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Netjets Aviation, Inc. and Netjets Sales, Inc v. Peter Sleiman Development Group

December 22, 2011


The opinion of the court was delivered by: Monte C. Richardson United States Magistrate Judge


THIS CAUSE is before the Court on Defendants', Peter Sleiman Development Group ("PSDG") and Peter Sleiman ("Sleiman"), Renewed Motion for Protective Order or in the alternative, to Quash Subpoenas (Doc. 92) filed October 19, 2011. Plaintiffs filed their response to the motion on November 7, 2011 (Doc. 96). Accordingly, the motion is now ripe for judicial review.


The instant litigation stems from contracts entered into between Plaintiffs and a Florida corporation, J.Ward. When J.Ward breached the contracts by failing to pay monies owed, Plaintiffs sued J.Ward in Ohio state court and obtained a judgment against it. Plaintiffs were unable to collect on the judgment and subsequently brought the instant litigation alleging breach of contract, implied contract-in-fact, and unjust enrichment based on alter ego liability against Defendants PSDG, Sleiman, and Jennifer Ward ("Ward"). On April 22, 2011, PSDG and Sleiman moved to dismiss Counts One and Five of the Second Amended Complaint, which alleged alter ego liability for breach of contract. (Doc. 67). Judge Corrigan referred the motion to the undersigned and on June 13, 2011, the undersigned issued a Report and Recommendation (Doc. 75) that the Motion be granted without prejudice. However, upon the objections of both sides, Judge Corrigan denied the Motion to Dismiss in an Order dated September 27, 2011. (Doc. 88). In that Order, Judge Corrigan determined that at the pleadings stage, Plaintiffs' alter ego allegations regarding whether J.Ward was used fraudulently or for an improper purpose were sufficient and that "further discovery [would] provide the proper record upon which to determine whether NetJets [could] ultimately make the required showing necessary to sustain [its] claims." Id.

Thereafter, on September 30, 2011, Plaintiffs served subpoenas on three non-party companies: Property Management Support, Inc. ("PMSI"), Property Support Systems, LLC ("PSS"), and TripleNet Equities, Lt. ("TNE"). Defendants, PSDG and Sleiman, filed the instant Motion asking the Court to enter a protective order preventing Plaintiffs from obtaining the requested documents from these entities or, in the alternative, quashing the subpoenas.


PSDG and Sleiman argue multiple reasons why a protective order should be entered or the subpoenas quashed. Specifically, PSDG and Sleiman argue the subpoenas seek irrelevant information, are overly broad, and seek private or confidential information. Plaintiffs respond that the subpoenas are narrowly tailored to seek relevant information and that Defendants have failed to show good cause exists to prevent the disclosure of any private or confidential information.

Rule 45(c) of the Federal Rules of Civil Procedure governs quashing or modifying subpoenas. The subpoenas at issue here were not issued to the parties, but rather, to three non-parties. While the Eleventh Circuit allows parties standing to challenge subpoenas issued to non-parties, it is only if the party alleges a "'personal right or privilege' with respect to the subpoenas." Auto-Owners Ins. Co. v. Southeast Floating Docks, Inc., 231 F.R.D. 426, 429 (M.D. Fla. 2005) (quoting Brown v. Braddick, 595 F.2d 961, 967 (5th Cir. 1979)). In the instant case, Defendants have made no allegations regarding a personal right or privilege. Therefore, as the instant motion is also based on Rule 26, the Court will analyze it as a motion for a protective order.

Rule 26(c) provides that upon a showing of good cause, a court may " issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense." The party seeking a protective order has the burden to demonstrate good cause, and must make "a particular and specific demonstration of fact as distinguished from stereotyped and conclusory statements" supporting the need for a protective order. United States v. Garrett, 571 F.2d 1323, 1326 n. 3 (5th Cir. 1978). Rule 26 permits the discovery of "any non-privileged matter that is relevant to any party's claim or defense . . ." Rule 26(b), Fed.R.Civ.P. Moreover, "[r]elevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Id. PSDG and Sleiman broadly argue that the documents sought by Plaintiffs are not relevant because they deal with three companies who are "wholly unrelated to the allegations in the Second Amended Complaint." (Doc. 92, p.7). The Court does not agree with this contention.

Defendants seem to argue that any discovery from the three non-parties is per se irrelevant because the non-parties are not specifically mentioned in the Complaint and there is no contention that they had anything to do with Plaintiffs. Plaintiffs note that through discovery, they have learned that each non-party has provided significant sums of money to J.Ward and that the checks issued by these non-party companies to

J.Ward were all signed by Sleiman. The Second Amended Complaint seeks to hold Sleiman and PSDG liable for J.Ward's breach of contract on an alter ego theory. To show alter ego liability, Plaintiffs must establish three elements:

(1) the shareholder dominated and controlled the corporation to such an extent that the corporation's independent existence, was in fact non-existent and the shareholders were in fact alter egos of the corporation;

(2) the corporate form must have been used fraudulently or for an ...

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