United States District Court, D. Maryland
In re SUBPOENA SERVED ON REGENT EDUCATION, INC.
DAVID KNOBEL et al., Defendants. CLINGMAN & HANGER MANAGEMENT ASSOCIATES, LLC as Trustee, Plaintiff,
Case: Case No. 16-cv-62028-JAL-JG in the United States
District Court for the Southern District of Florida
Lipton Hollander, United States District Judge
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).
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 ...