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The Price of Being an Innocent Bystander: Managing Discovery Obligations for Non-parties

If the burdens of discovery can seem harsh to a litigating party, they can seem downright draconian to non-parties.  Litigating parties, at least, often have leverage to negotiate the scope of discovery given their own power to subpoena.  They also have the expectation that discovery and other costs of litigation will be justified if they win their case.  In contrast, nonparties often have nothing to gain, much to lose, and little negotiating power when it comes to subpoenas. However, there are a few ways that non-parties can manage their discovery costs.

  1. Be ready

The threat of third party subpoenas means that just about everyone faces some risk of bearing the costs and hassles of discovery.  Companies that avoid assessing and planning for their own litigation readiness because “we don’t litigate” are surprised and sometimes overwhelmed when they find themselves subpoenaed as nonparties.  Companies commonly receive non-party subpoenas as part of separate lawsuits involving their employees, contractors, partners, customers, and suppliers, as well as government investigations that involve their industries.

Although a company can move to modify or quash a subpoena based on burden, it must be able to explain the burden in sufficient detail to help the court understand why it is burdensome.  This should include at least explaining the nature of potentially relevant data, where the data resides, the volume of the data, the steps to produce it, and costs involved.  Often, this initial assessment of the burden is itself very costly for unprepared companies.  Then, if data is produced, these initial costs can grow exponentially for companies without good information governance, because disorganized data and large volumes create expensive document reviews.  Therefore, the best thing companies to can do to manage costs of non-party subpoenas is the same as it is to manage costs for future litigation in which they will be a party:  implement a litigation readiness plan and sound information governance policies.

  1. Know your rights

Companies that receive non-party discovery requests should understand the limits of subpoena power under Federal Rule of Civil Procedure 45.  Rule 45(d)(3) provides that the court may quash or modify a subpoena that is unduly burdensome, and 45(e)(1)(d) provides that the person responding to the subpoena can avoid production of information if it can show that the information “is not reasonably accessible because of undue burden or cost.”  The court may also quash if the subpoena requires disclosure of "a trade secret, or other confidential research, development or commercial information."  Id. 45(c)(3)(B).  Moreover, Rule 45(d)(1) provides that the serving party “must take reasonable steps to avoid imposing undue burden or expense on a person subject to a subpoena,” and that the court “must enforce this duty and impose an appropriate sanction” if this is violated.  Thus, if a subpoena is unduly burdensome and/or the requesting party has not made efforts to help avoid unnecessary expenses, the subpoenaed party may be able to narrow or avoid the subpoena through negotiations, or if necessary, court order.

The court may also shift costs to the requesting party.  The cost shifting analysis under Rule 45 is the same as under Rule 26 for party requests, but third party status usually causes the factors to favor payment by the litigating party.

  1. Negotiate

Litigating parties are often willing to limit the initial scope of their subpoenas to third parties.  First, they may be more willing to cooperate with a third party and trust representations as to what information is most relevant than they are with opposing parties.  Second, narrowing the subpoena will also limit the requesting party’s expenses to review.  Chances are if you, a nonparty, have burdensome request, the litigating parties are also dealing with many other documents of their own and other parties as well.  Finally, a litigating party may prefer to avoid appearing abusive of third parties or difficult in front of the judge, especially when the opposing party is not involved.

To negotiate effectively, you need to convince the requesting party that you can identify and produce the information they most need. Therefore, nonparties should be ready to disclose some details about how data is maintained and how it will be searched., as well as what data will be preserved and for how long.  However, there should be less pressure for the level of transparency and cooperation increasingly expected between litigating parties.

If negotiation fails and you need to seek a protective order, taking the above steps will put you in the best position to convince the court that it should modify or quash the subpoena.

Tara Emory, PMP
Tara Emory, PMP
Tara Emory advises organizations and law firms on e-Discovery and information governance programs. Tara counsels clients on data management and compliance, policies, records management technology, and defensible deletion. In litigation, she is an expert on search methodologies, data preservation and collection approaches, discovery protocols, and strategies for resolving discovery issues with litigation adversaries, government regulators, and the courts. Above all, Tara seeks to solve her clients’ unique data problems in ways that reflect a best fit for each client and matter.