Nebraska banks are regularly served with subpoenas commanding the bank to produce documents. Document subpoenas, formally known as subpoenas duces tecum, are orders from governmental entities, or the Court, that order a third party, such as a bank, to provide specific information. A subpoena might seek information regarding customer accounts, specific transactions, or the activities and operation of the institution itself.1 After receiving a subpoena, the bank should take immediate action to evaluate the type of subpoena and the validity of the subpoena, consult with legal counsel, and object and/or comply as appropriate. This article provides practical guidance informing how a Nebraska bank should manage responses to third-party civil subpoenas for documents.
- Immediately Review Subpoena and Identify Deadlines Upon receipt, immediately review the subpoena to identify the deadline for compliance and categories of information the subpoena requests. Given the numerous issues that a bank served with a subpoena can face, it is inevitable that the bank will have questions regarding the validity, scope or response to the subpoena. Such questions should be immediately brought to legal counsel’s attention. Best practice is to implement policies and procedures to guide the bank’s subpoena response and immediately bring a subpoena to the attention of internal or external legal counsel, considering the short time frames for objection and compliance. Under both federal and Nebraska law, when the bank receives a subpoena in a civil case, it typically must object or respond to the subpoena within 14 days of receipt unless the subpoena specifies a different time for compliance.2 If the bank believes it will need more time to respond, it should have counsel request an extension of time from the issuing party or, if necessary, serve a written objection on the party who issued the subpoena or file a motion with the Court to extend the deadline and preserve the bank’s objections. In any event, immediate action — either to comply, respond, request an extension or file a motion — is required upon the receipt of a subpoena.
- Contact Legal Counsel and Verify the Subpoena’s Validity In immediately discussing the subpoena with legal counsel, the bank should, at minimum, verify the validity of the subpoena before responding. A valid subpoena should state on its face: (1) the individual and/or business that is the topic of the request; (2) the information the subpoena seeks; (3) the authority of the subpoena’s issuing party; and (4) the deadline for compliance. For example, if a subpoena does not include a case caption, court seal or any request regarding your institution, the subpoena may be flawed or invalid. A civil subpoena is invalid and should be objected to if the issuing party failed to notify the bank’s customer or obtain that customer’s consent before issuing the third-party subpoena for the customer’s records.3 If a subpoena seeks documents of a customer who is a party to the captioned case, the customer should have been given the opportunity to review the subpoena and an opportunity to object.4 Another potential defect is the issuing party’s failure to notify all the other parties in the lawsuit prior to issuing the subpoena; the subpoena must expressly state notice occurred.5 The failure to notify other parties to the litigation likely invalidates the subpoena and impacts the customer’s privacy rights. The bank should attempt to verify that the issuing party afforded the bank customer proper notice of the subpoena and an opportunity to object before complying.
- Evaluate the Bank’s Grounds for Objecting to the Subpoena
A bank can object to a subpoena for various reasons, including (a) it does not provide a reasonable time for compliance; (b) it requires the disclosure of privileged or confidential information; or (c) it subjects the bank to undue burden.6 The bank should consult with its legal counsel regarding these and other potential objections.
- Reasonable Time for Compliance
If the bank objects to the time for compliance specified in the subpoena, a court may quash the subpoena, declaring it invalid. A court determines a reasonable time for compliance by considering the burden of the request and the time given for compliance. This is necessarily a fact-intensive inquiry that will turn on the specific circumstances of each subpoena. For example, in one case, the court found 10 business days an unreasonable time to comply with a subpoena for documents seeking information extending over a decade and implicating thousands of confidential files.7 If there is a significant burden placed on the bank to identify and produce the requested documents, a court may require the issuing party to shoulder the costs of compliance. In such instances, the bank can ask for an advance of reasonable costs before undertaking the burden of compliance.8 - Disclosure of Privileged or Confidential Information
Another important aspect of responding to a subpoena is recognizing that federal and state law protects various information held by the bank as privileged or confidential.- Bank Examination Privilege
Federal law prohibits an FDIC-insured bank’s disclosure of any information regarding a suspicious activity report (SAR).9 If a bank receives a subpoena that would require the production of a SAR or related documents, it should object and also notify the FDIC.10 Nebraska law is also clear that any regulatory report by a financial agency is a confidential record of that agency.11 The bank should object to any subpoena seeking information about SARs or regulatory reports. - Attorney-Client and Work-Product Privilege
The attorney-client privilege protects confidential communications between an attorney and the attorney’s client. Generally, the privilege applies if (1) the bank communicates with its attorney; and (2) the communication relates to information shared with the attorney for a legal opinion or legal services.12 The work-product privilege applies to materials prepared in anticipation of litigation, even when the bank is not a party to the litigation but is a third party to the proceeding. This privilege does not apply to documents prepared in the regular course of business.13 A bank should withhold any information constituting confidential communication between the bank and its attorney or prepared in anticipation of litigation, from production and object to a subpoena on grounds of privilege when appropriate.14 - Harmful Disclosure of Confidential Information
