SDNY Holds That a Defendant Is Not Required to Produce Documents of Its Subsidiaries

The United States District Court for the Southern District of New York denied the class action plaintiffs’ motion to compel a defendant company to produce subpoenaed documents potentially held by the defendant’s subsidiaries, holding that the defendant did not exercise control over such documents.  See Sicav v. Wang, 2014 WL 2624753 (S.D.N.Y. June 12, 2014).  In Sicav, the plaintiffs argued that the defendant’s subsidiaries acted under the defendant’s control and therefore that it should be forced to produce documents held by the subsidiaries.  The Court, however, disagreed, finding that a number of factors indicated that the subsidiaries’ documents were not in the defendant’s “possession, custody or control,” as would be required under F.R.C.P. 34 to compel production, including: (i) though the defendant owned whole or controlling shares in the subsidiaries, they all acted independently and outside the direction of the defendant; (ii) the defendant has no office or employees, and thus would be unable to share either with the subsidiaries; and (iii) any documents exchanged between the defendant and subsidiaries had to pass through four intermediaries, thus granting the defendant “at best very limited and tenuous access[.]” The SDNY reached the opposite conclusion in another case this past November, in which it determined that the defendant company there had the “practical ability” to obtain the documents from a subsidiary. For the blog post on that decision, click here.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com.