The Fine Line Between Rules 34 and 45

Do you really know the difference between them?  The Court of Appeals issued a writ on this topic on November 21.[1]

Wassner and Oshins are co-trustees to a family trust.  Oshins sued Wassner alleging breach of fiduciary duty.  Relevant to the writ petition, “Oshins alleged that Wassner, specifically Gary, engaged in self-dealing by loaning $500,000 in Trust assets to the Hilldun Corporation—a business in which Gary Wassner is a shareholder and corporate officer.”  When discovery opened and Oshins 1) issued a Nevada subpoena for “Hilldun’s tax returns and financial records from 2007 to the present,” 2) domesticated that subpoena in New York; and 3) and served it on Hilldun.  There was an objection and apparently a compromise that Hilldun satisfied but that did not give Oshins everything that was sought.

Oshins then served Wassner with a Rule 34 request that was substantially similar to the subpoena.  Wassner did not comply with the request, the district court granted a motion to compel, and then Wassner filed a writ petition.  Writ petitions are almost automatically denied for procedural reasons.  This one wasn’t.  The Court of Appeals noted there was no direct appeal available because “a pretrial order granting a motion to compel discovery of documents from a nonparty is not substantively appealable and because … Hilldun is not a party to the action below….”  As a result a writ petition was procedurally available.

Using a Party to Get Documents from a Non-Party

The court first ruled that Rule 34 is for getting documents from a party, but Rule 45 is for getting documents from a non-party.  The two are different for a variety of reasons.  Further, if Oshins wanted information from the non-party, the jurisdiction to get those documents was in New York where the subpoena had been domesticated and served.

Possession, Custody, or Control

Oshins also argued that because Wassner was a corporate officer of Hilldun, he had the necessary possession, custody, or control to obtain the documents.  The court disagreed. 

Generally, a party to an action who is an officer, director, or majority shareholder of a corporation may be required to produce documents in the possession of the corporation, so long as he has been sued in his corporate capacity.  However, when a corporate officer is being sued in his noncorporate or personal capacity, and the corporation is also not a defendant, this rule is inapposite unless there is evidence that the officer is the alter ego of the corporation.

Wassner had not been sued in his corporate capacity relating to Hilldun, nor was evidence presented of an alter ego relationship.  So Rule 34 could not be used to get corporate documents from Hilldun through Wassner in this particular fact pattern.

[1] Wassner v. Dist. Ct., No. 78828, 2019 Nev. App. Unpub. LEXIS 967 (Nov. 21, 2019).