As of May 1, 2017, all new cases filed in the US District Court for the District of Arizona are automatically subject to mandatory “pilot” discovery obligations requiring comprehensive disclosures on an expedited schedule. For those familiar with litigating in Arizona state courts, the new discovery obligations are based on and resemble the disclosure requirements of Rule 26.1 of the Arizona Rules of Civil Procedure. Although applicable to all parties, the new discovery obligations are particularly significant for corporate defendants, as they give defendants little time to investigate and evaluate a case before serving mandatory discovery responses; increase the burdens of dealing with frivolous or non-viable claims; and impose new requirements for producing electronically stored information (ESI) that will likely disproportionately impact corporate defendants. This alert is based on Steptoe’s initial experience with the pilot program that began on May 1, and outlines the most critical new requirements parties should be ready to address when defending cases in federal court in Arizona.
Significantly Reduced Time to Investigate and Gather Potentially Discoverable Documents
Perhaps most significantly, the new obligations significantly reduce the “ramp up” time for investigating the claim and gathering relevant information. Under the pre-pilot rules, no discovery could occur until after a Rule 26(f) conference, which usually gave defendants several months to investigate the case and gather information before needing to respond to discovery and make disclosures. Under the new discovery obligations, all parties must file mandatory initial discovery responses no later than 30 days after the first responsive pleading and ESI must be produced within 40 days of serving the initial discovery response. The mandatory discovery requires the parties to identify the:Names and contact information for all persons likely to have discoverable information
- Names and contact information for all persons who have given written or recorded statements
- Documents and ESI that may be relevant
- Facts relevant to claims or defenses and legal theories
- Computation of damages
- Insurance that may apply
Unlike the pre-pilot rules, each party must produce all relevant information and documents that are responsive to the mandatory discovery – even if the party does not plan to use that information to support its claims. A party is not excused from providing an Initial Discovery Response because it has not yet investigated the claim, it challenges the sufficiency of another party’s mandatory discovery response or another party has not yet responded. While the parties can seek a one-time 30-day extension if they jointly certify that the case might settle before the 30-day period is up, the discovery obligations do not create any other mechanism for the parties to agree to voluntarily postpone the 30-day deadline.
Increased Burden for Defending Meritless Litigation
Under the pilot, filing a motion to dismiss that does not address all claims will not generally alter the deadline for filing an answer – nor the mandatory discovery responses that must be filed 30 days later. There is a limited exception for motions to dismiss based on a lack of subject matter jurisdiction, lack of personal jurisdiction, or certain immunities, in which case, the court has the option of deferring the time for filing an answer “for good cause.” But, even in those limited circumstances, the defendant needs to ask the court for this deferral in advance, requiring the defendant to signal its strategy for filing a motion to dismiss before filing the motion. In all other circumstances, a defendant must comply with the mandatory discovery requirements even if it has filed a potentially successful motion to dismiss.
New Obligations for Producing ESI
The pilot order creates new obligations for producing ESI that will particularly affect corporate defendants with significant electronic documents. ESI has to be produced in the form the other side requests unless the court orders otherwise. If the parties cannot agree on production format, or any other issue regarding ESI, they must present the dispute in a joint motion to the court or a conference call if the court so directs. This obligation creates an opportunity for discovery abuse by plaintiffs who have little ESI themselves, by giving them an incentive to demand production in the most burdensome manner possible to create an early discovery dispute that must be resolved by the court. On the other hand, this process may be beneficial to both parties as it is often helpful to discuss and resolve ESI issues early in the litigation.
In addition, any party claiming “burden” as a reason for not producing any information in response to the mandatory discovery must “explain with particularity the nature of the objection and its legal basis, and provide a fair description of the information being withheld.” Corporate defendants attempting to limit the scope of ESI they produce will need to be prepared to specifically identify the basis for a burden objection at the outset, including potentially providing supporting affidavits or explanations for the burden claim.
The pilot’s mandatory discovery requirements are similar to the mandatory disclosure rules applicable in Arizona state courts. However, the pilot discovery deadlines come even more quickly than the state court’s disclosure requirements (30 days after filing a responsive pleading rather than 40 days under the Arizona state rules), with only limited ability to extend the deadlines and with no ability to avoid discovery while a motion to dismiss is pending. Moreover, although parties involved in state court litigation are generally free to negotiate extensions among themselves, based on a recent order in the District of Arizona relating to the new obligations, it appears that District Court judges may be disinclined to grant extensions to file a responsive pleading. In addition, state courts in Arizona have been very reluctant to grant sanctions for violations of the state’s mandatory disclosure rules, unless disclosure failures cause prejudice or affect the trial date. Traditionally, federal courts in Arizona have been much more willing to enforce discovery requirements – making it even more important to pay attention to the pilot discovery obligations. Failures to comply with mandatory discovery are subject to Rule 37(b), which gives courts significant latitude in imposing sanctions.
The Mandatory Initial Discovery Pilot Project was developed by the Advisory Committee on the Federal Rules of Civil Procedure, to assess whether requiring mandatory discovery will reduce the costs and delay of litigation. The Northern District of Illinois is also participating in the pilot program, and other district courts may join the program as well. The pilot program is scheduled to run for the next three years.