Account Holder Does Not Have Standing to Move to Quash a Subpoena for its Bank Records

On February 26, 2020, Justice Friedman of the New York County Commercial Division issued a decision in Royal Bank of Can. v. Solny, 2020 NY Slip Op. 30551(U), holding that an account holder did not have standing to move to quash a subpoena for its bank records, explaining:

There is a substantial body of New York law that a depositor has not ownership or other interest in a bank's records of his accounts. Thus, he has no standing to object to a subpoena directed at them. While this rule has been subject to criticism, it remains the law of New York. The court, however, retains discretion to entertain a party's request for a protective order pursuant to CPLR 3103.

In the motion, defendants request that the court quash the subpoena or, in the alternative, limit it to what is actually discoverable based on the limited factual transaction alleged in Plaintiff's complaint. Defendants do not dispute, however, that their attempts to resolve the issue were limited to a request that plaintiff withdraw the subpoena in its entirety. . . . .

Under these circumstances, the court declines to quash the subpoena or to grant a protective order except to the following extent: On the court's own motion, the subpoena shall be modified to provide that the information requested in the subpoena shall be provided for the time period beginning on September 9, 2019, the date of the wire transfer, not June 19, 2019, . . . .

(Internal quotations and citations omitted) (emphasis added).

A big part of complex commercial litigation is giving, receiving and evaluating evidence (this is called "discovery"). The scope of discovery is broad, but as this decision shows, it is not unlimited. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client has a question regarding discovery obligations (and what to do if a litigant is not honoring those obligations).