Scientific Applications & Research Associates v. International

Background

SARA’s underlying lawsuit against Zipline alleges infringement of U.S. Patent No. 7,606,115 and trade-secret misappropriation. Sequoia, a nonparty, sought attorney’s fees and costs incurred in responding to SARA’s third-party subpoena and motion to compel, as well as in bringing its fee motion.

SARA first subpoenaed Sequoia for documents concerning Sequoia’s valuation of Zipline. After Sequoia objected, SARA attempted to obtain overlapping documents from Zipline. When those efforts did not produce the requested information, SARA contacted Sequoia again and identified six key example documents to help narrow the request. Sequoia agreed to produce one document, later offered a small production near the end of fact discovery, and made itself available for a meet-and-confer after fact discovery closed. SARA then moved to compel additional production. The court denied that motion because SARA had not persuasively explained how third-party investors’ independent evaluations were relevant to a claim or defense.

Legal standards

Federal Rule of Civil Procedure 45(d)(1) requires a party or attorney issuing a subpoena to take reasonable steps to avoid imposing undue burden or expense on the subpoena recipient. Sanctions under that rule are discretionary and may include reasonable attorney’s fees. The court explained that sanctions generally require evidence of an undue burden imposed by an oppressive subpoena, a facially defective subpoena, or bad faith. Merely losing a motion to compel does not automatically lead to Rule 45 sanctions.

The court also considered Federal Rule of Civil Procedure 37(a)(5)(B), which addresses reasonable expenses incurred in opposing a motion to compel. That rule does not require payment when the motion was substantially justified or when other circumstances would make an award unjust.

Court’s analysis

The court denied fees for responding to the subpoena. Although SARA initially served Sequoia before seeking the documents from Zipline, SARA later attempted to obtain the information from Zipline before returning to Sequoia. The court also found that Sequoia’s evidence of burden consisted of vague, conclusory statements rather than specific information about the time, employees, cost, or volume of records involved.

The court separately denied fees for opposing the motion to compel. It explained that Rule 45 sanctions primarily address the costs of complying with a subpoena, not merely the costs of contesting a motion to compel. The court further found that the order denying SARA’s motion to compel did not determine that the requested information was wholly irrelevant under every possible legal theory; it determined only that SARA had not met its burden to explain the information’s relevance. The court also found that SARA had attempted to tailor its requests, that counsel had communicated in good faith, and that Sequoia had declined to participate in a final meet-and-confer before SARA filed the motion.

Disposition

In the exercise of its discretion, the court DENIES Third-Party Sequoia’s motion for attorney’s fees and costs. The order states that it disposes of Docket No. 160.