It’s not often – like once every quarter century – that the Advisory Committee on Civil Rules (the folks who decide when the Federal Rules of Civil Procedure need to be amended, and how) decide to take on Rule 26(a) (concerning scope of discovery) and Rule 37(e) (concerning sanctions) essentially from the ground up. That’s what’s happening now, and it’s high time that our defense-side readers put their two cents (or more) into this process. Some very helpful changes to reduce the outrageous costs of discovery and to do away with the “gotcha game” of discovery sanctions (primarily, but not totally, concerning ediscovery) have been proposed. You can bet your bottom dollar that when anything is proposed that is useful to us and our clients as producing parties, the other side will be out in force (see here, for example) to try to stop it in its tracks. 

We need to get off our collective duffs and do something about this.  Discovery, especially ediscovery, is the biggest single cost issue in litigation, both in pharmaceutical mass torts and elsewhere.

Here’s a link to the Committee’s proposal.

Specifically, the committee has asked for public comment on two proposals to amend the Federal Rules, both of which are designed to reduce the costs and burdens of discovery that we as defendants and defense counsel routinely face as producers of large quantities of information, both electronically stored and otherwise. The broadest rules change is a revision to Rule 26(b)(1), which re-defines the scope of discovery. It would get rid of the current, and often misused (as we discussed last week ) standard by which discovery is measured: “reasonably calculated to lead to the discovery of admissible evidence.” Instead, discovery would be permissible of “any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case.” Currently the proportionality concept is buried in Rule 26(b)(2)(C)(iii), where it looks more like an affirmative defense. If the amendment is adopted, proportionality becomes part of the basic definition of scope. Think of the difference that could make in encouraging both judges and the parties to take a pragmatic perspective on what discovery is appropriate to each particular case.

The committee’s proposed amendment also deletes the phrase “subject matter involved in the action” from the scope of discovery.  The effect of that proposed change would be to cabin discovery to only what is pertinent to the claims and defenses actually identified in the pleadings.  This change would put some brakes on broad discovery designed to allow the other side to use the discovery process to uncover additional new claims that have not been pleaded, and to restrain the metastasis of litigation that we see all too often, particularly in multidistrict actions. One further improvement we’d like to see (yes, we can propose changes, too) would be to make that point explicit, such as by adding a materiality-based aspect to the scope of discovery, defining it as “any non-privileged matter that is relevant and material to any party’s claim or defense.” Such a materiality standard would strengthen Rule 26(b)(1) while still ensuring that parties can obtain the information they need to bring or defend against any claim that either side has cared enough about to plead. Both of these changes would bring about meaningful improvement compared to the overbroad scope of discovery defined by current Rule 26(b)(1), which is probably the root cause of the high costs and burdens of today’s excessive discovery.

In an effort at addition by subtraction, the committee’s proposed amendment also seeks to eliminate another well-known phrase, and overused 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.”  We’ve all seen this language misused to create a very onerous scope of discovery, even though the Committee originally intended it just to clarify that inadmissible evidence such as hearsay could still be within the scope of discovery provided it is relevant (a point that is preserved in the proposed amendment).  This amendment targets such abuses as discovery concerning other products and dissimilar complaints and adverse events, as well as huge data sets relating to clinical studies of aspects of a drug or device other than the injuries claimed by the plaintiff(s).

The second set of changes, while less broad in scope, may well be more important in practice. The Committee has proposed to rewrite Rule 37(e), concerning sanctions for failure to preserve discoverable information. We’ve blogged about this before , describing the changes, but as a reminder, here are some bullets that: (1) hit the highlights, and (2) recommend additional clarifying changes:

  • The amendment to Rule 37(e) would prohibit sanctions for failure to preserve discoverable information unless the failure was “willful or in bad faith” and causes “substantial prejudice.” It would 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. While that change would also benefit plaintiffs who dispose of the product over which they later sue (something we’ve complained about before), on the whole the defense side would benefit, since our side is much more frequently on the receiving end of ediscovery gotcha games.
  • The proposed revision to Rule 37(e)(1)(B)(ii) currently contains an exception to the willfulness/bad faith standard for lost material that “irreparably deprives” a party of any ability to present or defend the action. Again, while this could be useful for dealing with plaintiffs who dispose of the product, it could also “swallow the rule” by providing an avenue for courts to continue imposing spoliation sanctions absent willfulness or bad faith. On the whole we’d rather see that exception removed before the proposal is adopted.  
  • The proposed Rule 37(e) would authorize sanctions for “willful or in bad faith” conduct. That’s a big improvement, but we don’t see why we need both. Sometimes “willfulness” gets defined as intentional or deliberate conduct without a culpable state of mind. Even the establishment of a routine auto-delete function for electronic documents could be described as “willful,” in the sense that it was done intentionally (as opposed to by accident), even even though such widely used automatic functionality has not a whiff of bad faith to it. Thus, we’d rather see the Advisory Committee use “and” rather than “or” so that it is 100% clear that sanctions would be available only for conduct that is both willful and in bad faith.
  • We don’t think that subpart 2 of the revised rule needs to be cluttered up with a list of “factors to be considered in assessing a party’s conduct.”  That kind of stuff belongs in the Committee rather than the text.  The central point of the proposed amendment is the “willful”/”bad faith” requirement for spoliation and the showing of “substantial prejudice.”  A necessarily incomplete list of “reasonableness” factors (such factors are as broad as the concept of “reasonableness” itself) is more likely to confuse than clarify.  Putting a list in the black letter creates a significant risk of these factors being converted to mandates, the existence of which could justify sanctions in the absence of culpability and prejudice.

