Possession, Custody, or Control – Part II

“Florida bar weighs whether lawyers using AI need client consent”
October 26, 2023
Court Uses an Informal Discovery Procedure to Hold That Untimely Objections Were Waived, and Answers to Interrogatories Defectively Referred to Deposition
November 1, 2023

Joan Kim has written an excellent summary in Legal Separateness: The Boundaries on Written Discovery | Proskauer – Minding Your Business – JDSupra (Oct. 23, 2023).

Her blog  accurately states:

The concept of corporate legal separateness has long been a fortress protecting affiliated business entities such as parents, subsidiaries, and sister companies from various kinds of liability and litigation. However, how much protection does such legal separateness offer the information that corporations gather and store when faced with vehicles of written discovery such as interrogatory requests or requests for production? In other words, if an opposing party requests information or documents from a party that requires that party to seek information or documents from an affiliated non-party entity, is the party then required to seek the requested information or documents from its affiliated non-party entities?

Ms. Kim adds:

A survey of case law throughout different federal circuits shows that the degree of separation may vary depending on the jurisdiction and the facts involved. But ultimately, the central question in all circuits becomes, what degree of “control” does one entity have over the other?

Ms. Kim then correctly states: “Each Circuit has its own complex balancing test to define the level of control between corporate entities.”

She describes those tests and properly concludes: “The facts of each case and the various factors considered by the court may result in different outcomes in seeking to obtain discovery from affiliated non-party entities of parties in a case. Knowing the tests and precedent in your jurisdiction may dictate whether certain requests should be compelled or opposed during discovery. That said, in many cases, a third-party subpoena may be a less complex vehicle for parties to obtain information and documents from non-party affiliated entities.”

I have posed the question: Isn’t It Time for a Uniform National Standard on “Possession, Custody, or Control”?  In my view, a uniform standard would further the goal of the just, speedy, and inexpensive resolution of many lawsuits.

The Sedona Conference has written that the differing approaches “lead to a lack of clarity for lawyers and litigants that must manage discovery or advise clients…. This is especially problematic given that in today’s digital world, borders have broken down and many businesses and individuals live their lives and conduct business nationwide.”  17 Sedona Conf. J. at 482–83 (emphasis added).

The Sedona Conference describes three separate standards.  That  has led to the expenditure of the resources of both litigants and courts.  See, e.g., Robinson v. Moskus, 491 F. Supp. 3d 359, 361, 364-66 (C.D. Ill. 2020).

As noted in my blog:

Uniformity has always been a goal of the rules:  “One of the original purposes of the enactment of the Federal Rules of Civil Procedure was to develop a relatively uniform practice of law throughout the country.” [emphasis added; citation omitted].

“Possession, custody, or control” is an issue presented in most or all discovery responses.  As suggested by The Sedona Conference, the application of varying formulations of the bedrock “possession, custody, or control” concept is often contrary to the goals of uniformity and the just, speedy, and inexpensive resolution of each action under Fed.R.Civ.P. 1.

In a recent Maryland appeal, the son of the owner of an auto dealership was involved in an auto accident on his father’s business premises.  While, there were many additional facts and issues, the plaintiff sought discovery of a video of the occurrence.  Defendant had not preserved it.  Defendant admitted that it showed the collision.  However, plaintiff’s request for sanctions was denied.

Defendant’s brief stated that he “never had actual possession of the video of the accident.”  However, in the next sentence, the brief admits that “[h]e obtained a copy from his employer,” i.e., his father’s company. Nevertheless, he argued that he did not have “control of the video….”  It was in control of his “insurance company and employer,” who were not parties.

The Appeals Court agreed.  For what it is worth, I don’t. See Should Carl Little, Jr., Have Won His Appeal Challenging Denial of a Spoliation Instruction?

Cases are won and lost on this issue.  There is a need for a national, uniform standard.[1]


[1] There were a number of other issues presented in Mr. Little’s case and the “possession, custody, or control” decision may not have been dispositive.