297 F.R.D. 223
S.D.N.Y.2013Background
- Defendants seek to depose SEC employees and subpoenas narrowed from nine to two witnesses, Lamore and Suh, to show SEC failed to discover Madoff’s fraud earlier despite its interactions with BLMIS.
- SEC denied service subpoenas on grounds of public interest and substantial burden; Commission review denied by August 2013 decision, keeping the matter before the court.
- Lamore and Suh are currently Division of Enforcement personnel associated with ongoing investigations and identified as potential discoverable information.
- The court analyzes whether Rule 45 or APA standards apply for third-party deposition against an agency, noting the unsettled Second Circuit position on standard of review.
- The court ultimately finds the proposed testimony marginal in relevance and imposes undue burden, denying the Defendants’ motion to compel.
- The opinion later notes related procedural history and additional statements regarding the potential scope and impact of allowing agency witness depositions repeatedly in such cases.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Appropriate standard of review for agency subpoenas (Rule 45 vs APA). | Defendants argue for APA standard as applicable. | SEC contends Rule 45 governs; standard not settled by Second Circuit. | Rule 45 standard applied; no need to resolve APA issue here. |
| Whether Lamore and Suh deposition is relevant and not unduly burdensome. | Testimony would show SEC failure to uncover fraud and SEC’s regulatory gaps. | Testimony is marginally relevant and would impose undue burden. | Depositions denied; limited relevance and burden outweigh potential probative value. |
| Whether SEC’s prior Inspector General findings render SEC witnesses' testimony redundant. | IG report and prior disclosures do not resolve whether Lamore/Suh add new facts. | Prior disclosures insufficient to prove the issues sought. | Burden and marginal relevance persist; testimony not warranted. |
Key Cases Cited
- U.S. Env’l Prot. Agency v. Gen. Elec. Co., 197 F.3d 592 (2d Cir. 1999) (APA review standards for agency subpoena enforceability discussed)
- U.S. Env’l Prot. Agency v. Gen. Elec. Co., 212 F.3d 689 (2d Cir. 2000) (Second Circuit discussion on whether final agency decision should be reviewed under APA or Rule 45)
- Exxon Shipping Co. v. U.S. Dep’t of Interior, 34 F.3d 774 (9th Cir. 1994) (government resource concerns in discovery balancing)
- In re Sept. 11 Litig., 621 F.Supp.2d 131 (S.D.N.Y. 2009) (court applied APA abuse of discretion in discovery context)