CITGO PETROLEUM CORP., Petitioner, v. PETROLEUM LOGISTICS SERVICE USA, INC., Respondent CASE NO. 22-MC-20762-ALTMAN/REID United States District Court, S.D. Florida Signed April 12, 2022 Counsel Ricardo Hugo Puente, Amy Grace Fudenberg, Jones Day, Miami, FL, Michael J. Gottlieb, Pro Hac Vice, Robert J. Meyer, Pro Hac Vice, Willkie Farr & Gallagher, LLP, Washington, DC, for Petitioner. Reid, Lisette M., United States Magistrate Judge ORDER GRANTING MOTION TO COMPEL *1 This cause is before the Court on Petitioner, CITGO Petroleum Corp.’s Motion to Compel Respondent, Petroleum Logistics Service USA, Inc.’s Compliance with Subpoena. [ECF No. 1]. For the reasons explained below, Petitioner's Motion is GRANTED. BACKGROUND This Petition stems from a case currently pending in the United States District Court for the Southern District of Texas, CITGO Petroleum Corp. v. Petroleum Logistics Service Corp., et al., No. 4:20-cv-01820 (S.D. Tex. Oct. 13, 2021) (the “underlying action”). In the underlying action, Petitioner issued a non-party subpoena to Petroleum Logistics Service USA, Inc. (“PLS USA”), a corporation located within this District. Petitioner contends that despite numerous attempts to coordinate PLS USA's compliance with the subpoena without court intervention, it has been unable to do so. See generally [ECF No. 1]. As such, Petitioner now requests that this Court issue an Order compelling PLS USA's compliance with the subpoena. I. The Underlying Action The underlying action involves Petitioner's claims for fraud, breach of contract, and civil claims under the Racketeer Influenced and Corrupt Organizations Act (“RICO”) against Petroleum Logistics Service Corp. (“PLS”), a Panama-based company and Jose Manuel Gonzalez Testino, who indirectly owns PLS. [Id. at 2]. PLS provided procurement and logistics services for Petitioner and, according to Petitioner, PLS USA performed some of the services PLS was contracted by Petitioner to provide. [Id. at 3-4]. During the course of the business relationship Petitioner asserts it paid tens of millions of dollars to PLS, PLS USA, and “other Testino-affiliated entities.” [Id.]. At some point in 2018, however, the relationship soured. Petitioner learned that “beginning at least as early as 2012, Testino took part in a bribery and money laundering conspiracy through which Testino obtained lucrative contracts with [Petitioner] for companies under his control, including the [the March 2014] Agreement.” [Id.]. Testino was arrested and charged under the Foreign Corrupt Practices Act, and ultimately “pled guilty to a Criminal Information that described bribes paid to [Petitioner's] employees in exchange for securing contracts with his companies.” [Id.]. Petitioner alleges PLS actively attempted to conceal Testino's indirect ownership and control of PLS from it. [Id.]. Notwithstanding, Petitioner learned of Testino's connection with PLS, and that it had “purchased goods and services from other Testino-affiliated entities.” [Id.]. Importantly, Petitioner contends it has reason to believe the prices it paid for goods and services under the March 2014 Agreement were “improperly inflated” by Testino and PLS. [Id.]. Consequently, Petitioner initiated the underlying action to “recover damages caused by this bribery scheme.” [Id.]. II. Non-Compliance with Subpoena After the court in the underlying action in the Southern District of Texas granted Petitioner's third-party discovery request, Petitioner issued a non-party subpoena to PLS USA requiring it to produce documents responsive to eighteen enumerated document requests, and produce a corporate representative to be deposed. [Id.]. *2 According to the declaration of Robert Meyer, counsel for Petitioner, on November 8, 2021, PLS USA was served with the subpoena. [Id. at 5]. The subpoena specified that PLS USA was to have a corporate representative appear for deposition on December 2, 2021. [Id.]. On December 1, 2021, the day before the deposition was to take place, PLS USA's counsel requested the deposition be rescheduled. [Id.]. Counsel for Petitioner acquiesced. [Id.]. From this point, however, Petitioner contends things deteriorated. Despite trying to coordinate a mutually convenient time for the deposition, Petitioner alleges PLS USA's counsel routinely failed to provide such dates, respond to emails, or attempts to meet and confer. [Id.]. On January 18, 2022, PLS USA was again served with the subpoena, which this time included a check for the deposition appearance fee and estimated mileage. [Id.]. The reissued subpoena provided February 7, 2022, as the date of deposition, which was to be held at the Petitioner's counsel's office, located in Miami, Florida, approximately fifteen miles from PLS USA's principal place of business. [Id. at 6, 9]. Again, despite numerous attempts to confer with PLS USA's counsel to ensure compliance with the second subpoena, no response was received until February 7, 2022, the day of the scheduled deposition. [Id. at 6]. On that date, PLS USA's counsel asserted “the prior emails from counsel for [Petitioner] had gone into his “Junk Box” and had not been read by counsel for PLS USA until that morning.” [Id.]