*1 As the Supreme Court has proclaimed, “[f]or more than three centuries it has ... been recognized as a fundamental maxim that the public ... has a right to every man's evidence.” Jaffee v. Redmond, 518 U.S. 1, 10 (1996) (internal quotation marks omitted) (citing United States v. Bryan, 339 U.S. 323, 331 (1950)). Pending before the court is the Defendants'[1] and Provider Plaintiffs' Joint Motion Regarding Costs Incurred by Aetna and Humana field on April 9, 2018. (Doc. 2066). Aetna and Humana filed a joint motion for fees and response in opposition to the motion. (Doc. 2123). Both motions have been briefed, and the court heard argument on May 15, 2018. At issue in both motions is whether Aetna and Humana are entitled to shift to the Defendants and the Providers the full costs and attorneys' fees incurred to comply with the Defendants' and the Providers' subpoenas. While Aetna and Humana argue that the court has already shifted the reasonable costs incurred by Aetna and Humana to the Defendants and Providers,[2] the court explicitly held that it “reserve[d] judgment on the reasonableness of costs until production by the Nationals is complete” and that it “will revisit the question of ... the payment of such costs by the parties.” (Doc. 1391 at 3-4) (emphasis added). The court does so now.

I. DISCUSSION

Federal Rule of Civil Procedure 45(d)(1) provides that “[a] party or attorney responsible for issuing and serving a subpoena must take reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena.” Thus, Rule 45 protects non-parties who are subpoenaed to “produce documents for litigation that they have no interest in[3] and no ability to control” from the undue burden and expense imposed by such production. Stormans Inc. v. Selecky, No. C07-5374 RBL, 2015 WL 224914, at *4 (W.D. Wash. Jan. 15, 2015); see also Fidelity & Deposit Co. of Md. V. Jefferson Cty. Comm'n, No. 2:09-cv-247-JHH, 2010 WL 11562036, at. *1 (N.D. Ala. March 1, 2010) (“A Rule 45 subpoena is a discovery vehicle used against non-parties to, among other things, obtain documents relevant to a pending lawsuit.”). While Rule 45 protects non-parties from undue burden and expense, non-parties may not use Rule 45 to escape the required production of relevant documents sought by a party under a subpoena. See Fidelity, 2010 WL 11562036 at *1 (quoting 9A Charles Alan Wright & Arthur R. Miller, FEDERAL PRACTICE AND PROCEDURE § 2452 (3d ed. 2008)) (“Rule 45 must be read in conjunction with Federal Rule of Civil Procedure 26, because the latter rule ‘clearly defines the scope of discovery for all discovery devices.’ ”). They are not immune from the burdens and costs of discovery sought from them simply because they are legally disinterested third parties. While courts must make efforts to reduce the impact of discovery on non-parties, such disinterested witnesses cannot escape the duty to provide their evidence relevant to the controversy. The public has the right to their evidence, even if that imposes on them some burdens and expenses. The Rule protects them only from “undue burden and expense.” Fed. R. Civ. P. 45(d)(1) (emphasis added).

*2 The language in Rule 45 creates two distinct analyses related to the burden and expense imposed upon non-party targets of subpoenas. See Legal Voice v. Stormans Inc., 738 F.3d 1178, 1184 (9th Cir. 2013); see also In re: Modern Plastics Corp., 890 F.3d 244, 250 (6th Cir. 2018), reh'g denied (May 17, 2018), cert. denied sub nom. New Prod. Corp. v. Dickinson Wright, PLLC, No. 18-208, 2018 WL 4006314 (U.S. Oct. 1, 2018). First, as mentioned, Rule 45(d)(1) imposes a duty on the requesting party and attorney issuing a third-party subpoena to “take reasonable steps to avoid imposing undue burden and expense on the person subject to the subpoena.” (Italics added). A failure to take such reasonable steps can lead to sanctions, including the award of attorneys' fees in favor of the non-party target. “A court may, ... impose sanctions when a party issues a subpoena in bad faith, for an improper purpose, or in a manner inconsistent with existing law.” Id. at 1185. This implies that the attorney's fees incurred by the target of the subpoena in responding to a proper subpoena are assumed to be part of the ordinary “expense” of the responding non-party. A responding target's attorney's fees are awardable against the requesting party only as a sanction for that party's failure to take reasonable steps to avoid “undue” burden and expense on the responding target of the subpoena.[4]

