TRUSTEES OF THE CHICAGO REGIONAL COUNCIL OF CARPENTERS PENSION FUND, et al., Plaintiffs, v. DRIVE CONSTRUCTION, INC., Defendant No. 1:19-cv-2965 United States District Court, N.D. Illinois, Eastern Division Filed: May 08, 2023 Counsel Terrance Bryan McGann, Ashley Lauren Stead, David Faxon Whitfield, Karen M. Rioux, McGann, Ketterman & Rioux, Chicago, IL, for Plaintiffs. Jeffrey Scot Fowler, David Cascio, Laner Muchin, Ltd., Chicago, IL, Richard N. Kessler, McDonald Hopkins LLC, Chicago, IL, for Defendant. Cummings, Jeffrey I., United States Magistrate Judge ORDER *1 Before the Court is a motion to quash, (Dckt. #197), filed by third-parties Cortez Accurate Construction, LLC (“Cortez-Accurate”) and Jesus Cortez (“Jesus”), seeking to quash the subpoena issued by plaintiffs, the Chicago Regional Council of Carpenters Pension Fund, et al., to First Midwest Bank/Old National Bank (“Old National Bank”). For the reasons set forth below, the motion to quash is denied. I. BACKGROUND Plaintiffs are jointly administered benefit funds created under collective bargaining agreements between the Chicago Regional Council of Carpenters (“Union”) and various associations and employers in the construction industry. Plaintiffs initially filed a complaint against defendant Drive Construction, Inc. (“Drive”), a party to one such collective bargaining agreement (“CBA”), pursuant to 29 U.S.C. § 1132 of the Employee Retirement Income Security Act. The CBA between Drive and the Union obligates Drive to make monthly contributions to plaintiffs based on the hours of the type of work covered by the CBA that are completed by Drive employees. Plaintiffs allege that the records they received from Drive were inadequate because Drive paid numerous employees in cash and failed to record or report the payments, thus preventing plaintiffs from adequately calculating the benefits due under the CBA. Plaintiffs’ cash payment theory has evolved as discovery has progressed and, on January 3, 2023, the District Court granted plaintiffs’ motion to file a Second Amended Complaint (“SAC”) to incorporate their updated allegations. (Dckt. #188). The SAC “centers on the dealings of three brothers – Gerardo, Eduardo, and Jesus Cortez.” (Id. at 2). Gerardo is Drive's President, Eduardo is Drive's Secretary and Chief of Operations, and Jesus, a moving party here, was a Drive employee at the operative time. (Dckt. #190 at ¶¶9, 12). Jesus formed Cortez-Accurate in 2014. (Id. at ¶10). That company was dissolved in 2015, (Id. at ¶11), and Accurate Construction LLC (“Accurate”) was subsequently formed in 2016. (Id.). Kelly Byrne – the former Vice President of Cortez-Accurate according to plaintiffs – was registered as Accurate's sole member. (Id.). In their SAC, plaintiffs added Accurate as a defendant and allege that it “was nothing but a paper company that the Cortez brothers controlled and treated as an alter ego of Drive in their construction business.” (Dckt. #188 at 3). Plaintiffs further assert that Drive and Accurate used various other entities – owned by current and former Drive employees – to transfer the funds that were used to pay carpenters outside of the scope of Drive's contracts with plaintiffs. (Id. at ¶¶18-21).[1] Discovery in this matter is ongoing. On January 9, 2023, plaintiffs issued a subpoena to Old National Bank seeking documents, dating back to 2016[2], related to any “business accounts” held by Cortez-Accurate and Jesus, including, inter alia, monthly statements, deposit tickets, checks, money orders, wire transfers, ATM withdrawals, and debit and credit card activity. (Dckt. 198 at 7). Non-parties Cortez-Accurate and Jesus now seek to quash the subpoena, arguing that it is “not narrowly tailored to seek relevant information related to the claims and defenses in this case,” but is instead a “fishing expedition into private financial information.” (Dckt. #197 at 3). *2 Plaintiffs respond that: (1) Cortez-Accurate and Jesus lack standing to object to the subpoena on relevancy