2018 U.S. Dist. LEXIS 235068; 2018 WL 10517074

GOVERNMENT EMPLOYEES INSURANCE COMPANY, Geico Indemnity Company, Geico General Insurance Company, and Geico Casualty Company

v.

Igor MAYZENBERG, Mingmen Acupuncture, P.C., Sanli Acupuncture, P.C., Igor Dovman, Laogong Acupuncture, P.C., and Tamilla Dovman, a/k/a Tamilla Khanukayev

ORDER

BLOOM, United States Magistrate Judge:

Non-parties Gold Findings Co., Inc. ("GFC") and Alex Slomovits ("Slomovits") move to quash subpoenas requiring that they produce documents to plaintiffs and appear for depositions in this action pursuant to Federal Rule of Civil Procedure 45(d). ECF Nos. 78, 79, 80. Plaintiffs oppose defendants' motion to quash, ECF No. 84, and the non-parties have replied, ECF No. 85. GFC and Slomovits challenge plaintiffs' subpoenas on the grounds that (1) the information plaintiffs seek is neither relevant, nor proportional to the needs of the instant case, and (2) compliance with the subpoenas would cause them an undue hardship. For the reasons stated below, the non-parties' motion to quash is denied. However, the subpoenas the plaintiffs served on GFC and Slomovits are modified as detailed herein. BACKGROUND

Plaintiffs GEICO provide personal injury and automobile insurance coverage to many insured New York motorists pursuant to New York's No-Fault Insurance Laws. ECF No. 48, Amended Complaint ("Am. Compl."), ¶ 12. Plaintiffs initially brought this action alleging that defendants Mingmen Acupuncture, P.C. ("Mingmen"), Sanli Acupuncture, P.C. ("Sanli"), and Igor Mayzenberg take advantage of New York's No-Fault statutes by operating "medical mills" and systematically submitting thousands of fraudulent no-fault claims to GEICO. Plaintiffs seek to recover $622,000 in claims previously paid to defendants Mingmen and Sanli ("the Acupuncture Defendants") that plaintiffs maintain were fraudulent claims, and to obtain a declaratory judgment that plaintiffs need not pay the Acupuncture Defendants more than $2,705,000 in outstanding fraudulent claims. Am. Compl. ¶¶ 1, 7.

On April 6, 2018, plaintiffs were given leave to file an amended complaint, which named Igor Dovman, Tamilla Dovman and Laogong Acupuncture, P.C. for the first time. ECF No. 48. Plaintiffs allege that the newly named individual defendants own and operate a number of shell corporations created to assist the Acupuncture Defendants in their practice of filing fraudulent no-fault claims and to perpetuate an illegal referral and kickback payments arrangement that plaintiffs accuse defendants of orchestrating. Am. Compl. ¶¶ 91-97. Plaintiffs learned through the course of discovery in the instant litigation that, beginning in 2015, the Acupuncture Defendants made numerous payments to more than a dozen corporations, all owned and operated by Igor Dovman and/or Tamilla Dovman. Am. Compl. ¶¶ 85, 104. Plaintiffs further allege that the Dovmans paid two personal injury attorneys in Coney Island to refer their clients to the Acupuncture Defendants who, in turn, paid the Dovmans for those referrals. Am. Compl. ¶¶ 85-90. Throughout discovery, plaintiffs have been actively investigating various entities and individuals with apparent connections to one or more of the named defendants, often through the use of non-party subpoenas.

On May 10, 2018, plaintiffs served the subpoenas at issue on GFC and Slomovits. ECF No. 84-11, Declaration of Steven T. Henesy, ¶ 3. The subpoenas directed the non-parties to appear for depositions at plaintiffs' counsel's office on June 8, 2018 at 2:00 p.m. and to produce any and all communications and documents relating to correspondence, agreements, contracts, orders, payments, etc. between the non-parties and various corporations belonging to Igor Dovman by June 8, 2018 as well. ECF No. 80, Pages 3-7. The non-parties retained counsel on June 5, 2018. ECF No. 85-1, Declaration of Daniel Ginzburg, ¶ 2. On June 6, 2018, counsel for the movants reached out to plaintiffs' counsel to reschedule the noticed depositions. Id. at ¶ 3. Plaintiffs thereafter noticed the non-party movants for depositions on June 18, 2018. ECF No. 84-11, Declaration of Steven T. Henesy, ¶ 11. In the early morning of June 14, 2018, counsel for movants notified plaintiffs' counsel that they would be moving to quash the subpoenas, and filed the motion with the Court later that day. ECF No. 84-11, Exhibit 3. STANDARD

