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In re Subpoena Served on Regent Education, Inc.

United States District Court, D. Maryland

December 13, 2017


         Related Case: Case No. 16-cv-62028-JAL-JG in the United States District Court for the Southern District of Florida


          Ellen Lipton Hollander, United States District Judge

         This case is rooted in litigation pending in federal court in Florida. The issue before me is limited. I must determine whether to compel a non-party, Regent Education, Inc. (“Regent”), to comply with the subpoena issued by David Knobel, Jeffrey Pierne, Dean Bartness, Siana Steward, Cid Youselfi, and Neal Yawn, who are defendants in the Florida case (collectively, “Defendants”). Because Regent's principal place of business is in Maryland (ECF 1-1, ¶ 13), this Court has jurisdiction to enforce the subpoena under Fed.R.Civ.P. 45(d)(2)(B)(i).

         Pursuant to Fed.R.Civ.P. 45(d)(2)(B)(i), Defendants have moved to compel Regent's compliance with the subpoena. ECF 1. The motion is supported by a memorandum (ECF 1-1) (collectively, the “Motion”) and exhibits. Regent opposes the Motion, supported by exhibits, on the grounds that, under Fed.R.Civ.P. 26, the subpoena is unduly burdensome and compliance is costly because of the scope of the document request. ECF 7 (“Opposition”). It moves for an award of expenses related to its response to the subpoena and to the Motion. Id. Regent also seeks a protective order excusing it from further production relating to the subpoena “until and unless” Defendants pay for Regent's costs and fees. ECF 7 at 8-9. Defendants have replied. ECF 9.

         The issues have been fully briefed, and no hearing is necessary to resolve them. See Local Rule 105.6. For the reasons that follow, I will grant the Motion in part and deny it in part.

         I. Background

         Defendants and Regent have not provided a thorough background of the underlying case. It appears that in August 2016, plaintiff, Clingman & Hanger Management Associates, LLC, as liquidating trustee for the now-bankrupt FCC Holdings, Inc. (“FCC”), filed the underlying case in the United States District Court for the Southern District of Florida, alleging that Defendants breached their fiduciary duties. ECF 1-1, ¶ 1; see Clingman & Hanger Management Associates, LLC, as Trustee v. Knobel et al., Case No. 16-cv-62028-JAL-JG (the “Florida case”). Defendants appear to be officers and employees of FCC, a company that operated for-profit colleges throughout the United States. See ECF 7-1 at 4.

         The docket reflects that the discovery deadline for the Florida case was initially set for December 1, 2017. See ECF 7-2 at 17 (Florida case docket). However, on October 23, 2017, the fact discovery deadline in the Florida case was extended until January 3, 2018. See Id. at 21.

         As noted, Regent is not a party to the Florida case. See ECF 1-1, ¶ 3. However, Defendants contend that Regent is an important non-party because Defendants' alleged mismanagement of student financial aid funds was the result of “complications” with Regent's software, which Defendants used. Id. ¶ 4.

         On August 8, 2017, counsel for Defendants caused a subpoena to be issued to Regent. ECF 1-2 (Declaration of Kenneth Duvall, Esq., counsel for Defendants), ¶ 1. The subpoena commanded Regent to appear for a deposition at its principal place of business on August 25, 2017, and to bring relevant documents. ECF 1-2 at 12. The subpoena was served on Regent on August 9, 2017. ECF 1-2 ¶ 2.

         The subpoena directs Regent to produce a wide range of documents across 27 topic categories, including all documents and communications between Regent and documents related to development, implementation, marketing, and customer service related to “Regent 8, ” the software in question. ECF 1-2 at 22-25. Notably, the subpoena also requests all documents “containing student records concerning, related to, or in connection with FCC . . . including but not limited to records received from FCC, the DOE, or other third parties.” Id. at 24. The requests cover a period of almost nine years, from the beginning of 2009 to the present (id. at 22), and the response to the requests includes emails sent by dozens of custodians over that time span. See ECF 7-5 at 22 (discovery update). The subpoena further states: “In the event Regent Corporation agrees to produce the documents requested herein at least five business days before the scheduled deposition, the issuing parties will agree to adjourn the deposition until a later date.” ECF 1-2 at 12.

         After some correspondence between counsel for Regent and counsel for Defendants, Regent agreed on October 10, 2017, to produce the documents, and made its first production on October 17, 2017. ECF 1-2, ¶¶ 9-10; see ECF 1-2 at 40. Doug Armentrout, the eDiscovery specialist for Regent, understood this production to be the only one. ECF 7-5 (Declaration of Douglas Armentrout), ¶ 3. But, Defendants considered this production to be inadequate. ECF 1-2, ¶ 10. Accordingly, Defendants and Regent engaged in further discussions and agreed that Regent would complete production by November 14, 2017. ECF 1-2 at 73 (email from Andrew Grosso, Esq., counsel for Regent, to Kenneth Duvall, Esq.). They also agreed that the deposition would be rescheduled for November 29, 2017. Id.

         On November 10, 2017, some three months after Regent was served with the subpoena, Regent filed objections to the subpoena. ECF 1-2, ¶ 16; ECF 1-2 at 76-85 (Regent's objections). These included objections to Defendants' request for documents that Regent claims contain students' “personal identifiable information” (“PII”). See ECF 1-2 at 78; ECF 7 at 2. Defendants assert that these objections were untimely because they were not made within 14 days of service of the subpoena, as required by Fed.R.Civ.P. 45(d)(2)(B). See ECF 1-2, ¶ 16.

         In any event, Regent's production continued, but not to the satisfaction of Defendants. Id. ¶¶ 17-20. Regent maintains that production was slowed by the vast quantities of documents sought by Defendants, which Regent and Armentrout contend include tens of terabytes of data across “144 person-years of email.” ECF 7-4 at 5; ECF 7-5, ¶ 6. The parties also assert that a ...

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