Duck v. United States Securities and Exchange Commission
317 F.R.D. 321
D.D.C.2016Background
- Petitioner Randall Duck is a lead plaintiff in In re Molycorp, Inc. Securities Litigation (D. Colo.), alleging misstatements about Molycorp’s products and Mountain Pass mine reserves. The underlying case began in 2012 and was amended in 2015.
- Defendants filed a motion for summary judgment in the Colorado action arguing dismissal of all claims or, alternatively, that discovery be narrowly tailored; briefing on that motion was ongoing when this transfer motion was decided.
- Petitioner served a subpoena duces tecum on the SEC (a nonparty) seeking documents Molycorp produced to the SEC during agency inquiries into Molycorp’s disclosures.
- Petitioner filed a Motion to Compel in D.D.C. and a Motion to Transfer the subpoena-related motion to the District of Colorado under Fed. R. Civ. P. 45(f).
- The D.D.C. court found that (1) the Colorado court had been heavily involved in the case for years, (2) resolution of the summary judgment motion could moot or materially affect the scope of discovery, and (3) transfer would avoid the risk of inconsistent rulings while imposing minimal burden on the SEC.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 45(f) “exceptional circumstances” warrant transferring a subpoena-related motion to the issuing court | Transfer warranted because the subpoena’s subject matter is squarely implicated in pending summary judgment briefing and Magistrate Judge Tafoya has already overseen related discovery issues | No exceptional circumstances: issuing court hasn’t ruled on discovery; D.D.C. can decide without conflict; SEC prefers local resolution | Transfer granted: exceptional circumstances found to avoid disrupting issuing court management and risk of inconsistent rulings |
| Whether deciding the Motion to Compel here would risk inconsistent or duplicative rulings affecting the underlying litigation | A D.D.C. ruling could conflict with outcomes from Colorado, especially if summary judgment or discovery-limiting orders are entered | Argues no current rulings to conflict with and no substantive issues implicated | Court agreed there is real risk of inconsistent results and disruption; transfer favored |
| Burden on the nonparty SEC vs. interests of the issuing court | SEC is a federal agency with counsel; travel and local appearance are manageable; Colorado court is better positioned | SEC raised generalized concern about future ease of subpoenas from many cases but identified no specific burden here | Court found any burden on SEC minimal and outweighed by the need to avoid disrupting the issuing court; transfer appropriate |
Key Cases Cited
- Judicial Watch, Inc. v. Valle Del Sol, Inc., 307 F.R.D. 30 (D.D.C. 2014) (factors courts consider in applying Rule 45(f))
- Fed. Home Loan Mortg. Corp. v. Deloitte & Touche LLP, 309 F.R.D. 41 (D.D.C. 2015) (transfer appropriate to avoid interference with time-sensitive discovery schedule)
- In re UBS Fin. Servs., Inc. of Puerto Rico Sec. Litig., 113 F. Supp. 3d 286 (D.D.C. 2015) (transfer where issuing court had supervised substantial discovery and issued many related orders)
- Wultz v. Bank of China, Ltd., 304 F.R.D. 38 (D.D.C. 2014) (exceptional circumstances found due to complexity and extensive court involvement)
- XY, LLC v. Trans Ova Genetics, L.C., 307 F.R.D. 10 (D.D.C. 2014) (transfer appropriate where issuing court had already supervised substantial discovery)