IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

MID-ATLANTIC CONSTRUCTORS :

INC., : CIVIL ACTION

: NO. 03-6125

Plaintiff, :

:

v. :

:

STONE & WEBSTER CONSTRUCTION, :

INC., :

:

Defendant. :

M E M O R A N D U M

EDUARDO C. ROBRENO, J. November 3, 2005

Before the Court is a motion for sanctions filed by the

plaintiff Mid-Atlantic Constructors (“Mid-Atlantic”) after the

defendant Stone & Webster Construction (“Stone & Webster”) filed

a subpoena on a third-party past the discovery deadline and

without prior notice to the plaintiff. For the reasons set forth

below, the motion for sanctions is granted and plaintiffs shall

be awarded attorneys fees for the prosecution of this motion, the

exact amount of which will be determined at the conclusion of

this litigation.

I. BACKGROUND

Mid-Atlantic brings a diversity action under 28 U.S.C.

§ 1332 against defendant Stone & Webster Construction, Inc.

(“Stone & Webster”) based on a subcontract that was entered into

between the two parties. The subcontract required Mid-Atlantic

Case 2:03-cv-06125-ER Document 99 Filed 11/04/05 Page 1 of 8
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to set certain equipment and install certain off rack piping and

prefabricated pipe racks in connection with the construction of a

combined cycle power plant in Marcus Hook, PA (the “Project”). 

Mid-Atlantic alleges that Stone & Webster caused delays and

accelerated conditions and inefficiencies in connection with MidAtlantic’s performance of its duties, thereby causing MidAtlantic to incur substantial cost increases and delays. MidAtlantic further alleges that Stone & Webster terminated MidAtlantic in bad faith and without justification. The Complaint

brings claims of breach of contract, unjust enrichment, quantum

meruit and violation of the Pennsylvania Contractor and

Subcontractor Payment Act (“PCSPA”), 73 P.S. § 501 et seq.. 

On January 26, 2004, defendant Stone & Webster filed a

Third-Party Complaint against HSI General Contractors, Inc.,

Frank W. Hake, Inc., and the Hake Group, Inc. alleging breach of

contract, common law indemnification and contractual

indemnification. Essentially, the Third-Party Complaint alleges

that the third party defendants’ own actions caused delays in the

Project. 

Two related cases have been consolidated with the

instant case. They are Frank W. Hake, Inc. v. Stone & Webster,

03-6964 and HSI General Contractors, Inc. v. Stone & Webster, 03-

6966, which are now proceeding under 03-6125. The plaintiffs

Frank W. Hake, Inc., HSI General Contractors, Inc. and MidCase 2:03-cv-06125-ER Document 99 Filed 11/04/05 Page 2 of 8
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Atlantic, are an amalgamated organization of sister companies

known as the Hake Group. The Complaint and responsive pleadings

in all three cases are virtually identical.

II. DISCUSSION

Mid-Atlantic filed a motion to sanction Stone & Webster

(doc. no. 93) for serving a non-party a subpoena in contravention

of the Federal Rules of Civil Procedure (doc. no. 87; filed

4/20/05). The non-party served was Nooter Construction, the

replacement subcontractor hired to complete construction after

Mid-Atlantic’s subcontract was terminated. Mid-Atlantic accuses

Stone & Webster of serving the subpoena past the deadline for

discovery, without prior notice to the plaintiffs and without the

Court’s permission. Mid-Atlantic requests 1) withdrawal of the

subpoena and return of the documents; 2) that the Court preclude

Stone & Webster from serving the subpoena until the Court rules

on the motion for leave; 3) an admonition that Stone & Webster

shall be precluded from using any information obtained from the

subpoena without providing notice to Mid-Atlantic; and 4)

attorneys fees incurred in litigating this motion for sanctions.

Stone & Webster responds that it merely sent Nooter a

“proposed” subpoena pending order of this Court on the motion for

leave to allow Nooter to prepare to respond to this Court’s

likely grant of that leave. See Mem. in Opp’n to Mot. for

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Sanctions (doc. no. 92). Moreover, Stone & Webster states that

Nooter voluntarily agreed to produce certain documents. The

documents from Nooter were sent to IKON copying service (except

for a CD of photographs) and are being held by IKON until this

Court rules on the motion for leave to serve the subpoena or the

subsequent motion for leave to receive those documents (doc. no.

92; filed 8/29/05). Stone & Webster also argues that plaintiffs

were offered an opportunity to copy the documents. The proposed

sanctions, they argue, are harsh and a waste of judicial

resources.