However, if the target of the subpoena objects to it or seeks to quash it, or the subpoenaing party files a motion to compel compliance with the subpoena, Rule 45(d)(2)(B)(ii) directs that the court's order compelling compliance “must protect a person who is neither a party nor a party's officer from significant expense resulting from compliance.” (Italics added). This protection against “significant” expense is mandatory, while the Rule 45(d)(1) award of expenses (including fees as a sanction) is discretionary. Id.

Notably, shifting the significant costs of a non-party to the serving party protects a non-party from undue burden or expense. See Western Convenience Stores, Inc. v. Suncor Energy (U.S.A.) Inc., No. 11-cv-01611-MSK-CBS, 2014 WL 1257762, at *21 (D. Colo. March 27, 2014). When a court orders a non-party to comply with a serving party's subpoena over the non-party's objection, “the order must protect [the non-party] from significant expense resulting from compliance.” Fed. R. Civ. P. 45(d)(2)(B)(i)-(ii). Courts “more routinely” shifts costs under Rule 45(d)(2)(B) “in order to avoid burdening non-parties who are compelled to ‘assist the court by giving information or evidence.’ ” United States v. McGraw-Hill Companies, Inc., 302 F.R.D. 532, 535 (C.D. Cal. 2014) (citing Fed. R. Civ. P. 45 advisory committee's note to 1991 amendment); see also Legal Voice v. Stormans, Inc., 738 F.3d 1178, 1184 (9th Cir. 2013) (holding that “cost shifting [is] mandatory in all instances in which a non-party incurs significant expense from compliance with a subpoena”).

Under Rule 45(d)(2)(B), “ ‘only two considerations are relevant’ to the cost-shifting inquiry: ‘(1) whether the subpoena imposes expenses on the non-party, and (2) whether those expenses are “significant.” ’ ” McGraw-Hill, 302 F.R.D. at 534 (quoting Legal Voice, 738 F.3d at 1184). Important to note, the non-party is not automatically entitled to fully shift its entire costs to the serving party. From the plain language of the rule, only those expenses “resulting from compliance” can be shifted to the requesting party. Put another way, expenses unrelated to compliance with the order compelling production are not compensable. Unreasonable expenses are not caused by or “result from” compliance with the subpoena. G&E Real Estate, Inc. v. Avison Young-Washington, D.C., LLC, 317 F.R.D. 313, 316 (D.D.C. 2016) (“An unreasonable expense, even undertaken in some sense as a response to a subpoena, does not result from that subpoena. Instead, it results from whatever set of decisions by and on behalf of the non-party led to those unreasonable expenses being incurred.”). Moreover, the requesting party is required to bear only “significant” expenses, not all expenses. “The party seeking discovery ... bear[s] at least enough of the cost of compliance to render the remainder ‘non-significant.’ ” McGraw-Hill, 302 F.R.D. at 534 (some quotation marks omitted) (quoting Legal Voice, 738 F.3d at 1184). The court also can require a non-party “to bear some or all of the expense where the equities of the particular case demand it.” Aggrenox Antitrust Litigation, 2017 WL 4679228, at *1.[5]

