Shifting The Costs Of Complying With A Rule 45 Subpoena

Companies are routinely served with subpoenas for litigation in which they are not parties. Responding to these subpoenas can involve significant expenditure of time and money, in addition to disruption and distraction. In many cases, the subpoenas also may demand a deposition from the company, requiring further expense and distraction for preparation. While there are more traditional options such as moving to quash or reduce the scope of a subpoena, the company still may be forced to spend legal fees and costs to comply. To avoid these burdens, in some instances, the company should consider a strategy of shifting some of the costs and fees associated with compliance to the party issuing the subpoena by taking advantage of recent appellate and district court decisions aimed at protecting the subpoenaed non-parties.

Federal Rule of Civil Procedure 45 governs discovery of non-parties by subpoena. A court must protect a non-party subject to a subpoena if it "requires disclosure of privileged or other protected matter" or the subpoena "subjects a person to undue burden." Fed. R. Civ. P. 45(d)(3)(A). Importantly, Rule 45(d)(2)(B)(ii) states that, when a court orders compliance with a subpoena over an objection, "the order must protect a person who is neither a party nor a party's officer from significant expense resulting from compliance."

The Ninth Circuit Court of Appeals provided clarification on this cost-shifting rule in its decision Legal Voice v. Stormans, Inc., 738 F.3d 1178 (9th Cir. 2013) (reversing a district court's denial of costs where the district court considered whether compliance was unduly burdensome for the subpoenaed non-party, rather than considering only whether the cost of producing documents was significant, when deciding whether to shift costs at all). As the Court explained, the leading Court of Appeals decision that analyzed the rule since the 1991 amendment was Linder v. Calero-Portocarrero, 251 F.3d 178 (D.C. Cir. 2001), where the D.C. Circuit held that the amendment made cost shifting mandatory in all instances in which a non-party incurs significant expense from compliance with a subpoena. Id. at 182.The plain language of this rule dictates its mandatory nature. The Linder court held that only two considerations are relevant under the rule: "[1] whether the subpoena imposes expenses on the non-party, and [2] whether those expenses are 'significant.'" Legal Voice at 1184. If these two requirements are satisfied...