United States v. Cory, 3:20-cr-99-MMH-JRK
| Decision Date | 20 August 2021 |
| Docket Number | 3:20-cr-99-MMH-JRK |
| Parties | UNITED STATES OF AMERICA v. JASON CORY |
| Court | U.S. District Court — Middle District of Florida |
Assistant U.S. Attorney (Mesrobian), Todd Foster, Esquire Kevin Darken, Esquire, Daryl Greenberg, Esquire, S. Jonathan Vine, Esquire
This cause is before the Court on Non-Parties, Sharedlabs Inc., Kishore Khandevalli, and Cesar Castillo's Motion to Quash Subpoenas Duces Tecum and Memorandum of Law (Doc. No. 65; “Motion”), filed April 14, 2021. Defendant responded in opposition to the Motion on April 28, 2021. See Defendant's Response to Non-Parties, Sharedlabs, Inc., Kishore Khandevalli, and Cesar Castillo's Motion to Quash Subpoenas Duces Tecum (Doc. No. 67). For the reasons stated below, the Motion is due to be granted in part and denied in part.
Defendant was charged on July 22, 2020 in a four-count indictment with wire fraud, in violation of 18 U.S.C. §§ 1343, 1349, and 2 (Counts I-III), and engaging in illegal monetary transactions, in violation of 18 U.S.C. §§ 1957 and 2 (Count IV). See Indictment (Doc. No. 1). On the same date, the Government filed a Motion for Capias (Doc. No. 2) that the Court granted. See Order (Doc. No. 3), entered July 22, 2020. An arrest warrant was issued, and on August 12, 2020, Defendant self-surrendered and made his initial appearance. See Minute Entry (Doc. No. 9). Defendant was arraigned on August 20, 2020. See Minute Entry (Doc. No. 21). He pleaded not guilty. Id.
Relevant to the instant Motion, on November 4, 2020, Defendant filed a Motion for Rule 17(c) Subpoenas and Incorporated Memorandum of Law (Doc. No. 30; “Motion for Subpoenas”) and an accompanying ex parte sealed declaration of his counsel regarding the need for the subpoenas (Doc. No. S-33). After the Government responded (Doc. No. 36), Defendant replied with leave of Court (Doc. Nos. 38, 42), and the Government sur-replied with leave of Court (Doc. Nos. 38, 43). The undersigned on February 18, 2021 held a videoconference hearing on the Motion for Subpoenas. See Minute Entry (Doc. No. 48); In Camera Transcript of In Camera, Ex Parte Portion of Hearing (Doc. No. S-75), filed August 12, 2021.[1] At the end of the hearing, Defendant was directed to submit modified proposed subpoenas. He did so. The undersigned then entered an Order on February 23, 2021 granting the Motion for Subpoenas and directing the service of the modified subpoenas but noting that the receiving parties were not “prevent[ed from] filing motions to quash after the subpoenas are issued.” Order (Doc. No. 49), at 4-5. Thereafter, the instant Motion and Response were filed.
Trial is currently set for the trial term commencing on December 6, 2021. See Order (Doc. No. 62), entered April 7, 2021.
Rule 17(c), Federal Rules of Criminal Procedure (“Rule(s)”), governs the use of subpoenas duces tecum in criminal proceedings and allows courts to “direct the witness to produce the designated items in court before trial or before they are to be offered in evidence.” Fed. R. Crim. P. 17(c). Rule 17(c) “was not intended to provide a means of discovery for criminal cases”; rather, “its chief innovation was to expedite the trial by providing a time and place before trial for the inspection of subpoenaed materials.” United States v. Nixon, 418 U.S. 683, 698-99 (1974); see also United States v. Silverman, 745 F.2d 1386, 1397 (11th Cir. 1984) (recognizing that Rule 17(c) “was not intended to provide an additional means of discovery for any party in criminal cases” (citation omitted)).
To obtain the production of information under Rule 17(c), a party must show the following:
(1) that the documents are evidentiary and relevant; (2) that they are not otherwise procurable reasonably in advance of trial by exercise of due diligence; (3) that the party cannot properly prepare for trial without such production and inspection in advance of trial and that the failure to obtain such inspection may tend unreasonably to delay the trial; and (4) that the application is made in good faith and is not intended as a general “fishing expedition.”
Nixon, 418 U.S. at 699-700. The party must therefore “clear three hurdles: (1) relevancy; (2) admissibility; (3) specificity.” Id. at 700.
