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United States v. Pistotnik

United States District Court, D. Kansas

February 12, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
BRADLEY A. PISTOTNIK, Defendant.

          MEMORANDUM & ORDER ON MOTION TO QUASH SUBPOENAS

          HON. KENNETH G. GALE U.S. MAGISTRATE JUDGE

         Now before the Court is the Motion to Quash Subpoenas filed by non-parties Xcentric Ventures, LL and Chandler Automated Systems (collectively “the movants”). (Doc. 47.) Having reviewed the submissions of the parties, the motion is GRANTED in part and DENIED in part for the reasons set forth below.

         FACTUAL BACKGROUND

         In the present action, Defendant Bradley Pistotnik has been indicted on 10 counts relating to his alleged threats to cause damage to the computer systems of Xcentric Ventures, LLC. Xcentric owns and operates a website know as www.ripoffreport.com (hereinafter “the website”), which it contends is “dedicated to consumer protection.” (Doc. 47, at 1.) Xcentric contends the website is “devoted to exposing fraudulent and improper conduct by businesses” and allows its readers to “read and post messages about businesses that purportedly have ‘ripped off' consumers in some manner.” (Id., at 1-2.) “These reports are authored and published by third-party readers and users of the Ripoff Report website, not by people employed by Xcentric Ventures.” (Id., at 2.) Xcentric states that the “declare[d] … mantra” of the website is that it “protects consumers' first amendment right to free speech.” (Id., at 1.) As such, Xcentric states that it

does not release identity information about the anonymous authors of Ripoff Reports, because Xcentric protects the free speech rights of anonymous authors, and because revealing author information without due process would chill free speech on the Ripoff Report forum and in general, due to concerns about retaliation from the subject of the Ripoff Reports.

(Doc. 47, at 2.) Xcentric also states that “[a]s part of its business practices, [it] also does not usually remove reports, but does allow for disputes about false statements of fact to be handled through a mediation program … .” (Id., at 3.)

         Chandler Automated Systems (hereinafter “Chandler”) “is a vendor of Xcentric who provides services to Xcentric in the areas of cyber security and information technology.” (Id.) One of Chandler's services is to protect Xcentric from computer hackers, to which Xcentric contends it is “especially prone” as a result of “the nature of their business.” (Id., at 3-4.) Chandler indicates it is a federal contractor, which requires system security plans they are involved with “to remain confidential and can only be provided to the federal government for audit purposes.” (Id., at 3.) The movants contend that “[t]his confidential information includes the internal environment of Xcentric and Chandler …, and release of that information would present a risk to both companies should it be obtained by hackers.” (Id., at 4.)

         Movants contend that an anonymous user posted a report about Defendant Pistotnik in 2014.[1] (Id., at 4.) Movants continue that “[a]s alleged in the indictment, Defendant Pistonik [sic] and Defendant David Dorsett conspired to hack and interrupt the business of Xcentric, along with its associates including its law firm of Jaburg Wilk and its customers and vendors by sending thousands of threatening messages to the servers of these businesses.” (Id.) Xcentric contends that the post was removed in September 2014 “to try to stop the attack, ” which apparently was successful. (Id.) A few months later, the posting was reposted on the website, allegedly resulting in a second cyberattack. (Id.) Xcentric reported both sets of attacks to the FBI. (Id.) Movants presume that “all of the information provided to the FBI about the attacks has been provided to Defendants in discovery” following their July 2018 indictments. (Id., at 5.)

         The subpoenas at issue were served on the movants in September 2018 and requested a 14-day response deadline for information. The subpoena to Xcentric sought

the identity and other private information about the anonymous author of the Ripoff Report about Pistotnik; all documents that “refer to” the cyberattacks, including the details about what Xcentric did to protect itself from the attack; the identity and financial records related to the vendors Xcentric used to prevent cyberattacks; all of the information regarding the types of countermeasures used by Xcentric to prevent cyberattacks, including “the name and version number” of Xcentric's countermeasures; documents regarding Xcentric's web providers and hosting environment and the configuration of those systems; details about the mail servers used by Xcentric; and all data received by ripoffreport.com during the attacks.

