United States District Court, D. Delaware
R. FALLON UNITED STAGES MAGISTRATE JUDGE
Wilmington this 6th day of June, 2017, the court having
considered the parties' submissions regarding
Plaintiffs' motion for a protective order quashing
defendant Wilmington Trust Corporation's
("WTC") subpoenas duces tecum to WHV
Investments Inc. ("WHV"), Buckhead Capital
Management, LLC ("Buckhead"), and DePrince, Race
& Zollo, Inc. ("DePrince") (collectively, the
"Investment Managers") (D.I. 573), IT IS HEREBY
ORDERED that Plaintiffs' motion is denied for the reasons
set forth below.
are institutional investors who purchased the common stock of
WTC between January 18, 2008 and November 1, 2010 ("the
class period"). (D.I. 149 at ¶¶ 25-30)
Plaintiffs claim that WTC's lending practices were part
of a "massive criminal conspiracy that 'fraudulently
conceal[ed] the Bank's true financial condition' and
'deceive[d] regulators and the public.'"
(Id. at ¶ 1) Plaintiffs commenced the instant
civil action on November 18, 2010 (D.I. 1), and filed their
fourth amended complaint on June 13, 2013 (D.I. 149).
May 19, 2014, the court entered a scheduling order requiring
the parties to substantially complete document production on
or before October 17, 2014, and to serve all requests for the
production of documents so as to complete document production
by that date. (D.I. 197 at ¶ 3(f)) The scheduling order
conditioned the deadlines on whether the Governmental
Entities interfered with discovery, stating that,
"[i]n the event any Governmental Entity seeks to stay,
limit, or review any discovery sought or provided by any
party, the parties agree to meet and confer regarding the
reasonable modification of these deadlines."
(Id. at ¶ 7) On August 12, 2014, the court
entered a joint Rule 26(f) scheduling order which
incorporated all dates from the May 19, 2014 scheduling
order. (D.I. 240 at ¶ 2)
accordance with the scheduling orders,
Defendants served document requests on June 24, 2014
concerning Plaintiffs' investments and their
relationships with their investment managers. (D.I. 223; D.I.
575, Ex. A at ¶¶ 1-4, 8, 17, 19, 33-35, 37-38)
Defendants J.P. Morgan Securities LLC and Keefe, Bruyette
& Woods, Inc. issued a subpoena duces tecum to
Buckhead Capital Management, LLC in November 2014. (D.I. 340)
October 10, 2014, the Government moved to intervene in this
action and requested a limited stay of fact depositions,
interrogatories, and requests for admission. (D.I. 297) The
Government expressly excluded from its request "document
production, discovery relating to class certification, or any
other issues in the Scheduling Order." (D.I. 298 at 1)
On July 2, 2015, the court entered an order staying the case.
(D.I. 397) On September 3, 2015, the court clarified that the
July 2, 2015 order staying the case "does not stay the
completion of document production that is not the subject of
a pending motion to compel." (D.I. 404)
court lifted the stay on December 19, 2016 and ordered the
parties to meet and confer regarding a revised schedule.
(D.I. 488) The parties were unable to reach an agreement
regarding a revised schedule, and the court held a hearing on
January 19, 2017 to consider the parties' competing
positions. (D.I. 496-501) On January 24, 2017, the court
issued a Memorandum Order entering a new scheduling order,
which set a deadline for all fact discovery of June 1, 2017.
(D.I. 509 at 3) The January 24 scheduling order did not
specifically mention document production.
March 3, 2017, WTC served three subpoenas duces
tecum, seeking the production of documents from the
Investment Managers by April 6, 2017. (D.I. 533; D.I. 534;
D.I. 535) Plaintiffs filed the pending motion to quash the
document subpoenas on March 27, 2017, alleging that the
requests should have been served in advance of the October
17, 2014 deadline. (D.I. 577 at 6-8) The Investment Managers
did not move to quash the subpoenas in accordance with Rule
45(d), and indicated their intention to produce responsive
documents if the instant motion is resolved in favor of WTC.
(D.I. 605, Exs. 2-5)
preliminary matter, the court concludes that Plaintiffs have
standing to bring their motion to quash WTC's third-party
subpoenas. "Generally, only the entity subject to the
subpoena has standing to challenge it." NorguardIns.
Co. v. Serveon Inc., C.A. No. 08-900, 2011 WL 344076, at
*2 (D. Del. Jan. 28, 2011). An exception to the general rule
is made "where the party claims some personal right or
privilege relating to the documents sought." Oliver
B. Cannon & Son, Inc. v. Fidelity & Cas. Co.
o/N.Y., 519 F.Supp. 668, 680 (D. Del. 1981); see
also Fed. R. Civ. P. 45(d)(3)(A)(iii). Bank records are
generally confidential, and confer standing on the party
whose records are sought pursuant to the subpoena. Ace
Hardware Corp. v. Celebration Ace Hardware, LLC, C.A.
No. 09-109-SLR, 2009 WL 3242561, at *2 (D. Del. Oct. 8, 2009)
("Personal rights claimed with respect to bank account
records give a party sufficient standing to challenge
third-party subpoenas served upon financial institutions
holding such information."). In the present case, WTC
seeks to subpoena Plaintiffs' investment records from the
non-party Investment Managers. Under these circumstances,
Plaintiffs have a privacy interest in the subpoenaed
information and, consequently, have standing to challenge the
subpoenas directed to the third-party Investment Managers.
However, Plaintiffs' motion to quash is denied because
the subpoenas are not untimely under either the court's
January 24 scheduling order, which sets a deadline for
completion of all fact discovery on or before June 1, 2017,
or the subsequent stipulation to extend time, which extended
the fact discovery deadline to August 15, 2017. (D.I. 509 at
3; D.I. 645) In previous orders, the court separately carved
out requests for production of documents when it sought to
establish separate deadlines or requirements for document
discovery. (D.I. 197 at ¶ 3(f); D.I. 404) The
court's failure to specifically address the completion of
document production in its January 24 scheduling order
supports WTC's position that the August 15, 2017 deadline
for all fact discovery encompasses the third-party subpoenas.
Plaintiffs' argument that the deadline for completion of
document production passed on October 17, 2014 is undercut by
the court's September 3, 2015 clarification of its July
2, 2015 order, which states that "[t]he Court's July
2, 2015 Order does not stay the completion of document
production that is not the subject of a pending motion to
compel." (D.I. 404) This language indicates that the
court considered document production to be ongoing as of July
2, 2015, months after the passage of the October 17, 2014
deadline in the original scheduling order.
Moreover, the court's January 24 scheduling order is
consistent with the parties' competing scheduling order
proposals, which did not seek an exception or a separate
deadline for document discovery or third-party subpoenas, and
did not ...