Once a subpoena is authorized and served, Rule 17(c)(2) allows a non-party to move to quash a subpoena: “[o]n motion made promptly, the court may quash or modify the subpoena if compliance would be unreasonable or oppressive.” Fed. R. Crim. P. 17(c)(2) (emphasis added). In ruling on such a motion to quash, a court “must reconsider the Nixon standard in determining whether compliance with the subpoena would be unreasonable or oppressive.” United States v. Thompson, 310 F.R.D. 542, 545 (S.D. Fla. 2015) (quotation and citation omitted).
Here, Non-parties first argue the material sought by the subpoenas is irrelevant and inadmissible, and the subpoenas are not specific. Motion at 7-11. Next, they contend that compliance with the subpoenas would be unreasonable and oppressive. Id. at 11-15. In attempting to convince the Court that they should not have to comply, Non-parties argue that the use of the terms such as “all documents, ” “all minutes, ” “all emails, ” “any other officer, director, or employee, ” and “any other agreements” shows “Defendant is merely improperly using the subpoenas to search for and attempt to procure more discovery.” Id. at 12. Non-parties also argue “the overbroad language renders the requests not proportional to the needs of the case and the extreme burden and expense on the [N]on-parties outweighs the requests' purported benefit.” Id. at 13. They give an estimate of an expected “100 hours of work” to respond, generally citing “investigating, searching, compiling, and responding.” Id. Non-parties represent, “[u]pon information and belief, there is no reliable central depository where documents are stored or could be found due to prior record-keeping practices and e-mail retention protocols at SharedLabs.” Id. at 14. As to burden, Non-parties state that “[i]t is likely that the contents of the requests based on the scope of time, content, and persons involved would comprise of an incalculable number of pages.” Id. at 14-15.
According to Non-parties, Defendant should already have the subpoenaed documents from SharedLabs, given that he was “the sole board member and head of the company[] prior to any subsequent individuals joining the board.” Id. at 14. Non-parties also state that the subpoenaed information contains “confidential, sensitive information[] as well as attorney-client and work-product information and potentially confidential trade secret or proprietary information.[]” Id. at 15.
Responding, Defendant argues the only grounds upon which Non-parties may move to quash are unreasonableness or oppression. Response at 1-2. According to Defendant, Non-parties have the burden, and they have failed to meet it with affidavits or other evidence. Id. at 2-3. Defendant then provides reasons why his counsel believes compliance is not unreasonable or oppressive. Id. at 3-7. As to the claim of privilege, Defendant characterizes it as painting with a “broad brush” and argues that Non-parties either should produce a privilege log or the Court should issue a protective order governing such information. Id. at 8-10.
In the Order entered on February 23, 2021, after hearing from the Government, from Defendant (ex parte), and reviewing the declaration of Defendant's counsel filed ex parte and under seal, the undersigned found the Nixon requirements were met as to the amended versions of the subpoenas that Defendant submitted after the hearing. Regardless of whether Non-parties are permitted to raise the Nixon-types of objections under Rule 17, the undersigned has sua sponte reconsidered the previous findings. To that end, the undersigned determines that the Nixon requirements are met as to paragraphs 3-7 and 9 of the SharedLabs subpoena and as to the entire subpoena to Kishore Khandavalli (consisting of one paragraph). The undersigned therefore declines to alter the previous findings regarding relevancy, admissibility, and specificity as to these specific paragraphs.[2] See, e.g., United States v. Wey, 252 F.Supp.3d 237, 254 (S.D.N.Y. 2017) ().
The undersigned also has determined that compliance with these specific paragraphs does not subject the Non-parties to such a burden that compliance would be unreasonable or oppressive. See, e.g., United States v. Martinov, No. CR11-00312 SBA-1 (KAW), 2012 WL 3987329, at *2-3 (N.D. Cal. Sept. 11, 2012) (unpublished) (). Nor is the undersigned convinced by Non-parties' assertion that Defendant should have the documents he subpoenaed from SharedLabs.
Regarding paragraphs 1, 2, 8, and 10 of the SharedLabs subpoena[3] and the entire subpoena to Cesar Castillo (consisting of two paragraphs), [4] the undersigned upon further reflection determines that they do not meet the specificity requirements of Rule 17, Nixon, and its progeny. With respect to these paragraphs, Defendant “has demonstrated why he...
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