A. Reasonable Costs and Expenses

*3 First, Aetna and Humana must demonstrate that the expenses “ ‘result[ed] from compliance’ with the court's order compelling production.” McGraw-Hill, 302 F.R.D. at 536 (quoting Fed. R. Civ. P. 45(d)(2)); G&E Real Estate, Inc. v. Avison Young-Washington, D.C., LLC, 317 F.R.D. 313, 316 (D.D.C. 2016). Furthermore, the expense resulting from compliance with the subpoena must be reasonable. Aggrenox Antitrust Litigation, 2017 WL 4679228 at *2 (quoting G & E Real Estate v. Avison Young-Wash., D.C. LLC, 317 F.R.D. 313, 316 (D.D.C. 2016)) (“ ‘only reasonable expenses are compensable’ under Rule 45.”). “The determination of .... reasonableness is committed to the sound discretion of the trial court.” Aggrenox Antitrust Litigation, 2017 WL 4679228 at *2 (quotation marks omitted) (quoting Travelers Indem. Co. v. Metro. Life Ins. Co., 228 F.R.D. 111, 113 (D. Conn. 2005)). The court in Aggrenox Antitrust Litigation succinctly explained the obligations of a non-party seeking to establish reasonable costs:

Aggrenox Antitrust Litigation, 2017 WL 4679228 at *2; see also McGraw-Hill, 302 F.3d at 537 (quoting In re Application of Michael Wilson & Partners, Ltd., for Judicial Assistance Pursuant to 28 U.S.C. 1782, 520 F. App'x 736, 741 (10th Cir. 2013) (underscoring “the non-parties' burden to demonstrate that the costs are reasonable and ‘resulted from compliance’ with the Court's order”); In re Aggrenox Antitrust Litig., No. 3:14-md-02516 (SRU), 2017 WL 4679228, at * 2,*7-*12 (Oct. 18, 2017); In re Am. Nurses Ass'n, 643 F. App'x 310, 314 (4th Cir. 2016) (“[T]he shifting of attorney's fees is only appropriate where the attorney's fees are actually necessary to a non-party complying with a discovery order.”).

Just like the court in McGraw-Hill, the court “is skeptical that ‘services provided by an attorney to a non-party for the non-party's sole benefit and peace of mind’ can be counted as ‘expenses.’ ” 302 F.R.D. at 536. The court has tried to explain to Aetna and Humana that “Rule 45 does not cut a blank check to non-parties—unnecessary or unduly expensive services do not ‘result from compliance’ and, therefore, do not count as ‘expenses.’ ” McGraw-Hill, 302 F.R.D. at 356; see also Western Convenience Stores, 2014 WL 1257762 at *25 (“Counsel for a non-party subpoena recipient, however, should be expected to ‘stop and think’ before taking actions that will almost certainly result in unnecessary delay and burden an already congested court docket.”). Reasonable expenses do not include “attorneys' fees incurred resisting a subpoena ....” Stormans Inc., 2015 WL 224914 at *5 (emphasis in original). Therefore, reasonable expenses do not include “attorneys' fees for litigating a subpoena,” Stormans Inc., 2015 WL 224914 at *5, as such are not the “result” of compliance with the subpoena, but the product of efforts to resist compliance. Aetna and Humana “should not be permitted to run up bills merely because they expect someone else [to] pay[ ] the tab.” Aggrenox Antitrust Litigation, 2017 WL 4679228 at *10 (quotation marks and citations omitted).

*4 Furthermore, “attorney's fees incurred in the pursuit of attorney's fees [are] not subject to shifting under” Rule 45(d)(2)(B) because those fees are “incurred after discovery [has been] completed” and are not necessary for compliance with the subpoena. Nurses Ass'n, 643 F. App'x at 314.

The threshold question thus becomes whether some or all of the expenses claimed by Aetna and Humana are not “reasonable” in the sense that they were incurred not as a result of complying with the subpoena or the court's order compelling compliance, and, even if so, were “reasonable” in the sense they are not excessive or unnecessary. To the extent Aetna or Humana seeks reimbursement of attorney's fees incurred resisting the subpoena, they are not reasonable because they did not “result from compliance” with the subpoenas. Further, some expenses claimed by them appear to be excessive and unnecessary, as more fully discussed below.

According to its letter to the Defendants and the Provider Plaintiff's dated January 10, 2018 (Docs. 2062 and 2066, Ex. 2), Aetna seeks a total reimbursement of $404,371.44, of which $100,000.00 was paid in advance as a good-faith deposit pursuant to Discovery Order No. 59 (Doc. 1391). Thus, Aetna seeks a net balance of $304,371.44.

