Academic journal article Defense Counsel Journal

Conning the IADC Newsletters

Academic journal article Defense Counsel Journal

Conning the IADC Newsletters

Article excerpt

Recognizing that a wide range of practical and helpful material appears in the newsletters prepared by committees of the International Association of Defense Counsel, this department highlights interesting topics covered in recent newsletters and presents excerpts from them.

Non-parties May Be Able To Recoup Costs

Writing in the September issue of the Advocacy, Practice and Procedure Committee newsletter, Randall R. Riggs and Carol A. Modesitt of Locke Reynolds Boyd & Weisell, Indianapolis, remind counsel of an option:

If you serve or receive non-party subpoenas with numerous requests for production of documents, you should be aware that the non-party may be able to recoup lost earnings and attorney's fees incurred by complying with the subpoena. In Fetch v. Conseco Inc., IP 92-699c M/S (S.D. Ind. Aug. 21, 1998), the U.S. District Court for the Southern District of Indiana allowed a non-party to recover its employees' lost earnings and attorney's fees incurred in responding to a subpoena containing 36 requests for production of documents.

Securities violations alleged

The plaintiff sued Conseco, alleging securities violations, and subsequently served Coopers and Lybrand (C&L), a non-party, with a subpoena containing 36 requests for production of documents concerning Conseco. C&L's attorney informed the plaintiff's attorney that approximately 35 to 40 linear feet of documents had been gathered but that the attorneys had not yet reviewed or screened the documents. C&L requested three extensions of time for filing its response to the subpoena, but it did not file an objection or move to quash.

After complying with the subpoena, C&L sought reimbursement for $10,578.13 in lost earnings for C&L employees and $17,496.39 in attorney's fees. The plaintiff argued that because C&L never provided notice of its intent to seek reimbursement and never objected or moved to quash the subpoena, it should not be entitled to recoupment.

The court rejected the plaintiff's argument and granted C&L's motion, awarding C&L a reduced amount of $12,341.25.

Reliance on rules

The court relied heavily on Rules 45(c) and 26(c) of the Federal Rules of Civil Procedure. Rule 45(c)(1) provides that a party responsible for the issuance of a subpoena shall "take reasonable steps to avoid imposing undue burden or expense on a person subject to that subpoena." Rule 45(c) allows the court to "impose upon the party or attorney in breach of this duty an appropriate sanction, which may include, but is not limited to, lost earnings and reasonable attorney's fee." Rule 26(c) provides that after the parties have in good faith attempted to resolve their dispute without court action, a court may "make any order which justice requires to protect a party or person from annoyances, embarrassment, oppression, or undue burden or expense."

Several courts have cited Rules 45(c) and 26(c) when determining whether a person should be reimbursed for expenses incurred while complying with a subpoena. Spears v. City of Indianapolis, 74 F.3d 153 (7th Cir. 1996); United States v. Columbia Broadcasting System Inc., 666 F.2d 364 (9th Cir. 1982), cert. denied, 457 U.S. 118 (1982); Mycogen Plant Science Inc. v. Monsanto Co., 164 F.R.D. 623 (E.D. Pa. 1996); Compaq Computer Corp. v. Packard Bell Electronics Inc., 163 F.R.D. 329 (N.D. Cal. 1995). In each of these cases, it is interesting to note, the non-party had either filed an objection or moved to quash the subpoena prior to seeking reimbursement.

However, Fetch rejected the plaintiff's argument that the non-party must first object or move to quash the subpoena before seeking reimbursement. C&L was not required to give formal notice of its intention to seek reimbursement or to move to quash, the court stated.

Heavy burden on non-parties

The court reasoned that under the plaintiff's argument, a non-party would "have no alternative but to file a motion to quash and to demand an advancement of fees as a sine qua non of production," even if the non-party was willing to comply with the subpoena, citing Columbia Broadcasting (666 F. …

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