Court of Appeals Clarifies Standard for Quashing Non-Party Subpoenas

On April 3, 2014, the Court of Appeals issued a decision in Matter of Kapon v. Koch, 2014 NY Slip Op. 02327, clarifying a "subpoenaing party's notice obligation to a non-party" under CPLR 3101(a)(4) and "the witness's burden when moving to quash the subpoena."

In Matter of Kapon, the Court of Appeals concluded:

that the subpoenaing party must first sufficiently state the circumstances or reasons underlying the subpoena (either on the face of the subpoena itself or in a notice accompanying it), and the witness, in moving to quash, must establish either that the discovery sought is utterly irrelevant to the action or that the futility of the process to uncover anything legitimate is inevitable or obvious. Should the witness meet this burden, the subpoenaing party must then establish that the discovery sought is material and necessary to the prosecution or defense of an action, i.e., that it is relevant.

(Internal quotations omitted). The Court explained:

CPLR 3101(a)(4) is one mechanism by which a party may obtain discovery from a nonparty. It provides that there shall be full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof, by: . . . (4) any other person, upon notice stating the circumstances or reasons such disclosure is sought or required.

Prior to its amendment in 1984, section 3101(a)(4) required a party seeking disclosure from a nonparty to first obtain a court order based on "adequate special circumstances". The 1984 amendment loosened that requirement by allowing for the discovery of any person who possesses material and necessary evidence," and eliminating the requirement that a party seeking disclosure first obtain a court order; the intent underlying the amendment was to address case law that had interpreted former section 3101(a)(4) as prohibiting parties from seeking discovery from nonparty witness without first securing a court order, an interpretation the Legislature deemed contrary to the purpose of the disclosure statutes. Thus, while the typical mechanism of securing discovery from a nonparty pursuant to CPLR 3101(a)(4) is the issuance of a subpoena with notice, that is the only meaningful distinction between the mechanisms seeking disclosure from parties and nonparties. Because a nonparty is likely to be less cognizant of the issues in pending litigation than a party, section 3101(a)(4)'s notice provision mandates that the nonparty is apprised of the circumstances or reasons as to why the party seeks or requires the disclosure.

. . .

Since the 1984 amendment, however, there has been a split among the departments concerning what "circumstances or reasons" are required before disclosure from a nonparty may be obtained pursuant to section 3101(a)(4). The First and Fourth Departments have adopted a "material and necessary" standard, i.e., that the requested discovery is relevant to the prosecution or defense of an action.

The Second and Third Departments, while acknowledging that the "special circumstances" requirement no longer applies, nonetheless require the party seeking discovery to meet the "material and necessary" standard and more. Specifically, in those departments, a motion to quash a subpoena will be granted if "the party issuing the subpoena has failed to show that the disclosure sought cannot be obtained from sources other than the nonparty, and properly denied when the party has shown that the evidence cannot be obtained from other sources".

We conclude that the "material and necessary" standard adopted by the First and Fourth Departments is the appropriate one and is in keeping with this State's policy of liberal discovery. The words "material and necessary" as used in section 3101 must "be interpreted liberally to require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity". Section 3101(a)(4) imposes no requirement that the subpoenaing party demonstrate that it cannot obtain the requested disclosure from any other source. Thus, so long as the disclosure sought is relevant to the prosecution or defense of an action, it must be provided by the nonparty.

(Internal quotations and citations omitted) emphasis added). On the issue of what "notice stating the circumstances or reasons such disclosure is sought or required" a non-party must be given, the Court of Appeals explained

the subpoenaing party's notice obligation was never intended by the Legislature to shift the burden of proof on a motion to quash from a nonparty to the subpoenaing party, but, rather, was meant to apprise a stranger to the litigation the circumstances or reasons why the requested disclosure was sought or required.

The subpoenas here plainly satisfy the notice requirement. They not only included the date, time and location of the depositions, but also affixed copies of the amended complaint in the California action detailing the relationship between AMC and Kurniawan. The notice served the function intended by the Legislature: it gave petitioners sufficient information to challenge the subpoenas on a motion to quash. Once [the party issuing the subpoena] met that minimal obligation, it was then petitioners' burden to establish that they were entitled to prevail on the motion to quash.

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

This decision clarifies several frequently-litigated issues regarding non-party subpoenas. It should be required reading for anyone litigating these issues going forward.