Contact: Joseph M. Russell; von Briesen & Roper, s.c. (Wisconsin, USA)
On August 15, 2013, proposed amendments to the Federal Rules of Civil Procedure were released to the public for a six-month comment period. These amendments, if approved, will significantly limit the scope and cost of discovery. They will also limit sanctions for the failure to preserve discoverable information and speed up the early stages of litigation.
There is still time to influence the final disposition of the proposed amendments. The comment period closes on February 15, 2014. The proposed amendments would become effective on December 1, 2015, with or without revision, if approved by the Rules Committee, the Judicial Conference and the Supreme Court – and if Congress does not act to defer, modify, or reject them.
This Update provides an overview of the proposed amendments and a short summary of the comments provided thus far.
Overview of Proposed Amendments
On June 3, 2013, the Rules Advisory Committee proposed amendments to Rules 1, 4, 16, 26, 30, 31, 33, 34, 36 and 37. The proposed amendments have been called the "Duke Rules" package because they emerged from a 2010 legal conference held at Duke University, where lawyers and judges discussed ideas for reducing costs and delays in civil litigation.
The proposed amendments reflect three overlapping themes: (1) proportionality in discovery, (2) active judicial case management, and (3) cooperation among litigants. Significant amendments to Rule 37, which governs discovery sanctions, have also been proposed limiting the sanctions parties now face for failure to preserve relevant documents – electronic or otherwise.
Proportionality in Discovery. The overarching aim of the amendments is to promote the responsible use of discovery, especially in cases where the discovery of large volumes of electronically stored information ("ESI") can result in litigation costs that are not justified by the amount in controversy. The key amendment in this regard is to Rule 26(b)(1), which is the Rule that sets the parameters of civil discovery. The amendment would narrow discovery between parties so that it is – as the new rule would read – "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 outweigh its likely benefit."
Rule 26(c) would be revised to make explicit the court's authority to enter a protective order that allocates discovery expenses. This revision would likely curtail unreasonably broad discovery demands as it will encourage courts to order more cost-shifting among parties for burdensome document collection, review and production.
Other amendments to the Rules reflect the Rules Advisory Committee's general intent to streamline discovery and reduce overall litigation costs:
- Rule 30: The presumptive number of depositions would be reduced to 5 (currently 10) and the presumptive time limit of each deposition would be reduced to 6 hours (currently 7).
- Rule 33: The presumptive number of interrogatories allowed would be reduced to 15 (currently 25).
- Rule 36: The presumptive number of requests for admission allowed would be 25 (currently there is no presumptive limit).
Active Judicial Case Management. Recognizing that "the longer it takes to litigate an action, the more it costs," the Rules Advisory Committee is proposing several amendments that would speed up the early stages of litigation and encourage courts to address electronic discovery at the outset:
- Rule 4(m): The time to serve the summons and complaint would be reduced from 60 days (currently 120 days).
- Rule 16(b)(2): The judge must issue a scheduling order within 90 days (currently 120) after any defendant is served or 60 days (currently 90) after any defendant appears.
- Rule 16(b)(3): The proposed amendments would permit an early scheduling order and discovery plan addressing the preservation of ESI. The proposed amendments would also add a new Rule 16(b)(3)(v) that would permit a scheduling order to "direct that before moving for an order relating to discovery the movant must request a conference with the court."
- Rule 26(d)(1), Rule 34: The proposed amendments would allow early Rule 34 discovery requests to be served before the parties' Rule 26(f) conference. A corresponding change would be made in Rule 34(b)(2)(A), which would set the deadline to respond to the early discovery requests to 30 days after the parties' first Rule 26(f) conference.
Cooperation. Recognizing that "hyperadversary behavior" leads to unnecessary discovery costs, the Advisory Committee's amendments seek to promote more cooperation among counsel regarding discovery.
