Considerations When Your Business Receives a Non-Party Subpoena Requesting Documents
By Alice M. Morical
Most businesses will, at some time, receive a subpoena requesting documents in connection with litigation involving other parties. If and when this happens to your company, it is important to consider your company’s legal obligations and strategies to properly limit the scope of the documents to be provided, any trade secret or confidentiality issues, the manner and timing of the production, and finally, minimizing any costs that may be incurred to respond to the subpoena. A lawyer familiar with the process may be able to assist in managing the process to the benefit of your company.
First, when your company receives a subpoena, you are legally required to respond. Often, an informal call to the lawyer that served the subpoena can be helpful in understanding why the lawyer’s client thought that your company would have documents or information relevant to the particular dispute. In the case of document requests, careful consideration should be given to the categories of documents requested, and a person familiar with the requested documents should evaluate how burdensome responding to the subpoena would be. Factors considered in evaluating the burden include the volume of documents requested, where and in what format(s) the documents are maintained, and who has responsibility for the documents. In this day and age, a party may request that non-parties provide electronic documents, which may include e-mail and native format documents, whether stored on PCs, shared servers or back-up tapes. The scope of the subpoena should be discussed with the requesting party’s counsel, agreed upon and put in writing.
Companies should be mindful that there are 14 to 30 days to respond to a subpoena, or potentially less, depending on the compliance deadline and whether it is a federal or Indiana suit. If your company does not serve written objections before the deadline, the objections may be waived. Written objections may relate to, e.g., the scope of the subpoena, the relevance of the documents requested, or that the documents are protected by a legal privilege (e.g., attorney-client, accountant-client).
Second, your company should consider whether any confidential or commercially sensitive documents are included in the categories of documents requested. If so, given that the lawyer who prepared the subpoena may not understand your company’s business, it is possible that the requesting party may not actually be interested in the sensitive documents. For example, the lawyers may be interested in contract negotiations about the manufacture and production of your product, but the requests may be broad enough that it could also be read to encompass design and engineering of the product. Understandably, you may not want to provide these documents and may be able to stipulate that they are outside the scope of the subpoena.
If the subpoena truly seeks commercially sensitive documents, you will want to determine whether there is a court order in place that will protect your documents from public disclosure. Often, if there is a business party to the litigation, the litigation will already have a protective order that will extend to confidential documents produced by third parties. If not, your company should consider attempting to negotiate an agreed proposed protective order to submit for court approval.
Third, once there is an understanding of the scope of the documents requested and the handling of any confidential information, the manner and timing of production should be considered. Various options should be considered, such as producing documents in phases (a “rolling production”) or producing documents in electronic format if more convenient or less costly.
Finally, your company should consider the cost and the burden to produce the documents, as well as the venue of the suit. There are federal and state provisions that may provide for non-party costs or fees to be shifted to the requesting party upon a showing of undue burden or significant expense. One’s ability to recoup its costs of complying with a subpoena may differ depending on whether the suit is in federal or state court. For example, in a recent federal case, an Illinois district court considered the time, labor and skill required of a non-party to comply with a document subpoena and awarded reasonable compensation to the non-party. Amerimax Real Estate Partners, Inc. v. Re/Max Int’l, Inc., Nos. 05 C 5300, 06 C 6574, 2008 WL 4498947 (N.D. Ill. Aug. 5, 2008). In another federal suit, an Indiana district court required the party seeking electronic data to compensate the non-party for its expense to work with an outside data search vendor to produce the requested electronic documents. Guy Chemical Co., Inc. v. Romaco, 243 F.R.D. 310 (N.D. Ind. 2007). Finally, the Indiana Rules of Trial Procedure allow a court to condition production upon the advanced payment of reasonable costs or damages, which can include reasonable attorney’s fees. Ind. T.R. 34(C)(3); Ind. T.R. 45(B)(2).
By keeping these points in mind, you can minimize the issues that arise in responding to a subpoena requesting documents. For more information about these issues or Hoover Hull LLP’s commercial litigation practice, contact Alice Morical or any of the Hoover Hull lawyers at 317-822-4400.
This article was first published in the Spring 2011 issue of the Hoover Hull LLP newsletter.