In Estate of Daher, by and through Daher v. LSH Co. (E.D. Pa. July 12, 2023), the plaintiff, seeking to recover the proceeds of a life insurance policy, served subpoenas on a nonparty (Coventry) to obtain documents related to a finance program administered by Coventry under which plaintiff alleged the policy was generated. Coventry objected to the subpoena on a number of grounds, including that the confidential data sought was not in its "possession, custody or control" but rather in the possession of a sister company, and the data sought was encrypted and therefore inaccessible. Plaintiff moved to compel production.
Specifically, plaintiff moved to compel documents and information residing on databases related to the deceased that Coventry had purchased from American Viatical Services (AVS), a defunct company that prepared life expectancy reports on insureds. Coventry opposed the motion to compel AVS documents and data on several grounds. First, Coventry argued it should not be required to produce the AVS database because it was replete with confidential information pertaining to tens of thousands of people. Judge Quiñones Alejandro rejected this argument because plaintiff only sought information concerning the deceased, not the entire contents of the database. Thus, concern that confidential information unrelated to the litigation would be disclosed through compliance with the subpoena was not a basis to avoid compliance. Second, Coventry argued the requested data was not within its possession, custody, or control because the data was owned by a sister company. This argument, too, was rejected. Although "separate and distinct corporate identities are not readily disregarded," Coventry clearly had the "ability to obtain upon demand" the requested documents from its sister company. Finally, Coventry argued that much of the requested data was encrypted and thus inaccessible. As a result, Coventry would need to engage a third-party consultant to decrypt the data. This exercise, purportedly, would pose an undue burden on Coventry. Finding Coventry's undue burden argument insufficient, Judge Quiñones Alejandro explained that Rule 26(b)(2)(B) provides that a party need not produce ESI upon a showing that the information is "not reasonably accessible because of undue burden or cost." Here, there was no evidence to support Coventry's "bald assertion" that "engaging a consultant to decrypt the AVS data would pose an undue burden or cost."
The court also directed, over objection, that Coventry provide the name and contact information of a data consultant who could decrypt the AVS data. Coventry argued that Rule 45 does not "require the creation of documents that do not already exist" and so it should not be compelled to provide such information. In issuing her directive, Judge Quiñones Alejandro rejected this argument because Coventry previously informed plaintiff that it possessed the requested contact information, so any claim that compliance with the subpoena would require Coventry to create new documents that did not already exist rang hollow.
This case offers a reminder that a party objecting to discovery as disproportionate or burdensome bears the burden of making a specific objection and showing that discovery fails the proportionality calculation mandated by Rule 26(b) by coming forward with specific information. Indeed, as federal courts repeatedly hold, the moving party must make a particular and specific showing of oppression, undue burden, or expense, unless the requested discovery is patently outside the bounds of Rule 26(b)(1). Additionally, that data is encrypted does not per se mean the data is "inaccessible" for purposes of discovery.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.