VLAD OURITSKI AUTO SALES INC v. RICHARD CATENA AUTO WHOLESALERS RICHARD CATENA (2010)

This appeal presents a limited issue of the authority of a state court to enforce a subpoena served on a federal agency by a state court.   The judge held that a state court lacked the authority to do so.   We affirm.

Following a non-jury trial and entry of judgment against defendant Richard Catena Auto Wholesalers ¹ in the amount of $32,800 plus pre-judgment interest, defendant filed a motion to enforce a subpoena duces tecum served on the Customs and Border Protection unit of the United States Department of Homeland Security (Customs) and to permit supplementation of the trial record.   Defendant filed the motion on October 6, 2009, thirty-six days after entry of final judgment.   The trial judge denied the motion.   In his opinion, Judge Langan held that he lacks the authority to compel Customs to produce the documents sought by defendant.

In its brief on appeal, defendant argues the trial judge erred because the information sought from this federal agency is discoverable pursuant to Rule 4:10-2(a).   It also contends that the information it seeks is freely available under the Freedom of Information Act (FOIA), 5 U.S.C.A. § 552.   Plaintiffs Vlad Ouritski and K & K Auto Sales, Inc. respond that defendant's motion to supplement the record was untimely and the subpoena is unenforceable in state court.

As a preliminary matter, we observe that the motion to supplement the record was founded on Rule 1:7-4(b).  This is not a mechanism to supplement the record.   Rather, it is a means to seek reconsideration based on evidence in the record or controlling legal authority overlooked by the trial judge.   We also question whether any information obtained from Customs could be considered “newly discovered evidence” under Rule 4:50-1(b) because defendant knew throughout the course of this litigation that the federal agency may have relevant information.

Addressing the merits, defendant's effort to obtain documents from a federal agency by means of a subpoena was procedurally flawed and its effort to enforce the subpoena fails due to the lack of authority of a state court to enforce a subpoena against a federal agency.   Federal agencies are authorized to regulate what information is subject to disclosure and the means by which third parties may obtain that information.

In this case, Customs adopted regulations governing disclosure of information in connection with a third-party civil proceeding.  19 C.F.R. §§ 103.21 to 103.27.   A Customs employee must receive specific authorization from the Chief Counsel of Customs prior to releasing any information.  19 C.F.R. § 103.22(a).   The decision to disclose information is informed by several general criteria, including the existence of any privilege, the relevance of the information to the third-party matter, and the availability of the information from other sources.  19 C.F.R. § 103.23(a).   The Chief Counsel must also consider whether disclosure is prohibited by statute, rule, or treaty, or whether the requested information would reveal confidential commercial information, classified or other confidential information.  19 C.F.R. § 103.23(b).  Finally, the party seeking information from Customs must meet its initial burden as outlined in 19 C.F.R. § 103.22(c), which includes service of a copy of the summons and complaint, an affidavit summarizing the documents or testimony sought and its relevance to the litigation.

Here, the Associate Chief Counsel for Customs wrote defendant's attorney informing him of the deficiencies of his request for information and inviting him to provide the requested information, including the summons and complaint and the required affidavit.   Defendant never fully addressed these deficiencies.   These omissions are critical because a federal agency has the authority to prescribe the procedure by which it will evaluate requests for information within its control.

Moreover, any effort to enforce a subpoena issued to a federal agency is considered process against the United States;  yet the United States is immune from suit unless Congress consents for the United States to be sued.   Minnesota v. United States, 305 U.S. 382, 387, 59 S.Ct. 292, 294, 83 L. Ed. 235, 240 (1939);  Stanley v. Schwalby, 162 U.S. 255, 270, 16 S.Ct. 754, 760, 40 L. Ed. 960, 965 (1896);  Tennessee v. Davis, 100 U.S. 257, 262-63, 25 L. Ed. 648, 650 (1879).

The United States has never waived its sovereign immunity from state court injunctive suits and “[a]bsent a waiver of sovereign immunity, a federal agency ․ cannot be compel[led] ․ to act.”  In re S.E.C. ex rel. Glotzer, 374 F.3d 184, 190 (2d Cir.2004) (citing EPA v. Gen. Elec. Co., 197 F.3d 592, 597 (2d.   Cir.1999)).   The United States has only waived its sovereign immunity from suits requesting non-monetary relief in federal court.  Fed. Nat'l Mortgage Ass'n v. LeCrone, 868 F.2d 190, 193 (6th Cir.1989), cert. denied, 493 U.S. 938, 110 S.Ct. 335, 107 L. Ed 2d 324 (1989).

As a result, state courts lack the authority to issue orders against federal agencies and employees.   In Swett v. Schenk, 792 F.2d 1447 (9th Cir.1986), the court reviewed a federal trial court dismissal of a contempt action against a federal employee.  Swett, supra, 792 F.2d at 1451.   The trial court had dismissed the action because the contempt action had originated in a state court proceeding in which the federal employee had been deposed.  Id. at 1449.   On appeal, the court held that because the employee's refusal to answer was protected by a federal regulation, the state court had no authority to hold him in contempt for conforming with that regulation.  Id. at 1451.

This rule is equally applicable here.   The subpoena issued by defendant to Customs was procedurally flawed.   Moreover, a state court lacks authority to compel a federal agency to comply with a subpoena issued in a third-party litigation matter pending in state court.   Judge Langan correctly denied relief to defendant.

Defendant's reliance on FOIA and Lakewood Residents Ass'n v. Township of Lakewood, 294 N.J.Super.   207 (Law Div.), aff'd, 294 N.J.Super.   146 (App.Div.1996) is misplaced.   Defendant did not seek information from Customs pursuant to a FOIA request and the plaintiff in Lakewood Residents invoked the state Right-to-Know Law, N.J.S.A. 47:1A-1 to -4, to obtain information.  Id. at 149.   Defendant, here, served a subpoena on a federal agency to obtain information for a third-party litigated matter.

Affirmed.

FOOTNOTES

FN1. The judge did not enter a judgment against the individual defendant..  FN1. The judge did not enter a judgment against the individual defendant.

PER CURIAM