This Court stated in Spencer v. Steinman, No. 96-1792,

1999 U.S. Dist. LEXIS 23387, at *2 (E.D. Pa. Mar. 1, 1999), that:

The United States District Court for the

Eastern District of Pennsylvania has the

inherent authority to insure that a party is

not deprived of the protection of receiving

notice of the issuance of a subpoena duces

tecum to a non-party, afforded by the Federal

Rules of Civil Procedure, and to protect the

integrity of the judicial system and

safeguard it against potential abuse. 

There, the Court had initially ordered monetary and non-monetary

sanctions for an attorney who served subpoenas without giving

notice as required under Federal Rule of Civil Procedure 45. The

court relied on its inherent powers to order the sanctions after

finding that Rule 11 did not apply, as the subpoena had been

served for a proper purpose (i.e. “obtaining evidence

discoverable under Rule 26(b)”). See id. (Rule 11 allows

Case 2:03-cv-06125-ER Document 99 Filed 11/04/05 Page 4 of 8
Stone & Webster states in its Motion for Leave to Receive 1

Documents Produced by Nooter Construction Company (doc. no. 92),

at ¶ 4, that “Stone & Webster left a message with opposing

counsel seeking their consent to Stone & Webster’s service of

subpoena upon Nooter” and that “[n]o response was received.” A

phone message to ask permission is not notice as provided in

5

sanctions for an improper purpose). Upon reconsideration, the

Court vacated the monetary sanction because the attorney had not

acted in bad faith, but rather negligently, in not ensuring that

the paralegal complied with the notice requirements. MidAtlantic cites Spencer in support of its request for monetary

sanctions, inferring bad faith by Stone & Webster. 

Although Stone & Webster characterizes the subpoena as

a “courtesy” and merely “proposed” until further order of the

Court, the manner in which Stone & Webster sought the discovery

violated several rules of civil procedure. First, there is no

authority under Rule 45(a) for serving a non-party with a

“proposed” subpoena. Second, Rule 45(b) governs service of

subpoenas and clearly requires prior notice to opposing counsel. 

Third, Rule 16 requires compliance with scheduling orders. 

Additionally, the justification for serving the

subpoena offered by Stone & Webster has no merit. Had Stone &

Webster wanted to serve a “proposed” subpoena, there was no

reason why it could not have given Mid-Atlantic notice of the

“proposed” subpoena while it awaited the Court’s decision on the

extension of discovery. 

1

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Rules 45(b) (requiring notice) or Rule 5(b) (setting forth the

procedures for service). 

6

Based on the aforesaid, the Court finds that Stone &

Webster’s actions violated Rules 45(a), 45(b) and 16. 

Additionally, the Court finds that Stone & Webster’s conduct was

not inadvertent or negligent, but rather was intentional and

undertaken in bad faith. See Spencer, 1999 U.S. Dist. LEXIS

23387, at *2 (finding that monetary sanctions are warranted upon

a finding of bad faith).

Sanctions must, of course, be proportionate to the

violation. Here, no prejudice will ensue to Mid-Atlantic

provided that the documents at issue are promptly turned over to

Mid-Atlantic. Yet, deterring future conduct demands that the

parties be put in the same position they would have been in but

for Stone & Webster’s violation. To vindicate this important

policy objective, under the Court’s inherent powers and Rule

16(f), attorneys fees and costs are awarded to Mid-Atlantic for

the prosecution of the motion for sanctions. The exact amount of

attorneys fees and costs due Mid-Atlantic shall be determined at

the conclusion of this litigation. 

III. CONCLUSION

Mid-Atlantic’s motion for sanctions is granted. 

Attorneys fees and costs are awarded as Stone & Webster acted in

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bad faith by serving a subpoena on a non-party past the discovery

deadline and without prior notice to opposing counsel.

An appropriate order follows. 

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

MID-ATLANTIC CONSTRUCTORS :

INC., : CIVIL ACTION

: NO. 03-6125

Plaintiff, :

:

v. :

:

STONE & WEBSTER CONSTRUCTION, :

INC., :

:

Defendant. :

ORDER

AND NOW this 3rd day of November, 2005, it is hereby

ORDERED that Mid-Atlantic’s Motion for Sanctions (doc. no. 93) is

GRANTED. Mid-Atlantic shall be awarded attorney’s fees for the

prosecution of this motion, the exact amount of which will be

determined at the conclusion of this litigation.

IT IS FURTHER ORDERED that Stone & Webster’s Motion for

Leave to Receive Documents Produced by Nooter Construction

Company (doc. no. 92) is GRANTED and a copy of all documents

produced by Nooter Construction Company shall be delivered to

Mid-Atlantic.

AND IT IS SO ORDERED.

 

EDUARDO C. ROBRENO, J.

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