Case of the Day: Netezza Corp. v. Intelligent Integration Systems
Posted on January 12, 2011
We will focus on international judicial assistance here at Letters Blogatory, but in federal countries such as the United States, issues of judicial assistance, comity, the extent of a court’s extraterritorial jurisdiction, and so forth can arise in purely domestic litigation, where some parties or witnesses are located in states other than the forum state. Our case of the day, Netezza Corp. v. Intelligent Integration Sys., Inc., is such a case.
IBM, a non-party, was in the process of acquiring Netezza. IIS asserted, in a lawsuit in the Massachusetts Superior Court, that Netezza had misappropriated its trade secrets and disclosed them to IBM. It wanted to serve a subpoena for documents and testimony on IBM, which was not a party, under Rule 45 of the Massachusetts Rules of Civil Procedure, which is closely analogous to the cognate federal rule.
IBM had a major laboratory and other facilities in Massachusetts. IIS’s process server attempted to serve the subpoena by hand at IBM’s laboratory. IBM’s response was somewhat more genteel than the response of the Dutch adult entertainment business in January 10’s case of the day:
IBM security and reception staff refused to accept the subpoena documents Cronin attempted to serve. They told Cronin to contact IBM’s legal department and gave him two phone numbers to do so. No one answered at either number.Thereafter, security personnel told Cronin that IBM’s legal department would get back to him and that nothing further could be done. Cronin asked to speak with someone in charge to serve the subpoena properly. He was told by security and reception personnel that all process papers and subpoenas were to be submitted to CT Corporation Systems, IBM’s registered agent in Massachusetts.
The process server proceeded to serve the documents on the registered agent. IBM, however, later sought a protective order, asserting that under Rule 45, it was improper to serve a subpoena on a foreign corporation on the corporation’s registered agent for service of process. IBM argued that IIS should have sought a letter rogatory directed to the courts in the state where the documents were located, as permitted by the Massachusetts judicial assistance statute. IBM also contrasted Rule 4, which expressly provides for service of a summons and complaint on a corporation’s registered agent for service of process, with Rule 45, which governs subpoenas to non-parties and which has no such express provision for service via a registered agent.
The court rejected IBM’s arguments. The judge noted that Rule 45 expressly contemplated that subpoenas could be served on non-residents, providing geographic limits on how far from the place of service a non-resident could be compelled to travel to appear as required by the subpoena. The judge also asserted that permitting service of subpoenas on non-residents under Rule 45 was harmonious with the judicial assistance statute, because Rule 45 applies to depositions to take place within Massachusetts while the statute applies to depositions to take place outside Massachusetts.
This outcome appears plainly correct. There is no question but that the Massachusetts courts could permissibly exercise jurisdiction over IBM if it were a party to the litigation, given its continuous and major presence in the Commonwealth. IBM had only weak arguments based on comparisons of Rule 45 with Rule 4 on the one hand and the judicial assistance statute on the other, which the judge easily dispatched. On the other hand, IBM was able to cite state court decisions from Louisiana and North Carolina in its favor, indicating that not all state courts view their own subpoena powers as broadly.
The case is Netezza Corp. v. Intelligent Integration Sys., Inc., Civ. A. No. 09-4961 (Mass. Super. Ct. Oct. 26, 2010).