Possession, Custody, or Control of Responsive Information by States Suing Meta

[EDRM Editor’s Note: The opinions and positions are those of Michael Berman.]

The September 6, 2024, decision in In Re: Social Media Adolescent Addiction/Personal Injury Products Liability Litigation, 2024 WL 4125618 (N.D. Cal. 2024), applies the “legal control” standard to Fed.R.Civ.P. 34 discovery requests propounded by defendant Meta Platforms, Inc., seeking documents from non-party State agencies in a lawsuit brought by 35 State plaintiffs.^[1]

The States and State Attorneys General “object[ed] to treating their respective state agencies as being subject to party discovery and insist[ed] that all of these agencies are third parties from whom Meta should seek documents by subpoenas under Federal Rule of Civil Procedure 45.”

Meta responded that Rule 34 requests were proper and it should not be forced to serve over 200 subpoenas under Rule 45. It moved to compel production. It also served, or provided notice of intent to serve, approximately 80 subpoenas, “without waiving its rights with regard to this pending dispute.”  Id. at * 2.

The court analyzed 35 briefs, which led to its “admittedly lengthy Order” that is roughly 130 pages long.  Id. at *130.  This admittedly lengthy blog skims the surface of that decision and omits much detail.  Meta’s motion was granted in part and denied in part.

Rule 34 requires that a party served with document requests produce responsive, non-privileged documents which are in that party’s possession, custody, or control.  “Because Rule 34 is written in the disjunctive, control is a separate and sufficient basis for production; issues such as actual possession, legal ownership, and custody are distinct from the issue of control.”  Id. at *3.

There are three different standards for determining the meaning of “control.”  See Isn’t It Time for a Uniform National Standard on “Possession, Custody, or Control”? (Sept. 7, 2022)(citations omitted).  They are: 1) the “legal right” to control standard; 2) the “legal right plus notification” standard; and, 3) the “practical ability” to control standard.  Id.; The Sedona Conference, “Commentary on Rule 34 and Rule 45 ‘Possession, Custody, or Control,’” 17 Sedona Conf. J. 467, 482-92 (2016).  The choice of the test may, and often does, impact the outcome of a discovery dispute.  Id.

In Social Media Adolescent Addiction, binding authority compelled use of the “legal right” test.  Therefore, “control” existed where a litigant had the legal right to obtain documents on demand. Id. at *3.  The court wrote that: “Accordingly, the primary issue in dispute is whether the named State Plaintiffs have ‘control’ for purposes of discovery over their respective state agencies’ documents.”

The Social Media Adolescent Addiction court wrote that the Ninth Circuit “has not delineated with precision” the contours of that standard.  Obviously, a contractual right to obtain documents suffices.  Id. at *4. A statutory or similar mandate may provide control.  Id. at *5. Alternatively, the right of the allegedly controlled entity to refuse a request is an indicator or lack of control.  Id. at *4.

The “legal right” to control inquiry is fact specific and no court has compiled all of the factors to consider. Id. at *4.  However, the Middle District of North Carolina wrote:

[T]here are a number of factors which may be distilled from case law which help to determine when documents in the possession of one corporation may be deemed under control of another corporation. These factors focus on the other corporation’s actual control or inferred control, including any “complicity” in storing or withholding documents. They include (a) commonality of ownership, (b) exchange or intermingling of directors, officers or employees of the two corporations, (c) exchange of documents between the corporations in the ordinary course of business, (d) any benefit or involvement by the non-party corporation in the transaction, and (e) involvement of the non-party corporation in the litigation …. [B]ecause of the ownership situation, there often exists some intermingling of directors, officers, or employees, or business relations. Consequently, the subsidiary may be required to respond to a Rule 34 request which includes the parent company’s documents. Sister corporations are subject to the same analysis.

Id. at *4 (citation omitted). 

The Social Media Adolescent Addiction court wrote: “Ultimately, the control issue under Rule 34 is governed by federal law. A federal district court has the authority under federal law to order disclosure of documents in discovery in civil actions, notwithstanding state law which put limits on such disclosure.”  Id. at *6.  And, the court stated that the Federal Rules prevail over contrary federal statutes, regulations, foreign law, state constitutions, and state laws, at least in federal question cases such as this one. Id. at *7-8.

The Social Media Adolescent Addiction court first addressed a series of common issues and then performed a state-by-state analysis.

For example, all of the State Attorneys General argued that they were separate State Constitutional officers, separately elected, with separate spheres of authority, and that the Governors controlled all of the identified State agencies within the executive branch.  As such, they argued that they lacked “control” over those agencies.

The court rejected the “split-government” argument. First, it wrote that State law did not override federal law.  Second, it pointed out that the “legal control” issue definitionally arises only when there are “two legally distinct or separate entities.” 

In some of the cases, the State was the named plaintiff and the Attorney General was not. In others, both were named. 

The court wrote: “In all thirty-two cases, the State itself is a party to the suit. Courts have found that discovery obligations extend to other government agencies even if they are non-parties based on the recognition that the State (or the government as a whole) is essentially the real party in interest and thus the discovery obligation extends to the entire government.”  Id. at *10.  

The court continued: “Indeed, courts have found when a state Attorney General initiates litigation on behalf of the state, and thus exercises authority to file a lawsuit parens patriae, that Attorney General has legal control over agency documents.”  Id. at *12.  Even if the agencies were not parties, “Rule 34 reaches non-parties where there is control.”  Id. at *12.

