Opinion
Case No. 01-2599-JAR
June 6, 2002
MEMORANDUM AND ORDER
This matter is before the Court on Plaintiff's Motion for Protective Order or in the Alternative to Quash or Modify Subpoenas (doc. 25). Plaintiff requests that the Court issue a protective order precluding discovery into six months of transaction activity on three bank accounts held jointly by Plaintiff and his wife, a non-party. Plaintiff contends that the information sought is wholly irrelevant to the facts of this case and Defendants' subpoenaing of these bank records is solely to annoy and harass him. Defendants oppose the motion arguing that the subpoenaed bank account information is relevant to support the defense that Plaintiff is not the real party in interest, to impeach Plaintiff's claims that he acted on his own behalf in this transaction, and to support the defense that Plaintiff was merely acting as an agent for a third party. For the reasons set forth below, Plaintiff's Motion to Modify Subpoenas (doc. 25) is granted in part.
I. Background Facts
Plaintiff's claims arise out of Defendants' solicitation of Plaintiff to make an investment in defendant Pegasus Engineering, L.L.C. (Pegasus). Specifically, Plaintiff claims that defendant Anderson told him that if he provided $55,000, then Anderson would sign the investment documents for Plaintiff's investment in Pegasus. Pl.'s Br. Based upon these representations, Plaintiff sent defendant Anderson a personal check for $55,000 dated November 29, 2001 and drawn on Plaintiff's checking account with Security Bank of Kansas City (Security Bank). Upon receiving the check, defendant Anderson alleges that he was surprised to receive a personal check from Plaintiff because he understood that he would be dealing with W.K. Jenkins, a non-party to this case. He then called Security Bank to verify that funds were available for Plaintiff's check and was informed by the bank that there were insufficient funds on deposit to cover the check. On Friday, November 30, 2001, Plaintiff's check was presented to Security Bank, clearing Plaintiff's bank account the next business day, Monday December 3, 2001. Plaintiff alleges that Anderson refused to sign the investment documents and refused to return the money.
Plaintiff filed the instant lawsuit seeking to recover the money paid to Defendants. During the course of discovery, defendants Tom W. Waterhouse, Charles L. Baker, and Baker Associates (Baker Defendants) served subpoenas duces tecum on two of Plaintiff's bank accounts at Security Bank and one of Plaintiff's bank accounts at United Bank of Kansas. The subpoenas seek "any documentation . . . regarding checking account . . . held in the name of [Plaintiff and his wife] . . . showing the signatures of individuals authorized to act with respect to this account, and copies of statements, checks, and deposit slips for the period beginning August 1, 2001 to January 31, 2002." Ex. 1 to Pl.'s Br. Plaintiff thereafter filed his Motion for Protective Order or in the Alternative to Quash or Modify Subpoenas.
II. Discussion
Fed.R.Civ.P. 26(c) provides that a court, upon a showing of good cause, "may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense." The party seeking a protective order carries the burden of persuasion to show good cause for it. Reed v. Bennett, 193 F.R.D. 689, 691 (D.Kan. 2000). To establish good cause, that party must make "a particular and specific demonstration of fact, as distinguished from stereotyped and conclusory statements." Gulf Oil Co. v. Bernard, 452 U.S. 89, 102 n. 16 (1981). The decision to enter a protective order is within the court's discretion. Thomas v. International Bus. Machs., 48 F.3d 478, 482 (10th Cir. 1995).
A. Relevancy Objection
Plaintiff first objects to the subpoenas duces tecum on the grounds they seek information that is wholly irrelevant to the facts of this case. The Baker Defendants oppose the motion, arguing that the subpoenaed bank account information is relevant to show that Plaintiff is not the real party in interest because Jenkins provided Plaintiff with the funding for the $55,000 check to defendants.
Relevancy is broadly construed, and a request for discovery should be considered relevant if there is "any possibility" that the information sought may be relevant to the claim or defense of any party. Scott v. Leavenworth Unified School Dist. No. 453, 190 F.R.D. 583, 585 (D.Kan. 1999); Etienne v. Wolverine Tube, Inc., 185 F.R.D. 653, 656 (D.Kan. 1999). A request for discovery should be allowed "unless it is clear that the information sought can have no possible bearing" on the claim or defense of a party. Scott, 190 F.R.D. at 585 (quoting Snowden v. Connaught Lab., 137 F.R.D. 336, 341 (D.Kan. 1991) (emphasis added by Scott).
