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Helping Reshape the FRCP to Reduce Discovery Abuse




by:
Goldberg Segalla LLP - Buffalo Office

 
February 18, 2014

Previously published on February 10, 2014

An important public comment period for proposed changes to the Federal Rules of Civil Procedure ends this week on  February 15. If your organization has yet to comment, please consider submitting a comment, however brief, in support of the proposed amendments. The amendments are designed to ease the burdens of preservation and discovery by establishing a national uniform standard for spoliation sanctions and narrowing the scope of discovery. Below you will find information about the proposed amendments and instructions on how to file a comment. If you would like more information or assistance submitting a public comment, we can help.

Goldberg Segalla has been actively involved in advocating for substantial changes to the Federal Rules of Civil Procedure on behalf of our clients. The firm, through testimony and contributing to submissions to the Federal Rules Advisory Committee, is seeking to establish a uniform national preservation standard requiring a finding of “bad faith” before a court can issues sanctions for a party’s failure to preserve evidence. In addition, we have been seeking to narrow the scope of discovery. As any litigant knows, discovery is often misused as a weapon by plaintiffs who intentionally seek overly broad discovery to extort settlements in meritless cases. Compounding such tactics is the refusal of most federal judges to limit the scope of discovery during litigation. As a result of the firm’s contributions, proposed amendments to the Federal Rules of Civil Procedure were recently published for public comment.

The proposed amendment to Rule 37(e) would make the rule apply to all forms of discoverable information and limit sanctions to those occasions where the failure to preserve caused “substantial prejudice” and was caused by “willful” or “bad faith” misconduct, or where such actions “irreparably deprived” the other party of “any meaningful opportunity to present or defend against the claims in the litigation.”

The proposed amendment to Rule 26(b)(1) would narrow the scope of discovery by re-defining the scope of discovery to “any non-privileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case.” The amendment would strike the well-known statement, “[r]elevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.”

In 1983, the Committee added Rule 26(b)(2)(c)(iii), requiring judges to limit discovery if “the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.” Greater emphasis is given to this “proportionality” requirement in the proposed amendments by moving this phrase directly into Rule 26(b)(1).

As previously stated, public comment period closes on February 15. After that, based on comments from the bench, bar, and general public, the Advisory Committee may then choose to discard, revise, or transmit the amendments as contemplated to the Standing Committee. The Standing Committee independently reviews the findings of the Advisory Committee and, if satisfied, recommends changes to the Judicial Conference, which in turn recommends changes to the Supreme Court. The court considers the proposals and, if it concurs, officially promulgates the revised rules by order before May 1. The rules would take effect no earlier than December 1 of the same year unless Congress enacts legislation to reject, modify, or defer the pending rules. It is unlikely that the proposed amendments will reach the Supreme Court by May 1, 2014, so the earliest we may see these amendments enacted is December 1, 2015. With the public comment period closing this week, now is the time to act in support of the amendments.

Information about the proposed amendments and how to comment is available at http://www.uscourts.gov. The overwhelming majority of comments have been by the plaintiffs’ bar in opposition to the amendments. We encourage you to submit comments in support of the proposed rules.

Below are some briefing points that can be raised in a written comment.

Briefing Points

Here are some key points about the proposed amendments:

Rule 26(b)(1) — Scope of Discovery 

  • The Advisory Committee’s proposed amendment to Rule 26(b)(1) would re-define the scope of discovery to allow discovery of “any non-privileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case.” The proposed amendment deletes the “subject matter involved in the action” from the scope of discovery in order to make clear that discovery is defined by the claims and defenses identified in the pleadings. This change would provide a meaningful improvement compared to the overbroad scope of discovery defined by current Rule 26(b)(1), which is a fundamental cause of the high costs and burdens of modern discovery.
  • The proposed amendment would also strike the well-known phrase, “[r]elevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” This language has erroneously been used to establish a very broad scope of discovery even though it was intended only to clarify that inadmissible evidence such as hearsay could still be within the scope of discovery so long as it is relevant (a principle the proposed amendment preserves).
  • The proposed amendment would also move the proportionality language currently found in Rule 26(b)(2)(C)(iii) into Rule 26(b)(1). Moving the current proportionality language is a modest edit, but if adopted, it would have the important effect of reminding parties of the applicability of the principle of proportionality to all discovery (including preservation) and would encourage parties and judges alike to maintain a pragmatic perspective on what discovery should mean to each individual case.
  • Opponents of the proposed amendments to Rule 26(b)(1) argue that the inclusion of proportionality in the definition of scope will “shift the burden of proof” to the party requesting discovery and will impose a burden on plaintiffs that will deny access to justice. This argument is unpersuasive for the following reasons:
    • The proposed amendment would not change any procedural “burden” related to the scope of discovery, but rather would amend the substantive definition of that scope. Similarly, the principle of proportionality is unchanged by the amendment; only its location in the rules would be changed (for the purpose of emphasizing its importance).
    • Currently, the “burden” of ensuring proportionality falls upon both requesting and responding parties. Rule 26(g) states that an attorney’s signature on a discovery request or response is a certification that the document is consistent with the FRCP, not interposed for any improper purpose (including cost and delay) and is “neither unreasonable nor unduly burdensome or expensive, considering the needs of the case.” Rule 26(g) and its attendant obligations would be unchanged by the current proposed amendments.
    • Although it is possible that the proposed amendment could lead to an increased number of motions to compel compared to motions for protective orders, this does not amount to a “shift of the burden of proof” to plaintiffs. (It is also possible and potentially more likely that the changes will result in less discovery motions because the rules will provide more clarity on permissible discovery.) Instead, the “burden” of filing a motion will fall upon the requesting/moving party regardless of their status as plaintiff or defendant, and the ultimate “burden” of establishing whether a particular request is proportional will inevitably fall to both parties.
    • The proposed amendment will not change the fact that discovery depends upon good faith in the process. Counsel will continue to work to reach agreement under the revised scope of discovery just as they do under the current scope, and will not overburden the courts with demands for intervention. Moreover, proposed amendments should not be undermined by the mere possibility of disagreement between the parties or potential bad behavior, rather the committee should assume that all sides will continue to act in good faith, as is required by the Rules of Professional Conduct.
    • To the extent the proposed rule changes any “burden” on requesting parties, such a change is warranted by the need to ensure proportionality in discovery, particularly in light of the “rise” of electronic discovery. Moreover, the committee has correctly observed that the current proportionality rule requiring responding parties to object has failed to limit the problems of overly broad discovery.