(Id., at 5; see also Doc. 47-1.) Movants allege that this subpoena sought “everything needed by a hacker to successfully breach all of Xcentric's cyber security.” (Id.) The subpoena to Chandler requested

all mitigation, troubleshooting, investigatory or remedial steps taken by Chandler Automated Systems to help stop and mitigate the attacks on Xcentric; all information about cyberattack countermeasures available to Xcentric or its owner, Ed Magedson; the web presence provider and hosting environment information for Xcentric and its owner; all logs and data regarding email and web traffic for Xcentric, Ed Magedson or the ripoffreport.com (not limited in time or by sender); and private financial records.

(Id., at 6; see also Doc. 47-2.) Movants contend this information, if produced, “would be sufficient to mount another attack on these entities.” (Id.)

         ANALYSIS

         I. Timeliness.

         As an initial matter, Defendant argues that movants' motion is untimely because the subpoenas “provided fourteen days to respond” and neither “party asked for more time, or for clarification regarding the scope of the subpoenas … .” (Doc. 54, at 1.) Defendant contends that neither of the movants “took any action whatsoever, until four days after the deadline for production had passed, and then only after the undersigned filed a motion asking for a finding of contempt.” (Id., at 1-2.) Defendant argues that the time for movants to file a motion to quash was “before the due date for a response to the subpoena that is the subject of the motion.” (Id., at 2.) In support of this position, Defendant cites Fed.R.Crim.P. 17(c)(2), which states, “[o]n motion made promptly, the court may quash or modify the subpoena if compliance would be unreasonable or oppressive.” Movants are correct that Rule 17 does not define what constitutes a “promptly” made motion. (Doc. 56, at 3.) The fourteen days was merely an arbitrary deadline Defendant imposed on complying with the third-party subpoenas. Movants indicate that they “are both out-of-state entities who were required, in order to challenge the subpoenas, to locate and retain outside counsel in Kansas.” (Id.) The Court agrees with movants' assertion that they “filed a detailed motion to quash as fast as is reasonable under these circumstances.” (Id., at 4.) Further, the Court notes the irony in Defendant relying on this language from Rule 17 when Defendant blatantly failed to comply with the Rule's requirement of requesting the Court's permission before serving the third-party subpoenas. See Fed.R.Crim.P. 17(c)(3); see also n.3, infra. As such, the Court OVERRULES Defendant's timeliness argument.

         II. Legal Standard on Subpoenas in Federal Criminal Cases.

         Subpoenas in federal criminal matters are governed by Fed.R.Crim.P. 17.

Subsection (c) of that Rule provides A subpoena may order the witness to produce any books, papers, documents, data, or other objects the subpoena designates. The court may direct the witness to produce the designated items in court before trial or before they are to be offered in evidence. When the items arrive, the court may permit the parties and their attorneys to inspect all or part of them.

Fed.R.Crim.P. 17(c)(1).

         A Rule 17(c) subpoena, however, is not “intended to provide a means of discovery for criminal cases, ” but rather is intended “to expedite the trial by providing a time and place before trial for the inspection of the subpoenaed materials.” United States v. Nixon, 418 U.S. 683, 698-99 (1974). “In other words, Rule 17(c) is not a discovery tool but offers compulsory process for securing specific, identifiable evidence for trial.” United States v. Jackson, 155 F.R.D. 664, 667 (D. Kan. 1994); see also United States v. King, 164 F.R.D. 542, 546 (D. Kan. 1996) (holding that “Rule 17 was not intended to provide the defendant a mechanism by which to troll the waters of the seas otherwise undiscoverable material in the small hope that something beneficial might rise to the surface.”).

         A subpoena for documents may be quashed if their production would be unreasonable or oppressive. Fed.R.Crim.P. 17(c)(2). See also Nixon, 418 U.S. at 698 (holding that “[a] subpoena for documents may be quashed if their production would be ‘unreasonable or oppressive,' but not otherwise.”); United States v. Reed , No. 06-20068-01-CM, 2008 WL 4724437, at *1 (D. Kan. Oct. 24, 2008).

         To determine if the burden of compliance rises to the level of being unreasonable or oppressive, courts examine whether the party seeking for the subpoena has shown:

(1) that the documents are evidentiary and relevant; (2) that they are not otherwise procurable reasonably in advance of trial by exercise of due diligence; (3) that the party cannot properly prepare for trial without such production and inspection in advance of trial and that the failure to obtain such inspection may tend unreasonably to delay the trial; and (4) that the application is made in good faith and is not intended as a general ‘fishing expedition.' Nixon, 418 U.S. at 699-700; see also Reed, 2008 WL 4724437, at *1. This ...

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