Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_07-cv-00795/USCOURTS-caed-1_07-cv-00795-3/pdf.json

Nature of Suit Code: 891
Nature of Suit: Agricultural Acts
Cause of Action: 28:1331 Enforcement of Administrative Subpoena

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, )

)

)

)

Petitioner, )

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v. )

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MARVIN D. HORNE, et al., )

)

)

)

Respondents. )

 )

1:07cv0795 AWI DLB

ORDER DENYING RESPONDENTS’

MOTION TO QUASH THIRD PARTY

SUBPOENAS DUCES TECUM

(Document 11)

Respondents Marvin D. Horne, Laura R. Horne, Don Durbahn, Raisin Valley Farms,

Raisin Valley Farms LLC, Raisin Valley Farms Marketing, Raisin Valley Farms Marketing LLC,

Raisin Valley Farms Marketing Association, Lassen Vineyards and Lassen Vineyards LLC

(“Respondents”), filed the instant motion to quash third party subpoenas duces tecum issued to

various customers on March 14, 2008. After the Court granted an order shortening time, the

matter was heard on April 2, 2008, before the Honorable Dennis L. Beck, United States

Magistrate Judge. Kimberly Gaab appeared on behalf of Petitioner United States of America

(“Petitioner”). Brian C. Leighton appeared on behalf of Respondents. 

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Case 1:07-cv-00795-AWI-DLB Document 17 Filed 04/03/08 Page 1 of 5
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 Respondents believe that four subpoenas to customers have been issued, but suggest in their motion that 1

there may be more. Respondents identify the customers Pacific/Atlantic Crop Exchange, Inc., United Naturals,

Multiple Organics and Food for Life. At the hearing, Petitioner confirmed that these were the only four subpoenas

issued. Of the four customers, one has produced documents. Of the remaining three, only Pacific/Atlantic Crop has

a scheduled appearance date, which has been extended to April 18, 2008.

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BACKGROUND

By this motion, Respondents seek to quash subpoenas duces tecum issued by the United

States Department of Agriculture (“USDA”) to various customers. They have filed their motion 1

in the instant case, initiated by Petitioner on May 30, 2007. Petitioner sought to enforce a

USDA/Agricultural Marketing Service (“AMS”) subpoena duces tecum issued to Respondents

on December 19, 2006. On August 2, 2007, the Court granted the petition and ordered

Respondents to produce the requested documents within sixty days. In so finding, the Court

determined that Petitioner needed the requested information to make a factual decision as to

whether Respondents were “handlers” or “producers” under the Agricultural Marketing

Agreement Act of 1937, 7 U.S.C. § 610(h) (“AMAA”) and the Marketing Order for Raisins

Produced from Grapes Grown in California, 7 C.F.R. pt. 989 (“Raisin Marketing Order”). 

The Court closed the action on August 2, 2007.

On October 1, 2007, pursuant to this Court’s order, Respondents produced documents.

Respondents filed the instant motion on March 14, 2008. On March 18, 2008, Petitioner

opposed the motion. Respondents filed their reply on March 27, 2008. 

DISCUSSION

Respondents explain that they recently learned that at least four of their customers have

received subpoenas duces tecum from the USDA/AMS regarding documents that relate to

Respondents. As an example, Respondents attach the subpoena issued to Pacific/Atlantic Crop

Exchange, Inc. The subpoena appears to be identical to the one issued previously to

Respondents, although it requests documents from December 1, 2003, through February 22,

2008. Respondents believe that the subpoenas have been issued for the sole purpose of harassing

Respondents’ customers and damaging their relationships with Respondents. Respondents

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further argue that the subpoenas do not seek evidence that is relevant and material to the

investigation.

1. Jurisdiction

The fundamental problem with Respondents’ motion is that this Court lacks jurisdiction. 

