Third Party Discovery: The Balancing Act Of Relevance Versus Burdensomeness

Author:Mr Austen Endersby
Profession:Fox Rothschild LLP

There is always a tension between requiring a third party to produce relevant discovery and protecting that third party against "unduly burdensome" discovery requests. By order dated September 3, 2015, Commissioner Bradley V. Manning of the Delaware Superior Court struck such a balance in granting-in-part and denying-in-part a Motion to Compel and related Motion to Quash. See September 3, 2015 Order in Gemalto, Inc. v. Merchant Customer Exchanges, LLC, C.A. No. N15M-07-052 (Del. Super. Ct.), available here.

In an underlying breach of contract dispute between Gemalto, Inc. and Merchant Customer Exchanges, LLC ("MCX") pending before the American Arbitration Association ("AAA"), Gemalto sought discovery from MCX regarding MCX's rationale for terminating its agreement with Gemalto and subsequently hiring another company, Paydiant, to finish the job. Gemalto also sought similar discovery from Paydiant, a non-party, and served a subpoena duces tecum on Paydiant's registered agent in Delaware. Dissatisfied with Paydiant's response to the subpoena, Gemalto filed a Motion to Compel in the Delaware Superior Court. Paydiant then filed a Motion to Quash the subpoena.

Gemalto's subpoena requested documents relating to ten topics, including documents regarding the reason why MCX terminated the contract with Gemalto. As Commissioner Manning noted, such documents would logically be in the possession of MCX. Commissioner Manning further noted the following: "As a non-party to the litigation, requiring Paydiant to produce any discovery is burdensome; whether it is 'unduly burdensome' is a...

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