Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Securities and Exchange Commission v. Pence

United States District Court, S.D. Florida, Miami Division

November 20, 2017

SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
STEPHEN B. PENCE, Defendant.

          ORDER DENYING MOTION TO QUASH SUBPOENA OR FOR THE ENTRY OF A PROTECTIVE ORDER

          FEDERICO A. MORENO, UNITED STATES DISTRICT JUDGE

         I. Introduction

         The Securities and Exchange Commission commenced this action against Stephen Pence for his allegedly fraudulent conduct in connection with two entities: PSQ, LLC and General Employment Enterprises. Pence has asserted the "advice of counsel" defense, contending that he followed the instructions provided by his attorneys: Gregory Bartko and Michael Andrew Stegawski. The SEC and Pence therefore seek to depose Stegawski. But Stegawski has no interest in being deposed, and asks this Court to quash the Rule 45 subpoena compelling his deposition. He contends that his testimony would provide limited-if any-value and would result in the unauthorized disclosure of client confidences and privileged communications.

         For the reasons discussed below, this Court finds Stegawski's arguments unavailing. Accordingly, Stegawski's Motion to Quash Subpoena or for the Entry of a Protective Order is DENIED.

         II. Analysis

         In his motion, Stegawski asks the court to do each of the following: (i) invalidate the Rule 45 subpoena because it was not personally served on Stegawski; (ii) quash the subpoena and enter a protective order preventing the Parties from deposing Stegawski; (iii) grant Stegawski an award of attorney's fees; and (iv) assess sanctions jointly upon Pence and his legal counsel. To the extent these requests merit consideration, the Court addresses them in turn.

         A. Stegawski's Request to Invalidate the Subpoena Based on Improper Service

         As an initial matter, Stegawski contends that the subpoena is invalid because it was not personally served. To be sure, neither the Commission nor Pence personally served Stegawski with the subpoena-but not for lack of trying. The Commission "made 14 unsuccessful attempts to personally serve Stegawski with a subpoena ad testificandum at five different locations" in three cities and two states. SEC v. Pence, No. 15-cv-7077-GBD-GWG, at *2 (S.D.N.Y. Sep. 28, 2017). And Pence's counsel contacted Stegawski multiple times by email and phone to arrange for personal service. Id. at 4-5. Ultimately, Judge Gorenstein-after a thorough evaluation of past and present case law-granted the Parties' joint request to permit substituted service using Stegawski's contact information listed on his CM/ECF account and in the Georgia and Florida bar directories. See Id. at 10-11. The Court accurately concluded "that there is virtually no possibility that Stegawski will fail to be aware of a subpoena served by these means." Id.

         Indeed, Stegawski concedes in his motion that he "undeniably has actual notice of the subpoena" and "does not dispute either that service was attempted or that he is aware of the subpoena." (Stegawski Mot. 17.) He also admits that courts in the Eleventh and Second Circuits have accepted substituted service of subpoenas. See, e.g., In re Falcon Air Express, Inc., Case No. 06-11877-BKC, 2008 WL 2038799 (Bankr. S.D. Fla. May 8, 2008) (holding that substitute service of a subpoena is effective on a non-party witness under Rule 45); Med. Diagnostic Imaging, PLIC v. CareCore Nat., LLC, No. 06-cv-13516-VM-THK, 2008 WL 3833238, at *3 (S.D.N.Y. Aug. 15, 2008) (permitting substituted service of "a deposition subpoena, by delivering a copy of the subpoena to his place of employment, mailing a copy by first class mail, and attaching a copy of this Order to the subpoena").

         Yet, astonishingly, Stegawski still contends that this Court should overturn Judge Gorenstein's well-reasoned Order, vitiate the prior service, and compel the Parties to start from scratch. He roots this conclusion in a pedantic policy argument that if courts permit substituted service on lawyers using contact information listed on CM/ECF and state bar directories, "the result would be that an attorney's CM/ECF registration with a federal court or state bar registration would effectively function as a waiver of all service of process in judicial proceedings." (Stegawski Mot. 17.)

         While sympathetic to Stegawski's "slippery slope" theory, the Court is confident that judicial restraint will limit this method of substituted service to those rare and exceedingly burdensome situations where a nonparty-attorney-witness unexplainably cannot be located- much less personally served-after 14 attempts.[1] Requiring the Parties to reinitiate personal service efforts at this juncture would do nothing but waste time and resources-something Stegawski has already accomplished in spades. Accordingly, the Court denies Stegawski's request to invalidate the subpoena for improper service.

         B. Stegawski's Motion to Quash the Subpoena and Enter a Protective Order

         Stegawski asks this Court to quash the Rule 45 subpoena compelling his deposition. He contends that forcing him to testify will result in the disclosure of confidential and privileged attorney-client information.

         The Federal Rules of Civil Procedure strongly favor full discovery whenever possible. See Farnsworth v. Procter & Gamble Co.,758 F.2d 1545, 1547 (11th Cir. 1985). Those Rules stipulate that a court may issue a protective order preventing a deposition only for "good cause." Fed.R.Civ.P. 26(c)(1). The federal courts employ a demanding balancing-of-the-interests approach when deciding whether there is good cause to issue a protective order. See Farnsworth, 758 F.2d at 1547. Specifically, "the Court should balance the non-moving party's interest in obtaining discovery and preparing for trial against the moving parly's proffer of harm that would result." Paxton v. Great Am. Ins. Co., 2009 WL 5064054 at *6 (S.D. Fla. 2009). "The burden is on the moving party and when the relief sought is preclusion of a deposition altogether, it is a heavy one." Ivax,LLC. v. Celgene Corp., No. 12-61917-CIV, 2013 WL 12085477, at *3 (S.D. Fla. July 29, 2013) (citing Dunford v. Roily Marine Serv. Co., 233 F.R.D. 635, 637 (S.D. Fla. 2005)). ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.