The total expenses claimed consist of various costs. First, Aetna seeks reimbursement for $46,884.95 in out-of-pocket costs paid to a vendor, DTI, to upload data to a platform for searching, deduping and threading,[6] adding Bates numbers, and producing the documents responsive to the subpoena. Second, Aetna claims $150,067.49, for hiring contract lawyers to conduct a screening review of the documents found to be responsive to the subpoena. Third, Aetna claims $207,419.00 in attorney's fees paid to Gibson, Dunn & Crutcher for additional document review and production, based on 316.9 hours billed by five different Gibson Dunn billers. The actual out-of-pocket costs paid to DTI are clearly the result of complying with the subpoena, and they appear to be reasonable in amount. Likewise, $150,067.49 paid to hire contract lawyers to screen the production documents for privilege and for financial and proprietary secrets plainly is a result of compliance with the subpoena and does not appear to be so excessive as to be unreasonable. Aetna was required to screen and review about 150,000 documents, many of which were multi-page documents.[7] On average, each document cost about one dollar to screen and review by the contract lawyers.[8] This seems remarkably efficient and not unreasonable.

*5 The court has much greater concern about the charge for Gibson Dunn lawyers to provide a second layer of screening, even after the contract lawyers had reviewed the documents. It is not clear how many of the 150,000 documents screened by the contract lawyers were subjected to a second review by Gibson Dunn lawyers, but it was clearly far fewer than all 150,000. The average hourly rate of this work by each of the Gibson Dunn lawyers was $654.53, and the court is comfortable assuming that the contract lawyers were not paid an hourly rate in the same ZIP Code as this rate. Thus, the court can infer that the Gibson Dunn lawyers reviewed a far smaller number of the documents than were screened by the contract lawyers because their review, per person, was far more expensive.

There are two aspects of the Gibson Dunn fees that trouble the court: the excessive rate charged for a relatively simple screening and review task, and that it appears the purpose of the secondary review was to suppress production of subpoenaed documents to the point that Aetna's production was a tiny fraction of that made by other National Insurers, including Cigna and Humana.

Looking first at the rate charged, it has already been noted that the average hourly rate for the relatively simple task of reviewing documents for privilege or other sensitive information was over $650 an hour.[9] Over two-thirds of the time (224.70 hours out of 316.90) was billed by a staff attorney and an associate attorney. The remaining time was billed by other, relatively inexperienced associates and a non-lawyer (apparently) ediscovery specialist. Given that this was a secondary review of documents that already had been screened by contract lawyers, both the amount of time (over three hundred hours) and the hourly rate at which it was charged seems unreasonable. A total of over $350,000.00 to conduct a preliminary screening and a secondary review of documents seems excessive, even for a collection of 150,000 documents.

Additionally, this screening process resulted in Aetna withholding 99% of the documents gathered from the custodians identified by the parties. Of the 150,000 documents identified by the key-term search as potentially relevant and responsive to the subpoena, less than 1,500 were actually produced. The rest were screen out either at the initial screening by the contract lawyers or in the secondary review by Gibson Dunn lawyers. Yet, an explicit claim of privilege was asserted for only 19 documents. Aetna offered no explanation for its refusal to produce the thousands of other documents.

This must be understood in the context of the responses made by the other National Insurers to the identical subpoena. Humana produced over 100,000 documents, totaling 500,000 pages. Although the court has not specific numbers for the size of Cigna's or UnitedHealth's responses, the court understands that the Defendants and Provider Plaintiffs were satisfied with them. Other non-parties subpoenaed for the production of documents likewise have produced much more voluminous responses than Aetna's. Several non-party targets of subpoenas much smaller than Aetna have produced thousands or tens of thousands of documents.