grounds; (2) notwithstanding the lack of standing, the subpoena is narrowly tailored to business records relevant to the claims at issue; and (3) any concerns about the potential disclosure of private financial information can be alleviated by the protections of the confidentiality order. The Court agrees on all counts. II. ANALYSIS A. Legal Standard Federal Rule of Civil Procedure 45 governs subpoenas directed to non-parties. “The scope of material obtainable by a Rule 45 subpoena is as broad as permitted under the discovery rules.” Williams v. Blagojevich, No. 05 C 4673, 2008 WL 68680, at *3 (N.D.Ill. Jan. 2, 2008). Accordingly, through a Rule 45 subpoena, parties may seek discovery “regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Fed.R.Civ.P. 26(b)(1). That said, the ability to use subpoenas to obtain information from non-parties is not unlimited, and the issuing party must “take reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena.” Fed.R.Civ.P. 45(d)(1); see also HTG Capital Partners, LLC v. Doe(s), No. 15-C-2129, 2015 WL 5611333, at *3 (N.D.Ill. Sept. 22, 2015) (“Non-parties are afforded this consideration because they have a different set of expectations than parties ... While parties to a lawsuit must accept the invasive nature of discovery, non-parties experience an unwanted burden.”). On a timely motion, Rule 45(d) dictates that a court must quash or modify a subpoena that “subjects a person to undue burden,” or “requires disclosure of privileged or other protected matter, if no exception or waiver applies.” Fed. R. Civ. P. 45(d)(3)(A)(iii-iv). Further, the Court “may” quash or modify a subpoena if it requires the disclosure “of confidential research, development, or commercial information.” Fed.R.Civ.P. 45(d)(3)(B)(i). The moving party “must establish the impropriety of the subpoena,” Architectural Iron Workers’ Loc. No. 63 Welfare Fund v. Legna Installers Inc., No. 22 C 5757, 2023 WL 2974083, at *1 (N.D.Ill. Apr. 17, 2023), and the court enjoys broad discretion in supervising such discovery disputes, Gile v. United Airlines, Inc., 95 F.3d 492, 495 (7th Cir. 1996); Chicago Reg. Council of Carpenters Pension Fund v. Celtic Floor Covering, Inc., 316 F.Supp.3d 1044, 1046 (N.D.Ill. 2018) (noting the Court's “vast discretion in overseeing discovery.”). B. Cortez-Accurate and Jesus have standing to contest the subpoena. Because non-parties Cortez-Accurate and Jesus are seeking to quash a subpoena directed to another non-party, Old National Bank, the Court must first address the threshold issue of standing. Generally speaking, a “movant that is not the recipient of a subpoena ordinarily has no standing to seek to quash a subpoena unless ‘the subpoena infringes upon the movant's legitimate interests.’ ” HTG Cap. Partners, 2015 WL 5611333, at *3, quoting United States v. Raineri, 670 F.2d 702, 712 (7th Cir. 1982); see also Silverstone Holding Grp., LLC v. Zhongtie Dacheng (Zhuhai) Inv. Mgmt. Co., No. 22MISC353RAGWG, 2023 WL 163256, at *1 (S.D.N.Y. Jan. 12, 2023) (“[A] non-party individual or entity has standing to quash a subpoena if the individual or entity is seeking to protect a personal privilege or right.”) (internal quotations and citation omitted). A number of courts have held, however, that individuals and corporations “whose banking records are subpoenaed have a privacy interest in their personal financial affairs that gives them standing to move to quash a subpoena served on a non-party financial institution.” Silverstone Holding Grp., 2023 WL 163256, at *1 (internal quotations and citation omitted); Architectural Iron Workers, 2023 WL 2974083, at *2 (collecting cases); see also HTG Cap. Partners, 2015 WL 5611333, at *3 (“[B]usinesses have a legitimate interest in the privacy of their financial information that can confer standing to challenge a subpoena to a third party to produce that information.”); but see United States v. Gordon, 247 F.R.D. 509, 509 (E.D.N.C. 2007) (finding vague claims of privacy concerns insufficient