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June 4, 2003


The opinion of the court was delivered by: Lewis A. Kaplan, District Judge

PRETRIAL ORDER NO. 155 (Rule 45 Motion — Degge Group, Ltd.)
Degge Group, Ltd. ("Degge") moves, pursuant to Fed.R.Civ.P. 45, for an award of (a) $21,649.21 plus interest in respect of the labor of its personnel in complying with a PEC subpoena, (b) attorney's fees in connection with subpoena compliance and the deposition in question, and (c) attorney's fees and costs incurred in seeking this recovery.


The facts are simply stated. Degge is a consulting firm that provides services to pharmaceutical manufacturers and was involved with Warner Lambert and related entities regarding Rezulin. On May 15, 2001, the PEC issued a subpoena to Degge for a deposition and production of documents. It required production of 23 categories of documents, virtually all limited to materials relating to Rezulin and to Degge's relationship with the manufacturer defendants in regard to Rezulin. (Motion, Ex. 2) Degge did not object to the subpoena, produced the documents, and appeared for the deposition, all of which occurred in 2001.

Commencing in 2001, Degge sought reimbursement from the PEC for copying costs. It claimed also that it had expended more than 159 hours of the time of its staff in complying with the subpoena and demanded payment of $21,649.21 in that respect. (Motion, Ex. 5) The sum was arrived at by applying hourly rates ranging from $85 for a legal assistant to $350 for Degge's president to the time each expended in complying with the subpoena (including preparation for and attendance at the deposition by the witness) and adding to that figure $97.96 in miscellaneous expenses. The PEC paid all or part of the copying costs, which no longer are at issue. It refused to pay for the labor of Degge's personnel in complying with the subpoena.


Rule 45 contains three relevant provisions designed to protect non-parties served with subpoenas from the imposition upon them of undue burden and expense.

First, Rule 45(c)(1)(B) provides that a person served with a subpoena to produce documents may serve written objections. If such objections are served, production is stayed unless and until the party serving the subpoena obtains a court order upon notice to the subpoenaed person and motion. In issuing such an order, the court "shall protect" non-parties "from significant expense resulting from the inspection and copying commanded." This rule has no bearing here because Degge never objected to the subpoena.

Second, Rule 45(c)(3)(A)(iv) obliges a court, "[o]n timely motion," to quash or modify a subpoena if it "subjects a person to undue burden." Degge, however, never moved to quash or modify the subpoena.

The third provision is Rule 45(c)(1). It imposes a duty on an attorney responsible for issuing and serving a subpoena to "take reasonable steps to avoid imposing undue burden or expense on a person subject to that subpoena." The court is obliged to enforce that duty by imposing "upon the party or attorney in breach of this duty an appropriate sanction, which may include, but is not limited to, lost earnings and a reasonable attorney's fee." Thus, the Court first must determine whether the PEC failed to take reasonable steps to avoid imposing undue burden or expense on Degge. If it so finds, it must determine an appropriate sanction.

The subpoena undeniably casts a broad net. Nevertheless, the scope of the material sought was entirely appropriate in view of the matters at issue in this action. In consequence, the terms of the subpoena itself did not constitute a breach of counsel's duty to avoid imposing undue burden or expense.

Even though the subpoena may have been reasonable in seeking production of the materials it describes, counsel theoretically might have breached the Rule 45(c)(1) duty if he had been informed of circumstances that rendered compliance unduly burdensome or expensive but declined to take reasonable steps to alleviate the situation. In this case, Degge's counsel advised the PEC's attorney, prior to the deposition, that Degge would be producing many thousands of documents as well as electronic files. According to Degge's attorney, the PEC attorney agreed that plaintiffs would reimburse Degge for the production, although she concedes that the "reimbursement details were not worked out." Rice Aff. ¶ 3. The PEC attorney, for his part, acknowledges such a conversation, but says that it related solely "to expenses associated with copying and delivery of the documents." Tisi Aff. ¶ 7.

This inconclusive exchange is insufficient to establish an agreement by the PEC to pay for anything beyond copying and delivery charges. Even more important, it fails to establish any breach by the PEC attorney of his duty to take reasonable steps to alleviate undue burden or expense. As far as he knew prior to the deposition, he had served a facially reasonable subpoena. Degge had not objected to compliance as unduly burdensome, notwithstanding its right to have done so under Rule 45(c)(1)(B) and to have moved to quash or modify under Rule 45(c)(3)(A), and was collecting and producing the documents. There is no evidence he was told that Degge personnel were being diverted from profitable work in which they otherwise would have been engaged or, for that matter, that Degge was incurring any incremental costs, apart from copying and delivery charges, attributable to subpoena compliance. He therefore cannot be said to have breached his duty to take reasonable steps to avoid undue burden and expense. In view of this conclusion, there is no occasion to consider whether Degge otherwise would be entitled not only to reimbursement for any incremental costs it may have incurred (beyond those already paid), but to the profit that presumably would be inherent in charging the PEC what seem to be its regular hourly rates charged to paying clients for collecting documents pursuant to a subpoena.


The Court is not unsympathetic to Degge's situation. It is a non-party, and it probably sustained some incremental costs in complying with this subpoena. If it regarded those burdens as excessive, however, it had the right to obtain a court determination in advance of incurring those costs. It did not avail itself of that opportunity. To be sure, the failure to object in advance does not foreclose a motion for sanctions under Rule 45(c)(1). But the bar to success on such a motion is high. It requires a ...

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