The paucity of production by Aetna, coupled with the extremely low number of documents claimed as privileged, raises the concern that Aetna's double-layer document review process was designed not to comply with the subpoena, but to avoid complying with it. It is understandable that a competitor of Blue Cross would be very wary of producing strategic and proprietary documents. Still, weeding out over 99% of the responsive documents on some basis not explained by Aetna appears to be nothing more than another way of refusing to comply. Because a non-party is entitled to undue expenses “resulting from compliance” with the subpoena and the Gibson Dunn fees appear more a way of avoiding compliance, the court does not believe Aetna is entitled to shift all of its Gibson Dunn fees to the Defendants and Provider Plaintiffs.

*6 Still, the court recognizes that Gibson Dunn incurred some fees in legitimate guidance and supervision of the gathering, screening, and production of the small number of documents it produced. While Gibson Dunn and Aetna are not entitled to fees incurred in resisting compliance with the subpoena, which seems to be largest portion, Aetna is entitled to reimbursement for a portion of the Gibson Dunn fees incurred during the gathering and production of the data and documents. A fair amount for such supervision and guidance seems to be about $25,000.00.

Thus, Aetna's reasonable and non-duplicative expenses resulting from compliance with the subpoena, assuming they meet the “significance” test below, are the following:

Humana's claimed expenses fall broadly into four categories: (1) charges by a document management vendor, H5; (2) charges for contract attorneys supplied by Lexolution; (3) charges by counsel from Bingham, Greenebaum & Doll; and (4) charges by counsel from O'Melveny & Myers. Using the exhibits to Christie Moore's letter of April 4, 2018 (Sealed Doc. 2062, Exhibit 9), the charges appear to be as follows:

Immediately it is apparent that the platform and hosting charges by H5 are far greater than the charge for comparable services claimed by Aetna. While Aetna claimed hosting and platform services totaling $46,884.95, Humana claims almost four times that amount. On the other hand, Aetna spent $150,000 hiring contract lawyers to review the responsive documents, while Humana claims only slightly more than $104,000.00 for its contract lawyers to review the potentially responsive documents produced by electronic searching. Also other National Insurers responding to this same subpoena were satisfactorily compensated by payment of the $100,000.00 deposit the court previously required the Defendants and Provider Plaintiffs to pay as a precondition to compelling the National Insurers to begin document production. Compared to Aetna's vendor charge for search platform and hosting services, H5's charge seems excessive. Even giving the benefit of the doubt, a charge of $100,000.00—or more than twice the amount claimed by Aetna—for these services seems fair and reasonable.

Humana's expense for contract lawyers to perform a privilege and relevance review of potentially responsive documents seems fair and reasonable.

The court recognizes that Humana's counsel also was required to give some guidance and provide some supervision in the formulation of the searches and the screening of documents identified by the searches. A total of more than $165,000.00 in counsel fees, on top of the fees for contract lawyers, however, seems unreasonable and excessive. The greatest amount of document screening was performed by the contract lawyers from Lexolution. It would be strange that a secondary review by counsel from Bingham, Greenebaum and O'Melveny & Myers would be even greater than the amount expended on the first and principal line of review, the contract lawyers.[11] One would expect that a secondary review of documents selected or questioned by the contract lawyers would be limited, narrower, and less costly. A reasonable and non-duplicative fee for the guidance and supervision supplied by Bingham, Greenebaum and O'Melveny & Myers counsel, therefore, would be in the range of $65,000.00.

*7 Thus the reasonable expenses that are the result of compliance with the subpoena for reimbursement to Humana is the following, assuming such meets the “significance” test discussed below:

B. Significance

Now Aetna and Humana must demonstrate that these potentially reimbursable expenses are “significant” expenses in order to shift costs to the Defendants and the Providers. First and foremost, an award of attorney's fees must be made “with an eye to moderation, seeking to avoid either the reality or the appearance of awarding windfall fees.” N.Y. State Ass'n for Retarded Children v. Carey, 711 F.2d 1136, 1139 (2d Cir. 1983). It is within the court's sound discretion to determine “[w]hat constitutes a ‘significant cost[.]’ ” Connell v. Columbus McKinnon Corp., No. 13-cv-2188-SI, 2015 WL 4747260, at *2 (N.D. Cal. 2015). A court determines significance by analyzing three factors: “ ‘(1) whether the non-party actually has an interest in the outcome of the case, (2) whether the non-party can more readily bear the costs than the requesting party, and (3) whether the litigation is of public importance.’ ” Behrend v. Comcast Corp., 248 F.R.D. 84, 86 (D. Mass. 2008) (citing In re Exxon Valdez, 142 F.R.D. 380, 383 (D.D.C. 1992)).[12]