"[T]he court for the district where compliance is required must quash or modify a subpoena that…subjects a person to undue burden." Fed. R. Civ. P. 45(d)(3)(A)(iv). "Subpoenas issued under Rule 45 are subject to the relevance requirement of Rule 26(b)(1)." Jalayer v. Stigliano, No. 10-CV-2285 (LDH)(AKT), 2016 U.S. Dist. LEXIS 135288, 2016 WL 5477600, at *2 (E.D.N.Y. Sept. 29, 2016) (quoting In re Refco Sec. Litig., 759 F. Supp. 2d 342, 345 (S.D.N.Y. 2011)). "Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case…." Fed. R. Civ. P. 26(b)(1) (emphasis added). Therefore, "[t]he party issuing the subpoena must demonstrate that the information sought is relevant and material to the allegations and claims at issue in the proceedings." Jalayer, No. 10-CV-2285 (LDH)(AKT), 2016 U.S. Dist. LEXIS 135288, 2016 WL 5477600, at *2 (E.D.N.Y. Sept. 29, 2016) (quoting Night Hawk Ltd. v. Briarpatch Ltd., 03 Civ. 1382 (RWS), 2003 U.S. Dist. LEXIS 23179, 2003 WL 23018833, at *8 (S.D.N.Y. Dec. 23, 2003)). It is not enough to simply state that the discovery requested is likely to uncover relevant evidence. "The party seeking the discovery must make a prima facie showing that the discovery sought is more than merely a fishing expedition." 287 Franklin Ave. Residents' Ass'n v. Meisels, No. 11-CV-976 (KAM)(JO), 2012 U.S. Dist. LEXIS 72855, 2012 WL 1899222, at *4 (E.D.N.Y. May 24, 2012) (internal citation omitted).

While, "the party issuing the subpoena must demonstrate that the information sought is relevant and material to the allegations and claims at issue in the proceedings," Night Hawk Ltd., 03 Civ. 1382 (RWS), 2003 U.S. Dist. LEXIS 23179, 2003 WL 23018833, at *8 (S.D.N.Y. Dec. 23, 2003), "the party seeking to quash the subpoena bears the burden of demonstrating that the subpoena is over-broad, duplicative, or unduly burdensome," Neogenix Oncology,  Inc. v. Gordon, No. 14-CV-4427 (JFB)(AKT), 2017 U.S. Dist. LEXIS 49293, 2017 WL 1207558, at (E.D.N.Y. Mar. 31, 2017) (internal citation omitted). "Whether a subpoena imposes an undue burden depends on such factors as relevance, the need of the party for the documents, the breadth of the document, the time period covered by it, the particularity with which the documents are described and the burden imposed." Wultz v. Bank of China Ltd., 298 F.R.D. 91, 98 (S.D.N.Y. 2014) (internal quotations and alterations omitted). The party moving to quash a subpoena on the basis of undue burden "cannot merely assert that compliance with the subpoena would be burdensome without setting forth the manner and extent of the burden and the probable negative consequences of insisting on compliance." Kirschner v. Klemons, No. 99 Civ. 4828 (RCC), 2005 U.S. Dist. LEXIS 9803, 2005 WL 1214330, at *2 (S.D.N.Y. May 19, 2005). "[I]nconvenience alone will not justify an order to quash a subpoena that seeks potentially relevant testimony." Id. (citation omitted).

