United States District Court, S.D. Indiana, Indianapolis Division
ENTRY ON PETITIONER'S MOTION TO QUASH
WILLIAM T. LAWRENCE, District Judge.
This cause is before the Court on the Petitioner's motion to quash subpoena (dkt. no. 3). The subpoena in this cause was served on Eli Lilly and Company ("Lilly") by Guoqing Cao and Shuyu Li ("the Defendants"), former Lilly employees who are currently charged in a criminal matter before this Court. See Cause No. 1:13-cr-150-WTL-TAB. The motion has been fully briefed by Lilly, the Defendants, and the Government. The Court now rules as follows.
I. BRIEF BACKGROUND
Pursuant to a superseding indictment, on August 14, 2013, the Defendants were charged with multiple counts of theft of trade secrets and one count of conspiracy to commit theft of trade secrets in violation of 18 U.S.C. § 1832. On March 12, 2014, the Government filed a second superseding indictment ("SSI") that changed the nature of the charges brought against the Defendants. Now, the Defendants face one count each of wire fraud, aiding and abetting, and conspiracy to commit wire fraud in violation of 18 U.S.C. §§ 1343, 2, and 1349.
Since the Defendants have been charged, the Defendants and the Government have worked together and with the Court through the discovery process. On May 19, 2014, this Court held a discovery hearing; at the hearing, and in the written entry that followed, the Court approved the Defendants' request to serve a subpoena on Lilly. The Defendants did so on May 19, 2014.
Lilly objected to the subpoena, and the Defendants and Lilly attempted to resolve their disputes in June 2014. Unfortunately, not all disputes were resolved, and Lilly filed this motion to quash on July 7, 2014.
In a federal criminal case, the parties are entitled to limited reciprocal discovery. See, e.g., Fed. R. Crim. P. 16. In the underlying criminal matter, the Government has produced much discovery to the Defendants pursuant to Rule 16. Nevertheless, the Defendants sought to obtain additional discoverable material from Lilly. The Defendants served the subpoena on Lilly pursuant to Federal Rule of Criminal Procedure 17 which provides, in relevant part, the following:
(c) Producing Documents and Objects.
(1) In General. A subpoena may order the witness to produce any books, papers, documents, data, or other objects the subpoena designates. The court may direct the witness to produce the designated items in court before trial or before they are to be offered in evidence. When the items arrive, the court may permit the parties and their attorneys to inspect all or part of them.
(2) Quashing or Modifying the Subpoena. On motion made promptly, the court may quash or modify the subpoena if compliance would be unreasonable or oppressive.
Fed. R. Crim. P. 17.
In United States v. Nixon, 418 U.S. 683 (1974), the Supreme Court delineated the following rule which guides this Court's analysis of the subpoena:
[I]n order to require production prior to trial, the moving party must show: (1) that the documents are evidentiary and relevant; (2) that they are not otherwise procurable reasonably in advance of trial by exercise of due diligence; (3) that the party cannot properly prepare for trial without such production and inspection in advance of trial and that the failure to obtain such inspection may tend unreasonably to delay the trial; and (4) that the application is made in good faith and is not intended as a general fishing expedition.'
Against this background, the [moving party], in order to carry his burden, must clear three hurdles: (1) relevancy; (2) admissibility; (3) specificity.
Id. at 699-700. With this background in mind, the Court turns to the instant motion.
Lilly seeks to have the subpoena "quashed in its entirety because it is categorically unreasonable and oppressive." Lilly Reply at 13. The Defendants seek to have the entire subpoena upheld, and they have submitted justifications for each of their requests in the 26-page subpoena. In reviewing the subpoena, it is true that many of the requests must be quashed for various reasons; however, this is certainly not true of all requests in the 26-page document. Accordingly, the Court will address the subpoena request-by-request in order to determine whether the items need to be produced by Lilly. The Court will note which requests should be quashed and which requests are appropriate. For some requests, however, the Court would like more information in order to make that determination. Accordingly, a conference shall be held on Friday, September 19, 2014, at 9:00 a.m. in Courtroom 202 of the Birch Bayh Federal Building & United States Courthouse, 46 E. Ohio Street, Indianapolis, Indiana. The parties should be prepared to address each request listed below for which the Court notes it needs more information. Prior to this conference, the parties should attempt to resolve the outstanding requests amongst themselves.
Before turning to the subpoena itself, the Court addresses two other issues. After receiving the subpoena, Lilly provided the Defendants with a document outlining "responsive documents previously produced." Accordingly, it argues that certain requests made in the subpoena are moot, as Lilly has provided the Government-who in turn has or will provide to the Defendants-the material sought. See dkt. no. 3-2. The Defendants argue that this assertion is incorrect, noting that the production contains "blank documents; non-responsive documents; and disaggregated, or broken up, pdf' versions of spreadsheets...." Defs.' Br. at 12. The Court is confident that the parties can resolve those disputes without Court intervention. If not, they may bring this to the Court's attention at the above-mentioned conference.
Similarly, Lilly provided the Defendants with a document outlining "responsive documents in production cue." This document outlines certain discovery that is forthcoming; these were items that Lilly was already planning on producing to the Government pursuant to this Court's discovery order. This Entry also does not address those requests; the Court is confident the Defendants will indeed obtain the discovery listed in the document. If not, the Defendants should bring this to the Court's attention at the conference, after attempting to resolve their disputes with Lilly.
Finally, the Court needs to address the date ranges contained in the subpoena. As Lilly indicates, many of the requests seek records going back to January 1, 2006; this is the same date that the Court has already addressed-with respect to emails-at an earlier hearing. As was the case with the emails, the Defendants do not provide a sufficient reason for the relevancy of records dating back to the year 2006. Accordingly, for certain requests noted below, the Court has changed the date range to correspond with its earlier order.
With these preliminary issues somewhat addressed, the Court now turns to the subpoena itself.
A. Interaction between the government and Eli Lilly relating to allegations (A1-A11)
The Defendants note that these requests "seek to determine Lilly's role in the radical shifts in prosecutive theory in this case..." Defs.' Br. at 33. Lilly argues that these requests do not meet the Nixon standard because they lack specificity. The Court agrees. The Defendants themselves essentially admit that they are on a fishing expedition: "We believe that Lilly, for improper purposes, persuaded the Government to charge, arrest, and detain two former employees on trumped up trade secret' evidence, easily contradicted. We believe the Government was at best gullible and guilty of poor investigative technique in accepting wholecloth what was sold by Lilly on the flimsiest of bases." Id. at 34 (emphasis added). Rule 17(c) subpoenas "must be made in good faith and [are] not intended [to be] a general fishing expedition.'" United States v. Tokash, 282 F.3d 962, 971 (7th Cir. 2002). The Defendants have not cleared the Nixon hurdles with respect to this category of requests. Accordingly, Lilly's motion to quash these requests is GRANTED.
B. Records of Eli Lilly and Company specific to defendants and colleagues (B1-B34)
This category of requests are for certain business records of Lilly; the Defendants' argue that these records would be admissible as business records pursuant to Federal Rule of Evidence 803(6). Lilly argues that the requests fail the relevancy and specificity hurdles. Notwithstanding Lilly's objections, the Court believes that the following requests meet the Nixon standard:
B3: Lilly has already produced/will produce the bonus information, see dkt. no. 3-2; it only makes sense, therefore, for it to produce the method for which the bonuses were calculated. This is also specific: the Defendants want the policy as to how bonuses were calculated.
B4: Records on deferred compensation, retirement benefits, and pension provisions fall into the same category as bonus information, which, as noted above, Lilly has already provided. The Court agrees that this could be used ...