Courts often look to “non-party's ability to pay” as the determining factor in whether an expense is significant. Connell, 2015 WL 4747260 at *4. As the court in McGraw-Hill held, “[t]his consideration makes practical sense—an expense might be ‘significant,’ for instance to a small family-run business, while being ‘insignificant’ to a global financial institution.” McGraw-Hill, 302 F.R.D. at 536.

In Bell Inc. v. GE Lighting, LLC, No. 6:14-cv-00012, 2014 WL 1630754, at *10-*15 (W.D. Va. April 23, 2014), the court held that attorney's fees should not be shifted from the non-party to the serving party. The parties served a subpoena on the non-party, and the non-party submitted a cost-estimate in the amount of $14,600. The non-party estimated that it would cost approximately $3,750 for imaging and copying, loading documents into database, applying search terms, and subsequently producing the documents. Furthermore, the non-party estimated that it would spend $8,850 for document review and an additional $2,000 for future costs. The parties agreed to pay half of the production-related costs, but the parties refused to pay $8,850 for document review, insisting that the non-party allow the parties to review the documents on an outside counsel basis for privilege and relevance subject to a claw back agreement. At the time of production, production-related costs equaled approximately $6,150, and document review for privilege and relevance totaled approximately $10,700.

*8 The court held that the parties would pay the non-party the full amount for production-related costs; however, the court held that the non-party would bear the full amount of the document review, declining to find the document review costs significant after weighing the three factors. The court reasoned that alternatives existed to “control the costs related to confidential information, including shifting the costs of production but not of privilege review, limiting the scope of discovery to control costs, and ordering production under claw back provisions.” Bell Inc., 2014 WL 1630754 at *12. “[I]t is untenable for a party to insist on individually reviewing all documents for privilege and responsiveness, rather than producing documents under a protective order with a claw back provision.” Id. The non-party undertook the document review “for its own reasons ....” Id. at *15.[13] The review “significantly delayed production[,] and [the parties] consistently had to prompt [the non-party] on its progress throughout the discovery process.” Id.[14]

Examining the three factors in this case, it is clear that the litigation is of public importance, but the remaining two factors do not weigh in favor of finding the expenses of responding to the subpoena insignificant to Aetna and Humana. While both are large, national corporations with the resources to bear the costs, so are the Defendant Blues. There is no reason to find that the non-party targets are better able to bear the costs than the Blues or, for that matter, the Provider Plaintiffs. Also, Aetna and Humana have no legal interest in the outcome of the case, although, as competitors in the health insurance market, they cannot be said to be disinterested in the outcome. It is true, however, that neither Aetna nor Humana are parties in this litigation or are likely to be drawn into it. Additionally, they had a legitimate interest in protecting their own proprietary information when responding to the subpoena. Accordingly, the expenses they incurred, as adjusted, above, were significant expenses for them, for which they are entitled to reimbursement under Rule 45.

II. CONCLUSION

*9 Consistent with the discussion above, therefore, Defendants' and ProviderPlaintiffs' Joint Motion Regarding Costs Incurred by Aetna and Humana (Docs. 2062, 2066), seeking a determination of the costs and expenses to which the non-party subpoena targets, Aetna and Humana, are entitled is GRANTED to the extent that the court herein has determined and set the amounts Aetna and Humana are entitle to be reimbursed. Likewise, the Joint Motion of Aetna, Inc., and Humana Inc. for Production Fees and Fees Incurred in Seeking Fees and Joint Opposition to Defendants' and Provider Plaintiffs' Joint Motion Regarding Costs Incurred by Aetna and Humana (Doc. 2123) is GRANTED IN PART and DENIED IN PART.

