Best Practices: How to Deal with a Subpoena for a Customer’s Bank Records

Banks are repositories for vast amounts of financial information.  This information may be useful to parties in lawsuits in which the bank is just an innocent bystander.  Banks often receive requests for financial information in matters in which the bank has no direct involvement.  However, banks have duties to their customers to maintain the confidentiality of their customers’ financial information.  Prudence dictates that, absent clear and specific consent from the customer, a bank should not provide financial information to any person who is not a customer unless the law requires the bank to do so.

In private civil litigation, the rules of court provide the parties with the ability to subpoena non-parties for documents.  Technically, a subpoena is issued by a court and is a command by the court to do what the subpoena requires.  As a practical matter, most courts are not involved in the issuance of subpoenas; that task is left to the lawyers for the litigants who are officers of the court and cause subpoenas to issue in the court’s name.  It appears then that upon receipt of a subpoena for financial information (a subpoena for the production of documents only, and not for testimony), the bank has a legal duty to produce its customers’ financial information that is described in the subpoena.  However, for a subpoena to be enforceable it must be issued and served consistent with the rules of the court pursuant to which the subpoena is issued.  The bank should make sure that the subpoena is enforceable before it provides any information in response to the subpoena.

Although each state has its own rules regarding the proper issuance and service of a subpoena for documents, most are similar to the Federal Rules of Civil Procedure which apply to every U.S. District Court.  Rule 45(b), Fed. R. Civ. P. provides what is required for service of a subpoena to be effective:  “[s]erving a subpoena requires delivering a copy to the named person….”  This means personal service; the subpoena must be physically handed to the person named in the subpoena.  Receiving a subpoena by email, or overnight mail, or certified mail, is not personal service.

A subpoena should only be requesting information that is either relevant to the litigation or reasonably likely to result in the discovery of relevant information.  But the bank is not a party to the litigation, so how would the bank possibly know what is relevant?  The bank may not know, but its customer likely does.  Rule 26 provides a mechanism for a party to apply to the court for protection from overly broad discovery requests.  It is therefore suggested that the customer be provided with a copy of the subpoena with the request that the customer take those appropriate steps to have the scope of the subpoena modified to require the production only of specific information that is relevant to the litigation.

Courts have become sensitive to the burdens of discovery in civil litigation, especially on those persons who are not parties to the litigation.  Although lawyers are responsible to take reasonable steps to avoid imposing undue burden or expense on non-parties, R. 45(d)(1), Fed. R. Civ. P., the document requests are often drafted broadly to make sure that the desired information comes within the scope of the request.  The request may then require the production of unnecessary information.  R45(d)(2)(B) provides a non-party recipient of a subpoena with the right to serve a written objection on the attorney who caused the issuance of the subpoena which then relieves the non-party from the obligation to comply with the subpoena until the issue of the scope of the subpoena is addressed to the proper court by the issuing party.  This has the practical effect of getting more time if needed, and usually results in communications that lead to the reduction of the burden on the person served with the subpoena.

So, if a bank receives a subpoena, make sure that it was properly served according to the rules of the court that allowed for the issuance of the subpoena, provide your customer with notice of the subpoena, and use the rules that are designed to minimize the burden and expense of compliance.

For assistance with litigation matters, please contact the attorneys at Starfield & Smith, P.C. at 215.542.7070 or email us at info@starfieldsmith.com.