Rule 37(e) — Failure to Preserve Discoverable Information

  • The proposed new Rule 37(e) would prohibit sanctions for failure to preserve discoverable information unless the failure was “willful or in bad faith” and caused “substantial prejudice.” This proposal holds great promise to establish a much-needed uniform national standard that would curtail costly over-preservation and ancillary litigation over allegations of spoliation. Unlike the current Rule 37(e), the proposed rule would not be limited to electronically stored information.
  • Unfortunately, an exception contained in subsection (1)(B)(ii) could “swallow the rule” by allowing courts to impose sanctions absent any willfulness or bad faith where the loss of information “irreparably deprives” a party of any ability to present or defend the action. Although the Advisory Committee intends for the exception to apply in only in the very rarest of situations, it is likely that courts would use the exception to avoid the primary rule. The exception should be removed before the proposal is adopted. As an alternative, the exception should be revised to apply to the loss of “tangible things” which will narrow the scope of the exception but will meet the committee’s goal of not overruling the “Silvestri” line of cases.
  • The proposed Rule 37(e) would authorize sanctions for “willful or in bad faith” conduct, which is problematic because some courts define “willfulness” as intentional or deliberate conduct without any showing of a culpable state of mind. For example, the act of establishing a standard auto-delete function could be characterized as “willful” because it is intentional, even if not done in bad faith.
  • The Advisory Committee should substitute the conjunctive “and” for the disjunctive “or” to make clear that sanctions apply only to conduct that is both willful and in bad faith. Alternatively, the committee should define “willful” to mean the deliberate destruction or alteration of information that was known to be subject to discovery requests.
  • The list of “factors to be considered in assessing a party’s conduct” in subsection (2) of the proposed rule should be deleted or, at most, included in the Committee Note rather than the rule text. None of the factors goes to the central point of the proposed rule, which is the determination of whether a failure to preserve information was “willful or in bad faith” and resulted in “substantial prejudice.” There is a high degree of risk that interpretation of the various factors could convert them into mandates whose violation is seen as justifying sanctions despite the culpability and prejudice requirements of the rule.
  • The proposed “Curative Measures” provision of Rule 37(e)(1) should be amended to require a threshold showing of culpable conduct (or at least negligence) as well as a required finding of substantial prejudice before curative measures may be imposed.
  • The proposed Rule 37(e) needs a clear, bright-line standard to clarify when the affirmative duty to preserve information is triggered. Currently, wasteful over-preservation is driven by a fear of sanctions, and judicial decisions have imposed great affirmative burdens to preserve all relevant material. The Advisory Committee should adopt a clear “commencement of litigation” trigger for when a party must take affirmative preservation steps, balanced with a prohibition against willful and bad faith destruction of material that causes substantial prejudice to a potential adversary. This would yield vast benefits without materially damaging any party’s ability to prove or defend against any claim.

Rule 1 – Cooperation

  • Rule 1, which sets forth the aspirational goal of the FRCP to “secure the just, speedy and inexpensive determination of every action,” has not before imposed any affirmative duties on parties or their lawyers. Now is not the time, as proposed by the Advisory Committee, to add “parties” to Rule 1 with an exhortation in the Committee Note for parties to cooperate with one another. Creating a duty to cooperate is a well-intentioned idea that is sure to lead to unintended negative consequences, including abusive motions accusing opposing counsel of failing to achieve the goals of the rules.

Rules 30, 31, 33, and 36 — Presumptive Numerical Limits

  • The Advisory Committee has appropriately proposed to reduce the presumptive numerical limits in several categories of discovery. The proposals include reducing the presumptive number of oral depositions from 10 per party to five and the presumptive duration of a deposition from seven hours to six (Rule 30); reducing the presumptive number of written depositions from 10 to five (Rule 31); reducing the presumptive number of Rule 33 interrogatories from 25 to 15; and adopting a presumptive limit of 25 for Rule 36 requests to admit. These limits would have a beneficial effect on the costs and burdens in many cases. They would encourage parties to make discovery proportionate to the true needs of each case, while preserving the ability to  secure needed expansion in individual cases by agreement or upon court motion.

How to File Comments

You can file your comment with the Advisory Committee electronically at this link: http://www.regulations.gov/#!docketDetail;D=USC-RULES-CV-2013-0002

The committee is also accepting written comments by mail at this address:

Committee on Rules of Practice and Procedure
Administrative Office of the United States Courts
Suite 7-240
Washington, D.C. 20544

THE DEADLINE FOR SUBMITTING COMMENTS IS FEBRUARY 15.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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