While the subpoenas at issue are related to the USDA’s investigation of Respondents, it does not

necessarily follow that Respondents can challenge them in this Court, either in the instant closed

case or a new action. This action was brought for the sole purpose of enforcing the subpoena

issued to Respondents. The Court’s jurisdiction for entertaining the petition was based on the

Federal Trade Commission (“FTC”) Act, 15 U.S.C. § 49, made applicable to the Secretary of

Agriculture by Section 10(h) of the AMAA, 7 U.S.C. § 610(h). Section 49 vests the Secretary

with subpoena power and gives jurisdiction to the district court to enforce the subpoena “in case

of contumacy or refusal to obey a subpoena.” District courts therefore “have jurisdiction to issue

writs of mandamus commanding any person, partnership, or corporation to comply” with

administrative subpoenas. 15 U.S.C. § 49.

Pursuant to this authority, then, this Court granted the petition to enforce the subpoena

issued to Respondents and closed the action on August 2, 2007. Although the Court maintains

continuing jurisdiction and can adjudicate further issues, it can only do so to the extent the issues

relate to the enforcement of the petition originally before this Court. In cannot, as Respondents

suggest, assume jurisdiction simply because the subpoenas now at issue arose out of, or are

related to, the original subpoena. 

Nor does this Court have an independent basis for jurisdiction. While 15 U.S.C. § 49

provides jurisdiction to enforce a petition, it does not provide jurisdiction to quash a petition. 

Neither the Court nor the parties are aware of any other statutory basis for jurisdiction. 

The Court recognizes Respondents’ frustration with this result. Other administrative

agencies, such as the Internal Revenue Service, have chosen to adopt the FTC regulations that

provide for an administrative forum for quashing subpoenas. The USDA chose not to do so and

therefore leaves the parties from which it requests documents with no administrative remedies. 

This places the third parties in the unfortunate position of having no proactive remedy. Instead,

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they must refuse to comply with the subpoena and stand by while the USDA decides whether to

move to enforce the subpoena pursuant to 15 U.S.C. § 49. Respondents’ frustration is

compounded by their belief that forcing their customers to refuse to comply with the subpoena,

rather than preemptively quashing it, will result in a loss of business. Again, the Court

understands Respondents’ frustration with this “Catch-22", but the absence of a remedy cannot

confer jurisdiction on this Court.

Accordingly, the Court finds that it does not have jurisdiction over Respondents’ motion

to quash.

2. Standing

Even assuming this Court had jurisdiction, it is not clear that Respondents have standing

to challenge the subpoenas issued to their customers. Respondents believe that standing exists

because they characterize the requested records as their records. At the hearing, though,

Petitioner suggested that the documents they have received from the one responding customer

involve only sales documents and other business records, and that such documents are sufficient. 

Although such documents may relate to Respondents, the documents are the customer’s records

of commercial transactions. As the customer’s records, then, standing to challenge disclosure

belongs to the customer, not Respondent. 

3. The Scope of the Subpoenas

Even if the Court could reach the merits of Respondents’ motion, their motion would be

denied. Based on Petitioner’s assertion at the hearing that documents relating to commercial

transactions with Respondents are sufficient, it is reasonable for the USDA to use the subpoenas

to verify the records produced by Respondents. E.E.O.C. v. Children’s Hosp. Med. Ctr. of N.

Cal., 719 F.2d 1426, 1428 (9th Cir. 1983) (overruled on other grounds). Nonetheless, given the

breadth of the subpoena served (and the ease with which they could have been narrowed) and

Petitioner’s concession that a narrow set of documents would suffice, it certainly lends credence

to Respondents’ belief that the subpoenas were issued, at least in part, to harass Respondents’

customers. It is unfortunate that Petitioner did not begin its quest for information with properly

tailored subpoenas.

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As to Respondents’ attempt to argue that the subpoenas are burdensome, this argument

must be made by the parties to which the subpoenas are directed, as they have the specific,

individualized knowledge necessary to make such a determination. 

Therefore, based on the above, Respondents’ motion to quash subpoenas duces tecum

issued to their customers is DENIED.

IT IS SO ORDERED. 

Dated: April 3, 2008 /s/ Dennis L. Beck 

3b142a UNITED STATES MAGISTRATE JUDGE

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