On Saturday, September 24, 2011, JNESO District Council 1, a union representing several hundred nurses employed by the Hudson Healthcare, Inc. Debtor at the Hoboken University Medical Center, issued a subpoena to Sills Cummis & Gross P.C., counsel for the Official Committee of Unsecured Creditors of the Debtor.

JNESO is seeking copies of all deposition transcripts in the Bankruptcy Case and  all documents produced to the Committee by the Debtor, the Authority, the proposed purchaser of the Hospital, or the City of Hoboken.

NOTICE OF MOTION OF THE HOBOKEN MUNICIPAL HOSPITAL AUTHORITY TO QUASH SUBPOENA SERVED ON SILLS CUMMIS & GROSS P.C.

LOWENSTEIN SANDLER PC
65 Livingston Avenue
Roseland, New Jersey 07068973.597.2500

Kenneth A. Rosen, Esq. (KR 4963)
Paul Kizel, Esq. (PK 4176)
Mary E. Seymour, Esq. (MS 3950)
Andrew Behlmann, Esq. (AB 1174)

Special Counsel to the Hoboken
Municipal Hospital Authority

UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF NEW JERSEY

In re: HUDSON HEALTHCARE, INC., Debtor.  Case No. 11-33014 (DHS) Chapter 11

NOTICE OF MOTION OF THE HOBOKEN MUNICIPAL HOSPITAL AUTHORITY TO QUASH SUBPOENA SERVED ON SILLS CUMMIS & GROSS P.C.

PLEASE  TAKE  NOTICE  that  on  the  18th   day  of  October  2011  at  10:00  a.m. (Prevailing Eastern Time), or as soon thereafter as counsel may be heard, the undersigned special counsel  to  the  Hoboken  Municipal  Hospital  Authority  (the  "Authority")  will  move  (the "Motion") before the Honorable Donald H. Steckroth, United States Bankruptcy Judge, at the United States Bankruptcy Court for the District of New Jersey, Dr. Martin Luther King, Jr. Federal Building, 50 Walnut Street, Third Floor, Newark, New Jersey 07101, for entry of an order quashing the subpoena dated September 24, 2011 served by Riker Danzig Scherer Hyland & Peretti LLP, as counsel for JNESO District Council 1, IUOE, AFL-CIO upon Sills Cummis & Gross P.C., counsel for the Official Committee of Unsecured Creditors of the above-captioned debtor and debtor-in-possession (the "Committee").

PLEASE TAKE FURTHER NOTICE that in support of the relief requested in the Motion, the Authority will rely on the Application filed contemporaneously herewith.

PLEASE   TAKE   FURTHER   NOTICE   that,   in   accordance   with   D.N.J.   Local Bankruptcy Rule 9013-2, no brief is being filed in support of the Motion, as the legal principles involved are not novel or disputed and are adequately set forth in the accompanying Application.

PLEASE TAKE FURTHER NOTICE that objections, if any, to the relief requested in the Motion shall (i) be in writing; (ii) specify with particularity the basis therefor; and (iii) be filed with the Clerk of the United States Bankruptcy Court, electronically by attorneys who regularly practice before the Bankruptcy Court in accordance with the General Order Regarding Electronic Means for Filing, Signing, and Verification of Documents dated March 27, 2002 (the “General Order”), and the Commentary Supplementing Administrative Procedures dated as of March 2004 (the “Supplemental Commentary”) (the General Order, Supplemental Commentary and the User’s Manual for the Electronic Case Filing System can be found at www.njb.uscourts.gov, the official website for the Bankruptcy Court), and by all other parties in interest, and shall be served on Lowenstein Sandler PC, 65 Livingston Avenue, Roseland, New Jersey 07068 (Attention: Mary E. Seymour, Esq. and Paul Kizel, Esq.) no later than seven (7) days prior to the return date.

PLEASE  TAKE  FURTHER  NOTICE  that  unless  objections  are  timely  filed  and served, the Motion shall be deemed uncontested in accordance with D.N.J. Local Bankruptcy Rule 9013-1(a) and the relief sought therein may be granted without a hearing.

PLEASE TAKE FURTHER NOTICE that pursuant to D.N.J. Local Bankruptcy Rule 9013-1(k), in the event the Motion is contested, there is a duty to confer to determine whether a consent order may be entered disposing of the Motion or to stipulate to the resolution of as many issues as possible.

PLEASE   TAKE   FURTHER   NOTICE   that   in   accordance   with   D.N.J.   Local Bankruptcy Rule 9013-1(i), unless the Court authorizes otherwise prior to the return date hereof, no testimony shall be taken at the hearing except by certification or affidavit.

Dated:  September 25, 2011

By: /s/ Mary E. Seymour
LOWENSTEIN SANDLER PC
Kenneth A. Rosen, Esq. (KR 4963)
Paul Kizel, Esq. (PK 4176)
Mary E. Seymour, Esq. (MS 3950) Andrew D. Behlmann, Esq. (AB 1174)
65 Livingston Avenue
Roseland, New Jersey 07068
Tel:      973-597-2500
Fax:     973-597-2400

Special Counsel to the Hoboken
Municipal Hospital Authority

APPLICATION IN SUPPORT OF MOTION TO QUASH SUBPOENA SERVED ON SILLS CUMMIS & GROSS P.C.

