The financial burdens, resources and time associated with the production of documents and electronically stored information (ESI) are of widespread concern to attorneys and their clients. These costs are even less palatable when they are being borne by a non-party with little or no stake in the underlying litigation – and the law recognizes this fact. The 2006 amendments to the Federal Rules of Civil Procedure regarding ESI and the related case law carve out important differences between the obligations of parties (Rules 26 and 34) and non-parties (Rule 45).1
Party status is clearly relevant to questions of fairness and reasonableness in the e-discovery arena, particularly when faced with considerations of undue burden and cost. Rule 45(c) obligates the requesting party to take reasonable steps to avoid placing an undue burden or expense on the non-party. According to the Sedona Conference Commentary on Non-Party Production & Rule 45 Subpoenas, courts often employ a balancing test comparing the benefit to the party with the burden on the non-party when analyzing undue burden.
The balancing equation may weigh in favor of the non-party when the requesting party makes duplicative requests for ESI or seeks documents the non-party can show are not reasonably accessible, such as data on back-up tapes. One common example in which the benefit to the party is likely outweighed by the cost to the non-party is when electronic files that were received by or sent from a litigation party are sought from a non-party.2
E-mail production is often expensive due to high storage volumes and technology limitations, which restrict the ability to effectively search and filter data at the point of collection. If the same files are likely in possession of a litigation party and the requesting party fails to show that the ESI production by the party is insufficient, then the balancing test likely tips in favor of the non-party.3 However, non-parties should be aware that the cost protections that Rule 45 puts in place do not automatically protect the responding party from their discovery obligations. Objections based on undue burden and cost must be accompanied by specific evidence.4
While it is not always possible for a non-party to entirely avoid discovery obligations based on objections due to undue burden and cost5, these considerations may be enough to gain a strategic advantage in negotiations. For example, the requesting party may be ordered to use tools and processes designed to cut discovery costs to avoid an undue burden on a third party. As such, non-parties negotiating a response to a third-party subpoena should strongly advocate for the implementation of search technologies and processes that reasonably limit the scope of discovery and the volume of documents for review.
Typically, these types of decisions occur during the Rule 26(f) meet and confer process. Although the meet and confer requirement does not directly apply to Rule 45, this is the stage in which parties should be taking proactive steps to avoid placing an undue burden on nonparties by carefully ascertaining the scope of discovery that applies to non-parties, and limiting third-party requests, where possible, through litigant discovery.6
Cost shifting is another mechanism contemplated under Rule 45(c) for insulating non-parties from undertaking unreasonable expense in response to discovery requests. Some courts examine a list of factors when determining whether to shift the cost of discovery from the responding non-party to the requesting party.7 It is difficult to separate the concept of cost-shifting from the general examination of undue burden. Both issues are open to interpretation and further clarification by the courts; however, case law suggests that considerations of undue burden and cost often favor non-parties.
While this should provide non-parties with some level of reassurance, particularly when faced with unreasonably broad and significantly expensive electronic discovery requests in third-party subpoenas, the unspoken rule that non-party respondents should understand how their obligations and defenses differ from those of party respondents remains.
Non-parties to litigation are understandably reluctant to assume the time and financial burdens associated with discovery. Although the law recognizes this fact, there are times when the benefit to the litigation party may outweigh the burden to the non-party. In such instances, the non-party should strongly advocate for cost shifting and the use of search technologies and processes that reasonably limit the scope of discovery and volume of documents for the review.