to support standing) *3 Given the above authority – and recognizing that the “burden to establish standing to challenge a Rule 45 subpoena is ... not a high one” – the Court finds that Cortez-Accurate's and Jesus’ privacy interests in seven years of banking records are sufficient to grant them standing to contest the subpoena. Architectural Iron Workers, 2023 WL 2974083, at *2; see also Jee Fam. Holdings, LLC v. San Jorge Children's Healthcare, Inc., 297 F.R.D. 19, 20 (D.P.R. 2014) (“The Non-parties, claiming that the records sought include their confidential financial information, have standing to object to the subpoenas.”). C. Despite their standing, Cortez-Accurate and Jesus have not met their burden to show that the subpoena should be quashed. Again, Cortez-Accurate and Jesus raise only two somewhat conclusory arguments in support of quashing the subpoena, namely that: (1) the financial records are not relevant to plaintiffs’ claims; and (2) their confidential financial records should not be disclosed. Respectfully, both of these objections lack merit. First, the Court quickly dispenses with the relevancy objection of Cortez-Accurate and Jesus, who are not the recipients of the subpoena. As “courts in this district have made clear, non-recipients do not have standing to quash subpoenas on relevance and proportionality grounds.” DeLeon-Reyes v. Guevara, No. 1:18-CV-01028, 2020 WL 3050230, at *2 (N.D.Ill. June 8, 2020); Parker v. Four Seasons Hotels, Ltd., 291 F.R.D. 181, 187 (N.D.Ill. 2013) (“Relevance, burden or service objections fall to the subpoena's recipient to make.”). Second, notwithstanding this rule, plaintiffs sufficiently explain, with supporting evidence, how the banking records of Jesus and Cortez-Accurate – the alleged predecessor entity of defendant Accurate – are relevant to their delinquent contribution claims against defendants. For example, despite Cortez-Accurate purportedly dissolving in 2015, plaintiffs have presented records reflecting payments after that dissolution from Cortez-Accurate to defendant Accurate and to other employees of defendant Drive, (Dckt. #202-8). As this Court has previously held, third-party financial discovery such as that requested here is relevant to plaintiff's claims of delinquent contributions. Trustees of Chicago Reg'l Council of Carpenters Pension Fund v. Drive Constr., Inc., No. 1:19-CV-2965, 2023 WL 429047, at *5 (N.D.Ill. Jan. 26, 2023) (citing Dugan v. J. Pease, Inc., No. 07 C 407, 2007 WL 9815644, at *2-3 (N.D.Ill. May 9, 2007)). Lastly, while the Court acknowledges their legitimate privacy interests in protecting confidential financial records, Cortez-Accurate and Jesus have not explained why those interests will not be adequately protected by the confidentiality order already in place, (Dckt. #11). Indeed, plaintiffs have agreed to stipulate that all documents produced by Old National in response to the subpoena will be produced in accordance with the confidentiality order. This is sufficient to protect the sensitive nature of the financial records. See Architectural Iron Workers, 2023 WL 2974083, at *5 (holding that “the confidentiality order sufficiently protects the sensitivity of documents that may implicate Defendants’ confidentiality and privacy concerns.”). CONCLUSION For all of the above reasons, Cortez-Accurate and Jesus have failed to meet their burden to show that the subpoena should be quashed, and their motion, (Dckt. #197), is denied. Plaintiffs’ counsel shall forward a copy of this Order to Old National, which shall comply with the subpoena by no later than the close of business on May 24, 2023. Footnotes [1] The Court notes that Accurate has filed a motion to dismiss, (Dckt. #260), which is being briefed before the District Court Judge. However, discovery in this matter has not been stayed and the pendency of that motion does not prevent the Court from resolving the instant motion to quash. [2] Pursuant to the SAC, the audit period is January 2016 through the present.