By: Dale Campbell & Brittany Shugart
The Federal Civil Rules Advisory Committee (the “Committee”) has proposed numerous rule revisions, several of which are designed to address discovery problems related to electronically-stored information (“ESI”). ESI discovery has become extremely complex and expensive as technology continues to expand into numerous and varying communication devices and data storage. ESI is located not only on the client’s main computer servers but also on each employee’s desktop, smart phone, and tablet device.
The complications of ESI discovery have led to what this writer considers to be a disturbing trend in commercial litigation. Litigation is frequently no longer focused on the facts of the case but, instead, on burdensome discovery fights frequently related to ESI, where one side or the other hopes to win the suit by trapping their opponents in an expensive discovery quagmire, unintentional deletion of historical ESI, or a simple good faith oversight in producing ESI.
The Committee has made recommendations for numerous changes of the federal discovery rules, including reducing the number of presumptive depositions and duration of depositions, as well as a reduction in the presumptive limits for interrogatories and requests for admission. One proposed revision that relates tangentially to ESI is a proposed revision to Rule 34(b)(2)(C), which would require any privilege objection to expressly “state whether any responsive materials are being withheld on that basis of that objection.” This proposed amendment relates to ESI in the context of the voluminous data that may be involved with production of ESI. The responding party may no longer use an omnibus privilege objection but must expressly state for each document request whether otherwise responsive documents are being withheld because of the privilege. While most of the proposed rule changes seek to streamline the discovery process, this proposed rule creates additional burdens on responding parties.
The Committee’s proposed revisions that relate most directly to ESI are as follows.
Rule 1 – Cooperation Revisions: The Committee proposed an addition to Rule 1 under which “parties are made to share responsibility for achieving the high aspirations expressed in Rule 1.” The proposed revision reads: “[T]hese 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.” (Emphasis added.) By this language, the Committee seeks to create a duty to cooperate and intends to discourage the practice of drowning an opponent in ESI discovery, inevitably leading to increased costs and delay.
Case Management Revisions: Proposed revisions to Rules 16(b)(3) and 26(f) would permit a scheduling order and discovery plan to provide for the preservation of ESI and to include agreements reached under Rule 502 of the Federal Rules of Evidence regarding inadvertent disclosure of attorney-client or attorney work product privileged material. The proposal also adds a new Rule 16(b)(3)(v), which permits a scheduling order to “direct that before moving for an order relating to discovery the movant must request a conference with the court.” The Rule 26(d)(1) amendment also allows for early Rule 34 document requests for the purpose of facilitating the scheduling conference by allowing consideration of the actual requests. The proposed revision allows document requests to be delivered early, but the requests are not considered to have been served until the date of the first Rule 26(f) conference, which starts the clock for determining the due date of responses. Knowing the scope of the discovery requests in advance will help facilitate meaningful discussions about ESI during the Rule 26(f) conference.
Rule 26 – Discovery Proportionality Revisions: The proposed revision to Rule 26(b)(1) requires that “discovery be 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.” The proposed scope of the party-controlled discovery is narrower than the expansive “subject matter involved in the action” allowed under the current rule. Under the proposed rule, discovery would be limited to “matter that is relevant to any party’s claim or defense.” Additionally, the current language of the rule, “Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence” would be restricted to read “[i]nformation within this scope of discovery need not be admissible in evidence to be discoverable.” This change is intended to more closely track the intent to instill the “proportionality” test into Rule 26.
The Rule 26(c)(1)(B) revision would also allow the entry of a protective order allocating the expense of discovery – a significant factor in e-discovery abuses.
Rule 37(e) – Preservation and Spoliation Revisions: The Committee proposed a new Rule 37(e) to rectify the problem parties face with multi-jurisdiction litigation that could implicate divergent standards for preservation and the imposition of sanctions. The proposed rule establishes a federal standard for the imposition of sanctions that eliminates the court’s ability to impose sanctions under the court’s “inherent authority” or state law and expands on the current rule’s application by applying to all discoverable information and not only to ESI. The proposed Rule 37(e)(1)(B)(i) authorizes sanctions or an adverse inference jury instruction “only on a finding that the party to be sanctioned has acted willfully or in bad faith” and if the loss caused “substantial prejudice” to the opposing party. Sanctions would be permitted in the absence of a willful or bad faith act only when the loss of information “irreparably deprived a party of any meaningful opportunity to present or defend against the claims in the litigation” and “only if the affected claim or defense was central to the litigation.” The Committee noted that the proposed new rule rejects the principle that negligence is sufficient culpability to support sanctions but accommodates case law that supports sanctions in the absence of a finding of willfulness or bad faith in exceptional circumstances.
The Committee has strived to propose rules intending to help the parties and the court manage the burden, cost, and delay of ESI discovery. The proposed rule changes will not only assist during litigation but will also help provide some additional guidance to clients seeking to develop rational data retention policies. The proposed rules can be found at:
http://www.uscourts.gov/uscourts/rules/preliminary-draft-proposed-amendments.pdf. You may comment on the proposed rules until February 15, 2014. The link to the comment page is http://www.regulations.gov/#!docketDetail;D=USC-RULES-CV-2013-0002.