What’s a Record Anyway? Understanding How a Business Record is Defined Can Help Limit Overbroad Third Party Subpoena Requests
Owen M. Praskievicz, Esq.
Schwartz Semerdjian Cauley & Moot, LLP
For many businesses in California, receiving a third-party subpoena for records often comes as a complete surprise and, in some cases, a Tylenol for the ensuing headache. Although some businesses may routinely receive these subpoenas and have a policy for responding, many small businesses receiving a third-party subpoena for the first time may be flummoxed and concerned about its implications, stressing over what it has to produce.
Businesses of all types need not fear such subpoenas, however, and responding to them need not cause any lost sleep so long as the businesses (and their attorneys) remind themselves of what exactly a “business record” is.
Unlike like requests for production served on parties to a lawsuit, third party subpoenas are limited to business records produced and prepared by the business. This may seem obvious, but breaking down the definition of what a business record is reveals some nuance to the terms “product” and “prepared by.” This article focuses on those nuances.
A brief refresher: In California, if a witness is a non-party—i.e., not a party to the action or a party affiliated witness—a deposition subpoena must be served to compel that witness’s attendance, testimony, or production of documents and things. Cal. Civ. Proc. Code §§ 2020.010-2020.510. There are four types of third-party deposition subpoenas, some of which require an oral deposition, but the most common is the subpoena for the production of business records pursuant to CCP § 2020.410.
Although Section 2020.410 tells us “how and when the subpoena must be served, when a notice to consumers must be given, who may copy the business records, how to determine admissibility of the records and other equally fascinating details, it does not tell us what is a ‘business record’ and what is not.” Urban Pacific Equities Corp. v. Superior Court (1997) 59 Cal.App.4th 688, 693.
In Urban Pacific Equities Corp., the court held that a deposition subpoena for business records, as used in Code of Civil Procedure section 2020.410 et seq., may request things like journals, account books, reports and the like—i.e., an item, collection or grouping of information about a business entity. (See id. at 692-693, note 9 (deducing a legislative assumption to the term based on a reading of the Evidence Code). Importantly, however, the term “business records” does not include records which are the product of its business. Id. at 692.
Urban Pacific Equities Corp. was a legal malpractice case in which a plaintiff subpoenaed a court reporter for a deposition transcript of the plaintiff’s deposition. Yes, you read that correctly—the plaintiff sought to avoid the reporter’s unconscionable $6,500 copying fee by getting an uncertified transcript via subpoena. Naturally, the trial court quashed the subpoena, but it raised an interesting question on the plaintiff’s writ of mandate. The ensuing appellate decision, a case of first impression, grappled with the meaning of what exactly a business record is, something not exactly defined under the CCP.
Noting that the copying fee was unconscionable, the Court of Appeal for the Second District, Division 1, nonetheless held “that a business records subpoena cannot be used as [plaintiff] tried to use it in this case.” Id. at 694. The court went on:
The transcript of [plaintiff’s] deposition is the product of [the court reporter’s] business, not a record of its business, and we do not think “business records” includes the product of a business entity. Rather, as used in section 2020, subdivision (d), we think ‘business records’ means an item, collection, or grouping of information about a business entity. (Compare Civ. Code, § 1799, subd. (e); see also Black's Law Dict. (6th ed. 1990) p. 199, col. 1 [defining “business records” as “[j]ournals, books of account and other records”].) In a case in which one of the parties wanted to examine a Ford Explorer, he could not obtain one by serving a business records subpoena on Ford Motor Company, notwithstanding that (leaving to one side all other objections) he could use a business records subpoena to obtain Ford's actual business records (that is, unprivileged information about how it makes its Explorers, the cost thereof and so on)-because the Explorer is Ford's product, not part of its business records. Just as Ford produces vehicles, Miller & Company produces deposition transcripts. Since substance must control over form, the fact that depositions look like business records is irrelevant.
Id. at 693-94.
