Legal Voice v. Stormans, Inc., No. 12-35224 (9th Cir. 2013)
Annotate this CaseThis appeal relates to a discovery dispute that arose in this action challenging Washington's rules that require pharmacies to maintain a representative assortment of drugs for which there was patient demand and to dispense prescription drugs and drugs approved by the FDA for restricted distribution, unless one of several enumerated exceptions applies. On appeal, Law Center challenged the district court's denial of sanctions and costs under Federal Rule of Civil Procedure 45(d). Concluding that the court had jurisdiction over the appeal, the court affirmed the denial of sanctions under Rule 45(d)(1). The court agreed with the D.C. Circuit's analysis of the amended rule and held that Rule 45(d)(2)(B)(ii) requires the district court to shift a non-party's costs of compliance with a subpoena, if those costs are significant. The court concluded that the district court erred in its interpretation of Rule 45(d)(2)(B)(ii) framing the issue in terms of undue burden, rather than significant expense. Accordingly, the court reversed the denial of costs and remanded for consideration of the proper allocation of costs.
Court Description: Discovery. The panel affirmed the district court’s denial of sanctions under Fed. R. Civ. P. 45(d)(1), reversed the denial of costs under Fed. R. Civ. P. 45(d)(2)(B)(ii), and remanded in an appeal related to a discovery dispute that arose in an action challenging Washington’s rules that require pharmacies to maintain a representative assortment of drugs for which there is patient demand and to dispense prescription drugs and drugs approved by the Food and Drug Administration for “restricted distribution,” unless one of several enumerated exceptions applies. Plaintiffs served a subpoena duces tecum seeking production on documents on the Law Center, a non-party that had participated in the rule-making process and was among the organizations that had reported incidences of pharmacists refusing to dispense emergency contraception. The Law Center raised various objections to the subpoena and requested in the alternative that, if it were compelled to produce any documents, that plaintiffs be required to reimburse the costs of compliance pursuant to Rule 45(d)(2)(B)(ii). The panel first rejected plaintiffs’ assertion that it lacked jurisdiction over the appeal because the Law Center did not immediately appeal any of the three orders related to the discovery dispute, but appealed only after final judgment was entered in the action. The panel held that a non-party may appeal an interlocutory order within thirty days after entry of final judgment to the same extent that a party may appeal such an order. The panel held that Rule 45(d)(2)(B)(ii) requires the district court to shift a non-party’s costs of compliance with a subpoena, if those costs are significant. Thus, rather than considering whether compliance with a subpoena was unduly burdensome, the district court should have considered only whether that cost was significant. Applying the correct standard, the panel concluded that the $20,000 expended by the Law Center was “significant.” Accordingly, the panel reversed the district court’s denial of costs and remanded for a determination of the proper allocation of costs under Rule 45(d)(2)(B)(ii). The panel concluded that the district court did not abuse its discretion in declining to impose sanctions under Rule 45(d)(1). The panel held that given that there was at least some ambiguity in the meaning of the district court’s first two discovery orders, the district court did not abuse its discretion in finding that plaintiffs did not necessarily act in bad faith in interpreting the orders in the way they did.
The court issued a subsequent related opinion or order on July 2, 2014.
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