April 12, 2018
Most commercial litigators are familiar with the process for responding to a subpoena demanding the production of documents from a non-party to litigation under Federal Rule of Civil Procedure 45. But interesting considerations arise when a client who is not a party to litigation receives a demand to preserve documents in connection with or in anticipation of litigation.
Attorneys have often struggled with efficiently requesting preservation of electronically stored information (ESI). The 2015 Amendments to the Federal Rules of Civil Procedure sought to limit the potential for over-preservation by clarifying that the scope of discovery is limited to proportionality factors and relevance. Even after the 2015 Amendments, however, attorneys continue to cast a broad net in serving preservation demands, often serving these demands on third parties.
Although a subpoenaed party must preserve evidence that it reasonably expects is responsive to the subpoena, a third party’s duty to preserve in the face of a preservation demand when no litigation is pending is less clear. After receiving a preservation demand, a third party must first evaluate whether it reasonably anticipates becoming a party to subsequent related litigation. If so, then it has an independent obligation to preserve potentially relevant data and should immediately take steps to do so. On the other hand, if the recipient merely holds information as a true disinterested third party, then the obligation to preserve is unsettled, as courts have taken various approaches in addressing this issue.
For example, one Massachusetts court has held that absent a subpoena, contract, or special duty to save data, a non-party has no obligation to save evidence relevant to others’ claims. In Quincy Mutual Insurance Co. v. W.C. Wood Co., 2007 WL 1829378 (Mass. Dist. Ct. June 6, 2007), the court declined to find that a non-party that destroyed a refrigerator was liable for spoliated evidence. The court explained that non-parties “do not have a duty to preserve evidence for use by others.” In contrast, other courts have found that a non-party does have a duty to preserve ESI even before being served with a subpoena. In Lofton v. Verizon Wireless (VAW) LLC, 308 F.R.D. 276 (N.D. Cal. 2015), the plaintiff alleged that non-party Collecto, Inc. (“Collecto”) obstructed class discovery in a Telephone Consumer Protection Act lawsuit by destroying call logs. Without specifying the source of Collecto’s duty to preserve or the exact moment when that duty arose, the court held that Collecto was on notice that it should preserve relevant ESI because it had previously been involved in a similar lawsuit.
Given the unsettled state of the law in this area, third parties that receive litigation preservation demands should take a proactive approach in responding to the demand. First, a third party that receives a preservation demand should confer with the issuing party or its counsel. During the conference, the two sides should attempt to reach agreement on the scope and nature of ESI subject to preservation by addressing items like production formats and ESI sources. The third party should then respond to the preservation demand letter in writing. In this response, the third party should describe the objections it anticipates making to a subpoena. The third party also should describe its efforts to confer with the issuing party. Proactive negotiation of this type may incline a court to look more favorably on a third-party’s “undue burden” argument if the third party attempted to narrow the scope of production before a subpoena was served.