One other thing the proposed Rule 37(e) revisions could use is a specific, bright-line standard for triggering any affirmative duty to preserve information.  Right now, there is no trigger that a potential litigant can rely on.  Thus, our potentially producing clients are forced to engage in wasteful over-preservation for fear of being second-guessed by sanctions.  The courts haven’t helped; too many decisions have imposed absurdly broad burdens to preserve all relevant material.  The current standard - “anticipation of litigation” – forces preservation decisions to be made before any complaint is received, and it is the complaint that should define the scope of litigation, not the current ex post facto rule formulation.  The existing rule creates a vicious cycle of saving back-up tapes that would otherwise be trashed or recycled and then letting plaintiffs try to impose massive costs in producing documents from them that are very unlikely to be different than what would otherwise be produced.  While the overall ratio of documents actually used at trial to documents produced is absurdly low, the ratio for pre-litigation backup tapes has to be close to nonexistent.

Under the current “anticipation” standard, there is no opposing lawyer to negotiate with (or even to receive demands from), and no judge before whom the scope of reasonable “anticipatory” preservation can be determined. The Advisory Committee should amend Rule 37(e) to impose a “commencement of litigation” trigger for affirmative preservation – with the amendment’s prohibition against “willful”/”bad faith” requirement applicable to pre-litigation destruction of material that causes substantial prejudice to a potential adversary. The savings in time and money would be large, and the ability of parties to prove or defend against any claims actually asserted would be preserved.

The proposed amendments would make other changes to Rules 1, 4, 16, 30, 31, 33, 34, and 36.  It should also be kept in mind that amendments to the Federal Rules also indirectly influence state procedures, not only because some states will adopt federal changes where their rules track the federal ones, but also because in this instance the commentary that would accompany this proposal may give pause to state court judges otherwise inclined to treat electronically-stored information as just some sort of new-fangled filing cabinet.

So - what to do.

It’s our experience that many, if not most, large defense firms are organized so that their litigators include a specific group of attorneys and others who specialize in the intricacies of ediscovery – itself, further indication that the process of ediscovery has outstripped the substance of the litigation requiring it.  We would encourage our readers – including those of you who are clients of such firms – to ensure that each such firm’s ediscovery group submits comments to the Advisory Committee.  It should not be difficult or time-consuming for ediscovery groups hired by producing parties to prepare such comments, since these are the folks that know this stuff like the backs of their hands.  Ideally such comments would also describe current-rule ediscovery “horror stories” to the extent permitted by counsel’s ethical obligations to their clients.  These ediscovery groups are ready-made founts of useful information on discovery problems caused by the current rules, and seem to us to be the ideal units to provide the Advisory Committee with useful information.This opportunity may not come again during many of our careers to do something that materially improves the litigation climate.

Everyone who supports these reforms needs to submit a letter to the Advisory Committee during its public comment period, which began August 15, 2013, and closes February 15, 2014Again, you can be sure that the other side will (and indeed already is) make their voices heard in favor of the expensive status quo, since excessive discovery costs increase every case’s nuisance value. The public comment period is our only chance to balance the antis with submissions in support of the proposals and to make the additional suggestions for revision outlined above.

Comments can be filed with the Advisory Committee electronically or by mail. Here is the link for filing electronically. Witten comments by mail should be sent to:

            Committee on Rules of Practice and Procedure

            Administrative Office of the United States Courts

            Suite 7-240

Washington, D.C. 20544

For those of you who don’t have experience in filing formal comments with the Advisory Committee, and would like to see what one looks like, here’s a link to the comprehensive comment filed by the Lawyers For Civil Justice, which makes all of the points we’ve discussed in this post, and more.

For anybody who’s interested in doing more than just commenting, the Advisory Committee has scheduled three public hearings on the proposed amendments. We expect significant opposition to the rules amendments, including at the public hearings; therefore it is critical for the Committee to hear from those in favor of the adopting the amendments with appropriate changes. The dates and locations of the public hearings are as follows:

November 7 in Washington, D.C.;

January 9 in Phoenix, Arizona; and

February 7 in Dallas, Texas.

The Advisory Committee requires prospective witnesses to submit their names by regular mail 30 days in advance of each hearing at the same address listed above for the receipt of written comments.