. Petitioner notes this “explanation is curious as counsel for PLS USA had previously responded to an email from [Petitioner's] counsel” from the same email address. [Id. at 6 n. 1]. In this email exchange, PLS USA's counsel indicated “his client intended to produce documents and attend a deposition, and that he would meet and confer.” [Id. at 6]. Yet, PLS USA's counsel again failed to provide any dates for such a meet and confer, but instead relayed that his assistant would coordinate the date and time. [Id. at 7]. The assistant, however, never followed up. [Id.]. Instead, Petitioner's counsel sent communications and called PLS USA's office on February 8, February 9, and February 14, 2022. [Id.]. After receiving a February 14, 2022, email, in which Petitioner's counsel provided “that if proposed dates for a meet and confer and [PLS USA's corporate representative] deposition were not provided by 5:00 p.m. on February 16, 2022, [Petitioner] would file a motion to compel.” [Id.]. PLS USA's counsel's assistant responded and “indicated she would reply that day with proposed dates and times for a meet and confer” and for the deposition. [Id.]. PLS USA's counsel's assistant followed up the next day, but only provided dates for a meet and confer, which was scheduled for February 22, 2022. [Id.]. Petitioner asserts this meet and confer never took place. [Id.]. Petitioner alleges that in fact counsel for PLS USA cancelled less than fifteen minutes before the scheduled meet and confer. [Id.]. The parties agreed to reschedule for the following day. [Id.]. That appointment was cancelled five minutes before it was to occur. [Id.]. Petitioner's counsel agreed to hold the meet and confer the following week. [Id. at 8]. Yet, Petitioner alleges since then its counsel has “been unable to reach counsel for PLS USA to arrange a meet and confer despite multiple emails and telephone calls, and despite stating that if a meet and confer did not take place by March 4, counsel for [Petitioner] would file a motion to compel.” [Id.]. Given Petitioner's counsel inability to communicate with counsel for PLS USA, the underlying Petition was filed. DISCUSSION I. The Subpoena was Properly Issued, PLS USA Properly Served, and There is no Evident Justification or Excuse for PLS USA's Failure to Comply with the Subpoena For the reasons outlined below, Petitioner has demonstrated that the subpoena was properly issued, PLS USA was properly served under Federal Rule of Civil Procedure 45, and that there is no reasonable justification or excuse for their failure to comply with the subpoena. *3 Federal Rule of Civil Procedure 45(a)(2) provides that a “subpoena must issue from the court where the action is pending.” Fed. R. Civ. P. 45(a)(2). A party seeking enforcement of the subpoena, however, “must file its motion to compel in ‘the district where compliance is required....’ ” In re Monat Hair Care Prod. Mktg., Sales Pracs., & Prod. Liab. Litig., No. 18-MD-02841, 2020 WL 1950463, at *1 (S.D. Fla. Apr. 23, 2020) (quoting Fed. R. Civ. P. 45(d)(2)(B)(i)). Under Rule 45, for a subpoena requesting non-party production of documents or attendance at a deposition “the ‘place of compliance’ is ‘within 100 miles of where the person resides, is employed, or regularly transacts business in person....” Id. (quoting Fed. R. Civ. P. 45(c)(2)(A)); see also Fed. R. Civ. P. 45(c)(1)(A). As to effective service, Rule 4, which governs service of summons and complaints, provides a corporation may be served through “an officer, a managing or general agent, or any other agent authorized by appointment or by law to received service of process.” Fed. R. Civ. P. 4(h)(1)(B). More pertinent, Rule 45 contains its own standard for effective service which requires that service be made by “delivering a copy to the named person and, if the subpoena requires that person's attendance, tendering the fees for 1 day's attendance and mileage allowed by law.” Fed. R. Civ. P. 45(b)(1). See also In re MTS Bank, No. 17-21545-MC, 2018 WL 1718685, at *3 (S.D. Fla. Mar. 16, 2018) (finding service under Rule 45(b)(1) is sufficient where the method used “ensures the subpoena is placed in the actual possession or control of the person to be served”) (quotation and citation omitted). Absent “adequate excuse,” a non-party that fails to obey a properly issued and served subpoena may be held in contempt by the court for the district where compliance is required. Fed R. Civ. P. 45(g). In the instant case, the Rule 45 non-party subpoena was issued by the court in which the underlying action is pending, located in the District Court for the Southern District of Texas. The subpoena seeks the production of documents and for PLS USA's appointed corporate representative to attend a deposition at the offices of a law firm located approximately fifteen miles from PLS USA's principal place of business. Thus, the subpoena was properly issued. The second subpoena, served on January 18, 2022, which included “a check for the deposition appearance fee and estimated mileage,” was adequately served upon PLS USA. Petitioner had the subpoena “personally delivered to Sergio Omana—PLS USA's registered agent and an employee who informed the process server that he was authorized to accept service on” PLS USA's behalf. [ECF No. 1 at 5–6]. Therefore, under Rule 45’s service requirements, PLS USA was adequately served to ensure the witness received the subpoena.