WHEN MAY A COMMUNICATION SERVICE PROVIDER REFUSE TO COMPLY WITH A SUBPOENA?

Communication service providers are frequently served with subpoenas from law enforcement agencies and civil litigants seeking information on communication service subscribers.  A subscriber’s billing records can reveal valuable evidence about his or her activities.  Generally speaking, if the subpoena validly requests records in the service provider’s possession, the provider must disclose them.

However, the recent case of Hadeed Carpet Cleaning, Inc. shows that if a service provider receives a civil subpoena in one state but maintains the targeted records in another state, it may have grounds to reject the due process request based on a lack of jurisdiction.

The Hadeed Case

Hadeed Carpet Cleaning, a Virginia business, filed a civil defamation suit against a local competitor.  Hadeed believed the competitor concocted defamatory customer reviews of Hadeed’s business and posted them under pseudonyms on Yelp, the social networking site.  Hadeed served a subpoena on Yelp’s registered agent in Virginia to learn the real names of the online critics.  Yelp is registered in Virginia, as required by Virginia law, but stores its user names on servers in California.

Yelp opposed the subpoena.  It argued that it was not subject to a subpoena in a Virginian lawsuit just because it had a registered agent in Virginia.  The lower Virginia courts ruled in favor of Hadeed.

The Virginia Supreme Court vacated the lower court decisions.  The higher court reasoned that although a Virginia subpoena may be served on an out-of-state company if it is a party to the lawsuit, Yelp was not a party to the Hadeed suit.  The Court left Hadeed to serve its subpoena in the California circuit where Yelp stores its user records.

Implications of the Hadeed Case

The Hadeed case involved a social networking site but would apply to any communication service provider.  Likewise, although the case involved only the subpoena rules of Virginia, similar rules apply in other states.

Hadeed complicates the subpoena process for everyone involved.  Plaintiffs may experience problems gathering evidence vital to their cases.  In particular, when communication subscriber records are held by a service provider with a regional or nationwide presence, the plaintiff may not know which state hosts the targeted records and therefore may not know where to serve the subpoena.  Even after finding the right state, the laws of that state may not permit the disclosure of the requested evidence.

Defendants may have doubts about their defense strategies if they are unsure what evidence the plaintiff can obtain.

Service providers with a regional or nationwide presence probably dread the potential inefficiency of responding to multiple state-specific subpoenas for a single piece of evidence. Most providers don’t even have the legal resources to research the jurisdictional subtleties.  Yet without legal advice they face a dilemma: risk the improper disclosure of private subscriber records or risk a judicial contempt order for flouting a valid subpoena.

One Way to Resolve the Hadeed Dilemma

In civil proceedings, where subpoenas are served without restrictions of confidentiality, a service provider has at least one solution to the above-described dilemma.  It may notify the affected subscriber of the subpoena and let the person decide whether to oppose it in court.  This approach would require some administrative tracking.  But it would validly shift the privacy protection responsibility to the subscriber, the party involved in the suit.