoenas duces tecum on the FBI seeking deposition testimony from Dennady and Begley (the "Subpoenas"). The Subpoenas were issued from the State Litigation. By letter from the FBI's Chief Division Counsel, Steven A. Carlotto, to Gerald E. Singleton dated April 11, 2002 (the "April Letter"), the FBI informed Meisel that it would not comply with the Subpoenas because Meisel had not satisfied applicable procedural regulations.¹ In particular, the FBI stated it was not authorized to disclose the requested information because the Subpoenas: (1) were issued by a state court and thus jurisdictionally invalid; (2) did not explain how the information requested is relevant to the underlying litigation and thus did not satisfy Touhy Regulations; (3) violated the Privacy Act; (4) were barred by res judicata, and because Begley was no longer employed at the FBI.

Meisel's fourth step was to file the Application. Meisel filed the Application pursuant to the Privacy Act, 5 U.S.C. § 552a(b)(11), and the Administrative Procedures Act, 5 U.S.C. § 702 et seq. (the "APA"), arguing that the April Letter is an arbitrary and capricious final agency action. As relief, Meisel requests that the Court issue an order "directing the FBI to comply with the Subpoena and to produce FBI Agents Dennady and Begley for deposition." (Application, at 15.) The Application was assigned to this Court, sitting in Part I.

The FBI filed numerous objections and oppositions to Meisel's miscellaneous motion. Meisel filed letter briefs in reply. On May 15, 2002, the Court held a hearing to determine its jurisdiction and address the parties' arguments. Following that hearing, the parties supplemented their oral arguments with additional letter briefs.

At the Hearing, also, Blumenfeld sought to intervene pursuant to Fed.R.Civ.P. 24(a). Meisel consented to the intervention but the FBI objected. On the record, Blumenfeld explained his interest in the proceeding, informing the Court that he sought only "reciprocity or parity" rights to be present at the depositions of Dennady and Begley, if ordered. (Tr., at 39-41.) Based on these representations the FBI withdrew its objection. (Tr., at 41-42.) The Court granted Blumenfeld's motion to intervene. (Tr., at 44.)

II. DISCUSSION

The Court has reviewed the parties' submissions and provides the following summary as a guide to their positions and arguments. Meisel argues that it made a proper request under the Touhy Regulations and may proceed by miscellaneous motion to commence an action pursuant to the APA to enforce its rights. Meisel seeks deposition testimony as relief.

The FBI's primary objection is that Meisel should have proceeded by filing a complaint, thereby commencing an action pursuant to the Federal Rules of Civil Procedure. The FBI also opposes Meisel's motion on the grounds that: (1) the Application is barred by the doctrine of sovereign immunity; (2) the Application is precluded by res judicata; (3) Meisel failed to follow Touhy Regulations; and (4) there has been no final agency action on which to base an APA action. The Court addresses each argument in turn.

A. Commencement of an Action Pursuant to the APA

The Federal Rules of Civil Procedure instruct that the only "action" they provide for is a civil action, Fed.R.Civ.P. 2, that can be commenced only by filing a complaint. See Fed.R.Civ.P. 3. The Second Circuit, however, identified a circumstance whereby an APA action may be commenced without filing a complaint. See Environmental Protection Agency v. General Electric Co., 197 F.3d 592 (2d. Cir.1999) ("G.E."). In G.E., the Second Circuit held that "the APA allows the enforcement of a non-party subpoena duces tecum for discovery against the government through a motion to compel compliance." Id. at 599. In that case, General Electric Co. ("GE") had requested documents from the Environmental Protection Agency ("EPA") as part of its discovery efforts in a litigation pending before the United States District Court for the District of New Jersey. The EPA declined to honor the subpoena. When GE moved to compel the subpoena by miscellaneous motion in the Southern District of New York, the EPA moved to quash it because, inter alia, GE should have filed a complaint under Federal Rule of Civil Procedure 3 to commence an APA action and obtain the necessary waiver of sovereign immunity. The district court agreed and dismissed GE's miscellaneous motion. The Second Circuit, however, reversed because "the district court interpreted `action' in section 702 of the APA in too narrow a fashion for the purposes of this case." G.E., 197 F.3d at 599. It remanded GE's miscellaneous motion for further proceedings.

The parties here focused their efforts on arguing and briefing the question of whether the G.E. decision permits Meisel a party in a pending state litigation, to obtain discovery from the FBI, as a third party to the State Litigation, by filing a miscellaneous motion seeking testimony and documents. The FBI opposes Meisel's use of this procedure because the expediency of proceeding by miscellaneous motion deprives the FBI of the lengthier time schedule to answer contained in the Federal Rules of Civil Procedure. (See Tr., at 28 ("[T]he government's main concern here is creating precedent of allowing State Court litigants to hail the FBI on an expedited basis in Part 1.")); see also Fed. R.Civ.P. 12(a) (defendant who waives summons has 60 days to answer complaint). The FBI did not identify any concrete harm or prejudice that would result from expedited review for state court litigants as well as federal court litigants. Rather, the FBI asserts that the distinction between enforcing a subpoena issued by a federal court in a pending federal litigation by miscellaneous motion and enforcing a subpoena issued by a state court in a pending state litigation is inherently determinative, requiring the Court to reject the Application as a Part I matter. As support, the FBI cites cases that were removed...