United States v. DNRB, Inc.

257 F.Supp.3d 1033

UNITED STATES of America, Plaintiff,

v.DNRB, INC., d/b/a Fastrack Erectors, Defendant.

No. 4:15-cr-0362-01-DGK.

United States District Court, W.D. Missouri, Western Division.

Signed June 27, 2017

Paul S. Becker, United States Attorney's Office, Evert H. Van Wijk, Rachel L. Parsons, United States Department of Labor, Kansas City, MO, for Plaintiff.

Steven Martin Aaron, Diane D. Carter, Lisa M. Krigsten, Dentons US LLP, Kansas City, MO, for Defendant.

ORDER DENYING DENTONS' MOTION TO QUASH AND DNRB'S OBJECTIONS

GREG KAYS, CHIEF JUDGE

This criminal case arises from the death of an ironworker, Eric Roach, on a construction site. He fell while working on a steel beam 36 feet off the ground without fall protection and died the next day from his injuries. After a two-day bench trial, the Court found Defendant DNRB, Inc., d/b/a Fastrack Erectors ("DNRB"), guilty of violating an OSHA regulation and causing death, 29 U.S.C. § 666(e).¹ See Mem. Regarding Verdict (Doc. 68); Mem. Order and Verdict Making Findings of Fact and Conclusions of Law (Doc. 69). The Court has not yet sentenced DNRB.

Prior to the initially scheduled sentencing hearing, DNRB provided information to the probation office suggesting it was incapable of paying a fine. Believing a successor corporation existed which could pay a fine, the Government issued subpoenas to the suspected successor entity, St. Louis Steel Construction, LLC ("St. Louis Steel"),² and to defense counsel Dentons US LLP ("Dentons"). The Government issued the subpoena to Dentons in order to determine precisely how DNRB was paying its legal bills.

Now before the Court is Dentons' Motion to Quash Subpoena (Doc. 79) and DNRB's Objections to Government Subpoena (Doc. 83). The Court denies the motion and overrules the objections because they were not promptly filed and because the subpoena, as modified, complies with the law.

Background

On April 18, 2017, the Court issued an order setting the sentencing hearing for May 31, 2017, at 2:00 p.m.

On May 9, the probation officer released his final presentence investigation report ("PSR"). The PSR concluded that based upon financial statements provided by DNRB, which showed DNRB had a majority of zero balances in its accounts, DNRB would not be able to pay a fine of any amount either now or in the future.

On May 11, the Court ordered the parties to brief what they believed an appropriate sentence would be, particularly given that DNRB was voluntarily dissolved in January 2016. Among other questions, the Court asked if a fine was an appropriate sentence, and if so, how it could be paid since DNRB had voluntarily dissolved.

On May 16, the Government served Dentons with a subpoena to obtain billing records.³ The subpoena sought: "Any and all records regarding billing and payment records for the representation of DNRB, Inc., for the time period from August 1, 2015, through the date of subpoena." Subpoena at 2 (Doc. 79–1). It directed Dentons to produce the information at the sentencing hearing.

Less than twenty-four hours before the hearing, on May 30 at 2:27 p.m., Dentons filed the pending motion to quash. At 5:26 p.m., DNRB filed its objections.

The Government filed its response the next morning. In it, the Government clarified that it is "only seeking information concerning the amounts billed to the client on a monthly or other periodic basis, the payments made to the law firm, the method of payments to the law firm, and the source of the payments to the law firm." Resp. at 1 (Doc. 82).

Later that day, at the scheduled time of the sentencing, the Court held a brief hearing in the matter. Instead of going forward with the sentencing, as DNRB requested, the Court heard argument from the parties.

Standard

Under Federal Rule of Criminal Procedure 17(c)(1), a party may use a subpoena to "order the witness to produce any books, papers, documents, data, or other objects the subpoena designates" before trial or before they are offered into evidence. The purpose of the rule is to expedite a trial or hearing by providing a means before the trial or hearing to inspect subpoenaed materials. United States v. Nixon , 418 U.S. 683, 698–99, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974). Rule 17 is not a means for generalized discovery or to obtain general discovery from third parties. Id. ; United States v. Stevenson , 727 F.3d 826, 831 (8th Cir. 2013).

