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Matter of Kapon v. Koch

Court of Appeals of New York

February 19, 2014, Argued; April 3, 2014, Decided

No. 63

Opinion

 [**711]  [*34]  [***561]  Pigott, J.

This appeal involves the service of a subpoena by a party seeking discovery [***562]  from a nonparty pursuant to CPLR 3101 (a) (4), the subpoenaing party's notice obligation to a nonparty under that statutory provision, and the witness's burden when moving to quash the subpoena. We   conclude that the subpoenaing party must first sufficiently state the "circumstances or reasons" underlying the subpoena (either on the face of the subpoena itself or in a notice accompanying it), and the witness, in moving to quash, must establish either that the discovery sought is "utterly irrelevant" to the action or that the "futility of the process to uncover anything legitimate is inevitable or obvious." Should the witness meet this burden, the subpoenaing party must then establish that the discovery sought is "material and necessary" to [**712]  the prosecution or defense of an action, i.e., that it is relevant.

Petitioner John Kapon is a New York resident and Chief Executive Officer of Acker, Merrall & Condit Company  [****2] (AMC), a New York corporation with a principal place of business in New York City. AMC is a retailer and auctioneer of fine and rare wines, and is the employer of petitioner Justin Christoph. In 2009, respondent William Koch, a wine collector, commenced a fraud action in California (California action) against Rudy Kurniawan alleging that Kurniawan had sold Koch 149 bottles of counterfeit wine through AMC's auctions and private sales. Neither AMC nor petitioners are parties to the California action. However, in 2008, Koch had commenced an action against  [*35]  AMC in Supreme Court, New York County (New York action) concerning five bottles of alleged counterfeit wine that Kurniawan had consigned to AMC and that AMC had sold to Koch.

In early 2012, Koch, purportedly seeking disclosure in the California action, served subpoenas on petitioners pursuant to ] CPLR 3119. That section, known as the "Uniform Interstate Depositions and Discovery Act," provides a streamlined mechanism for disclosure in New York for use in an action that is pending in another state or territory within the United States (see CPLR 3119 [a] ; [b], [c]).

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23 N.Y.3d 32 *; 11 N.E.3d 709 **; 988 N.Y.S.2d 559 ***; 2014 N.Y. LEXIS 662 ****; 2014 NY Slip Op 2327; 2014 WL 1315590

 [1]  In the Matter of John Kapon et al., Appellants, v William I. Koch, Respondent.

Prior History: Appeal, by permission of the Court of Appeals, from an order of the Appellate Division of the Supreme Court in the First Judicial Department, entered April 25, 2013. The Appellate Division affirmed an order and judgment (one paper) of the Supreme Court, New York County (Michael D. Stallman, J.; op 37 Misc 3d 1211[A], 2012 NY Slip Op 51992[U] [2012]), which had (1) denied the petition to quash out-of-state subpoenas served on petitioners or, in the alternative, for a protective order; (2) dismissed the proceeding; (3) ordered petitioners to appear for depositions; and (4) permitted petitioners to object and decline to answer questions posed at their depositions on the ground that the answer would divulge confidential information or trade secrets of Acker, Merrall & Condit Company.

Matter of Kapon v Koch, 105 AD3d 650, 963 NYS2d 578, 2013 N.Y. App. Div. LEXIS 2767 (N.Y. App. Div. 1st Dep't, 2013)affirmed.

CORE TERMS

subpoena, disclosure, nonparty, discovery, notice, circumstances, deposition, reasons, motion to quash, petitioners', deposition testimony, special circumstance, parties

Civil Procedure, Discovery & Disclosure, Disclosure, General Overview, Discovery, Relevance of Discoverable Information, Methods of Discovery, Foreign Discovery, Governments, Legislation, Interpretation, Protective Orders, Evidence, Burdens of Proof, Allocation, Burden Shifting