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In re Subpoena Proceedings

September 10, 2009

IN RE SUBPOENA PROCEEDINGS:
PLEASANT GARDENS REALTY CORP.,ET AL., PLAINTIFF,
v.
H. KOHNSTAMM & COMPANY, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Joel Schneider United States Magistrate Judge

[Doc. No. 11]

OPINION AND ORDER

This matter is before the Court on Sensient Colors, Inc.'s "Renewed Motion for Order to Show Cause Why Defendant Should Not Proceed with Subpoenaed Depositions." [Doc. No. 11].*fn1 The Court received the opposition of the United States [Doc. No. 14], Sensient's reply [Doc. No. 17], and additional briefs addressing standing issues [Doc. Nos. 11-2, 14]. The Court also conducted oral argument. For the reasons to be discussed Sensient's motion is GRANTED in part and DENIED in part.

Background

This case originated as a civil action in the Superior Court of New Jersey, Law Division, Camden County, titled Pleasant Garden Realty Corporation v. H. Kohnstamm & Company, Inc., et al., Docket No. L-6579-03 (N.J. Super. Ct. Law Div.)(Camden County). Plaintiff is the former owner of the Pleasant Gardens Apartments ("Pleasant Gardens" or "Site") which is presently owned by the Gardens Redevelopment Agency who acquired the Site through eminent domain. Plaintiff alleges that Sensient and General Color Company are legally responsible for the cost to remediate contamination at the Site. The United States is not a party in the case.

While the case was pending in state court Sensient issued subpoenas to take the depositions of five (5) current or former EPA employees: (1) Christine Whitman - former EPA Commissioner, (2) Jane Kenny - former Regional Administrator for Region 2, (3) Anthony Cancro - former Chief of Staff for Region 2, (4) Richard C. Salkie - former Branch Chief of the EPA's Renewal Assessment and Enforcement Section, and (5) David Rosoff - current EPA On-Scene Coordinator.*fn2 On October 27, 2008, the United States filed a Motion for Protective Order to quash Sensient's subpoenas. On November 5, 2008, Sensient filed its "Motion for Order to Show Cause Why Defendant Should Not Proceed with Subpoenaed Depositions." Before these motions were decided the government removed to this court the subpoena proceedings that were filed in state court. Nevertheless, the remainder of the Pleasant Gardens litigation is still pending in state court.

As the parties are aware, the issues in the Pleasant Gardens litigation overlap with, but are not identical to, the issues in a separate case pending in this court--United States of America v. Sensient Colors, Inc., et al.,C.A. No. 07-1275 (JHR/JS). In March 2007, the United States filed a cost recovery action against Sensient pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. §§9601-9675 (2000). The United States alleges Sensient is responsible for contaminating the General Color Site, and seeks approximately $16 million in costs resulting from its removal activities. The General Color Site is adjacent to the Pleasant Gardens Site. Sensient challenges the EPA's characterization of the General Color project as a "removal action." Sensient contends the government performed a community development project under the guise of a "removal action" and consequently it is not responsible to reimburse the government's costs.

Sensient seeks to compel the depositions of Kenny, Cancro and Salkie. In its motion Sensient challenges the government's standing to object to the subpoenas directed to its former employees. Sensient argues the government is not a "party or any person from whom discovery is sought" and therefore the United States has no standing to move for a protective order pursuant to Fed. R. Civ. P. 26(c). Sensient also argues the government does not represent Kenny, Cancro and Salkie. In response the government avers that the Department of Justice ("DOJ") "represents the United States, including its current and former employees in their official capacity and relating to the scope of their employment at EPA." Standing Brief at 5, Doc. No. 14 (emphasis in original). The government also argues it has standing to object to "testimony regarding information that current and former EPA employees acquired in the course of performing official duties or because of their affiliation with EPA or concerning the CERCLA response actions conducted by EPA at the General Color Site." Id. at 4 (citation omitted). In addition, the government argues the requested depositions should be barred on different grounds, including on the basis of the doctrine of sovereign immunity.

Discussion

Standing

The first issue to address is whether the United States has standing to challenge the subpoenas directed to its former employees. The Court rules in favor of the United States on the standing issue.

The United States has standing to challenge Sensient's deposition subpoenas directed to its former employees because Sensient is seeking to discover "official information" that belongs to the United States, some of which may be privileged or otherwise protected from discovery. Accordingly, because the United States is seeking to protect its property right or privilege, it has standing to object to Sensient's subpoenas even though they are directed to third persons. See In re Grand Jury ("Grand Jury I"), 619 F.2d 1022, 1026 (3d Cir. 1980)(finding third party employer had a property interest in the services of his employees and thus had standing to object to subpoenas directed to the employees); In re Grand Jury Matter ("Grand Jury II"), 770 F.2d 36, 38 (3d Cir. 1985)("[a]s our prior decisions indicate, an individual or entity claiming a property right or privilege in the subpoenaed documents has standing to contest the denial of a motion to quash the subpoena").*fn3 See also United States v. Raineri, 670 F.2d 702, 712 (7th Cir. 1982)("[a] party has standing to move to quash a subpoena addressed to another if the subpoena infringes upon the movant's legitimate interests"). Also supporting the Court's ruling are cases holding that a non-party employer has standing to move to quash subpoenas directed to its non-party former employees where, like this case, the employer is seeking to protect its privileged information. See Sparks v. Seltzer, C.A. No. 05-1061, 2006 WL 2358157, at *4 (E.D.N.Y. Aug. 14, 2006)(finding non-party employer had standing to object to subpoena directed to former employee that sought information gained through her employment and was subject to a confidentiality agreement); Nagy v. Baltimore Life Insurance Company, 49 F. Supp. 822, 824-26 (D.Md. 1999)(granting motion to quash brought by non-party employer (Maryland Insurance Commissioner), finding that the employer held a privilege claim over information sought in subpoenas directed to current and former employees).*fn4

To the extent Sensient seeks to depose the EPA's former employees concerning their official duties and knowledge, the government has standing to protect its property right or privilege. This is so because the "official" knowledge of the witnesses belongs to the government, not the deponents. "Observations a federal employee makes to carry out his [or her] job responsibilities are unquestionably government information." In re Subpoena in Collins, 524 F.3d 249, 252 (D.C. Cir. 2008). As noted in Collins, "observations an EPA employee made for an official investigation he conducted were 'obtained in his official capacity,' and a subpoena directing him to testify about those observations was 'inherently that of an action against the United States.'" Id. (citations omitted). See also Boron Oil Company v. Downie, 873 F.2d 67, 70-71 (4th Cir. 1989)("[e]ven though the government is not a party to the underlying action, the nature of the subpoena proceedings against a federal employee to compel him to testify about information obtained in his official capacity is inherently that of an action against the United States....")

Due to the Court's familiarity with the case and the allegations in Sensient's briefs it is not difficult to predict some of the subject areas Sensient is likely to pursue at its depositions. Sensient argues that the alleged "fraud identified in connection with the General Color Site erodes the putative legitimacy of the NJDEP's remedy for the Pleasant Gardens Site." Brief at 4. Sensient further argues that it must understand "the scope and impact of fraud in the Federal Case." Id. at 6. Specifically, Sensient argues Kenny invited Camden to create a risk to the public health and environment in order to conduct a community redevelopment. Id. at 6-7. Sensient, ...


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