The party seeking production under Rule 17(c) must show the subpoenaed materials are: (1) relevant; (2) admissible; and (3) requested with adequate specificity (collectively "the Nixon factors"). Stevenson , 727 F.3d at 831. Other considerations include whether failure to obtain the documents may tend to unreasonably delay the trial, and whether the materials are requested in good faith. United States v. Shepard , 4:09–cr–423 RWS DDN, 2010 WL 750110, at *2 (E.D. Mo. Feb. 26, 2010).

Rule 17 also provides that upon a "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). The party seeking to quash or modify the subpoena bears the burden of showing it is unreasonable or oppressive. Matter of Grand Jury Proceedings (Krynicki), 2 F.3d 1153, at *2 (7th Cir. 1993) (citing United States v. R. Enterprises, Inc. , 498 U.S. 292, 111 S.Ct. 722, 728, 112 L.Ed.2d 795 (1991) ).

Discussion

As a threshold matter, both Dentons' motion to quash and DNRB's objections were not made promptly as required by Rule 17(c)(2). There is little caselaw discussing in depth what "promptly" means; it appears to turn on the particular facts of the case. Generally speaking, the purpose of this requirement is to keep the litigation moving. See Nixon , 418 U.S. at 698–99, 94 S.Ct. 3090 (noting the Rule's "chief innovation was to expedite the trial by providing a time and place before trial for the inspection of subpoenaed materials."); Shepard , 2010 WL 750110, at *2 (holding in ruling on a motion to quash, the court must consider whether the party subpoenaing the information can "adequately prepare for trial without advance production of the documents," or if failure to obtain the documents will "unreasonably delay the trial"). The Rule aims to prevent the moving party from waiting until the last possible moment to object, forcing the Court to either delay the case or proceed and deprive the non-moving party of access to evidence.

That is what happened here. Although being served on May 16 compressed Dentons' and DNRB's time to respond, they have known since May 1 that the Government was seeking these records. They could have objected quickly, within a few days of being served. The issues presented here are not novel or complex: Dentons' combined motion and suggestions in support is only four pages long, and DNRB's is six. An associate could have researched and written each filing in less than a day. Even including time to consult with a client or a corporate representative who might not be immediately available, or to write multiple drafts of a very short motion, these filings could have been made within a week.

The Court's finding concerning promptness is also shaped by the fact that the failure to file until the day before the hearing was not an oversight. Although Dentons and DNRB fail to mention the "promptly" requirement when they quote Rule 17(c)(2), it is in the text of the rule, and both Dentons and DNRB are represented by sophisticated counsel with extensive experience litigating criminal cases in federal court.⁴ Consequently, the Court finds Dentons' and DNRB's failure to file the motion and objections until the last minute was not due to a lack of time to respond or inadvertent, it was a deliberate decision. Why they made this choice is unclear; it appears they wanted to limit the Government's time to respond to prevent release of the information. In any event, the motion to quash and objections were not filed "promptly."

Whether this ends the analysis is unclear. At least one court has held that a Rule 17 motion to quash that is not filed promptly should be denied as untimely, see United States v. Debolt , No. 5:09cr24, 2010 WL 4281699, at *4 (N.D.W. Va. Oct. 19, 2010), and the Court could not find any contrary authority. However, out of an abundance of caution and to aid in any appellate review, the Court will consider the parties' arguments regarding the merits of the subpoena.

Dentons argues the subpoena "seeks documents and/or information protected from disclosure under the attorney-client privilege, the attorney work-product doctrine, and potentially other privileges and protections recognized under applicable substantive and procedural law, and/or applicable ethical rules." Mem. in Supp. at 3 (Doc. 79). Dentons does not, however, identify what specific protected information would be disclosed, or how it would be disclosed.⁵

DNRB argues the subpoena seeks irrelevant and inadmissible materials, is insufficiently specific, is a "fishing expedition" for general discovery materials, and seeks privileged materials.

The Court holds the Nixon factors are satisfied because the information sought is relevant, admissible, and requested with adequate specificity. First, the material is relevant because it tends to make several facts of consequence to sentencing more probable or less probable, namely: (1) whether DNRB possesses the ability to pay a fine; (2) whether there is a corporate successor to DNRB; and (3) whether that successor possesses the ability to pay a fine.

The Court is unmoved by DNRB's argument that the information is irrelevant because the Government did not formally object to the PSR's...