The court DENIES Aetna and Humana's Joint Motion to the extent it seeks fees and expenses incurred as a result of Aetna's and Humana's opposition to the Defendants and Provider Plaintiffs' Joint Motion and in the preparation and filing of their own Joint Motion arising from the dispute concerning the proper fees and expenses to which Aetna and Humana are entitled for responding to the third-party subpoenas.

Aetna and Humana's Joint Motion is GRANTED with regard to their fees and expenses associated with complying with the third-party subpoenas served on them, and such subpoena compliance fees and expenses, as calculated hereinabove, are hereby SET and ORDERED to be reimbursed and paid by the Defendants and the Provider Plaintiffs, in accordance with the agreement among them, in the amounts of $121,952.44 payable to Aetna and $169,095.00 payable to Humana.

In all other respects, both motions are DENIED.

DONE this 24th day of October, 2018.

Defendants Health Care Service Corporation and Caring for Montanans did not join this motion. (Doc. 2066 at 1 n.1).

See Doc. 2123 at 13-16. Specifically, Aetna and Humana cite to the court's language in Discovery Order No. 44 (doc. 1391) where the court wrote that the “parties seeking information will be required to pay the Nationals the reasonable cost of searching for, gathering, and producing the documents and data sought.”

Aetna and Humana may not have a legal interest in this litigation, but the court is not naïve enough to believe they have no business interest in it. The Blue Cross Blue Shield organizations are some of Aetna's and Humana's largest competitors in the health-insurance market, and the outcome of this case has the potential for reshaping the competitive relationship among them. Aetna and Humana, along with other health-insurance providers, are keenly interested in this case.

As will be explained in more detail below, the court is persuaded that the requesting Plaintiffs and Defendants undertook reasonable steps to avoid undue expense and burden on Aetna and Humana, so that their fees are not awardable as a sanction under Rule 45(d)(1). Given the issues at stake in this case, including the need of the Plaintiffs and Defendants to compare the health insurance provided by the Blues to that of the National Insurers for purposes of understanding the health-insurance market, some expense and burden should be expected in responding to a subpoena. It is only the failure to avoid undue expense and burden that triggers the possibility of a sanction. Admittedly, responding to these subpoenas was expensive and burdensome, but the court does not believe it was unduly so in the context of the needs of this case.

It is possible that Rule 45(d)(3)(C) additionally applies to the subpoenas and document production at issue here. Specifically, Rule 45(d)(3)(B)-(C) provides that, where a subpoena requires the disclosure of “confidential research, development, or commercial information[,]” the court may order the non-party to comply with the subpoena if the serving party “(i) shows a substantial need for the testimony or material that cannot be otherwise met without undue hardship; and (ii) ensures that the subpoenaed person will be reasonably compensated.” Notably, pursuant to Rule 45(d)(3)(C), “whether a nonparty subject to a subpoena must bear the costs of compliance is decided at the court's discretion.” Axcess Int'l, Inc. v. Baker Botts, L.L.P., No. 3:10-cv-1383-F, 2012 WL 12884745, at *6 (N.D. Tex. March 30, 2012) (citing the pre-2013 version of Rule 45(d)(3)(C)); ; see also 9A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2463.1 (3d ed. 2008) (“What exactly is entailed by ‘reasonable compensation’ is left implicitly by the text of the rule to the court's discretion.”).

For the late-night pleasure of any casual readers of this Order, “deduping” and “threading” refer to techniques designed to eliminate duplicate documents produced by searching a massive collection or database. Whenever a large collection of data or documents is electronically searched, either with key-term searching or TAR (Technology Assisted Review—a form of artificial intelligence in which the searching computer learns to identify and differentiate relevant documents from the irrelevant), multiple copies of the same documents are extracted from different sources or custodians. For example, if an electronic or written communication is addressed to a particular recipient but “carbon copied” (“CCed”) to several others, an electronic search of these various sources, or “custodians,” will produce not only the original memorandum, but its various copies also. To reduce this unnecessary duplication, the extracted documents go through a “deduping” application to identify those that are exactly alike so that unnecessary copies of the same document can be eliminated. Likewise, in the production of emails, multiple individual emails are produced that, when communicated originally, were part of a chain or “thread” of emails. A threading application links the related emails together to reconstruct the email “thread,” or the back-and-forth communication made up of the individual emails, so that a cohesive thread is produced rather than separate multiple copies of related emails.

