D. Maryland Discusses Facts Required to Prove Control by a Nonparty Under Rule 34

Per Steele Software Systems, Corp. v. DataQuick Information Systems, Inc., 237 F.R.D. 561 (D. Md. Oct. 03, 2006):

It is well established that a district court may order the production of documents in the possession of a related nonparty entity under Rule 34(a) if those documents are under the custody or control of a party to the litigation. See, e.g., Societe Internationale Pour Particpations Industrielles et Commerciales, S.A. v. Rogers, 357 U.S. 197, 204, 78 S.Ct. 1087, 2 L.Ed.2d 1255 (1958); Evenflo Co., Inc. v. Hantec Agents Limited, 2006 WL 1580221 (S.D.Ohio 2006); Uniden America Corp. v. Ericsson, Inc., 181 F.R.D. 302, 305 (M.D.N.C.1998); Hubbard v. Rubbermaid, 78 F.R.D. 631, 637 (D.Md.1978). " 'Control' has been construed broadly by the courts as the legal right, authority, or practical ability to obtain the materials sought on demand." SEC v. Credit Bancorp, Ltd., 194 F.R.D. 469, 471 (S.D.N.Y.2000) (citations omitted) (applying the interpretation of control under Rule 34 to a Rule 45 subpoena).

Several factors are relevant to determining whether a party has control over documents that are in the possession of a related nonparty for the purpose of Rule 34. In Afros S.P.A. v. Krauss-Maffei Corporation, 113 F.R.D. 127, 130 (D.Del.1986), the court identified three: (1) the corporate structure of the party/nonparty, (2) the nonparty's connection to the transaction at issue in the litigation, and (3) the degree that the nonparty will benefit from the outcome of the case. Id. at 331. Other relevant factors include whether the related entities exchange documents in the ordinary course of business, and whether the nonparty has participated in the litigation. Uniden, 181 F.R.D. at 306.

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Documents in the possession of a nonparty are not automatically subject to discovery under Rule 34 simply because the nonparty has a corporate relationship to a party to the litigation. Ordinarily, a party seeking the production of documents from a nonparty must provide specific facts demonstrating that some or all of the foregoing factors of control are present. Cotracom Commodity Trading Co. v. Seaboard Corp., 189 F.R.D. 655, 663 (D.Kan.1999). See also Uniden, 181 F.R.D. at 307 ("if the factors are present, then an inference of control is found."). Because the burden of proof rests with that party seeking production, therefore "[a]n unsubstantiated assertion [of control] generally does not suffice." Id. The burden may shift, however, when the party from whom production is sought fails to respond to assertions of control when given the opportunity to do so. Cotracom, 189 F.R.D. at 663.