Case Number CR-05-149-C.
February 24, 2006
MEMORANDUM OPINION AND ORDER
Now before the Court are six Motions to Quash Subpoena Duces Tecum filed by multiple non-parties to the instant criminal proceeding. Plaintiff, the United States of America (Government) takes no position on the disposition of these motions. Each motion, and the Court's corresponding disposition, are discussed below individually.
Defendant Pamela Lynn Trout (Trout) formerly worked as an Office Manager, General Manager, and Personal Assistant for the Petroleum Property Management Company and its owner William T. Egolf (WTE) in Oklahoma City, Oklahoma, for approximately twenty years. The Government alleges that Trout engaged in a scheme to defraud WTE and embezzled approximately $850,000.00 for her own personal expenditures. A grand jury subsequently indicted Trout on nineteen counts: Counts One to Seven, Mailings in Furtherance of the Fraud, 18 U.S.C. §§ 2(b), 1341, and Counts Eight to Nineteen, Interstate Wire Communications in Furtherance of the Fraud, 18 U.S.C. § 1343. In preparation of her defense, Trout served multiple non-parties with subpoenas duces tecum in order to obtain documents believed to be relevant to her defense. The non-parties object to complying with the subpoenas duces tecum and move the Court to quash them.
The core of this dispute concerns Trout's ability to obtain documents which she believes are pertinent to her defense from multiple non-parties to the instant criminal action. Under Fed.R.Crim.P. 17(c),
(1) 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) On motion made promptly, the court may quash or modify the subpoena if compliance would be unreasonable or oppressive.
Rule 17(c) is not an additional tool a criminal defendant may use for discovery; its purpose is to expedite a trial by allowing a party to inspect the subpoenaed items in advance for usability at trial. Bowman Dairy Co. v. United States, 341 U.S. 214, 219-20 (1951). In so doing, "Rule 17(c) implements the Sixth Amendment guarantee that an accused have compulsory process to secure evidence in his favor." In re Martin Marietta Corp., 856 F.2d 619, 621 (4th Cir. 1988).
United States v. Nixon, 418 U.S. 683, 699 (1974), controls the enforcement of a Rule 17(c) subpoena and requires the moving party to demonstrate
(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.'Id. at 699-700 (footnote omitted). In order to bear her burden, Trout "must clear [the] three hurdles" of relevancy, admissibility, and specificity. Id. at 700.
For each motion, the Court will address each disputed subpoena request as enumerated within the subpoena by Trout.
I. Motion to Quash Filed by Non-parties William T. Egolf Revocable Trust; Egolf Holding Corporation; Petroleum Properties Management Company, L.L.C.; Egolf Family Limited Partnership; Egolf Energy Corporation; Brian F. Egolf Family Trust; and Louise Anne Egolf 1999 Family Trust (collectively the Egolf Entities).
The Egolf Entities paint their objections to Trout's subpoenas with very broad strokes and with virtually no explanation or citation to legal authority. Nonetheless, the Egolf Entities object on the grounds that the subpoenas are overbroad, unlimited in time and scope, seek irrelevant information, and that responding to the subpoenas would be oppressive and unreasonable given that the subpoenas are a general "fishing expedition." Trout, however, only responded to that part of the motion applicable to the William T. Egolf Revocable Trust (WTERT). The Court, therefore, deems the motion confessed, grants the motion, and quashes Trout's subpoenas duces tecum for the following entities: Egolf Holding Corporation; Petroleum Properties Management Company, L.L.C.; Egolf Family Limited Partnership; Egolf Energy Corporation; Brian F. Egolf Family Trust; and Louise Anne Egolf 1999 Family Trust. LCvR7.2(f); LCrR1.3, 12.1(b).
In her subpoena, Trout seeks fourteen categories of information from WTERT. The Court disagrees with WTERT's arguments, except for its contention that the subpoena is unlimited in time. As a result, the Court finds that all fourteen categories of information are to be produced for the time period of July 1999 — a date six months prior to the time the Government claims Trout formulated her plan to defraud — through July 2004 — the month of Trout's termination.
For the first element of Nixon, the fourteen items are of an evidentiary nature as they would be admissible with respect to the offenses with which Trout is charged. See Fed. Rs. Evid. 801(d)(2), 803(6). The Court accepts Trout's contentions that they are also relevant for the following reasons:
(a) The bank statements and detail from Bank of America (BOA) and MidFirst Bank (MidFirst) are relevant to demonstrate Trout's level of authority over the accounts in question and when her level of authority changed.
