In Re: Ubs Financial Services, Inc. of Puerto Rico Securities Litigation
113 F. Supp. 3d 286
| D.D.C. | 2015Background
- Plaintiffs (SDM Holdings, Carmelo Roman, Ricardo Roman‑Rivera) sued various UBS entities and an individual in the District of Puerto Rico in August 2012 in a complex securities action with extensive discovery and procedural rulings over ~3.5 years.
- On January 29, 2015 plaintiffs served a subpoena duces tecum on the SEC in Washington, D.C., seeking nine categories of documents largely overlapping documents the SEC obtained during its 2009–2010 investigation of defendants.
- Defendants moved in D.C. to quash the subpoena, arguing the subpoena is an attempt to evade the Puerto Rico discovery process and places an undue burden on the SEC; they alternatively sought a stay or transfer of the motion to the District of Puerto Rico.
- The court evaluated Federal Rule of Civil Procedure 45(f), which permits transfer of subpoena‑related motions to the issuing court when exceptional circumstances exist and/or to avoid disruption of the issuing court’s management of the underlying litigation.
- The District of Puerto Rico case has a lengthy procedural history, including many discovery rulings by Judge Cerezo and a pending class‑certification issue that may affect discovery scope; the D.C. court consulted Judge Cerezo, who agreed to address the dispute.
- The court concluded transfer would promote judicial economy, avoid inconsistent discovery orders, and impose minimal added burden on the SEC, which has national reach and has not opposed transfer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the D.C. court should quash the subpoena or transfer the motion under Rule 45(f) | Plaintiffs served the SEC to obtain documents relevant to their Puerto Rico litigation; subpoena is proper | Subpoena evades Puerto Rico discovery, unduly burdens the SEC, and should be quashed (or decision stayed/transferred) | Court found "exceptional circumstances" and transferred the motion to the District of Puerto Rico for resolution |
| Whether transfer would unduly burden the SEC | SEC can comply; plaintiffs implicitly rely on SEC’s ability to respond | Transfer would burden a nonparty outside the issuing district | Court held burden is minimal given SEC’s national reach and its lack of opposition; transfer appropriate |
| Whether transferring promotes judicial economy and avoids inconsistent orders | Plaintiffs sought local D.C. resolution | Defendants argued issuing court is better positioned due to case history | Court agreed issuing court (Puerto Rico) is better informed and transfer promotes judicial economy |
Key Cases Cited
- Wultz v. Bank of China, Ltd., 304 F.R.D. 38 (D.D.C. 2014) (discussing when the issuing court may be in a better position to resolve subpoena‑related motions and factors bearing on transfer under Rule 45(f))