The Court has discretion whether to quash a subpoena based on the specific circumstances and needs of the case. The Court must analyze both relevance and proportionality of the requested information and may not accept conclusory allegations as to either under Rule 26(b)(1). The party seeking then information must provide both facts and evidence on which the Court may find that the requested material is both relevant and proportional. Cf. Neogenix Oncology, No. 14-CV-4427 (JFB)(AKT), 2017 U.S. Dist. LEXIS 49293, 2017 WL 1207558, at *10 (E.D.N.Y. Mar. 31, 2017) ("The problem with Defendant's proffer is that it fails to cite any evidence or concrete facts which would provide even elementary support for the assertions it makes and the broad swath of discovery it seeks to obtain via the Subpoena. Such substantiation is even more important, where, as here, Defendant seeks a broad universe of discovery as well as deposition testimony from a non-party to this lawsuit." (internal citation omitted)). So, too, the movant seeking to quash the subpoena must "justify curtailing discovery" and "'conclusory obligations as to relevance, overbreadth, or burden are insufficient to exclude discovery of requested information.'" 2017 U.S. Dist. LEXIS 49293, [WL] at *8 (internal citations omitted). In exercising discretion, "the Court is entitled to broad latitude to determine the scope of discovery and to manage the discovery process." Catlin Syndicate 2003 v. Traditional Air Conditioning, Inc., No. 17-CV-2406 (JFB)(AYS), 2018 U.S. Dist. LEXIS 48859, 2018 WL 1459483, at *5 (E.D.N.Y. Mar. 23, 2018). DISCUSSION

Non-party movants state that plaintiffs have issued subpoenas that seek "every scrap of paper in GFC's possession relative to 29 separate persons and companies for the last seven-and-a-half years, but without any explanation of the relationship of movants to any of them." ECF No. 79, Page 4 of Movants' Memorandum of Law. Contrary to the movants' assertion, plaintiffs do provide both facts and evidence to demonstrate a nexus between defendant Dovman's corporations and the non-party movants. In their opposition, plaintiffs provide copies of the following documents: (1) checks written to GFC from various entities owned by Igor Dovman; and (2) documents showing that Igor Dovman is the incorporator and/or president of the entities that issued checks to GFC. ECF No. 84, Exhibits 3 & 4. Plaintiffs also demonstrate that Attorney Daniel Corley, another non-party who was recently deposed, received checks from defendant Sanli and issued checks to GFC, further suggesting some relationship between the non-party movants, the corporate defendants, Igor Dovman, and other non-parties deposed in this matter. ECF No. 84, Exhibits 7-10.

Movants argue that the evidence plaintiffs submit—checks from defendants and Corley to GFC—do not prove that GFC and Slomovits were engaged in any improper conduct. That is true; however, it is not plaintiffs' burden to prove that the non-parties actually engaged in the alleged misconduct. If plaintiffs had evidence of that, they would not need to subpoena GFC and Slomovits. Plaintiffs only need to show that there is a nexus between the information they seek and the claims in this action.

That said, the Court agrees with the non-parties that plaintiffs' subpoenas are overbroad. In the complaint, plaintiffs allege that the Acupuncture Defendants began paying Dovman on September 1, 2015. Am. Compl. ¶ 104. Dovman and his various corporations provide the nexus in this action to the non-party movants. The subpoenas served on the non-party movants on May 10, 2018 are overbroad in that they seek documents and information without a temporal limitation that is proportional to the needs of this case. Accordingly, the subpoenas are hereby modified to limit the information and documents requested to the time period beginning September 1, 2015 through to the present. See Sky Medical Supply Inc. v. SCS Support Claim Services, Inc., 12-CV-6383 (JFB)(AKT), 2017 U.S. Dist. LEXIS 43668, 2017 WL 1133349, at *11 (E.D.N.Y. March 24, 2017) ("To further enlarge this temporal period would result in an undue burden which outweighs the potential benefit here. That result would contravene the requirement that discovery be proportional to the needs of each case."). This modification will reduce the non-party movants' burden while still meeting plaintiffs' needs in the instant action.

GFC and Slomovits shall produce the subpoenaed documents to plaintiffs by July 23, 2018, and shall confer with plaintiffs to schedule their respective depositions before August 10, 2018. The Court recognizes these dates fall outside of the current discovery deadline. Accordingly, fact discovery is extended until August 15, 2018. Expert discovery shall be completed by October 15, 2018. Any party wishing to file a dispositive motion shall write to Judge Glasser by October 31, 2018, in accordance with his individual rules.

SO ORDERED.

Dated: June 29, 2018

Brooklyn, New York

/s/ LOIS BLOOM

United States Magistrate Judge