Litigation Alert

Date: Apr 08, 2014

Costs of a Non-Party’s Compliance with a Subpoena Will Shift to the Requesting Party If Costs Are “Significant"

The United States Court of Appeals for the Ninth Circuit recently joined the D.C. Circuit in finding that a non-party to a lawsuit may recover the costs of complying with a subpoena if those costs are significant.[1]  According to the Court of Appeals, if a subpoena imposes an expense and that expense is significant, the party requesting the information under the subpoena is required to bear “at least enough of the expense to render the remainder [of the costs] non-significant.”[2]

The Federal Rules of Civil Procedure were recently amended to provide for cost-shifting of subpoena compliance costs by non-parties.  Under Rule 45(d)(2)(B(ii), the trial court must protect a non-party – that is an individual/entity who is not the plaintiff or defendant – from significant expenses resulting from compliance with a subpoena.  This rule is mandatory.  Accordingly, courts are to determine whether the costs to comply with the subpoena are “significant” and, if so, shift the costs to the party requesting the information.[3]

The definition of “significant costs” does not appear in Rule 45(d).  However, the facts of a lawsuit, the size of the non-party and its role in the litigation are important in determining whether costs are significant.  Courts have found costs ranging from $9,000 to nearly $200,000 to be significant.[4]  De minimus costs, like those associated with sending faxes, making telephone calls, and postage,[5] and unnecessary costs, such as those associated with retaining “expensive counsel”[6] are unlikely to be recoverable.  Further, the reimbursement may only be partial.

Non-party individuals and entities to a lawsuit in receipt of a subpoena compelling the production of information, documents, and other tangible things should estimate the cost of compliance.  If the estimate is “significant,” the non-party should first attempt to obtain an agreement from the subpoenaing party to reimburse the expenses.  Failing an agreement, the non-party can seek a protective order from the court shifting the expenses.  In any event, a record of the expenses involved should be kept.

For assistance in seeking reimbursement for subpoena compliance in accordance with the Federal Rules of Civil Procedure or for more information on this subject, please contact Keller and Heckman LLP, Partner, Douglas J. Behr, behr@khlaw.com.

[1] See Legal Voice v. Stormans Inc., No. 7-cv-05374-RBL (9th Cir. Dec. 31, 2013).  A link to the decision is available here.

[2] Id.

[3] Id.; see also Fed. R. Civ. P. 45(d)(2)(B)(ii).

[4] See Williams v. City of Dallas, 178 F.R.D. 103, 113 (N.D. Tex. 1998) ($9,000); Legal Voice v. Stormans Inc. ($20,000); Linder v. Calero-Portacarrero, 251 F.3d 178, 182 (D.C. Cir. 2001) ($199,537).

[5].In re Propulsid Products Liability Litigation, 2003 U.S. Dist. LEXIS 16477 (E.D. La. Sept. 3, 2003).

[6] Prescient Acquisition Grp Inc. v.  MS Publishing Trust et al, 2007 WL 2996645 (S.D.N.Y. Oct. 13, 2006).