(b) The bank reconciliations for the WTERT bank accounts with BOA and MidFirst are relevant to demonstrate that another individual was responsible for reconciling the accounts under scrutiny and that the questionable transactions were completed with the permission of WTE.
(c) and (d) The chart of accounts and the general ledger and detail for WTERT on Quickbooks software are relevant to demonstrate that WTE actually knew of and approved the transactions in question and that another individual coded the transactions.
(e) and (f) The daily, weekly, and monthly cash sheets prepared by Trout for the WTERT bank accounts and the Quickbooks check register are relevant to demonstrate which transactions in question were directly approved by either WTE or Brian Egolf and whether they knew what was going in and coming out of the WTERT accounts.
(g) and (h) The tax information, including all spreadsheets and reconciliations, sent to Bloch and Company, P.C., and all open payable listings for the WTERT accounts are relevant to show how the disputed transactions were categorized and reviewed before payment by individuals other than Trout.
(i) The note agreements between WTERT and MidFirst are relevant to the determination of which transactions were loans and which were gifts.
(j) The list of all WTERT domestic employees, both current and past, paid out of WTERT are relevant to demonstrate that wage payments to employees were made in cash and that portions of the disputed transactions involving Trout were wage payments made in cash.
(k) and (l) Legal documents, in the form of trust agreements, wills, and structure of WTERT, as well as any correspondence between Trout and WTERT, are relevant in demonstrating Trout's duties to both WTE and WTERT and whether certain disputed transactions were ordered to be taken.
(m) The financials prepared for WTERT and the cash flow statements provided to financial institutions by WTERT are relevant in that they may show the level of WTE's oversight of both the accounts and Trout's actions, and show that WTE directed Trout to make certain entries, some of which may involve the transactions in dispute.
(n) The list of all WTERT trustees, both past and present, is relevant to show the extent of oversight and layers of overview and responsibility that could have caught the transactions in dispute if they were not actually approved.
The remaining three Nixon elements are also met, thus justifying the production of these items before trial. Trout cannot procure these documents from any other source other than WTERT. Moreover, the Court agrees that Trout cannot properly prepare for trial without access to documents capable of shedding light on the disputed transactions. Not to allow Trout pre-trial access and inspection of these voluminous documents is more likely oppressive and unreasonable, given that her liberty is at stake from accusations made by her former employer. These facts persuade the Court that her subpoena is made in good faith and is not intended as a fishing expedition. Accordingly, the Egolf Entities' motion is denied as it pertains to WTERT's subpoena.
II. Motion to Quash Filed by Non-party Bloch and Company, P.C. (Bloch).
Bloch moves to quash Trout's subpoena for the same reasons as WTERT. However, unlike the WTERT subpoena, portions of the Bloch subpoena fail the Nixon test.
(a) and (d) Trout seeks all documents relating to Trout's termination on July 9, 2004. The reasons why WTE terminated Trout are not relevant to the Government's charges of mailings and interstate wire communications in furtherance of the fraud or Trout's defenses in the instant criminal action. Fed.R.Evid. 401. Therefore, these items fail Nixon's first element. Sections (a) and (d) of Bloch's subpoena are quashed.
(b) Trout seeks all documents provided by any and all Egolf entities and Petroleum Properties Management Co., L.L.C. for the preparation of tax returns. Trout's request is overbroad as the charges levied against her involve fraudulent transactions and WTERT, the Egolf Family Limited Partnership, and a personal credit card account belonging to WTE. Trout's request as it concerns WTERT is also duplicative as it concerns the same documents discussed in § I(g) above. However, Trout's request as it concerns the Egolf Family Limited Partnership is relevant and passes the Nixon test for the same reasons as discussed in § I(g) and following. Bloch is to disclose the requested information for only the Egolf Family Limited Partnership; the subpoena is quashed as to the remaining entities included in Trout's request in § (b).
(c) Trout seeks the audio tape recording of the meeting in which she was terminated. Both Trout and the Government have a transcript of the audio tape; however, it is unknown if the parties' transcripts are certified or even complete transcriptions of the audio tape. The original audio tape is available and should be used. Fed.R.Evid. 1002. The audio tape is relevant to the disputed transactions and passes the Nixon test for the same reasons as discussed in § I(g) and following.