The Court is authorized to quash, modify or condition a subpoena to protect a third party from unnecessary or unduly harmful disclosures of confidential information. The law protects the disclosure of any records that implicate the bank’s trade secrets, confidential research, development or commercial information; the bank can object to any subpoena requests impacting these interests.15
- Bank Examination Privilege
- Undue Burden
A party issuing a subpoena is under an obligation not to unduly burden a third party when it issues the subpoena.16 A bank can object if a subpoena subjects the bank to undue burden by requesting (1) irrelevant information; (2) documents the issuing party does not need; (3) documents whose costs exceed its usefulness; (4) extensive time periods; (5) documents not described with particularity; and (6) information whose burden outweighs its benefit.17 The issuing party should ensure the information requested by the subpoena identifies relevant documents.18 A burdensome request is one seeking the disclosure of more information than what is relevant to the lawsuit or failing to appropriately limit the time period of the requests. A bank should coordinate with its data management team to identify the universe of responsive documents and determine if the volume unduly burdens the bank. Remember, if the burden is significant, the bank can request the issuing party advance the reasonable costs of production.19
- Reasonable Time for Compliance
- Asserting Objections by Motion to Quash If the bank believes it cannot reasonably comply with a subpoena, it should confer with legal counsel to determine its options. The bank must always respond to a subpoena, but that does not mean the response must comply with the subpoena. Other responses include objecting to a subpoena or negotiating with the issuing party to narrow its scope. If negotiations prove unsuccessful, the bank can serve written objections on the party who issued the subpoena setting out the grounds for the objections or file a motion to quash with the court raising its objections to the subpoena for the court to determine. If a subpoena contains multiple requests and the bank makes a partial production addressing certain requests, ensure that any response includes a statement confirming that the production does not waive any objection of the bank to the subpoena. Therefore, the bank will maximize the likelihood of preserving its objections to the other requests to be further negotiated or quashed as appropriate. In all instances, the bank should strongly consider seeking a protective order from the court to ensure that any production of documents remains confidential and for use only in the immediate lawsuit.20
- Practical Suggestions for Compliance A bank should include language in customer account agreements confirming that, while it will not generally disclose account information, if the disclosure is required under the law, the bank will produce it. The Gramm-Leech-Bliley Act21 generally prohibits the disclosure of any nonpublic personal information by a bank; complying with a valid subpoena is an exception to this rule.22 If the bank concludes that the subpoena is valid after reviewing the requests, determining its obligation to respond and identifying the universe of responsive, non-privileged documents, the bank should respond to the subpoena. The bank must produce the documents as kept in the ordinary course of business or must organize and label them to correspond to each request.23 If a responsive document includes privileged or objectionable information, the bank should withhold or redact the privileged information. When producing the documents, the bank should send them via encrypted email or a secure file transfer service. After production, the bank should keep a record of its subpoena response and production.
- Rhonda Henry-Webb, Kyle Owens, Subpoena Responses for Financial Institutions, REUTERS (March 2023), https://www.reuters.com/practical-law-the-journal/litigation/subpoena-responses-financial-institutions-2023-03-01/.
- FED. R. CIV. P. 45(d)(2); NEB. REV. STAT. § 6-334(A).
- 12 U.S.C.A § 3407.
- FED. R. CIV. P. 45(a)(4); NEB. REV. STAT. § 6-334(A)(b).
- NEB. REV. STAT. § 6-334(A)(d)(2)(e).
- FED. R. CIV. P. 45(d)(2); NEB. REV. STAT. § 6-334(A).
- BNSF Railway Company on behalf of United States v. Center for Asbestos Related Disease, Inc., 2022 WL 1442854, at *4 (D. Mont., 2022).
- Arthur Miller, § 2459 Subpoena for the Production of Documents and Things—Quashing or Modifying a Subpoena, 9A FED. PRAC. & PROC. CIV. § 2459 (3d ed.) (June 2024); NEB. REV. STAT. § 6-334(A)(a)(2).
- 12 C.F.R. § 353.3.
- Suspicious Activity Reports, 61 FR 6095-02, 1996 WL 64862 (February 16, 1996).
- NEB. REV. STAT. § 8-108; See NEB. REV. STAT. § 8-112; § 8-101.03(11).
- Thomas v. Marshall Public Schools, 690 F.Supp.3d 941, 958 (D. Minn., 2023).
- Thomas v. Marshall Public Schools, 690 F.Supp.3d 941, 955 (D. Minn., 2023).
- FED. R. CIV. P. 45(d)(2).
- FED. R. CIV. P. 45(d)(2).
- FED. R. CIV. P. 45(d)(1); NEB. REV. STAT. § 6-334(A)(d)(8).
- James Buchwalter, Litigation of Standing to Challenge Subpoena to Nonparty under Fed. R. Civ. P. 45, 187 AM. JUR. TRIALS 1 (Originally published in 2024); NEB. REV. STAT. § 6-334(A).
- Lupe Development Partners, LLC v. Deutsch, 2023 WL 11960418, at *6 (D. Minn., 2023) (finding subpoena sought irrelevant information regarding financial information spanning 2006 – 2023).
- Arthur Miller, § 2459 Subpoena for the Production of Documents and Things—Quashing or Modifying a Subpoena, 9A FED. PRAC. & PROC. CIV. § 2459 (3d ed.) (June 2024); NEB. REV. STAT. § 6-334(A)(a)(2).
- FED. R. CIV. P. 26(e); NEB. REV. STAT. § 6-334(A)(d)(7).
- 15 USCA § 6802 (2011).
- James Buchwalter, Litigation of Standing to Challenge Subpoena to Nonparty under Fed. R. Civ. P. 45, 187 AM. JUR. TRIALS 1 (originally published in 2024).
- FED. R. CIV. P. 45(d)(2); NEB. REV. STAT. § 6-334(A)(f)(1)(a).
