Opinion ID: 732420
Heading Depth: 2
Heading Rank: 1

Heading: The Fingerhut Subpoena

Text: 12 Appellants Steelworkers and 1199 urge this court to conclude that the district court erred by ordering Fingerhut to produce fourth-party documents unrelated to either party in the underlying abuse of process litigation. They not only contend that nonparty discovery is significantly more limited than party discovery, but also that, regardless of the standard of relevance applied, Steelworkers' and 1199's documents are simply irrelevant to the question whether UFCW committed the intent-specific tort of abuse of process against Food Lion. 7 13 Appellants challenge both bases of the district court's relevance ruling. First, they argue that, since the elements of the tort of abuse of process largely turn on the defendant's particular intent, the district court should have offered an explanation of how documents of Steelworkers and 1199 could lead to the discovery of admissible evidence on the intent of UFCW. Brief for Appellants, at 17. Second, appellants contest the district court's statement that discovery of these documents may help to determine what documents are missing from Fingerhut's productions involving UFCW. They claim that the fact that one union creates or has certain 'types' of documents has no bearing on whether another union could or should have the same or even similar documents. Id. at 18. According to appellants, [p]ermitting discovery on this basis would allow parties to obtain documents from non-parties based on sheer speculation. Id. 14 Food Lion, on the other hand, argues that the nonparty documents sought in the subpoena are relevant to the underlying abuse of process litigation for exactly those reasons identified by the district court. Food Lion explains: 15 Contrary to the Unions' suggestion, Food Lion is not proceeding on mere speculation. Academic studies of corporate campaigns and materials distributed by the AFL-CIO suggest that individual unions rely heavily on only a few sources, such as the Industrial Union Department of the AFL-CIO and a handful of public relations firms, to devise and implement corporate campaign strategy, and that union corporate campaigns, regardless of the specific union involved, typically involve a narrow range of identifiable tactics. 16 Brief for Appellee, at 17 (citing P. Jarley & C. Maranto, Union Corporate Campaigns: An Assessment, 43 IND. & LABOR RELATIONS REV. 505 (1990); Developing New Tactics: Winning with Coordinated Campaigns, Industrial Union Dep't, AFL-CIO (1985)). Thus, Food Lion alleges that documents relating to other unions' corporate campaigns are relevant because they may show that tactics used by those unions in other corporate campaigns were also used by UFCW in a campaign against Food Lion. Id. at 18. Additionally, although Food Lion concedes that the non-party status of a witness may have a bearing on determining the burdensomeness of discovery [under F.R.C.P. 26(c) ], it rejects the notion that the relevance standard applied to nonparties is more stringent than that applied to parties. Brief for Appellee, at 15; Fein v. Numex Corp., 92 F.R.D. 94, 96 (S.D.N.Y.1981) (... Rule 26(b) of the Federal Rules of Civil Procedure limits discovery to relevant matters, and makes no distinction in this regard between information in the hands of parties and that held by nonparties.). 17 Resolving the Fingerhut subpoena controversy requires us to explore the outer limits of the relevance inquiry in nonparty discovery. Whether the district court erred in ordering a third party to the underlying abuse of process litigation to produce fourth-party documents unrelated to either party in that litigation is a question of first impression in this circuit. Upon careful reflection, we conclude that the fourth-party documents at issue here are irrelevant and therefore vacate the district court's order enforcing Food Lion's subpoena insofar as it concerns these documents. Although we recognize that discovery in federal civil litigation casts a wide net, nevertheless there are some limits on what may be reasonably discovered. 18 Federal Rule of Civil Procedure 26(b)(1) provides in part that, [p]arties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action. Generally speaking, relevance for discovery purposes is broadly construed. Under Rule 26(b), information sought need not be admissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence. FED.R.CIV.P. 26(b)(1). Trial courts exercise considerable discretion in handling discovery matters, and a district court's decision to permit or deny discovery is reviewable only for an abuse of discretion. Brune v. Internal Revenue Service, 861 F.2d 1284, 1288 (D.C.Cir.1988). 19 Although it is rare for an appellate court to overturn a district court's decision to allow discovery, the relevance standard of Rule 26 is not without bite and may dictate no other choice. See, e.g., Epstein v. MCA, Inc., 54 F.3d 1422, 1423 (9th Cir.1995) (holding that district court abused its discretion in allowing discovery of documents that would have no bearing on either the merits of the case or on the motion for class certification and that therefore were irrelevant under Rule 26(b)(1)). Despite the fact that [t]he boundaries defining information that is relevant to the subject matter involved in the action are necessarily vague and it is practically impossible to state a general rule by which they can be drawn, it is also true that [n]o one would suggest that discovery should be allowed of information that has no conceivable bearing on the case. 8 WRIGHT, MILLER & MARCUS, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2d § 2008, pp. 105-06 (1994); see also In re Fontaine, 402 F.Supp. 1219, 1221 (E.D.N.Y.1975) (While the standard of relevancy [in discovery] is a liberal one, it is not so liberal as to allow a party 'to roam in shadow zones of relevancy and to explore matter which does not presently appear germane on the theory that it might conceivably become so.' ) (quoting Broadway & Ninety-Sixth St. Realty Co. v. Loew's Inc., 21 F.R.D. 347, 352 (S.D.N.Y.1958)). 