Cal federal court sanctioned third party who ignored subpoena for ESI
In Vasquez v. California, the California Court of Appeal held that under federal law, a nonparty cannot avoid complying with a subpoena seeking electronically stored information on the ground that it must create new code to format and extract that information from its existing systems. After identifying subpoenaed parties’ obligations the court upheld an award of attorneys’ fees against the third party.
In this case, 1,034 former students enrolled in a culinary school owned and/or operated by defendants, California School of Culinary Arts, Inc., and Career Education Corporation. The students filed a consolidated complaint alleging that defendants defrauded them into enrolling in culinary school by numerous misrepresentations about graduation rates, employment prospects after graduation, and anticipated income levels. Sallie Mae serviced student loans obtained by some of plaintiffs for the purpose of attending defendants’ culinary program.
Through the course of litigation, plaintiffs issued a business records subpoena to Sallie Mae seeking electronically stored information on student loans, and requested that the information be produced “on digital data disk(s) in a reasonably usable form, i.e., in a format that is electronically searchable and sortable.”
Sallie Mae filed a motion to quash the business records subpoena arguing that it was improper because it sought information irrelevant and unrelated to the underlying lawsuit; it sought information that plaintiffs already had; it improperly imposed on Sallie Mae an affirmative duty to do something other than produce existing documents and records; and it shifted the cost and burden of plaintiffs’ litigation efforts to Sallie Mae. Sallie Mae also filed objections to the business records subpoena on various grounds, including that it was unduly burdensome, that the information sought was not relevant or was already in plaintiffs’ possession, and was outside the proper scope of discovery, in that it would require Sallie Mae to perform research, implement information technology programming, and create a spreadsheet.
The trial court denied Sallie Mae’s motion to quash, finding that the information sought by plaintiffs was relevant and not already in their possession. The trial court concluded that the objections were without substantial justification and granted plaintiffs’ request for attorney fees.
Sallie Mae appealed the trial court’s sanctions order contending there was substantial justification for its motion to quash because plaintiffs’ right to discovery was limited to the production of existing records and information and Sallie Mae was not required to undertake extensive computer programming in order to create a spreadsheet that did not already exist.
However, the California Court of Appeal affirmed the trial court’s order awarding plaintiffs their attorney fees and expenses. The judges deemed that the subpoena sought information within the permissible scope of discovery under section 1985.8, Code of Civil Procedure. It furthermore held that
“a court will not automatically assume that compliance with a subpoena is unduly burdensome because it requests the production of electronically stored information. (Zubulake v. UBS Warburg LLC (S.D.N.Y. 2003) 217 F.R.D. 309, 318.)
Federal courts have also held that a subpoenaed person may not object to the production of relevant nonprivileged electronically stored information on the ground that such information can be produced in paper form if the requesting party has specified production in an electronic format.”
Accordingly, to the Court of Appeals believes that the fact that the requested documents exist in paper form does not excuse Sallie Mae’s obligation under section 1985.8 to produce them in an electronic format and in a reasonably usable form.
The decision of the Court of Appeal of California, Second Appellate District, Division Two is available at http://www.courts.ca…