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Proposed FRCP Amendments; The Emperor's New Clothes

Proposed FRCP Amendments; The Emperor's New Clothes

“The only thing necessary for the triumph of evil is for good men [and women] to do nothing.”

While the origin of the saying is muddled, the message should be clear and familiar. It speaks of our responsibility to bind together in furtherance of justice, and the inevitable consequences of complacency; our duty to make our voices heard, rather than sit idly by while liberty is threatened. It is a call to action.

Many of you have heard of proposed amendments to the FRCP (view full text here). These amendments are poised to change civil litigation, and not in a good way. As another old saying goes, if you’re not outraged, you’re not paying attention. In this post, and a few that follow, I will explain why they threaten our clients’ right to discover the truth in civil proceedings. I will demonstrate the lack of factual support for them. I will dispel myths, and tell you things the proponents of the amendments don’t want you to hear. I will provide a link to the page where you can make your voice heard. Here is the first installment.

THE PROPOSED AMENDMENT TO FRCP 26(b)(1)

First, the text of the amendment: added text, deleted text

26. Governing Discovery…

(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 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 within this scope of discovery need not be admissible in evidence to be discoverable. 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. All discovery is subject to the limitations imposed by Rule 26(b)(2)(C).

Current FRCP: Relevant information is discoverable if the request is reasonably calculated to lead to the discovery of admissible evidence. The court may enter an order limiting discovery or shifting costs, usually upon a showing by responding party of disproportionality or that burden or expense outweighs the likely benefit. Discovery about the existence, custody, location, etc. of documents and persons is expressly authorized. For good cause, the court can also order discovery of any matter relevant to the subject matter of the action.

Proposed Amendments: Gone is the “reasonably calculated” standard. The answer to the threshold question – not whether ESI should be produced, not whether costs of production are properly shifted, but whether material is actually within the scope of discovery at all –now turns on things like responding party’s resources, and the burden and expense associated with production. In order to demonstrate that material is discoverable, propounding party must present information which is most often solely in the possession of responding party. Well, maybe propounding party can get the information. Propounding party can take discovery regarding the existence, custody and location of docu… Oh. Wait. Nope. That provision has been deleted, too. Also, the court may no longer order discovery of “matter relevant to the subject matter” upon a good cause showing.

Assume that DrugsRUs, Inc. markets a product, concealing risks that then injure thousands of people. Assume that DrugsRUs fires employee Wendy Whistleblower because she was blabbing to doctors about the true risks associated with product. In ensuing litigation, DrugsRUs claims Wendy’s email files exist only on backup tape. In deciding the threshold question of whether Wendy’s files are even discoverable, should the court consider the “resources” of DrugsRUs or the “burden and expense” of restoring the backup tape? Should plaintiffs bear a burden of making a related showing? Do they have the information required, and where would they get it? Is this justice?

For decades, the scope of discovery in civil litigation has been driven by relevance, and limited (when shown appropriate) by considerations of cost and burden. The proposed amendment would put costs in the driver’s seat, and limit discovery of relevant information. If you have a plaintiffs’ practice, particularly one in which the lion’s share of the admissible evidence is in defendants’ possession, do you think that will help you or hinder you in getting to the truth and getting it before a jury?

This proposed amendment has more insidious effects. Not only does this amendment obstruct the discovery of relevant evidence, it also provides a pathway to its destruction. Remember: the scope of discovery defines the scope of preservation. When litigation is reasonably anticipated, a party need only preserve that which is discoverable. Here is an illustration.

Current FRCP: DrugsRUs believes that Wendy’s email should not be discoverable, and objects to producing it, because the burden or expense outweighs its likely benefit. DrugsRUs is nevertheless required to preserve the backup tapes, because they are within the scope of discovery. In ruling on DrugsRUs’ objection, the court may order their production, and may order cost-shifting, if appropriate.

Proposed Amendments: DrugsRUs believes that Wendy’s email, though relevant, does not fall within the scope of discovery because burden and expense outweigh likely benefit. DrugsRUs does not therefore take steps to preserve the backup tapes. The court in a later lawsuit determines that the documents should be produced. But the backup tapes containing Wendy’s email have now been overwritten. Sanctions? Doubtful, under the proposed amendment to Rule 37(e), which actually encourages such destruction of evidence. (I will cover that in the next installment.)

THE EMPEROR’S NEW CLOTHES

Everyone in the streets and the windows said, “Oh, how fine are the Emperor’s new clothes! Don’t they fit him to perfection? And see his long train!” Nobody would confess that he couldn’t see anything, for that would prove him either unfit for his position, or a fool…

-Hans Christian Andersen; The Emperor’s New Clothes

This amendment is part of a group, referred to as the “Duke Package,” and was “developed in response to the central themes that emerged from the conference held at the Duke Law School in May 2010.” Amendments, p. 259. The May 2010 conference at Duke was “to explore the current costs of civil litigation, particularly discovery, and to discuss possible solutions.” Some of the emerging “central themes” are recapped in the December 2010 Duke Law Journal.

In a nutshell, big companies and big law firms were complaining about big discovery costs and big sanctions. We have heard this mantra time and again, as if mere repetition lends truth. And we all eventually nod our heads and whisper in agreement as the Emperor strolls by in his glowing raiment. After all, somebody somewhere must have data to support the claim. The folks at the Duke Conference must have been knee-deep in valid empirical data establishing out of control costs, right? And demonstrating that restrictions on the scope of discovery would deliver a fair and just solution?

