Court Holds Non-Party in Contempt for Failing to Produce Documents in Response to Subpoena

On March 26, 2021, Justice Cohen of the New York County Commercial Division issued a decision in Impact Car Park, LLC v. Mutual Redevelopment Houses, Inc., 2021 NY Slip Op. 30950(U), holding a non-party in contempt for failing to produce documents in response to a subpoena, explaining:

EELD's conduct in failing to comply with the Subpoena, and failing to identify any grounds for its non-compliance, warrants imposition of sanctions. EELD acknowledged receipt of the Subpoena in March 2020 and even negotiated an extension of the deadline to produce responsive documents. But EELD has since failed to produce any documents and did not respond to repeated emails from Plaintiffs' counsel about the status of EELD's compliance. As a result, over a year after the Subpoena was served, EELD still has not produced a single document in response, forcing Plaintiff to file the instant motion.

The remedy for failing to comply with a judicial subpoena is set out in CPLR 2308 [a]: failure to comply with a subpoena issued by a judge, clerk or officer of the court shall be punishable as a contempt of court. If the witness is a party the court may also strike his or her pleadings. A subpoenaed person shall also be liable to the person on whose behalf the subpoena was issued for a penalty not exceeding one hundred fifty dollars and damages sustained by reason of the failure to comply.

The statute thereby identifies two forms of sanctions applicable to a non-party that disregards an attorney-issued subpoena - contempt of court, and also a $150 penalty plus damages sustained by reason of the failure to comply.

The Court therefore finds EELD in contempt of court. As for the amount of the sanction, Judiciary Law § 773 permits recovery of attorney's fees from the offending party by a party aggrieved by the contemptuous conduct. Plaintiff is entitled to recover the costs and expenses, including reasonable attorneys' fees, it incurred in pursuing this motion.

In addition, EELD is liable to Plaintiff for the statutory penalty under CPLR 2308[a], in the amount of $150.

(Internal quotations and citations omitted).

A big part of complex commercial litigation is giving, receiving and evaluating evidence (this is called "discovery"). This decision relates to the problem of litigants (or as here, even non-parties) not performing their discovery obligations and what can happen to them if they do not. 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).