Case Title: In re Omni Healthcare Financial, LLC

Citation: 

Docket Number: SC-2023-0027

State: alabama

Court: Alabama Supreme Court

Date: 2023-12-15T00:00:00Z

Document:
Rel: December 15, 2023 
 
 
 
 
 
 
 
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern 
Reporter.  Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 
300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other 
errors, in order that corrections may be made before the opinion is printed in Southern Reporter. 
 
 
SUPREME COURT OF ALABAMA 
 
OCTOBER TERM, 2023-2024 
_________________________ 
 
SC-2023-0027 
_________________________ 
 
In re: Omni Healthcare Financial, LLC  
 
(In re: Amy Lee Walker  
 
v.  
 
Eric Irvin Reese and SCP Distributors, LLC) 
 
 
Appeal from Dale Circuit Court 
(CV-22-000004) 
 
BRYAN, Justice. 
 
 
Omni Healthcare Financial, LLC ("Omni"), appeals from an order 
of the Dale Circuit Court holding Omni in contempt of court for failing to 
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2 
 
comply with a nonparty subpoena.  For the reasons explained below, we 
reverse the contempt order and remand this cause for further 
proceedings. 
Background 
 
The underlying action in this case involves claims asserted by Amy 
Lee Walker against Eric Irvin Reese and SCP Distributors, LLC ("the 
defendants"), arising from an automobile collision.  Walker commenced 
the action in the Montgomery Circuit Court, but the action was later 
transferred to the Dale Circuit Court ("the circuit court"). 
  
Omni is a North Carolina-based factoring1 company that purchased 
certain accounts receivable from a medical provider who had treated 
Walker.  The relevant accounts receivable are secured by an interest in 
any recovery that Walker obtains from this action against the 
defendants.  On May 18, 2022, the defendants served a nonparty 
subpoena on Omni's registered agent in Alabama, seeking the production 
of certain documents.  Omni did not respond to the subpoena within the 
 
1"Factoring" is defined as: "The buying of accounts receivable at a 
discount. • The price is discounted because the factor (who buys them) 
assumes the risk of delay in collection and loss on the accounts 
receivable."  Black's Law Dictionary 738 (11th ed. 2019). 
SC-2023-0027 
3 
 
initial time allotted, but it later submitted a response providing certain 
documents but also asserting certain objections to the subpoena.   
On June 22, 2022, the defendants filed a motion asking the circuit 
court to hold Omni in contempt of court for failing to comply with the 
subpoena or, alternatively, to order Omni to show cause why it should 
not be held in contempt.  On July 28, 2022, Omni submitted a response 
to the defendants' motion.  Omni also filed in the circuit court a motion 
to quash the subpoena. 
The circuit court conducted a hearing regarding the defendants' 
contempt motion on August 2, 2022.  On August 5, 2022, the circuit court 
entered an order granting the defendants' motion to hold Omni in 
contempt, ordering Omni to produce the requested documents without 
objection, requiring Omni to pay expenses of the defendants, and denying 
Omni's motion to quash the subpoena.   
Omni filed a motion to alter, amend, or vacate the circuit court's 
August 5, 2022, order.  Omni's motion was denied by operation of law.  
See Rule 59.1, Ala. R. Civ. P.  Omni appealed.  See Rule 70A(g)(2), Ala. 
R. Civ. P.  See also Moultrie v. Wall, 143 So. 3d 128, 134 (Ala. 2013)("This 
Court has previously reviewed a contempt adjudication by appeal even 
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though there had not been a final judgment on the merits in the 
underlying proceeding."). 
Analysis 
On appeal, Omni asserts three primary arguments.  However, we 
conclude that Omni's first argument is dispositive in this case; therefore, 
we do not consider Omni's other two arguments and express no opinion 
regarding them.  In its first argument, Omni asserts that the circuit court 
erred by holding it in contempt because, Omni contends, the subpoena at 
issue was invalid.  Omni relies primarily on In re National Contract 
Poultry Growers' Ass'n, 771 So. 2d 466 (Ala. 2000), in support of its 
argument. 
In re National Contract Poultry Growers' Ass'n involved a 
defendant who had requested that the trial court issue a nonparty 
subpoena to the National Contract Poultry Growers' Association ("the 
NCPGA"), a corporation whose principal place of business was in 
Louisiana.  The NCPGA did not respond to the subpoena, and the trial 
court eventually held the NCPGA in contempt, ordering it to, among 
other things, comply with the subpoena.  The NCPGA appealed to this 
Court.   
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This Court concluded that the trial court had lacked authority to 
issue a nonparty subpoena directed to the NCPGA because the requested 
documents were located outside of Alabama's boundaries; the Court 
stated: "[T]he subpoena had to be issued by a Louisiana court and had to 
be served in accordance with Louisiana law."  Id. at 469. 
The Court explained: 
"When one seeks a subpoena to secure the attendance of 
a witness, or to procure the production of documents, located 
outside the state, a different procedure is warranted.  
Although we find no Alabama decision addressing this specific 
situation, one commentator has stated the applicable 
procedure: 
 
