Arrowhead Capital Finance, Ltd. v. Seven Arts Entertainment, Inc.

Background

The court had entered judgment for Arrowhead Capital Finance, Ltd. on June 5, 2018. In connection with efforts to collect that judgment, Arrowhead used subpoenas to seek documents from Picture Pro LLC and Uncork’d Entertainment under Federal Rule of Civil Procedure 69(a)(2), which permits discovery to aid enforcement of a judgment.

Picture Pro is described as a Colorado limited liability company with its principal place of business in Los Angeles, California. Uncork’d is described as a Texas limited liability company. Peter Hoffman’s declaration stated that neither company had made relevant affirmative contacts with New York. Uncork’d did not separately object to its subpoena, and the court understood that it had produced a substantial volume of responsive documents.

Issues and analysis

Picture Pro moved to quash the subpoenas, arguing that the court lacked personal jurisdiction—legal power over the subpoenaed entity. Arrowhead asked the court to compel Picture Pro to comply, award attorney fees and costs connected to Picture Pro’s noncompliance and motion, and impose sanctions against Picture Pro and Hoffman for allegedly obstructive conduct.

The court held that the subpoenas were governed by Federal Rule of Civil Procedure 45. It concluded that the subpoenas’ substance, issuance, and service complied with the relevant parts of Rule 45. But the court found that the parties had not followed the rule governing where subpoena-related motions must be filed.

Under Rule 45, a motion to quash must be filed in the federal district where compliance with the subpoena is required, rather than in the court that issued the subpoena. The subpoena to Picture Pro required compliance in Los Angeles, so the court identified the United States District Court for the Central District of California as the proper forum. The court noted that the subpoena to Uncork’d required compliance in DeLand, Florida, but did not decide whether Picture Pro had standing to challenge that subpoena.

The court likewise held that Arrowhead’s request to compel compliance had to be made first in the district where compliance was required. It stated that the request could not be considered in the Southern District of New York unless it were transferred there under Rule 45(f).

Ruling

Judge Katherine Polk Failla denied Picture Pro’s motion to quash without prejudice to its ability to file a motion in the proper forum. The court also denied Arrowhead’s requests for an order compelling compliance, attorney fees, and sanctions without prejudice to Arrowhead’s ability to seek those forms of relief in the United States District Court for the Central District of California. The clerk was directed to terminate the motion at Docket No. 231.