[1] See Anthony v. FDE Mktg. Grp. LLC, No. 21-23345-MC, 2021 WL 5937683, at *5 (S.D. Fla. Dec. 16, 2021) (noting that “there is no requirement that a Rule 45 subpoena be formally served. Rather, Rule 45 ‘requires service reasonably calculated to ensure receipt of the subpoena by the witness.’ ”); In re MTS Bank, 2018 WL 1718685, at *3 (same). *4 Additionally, this Court has authority under Rule 45 to compel PLS USA's compliance with the subpoena. See Fed. R. Civ. P. 37(a)(2). The place of compliance is located in Miami, Florida, and is located approximately 15 miles from PLS USA's principal place of business. All of these locations are within this District. Consequently, this Court is empowered to enforce the subpoena under Rule 45. II. PLS USA has Failed to Respond to the Subpoena, Proffer Objections, and no Adequate Excuse is Apparent from the Record PLS USA's failure to timely raise any objections to the non-party subpoena, move to quash the subpoena, or proffer any adequate excuse for the noncompliance has resulted in PLS USA's waiver of the ability to contest the subpoena. As such, PLS USA must comply with the subpoena. Rule 45 provides that a subpoenaed non-party “commanded to produce documents or tangible things” must serve any objections “before the earlier of the time specified for compliance or 14 days after the subpoena is served.” Fed. R. Civ. P. 45(d)(2)(B). Generally, a non-party's failure to file written objections to a subpoena within the applicable timeframe results in waiver of the right to object to enforcement of the subpoena. See, e.g., Sun Cap. Partners, Inc. v. Twin City Fire Ins. Co., No. 12-CIV-81397, 2016 WL 1658765, at *4 (S.D. Fla. Apr. 26, 2016) (noting that “[f]ailure to timely file a written objection to a subpoena will generally result in waiver of the right to object to enforcement of the subpoena”); Whatley v. World Fuel Services Corp., No. 20-20993-MC, 2020 WL 2616209, at *3 (S.D. Fla. May 22, 2020) (finding the defendant waived the right to object to the subpoena because the “failure to serve written objections to a subpoena within the time specified by Rule [45(d)(2)(B)] typically constitutes a waiver of such objection, as does failing to file a timely motion to quash”). The same is true regarding a non-party's failure to appear for deposition following proper service of a subpoena under Rule 45. See Selinger v. Kimera Labs, Inc., No. 20-24267-CIV, 2021 WL 6284604, at *1 (S.D. Fla. Dec. 6, 2021) (noting “[n]on[-]parties receiving a lawful subpoena have a duty to provide his or her testimony ... [and although a non-party] commanded to respond to subpoena may object ... [a] non-party waives any objections if [he or] she does not timely object to the subpoena”); Rutsky v. Target Corp., No. 12-61828-CV, 2013 WL 12009695, at *2 (S.D. Fla. June 17, 2013) (granting motion to compel deposition where non-party had been properly served with a subpoena pursuant to Rule 45, and also warning if the non-party “fails to appear for his next deposition ... Plaintiff may seek sanctions or contempt against [the non-party] from the Court”). See also Fed. R. Civ. P. 45(g) (“[t]he court for the district where compliance is required ... may hold in contempt a person who, having been served, fails without adequate excuse to obey the subpoena or an order related to it”). In the instant case, the second subpoena served on PLS USA on January 18, 2022, served as the date on which the clock for PLS USA to object to the subpoena began to run. Under Rule 45, PLS USA had until February 1, 2022, to object to or move to quash the subpoena. PLS USA failed to do so. PLS USA has also failed to proffer any adequate excuse (or anything at all for that matter) for its failure to comply with the subpoena. Nor is any apparent to the Court. Petitioner has also been diligent in attempting to coordinate PLS USA's compliance with the subpoena at a mutually convenient time. Despite this, and Petitioner's numerous attempts to meet and confer, PLS USA has not complied with the subpoena, or even designated a specific individual to serve as its corporate representative to be deposed. *5 Consequently, under Rule 45(g), as well as Rule 37(a)(2), (a)(3)(B)(ii), PLS USA must produce the documents requested in the subpoena, as well as designate a corporate representative to be deposed. III. The Scope of the Discovery Sought in the Subpoena is Within