At some point, insurance agencies are bound to receive a subpoena for business records in the context of litigation, seeking the claims file pertaining to the lawsuit. Are agencies required to hand over the entirety of the claims file, and if not, what are their options?
In general, any party may issue a subpoena for business records to a non-party – including a party’s insurance carrier in insurance litigation – as a means of discovery. For example, a typical subpoena for records may include language such as, “any and all records pertaining to Claim No. XXXX.” Such a request is far too broad and is absolutely objectionable. What, then, should you do?
What courts consider discoverable is quite broad; information sought need not be admissible into evidence in order to be discoverable. (Ariz. R. Civ. P. 26(b)(1)). However, there are limits, particularly when objections are raised based on attorney-client privilege or the attorney work product doctrine.
Among other things, Arizona Rule of Civil Procedure rule 45 provides the court must quash or modify a subpoena (1) if it requires disclosure of privileged or other protected matter to which no exception or waiver applies, or (2) subjects a person to undue burden or expense.
The Court may quash or modify a subpoena where, among other things, (1) it requires disclosing a trade secret or other confidential research, development, or commercial information, (2) it requires disclosing an unretained expert’s opinion or information that does not describe specific occurrences in dispute and results from the expert’s study that was not requested by a party; or (3) justice so requires. (Ariz. R. Civ. P. 45(e)(2)B)).
If you are faced with a subpoena for records that raises concerns, promptly contact counsel to determine whether there are any objectionable grounds precluding disclosure. If so, proceed as follows:
Step 1: Promptly contact counsel for the issuing party and identify in writing the information or document withheld, and, without revealing the information that is itself privileged or protected, describe the nature of that information or document to enable the issuing party to assess the objections.
Step 2: Request that the issuing party modify or withdraw the subpoena. If counsel will not agree, the parties must informally attempt to reach agreement.
Step 3: If the dispute cannot be involved absent court intervention, file a Motion to Quash the subpoena. Ensure compliance with the Arizona Rules of Civil Procedure.
(Ariz. R. Civ. P. 26(c)(6)(A)).
In the meantime, the records may not be disseminated while the motion is pending.
When faced with a subpoena for business records, do not assume you have to hand it all over to the issuing party without a fight. Raise your concerns with counsel and determine if you have a valid basis to object; odds are, you do, and the Court may well agree.
Ashley Kay is an Associate at TYSON & MENDES, LLP, and primarily represents clients in defending personal injury, products liability, general liability, directors and officers liability, and professional liability claims.