The New World of Discovery and Efficiency in Litigation

On December 1, 2015 new amendments for the Federal Rules of Civil Procedure (FRCP) will take effect. The amended rules include Rule 26(b), Rule 4m and Rule 37(e). The focus of the amended rules is to provide efficiency in the litigation process and curtail discovery costs.

  1. Rule 26(b)

Rule 26 (b) governs the scope of discovery request in litigation. The amended rule aims to narrow the scope of discovery, alleviate the high cost burden associated with overly broad discovery request and provide judges a basis for controlling discovery request and ensuring efficiency in litigation.

Rule 26 has three notable changes that are intended help to define the overly broad scope of discovery. These include (1) redefining the language of “reasonably calculated”, (2) adding proportionality factors and (3) removing well-established language. The previous rule stated:

“Parties may obtain discovery regarding any non privileged matter that is relevant to any party’s claim or defense including the existence, description, nature, custody, condition and location of any documents or other tangible things and the identify 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)”

 The first change in the new rule is the deletion of “reasonably calculated to lead to the discovery of admissible evidence.” Critics of the language argued that the “reasonably calculated” language did not accurately define the scope of discovery and overly broadened the definition. Further, the previous language was often misinterpreted by attorneys and did not provide courts a foundation for controlling discovery request. The language “reasonably calculated” was never intended to define the scope of discovery. [1] However many attorneys interpreted the language to mean fair game for broad discovery request. [2] The amended rule seeks to provide a barrier for defining discovery requests.

Second, new proportionality considerations were added to easier define the broad scope of discovery and prevent confusion with the “reasonably calculated” language. The new rule defines “proportionality” based on six factors:

  1. The importance of the issues at stake in the action,
  2. The amount in controversy,
  3. The parties’ relative access to relevant information,
  4. Parties’ resources,
  5. Importance of the discovery in resolving the issues,
  6. Whether the burden or expense of the proposed discovery outweighs its likely benefit.

The proportionality factors were created because the committee reasoned that the cost of discovery in litigation was disproportionate to the issues resulting in litigation. [3] Consequently, the high cost in litigation created a barrier for many get their case to federal court.[4] Proportionality should help attorneys on either side weigh the relevance and cost of discovery request.

The proportionality factors were initially found in rule 26 b (2)( c )(iii) and were moved to rule 26 (b)(1). The committee notes specify that this change better defines discovery limitations upfront and prevents the proportionality language from being overlooked.[5] The new revision to 26(b) seeks to ensure that parties consider whether their discovery requests support their claims or defenses thus hoping to cut down on frivolous request.

Third, the Committee removed the language:

“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.”

Although removed, the Committee notes that this language is still applicable. The committee notes assert that the language was no longer necessary because it is well-established information. Thus, attorneys should still consider this language despite it’s absence in the rule. [6]

The proposed amendment to Rule 26(b)(1) reads:

“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 importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, 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.

This rise in discovery cost and incongruous interpretation of the broad language in the previous rule is the purpose behind the new amendments. The proportionality factors are a tool to help speed up the litigation process and reduce the rising cost of discovery request.

  1. 4M – Time to Serve

The amendments in Rules 4(m) and Rule 16 were designed to promote more active judicial case management. The committee reasoned that acknowledging ESI issues upfront and in a shorter time frame will speed up the litigation process.

Rule 4m has reduced the time frame to serve a summons and complaint from 120 days to 90 days. The committee determined that 120 days was an extensive amount of time and that most cases require less than 120 days. [7] Additionally, the committee reasoned that the reduced time would prevent attorneys from using the time to unnecessarily delay filing a summons or complaint. [8] The committee notes also acknowledge that the Court may grant additional time on a case-by-case basis. The new 90-day time limit seeks to provide more efficiency in the litigation process.[9]

  • Rule 16

Rule 16 (b) (3) adds additional subjects that may be addressed in case management. The added subjects are the preservation of ESI and agreements either party reach under Federal Rule of Evidence 502 (attorney-client privilege ad work product). The Committee notes state that addressing ESI issues during pre- trial would reduce the rising number of ESI issues during litigation.

  1. Rule 37 (e)

The accelerated growth of electronically stored information (ESI) is the purpose for Rule 37(e). Rule 37(e)(1) permits Courts to impose severe sanctions on parties for the loss of ESI that cannot be restored or replaced. The amended rule defines the Court’s discretion to resolve prejudice caused by the loss of ESI. The amended rule states:

“upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice.”

The new rule does not designate which party bears the burden of proving prejudice. Rather, the comments acknowledge that each party is responsible for proving prejudice. [10]

Additionally, 37(e)(2) settles a split among circuits about when courts should impose severe sanctions for the failure of a party to preserve ESI.[11] Prior to the new rule some circuits required a showing of negligence while others required bad faith. [12] The new language lists defined factors for Courts to use. The new rule provides that the Court :

“only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation, may:

(A)  presume that the lost information was unfavorable to the party;

(B)  instruct the jury that it may or must presume the information was unfavorable to the party; or

(C)  dismiss the action or enter a default judgment.”

The Committee notes states that Courts should exercise caution when imposing 37(e) sanctions. The sanction should justify the wrongdoing and should not be imposed for insufficient information.

Overall, the amended Federal Rules of Civil Procedure will change the scope of discovery request and ESI. The practical implications of the changes are efficiency in litigation and to reduce the burden of high litigation cost. All the changes aforementioned went into effect on December 1, 2015 and are now implemented by Federal Courts.

[1] Memorandum from Hon. David G. Campbell, Chair, Advisory Comm. on Fed. Rules of Civil Procedure to Jeffrey Sutton, Chair, Standing Comm. on Rules of Practice & Procedure (June 14, [2014) at B-9-10 hereinafter “June 2014 Rules Report”].

[2] Id. at Note 2, B-5

[3] Id. at Note 2

[4] Id. at Note 2

[5] June 2014 Rules Report at B-5

[6] June 2014 Rules Report at B-9

[7] June 2014 Rules Report, at B 12-13

[8] Id. at Note 6

[9] June 2014 Rules Report, at B-13

[10] June 2014 Rules Report, at B17

[11] June 2014 Rules Report, at B-16–18.

[12] Id. at Note 9

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