Have you or your company ever been subpoenaed by someone and you wonder, “wait, why am I being dragged into their mess?” It seems unfair. Why should you have to take time out of your busy day to help someone else either pursue or defend their own lawsuit? Let’s face it, most people don’t want to be involved in litigation of any kind, let alone someone else’s litigation. There’s nothing to be gained and only time and money to be lost. However, a North Carolina Business Court ruling last year made clear that non-parties to the case should not be unduly burdened with subpoena requests or required to turn over confidential or proprietary information to competitors that are parties to the case.
There are several ways lawyers obtain information about opposing parties and the facts surrounding the case. Discovery is the formal process by which one side asks the opposing side written questions (“interrogatories”) and requests documents that are pertinent to the case. Another way is to depose the opposing party or another person that has knowledge of the case. Lawyers can also use subpoenas to gain access to information and documents from people or companies that are not a party to the lawsuit.
Subpoenas can be extremely useful tools for attorneys to gain access to information they would not otherwise be able to access. Afterall, you can’t just walk into a doctor’s office and ask for a patient’s chart or walk into a bank and look at someone else’s bank statements. At Lindley Law, we handle trust and estate matters as well as guardianships. In those cases, medical records are often very important to our case, so we often subpoena various medical offices in order to obtain those records. One way these can be very helpful is if we can find documentation of a medical diagnosis of mental incompetence and compare it to when a legal document was signed. In other cases, we need to subpoena bank records which can show whether an executor has been spending a deceased person’s money inappropriately or recklessly. Without the use of subpoenas, this process would be much more complicated, if not impossible altogether.
However, if you’re a business owner who is subpoenaed for documents and you’re not a party to the case, it takes your own time and money to find relevant documents and send them to the requesting party. Courts have long recognized the importance of subpoenas and their role in facilitating the civil legal process, but they have also recognized the difference between the burden you can place on a party to the lawsuit, who has an actual stake in the case, and a non-party who will likely gain nothing by cooperating with a subpoena.
Rule 45 of the North Carolina Rules of Civil Procedure provides greater protection to non-parties responding to subpoenas than it does to parties responding to discovery. This means that you can ask a lot more of a party to a suit and subject them to more burden and more expense than you can for a non-party. The Rules require that the party who sends the subpoena “take reasonable steps to avoid imposing an undue burden or expense on a person subject to the subpoena.” (Rule 45(c)(1)) The Rules also allow the court to quash or modify the subpoena if it requests trade secrets or confidential information.
In Arris Group, Inc. v. CyperPower Systems, Inc. et. al., which was decided last summer by the North Carolina Business Court, the judge found that a subpoena request for a contract between a party and a non-party was not an undue burden because it was “discrete [and] targeted to a specific written agreement” and didn’t ask for all of the communications regarding the negotiations of the agreement. Such communications could have included seemingly endless email chains between lawyers at the two companies as well as executives and other company officials and may have been overly burdensome. However, simply handing over the agreement was not asking too much. It is worth noting that asking for the associated communications is not necessarily unduly burdensome by default, but rather a decision the judge must make in his or her discretion based on the facts at hand.
However, the requesting party failed to specify a time limit on other specific subpoena requests. So when a manager for the non-party company testified that the effort would entail reviewing “millions of communications” requiring “hundreds of hours” and “extensive legal fees”, the judge ruled that non-parties should not be subject to such a burden. Again, judges make determinations by considering all the surrounding facts. That which is too burdensome for a company of 50 employees may not be too burdensome for a company of 1000 employees with their own in-house legal department.
When considering a request for “specifications” regarding power supplies and battery components, two of the major products the company makes, the judge ruled against the requesting party. He found that asking a company to release their own technical specifications was asking too much, but not because it was unduly burdensome. Specifications of the type in the Arris case are “highly confidential and likely the subject of trade secret protection.” Essentially, he didn’t require the company to turn over their confidential and proprietary information to a competitor citing confidentiality reasons.
For attorneys, subpoenas to non-parties should not create an undue burden on the company they are requesting information from or they run the risk of facing an objection. Objections slow cases down and may result in the subpoena being modified or quashed altogether. Attorneys have a choice: cast a wide net and face the possibility that their subpoena will be objected to or narrowly tailor the subpoena to avoid a potential fight. It may be a questions of litigation strategy and the tactic an attorney chooses may make sense in one case, but not in another.
When it comes to confidential or proprietary information, it may be obvious that what an attorney is asking for is confidential or proprietary, but it may not. Again, litigation strategies may differ depending on the nature of the case and the parties. Some attorneys may elect to ask for more information than they think they’re entitled to and hope there’s no objection. Others may not want to risk it and may focus their subpoena on a much narrower set of documents or communications in the initial subpoena.
For non-parties that are subpoenaed for documents or information in a case, if you think compiling the information requested is going to take a long time and incur extensive legal fees, objecting to the subpoena on the grounds that it is unduly burdensome is an option. Whether it is unduly burdensome is a matter of the judge’s discretion, but if a small office is going to be required to spend hundreds of hours reviewing millions of communications, a judge is likely going to rule that the requesting party needs to more narrowly tailor their request for information so as to not overburden the non-party.
Subpoenas are a very necessary part of litigation, but for non-parties, they amount to time and money going towards another person’s goals instead of their own business. If you or your company has been served with a subpoena that you think might be unduly burdensome, please give us a call at 704-457-1010 to set up a consultation. For more information about our firm, our attorneys, and our practice areas, please visit us at www.lindleylawoffice.com.