In re Rule 45 Subpoena Issued to Robert K. Kochan, Case No. 5:07-MC-44-BR (E.D.N.C. November 26, 2007)

This is another in a long line of cases where counsel relied on “bald assertions that the production is impermissible,” to use the court’s words, and as a result, plaintiffs are free to wander through the company’s computers, opening directories that look interesting, viewing files, and even reading the first few pages of whatever document looks interesting. From the perspective of the subpoenaed party, this is not a good result. From the perspective of the court, it was left with little choice.

The case arose initially in the Southern District of Mississippi, where plaintiffs had sued Forensic Analysis & Engineering Corp. (“FAEC”) alleging fraud related to investigations of insurance claims for damages arising out of Hurricane Katrina. Plaintiffs served a subpoena on Kochan, the president and sole owner of the Subchapter S company seeking to copy all ESI created on or after August 29, 2005, through imaging the hard drives of company computers located at the company’s headquarters in North Carolina. Kochan filed objections 9 days later, one day before the return date on the subpoena, for the most part challenging the propriety of issuing a subpoena to the president/owner of the company, rather than the company itself.

The plaintiffs filed a contempt motion as well as a motion to compel. The court made short order of the contempt motion, finding that Rule 45 permits objections to be filed just before the time specified for compliance when that time is less than fourteen days after service of the subpoena and that so long as non-frivolous objections were served, noncompliance was not contemptible. The court also found that the case law supports the right of a party to obtain documents from the business president or owner, since he controls the business and hence all documents in its possession.

The court was thus left to consider the scope of the subpoena, and in that Magistrate Judge James E. Gates was given little help. Counsel had not reviewed the data sought and when asked at the hearing on the motion whether Kochan Proposed any limits regarding the manner in which the inspection and copying should proceed, none were proposed. This is particularly perplexing since plaintiffs’ expert indicated that the production and copying of data from the computers could be completed in a matter of minutes. Clearly, what the plaintiffs contemplated was the imaging of every hard drive. No review; just take it all.

The protocol ordered by the court is instructive, more for its description of what you never want to permit than for its suggestion of a rational approach to the problem:

In conducting the inspection and copying authorized by this order, plaintiffs shall make reasonable efforts to utilize a computer search methodology to inspect and copy only that information which is identified in the subpoena as subject to such inspection and copying. Upon determining that information on the computers in issue is outside the scope of the subpoena or otherwise privileged, plaintiffs, their counsel, their experts, and anyone else working on plaintiffs' behalf in this case shall undertake no further inspection or copying of such information. The search methodology used by plaintiffs may include, but is not limited to, the following techniques:

(a) surveying various file "directories" and the individual files they contain (analogous to looking at the outside of a file cabinet for the markings it contains and opening a drawer believed to contain pertinent files);

(b) "opening" or cursorily reading the first few "pages" of such files in order to determine their precise contents;

(c) "scanning" storage areas to discover and possibly recover recently deleted data;

(d) scanning storage areas for deliberately hidden files; or

(e) performing key word searches through all electronic storage areas to determine whether occurrences of language contained in such storage areas exist that are intimately related to the subject matter of the investigation.

No objection was filed to the Magistrate’s M&R, and it was affirmed by Senior District Judge W. Earl Britt.

My discomfort with this opinion should be obvious. There is nothing in the Rules of Procedure that suggests that a party to a lawsuit should be permitted to rifle through a company’s computer hard drives, particularly a non-party. While it is true that FAEC is a party to the lawsuit, the plaintiffs here chose to subpoena a non-party and should have to live with that choice. Any argument for imaging hard drives should have to pass extreme scrutiny when a non-party is involved.

But even a party to a lawsuit should not have to submit to the kind of intrusive search and seizure permitted here. The Liberty Mutual case discussed here provides the proper analysis. Without evidence of spoliation, access to a party’s computers should be sharply circumscribed. Far too many courts are permitting routine access to the opposing party’s computers. Counsel need to do a better job in arguing their case, even to the point of seeking interlocutory appeal. But the real key is providing evidence to back up the assertion that no basis exists for permitting this kind of conduct.

Read the Magistrate’s M&R

Read the Court’s affirming order