New Prods. Corp. v. Dickinson Wright, PLLC (In Re Modern Plastics Corp.)
890 F.3d 244
6th Cir.2018Background
- NPC sued the Chapter 7 Trustee alleging breach of fiduciary duty concerning a former manufacturing property; NPC’s counsel Mark Demorest served broad subpoenas duces tecum on five non‑parties (Bank of America, Dickinson Wright and two of its attorneys, and two Harbor Shores entities).
- The subpoenas sought voluminous ESI and communications in numerous broad categories dating back to 2005; non‑parties objected and demanded cost reimbursement under Fed. R. Civ. P. 45.
- Respondents’ counsel (McDonald) warned the requests were burdensome, proposed a protective order, identified thousands of potentially responsive documents and invited narrowing of search terms or custodians; Demorest did not narrow the requests or engage meaningfully.
- Bankruptcy court entered a protective order, then after an evidentiary hearing found the subpoenas unduly burdensome and shifted reasonable attorney fees and third‑party vendor costs to NPC and Demorest under Rule 45(d). The court reduced the amounts sought and awarded approximately $166,187 total.
- NPC and Demorest were later found in civil contempt for failing to pay as ordered; they appealed to the district court which affirmed, and the Sixth Circuit panel also affirmed.
Issues
| Issue | Plaintiff's Argument (NPC/Demorest) | Defendant's Argument (Respondents) | Held |
|---|---|---|---|
| Whether Rule 45(d)(1) sanctions were proper for failing to avoid undue burden | Sanctions require bad faith; Demorest argues he did not act in bad faith and subpoenas were permissible | Respondents argue subpoenas were overbroad and counsel failed to take reasonable steps to mitigate burden | Court held sanctions proper: no bad‑faith requirement; subpoenas were unduly burdensome and Demorest failed to mitigate, so Rule 45(d)(1) sanctions were warranted |
| Whether Rule 45(d)(2)(B)(ii) cost‑shifting was available | NPC contends cost‑shifting not available because respondents voluntarily produced or forfeited the right to reimbursement | Respondents contend they timely objected, conditioned production on reimbursement and did not produce until order; thus Rule 45 protection applies | Court held cost‑shifting appropriate: respondents objected, did not voluntarily produce without conditions, and the court must protect non‑parties from significant expense under Rule 45(d)(2)(B) |
| Whether respondents forfeited reimbursement rights by producing before a court order | NPC argues respondents should have refused production and waited for a motion to compel (citing Angell) | Respondents point to objections, conditioning, and that documents were ultimately produced only after protective order; costs were incurred post‑objection and reasonably necessary | Court rejected forfeiture argument: factual record showed objections and conditioning; production was not effectively voluntary without protection, so reimbursement claim survived |
| Whether contempt was an appropriate enforcement mechanism for the fee award | NPC argues enforcement must be by writ of execution under Rule 69, not contempt | Respondents argue contempt is an appropriate means to enforce discovery sanctions and non‑monetary judgments tied to misconduct | Court held contempt appropriate: contempt can enforce discovery sanctions and the bankruptcy court provided opportunity to purge by paying as ordered |
Key Cases Cited
- Legal Voice v. Stormans Inc., 738 F.3d 1178 (9th Cir. 2013) (failure to narrowly tailor subpoenas can support Rule 45 sanctions; bad faith not required)
- Mount Hope Church v. Bash Back!, 705 F.3d 418 (9th Cir. 2012) (bad faith sufficient but not necessary for Rule 45(d) sanctions)
- Linder v. Calero‑Portocarrero, 251 F.3d 178 (D.C. Cir. 2001) (interpretation of Rule 45 cost‑shifting principles)
- United States v. McGraw‑Hill Cos., 302 F.R.D. 532 (C.D. Cal. 2014) (discussing Rule 45(d)(2)(B) protection for non‑parties and pre‑1991 equitable factors)
- Am. Elec. Power Co. v. United States, 191 F.R.D. 132 (S.D. Ohio 1999) (factors for assessing undue burden from subpoenas)
- Cleveland Hair Clinic, Inc. v. Puig, 106 F.3d 165 (7th Cir. 1997) (contempt appropriate to enforce sanctions for misconduct)
- In re Lowenbraun, 453 F.3d 314 (6th Cir. 2006) (standards for appellate review of bankruptcy court orders)