the Bounds Provided by the Federal Rules o Civil Procedure The discovery Petitioner seeks through the Rule 45 subpoena is within the scope of discovery allotted in the Federal Rules of Civil Procedure. Rule 45 does not expressly provide for the scope of discoverable information from a non-party subpoena. Yet, courts have found that “[i]t is well settled that the scope of discovery under a subpoena is the same as the scope of discovery under Rule 26(b) and Rule 34.” Anthony v. FDE Mktg. Grp. LLC, No. 21-23345-MC, 2021 WL 5937683, at *1 (S.D. Fla. Dec. 16, 2021) (citation omitted). Rule 26(b) provides that: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable. Fed. R. Civ. P. 26(b). Further, “[t]he Supreme Court has stressed on multiple occasions the need to construe the [Federal] Rules liberally to allow for robust discovery.” Anthony, 2021 WL 5937683, at *2 (quoting Akridge v. Alfa Mut. Ins. Co., 1 F.4th 1271, 1276 (11th Cir. 2021)). A non-party concerned about the discovery sought in a subpoena may seek relief with the court under Rule 45(d)(3)(A)(i)–(iv). Here, and as previously noted, PLS USA never sought protection from this Court regarding the scope of the information sought in Petitioner's subpoena. Further, the scope of discovery Petitioner seeks is within the bounds of that afforded under the Federal Rules. Specifically, Petitioner is requesting production of documents and deposition testimony related to the value of services PLS and/or PLS USA performed for [Petitioner] and its parent corporation, PLS USA's relationship with certain other entities with ties to Testino, the amount prices charged by PLS, PLS USA, and other Testino-affiliated entities were improperly inflated, and inducements and bribe payments made by PLS and PLS USA's employees to [Petitioner's] employees. [ECF No. 1 at 13–14]. These requests are calculated to obtain information relevant to Petitioner's claims against PLS and Mr. Testino. Given PLS USA's alleged involvement in and proximity to the underlying action and the allegations made therein, this information is highly probative to the extent of any bribery, price-inflation, and other information necessary to accurately calculate damages in the underlying action. Accordingly, the scope of discovery sought in the subpoena is appropriate and is in no way an impediment to it being granted. IV. Petitioner Will be Permitted to File a Motion Seeking an Award of Reasonable Expenses and Fees Incurred in Bringing the Instant Petition *6 Petitioner seeks reimbursement for the expenses incurred in bringing this Petition to compel PLS USA's compliance with the properly issued and served subpoena. Given PLS USA's failure to bring forth any adequate excuse for its noncompliance, Petitioner is given leave to file a motion for reasonable expenses, including any reasonable attorneys’ fees and costs. Rule 37 provides where a party seeking discovery is successful in a motion to compel a corporate designation under Rule 30(b)(6), the “court must, after giving an opportunity to be heard, require the party or deponent whose conduct necessitated the motion ... to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees.” Fed. R. Civ. P. 37(a)(5)(A). The court cannot impose such sanctions where: “(i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other circumstances make an award of expenses unjust.” Fed. R. Civ. P. 37(a)(5)(i)–(iii). Given PLS USA's failure (and lack of explanation) to comply with the subpoena, engage in Petitioner's attempts to meet and confer, or even designate an individual to serve as corporate representative for deposition, Petitioner is permitted to file a motion for appropriate expenses under Rule 37. In this motion, Petitioner, in accordance with the local rules, should detail the expenses incurred in pursuing this Petition. CONCLUSION Based on the foregoing, it is ORDERED AND ADJUDGED that: (1) Petitioner's Motion to Compel is GRANTED; (2) PLS USA shall promptly produce documents responsive to Petitioner's subpoena, designate a corporate representative to appear for deposition on PLS USA's behalf, and promptly coordinate a date for the deposition to take place; (3) Petitioner may file a motion to seek compensation for the cost incurred in proceeding with the instant Petition, including reasonable attorneys’ fees; and (4) The Court may hold PLS USA in contempt of court and impose further sanctions on both PLS USA and its attorneys should PLS USA fail to comply with this Order. DONE AND ORDERED in Chambers, at Miami, Florida this 11th day of April 2022. Footnotes [1] Petitioner elaborates that service was properly made under Federal Rule of Civil Procedure 4, which governs service of summons and complaints. The Court assumes Petitioner references Rule 4’s service standard because in part it provides instructions for service upon a corporate entity. See Fed. R. Civ. P. 4(h)(1)(B). Notwithstanding, Rule 45, not Rule 4, provides the controlling service standard which Petitioner must satisfy.