Can a Non-Party Recover Fees for Complying with a Discovery Subpoena in New York State Court?
The Scenario: You represent an entity that receives a non-party discovery subpoena requesting a voluminous document production. To further complicate matters, some of the documents requested are subject to the attorney-client privilege and/or other confidentiality restrictions or privileges. As a result, your client asks you to assist in preparing the response to the subpoena and in producing responsive documents, including undertaking a review of all documents for privilege.
The Quandry: Your client will incur legal fees to respond to the non-party subpoena, and wants to know if it is entitled to reimbursement for its attorneys’ fees from the party issuing the subpoena.
The Answer: Prior to October 2024, it was unclear as to whether legal fees would be recoverable under the scenario posed above. CPLR 3122 provides, in pertinent part:
- (d) Unless the subpoena duces tecum directs the production of original documents for inspection and copying at the place where such items are usually maintained, it shall be sufficient for the custodian or other qualified person to deliver complete and accurate copies of the items to be produced. The reasonable production expenses of a non-party witness shall be defrayed by the party seeking discovery.
Although the statute clearly mandates that a non-party is entitled to recover it’s “production expenses” (which expenses would include copying documents), the last sentence of this statute does not mention “legal fees” as part of those permitted expenses. However, in many circumstances, the responding party will incur legal fees as part of its “production expenses”, particularly if it wants its attorneys to conduct the privilege review.
Numerous Courts have reviewed CPLR 3122(d) to determine whether attorneys’ fees will constitute “production expenses.” Previously, various courts issued conflicting decisions as to whether a non-party was entitled to recover attorney’s fees incurred in responding to a subpoena.
In L.F. v. M.F., 78 Misc.3d 810 (Sup. Ct. Nassau Co. 2023), the court reviewed CPLR 3122(d) to determine whether attorneys’ fees constituted “production expenses” which would be recoverable. The court denied the non-party subpoena recipient’s request for attorneys’ fees, holding that the plain language of the statute did not specifically authorize the recovery of attorneys’ fees. The court held that permitting the recovery of attorneys’ fees by a non-party subpoena recipient pursuant to CPLR 3122(d) would be an expansion or amplification of the statute, and the court was not willing expand the statute.
On the other hand, numerous trial courts did allow non-party subpoena recipients to recoup attorneys’ fees incurred in responding to a subpoena. See Matter of Khagan (Elghanayan), 66 Misc.3d 335 (Sur. Ct. Queens Co. 2019); Mayer v Marron, 2018 WL 878613 (Sup. Ct. N.Y. Co. 2018); see also Walt Disney Co. v Peerenboom, 2019 NY Slip Op 30181[U](Sup Ct, NY Co. 2019).
In fact, one New York State trial court issued an order which specifically disagreed with the L.F. v. M.F. decision. In Peerenboom v. Marvel Entertainment, LLC, 2024 WL 3496775 (Sup. Ct. N.Y. Co. 2024), the Court granted a non-party subpoena recipient’s reasonable attorney’s fees on the basis that there was no decisional authority barring a non-party from such recovery. The court expressly held that the party seeking the non-party discovery by way of a subpoena would be obligated to pay those fees.
The First Department addressed this issue head on in Barons Media, LLC v. Shapiro Legal Grp., PLLC, 231 A.D.3d 639, 640, 219 N.Y.S.3d 63 (1st Dep’t October 24, 2024). In Barons Media LLC, the appellate court affirmed a trial court order granting a non-party subpoena recipient’s request for legal fees incurred in responding to a subpoena. In doing so, the First Department specifically held that “reasonable production costs” may include “reasonable fees charged by outside counsel and e-discovery consultants” for gathering and reviewing documents for relevance and privilege before production, in addition to those charged by vendors involved in the harvesting and storage of ESI”. Id. Thus, the Barons Media LLC decision made it overwhelmingly clear that a non-party recipient may recover reasonable attorney’s fees for responding to a subpoena.
There is one limitation on the non-party subpoena recipient’s recovery of attorney’s fees – the court retains jurisdiction to determine the reasonableness of the fees sought. Id. In Barons, the First Department affirmed the lower court’s determination that the non-party was only entitled to reimbursement of two-thirds of its claimed fees, since the billing rate and some of the time entries of outside counsel could be deemed unreasonable.
So far, only one trial court has reviewed the Barons decision and the issues raised concerning reimbursement of attorneys’ fees for responding to a non-party subpoena. In Beast Investments LLC v. Celebrity Virtual Dining, LLC, 2024 WL 4784254 (Sup. Ct. N.Y., Co. 2024), Justice Schechter followed the appellate division’s lead in Barons Media, and granted the non-party subpoena recipient its ESI costs, vendor costs, and attorneys’ fees related to reviewing document for responsiveness and privilege. More specifically, Justice Schechter specifically expounded on the Barons decision to hold that “[t]he Court regards the suggestion that the [non-party] should not be entitled to reimbursement for reviewing documents for responsiveness and privilege to be near frivolous.” Judge Schecter concluded that the sole avenue to “challenge” the non-party subpoena recipient’s fees was to challenge the reasonableness of the attorneys’ fees, and not whether or not the non-party was entitled to recover such fees.
The upshot of the Barons Media LLC case is that New York State Appellate Courts have confirmed that non-parties can now obtain reimbursement of their legal fees for responding to a subpoena, including those legal fees incurred for in connection with a privilege review. Additionally, it is clear under this recent caselaw that those legal fees must be borne by the party who sought the non-party discovery in New York State Courts.
These recent cases bring good news for clients, who now have a clear right to recover attorneys’ fees incurred in responding to a non-party discovery subpoena in New York State Court.
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Benjamin Blum focuses his practice on all aspects of complex corporate, commercial and real estate litigation. For questions about the topics covered herein, do not hesitate to contact Mr. Blum or your Windels Marx relationship lawyer.
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