However, rather than imposing an explicit duty of cooperation, the Advisory Committee has only proposed a small addition to Rule 1 that reflects the Rules' aspirational purpose as a whole: "These rules . . . should be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding." (proposed addition underlined)
Rule 37. The Advisory Committee, mindful that the amount and variety of digital information has significantly increased the burdens posed by litigation holds, has proposed amendments to Rule 37(e) that would clarify the standard by which a court may levy sanctions on a party that fails to preserve discoverable information.
Amended Rule 37(e) would establish – except in rare cases in which a failure to preserve "irreparably deprived a party of any meaningful opportunity to present or defend against the claims in the litigation" – that a court can only sanction a party for failure to preserve relevant information if the failure is "willful" or in "bad faith" and if that failure caused "substantial prejudice" to the other party in the litigation.
This new standard provides significantly more protection to parties than is available under the current rules. The Rules Advisory Committee notes, for instance, that the new standard explicitly rejects Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99 (2d Cir. 2002), which held that negligence is sufficient culpability to support sanctions.
Summary of Public Comments
Over 500 public comments – ranging from one-sentence to dozens of pages – have been provided thus far.
Comments from the plaintiffs' bar make up the majority of that number. The following comments illustrate the types of critiques the plaintiffs' bar have provided:
- "The proposed changes unnecessarily narrow the scope of discovery, negate the truth-finding philosophy that is the bedrock of our civil justice system, and improperly constrain the ability of plaintiffs to hold wrongdoers accountable."
- "The goal of litigation is to achieve a fair and just result through an open exchange of information that is not privileged. Restricting discovery does not encourage that goal. It instead encourages a game of 'hide the ball,' primarily to the detriment of those already harmed by negligence."
- "The proposed rewording of Rule 26(b)(1) would have the serious adverse effect of upending decades of precedent that the Rules should be liberally construed to allow broad discovery into any relevant areas of inquiry "reasonably calculated to lead to the discovery of admissible evidence."
There are a smaller number of comments that generally support the proposed amendments – or offer some constructive revisions of them. These include comments from corporations and defense counsel associations:
- DRI: "Currently, onerous litigation costs constitute an unnecessary drain on American businesses. The ill-defined and overly-broad discovery regime that currently exists under the Federal Rules imposes a heavy cost and burden with little corresponding benefit. . . .Without any sacrifice to the ability of litigants to obtain information they truly need in the pursuit of justice, modest revisions to the Rules will go far towards reducing these costs and improving federal litigation practice in a way that would benefit all parties."
- International Association of Defense Counsel (IADC): "The proposed amendments are a major step in alleviating the litigation congestion in our courts caused by repetitive discovery disputes and a lack of clarity in the current Rules."
- Ford: "Ford applauds the Committee's efforts to reform the FRCP and supports the Committee's aim to create procedures that require litigants to focus on the merits of a case rather than on unduly burdensome and costly discovery practices."
- Pfizer: "All too often, as a corporate defendant in federal court, Pfizer pays a significant penalty before any consideration of the merits of a particular case because of the unnecessarily burdensome nature of discovery under the current Rules."
Conclusion
If the scope and cost of discovery, and related sanctions, are issues that concern your company or organization, von Briesen encourages you to provide comments by February 15, 2014. Please contact the author or your von Briesen attorney for more information or for assistance preparing public comments.
Additional Resources
The proposed amendments, rules committee reports, and other information are available at http://www.uscourts.gov/RulesAndPolicies/rules/proposed-amendments.aspx.
Public comments can be submitted and reviewed electronically at http://www.regulations.gov/#!docketDetail;D=USC-RULES-CV-2013-0002.
Comments can also be submitted in writing to the following address:
Committee on Rules of Practice and Procedure
Administrative Office of the United States Courts
One Columbus Circle, NE
Washington, D.C. 20544
von Briesen & Roper Legal Update is a periodic publication of von Briesen & Roper, s.c. It is intended for general information purposes for the community and highlights recent changes and developments in the legal area. This publication does not constitute legal advice, and the reader should consult legal counsel to determine how this information applies to any specific situation.
