We’re celebrating our 75th episode with readers and viewers! For our 75th episode, we look at a case from a recent webinar Kelly Twigger participated in with the Honorable Andrew Peck, Senior Counsel at the international law firm, DLA Piper; Karyn Harty, a Partner at McCann FitzGerald in Dublin; and David Horrigan of Relativity.
The case is Martley v. City of Basehor, 2022 WL 1302820 (D. Kan. 2022), May 2, 2022. It was presided over by United States Magistrate Judge Gwynne E. Birzer and involves a third-party subpoena to a party’s IT services provider. Kelly discusses when a party has standing to move to quash, why we need more guidance on possession, custody and control in ESI and whether an end run via subpoena in discovery can work.
Thanks for all the support so far and as we continue on the road to episode 100.
Good morning and welcome to our Case of The Week Series, published in partnership with ACEDS. My name is Kelly Twigger. I am the CEO and founder of eDiscovery Assistant, as well as principal at ESI Attorneys, and I am very happy to be with you here today. Thanks so much for joining me.
As you know, each week we choose a recent decision in eDiscovery that highlights key issues for litigators and those involved in the eDiscovery process, and we talk about the practical implications of that decision on you, your clients, and your practice.
This week marks our 75th episode of Case of The Week (hard to believe), which we started back in the fall of 2020. In those 75 cases, we have worked to address a wide range of issues in case law on the complexity of ESI, which have included sanctions, manner and form of production, dealing with instant messaging applications like Slack, WhatsApp, and Teams, how courts are dealing with hyperlinks in documents, whether categorical privilege logs meet Rule 26’s requirements, and what your obligations are to understand eDiscovery as counsel for your clients, as well as many more.
The emergence and prominence of new technologies during the pandemic and the greater adoption of those technologies by lawyers has certainly increased the complexity of dealing with ESI, and it just keeps on growing. Already this year, we’ve amassed more than 2,500 decisions in our eDiscovery Assistant case law database, and we are on pace to meet or beat last year’s total of just over 5,000 decisions in our database.
Over these 75 episodes, I have had a lot of fun hearing from all of you about your questions, issues that you want to have covered in cases that you want to talk about. Please keep sending your questions, thoughts, and case suggestions to us at email@example.com, and I certainly hope you’ll stay with us for the next 75 episodes.
We’re going to dive into this week’s case on our episode. We’ve also provided a link to Doug Austin’s article from eDiscovery Today, also covering this latest decision.
This week’s decision comes to us from the case titled Martley vs. City of Basehor. This is a case that we first addressed last week with Relativity on the 2022 Data Discovery Mid-year Legal Update with David Horrigan, who was kind enough to include me on that broadcast. I wanted to dive a little further into the issues in this case because we only touched on them briefly with the number of cases that we covered on that webinar. But there are some pretty significant things to think about here, and so I thought it was worth a deeper dive.
This decision from Martley comes to us from May 2nd of 2020. It is a decision by United States Magistrate Judge Gwynne Birzer out of the District of Kansas. Judge Birzer has many cases in our database—31 in total. She has written quite a number of thoughtful eDiscovery decisions, and today’s case decision in Martley is no different.
As always, in eDiscovery Assistant database, we tag each of our decisions with issues to allow you to search and filter them more easily. Issues assigned to this case include:
- Search terms
- Stored communications act
- Privilege log
- Attorney-client privilege
- Legal hold
- In-camera review
- Possession custody or control
- Cooperation of counsel
- Protective order
- Third-party subpoena, and
- Forensic examination.
There are a lot of issues that are covered in this case.
Getting into the Facts
Underlying facts of this case are that the plaintiff served as police chief and the city administrator for the City of Basehor from 2008 until July 2018, when he retired. The plaintiff now alleges that the City of Basehor violated the equal pay act, claiming that the City paid him less for the same duties as city administrator, than it is now paying the new city administrator. The defendant claims that, in fact, the plaintiff was a part-time city administrator and did not do the same level of work as the new city administrator in response.