20 Applying these tenets to the instant case, we conclude that the documents sought by the Fingerhut subpoena are not relevant to the subject matter of the underlying litigation and thus may not be discovered by Food Lion. We fail to see any reasonable likelihood that allowing discovery of the nonparty unions' documents will lead to discovery of evidence relevant to the underlying action. Under South Carolina law, the elements of the tort of abuse of process are (1) ulterior purpose; and (2) a willful act in using process that is not proper in the regular conduct of a proceeding. As the appellants aptly point out, both of these elements turn primarily on the specific intent of UFCW in pursuing the Bryant litigation. Even if Food Lion were correct that the fourth-party documents at issue might lead to evidence of other corporate campaigns carried on by other unions against other employers, we do not see how this evidence would bear on UFCW's intent in carrying out the Bryant litigation. 8 21 Indeed, in a less extreme case involving discovery of loan applications submitted by nonparties to a bank which was a party to the litigation, the District Court for the Eastern District of New York reached a conclusion similar to the one we reach today. In re Fontaine, 402 F.Supp. 1219 (E.D.N.Y.1975). In that case, which was decided under bankruptcy rules which incorporate by reference the relevance standard of Rule 26(b), the district court reversed an order by a bankruptcy judge permitting a defendant-debtor to inspect and copy all loan applications submitted by nonparties to the plaintiff-creditor's office during a three-month period. The creditor in the underlying controversy sought to establish that the debt of the bankrupt was not dischargeable because credit had been extended to him in reliance upon an intentional and material false statement in the credit application. The defendant-debtor admitted that he had made a false statement on his loan application, but denied that the creditor had relied upon that statement in extending him credit. He sought discovery of other, nonparty debtors' loan applications in order to demonstrate that the bank had not relied on his false statement. The creditor, in turn, argued that the other loan applications were irrelevant to th[e] case since each application [was] independently considered solely on its own merit by weighing numerous variables. Id. at 1221. 22 The Fontaine court reversed the bankruptcy judge and disallowed discovery of nonparty loan applications, despite the fact that they were submitted to and processed by the same plaintiff bank, who was suing the defendant who issued the subpoena. The court reasoned in part that the bank's failure to rely on similar false statements, if true, is no evidence that there was no reliance in this particular instance especially in view of the fact ... that each loan is a separate entity and is considered apart from previous applications. Id. The court concluded that, [c]onsequently, there is no likelihood that useful evidence might be uncovered which is relevant to the subject matter. Id. In Fontaine, the only connection between the nonparty loan applications sought and the defendant-debtor's application were that they were handled by the same bank, and this connection alone was not enough in the court's view to establish Rule 26 relevance. Similarly here, we fail to see how the discovery of nonparty documents pertaining to 1199 or Steelworkers is germane to the abuse of process case involving UFCW and Food Lion. Even if Food Lion were able to establish that either 1199 or Steelworkers had conducted a corporate campaign against some other employer involving litigation that constituted abuse of process under South Carolina law, it would still be problematic whether this happenstance would in any way pertain to UFCW's intent in conducting the Bryant litigation. Here, of course, there is not even the coincident of other unions using litigation as a part of their campaigns against other employers. Discovery of one abusive union without more cannot be used as a basis to infer another union's alleged abuse of process in a completely different factual setting, absent a stronger showing of nexus between the two unions than the fact that they both used the same public relations agency. 23 The Fontaine case highlights the problems of boundless discovery without a meaningful standard of relevance. Had the Fontaine court upheld the bankruptcy court's ruling, the debtor could have obtained confidential records of hundreds of loan applicants whose only connection to his case was the fact that they used the same bank. Just as menacingly here, allowing the discovery sought would enable an employer at war with an organizing union to get its hands on the documents of two completely independent unions which have absolutely no connection to that employer at all. Indeed, their only connection to the litigation is that they used the same public relations firm as UFCW, the union in contact with Food Lion. Where would the stopping-place be? If Food Lion may obtain the documents of 1199 and Steelworkers, why should it not on a similar justification also be permitted to obtain the documents of every other union client advised by Fingerhut? The definition of a corporate campaign set forth by Food Lion would seem to cover almost any public relations work done by Fingerhut on behalf of virtually any union client. 9 Similarly, such a holding would presumably allow a plaintiff-client suing a tax or accounting firm for malpractice to obtain access to thousands of other people's confidential records, on the sole ground that the nonparties had the misfortune of employing the same tax or accounting firm. Such wide-ranging, intrusive, and ultimately irrelevant discovery must undeniably be found to cross the legitimate boundaries of Rule 26. Unless a movant can demonstrate a stronger nexus between third- and fourth-party documents and the elements necessary to the underlying cause of action than Food Lion has done here, 10 discovery may not be had. Accordingly, we conclude that the district court abused its discretion in allowing discovery of Fingerhut documents pertaining to 1199 and Steelworkers.