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John Hopkins
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Proposed eDiscovery Rules Would Provide for an Unfair Imbalance

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Without more outspoken opposition from the legal community, the rules in Federal Court may change drastically on February 15, 2014 when it comes to e-discovery matters. On this date comments concerning the rules will no longer be accepted.

The biggest losers in the rule revamps will be plaintiffs.

The rules committee for the US Judicial Conference has proposed revisions of the e-discovery portions to the Federal Rules of Civil Procedure. The new rules are likely to create new and even more substantial impediments to plaintiffs suing corporations. In an interesting development, although court rules have traditionally been allowed to develop through court decisions, the rules committee has apparently taken the route of submitting the proposed rules to Congress under the Rules Enabling Act.

The Hand of Injustice

In one hand the proponents of amending the rules indicate that “empirical studies” demonstrate that “in most cases discovery now, as it was then, is accomplished in reasonable proportion to the realistic needs of the case.” The supporters want the rules changed, they say, to prevent a minority of cases in which “discovery runs out of proportion 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.” (page 65)

What are the dangers of these new rules? It is no longer the days of asking for “documents” and being told they are in filing cabinets in departments A, B, and C. Now those same “documents” are trillions of “1’s” and “0’s”; binary code, stored on drives in office buildings, overseas in other countries, in data back-up facilities and “in the cloud”.

Today, finding the data and information you need to prove your case can be as much about understanding how the corporate defendant does business; how they manage their information technology; and where they store their data; as it is about the legal causes of action you may have. It has opened a whole new area for defendants to engage in a shell game for discovery of information and, as Senator Sheldon Whitehouse said at the hearings, allowing defendants “to delay the trial, burning up the plaintiffs’ money and starving out the case before it ever makes it to trial.”

Often, before you can get to the evidence to prove your legal claims, you first must get to the details of how the defendant runs their business. The current federal rules encourage the parties to meet and mutually cooperate (Rule 26) in planning discovery and providing information for the methods used by defendants in maintaining data. The discovery process can be complex and can be made that much more difficult where one of the parties is not providing full cooperation. Sadly, we still have not moved beyond the removal of relevant information or the hiding of it in the proverbial “snow storm” of data.

What was the project called internally? So, if the corporation was building the latest widget, but internally the widget was referred to as “the north star project”, you will need to know that. To get to know those facts, though, you will need to conduct discovery of information before you even get to doing discovery on the actual legal claims you have.

You may need to depose the IT Supervisor; the Widget Department heads; the Marketing Department heads; the design engineers; and, well you get the idea. Interrogatories (questions you demand the defendant answer) may have to be sent to discover which custodians may have relevant data and where it may be. Today, data is not limited to the office; it can be found in each employees’ smart phones, iPads, tablets, laptops, home computers, business email accounts, personal email accounts and stored somewhere in the clouds.

The committee and proponents of the rule revisions claim that the amendments would reduce unnecessary court costs, while critics contended they would make it harder for plaintiffs to obtain justice. New York University School of Law Professor Arthur Miller believes the federal rules over the years have been increasingly preventing Americans from “getting meaningful days in court, undermine congressional and constitutional policies, and have resulted in the deformation of the Federal Rules of Civil Procedure.”

Although defendants complain it is plaintiffs that run up the cost of e-discovery, it is usually a lack of cooperation and/or communication that drives costs up. Where both parties are cooperating and trying to be forthright , both the defense and plaintiff can usually find middle ground for controlling costs and the extent of discovery. The Rules really come into play in two ways: to allow the parties to understand the tools that are available to force discovery and to provide methods for creating a mutually beneficial road map to control the discovery. Unfortunately, the largest numbers of cases have the plaintiff insisting on the discovery of information to understand how the defendant maintains its information; so it can then conduct real and meaningful discovery. In effect discovery must be carried out twice; once to determine how to conduct discovery and a second time to discover the information that relates to the subject of the litigation.