(e) Lastly, Trout requests all information relating to Egolf's Seven Seas Petroleum Corporation business on the ground that it will demonstrate her authority over the business activities as well as the review exercised by others over Trout's actions. These documents are irrelevant as they do not involve the entities from which Trout allegedly embezzled money. Production of the documents would be unreasonable as they would be merely cumulative of other documents from WTERT that demonstrate her level of authority. In addition, Trout's request fails Nixon's specificity test as it is overbroad — a request for "all information" relating to an entity is a fishing expedition. Given her statement that she knows the documents exist, Trout should have specified the exact documents or kind of documents. For these reasons, § (e) of Bloch's subpoena is quashed.
III. Motion to Quash Filed by Non-party Gary Fuller, Esq. (Fuller).
Fuller objects to Trout's subpoena on multiple grounds, but primarily on the ground that he has turned over all relevant documents to the Government. In her response, Trout recognizes Fuller as an officer of the Court in good standing and accepts his assertion. Therefore, Trout's subpoena is quashed.
IV. Motion to Quash Filed by Non-parties On-Call Services (OCS) and JPMorgan Chase (Chase).
OCS and Chase object to Trout's subpoena for virtually the same reasons as WTERT. The documents requested are either covered by previous requests or fail Nixon's requirements of relevancy and being necessary for proper trial preparation. The requests are also overbroad and lack specificity. The Court agrees that these subpoenas should be quashed in their entireties.
Chase also asserts an objection under Oklahoma's Financial Privacy Act, 6 Okla. Stat. §§ 2201-08[6-2201-08]. The Court need not address this objection.
V. Motion to Quash Filed by Non-party MidFirst.
MidFirst primarily argues that Trout's requests fail theNixon test and are overbroad. MidFirst also objects on the grounds that her requests improperly seek potential trade secrets, confidential research, or commercial information, and that they fail to allow a reasonable time for compliance. For MidFirst's first objection, the Court agrees that portions of Trout's requests do not pass muster under Nixon.
(a-e) Trout seeks a litany of documents for a multitude of Egolf entities. The majority of Trout's requests are either duplicative of previous requests or are irrelevant to the charges being prosecuted. The sole exception is the Egolf Family Limited Partnership. The documents requested in §§ a-e are relevant and pass Nixon for reasons described in § I and should be produced. The subpoena is quashed, however, as to the remaining entities listed.
(f-k) These document requests wholly fail Nixon's requirements of relevancy and necessity. These requests are also overbroad, lack specificity, and qualify as a fishing expedition.
(l) This request seeks a letter from WTE to MidFirst authorizing Trout to do bank transactions. The Court agrees that this letter is both evidentiary, Fed.R.Evid. 8001(d)(2), and relevant, in that it demonstrates Trout's authorization on the accounts. The remaining Nixon elements are met for the same reasons discussed in § I; therefore, this document should be produced.
As for MidFirst's remaining objections, they are unpersuasive. MidFirst fails to prove how the requested information qualifies as a trade secret, confidential research, or commercial information subject to protection. And, as explained below, the Court finds that MidFirst will have a reasonable amount of time for compliance given the Court's modification of Trout's subpoena.
Lastly, MidFirst requests that it be granted attorney fees, expenses, and costs of responding to Trout's subpoena. In light of the Court's rulings on MidFirst's motion above, Trout did not unreasonably or vexatiously multiply the proceedings in this case so as to incur liability for excessive costs under 28 U.S.C. § 1927; therefore, MidFirst's request is denied.
VI. Place of Production.
Trout's subpoenas state that the documents are to be produced at the offices of Hughes, Artus Goodwin in Oklahoma City, Oklahoma. Neither the non-parties nor the Government object to the requested place of production; accordingly, WTERT, Bloch, and MidFirst are to produce the documents requested by Trout and approved by this Order at the offices listed above on or before noon, Friday, March 3, 2006.
As delineated more fully herein, the Egolf Entities' motion [Dkt. No. 21], Bloch's motion [Dkt. No. 22], and MidFirst's motion [Dkt. No. 25] are GRANTED IN PART and DENIED IN PART. Fuller's motion [Dkt. No. 23], OCS's motion [Dkt. No. 24], and Chase's motion [Dkt. No. 38] are GRANTED.
IT IS SO ORDERED.