Now, for another bit of background on this case. This is, as the Court notes, the 10th discovery decision on file in this matter, all of which are included in our eDiscovery Assistant database. This Court is very familiar with the discovery disputes between the parties and the behavior that has been occurring throughout the course of discovery in this case. We are picking up with this decision after the close of discovery in the case.
We are before the Court in this decision on a motion to quash being brought by the defendants. The defendants seek to quash an amended subpoena that the plaintiff served on the City of Basehor’s former IT services provider, NetStandard data center, or who were referred to as NetStandard. The defendants here really seek to quash that third-party subpoena. We get into a number of questions as to whether or not the defendants have standing even to move to quash, since they are not the subject of the subpoena, and whether there’s possession custody or control over the data by NetStandard, such that it can be produced, as well as a number of other issues.
The defendants really object to the subpoena on two grounds. They state that the subpoena is in violation of Rule 45, which provides for the discovery by third-party subpoena, because the defendants were not provided notice before it was served on NetStandard. Second, the defendants object to the subpoena because they believe that the plaintiffs are using third-party discovery to avoid compliance with Federal Rules 26 and 34, and specifically, that the plaintiff wants to get documents via subpoena after he served his sixth request for production too late for that response to occur prior to the close of discovery.
As Rule 34 requires, when you’re serving requests for production, they have to be served 30 days prior to the close of discovery in order to allow for sufficient time for the responding party to answer them before that discovery closes. The defendants also asked for costs and fees associated with their motion to quash, even though those are not provided for on a motion to quash in the same way that they are on a motion to compel.
In response, the plaintiff argues a number of things. With respect to the notice issue, plaintiff says hey, we gave you notice. We gave it to you half a day before we even served the subpoena on NetStandard. You had plenty of time to go to the court and ask for a hearing on the motion to quash, and you subsequently moved to quash the next day.
The plaintiff also argues that it’s defendant’s failure to appropriately search the City and Police Department servers and produce the previously requested documents that promoted the use of the third-party subpoena to NetStandard. In support of that argument, the plaintiff lays out a number of things that point to the fact that they have not received documents in discovery from the servers that were maintained by NetStandard. Those include a timeline of events involving the City’s efforts to have NetStandard image those servers, counsel’s possession of a hard drive reporting to contain images of the servers, counsel’s communications with NetStandard regarding the data on the hard drive and accessing of the same data, request for production requesting searches of the servers, and the City’s supplementation of response to the request which does not identify any new documents at all to be produced.
In essence, the plaintiff says we’ve been getting the runaround in discovery; you still haven’t given us all of the documents. We’ve even gotten them from a couple of other sources to demonstrate that you haven’t been giving us all those documents, and so we want them.
They went to NetStandard as a last measure to try and get that information.
Analysis By the Court
What is the Court’s analysis on the motion to quash? Well, the first issue before the court is really whether or not the defendants have standing to oppose a third-party subpoena. The general rule under Rule 45 is that a motion to quash or modify a subpoena duces tecum may only be made by the party to whom the subpoena is directed.
That’s the rule we’re dealing with, and the defendants have to get around that. However, the Court notes that the Court may make an exception if the party seeking to challenge the subpoena has a personal right or privilege regarding the information requested. The Court here finds that:
Where the subpoena seeks to have searches run on the City’s email data remaining on NetStandard servers for the period of time when the defendant was mayor, the Court finds defendants have a personal right regarding the information requested.
Because the defendants have a personal right regarding the information requested, the Court holds that the defendants have standing to move to quash the subpoena served on NetStandard. Now, that is a very key issue that we’re going to discuss more in our takeaway section as to this personal right exception. It’s a minefield when it comes to ESI because there are facts that are going to have to be parsed in order to determine whether that personal right exists.
There are, as I read the facts that are laid out in this decision, a couple of facts that distinguish this situation. First, NetStandard really just manages the data for the defendants. The data requested just sits on specific servers or locations on servers at NetStandard. NetStandard is not accessing, deleting, or taking any action on that data for purposes of maintaining it or in as far as the facts of the decision list.
Now contrast that situation with NetStandard just simply housing the data to another situation. Take, for example, say ABC company tries to move to quash a subpoena to a supplier in a breach of contract case. In the case of ABC, the supplier is not simply housing the data that can be accessed by the defendant, rather, the supplier would have its own communications about the production and relationship that may be discoverable on a third-party subpoena.
That’s a big difference between what we’re talking about here, which is the relationship of NetStandard to the City as opposed to a third-party agent. Presumably in that third-party agency situation, the defendant would not have any standing to quash that subpoena.
Notice to the Defendant
The second issue, having resolved the personal right issue for the court, is the notice issue that’s raised by the defendant. Did the defendant get actual notice of the third-party subpoena? The Court notes that nothing in Rule 35 really requires the parties to confer prior to filing of the notice for a third-party subpoena. The defendant’s argument that the plaintiff was required to confer with them is rejected.
In terms of the timing of the notice that was provided to the defendants, the Court says, hey, we really wish you would have given them more than half a day, but courts have found that half a day is sufficient. Based on the timing of when the defense counsel came to the court to move to quash this, we find that there was sufficient notice under Rule 45.
Whether NetStandard Has Control
Third issue for the Court is whether or not NetStandard has a control over the documents that were covered by the third-party subpoena. Defendants of course argue that NetStandard does not have control over the City’s servers or documents. Of course, we’re talking about the possession, custody or control requirements of rule 45.
Custody and control really are no brainers because clearly the data is sitting at NetStandard. The question is whether they’ve got control over it. Possession and custody are clear, control is the issue.
The Court notes here that it is uncomfortable with plaintiff’s tactic of going around defendants to their former IT vendor to conduct searches on any of the City’s email data it may still have in its possession after its services were terminated and also questions whether the documents are in the control of NetStandard and whether it should be burdened with production.
Citing the Sedona Conference Commentary on Rule 45, the Court notes:
A requesting party should seek documents or ESI from the party that controls the information through a Rule 34 request, where a party to the litigation has control over the requested documents and ESI that are in the possession or custody of a non-party, a document request to a party, rather than subpoenas to the custodial non-party are the appropriate method to obtain discovery of those documents and ESI.
The Court also goes on to state that documents are in the control of the party if the party has the legal right to obtain the documents on demand.
Here, the Court finds that because the defendants have already requested and received images of those servers from NetStandard, that the City does in fact have control over the email data that NetStandard still maintains. We’ve answered the control question for purposes of allowing the defendant to move to quash here and determined that NetStandard doesn’t have any control over the data, that control rests with the City.
The Court also notes here that the burdens of discovery should fall on parties versus non-parties, and that’s an important notion to remember when you’re talking about third-party discovery. The Court notes that the parties are in a better position to address issues of privilege, data privacy and confidentiality, while a non-party really has no incentive to do so, and sometimes no resources to go along with that lack of incentive.
In contrast here, the Court notes that the parties have a protective order in place that does provide for confidentiality designations. The Court also notes that the subpoena seeks documents that include communications with counsel that may be privileged, and so the Court is concerned about NetStandard producing documents without defense counsel reviewing them for privilege.
Now that gives me a little bit of pause because that happens all the time with third-party productions, where the third-party is an agent or simply just any kind of third-party of one party. Routinely, the third-party may provide the production to the party for review, and then produces it following a privileged review after that review is complete by the party. But that is not a basis to quash the subpoena generally.
I definitely see what the Court is saying here and completely agree that third-parties rarely have the incentive to take the precautions that parties have in litigation. But I’m not sure that it qualifies as a basis for allowing a party to quash a subpoena to a third-party. That’s just one piece of the Court’s analysis here, though.
Finally, the Court also questions whether NetStandard would be permitted to divulge the contents of the City’s communications under the Stored Communications Act, without the City’s consent. Again, the Court cites to the Sedona Conference Commentary to Rule 45, which states that “[u]nder the Stored Communications Act, remote computing service providers may not divulge communications that are carried out or maintained on that service, absent the customer’s consent.”
Based on all of that, the Court here quashes the subpoena, and doesn’t view the third-party subpoena to NetStandard as an appropriate vehicle for use in discovery. However, the Court does agree with the plaintiff that it should be entitled to the appropriate discovery, and that some of the actions by defendants in getting information from NetStandard servers have been less than up to snuff.
The Court continues to be bothered by the fact that documents continue to come to light that are presumably responsive to requests for production that plaintiff has already served but have not been produced by the defendants. The Court points to two examples, specifically — that the plaintiff asked the deponent to run a search during a remote deposition that turned up on produced documents, as well as the plaintiff obtaining documents from a city counsel member, that were not produced by the defendants but would have been covered by the discovery request.
The Court has good reason to note that the defendants frankly are not meeting their discovery obligations. The Court also notes that the defendants knew there were issues with their production from the servers from NetStandard, and points to a series of facts that show that “the City personnel, counsel and even its IT vendor involved in the litigation hold, imaging, and searching processes, may not have been up to the technical nature of the task” of searching for those documents.
The Court then looked at the plaintiff’s request for production and said that at least one of them covers the documents that are covered in the subpoena request. As such, the Court says, well, we’re not going to reopen discovery here, but I am going to order you guys to cooperate and share the expense of finding either a forensic examiner or a discovery vendor to run the searches that are set out in the subpoena on the NetStandard servers. It also sets out a process and a timeline for the parties follow that includes a review of those documents for privilege prior to production.
In essence, the plaintiff gets what it really wanted by going to NetStandard here. While the Court quashed the subpoena, I think the result for the plaintiff is going to be essentially what they were trying to achieve through the process of the third-party subpoena. The Court does deny the motion for costs and fees on the motion to quash, which was requested by plaintiff.
What are our takeaways following this ruling? Well, the Court place’s a lot of reliance on the Sedona Commentary here. Many of my very esteemed colleagues work on the Sedona Commentaries, and they are always very thoughtful. But there’s not a lot of case law support for some of the holdings by the Court in this decision, and it raises some key issues that are complicated by the creation and storage of ESI.
I think that we’re going to have to continuously revisit these particular issues that are raised here in this Martley decision. It’s very possible that this ruling — finding that a party has standing to challenge a third-party subpoena if the party seeking to challenge has a personal right or privilege — may open a big can of worms.
The Court does not specifically limit its holding to the fact pattern here, i.e., that NetStandard is really simply housing the documents for the defendants. I think we’re going to have to keep our eyes open as to whether or not that holds up, is broadened, or we can get some more specific guidance on what that personal right or privilege means, because that could be a rabbit hole for many folks to go down, arguing that they should be entitled to take a position on a motion to quash on the third-party subpoena when they are a party to the case.
The issue of control by NetStandard here is another issue that we want to keep our eyes open on. Clearly, as I mentioned, NetStandard has possession and custody because the documents are on their servers. But as the Court notes, it does not have control over the data without consent from the City. This case is just another example of the complexity of possession, custody and control in the context of ESI.
We really do need more and better guidance from the courts or from the Rules Committee on how these fine lines are drawn for possession, custody and control. Whether that’s under Rule 34 or under Rule 45, we’re seeing both in the eDiscovery case law.
What I love about this decision is that the Court recognizes that although the third-party subpoena isn’t the right vehicle, the plaintiff is still not getting what it’s required to get in discovery. The Court maps out a process for the defendants to meet their obligations in producing the documents, even though it’s with the help of an expert.
While I love the decision from that perspective, I do have a big question, and that is if the issue with the defendants is that they were not meeting their discovery obligations to produce all of the data from these NetStandard servers, why does it become incumbent upon the plaintiff to share in the costs of the expert to meet those discovery obligations that would otherwise be entirely on the defendants to bear? That’s not a question that the Court answers here, so I think we’ll have to leave that one for another time, maybe over a beverage.
All right, that’s our Case of The Week for this week. Again, a lot to chew on here. Thanks so much for joining us on our 75th anniversary edition, and we’ll be back again next week with another decision from our eDiscovery Assistant database.
Thanks, stay safe and healthy out there. Have a great week.
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