Attorney-at-Law

THE BLATANT SUBPOENA

In Uncategorized on 10/01/2020 at 16:06

No stealth about it, IRS, trying to submarine Rule 147 and the scheduling order,  unloads a spread of trial subpoenas after the scheduling order cutoff for discovery in YA Global Investments, LP f.k.a.  Cornell Capital Partners, LP, et al., Docket No. 14546-15, filed 10/1/20. But Judge James S (“Big Jim”) Halpern only lets IRS have one, not the ten they wanted.

Teletrials are new, and one problem is how to get third parties to show up. Tax Court solved that with the August 6 press release.  YA claims sabotage, and IRS ripostes that those subpoenaed already talked to IRS and had relevant materials.

Now of course there’s the usual Rule 147 vs. FRCP 45 argy-bargy, but Judge Big Jim has the usual “somber reasoning and copious citation of precedent” to show that, whatever, you can’t use trial subpoenas to game the scheduling order cutoff.

IRS says, “But COVID-19! And August 6 two-week free kick!”

“The August 6 procedure may provide a temptation to use a trial subpoena to attempt unauthorized discovery by opening an approximately two-week period between any return of a document subpoena pursuant to that procedure and the start of the virtual hearing session for which the documents are subpoenaed. Two weeks may prove a useful period to determine the benefit of the documents produced and adjust a trial strategy accordingly.” Order, at pp. 9-10.

See above. “We need not here determine whether the limits for a Rule 147(b) trial subpoena are coextensive with the general rule that Fed. R. Civ. P. 45 subpoenas may be employed in advance of trial and after the discovery deadline for the limited purposes of memory refreshment, trial preparation, and to secure, for the use at trial, original documents previously disclosed by discovery. Respondent’s proposed subpoena to Bruce, to rectify [Bruce]’s possible lack of authority in producing documents that respondent already has in hand and may use (we assume at trial) is an appropriate use of a trial subpoena. The remainder of respondent’s proposed subpoenas, however, if we allowed them to issue, would threaten the integrity of our discovery rules.” Order, at p. 10.

IRS does get to subpoena Bruce, because he previously produced some documents he may not have been authorized to produce. So IRS wants to make sure before picking the fruits of the forbidden cliché that same are wholesome.

The rest of the barrage is out.

But lest I be accused of piling on IRS after the whistle, remember Rule 147 doesn’t allow for pretrial subpoenas. See my blogpost “The Time-Bound Subpoena,” 12/26/19. Sure, here IRS was trying to score from first on a bloop single; but their try wasn’t wholly without basis.

But why not revise Rule 147 to line it up with the FRCP?

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