Given all the effort required to discover “where” information may be stored by a defendant, what does the committee want to do with the rules? The change proposed to Rule 26 is a shift in the burden for proving certain discovery is overly burdensome. Plaintiffs will be placed in the position of proving the information they seek outweighs the burden of the defendant in producing it. The new rule would require discovery be “proportional to the needs of the case” as measured by a cost-benefit calculus. The rule would also eliminate the present authority to order discovery extending to “the subject matter of the action,” so that all discovery would be confined to what is relevant to the claims or defenses of the parties. Further, although information would still not need to be admissible in evidence to be discoverable, the proposed amendment would eliminate the existing language extending discovery to information that appears “reasonably calculated to lead to discovery of admissible evidence.”

The highlights of the proposed changes that most negatively impact the ability to discover relevant and crucial information are:

  • A reduction in the number of Rule 33 interrogatories permitted, from 25 to 15.
  • A limit of 25 requests for admission for each party in Rule 36. Requests to admit the genuineness of documents would be expressly exempted from the limit of 25.
  • A reduction in the number of depositions presumptively allowed per side, from 10 to five, and reduction in the time limit for each deposition, from seven hours to six hours.
  • Objections to Rule 34 document requests must be stated with specificity and include a statement whether any responsive materials are being withheld on the basis of the objection.
  • Service of Rule 34 requests, relating to electronically stored information and tangible things, prior to the parties’ Rule 26(f) conference.

Spoliation under the new rules would be severely limited and includes references to “over-preservation”. Curative measures could be ordered so that even with outright spoliation, a party might find a friendly judge willing to provide a curative measure or instruction. The new rule has been suggested to impose sanctions or give an adverse-inference jury instruction only if the court finds that the party’s actions caused “substantial prejudice in the litigation and were willful or in bad faith” or “irreparably deprived a party of any meaningful opportunity to present or defend against the claims in the litigation.” The rule sets forth a weak set of guidelines for the court to follow in determining whether a party should receive sanctions against it.

The problem with requesting preservation from a prospective defendant is that it happens before the requesting party knows anything about the extent of data or the methods used by the responding party in keeping data. It places the requesting party at a distinct disadvantage and the responding party in an advantageous position. The proposal will also eliminate negligence as a basis for sanctions; which is all that will be heard now from responding parties and the prospective “reason for negligence” choices are vast.

Judge Shira Sheindlin, one of the foremost judges in eDiscovery law including the seminal Zubalake cases criticized the proposed amendments to FRCP 37(e) on the grounds that it will encourage litigants to take the duty to preserve less seriously and inevitably lead to sloppier preservation practices. Judge Scheindlin also criticized the Advisory Committee Note to the proposed amendments for requiring the innocent party to prove that “it has been substantially prejudiced by the loss of relevant information, even where the spoliating party destroyed information willfully or in bad faith.”

What the rule proposals seem to insinuate in the background is that judges should not be allowed to use as much judgment as they have in the past and the rules can be used to narrow the tools available to a party trying to determine where the adverse party may be “keeping” its data.

Whether the parties have tried to cooperate in setting forth both the disclosures under rule 26(a) and a cooperative discovery plan as required under rule 26(a)(1)(C) should be for the court to decide. If one or both parties are not trying to work cooperatively through a Rule 26 discovery conference, the court should impose rapid and severe sanctions, if necessary, to motivate the parties.

These cooperative obligations and the court’s ability to make judgments about them should not be limited by a set of rules simply because “to prevent a minority of cases in which “discovery runs out of proportion in a worrisome number of cases, particularly those that are complex, involve high stakes, and generate particularly contentious adversary behavior”. Those are the very cases that typically require well thought discovery tools and guidance by the court to work the way through them fairly; but they are, as the proponents state, the minority of the cases.

Headline Image Source: flickr/lizzardo (CC BY 2.0)

Note: the author is not an attorney and to the extent the article offers legal advice, opinion or perspective, the author urges the reader to consult with a licensed attorney about those issues.

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    The people don’t realize that their rights are being taken away by powerful corporate forces interested only in profits. Thanks for highlighting this problem.