Possession, Custody & Control: Should It Matter Where You Find Yourself?
By Chris Schultz, Level 2 Legal's EVP & General Counsel
Lawyers love a good turn of phrase – especially those with three parts. And hence “possession, custody, or control” tends to roll off the tongue of most litigators quite easily – especially those litigators who are dealing with discovery requests that cross corporate and (increasingly) international boundaries.
Rules 26(a) (required disclosures), 34(a) (document requests), and 45(a) (subpoenas) of the Federal Rules of Civil Procedure (and their analogs in the discovery rules of many states) all incorporate the concept of possession, custody, or control. Specifically, they all allow for the discovery of “documents, electronically stored information, and tangible things” in the “possession, custody, or control” of the responding party.
Now, all might be well if the Rules went on to define “possession, custody, or control.” But the Rules are silent on this score – leaving litigators and others to rely on case law for both definition and application. And therein lies the current trouble – as the law across circuits in the United States is both inconsistent and sometimes unclear. Which means your discovery obligations under the Rules noted above just might vary depending on where you find yourself in court – not a reassuring outcome.
Enter our friends at the Sedona Conference® who – consistent with their mandate of “moving the law forward in a reasoned and just way,” has issued its “Commentary on Rule 34 and Rule 45 ‘Possession, Custody, or Control,’” 17 Sedona Conf. J. 467 (2016). The Commentary summarizes the three standards (Legal Right, Legal Right plus Notification, and Practical Ability) that the circuit courts in the United States variously use to interpret and define “possession, custody, or control,” and then proposes “practical, uniform, and defensible guidelines” to replace all three standards. Those guidelines – expressed as Principles – include:
Principle 1: A responding party will be deemed to be in Rule 34 or Rule 45 “possession, custody, or control” of Documents and ESI when that party has actual possession or the legal right to obtain and produce the Documents and ESI on demand. Id. at 528.
Principle 2: The party opposing the preservation or production of specifically requested Documents and ESI claimed to be outside its control, generally bears the burden of proving that it does not have actual possession or the legal right to obtain the requested Documents and ESI. Id. at 547.
Principle 3(a): When a challenge is raised about whether a responding party has Rule 34 or Rule 45 “possession, custody, or control” over Documents and ESI, the Court should apply modified “business judgment rule” factors that, if met, would allow certain, rebuttable presumptions in favor of the responding party. Id. at 552.
Principle 3(b): In order to overcome the presumptions of the modified business judgment rule, the requesting party bears the burden to show that the responding party’s decisions concerning the location, format, media, hosting, and access to Documents and ESI lacked a good faith basis and were not reasonably related to the responding party’s legitimate business interests. Id. at 552.
Principle 4: Rule 34 and Rule 45 notions of “possession, custody, or control” should never be construed to override conflicting state or federal privacy or other statutory obligations, including foreign data protection laws. Id. at 566.
Principle 5: If a party responding to a specifically tailored request for Documents or ESI (either prior to or during litigation), does not have actual possession or the legal right to obtain the Documents or ESI that are specifically requested by their adversary because they are in the “possession, custody, or control” of a third party, it should, in a reasonably timely manner, so notify the requesting party to enable the requesting party to obtain the Documents or ESI from the third party. If the responding party so notifies the requesting party, absent extraordinary circumstances, the responding party should not be sanctioned or otherwise held liable for the third party’s failure to preserve the Documents or ESI. Id. at 572.
The Commentary is available for download via the “Publications” section of the Sedona Conference® website.