LOWENSTEIN SANDLER PC
65 Livingston Avenue
Roseland, New Jersey 07068
973.597.2500

Kenneth A. Rosen, Esq. (KR 4963)
Paul Kizel, Esq. (PK 4176)
Mary E. Seymour, Esq. (MS 3950)
Andrew Behlmann, Esq. (AB 1174)

Special Counsel to the Hoboken
Municipal Hospital Authority

UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF NEW JERSEY

In re: HUDSON HEALTHCARE, INC., Debtor.    Case No. 11-33014 (DHS) Chapter 11

APPLICATION IN SUPPORT OF MOTION TO QUASH SUBPOENA SERVED ON SILLS CUMMIS & GROSS P.C.

Hoboken Municipal Hospital Authority (the "Authority"), a creditor and party-in-interest in the chapter 11 bankruptcy case (the "Bankruptcy Case") of the above-captioned debtor and debtor-in-possession (the "Debtor"), by and through its undersigned special counsel, hereby respectfully states as follows:

1. Late in the evening of Saturday, September 24, 2011, without any prior notice or discussion, JNESO District Council 1 ("JNESO"), a union representing several hundred nurses employed by the Debtor at the Hoboken University Medical Center (the "Hospital"),1  issued a subpoena (the "JNESO Subpoena")2  to Sills Cummis & Gross P.C., counsel for the Official Committee of Unsecured Creditors of the Debtor (the "Committee")—of which JNESO itself is a member—seeking copies of (i) all deposition transcripts in the Bankruptcy Case and (ii) all documents produced to the Committee by the Debtor, the Authority, the proposed purchaser of the Hospital, or the City of Hoboken (the "City").  The return date of the JNESO Subpoena is Monday, September 26, 2011 at 9:00 a.m, just thirty-six hours after issuance and twenty-four hours after the JNESO Subpoena was provided to counsel for the Authority.

2. The  JNESO  Subpoena  must  be  quashed  because  it  would  (a)  require  the Committee's counsel to disclose information that was provided to it by the Authority on a confidential basis pursuant to a nondisclosure agreement with the Committee and (b) impose an undue burden on the Authority by requiring the Authority to potentially re-review—in just one weekend day—nearly 200,000 pages of documents previously provided to the Committee before authorizing the Committee to produce any of those documents to JNESO.  See Fed. R. Civ. P. 45(c)(3).

3.  On  August  26,  2011,  the  Committee  executed  a  Confidentiality  and  Non- Disclosure Agreement (the "Confidentia lit y Agreement") setting forth the terms and conditions upon which the Authority would produce certain confidential materials to the Committee in response to the Committee's subpoena.  In pertinent part, the Committee, its professionals, and its members agreed in the Confidentiality Agreement that "[t]he Committee will not use the Confidential Materials for any purpose whatsoever, except to exercise its rights and remedies of any kind or nature and/or discharges its obligations of any kind or nature as a committee pursuant to applicable law. . . ."  See Confidentiality Agreement at ¶ 3(c) (emphasis added).  It is thus irrefutable that Committee members are not permitted to use in their individual capacity any confidential information obtained in their capacity as members of the Committee. 

4.  In  response  to  the  Committee's  demands  for  broad,  expedited  discovery,  the Authority produced nearly 200,000 pages of responsive documents to the Committee's counsel in approximately two weeks' time. Given the incredibly short timing and sweeping scope of the Committee's requests, and in the interest of maintaining an open dialogue with the Committee, the Authority designated as confidential substantially all of the documents it produced, thereby enabling the Committee's professionals to review substantial volumes of financial data, meeting minutes, and electronic mail communications related to the Bankruptcy Case and the sale of the Hospital.   However, under the unambiguous terms of the Confidentiality Agreement, the Committee's counsel cannot simply give those documents to a Committee member for use in its individual capacity.

5.  JNESO is certainly not a newcomer to the Bankruptcy Case: JNESO's counsel entered an appearance3 just hours after the commencement of the Bankruptcy Case, JNESO sought and obtained a seat on the Committee, and JNESO has been actively involved in proceedings before the Court throughout the Bankruptcy Case and in the ongoing settlement discussions among the Committee, the Debtor, the Authority, and the City for the past two weeks.   However, despite its extremely active role in the Bankruptcy Case, the JNESO Subpoena—issued just as those lengthy settlement talks appeared to be approaching a successful resolution—is the first time JNESO has made any attempt to take discovery.  This timing is not a coincidence: if the Committee agrees to support to the proposed sale and settlement, JNESO will no longer be able to rely on the Committee and its professionals as its own mouthpiece to disrupt a process that is in the best interests of the Debtor and all of its stakeholders (including JNESO's own members).

6. By issuing the JNESO Subpoena to counsel for the Committee—of which JNESO itself is a member—JNESO is seeking to circumvent the Federal Rules of Civil Procedure (as made applicable by Fed. R. Bankr. P. 9016) to obtain documents from the Authority without actually issuing a subpoena to the Authority, because JNESO knows the Authority would not produce any documents without first entering into a nondisclosure agreement.  If JNESO wants to take discovery from the Authority, JNESO must make specific requests of the Authority, see Fed. R. Civ. P. 45(a)(1)(A)(iii); afford the Authority a reasonable opportunity to object to those requests and preserve its rights, see Fed. R. Civ. P. 45(c)(2)(B), (d)(2); and negotiate confidentiality terms governing JNESO's use of the Authority's proprietary information or afford the Authority an opportunity to seek an appropriate protective order, see Fed. R. Civ. P. 26(c). The Court should not permit JNESO to make a disingenuous end run around the terms of the Confidentiality Agreement and the Federal Rules of Civil Procedure.