Look Before You Leap: Nine Fundamentals of Effective Subpoena Responses for Nonprofits and Associations

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In-house general counsel who are unfamiliar with litigation processes or government investigations (as applicable) should strongly consider retaining experienced external counsel when a subpoena is first received in order to minimize both the costs incurred and the level of legal jeopardy the organization faces.

Whether state or federal, civil, or administrative, subpoenas can be (sometimes surprisingly) costly to administer and answer. However, taking time to handle subpoenas properly is critical. Here are the fundamental considerations that shape an effective response and that organizations should keep in mind when a subpoena is received.

1. Timing and Service

Subpoenas (or similar vehicles, such as civil investigative demands) are governed by their own rules and regulations (e.g., Federal Rule of Civil Procedure 45). Key among those rules is the time allotted for the recipient to object to or challenge the subpoena. To avoid default or waiver, determine your response deadline early on and consider requesting an extension of the response window if the circumstances necessitate gathering more information to inform your response. Additionally, if you are asked to accept service of process of a subpoena, remember that accepting service of process does not mean accepting the terms of the subpoena itself. This can show an initial posture of good faith and cooperation, which the circumstances may warrant.

2. Preservation Hold Notice Issuance

Notify key executives and records custodians about the subpoena early on and communicate the significance of the process. Instruct custodians and IT personnel to preserve and cease auto-delete functions of any potentially relevant information sources. While most everyone is aware of the need to preserve all documents and emails, authorities are increasingly seizing on entities' use of modern workplace collaboration tools and ephemeral messaging services as a key aspect of implementing a reasonable preservation hold. If your organization uses applications like Microsoft Teams or Slack, or social media platforms like Snapchat or Facebook, in ways related to the subpoena's subject matter, those tools need to be locked down, auto-delete needs to be paused, and all information needs to be retained once you've received the subpoena or information request.

3. Applicable Law

The scope of attorney-client, work product, deliberative process, and other relevant litigation privileges varies by jurisdiction. Similarly, protections for confidential, competitively sensitive, or trade secret information can vary across jurisdictions. So too can the scope of reach of the demand to your organization (e.g., evaluating your custody and control over the information in possession of your organization's members or advisors). Clarify these key legal points early in crafting your response strategy.

4. Forum Considerations

Gather background information on the issuing agency, the judge, and/or the forum, as applicable. Is it plaintiff-friendly or not? Is it business-friendly or not? What is your organization's connection to or relationship with the forum or agency? At what stage is the litigation or investigation? The response strategy and approach to outreach to the issuing authority are sometimes highly dependent on these considerations.

5. Fellow Travelers

Understand whether your organization is similarly situated to others who have also received a subpoena or civil investigative demand before staking out your position in response. If your organization aligns on relevant legal issues with one or more parties in the litigation or with other subpoenaed entities, consider whether to establish a common interest agreement. Under such agreement, you may have the opportunity to align with allies on issue scope, cost-sharing, and legal principles in ways that can strengthen your response position.

6. Costs

Aside from being disruptive and distracting, electronic discovery, document collection, and review can be very costly to any nonprofit or association. If the scope of a subpoena or investigative letter presents cost concerns, consider whether you are entitled to cost-sharing or cost-shifting under the applicable rules. For example, federal civil document subpoenas generally allow the subpoenaed party to shift the costs of compliance if the party has no interest in the outcome of the proceedings, has limited ability to absorb these compliance costs relative to the demanding party, and if the case does not involve issues of public importance. Case law from the relevant forum will amplify the factors to be weighed in order to shift compliance costs.

7. Insurance and Assignment

In some circumstances, receipt of a subpoena or investigative demand can trigger notice obligations to your insurance policy. Notifying your policy holder early on increases the chances of having coverage if and when appropriate, so be aware of your policy terms. Occasionally, you may be in a situation where the subpoena or demand letter falls within the scope of authority over claims you've assigned to another entity to respond or negotiate on your behalf. In that case, communicate the subpoena and confirm the response authority to the assignee as soon as possible.

8. Regulators and Repeat Players

Don't overlook instances when a subpoena response could implicate areas of interest to your regulators. Plan your response with this awareness. The subpoena itself may be an act of regulatory leverage or merely an inadvertent trap for the unwary association that answers without careful consideration of the implications. When substantively responding, draw your objections and set the boundaries of issue scope with awareness of whether you're likely to face copycat subpoenas or litigation in the future. Avoid viewing a single subpoena in isolation if the same issues could recur for your organization.

9. Correspondence with Opponent

The process of answering and enforcing subpoenas is one that tends to trundle on, and it may benefit your organization to take ample time in responding in order to avoid errors and pitfalls such as those noted above. Maintain a clear record of communications with your opponent from the start and throughout your negotiations. Discussions on a range of topics, including compliance, issue scope, time periods, priority, costs, and relevance, may take place over the phone. It is a good practice to follow up these conversations with a confirmatory letter or email. This not only demonstrates diligence and good faith in your efforts to respond but can also create a record supporting compliance or cost-sharing arguments if the matter reaches a motion-to-compel stage.

• Molly L. Wiltshire

  Partner
• Brian D. Schneider

  Partner