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Non-Party Not Subject To Same Broad Rules Of Discovery As Party To Suit

By on March 4, 2022 in Discovery with 0 Comments

The plaintiff Trenton Renewable Power, LLC owned and operated an anaerobic biodigester facility in Trenton and contracted with non-party Symbiont Science, Engineering and Construction, LLC (“Symbiont”) to design and build out the facility.  Defendant Denali Water Solutions, LLC (“Denali”) contracted with plaintiff to supply the organic waste for processing at the facility in Trenton.  The issue in Trenton Renewable Power, LLC v. Denali Water Solutions, LLC, 2022 N.J. Super. LEXIS 9 (App. Div. Jan. 24, 2022) was the scope of discovery that could be obtained from the non-party Symbiont via a subpoena.

A disagreement arose between plaintiff and Denali concerning Denali’s agreement to deliver under the contract.  Denali cited the contract’s force majeure provision, claiming that the Covid-19 pandemic made it impossible for it to perform as required by the agreement.  Further, Denali claimed that the Trenton Facility could not process all categories and quantities of waste Denali was required to deliver under the contract due to a fundamental design flaw and inadequate equipment and technology at the plant.  The parties were not able to resolve this dispute and plaintiff filed suit.

In discovery, Denali served a subpoena upon Symbiont to obtain records.  Symbiont filed a motion to quash the subpoena or, in the alternative for a protective order limiting the scope of the request on the basis that it would be unduly burdensome and also sought to shift the cost of compliance to Denali.  That application was denied and Symbiont filed a motion before the Appellate Division seeking leave to appeal the denial of its motion, which was granted.

This subpoena was very broad, requesting that Symbiont produce for a deposition a corporate designee with knowledge of 17 different topics, as well as a voluminous amount of documents.  Symbiont’s counsel provided a list of 55 custodians who worked on the project and designated 11 who were key personnel and suggested that the parties confer to identify the custodians whose records Denali would like Symbiont to search.  Denali refused to limit its request.

In its motion to quash the subpoena, Symbiont’s counsel represented that it had identified four computer drives that included some information on the Trenton project with approximately 40,000 files and approximately 136 gigabytes of data.  This did not include the e-mails of Symbiont’s 100 workers, most of whom had some involvement with the Trenton project, because the e-mails were stored elsewhere in the system.  Symbiont searched only the e-mails that the key personnel had identified and located about 31,000 potentially responsive e-mails.  Symbiont’s counsel certified that an outside vendor estimated the cost of producing the data would be $10,000 plus an additional $5,330 per month in storage fees.

The trial court judge did not find Denali’s demands of Symbiont to be overly broad or unduly burdensome and denied Symbiont’s motion to quash.  Upon appeal, Symbiont renewed its argument that it would be an unreasonable burden and cost in providing the electronically stored information (ESI) demanded by Denali and the same information was successful from other sources, including plaintiff.

The Appellate Division noted that, while the discovery rules are to be construed liberally in favor of a broad pretrial discovery, discovery rights were not unlimited.  For good cause shown, any party can seek an order, for good cause shown, when “justice requires to protect a party or person from annoyance, embarrassment, impression, or undue burden or expense.”

The Court noted that the status of a witness as a non-party entitles the witness to consideration regarding expenses and inconvenience.  Here, the Appellate Division found that the trial court judge had utilized the standard concerning parties in determining whether to quash a subpoena, not the standard governing a subpoena issued upon a non-party.  He failed to consider the distinction between the burden plaintiff carried in opposing Denali’s broad discovery request and the “qualitatively” different burden imposed upon Symbiont.

Denali argued that the discovery from Symbiont was necessary to support its claim that the Trenton Facility’s imperfections made it impossible for plaintiff to process the organic waste products that Denali was contractually obligated to deliver under the agreement.  Some of the information Denali sought from Symbiont would undoubtedly be in plaintiff’s possession, as would communications between plaintiff and Symbiont regarding the Trenton Facility’s design and operation.  Yet, rather than waiting for the discovery responses to be provided by plaintiff, Denali chose to compel production from both at the same time.  Denali acknowledged that it was essentially a strategic decision on its part and not compelled by any necessity.

The Appellate Division found that the trial court judge did not recognize the burden upon Symbiont in how much work it would take to produce its ESI subject to assertions of privilege and confidentiality. Thus, the Court reversed the trial court’s rulings but expressed no opinion on Denali’s ability to compel production of the requested information from Symbiont in the future if the parties could otherwise agree to an appropriate scope of production. 

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About the Author

About the Author:

Ms. Ramos is an Executive Committee Member and Co-Chair of the Litigation Department at Capehart Scatchard, P.A. located in Mount Laurel, New Jersey. She is an experienced litigator with over 30 years experience handling diverse matters. Practice areas include tort defense, business litigation, estate litigation, tort claims and civil rights defense, construction litigation, insurance coverage, employment litigation, shareholder disputes, and general litigation.

For the years 2020-2023, Ms. Ramos was selected for inclusion in The Best Lawyers in America© in the practice area of Litigation - Insurance. The attorneys on this list are selected based upon the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical area and legal practice area. A complete description of The Best Lawyers in America© methodology can be viewed via their website at: https://www.bestlawyers.com/methodology.

In 2021, Capehart Scatchard and Ms. Ramos received the “Best Law Firm” ranking in the area of Litigation – Insurance (Metro, Tier 3) published by U.S. News & World Report and Best Lawyers®. Law firms included on the list are recognized for professional excellence with consistently impressive ratings from clients and peers. To be eligible for a ranking, a firm must have at least one attorney who has been included in the current edition of Best Lawyers in America, which recognizes the top five percent of practicing lawyers in the United States. Betsy Ramos (Litigation – Insurance) was recognized for this prestigious award in the 2021 edition. For a description of the “Best Law Firm” selection methodology please visit: https://bestlawfirms.usnews.com/methodology.aspx.

“Best Law Firms” is published by Best Lawyers in partnership with U.S. News & World Report. For a description of the selection methodology please visit: https://bestlawfirms.usnews.com/methodology.aspx.

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