Nope. That is a myth. The research before the Duke Conference does not support these claims.

Read“Defining the Problem of Cost in Federal Civil Litigation” by Emery G. Lee III and Thomas E. Willging, researchers at the Federal Judicial Center (FJC). The FJC is the “education and research agency for the federal courts.” The FJC was created for this very purpose, and was asked – by the very committee that is now proposing these amendments – to “conduct an empirical study of civil litigation, especially with respect to costs.” Lee, p. 767. They did. They produced reports. They summarized all of the research available to the Duke Conference (theirs and others) in their Duke Law Journal article. Here is the Reader’s Digest version:

[W]e propose to survey the research, including the FJC reports, prepared for the Duke Conference, to define what, exactly, the problem is with civil litigation. In Part I, we argue that the problem cannot be simply that “litigation is too expensive.” Without a normative standard, it is impossible to say, in any meaningful way, that litigation is too expensive. Moreover, the limited empirical evidence that exists does not support the broad statement that litigation costs, in general, are out of control. In Part II, we discuss our finding that the stakes in the litigation are, empirically, the best predictor of costs. Indeed, in most federal civil cases, the costs appear to be proportionate to the monetary stakes. If so, the problem is not out-of-control costs generally. Nevertheless, there is a desire in some quarters to find general solutions to the as-yet-undefined problem of too-expensive litigation. The usual suspects are the pretrial discovery rules. But, as in Casablanca, the usual suspects are often not the perpetrators. In Part III, we demonstrate that there is little reason to think that the state procedural limits on discovery advanced as models for federal rules reform accomplish the goals set out for them. Part IV argues, based on empirical research, that there is scant evidence that alternative discovery rules would result in lower costs or shorter processing times in any predictable fashion. This leads to the larger question of whether the pretrial discovery rules are really the cause of the perceived problem of costs. Although we do not answer that question, we end with the suggestion thatbefore any further amendments to the discovery rules are proposed in the name of reducing costs, more effort must be made to define the problem that such rule amendments are supposed to address. Lee, p. 768, emphasis added.

This is what the Federal Judiciary researchers actually said.

Let’s look at the paragraph in the accompanying Advisory Committee Notes (Amendments, p. 265) which purports to explain the reasoning behind the amendments. It’s interesting to look at a redline, comparing the final, published version of that paragraph with what appears to be the penultimate draft (at p. 10):

Although the rule now directs that the court “must” limit discovery, on its own and without motion, it cannot be said to have realized the hopes of its authors. In most cases discovery now, as it was then, is accomplished in reasonable proportion to the realistic needs of the case. This conclusion has been established by repeated empirical studies, including the large-scale closed-case study done by the Federal Judicial Center for the Duke Conference. But at the same time discovery runs out of proportion in a worrisome number of cases Surveys produced in connection with the Duke Conference by various groups, including the Federal Judicial Center, the ABA Section of Litigation, the National Employment Lawyer’s Association, and Lawyers for Civil Justice, indicate that excessive discovery occurs in a worrisome number of cases, particularly those that are complex, involve high stakes, and generate particularly contentious adversary behavior. The number of cases and the burdens imposed present serious problems. These problems have not yet been solved.

But we just read the FJC’s conclusions about the surveys before the Duke Conference: the empirical data don’t support the stated premise, and don’t point to discovery rule amendments as the solution. Read the ABA, NELA and LCJ surveys, available here. (Also read the FJC’s criticisms of them in Lee.) If you can find valid empirical data that tell us what “excessive” discovery is, and in proportion to what stakes, what a “worrisome” number of cases is, and how “burdens imposed present serious problems,” please tell me, because I can’t seem to find that information. I hope to provide separate analysis of these surveys in later posts.

The Advisory Committee Note identifies as particularly problematic those cases which are “complex, involve high stakes, and generate particularly contentious adversary behavior.” But both common sense and the FJC data tell us that complexity, high stakes and contentious behavior are drivers of litigation cost which are independent of and typically more important than so-called “excessive” discovery. (see Lee, p. 782-786.) Most importantly, don’t we expect that complex cases, and those where the stakes are high, will require more discovery and have higher (“proportional”) discovery costs? How, then, do these cases become poster children for limiting the scope of discovery across the entire federal civil justice system? How does an amendment intended to limit discovery in those cases serve justice or solve a problem?

HOW TO COMMENT

But he hasn’t got anything on,” a little child said… And one person whispered to another what the child had said… “But he hasn’t got anything on!” the whole town cried out at last.

-Hans Christian Andersen; The Emperor’s New Clothes

Whisper to the person next to you. But let’s all cry out.

The threat is imminent, and the time short. In May, the amendments were proposed by the “Advisory Committee on FRCP” to the “Standing Committee on Rules of Practice and Procedure.” Until February 15, 2014, they are in a “Public Comment” period. And unless we make our voices heard now, they are on track to be become effective on December 1, 2015.

You can submit a comment electronically. It’s easy. Just click here.

In my next post, I’ll cover the proposed amendments to FRCP 37(e).

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