"'Process beyond the jurisdiction of the 
courts to which these rules apply must depend 
upon the existence of a rule or statute in the other 
state 
or 
country 
which 
makes 
available 
compulsory process to foreign litigants who desire 
to return to their home state for trial with the 
fruits of discovery thus obtained. For our rule 
extending this courtesy to foreign litigants who 
need discovery in Alabama for actions pending 
outside of Alabama, see Rule 28(c)[, Ala. R. Civ. 
P.,] which makes our Rule 45[, Ala. R. Civ. P.,] 
available.' 
 
"1 Champ Lyons, Jr., Alabama Rules of Civil Procedure 
Annotated § 45.2 (3d ed. 1996).  This procedure accords with 
the procedure used in other jurisdictions to secure the 
issuance of a subpoena for the attendance of a person, or the 
production of documents from a nonparty, located outside the 
state's boundaries." 
SC-2023-0027 
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Id.  Thus, the Court held: "NCPGA cannot be held in contempt for failing  
to respond to th[e] subpoena.  The judgment of the trial court holding 
NCPGA in contempt of court is reversed and this cause is remanded."  Id. 
at 470. 
 
Rule 37(b), Ala. R. Civ. P., provides the procedure for seeking 
sanctions for failure to comply with an order compelling discovery.  Rule 
37(b)(1) states, in pertinent part: 
"(1) Sanctions by a Circuit Judge or Court in Place 
Where Deposition Is Taken or Production Sought. …  [I]f a 
person, not a party, fails to permit production of documents … 
under Rule 45(a)(3)[, Ala. R. Civ. P.,] after being directed to 
do so by a circuit judge or, when production or entry is sought 
outside the state, by the court in the place where the 
documents … are located, the failure may be considered a 
contempt of court." 
 
(Emphasis added.) 
 
In this case, it is undisputed that the documents at issue are located 
at Omni's facilities in North Carolina.  It is also undisputed that the 
defendants have not asked a North Carolina court to direct Omni to 
produce the documents.  Thus, it is clear that the defendants did not 
comply with the requirements of Rule 37(b) in seeking to hold Omni in 
contempt of court. 
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As Omni points out, in 2011 North Carolina enacted the North 
Carolina Uniform Interstate Depositions and Discovery Act ("the 
NCUIDDA"), N.C. Gen. Stat., § 1F-1 et seq., which provides a procedure 
for addressing foreign discovery requests.  Section 1F-3(a) of the 
NCUIDDA states, in pertinent part: "To request issuance of a subpoena 
under this section, a party must submit a foreign subpoena to a clerk of 
court in the county in which discovery is sought to be conducted in this 
State."  Notably, § 1F-7 of the NCUIDDA provides: "In applying and 
construing this Chapter, consideration shall be given to the need to 
promote uniformity of the law with respect to its subject matter among 
states that have enacted the Uniform Interstate Depositions and 
Discovery Act."   
In 2012, Alabama enacted the Alabama Uniform Interstate 
Depositions and Discovery Act, § 12-21-400, et seq., Ala. Code 1975.  
Similar to the NCUIDDA, the Alabama Uniform Interstate Depositions 
and Discovery Act provides, in relevant part:  
"(a) In applying and construing this uniform act, 
consideration shall be given to the need to promote uniformity 
of the law with respect to its subject matter among states that 
enact it. 
 
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"(b) The privilege extended to persons in other states for 
discovery under this article shall only apply if the jurisdiction 
where the action is pending has extended a similar privilege 
to persons in this state." 
 
