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Judge Won't Enforce Subpoena In $1B Boeing Contract Row

An Alabama federal judge on Monday denied Boeing’s bid to enforce a subpoena against a California investment firm in a suit over a $1.1 billion Air Force contract, ruling that Boeing must seek enforcement through the California court that issued the subpoena.
U.S. District Judge R. David Proctor, who oversees the lawsuit against Boeing by bankrupt defense contractor Alabama Aircraft Industries Inc., said the airplane manufacturer must turn to the California federal court because Tennenbaum Capital Partners LLC opposes the subpoena for its documents.
“The Federal Rules make clear that when a third party objects to a subpoena, as TCP has here, any motion to enforce the subpoena must be made in the court of compliance,” Judge Proctor wrote.
Boeing asked the court to enforce the subpoena last month, arguing that TCP cannot claim privilege for many of the 1,500 documents the company has declined to provide about its investment in Pemco Aviation Group Inc., which later became Alabama Aircraft.
Boeing has struggled to enforce the subpoena, which it first served on TCP in February 2015 out of the U.S. District Court for the Southern District of California, according to records in the Alabama lawsuit. After TCP challenged service there, Boeing had another subpoena issued out of the Central District of California which, like TCP, is based in Los Angeles.
Judge Proctor noted that TCP has provided some documents to Boeing under a discovery agreement but reserved the right to oppose motions to compel it to provide other documents, which it did in this case. To resolve that objection, the judge pointed to federal rules that give authority over subpoenas to the court in the district from which the subpoenas are issued.
“If Boeing wishes to compel production” of the documents sought in the subpoena, the judge said, “any such motion must be made in the Central District of California.”
The judge rejected as “off the mark” Boeing’s contention that it is actually seeking to enforce its discovery agreement with TCP, giving the Alabama court jurisdiction to compel TCP to produce the documents because the agreement is part of the suit.
“The subpoena was served in California on a California company and seeks documents maintained in California,” Judge Proctor wrote.
TCP has claimed it has never owned a stake in the company’s current form as Alabama Aircraft Industries and that it has no interest in the outcome of the lawsuit, according to Boeing's motion to enforce the subpoena.
Alabama Aircraft accuses Boeing of reneging on a 2005 agreement to bid jointly on a contract to maintain the Air Force’s KC-135 tanker fleet, work the two companies had performed together between 2000 and 2004. Boeing canceled the agreement in 2006 and ultimately won the Air Force contract on its own with a $1.17 billion bid, with the Alabama company submitting a bid just $15 million higher, according to Alabama Aircraft’s complaint.
Alabama Aircraft has asserted that Boeing used its proprietary information, which it allegedly shared during the partnership, to get an unfair competitive boost and swindle Alabama Aircraft out of its half of the contract.
Last week, Judge Proctor granted Boeing Co.’s request to compel deposition testimony from Alabama Aircraft related to its proprietary information, how that information was allegedly used by Boeing to win the contract and how the loss of the contract affected Alabama Aircraft’s unpaid creditor claims.
TCP and attorneys for Boeing did not respond to requests for comment.
AAI is represented by J. Michael Rediker, R. Scott Williams, Peter J. Tepley, Meredith J. Lees, Rebecca A. Beers and Joshua D. Lerner of Rumberger Kirk & Caldwell.
Boeing is represented by Kevin C. Newsom, John Thomas Richie and R. Thomas Warburton of Bradley Arant Boult Cummings LLP and Craig S. Primis, Matthew E. Papez, and Erin C. Johnston of Kirkland & Ellis LLP.
The case is Alabama Aircraft Industries Inc. v. Boeing Co. et al., case number 2:11-cv-03577, in the U.S. District Court for the Northern District of Alabama.