See Joint Motion of Aetna and Humana, etc., Doc. 2123, p. 10.

A total cost for all contract lawyers of $150,067.49 divided by 150,000 documents equals one dollar of time per document (150,067.49 ÷ 150,000 = 1.0004) on average. Certainly some documents required more than one minute to review, while others (perhaps many others) required far less than one minute each to review.

While the court can calculate the average hourly rate based on the total billed amount and the total hours, the court has not located among the voluminous exhibits the actual time sheets or billing records of the individual Gibson Dunn lawyers who performed the secondary review. For this reason, the court does not know the rates charged separately by each lawyer.

The court notes that this total differs from the amount stated of $442,421.41 claimed for reimbursement in Exhibit 9, being $332.91 higher than the claimed amount. For that reason, the court will use Humana's lower claim as the baseline for analysis in this opinion.

To be clear, the court is not suggesting anything untoward by outside counsel—only that, anticipating that the Defendants and Providers would pay for these expenses, they were not as careful and efficient with their time as they might have been if their own client were paying.

The Central and Northern Districts of California have previously held that the significance component of Rule 45(d)(2)(B) does not require analysis of these three factors. See McGraw-Hill, 302 F.R.D. at 535-36; Connell, 2015 WL 4747260 at *2-*3. These courts note that the three-factor test existed before the significance provision was added to Rule 45 in 1991. Id. “Pre-1991 case law—while still instructive to the extent it bears of the question of significance—did not contemplate the Rule's revitalization, and therefore should not be applied wholesale, without further analysis.” Connell, 2015 WL 4747260 at *3; McGraw-Hill, 302 F.R.D. at 536 (finding the three-factor test obsolete). But see Linder v. Calero-Portocarrero, 251 F.3d 178, 182 (D.C. Cir. 2001) (internal quotation marks omitted) (quoting In re The Exxon Valdez, 142 F.R.D. 380 at 383) (“There is no indication that [the amendment] intended to overrule prior Rule 45 case law, under which a non-party can be required to bear some or all of its expenses where the equities of a particular case demand it.”).

A decent argument can be made that attorneys' fees associated with some types of screening and reviewing of documents before production are not expenses “resulting from compliance” with the subpoena, but, in fact, are for the benefit of the producing target of the subpoena. Compliance requires only that the target gather responsive documents and produce them in accordance with the demand of the subpoena. Admittedly, the process of identifying and gathering the documents responsive to the subpoena may well involve some screening for relevance, i.e., to make sure that each document is one actually requested by the subpoena. As such, this type of screening is an expense “resulting from compliance” with the subpoena. However, screening documents to be withheld on a claim of privilege and identifying documents containing sensitive business information, for which a protective order may be necessary, are not something required for “compliance” with the subpoena. Rather, these activities are to protect the interests of the producing target. The benefit of screening documents for privilege and proprietary information inures not to the requesting party, but to the target of the subpoena and, thus, is something different and apart from complying with the subpoena. The requesting party seeks only the production of the responsive documents. Compliance with the subpoena is unconcerned with whether the documents are privileged or sensitive. The question of privilege or proprietary sensitivity belongs to the producing target, who may seek to resist, narrow, or limit the subpoena to protect those interests. The expense entailed in preserving privileged information or protecting sensitive business information is incurred not because the requesting party wants it, but because the producing target desires it for its own interests. In that sense, therefore, screening for privileged and confidential information is not a “result[ ] of complying” with the subpoena.

See also Behrend, 248 F.R.D. at 85-87 (granting motion to compel where the non-party refused to permit the party to conduct the document review subject to the underlying protective order because the non-party was an interested party).