§ 12-21-406, Ala. Code 1975. 
 
Thus, the plain language of both North Carolina law and Alabama 
law directs courts to consider the need to promote uniformity of the law 
with respect to matters involving interstate discovery.  Moreover, the 
plain language of Alabama law also requires that other states permit 
litigants in Alabama to obtain discovery from their residents as a 
prerequisite for a similar privilege being applicable regarding discovery 
sought from Alabama residents.   
Consistent with these notions of comity, Rule 37(b) plainly provides 
for the involvement of foreign courts in obtaining from nonparties 
documents located entirely within the territories of such courts.  
Consequently, the circuit court erred by holding Omni in contempt in this 
case.  Therefore, we reverse the circuit court's order holding Omni in 
contempt of court and remand this cause for further proceedings 
consistent with this opinion. 
 
REVERSED AND REMANDED. 
SC-2023-0027 
9 
 
Parker, C.J., and Shaw, Wise, Sellers, Mendheim, Stewart, and 
Mitchell, JJ., concur.  
Cook, J., concurs specially, with opinion. 
 
 
SC-2023-0027 
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COOK, Justice (concurring specially).  
 
I concur fully with the main opinion's conclusion that the Dale 
Circuit Court lacked the authority to hold Omni Healthcare Financial, 
LLC, in contempt after it failed to comply with a nonparty subpoena 
directing it to produce documents that are located outside Alabama. I 
write specially, however, to highlight for the bench and the Bar the 
distinction that this Court has previously made between a trial court's 
subpoena power and its personal jurisdiction over a nonparty in deciding 
whether a trial court has the authority to compel a nonparty to comply 
with a subpoena directing it to produce out-of-state documents.  
As noted in the main opinion, in In re National Contract Poultry 
Growers' Ass'n, 771 So. 2d 466 (Ala. 2000), this Court concluded that the 
trial court had lacked authority to compel a nonparty to produce the 
documents at issue that were located outside Alabama. In reaching our 
conclusion in that case, this Court explained that, even if an Alabama 
trial court could exercise personal jurisdiction over a nonparty, this did 
not necessarily mean that it had the authority to compel the production 
of documents located out of the state because "[t]he underlying concepts 
of personal jurisdiction and subpoena power are entirely different." 771 
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So. 2d at 469. This Court explained: 
"Personal jurisdiction is based on conduct that subjects the 
nonresident to the power of the Alabama courts to adjudicate 
its rights and obligations in a legal dispute. … By contrast, 
the subpoena power of an Alabama court over an individual 
or a corporation that is not a party to a lawsuit is based on the 
power and authority of the court to compel the attendance of 
a person at a deposition or the production of documents by a 
person or entity. See Ex parte Leverton, 536 So. 2d 41, 44 (Ala. 
1988) (state trial court does not have jurisdiction over a 
nonparty, out-of-state witness)." 
 
Id.  
Other jurisdictions have likewise recognized this distinction. See, 
e.g., Yelp, Inc. v. Hadeed Carpet Cleaning, Inc., 289 Va. 426, 438, 770 
S.E.2d 440, 446 (2015) (recognizing that, "[a]lthough the General 
Assembly has expressly authorized Virginia courts to exercise personal 
jurisdiction over nonresident parties, it has not expressly authorized 
Virginia courts to compel nonresident non-parties to produce documents 
located outside of Virginia"); Syngenta Crop Prot., Inc. v. Monsanto Co., 
908 So. 2d 121, 128 (Miss. 2005) (concluding that, because personal 
jurisdiction and subpoena power are different concepts, Mississippi 
courts do not have authority "to compel … nonresident nonparties[] to 
produce documents located out of th[e] state" even if the nonparty has a 
registered agent present in the state); and Phillips Petroleum Co. v. OKC 
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Ltd. P'ship, 634 So. 2d 1186, 1189 (La. 1994) (holding that Louisiana 
courts lacked authority to "order a nonresident nonparty witness to 
appear and/or produce documents … in Louisiana" when the nonparty 
was authorized to do business in Louisiana and maintained an agent for 
service of process in Louisiana).  
In highlighting this distinction, I hope to provide the bench and the 
Bar with some additional clarity as to what authority trial courts have in 
Alabama to compel nonresident nonparties to produce documents located 
out of the state.