On December 1, 2015, amendments to the Federal Rules of Civil Procedure adopted by the United States Supreme Court will be effective (absent action by Congress).  The amendments to the Rules should be duly noted by litigation practitioners as certain of the amended rules  appear to represent an increased focus on limiting discovery and even a departure from prior practice.  If the intent of these changes are actually followed, these amendments should have an impact not only on securities cases but on any case filed and litigated in federal court.

One of the most significant changes is the new Rule 26(b)(1), which reads:

(b)        Discovery Scope and Limits.

            (1)        Scope in General.  Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.  Information within this scope of discovery need not be admissible in evidence to be discoverable.

This new language is important because (1) it emphasizes that discovery sought by any party must be proportional to the needs of the case, and (2) it eliminatesthe prior language of the rule that relevant information need not be admissible so long as it appears “reasonably calculated to lead to the discovery of admissible evidence.”

Proportionality.  Under the amended provision, there is a renewed focus on the need for proportionality in discovery based on the needs of the case.  The Advisory Committee’s notes state that prior amendments to the Rules may have inadvertently “softened” this requirement, and the amendment “restores the proportionality factors to their original place in defining the scope of discovery.”  The Notes add that “the change does not place on the party seeking discovery the burden of addressing all proportionality considerations,” but neither “is the change intended to permit the opposing party to refuse discovery simply by making a boilerplate objection that it is not proportional.”  The Committee advises that the “parties and the court have a collective responsibility to consider the proportionality of all discovery and consider it in resolving discovery disputes.”  Finally, the Committee states that the “burden or expense of proposed discovery should be determined in a realistic way.  This includes the burden or expense of producing electronically stored information.”  Most of these admonitions are not novel concepts for experienced litigators, but the new language highlights the requirements of proportionality and provides more clear authority, language and guidance when litigating discovery disputes over the breadth of discovery.

Scope of Discovery:  As noted above, the prior language of Rule 26(b)(1) stated that “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense” but also provided “[r]elevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Under the amended provision, this latter sentence has been eliminated from the text of the rule.  The Advisory Committee Notes explain:

The phrase has been used by some, incorrectly, to define the scope of discovery.  As the Committee Note to the 2000 amendments observed, use of the “reasonably calculated” phrase to define the scope of discovery “might swallow any other limitation on the scope of discovery.”  The 2000 amendments sought to prevent such misuse by adding the word “Relevant” at the beginning of the sentence, making clear that “‘relevant’ means within the scope of discovery as defined in this subdivision . . . .”  The “reasonably calculated” phrase has continued to create problems, however, and is removed by these amendments.  It is replaced by the direct statement that “Information within this scope of discovery need not be admissible in evidence to be discoverable.”  Discovery of nonprivileged information not admissible in evidence remains available so long as it is otherwise within the scope of discovery.

At this point, it remains to be seen what practical effect this particular change will have on discovery practice and resolution of discovery disputes, but the Notes suggest (and thus a litigant opposing overbroad discovery may argue) that the change to the rule was intended to limit, not broaden, discovery because the prior “reasonably calculated” language could be read to “swallow any other limitation on the scope of discovery.”

There are several other substantive and practical amendments to the Rules, including a notable change to Rule 34 which imposes additional obligations on counsel in responding to document requests.  The amended Rule 34 requires that an “objection must state whether any responsive materials are being withheld on the basis of that objection.”  This may be a departure from prior practice by some attorneys.  As the Committee states:

This amendment should end the confusion that frequently arises when a producing party states several objections and still produces information, leaving the requesting party uncertain whether any relevant and responsive information has been withheld on the basis of the objections.  The producing party does not need to provide a detailed description or log of all documents withheld, but does need to alert other parties to the fact that documents have been withheld and thereby facilitate an informed discussion of the objection.  An objection that states the limits that have controlled the search for responsive and relevant materials qualifies as a statement that the materials have been “withheld.”

In addition to the foregoing, every lawyer should familiarize themselves with all of the other amendments to the Rules.  The full text of the pending amendments and Advisory Committee Notes may be found here.