North Carolina Business Litigation Report

Business Court Rules On Multiple Discovery Issues, Including: Validity Of Subpoena, Deposing Opposing Counsel, And Need For A Motion For A Protective Order

There haven't been a lot of opinions from the Business Court on Motions to Compel, but yesterday there were two, both from Judge Murphy.  In the first, Blue Ridge Pediatric & Adolescent Medicine, Inc. v. First Colony Healthcare, LLC, 2012 NCBC 45, the Judge found a general objection insufficient to withstand the Motion to Compel and made other rulings of interest.

You'd Better Think About Moving for a Protective Order

The objections to the discovery in the case stated that the discovery was inappropriate and that the Defendant intended to move for a protective order against it.

But the Defendants who had objected to the discovery never followed on with their Motion for a Protective Order.  Judge Murphy held that this was fatal to their opposition to the Motion to Compel and granted the Motion:

The appropriate means for the [] Defendants to prevent or limit discovery that they contend is unreasonable, inappropriate, and excessive is to seek a protective order under Rule 26(c). Because no such motion has been made to this Court, the Court concludes that the [] Defendants have not properly contested Plaintiff Blue Ridge’s discovery requests.

Op. 29 (emphasis added).

So if you are trying to shut the other side down on discovery, you'd better file a Motion for a Protective Order soon, probably before they file a Motion to Compel.

And there's more to the Blue Ridge case.

Service of Subpoena on a Corporation

When you send a subpoena to a corporation, do you have to address it to a particular human being?  Rule 45 says that a subpoena must contain "[a] command to each person to whom it is directed. . . ."

The subpoena at issue was addressed to a law firm (a P.A., and therefore a corporation), without naming an individual or agent responsible for compliance.  There's no North Carolina appellate case law on the validity of this sort of subpoena.

The Judge found "substantial compliance" with Rule 45, particularly since a corporation is often held to be a "person" under the law.

Good to know, though there's no reason not to put the name of the registered agent on a subpoena to a corporation.

Preserving Objections Based on Privilege

The law firm quarreling with the validity of the subpoena also objected to it on the basis that it sought privileged materials.  And it did, it asked for "all materials, whether considered privileged or not, that relate to the transactions and execution of instruments that give rise to this litigation."

Here, the non-compliance with the Rules of Civil Procedure was more extreme than with the subpoena.   Rule 45(d)(5) says that a person receiving a subpoena objecting on grounds of privilege must make the objection "with specificity" and support it with:

a description of the nature of the communications, records, books, papers, documents, electronically stored information, or other tangible things not produced, sufficient for the requesting party to contest the objection.

Judge Murphy held that as a result of a failure to obey Rule 45, the privilege issue was not properly before him.  Op. ¶49.  He didn't find waiver of the privilege, however.  He ordered a privilege log to be produced in thirty days, and for the parties to meet to attempt to resolve the claims of privilege.

Deposing Opposing Litigation Counsel

 You've all wanted to depose opposing trial counsel at one time or another.  Admit it. 

There's no North Carolina state court authority on whether you can do that, but Blue Ridge provides some guidance.  It adopts the standard set out by the Eighth Circuit in Shelton v. American Motors Corp., 805 F.2d 1323 (8th Cir. 1986), followed by the Middle District of North Carolina in N.F.A. Corp. v. Riverview Narrow Fabrics, Inc., 117 F.R.D. 83 (M.D.N.C. 1987); and Static Control Components, Inc. v. Darkprint Imaging, Inc., 201 F.R.D. 431 (M.D.N.C. 2001).

The Shelton case says that you can depose opposing counsel only if you have:

shown that (1) no other means exist to obtain the information than to depose opposing counsel; (2) the information sought is relevant and nonprivileged [sic]; and (3) the information is crucial to the preparation of the case.

Op. 58.

Applying that standard, Judge Murphy quashed the subpoena to the attorney who had signed the Complaint.He didn't find attractive Defendants' position that they wanted to ask the lawyer about “advice, communications, and receipt of documents [that are] the basis” of Plaintiffs’ suit.  He said that "[s]uch knowledge is precisely the type of information Shelton attempts to protect from disclosure by litigation counsel in a deposition."  Op. 62.

The opportunity for deposing opposing litigation counsel is pretty limited.  Better quench that desire.

 There's Another One Coming

Yes, I did say there were two Motion to Compel opinions.  The Blue Ridge case was so chock full of stuff that I'm saving the other case for Monday.

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Mack Sperling
Brooks Pierce, LLP
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