Another potential defect is the issuing party’s failure to notify all the other parties in the lawsuit prior to issuing the subpoena; the subpoena must expressly state notice occurred.5 The failure to notify other parties to the litigation likely invalidates the subpoena and impacts the customer’s privacy rights. The bank should attempt to verify that the issuing party afforded the bank customer proper notice of the subpoena and an opportunity to object before complying. 3. Evaluate the Bank’s Grounds for Objecting to the Subpoena A bank can object to a subpoena for various reasons, including (a) it does not provide a reasonable time for compliance; (b) it requires the disclosure of privileged or confidential information; or (c) it subjects the bank to undue burden.6 The bank should consult with its legal counsel regarding these and other potential objections. a. Reasonable Time for Compliance If the bank objects to the time for compliance specified in the subpoena, a court may quash the subpoena, declaring it invalid. A court determines a reasonable time for compliance by considering the burden of the request and the time given for compliance. This is necessarily a fact-intensive inquiry that will turn on the specific circumstances of each subpoena. For example, in one case, the court found 10 business days an unreasonable time to comply with a subpoena for documents seeking information extending over a decade and implicating thousands of confidential files.7 If there is a significant burden placed on the bank to identify and produce the requested documents, a court may require the issuing party to shoulder the costs of compliance. In such instances, the bank can ask for an advance of reasonable costs before undertaking the burden of compliance.8 b. Disclosure of Privileged or Confidential Information Another important aspect of responding to a subpoena is recognizing that federal and state law protects various information held by the bank as privileged or confidential. i. Bank Examination Privilege Federal law prohibits an FDIC-insured bank’s disclosure of any information regarding a suspicious activity report (SAR).9 If a bank receives a subpoena that would require the production of a SAR or related documents, it should object and also notify the FDIC.10 Nebraska law is also clear that any regulatory report by a financial agency is a confidential record of that agency.11 The bank should object to any subpoena seeking information about SARs or regulatory reports. ii. Attorney-Client and Work-Product Privilege The attorney-client privilege protects confidential communications between an attorney and the attorney’s client. Generally, the privilege applies if (1) the bank communicates with its attorney; and (2) the communication relates to information shared with the attorney for a legal opinion or legal services.12 The work-product privilege applies to materials prepared in anticipation of litigation, even when the bank is not a party to the litigation but is a third party to the proceeding. This privilege does not apply to documents prepared in the regular course of business.13 A bank should withhold any information constituting confidential communication between the bank and its attorney or prepared in Continued on page 18 16 NEBRASKA BANKER
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