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concerning non-party discovery under Fed. R. Civ. P. 45, "[n]umerous courts have concluded that a parent corporation has a sufficient degree of ownership and control over a wholly[]owned subsidiary that it must be deemed to have control over documents located with this subsidiary"
Summary of this case from Motorola Credit Corp. v. UzanOpinion
04 Civ. 7844 (BSJ) (DFE), 04 Civ. 8967 (BSJ) (DFE).
June 20, 2006
MEMORANDUM AND ORDER
I am responding to the joint letter dated June 14, 2006 from (a) Visa U.S.A., Inc. and (b) the non-party "Citi Entities" (Citigroup Inc., Citibank, N.A., and Citibank (South Dakota), N.A.). Pursuant to my normal practice, I plan to keep the joint letter and its exhibits in my chambers file, and I do not plan to have it docketed.
In each of these two lawsuits, Visa U.S.A. has served a document subpoena on each of the three Citi Entities. They raise a venue issue as to Citibank (South Dakota), N.A., which they say "is the entity that issues credit cards and will have the vast majority of responsive documents." They say that the U.S. District Court for the District of South Dakota is the only proper court to hear a motion to compel documents from Citibank (South Dakota), N.A. It appears to be undisputed that Citibank (South Dakota), N.A. is a wholly owned subsidiary of Citigroup, Inc. and Citibank, N.A. It is true that Visa U.S.A. obtained subpoenas from the district court in South Dakota on February 13, but it appears that those subpoenas were back-stops to the subpoenas it obtained three days earlier from our court. Our court's subpoenas were addressed to the parent companies, which do not deny that they have control over the documents of their wholly owned subsidiary in South Dakota. Citigroup Inc. and Citibank, N.A. have no answer to Visa U.S.A.'s quotation from Judge Sweet:
Pursuant to Federal Rule of [Civil] Procedure 45, a non-party may be required to produce materials in its "possession, custody, or control."
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Numerous courts have concluded that a parent corporation has a sufficient degree of ownership and control over a wholly-owned subsidiary that it must be deemed to have control over documents located with this subsidiary.Dietrich v. Bauer, 2000 WL 1171132, *2-3 (S.D.N.Y. Aug. 16, 2000). Accordingly, I have jurisdiction to compel Citigroup Inc. and Citibank, N.A. to produce documents that are located with any of their wholly-owned subsidiaries.
I agree with each of the objections made by the Citi Entities to eleven categories of documents. See 6/14/06 joint letter at pp. 18-26. They have offered to produce all documents described in the 22 paragraphs set forth by them in Exhibit V to the joint letter. As to Paragraphs 3-22, the City Entities propose a cut-off two years prior to February 10, 2006 (the date of the subpoenas). I note that the first bank to "partner" with American Express did so in January 2004. (Exh. A, p. 1.) Accordingly, I direct that the time period for Paragraphs 3-22 shall be from January 1, 2004 to February 10, 2006. This does not preclude Visa U.S.A. from going back farther in time at depositions and (for good cause shown) in future document requests.
I direct the City Entities to produce all documents described in Paragraphs 1-21 of Exhibit V, on a rolling basis, commencing on June 23, 2006 and concluding no later than July 13, 2006. As to Paragraph 2 ("The document production made by Citigroup Inc. to the Department of Justice in United States v. Visa and MasterCard"), I see no reason why the entire DOJ production should be delayed beyond June 23.
I disagree with the Citi Entities as to the twelfth category. Request No. 53 calls for:
Citigroup organizational charts sufficient to identify all Citigroup divisions, business units, and/or individuals . . . (a) involved in the evaluation of whether and/or the decision to issue American Express-Branded Cards and/or Discover-Branded Cards and/or (b) involved in the actual issuance of American Express-Branded Cards and/or Discover-Branded Cards.
Visa U.S.A. explains, "This request is plainly relevant to identifying potential witnesses who may give relevant testimony in this action." (Joint letter, p. 11.) At pp. 26-27, the Citi Entities say they are willing to produce only "an organizational chart sufficient to reflect the Citi-related banks that issue credit and debit cards." As to identifying individuals, so that Visa U.S.A. can prepare deposition notices, the Citi Entities say: "If faced with a properly articulated request, the Citi Entities would consider production of organizational charts reflecting the head of the credit card organization, his direct reports and their direct reports." I realize that a number of these individuals will be identified in the other documents. For example, in Exhibit V see ¶ 5 ("Citibank internal documents relating to Citibank's consideration and negotiation of the American Express Card Issuer Agreement, including non-privileged draft agreements") and ¶ 7 ("Documents, if any, discussing the pros and cons of Citibank's issuance of American Express cards"). However, it is reasonable to request organizational charts or other documents that will identify all the high-level and midlevel individuals who were involved in such consideration and discussing. I direct the Citi Entities to produce, by July 13, 2006:
Organizational charts and/or other documents sufficient to identify all subsidiaries, divisions and business units of Citigroup Inc., Citibank, N.A. and Citibank (South Dakota) N.A. that (a) were involved in the evaluation of whether and/or the decision to issue American Express-Branded Cards and/or Discover-Branded Cards and/or (b) were involved in the actual issuance of American Express-Branded Cards and/or Discover-Branded Cards; and, (as to each such subsidiary, division or business unit) organizational charts and/or other documents sufficient to identify, for the period from January 1, 2004 to February 10, 2006, the head of the subsidiary, division or business unit, and his/her direct reports, and their direct reports.
Visa U.S.A. has agreed to pay the Citi Entities for the costs and expenses incurred in the collection and production process. I deny the Citi Entities' request that I require payment for additional costs and expenses, including attorneys' fees. I do not preclude the possibility that I might impose attorneys' fees if anyone make additional motions to compel discovery from the Citi Entities.