In August 2013, the Judicial Conference Advisory Committee on Bankruptcy and Civil Rules (the “Committee”) released a “package” of proposed amendments to the Federal Rules of Civil Procedure (the “Rules”) which, in a departure from the trend of prior Rule updates, propose to limit the scope of discovery rather than expand it. See Preliminary Draft of Proposed Amendments to the Federal Rules of Bankruptcy and Civil Procedure, available at http://www.uscourts.gov/ uscourts/rules/preliminary-draft-proposed-amendments.pdf (the “Proposed Rules”). Judges and other members of the legal community have recently voiced their support to limit the scope of discovery, arguing that the cost and burden of discovery may be spiraling out of control.
Perhaps the most significant proposals considered by the Committee are amendments to Rule 26(b)(1) governing the scope of discovery. If enacted, the proposed changes would require proportional discovery, limiting discovery more than presently allowed. Currently, Rule 26(b)(1) provides the “scope of discovery” as follows:
Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense — including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.
The current embodiment of Rule 26(b)(1) thus authorizes broad discovery, only requiring that the discovery request appear “reasonably calculated to lead to the discovery of admissible evidence.” The proposed amendment to Rule 26(b)(1) alters the current language significantly and reads 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 amount in controversy, the importance of the issues at stake in the action, 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 need not be admissible in evidence to be discoverable.
See Proposed Rules at 289-290 (emphasis added).
The proposed amendments would thus restrict the currently bro ad scope of discovery procedures to information “proportional to the needs to the case.” The proposed changes would remove the “any matter relevant to the subject matter” clause now in the rule, specifically restricting discovery to “any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the ne eds of the case considering the amount in controversy…and whether the burden or expense of the proposed discovery outweighs its likely benefit.” This would likely have significant impact on discovery in future litigations if adopted, although many courts already consider proportionality and amount in controversy when the scope of discovery becomes subject to dispute.
Codifying Sanctions for Failure to Preserve Discoverable Information
The Committee also considered, in conjunction with the proposed amendments to Rule 26(b), amendments to Rule 37, which governs the imposition of sanctions when a party fails to preserve discoverable evidence. The proposed amendments to Rule 37 are designed to “ensure that potential litigants who make reasonable efforts to satisfy their preservation responsibilities may do so with confidence that they will not be subjected to serious sanctions should information be lost despite those efforts.” See Proposed Rules at 318. The proposed amendments achieve the Committee’s stated purpose by establishing two types of action that a court may take when it finds that a party has failed to preserve documents important to the litigation. The first is more concerned with curative measures such as additional discovery, while the second addresses more punitive actions. See Proposed Rules at 320-21. To achieve those goals, the Proposed Rule 37(e)(1) provides that “If a party failed to preserve discoverable information that should have been preserved in the anticipation or conduct of litigation, the court may (A) permit additional discovery, order curative measures, or order the party to pay the reasonable expenses, including attorney’s fees, caused by the failure; and (B) impose . . . sanction[s] or give an adverse-inference jury instruction” in certain enumerated circumstances. Proposed Rules at 314-15.
At a panel during the summer of 2013, the Consortium on Litigation, Information Law & E-Discovery, several judges voiced their support for the proposed changes. See Monica Bay, Judges Chime in on Proposed E-Discovery Amendments, Law Technology News (May 3, 2013), available at http:// www.law.com/jsp/lawtechnologynews/PubArticleLTN. jsp?id=1202598538058. Southern District of New York Judge Shira Scheindlin suggested that an emphasis on proportionality was necessary: “How am I supposed to pending a motion to dismiss…to weed out the cases that cannot proceed.” Id. Southern District of New York Magistrate Judge James Francis, also a frequent speaker on e-discovery topics, reassured those worried about the effect the proposals could have on preservation and sanctions, stating that sanctions are “highly unlikely events” and most judges are reasonable. Id.
The philosophies expressed by Judges Scheindlin and Francis were reportedly also shared by Judge Peter Flynn, of the Circuit Court of Cooke County Illinois Chancery Division. Judge Flynn questioned the absurdity of, what he calls, “discovery paranoia – the urge to turn over the next rock, no matter the consequences.” Id. Judge Flynn argued that preservation should be viewed from a business rather than a legal perspective, as the preservation of all unnecessary documents is not a good business practice. Id.
Wh i l e th e am endm en t s und e r c on s id e r a t i on b y th e Committee may ultimately be rejected or take years to become law, it is interesting to note the theme of cooperation present in the proposals. In its notes, the Committee drives this point home: “[e]ffective advocacy is consistent with – and indeed depends upon – cooperative and proportional use of procedure.” Proposed Rules at 270. The written comment period on the Proposed Rules closed February 15, 2014.