Practically speaking, objecting on the grounds that a business record is a product of a business and not an actual business record is effective in limiting overbroad requests. For example, subpoena requests sometimes request reports, designs, or presentations created for clients of the business. Under the Urban Pacific Equities Corp. holding, the business can and should object to any production of those documents because they are not considered business records.
Another important limitation is that business record subpoenas to non-parties are limited to records “prepared by” the subpoenaed business. Even where the subpoena describes the correct type of documents, it may not be enforceable where the business records sought were prepared or generated by entities other than the subpoenaed business. See Evid. Code § 1561(a) (records custodian must attest records were “prepared by” subpoenaed business); Cooley v. Sup.Ct. (Greenstein) (2006) 140 Cal.App.4th 1039, 1041.
For example, documents prepared by governmental entities that are not records of the subpoenaed business and were not prepared by the business are not discoverable in a business records subpoena. Thus, when a record requests police reports or other governmental reports that your business may or may not have in its possession, the business need not concern itself with tracking these reports down. They are not required.
The case of Cooley v. Sup.Ct. (Greenstein) broke down the term “prepared by.” Noting that a deposition subpoena for business records is to be directed to the custodian of those records or another person qualified to certify the records under Section 2020.410, subd. (c), the court stated that “[a]t first blush, it would seem that a person or entity that maintains records would also be the custodian of those records… [n]evertheless, the custodian of records or other qualified witness contemplated by Evidence Code section 1561 must also be able to attest to various attributes of the records relevant to their authenticity and trustworthiness.” Cooley at 1041. In the eyes of the Cooley court, then, only a business that can satisfy the requirements for execution of a section 1561 affidavit can be considered a “custodian” of that record.
The Cooley court traced its understanding of the term “prepared by” back to the case of Taggart v. Super Seer Corp. (1995) 33 Cal.App.4th 1697, which dealt with a version of Evidence Code section 1561 that did not contain subdivision (a)(4) and (5). The issue presented in Taggart was whether a deposition subpoena affidavit accompanying records complying with that version of Evidence Code section 1561 provided a sufficient foundation for admission of the records into evidence under Evidence Code sections 1562 and 1271.3. In concluding it did not, the Taggart court reasoned that “a custodian's declaration may state all the matters it is required to state under section 1561, yet fail to provide a sufficient foundation for admission of the records under section 1271… [m]ost significantly, the custodian's declaration is not required to state the ‘identity’ or ‘mode of preparation’ of the records. As a result, it will usually fail to show that ‘[t]he sources of information and method and time of preparation’ of the records indicate their trustworthiness.” Taggart at 1706.
The year after Taggart was decided, and in direct response to that opinion, Evidence Code section 1561 was amended to add subdivision (a)(4) and (5) “to ensure that such [nonparty business] records may continue to be admissible without requiring their authenticity to be proved through live testimony from the custodian of records or other qualified witness.” (Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Assem. Bill No. 3001 (1995–1996 Reg. Sess.) May 16, 1996, p. 1.) Thus, in order to satisfy the requirements for a business records subpoena, a requested document must be something that can be authenticated by the subpoenaed business in compliance with the business code.
In Cooley, the County of Los Angeles District Attorney's Office (DA) asserted that it did not prepare or generate any of the documents covered by a depositions subpoena, which included police reports created by other law enforcement agencies—an uncontested assertion. Cooley at 1041. Thus, even before the 1996 amendment's addition of subdivision (a)(4) and (5) to Evidence Code section 1561, the DA could not have made the attestation set forth in subdivision (a)(3) that the subpoenaed records had been prepared in the ordinary course of business at or near the time of the event. Id. And as section 1561 now stands, the DA would be unable to comply with subdivision (a)(4) and (5), and thus is not a custodian of the records sought.
So the next time your client receives a third party business records subpoena, remember these limitations: (1) the requested record must be a record of the business and not a product of the business and (2) the requested documents must be prepared by the subpoenaed business in the ordinary course of business at or near the time of the event—in other words, it must be able to authenticate the document under the Evidence Code. If either of these two requirements is not met, you know the drill—objection!