164 A.D.3d 401
N.Y. App. Div.2018Background
- Plaintiffs (two wholesale fuel distributors) allege Gulf/Cumberland and Anjon induced five Mobil-branded stations to stop buying Mobil fuel and rebrand as Gulf, causing tortious interference with franchise agreements.
- The stations previously sued plaintiffs in separate litigation (Go Green), where defendants' counsel represented the stations; that litigation is resolved and produced many documents.
- Plaintiffs served a subpoena on defendants' current counsel (who did not represent Gulf/Cumberland at the time of the alleged debranding) seeking documents and his deposition about communications regarding the inducement.
- Counsel did not respond; plaintiffs moved to strike defendants’ answer under CPLR 3126 for discovery failures; defendants cross-moved for a protective order quashing the subpoena to counsel.
- Supreme Court granted the protective order and denied the CPLR 3126 motion; the Appellate Division affirmed in part, reversed in part, and remanded regarding counsel’s deposition while upholding the quash as to documents.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether subpoena to opposing counsel for documents should be enforced | Documents (retainer, leases) are relevant to motive/indemnification and may show who paid counsel | Documents are irrelevant or duplicative of productions already made; privilege/work product | Quashed as to documents: counsel met prima facie burden; plaintiffs failed to show materiality/necessity |
| Whether deposition of opposing counsel should be allowed | Deposition is needed to establish counsel’s role in negotiations and tortious intent | Deposition is irrelevant, seeks privileged communications, and may be a tactic to disqualify counsel | Remanded: plaintiffs must show materiality/necessity, good faith, and that info is unavailable elsewhere; deposition may proceed if court finds criteria met, subject to privilege objections |
| Proper standard for ordering deposition of opposing counsel (Shelton test vs NY law) | Shelton factors should control (no other means; relevance/nonprivileged; information "crucial") | New York law places initial burden on party seeking protective order; Kapon governs | Shelton is inconsistent with NY law; New York test applied (protective-order party bears initial burden; subpoenaing party must show material and necessary); added requirements: good faith and unavailability from other sources for attorney depositions |
| Whether striking defendants’ answer under CPLR 3126 was warranted | Defendants’ discovery failures justified striking the answer | Delay was not willful and plaintiffs were not prejudiced; other explanations existed | Denial of CPLR 3126 motion affirmed: no willfulness, no prejudice, and acceptable exercise of discretion |
Key Cases Cited
- Matter of Kapon v. Koch, 23 N.Y.3d 32 (N.Y. 2014) (party seeking protective order bears initial burden; subpoenaing party must show discovery is material and necessary)
- Spectrum Sys. Intl. Corp. v. Chemical Bank, 78 N.Y.2d 371 (N.Y. 1991) (privilege/work-product protection must be narrowly construed and consistent with its purposes)
- Shelton v. American Motors Corp., 805 F.2d 1323 (8th Cir.) (test limiting depositions of opposing counsel; court holds Shelton inconsistent with NY law)
- Equitable Life Assur. Soc. v. Rocanova, 207 A.D.2d 294 (1st Dept.) (deposing opposing counsel disfavored; communications with counsel immune absent showing of necessity)
- S & S Hotel Ventures Ltd. P’ship v. 777 S.H. Corp., 69 N.Y.2d 437 (N.Y. 1987) (advocate-witness/disqualification concerns and impact on parties’ right to counsel)