The Attorneys General argued that they lacked control because the agencies had a “virtual veto” and could refuse to cooperate with them.  Id. at *13. The court found this argument to be speculative and illusory, noting its enforcement powers.  Further, it added: “It is not explained why an agency would absolutely refuse to produce documents at all under Rule 34 without good and proper reasons, and yet why the same good and proper reasons would disappear in the face of a subpoena.”  Id. at *13.  And, the court wrote that: “As counsel for a party subject to discovery, a state Attorney General has the legal authority and duty to take action to make inquiry and collect the documents from the uncooperative state agencies directly and cannot simply sit on their hands in the face of an uncooperative client.”  Id. at *14. 

Addressing another argument, the court wrote that: “When a state agency is mandated to use the state attorney general as its exclusive legal counsel, this mandate carries with it an indication that the attorney general has legal control over the agency’s documents. The close coordination underlying an attorney-client relationship is a factor in the legal control analysis.”  Id. at *16.

“[F]or many (if not most) of the states the Attorney General is obligated by local law to represent the state agencies at issue in this matter…. Accordingly, the upshot is that, on the current record before the Court, it appears that all (or virtually all) of the state Attorneys General will represent both the named plaintiff and the state agencies at issue for purposes of discovery in this case.”  Id. at *18. 

As counsel, attorneys are presumed to have control over the client’s documents. Id.  The court wrote: “The Maryland Attorney General’s role as counsel for the agencies at issue inherently involves obtaining necessary documents for effective representation in litigation. In acting as counsel, the Maryland Attorney General would necessarily have access to and thus control over the relevant documents needed to respond to discovery requests.”  Id. at *70.

Additionally, the court wrote that there could be legal control where a party and non-party share financial interests in the lawsuit: “When litigation proceeds directly support or fund a state agency, it is reasonable to expect full cooperation in the discovery process. This cooperation ensures the availability of relevant documents….”  Id. at *21.

While the Ninth Circuit foreclosed use of the “practical ability” test for “control,” “practical ability” was “a factor” in the legal control test.  Id. at *21.  In this complex case, the Social Media Adolescent Addiction court considered “the goals of efficiency, preservation of judicial resources, preservation of party resources, and simplification of an already complex discovery landscape.”  Id. at *23.  The court explained: “If the state Attorneys General were correct as to the absolute lack of control of any of the agencies at issue, then Meta would be required to issue over 250 individual subpoenas, and then negotiate the scope of each subpoena after receiving written responses and objections to each. The state agencies and their counsel would be required to correspondingly respond and object to all of these subpoenas and negotiate them with Meta. As a result, there would be the potential for these parties to present over 200 allegedly separate disputes over these subpoenas to this Court, with the potential for raising inconsistent or contradictory arguments.”  Id. at *24.  In my words, the States’ positions were impractical.

The court proceeded to a state-by-state analysis, writing: “It is self-evident from the length of this opinion that state Attorneys General and Meta raised complex questions in the context of the factors used to determine control under the ‘legal control’ test.… [T]he Court next analyzes the control issue on a state-by-state basis. The Court approaches that state-by-state analysis following the directive that, fundamentally, ‘[c]ontrol must be firmly placed in reality.’”  Id. at *24.

Just as the court’s decision was lengthy, this blog is long.  The balance of the court’s opinion is well worth reading.  I will give only two examples.

Several of the Attorneys General asserted that communications between their office and the State agencies were privileged.  The court wrote that it was inconsistent for the State to argue that, on the one hand, the State Attorney General represented the agencies and its communications were privileged and, on the other hand, assert that for discovery purposes, Meta must issue a subpoena to the State agencies because the attorneys did not have control.  Id. at *45, 49, 70, passim.

Additionally, the court noted that “Meta has recently served an intent to issue subpoenas to various state agencies….  None of these state agencies are allowed to employ legal counsel other than the Idaho Attorney General and thus by statute each must be represented by the Idaho Attorney General in this matter for discovery. This arrangement indicates strongly that the state Attorney General, in fulfilling its role as chief legal advisor, would necessarily and inherently have access to and control over the necessary documents for effective legal representation of these state agencies. Therefore, the Court concludes that the Idaho Attorney General has legal control, for the purposes of discovery, over the documents held by the Idaho agencies listed by Meta, including in particular the three agencies recently listed in the intent to issue subpoenas.”  Id. at *53.

Finally, in an interesting twist, the Social Media Adolescent Addiction court wrote that “litigation holds have been issued to the state agencies….”  Id. at *84.  It wrote that “a number of State Attorneys General have voluntarily sent litigation hold notices to their respective identified agencies, and pursuant to this Court’s Order, the State Attorneys General who did not voluntarily do so have sent litigation hold notices to their respective agencies.”  Id. at *17, 87.  Generally, a litigation hold notice is a communication from an attorney to their client.

The Social Media Adolescent Addiction decision concludes: “[T]he Attorneys General of multiple states here preemptively declared at oral argument their intent to appeal any adverse ruling on ‘control’ before they even saw this Order or this Court’s reasoning (and where the Court did not rule from the bench). The detailed discussion in this Order is intended, hopefully, to facilitate any later review. The Court again reminds counsel for all Parties of their duties under Fed. R. Civ. P. 1 and 26 to work collaboratively for the efficient progress of this case, and to avoid unduly multiplying the proceedings.”  Id. at *130.^[2]

Notes

[1] I wrote a series of blogs on a February 2024 decision in the same case.  4 Things You Never Wanted to Hear + 8 Lessons & a Dispute Over Revealing Recipients of Litigation Hold Notices, All in One Case (May 4, 2024); An Epilog:  4 Things You Never Wanted to Hear + 8 Lessons & a Dispute Over Revealing Recipients of Litigation Hold Notices, All in One Case (May 10, 2024).  I concluded by writing: “This is most certainly not the last chapter in In Re: Social Media Adolescent Addiction.”

[2] The Social Media Adolescent Addiction court swept aside the argument that State open records laws foreclosed any other access by Attorneys General to State records. Id. at *20-21.

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