Scott and Etienne were decided under the prior version of Fed.R.Civ.P. 26(b)(1), which provided that parties could obtain discovery regarding any matter "that is relevant to the subject matter involved in the pending action." (Emphasis added.) Despite the change in the Rule , the standard enunciated in Scott and Etienne still applies. Sheldon v. Vermonty, 204 F.R.D. 679, 690 n. 7 (D.Kan. 2001).
When the discovery sought appears relevant on its face, the party resisting the discovery has the burden to establish the lack of relevance by demonstrating that the requested discovery (1) does not come within the broad scope of relevance as defined under Fed.R.Civ.P. 26(b)(1), or (2) is of such marginal relevance that the potential harm occasioned by discovery would outweigh the ordinary presumption in favor of broad disclosure. Scott, 190 F.R.D. at 585 (citations omitted). However, when relevancy is not apparent, the burden is on the party seeking discovery to show the relevancy of the discovery request. Steil v. Humana Kansas City, Inc., 197 F.R.D. 442, 445 (D.Kan. 2000) (emphasis added).
The Court determines that the subpoenas duces tecum on their face do not appear relevant. As such, the Baker Defendants, as the party seeking the information, have the burden to show the relevancy of these subpoenas. The Baker Defendants assert that the requested bank records are relevant to support their defense that Plaintiff is not the real party in interest, to impeach Plaintiff's claims that he acted on his own behalf in this transaction, and to support the defense that Plaintiff was merely acting as an agent for a third party. The Court determines that these assertions sufficiently demonstrate that the subpoenaed bank records at issue are relevant in this case. The Court, however, determines that, due to the confidential nature of the records sought, the subpoenas duces tecum should be limited to the thirty-day time period prior to the date Plaintiff's check cleared the bank account. All the subpoenas duces tecum at issue in this motion shall therefore be limited to the time period November 3, 2001 through December 3, 2001.
B. Non-Party Records Objection
Plaintiff also objects to the subpoenas duces tecum on the basis that they seek confidential financial information relating to his wife, a non-party. The Baker defendants argue that Plaintiff cannot object on this basis because he failed to keep his "business" funds separate from his "personal" funds.
Under Rule 45(c), the Court "shall quash or modify [a] subpoena if it . . . requires disclosure of privileged or other protected matter and no exception or waiver applies, or [if it] subjects a person to undue burden." Fed.R.Civ.P. 45(c)(3)(A)(iii) and (iv). Generally speaking, only the party or person to whom the subpoena is directed has standing to move to quash or otherwise object to a subpoena. Hertenstein v. Kimberly Home Health Care, Inc., 189 F.R.D. 620, 635 (D.Kan. 1999). "A motion to quash or modify a subpoena duces tecum may only be made by the party to whom the subpoena is directed except where the party seeking to challenge the subpoena has a personal right or privilege with respect to the subject matter requested in the subpoena." Id. (quoting Smith v. Midland Brake, Inc., 162 F.R.D. 683, 685 (D.Kan. 1995)).
The Court determines that Plaintiff has standing to move to quash or otherwise object to the subpoenas at issue because he has a personal right with respect to the subject matter requested in the subpoenas, his bank account records. Notwithstanding this determination, Plaintiff does not have standing to object on behalf of his spouse with regard to her personal rights or privileges in the bank account records. Furthermore, even if he did have standing to object on behalf of his wife, it is well settled that confidentiality does not act as a bar to discovery and is generally not grounds to withhold documents from discovery. See, e.g., McCoo v. Denny's, Inc., 192 F.R.D. 675, 689-90 (D.Kan. 2000); Mackey v. IBP, Inc., 167 F.R.D. 186, 196 (D.Kan. 1996). Confidentiality concerns in many cases may be addressed with an appropriate protective order. Mackey, 167 F.R.D. at 196.
III. Conclusion
The Court finds that Plaintiff has shown good cause for modifying the subpoenas duces tecum at issue and will therefore grant in part Plaintiff's Motion for Protective Order or in the Alternative to Quash or Modify Subpoenas (doc. 25). Defendants' Subpoenas Duces Tecum to Security Bank of Kansas City and United Bank of Kansas are hereby limited to the thirty-day time period from November 3, 2001 through December 3, 2001.
The Court further orders that, within ten (10) days of this Order, the parties shall submit a stipulated protective order to the Court protecting the confidentiality of the information at issue by limiting disclosure of all confidential information to purposes of this lawsuit only. Ten (10) days after the stipulated protective order is entered by the Court, the subpoenaed financial institutions shall produce Plaintiff's bank account information in accordance with the terms of this Order and the stipulated protective order.
IT IS SO ORDERED.