It’s the bane of every consulting and accounting business’s existence – the dreaded third-party subpoena. One of your clients is involved in a lawsuit, and now their opponent has sent you legal process demanding five years’ worth of e-mail, text messages, spreadsheets, and every paper file you have on that client. Even worse, the subpoena requires someone in your organization to appear at a deposition.
Whether your feelings about the subpoena range from mere annoyance to extreme anxiety, here are a few tips and tricks to keep in mind as you secure counsel and face down the subpoena response process:
(1) There are two types of subpoenas.
The first type is exactly what it appears to be on its face – an annoying request for you to spend time and money collecting documents relating to your client or business partner. This type of subpoena, while not pleasant, is not the end of the world.
And then there’s the second type – the subpoena that indicates that the requesting party is considering making you a co-defendant in a lawsuit. This type of subpoena must be handled with extreme care and strategic planning.
To put it bluntly, while anyone with a law license can help you respond to the first type of subpoena, only an experienced litigator can help you navigate the second. Further, if the worst happens and you are added as a party-defendant to the suit, it is much more efficient and cost-effective to hire defense counsel who handled the subpoena.
(2) Personal Jurisdiction and Service.
In my experience, the world is full of attorneys who don’t know the rules that apply to determining where a subpoena must be issued from and how to properly serve one. This is particularly true with respect to subpoenas served outside the jurisdiction where the case is pending. For example, before you can be subpoenaed for documents or testimony in a State-court action outside of your home state, the requesting party must first domesticate the case to your home state. It is a crucial step that a surprising number of attorneys skip.
Even when the subpoena is issued within your own state, many jurisdictions have rules about how far a subpoena can require you to travel to produce documents or appear for a deposition or trial testimony. If the requesting party does not comply with those rules, the subpoena cannot be enforced as written.
Before jumping into action to respond to the subpoena’s requests, you should first ask an attorney to confirm whether or not the subpoena was validly issued and served. You would be surprised how many times the answer is “no.”
(3) Being A Third-Party Is Easier Than Being A Party.
Courts are sympathetic to innocent third-parties whose businesses have been interrupted to support someone else’s lawsuit. Depending on they type of subpoena you’ve received and the centrality of your information to the case, there are a number of avenues available to you:
A. Protective Orders: If the requests for documents or testimony are extremely broad and potentially burdensome or dangerous to your business, you may apply to the Court for a protective order limiting your obligations pursuant to the subpoena. Courts are much more likely to grant a request for a protective order from a third-party subpoena recipient than from a party to the case.
B. Objections: Sometimes you need a protective order, and sometimes written objections are sufficient. If you timely serve written objections that are appropriate to the requests received, it is up to the other party to move to compel you to provide more than you have offered. Motions to compel are not always filed, and even when they are, sometimes they are rejected because of critical errors committed by the requesting attorney with respect to jurisdiction and service.
C. Electronic Discovery: When a lawsuit is commenced against a party (and sometimes even before), the party has an obligation to preserve relevant electronic data in anticipation of a request for production of documents. This often means that a party must spend thousands of dollars locating data and putting in place procedures to avoid regularly-scheduled deletion or overwriting. Third parties, on the other hand, are usually required to search their records for responsive information only once, and produce what is found pursuant to a reasonable, good-faith search. Once it has been produced, automated deletion and overwrite functions can usually continue unabated.
Additionally, courts are much more amenable to cost-shifting for electronic discovery when a third-party is asking. When the subpoena requests electronic discovery from a source that requires significant expense or time to access, you can apply to the court to require the requesting party to cover those costs. These requests are much more frequently granted when the person or entity asking is a third-party subpoena recipient.
(4) You Lose Your Rights If You Delay.
The good news is that third-parties have a better chance of exercising rights to limit the cost and burden of discovery than do parties. The bad news is that you often have an extraordinarily short amount of time in which to exercise those rights. For example, Federal Rule of Civil Procedure 45(d)(2)(B) provides that you only have 14 days or until the date the subpoena commands response – whichever occurs first – to send written objections to the subpoena.
One of the worst mistakes you can make is procrastinating before you hire counsel to assist with responding or objecting to a subpoena. Failure to timely object or move for a protective order can prevent you from taking advantage of valuable protections.
If you have received a third-party subpoena and need immediate assistance objecting or seeking a protective order, fill out the Contact Form below, and we will get in touch with you within one business day to see how we can assist you: