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Third-party e-discovery: Know your rights

In-house counsel must guard their companies against overbroad discovery requests and consider cost-shifting strategies

As businesses continue to invest in technology, the amount and variety of information they maintain in electronic form grows in exponential quantities. As such, many companies now find themselves recipients of third-party subpoenas seeking electronically stored information (ESI) in addition to traditional paper discovery. The costs of responding to such requests can be substantial. Nonetheless, the Federal Rules of Civil Procedure (as well as most state procedural rules) permit the discovery of ESI from nonparties to litigation. Accordingly, in-house counsel should take a proactive approach when responding to a subpoena and be mindful of their rights to seek relief from overbroad requests and/or to shift some or all of those costs to the party seeking such information. 

Assuming the third party is unable to reach an agreement to limit the subpoena to a reasonable scope and time frame, the party may seek relief pursuant to Federal Rule of Civil Procedure 45, which provides that a “person responding to a subpoena need not provide discovery of electronically stored information from sources that the person identifies as not reasonably accessible because of undue burden or cost.” For example, if a subpoena seeks ESI dating back multiple years and the older data is available only on backup tapes, such historical data is arguably not readily available in light of the additional costs to restore the data. The courts are generally mindful of the high costs associated with the collection and production of ESI and are reluctant to impose such costs on third parties. However, a court may still order discovery from such sources if the requesting party shows good cause. In this regard, a party can show good cause by demonstrating that the data is critical to the litigation and that the party has no alternative to obtain such records.

Contributing Author

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Christopher S. Naveja

Christopher S. Naveja is a partner at Arnstein & Lehr, LLP’s Chicago office, is the Co-Chair of the firm’s Consumer Finance Litigation Practice Group, and...

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Contributing Author

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William T. Eveland

William T. “Toby” Eveland is a partner at Arnstein & Lehr LLP’s Chicago office. His practice focuses on business and class action litigation, premises and...

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