There is always a tension between requiring a third party to produce relevant discovery and protecting that third party against "unduly burdensome" discovery requests. By order dated September 3, 2015, Commissioner Bradley V. Manning of the Delaware Superior Court struck such a balance in granting-in-part and denying-in-part a Motion to Compel and related Motion to Quash. See September 3, 2015 Order in Gemalto, Inc. v. Merchant Customer Exchanges, LLC, C.A. No. N15M-07-052 (Del. Super. Ct.), available here.
In an underlying breach of contract dispute between Gemalto, Inc. and Merchant Customer Exchanges, LLC ("MCX") pending before the American Arbitration Association ("AAA"), Gemalto sought discovery from MCX regarding MCX's rationale for terminating its agreement with Gemalto and subsequently hiring another company, Paydiant, to finish the job. Gemalto also sought similar discovery from Paydiant, a non-party, and served a subpoena duces tecum on Paydiant's registered agent in Delaware. Dissatisfied with Paydiant's response to the subpoena, Gemalto filed a Motion to Compel in the Delaware Superior Court. Paydiant then filed a Motion to Quash the subpoena.
Gemalto's subpoena requested documents relating to ten topics, including documents regarding the reason why MCX terminated the contract with Gemalto. As Commissioner Manning noted, such documents would logically be in the possession of MCX. Commissioner Manning further noted the following: "As a non-party to the litigation, requiring Paydiant to produce any discovery is burdensome; whether it is 'unduly burdensome' is a question for another day. In any event, as a non-party, Paydiant should not be placed in a position of providing discovery that is duplicative, cumulative or could more conveniently and reasonably be located in the possession of its creator—MCX." The Court, however, "recognize[d] that in the course of soliciting Paydiant to take over the software development from Gemalto, MCX may have communicated information concerning the reason for Gemalto's termination to Paydiant; information relevant to Gemalto's claim."
Accordingly, Commissioner Manning ordered Paydiant to produce documents relating to three of the ten subpoena topics relating specifically to the Gemalto-MCX contract and MCX's rationale for terminating the contract. Commissioner Manning specifically excluded trade secrets and commercially sensitive information from his Order, stating that such information need not be produced.
This Order provides a good example of the balancing act a Court must perform in connection with a subpoena for documents. The requesting party's right to the information must be carefully balanced against the burdensomeness to the third party of complying with the subpoena.
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