Third-Party Subpoenas: Who's Going To Pay For That?

• Published date: 13 July 2022
• Subject Matter: Litigation, Mediation & Arbitration, Compliance, Trials & Appeals & Compensation, Civil Law
• Law Firm: Cades Schutte LLP
• Author: Trisha H.S.T. Akagi

In litigation, responding to requests for production of documents can be time-consuming and expensive yet those costs are considered part of litigation and are generally born by the parties themselves. But what happens when discovery is sought from a person or entity who is not a party to the litigation? Who is responsible for paying for the costs associated with responding then? The answer to this question depends on whether the lawsuit is in federal court or state court.

Federal Court

Under the Federal Rules of Civil Procedure, an order compelling compliance with a subpoena 'must protect a person who is neither a party nor a party's officer from significant expense resulting from compliance.' Fed. R. Civ. P. 45(d)(2)(B)(ii) (emphases added). The Ninth Circuit Court of Appeals has interpreted this rule to require the shifting of the non-party's costs of compliance if those 'expenses' are 'significant.' Legal Voice v. Stormans Inc., 738 F.3d 1178, 1184 (9th Cir. 2013). Thus, a two-step inquiry is required: (1) whether the subpoena imposes 'expenses' on the non-party; and (2) whether those expenses are 'significant.'

What are 'expenses'?

Generally, 'expenses' are those costs resulting from compliance with the subpoena. This includes costs incurred in searching for and collecting documents, reviewing documents for responsiveness, reviewing documents for privileges such as attorney-client privilege, ensuring compliance with laws and regulations such as HIPAA, and preparing the document production.

Costs incurred in fighting the subpoena are not considered 'expenses' within the meaning of Rule 45 and are thus not recoverable. Therefore, costs incurred in researching, drafting, and filing a motion to quash the subpoena are not recoverable.¹ Unreasonably incurred costs are also not considered 'expenses' incurred in responding to the subpoena and are likewise not recoverable. Similarly, expenses that are incurred solely for the third-party's benefit or peace of mind are not recoverable. For example, if the third-party insists that its attorney sit through a deposition in which the third-party's documents will be used, those fees would not be considered recoverable expenses as they were not incurred in responding to the subpoena.

Once a court determines that the subpoena imposes 'expenses' on the responding party, the court must then determine if those expenses are 'significant.'

When are expenses 'significant'?

In determining whether an expense is significant...