Cooperation, Case Management At Forefront Of New Rules; Cost-Sharing on Horizon?

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By Tera Brostoff

Feb. 3 — While discussions of cost-shifting remain on the horizon for the Civil Rules Advisory Committee, the current proposed amendments to the Federal Rules of Civil Procedure should usher in more focused awareness and effort by practitioners and judges to pursue cooperation and efficiency in litigation, a panel of judges and attorneys said at the Jan. 29 webinar “Amending the Federal Rules: Moving Toward Adoption.”

Bloomberg BNA's Digital Discovery and eEvidence Report Advisory Board Chair Ronald J. Hedges, of Ronald J. Hedges LLC, moderated the discussion. The faculty was composed of the Honorable David Campbell, of the District of Arizona and Chair of the Civil Rules Advisory Committee; the Honorable Craig B. Shaffer, U.S. Magistrate Judge with the District of Colorado; Thomas Y. Allman, Adjunct Professor at the University of Cincinnati College of Law; Ariana J. Tadler of Millberg LLP and Kenneth J. Withers, Deputy Executive Director of The Sedona Conference®.

Advisory Committee Chair Discusses Amendments 

The panel began their discussion by referencing the Advisory Committee's process over the last several years to develop the amendments that currently sit before the Supreme Court, awaiting approval. Hedges asked Campbell if he was surprised by the unprecedented number of public comments the Committee received during the rulemaking.

“The changes strike right at the heart of what matters to litigators and litigants,” Judge Campbell said. “I was not surprised that there was a lot of interest in the amendments, and the extensive public comments and testimonies at the hearings were valuable for helping the Committee make decisions.”

Judge Campbell also discussed the timeline for crafting the amendments, noting that a new Rule 37(e)—in addition to the other amendments—was created and published for public comment in August 2013. Three hearings followed the opening of the public comment period, and more than 3,000 written comments were received. The Committee took into account all of the public input, dropped some of the proposals from the Duke Package and revised other amendments. 

Rule 1, Rule 26 to Encourage Cooperation 

Before the faculty tackled 37(e), Withers gave an overview of the other amendments. He first addressed the changes to Rule 1, which now includes language proposing that the courts and the parties will be equally responsible for ensuring the “just, speedy and inexpensive determination of every action and proceeding.” 

“The Committee Note to Rule 1 indicates that counsel is now expected to cooperate,” Withers explained. “But there is no independent cause of action for being uncooperative in the abstract.”

Withers also highlighted changes to Rule 26(b)(1) which relocate and reorder the proportionality factors from current Rule 26(g). Withers noted that the factor “importance of the issue at stake” now precedes the “amount in controversy” factor, and that a new factor— “parties' relative access to relevant information”—has been included.

Rule 26(f)(3) also was amended by the Committee to require parties to discuss the preservation of electronically stored information in their discovery plan, as well as Federal Rule of Evidence 502.

“This implies that attorneys will actually have to read 502 and understand it, which alone would be a vast improvement,” Withers quipped.

Cost-Sharing as The Committee's Next Hot Topic 

Before turning to the topic of 37(e), Hedges asked Judge Campbell to address the topic of cost-sharing, which many believe will be the next major issue tackled by the Advisory Committee.

“The Committee has been asked to look at cost-sharing by both congresspeople and specific groups, which have asked the Committee to require a more radical form of cost-sharing where people requesting discovery would have to pay for some or all of the expenses,” Judge Campbell explained. “This topic is not a continuation of what we've already done with the amendments.”

Judge Shaffer added that he is a big proponent of the amendments and he believes that if they are used effectively by judges and lawyers then they can substantially improve the civil litigation process.

“The most important amendment, and the one I hope has the biggest cultural impact is the change to Rule 1,” Judge Shaffer said. “Up until now, the courts have been uniquely responsible for case management and lawyers have been able to rationalize ineffective and obstructive behavior under the guise of zealous advocacy.”

The Evolution of 37(e) 

Allman led the discussion of Rule 37(e) by detailing the Rule's evolvement from the 2010 Duke Conference eDiscovery Panel to its current iteration.

“At the Duke conference, we agreed that the Rules should go further than they ever had before, to spell out the nature of the trigger and the content of the duty to preserve,” Allman said. “To make a long story short, we were unable to craft a Rule that would deal effectively with alerting the parties and the courts as to what their responsibilities were under the duty to preserve…What has emerged is that the Rules Committee has basically accepted the common law duty to preserve.”

Judge Campbell emphasized that the proposed Rule 37(e) only applies to ESI, and that a centuries-old well-developed body of law applies to spoliated non-ESI.

“We are not changing any state law either,” Judge Campbell added. “This new Rule 37(e) is the structure that the federal courts must follow, foreclosing the use of inherent authority.”

Concluding Remarks on Amendments' Future Effects 

The panel concluded by offering closing thoughts on the amendments.

“We don't pretend that these are the final answer on these complex issues…We know that we will learn more as a bench and as lawyers as we continue to deal with ESI and I am confident there will be modifications in the future that will improve these Rules,” Judge Campbell said. “We also believe as a Committee that if these become effective on December 1, we and others in the bar need to actively educate lawyers and judges about the changes and strongly encourage judges to become active case managers.”

Judge Shaffer echoed the sentiment, encouraging lawyers and judges to “use the rules creatively.”

Withers concluded by stating the “main point” is that the “proportionality factors of Rule 26 and its relationship to Rule 37(e) will force lawyers to act like lawyers.”

“Lawyers will be required to really analyze their discovery requests and responses by looking at their claims and defenses, what facts are necessary to establish those claims and defenses, what facts are actually in dispute and what are not,” Withers said. “And to prioritize those facts that are in dispute and to determine what evidence is actually needed…And if they engage in that type of analysis and look at the proportionality factors, we will see a tremendous sea change in the way discovery has been conducted since 1938.”

To contact the reporter on this story: Tera Brostoff in Washington at tbrostoff@bna.com.

To contact the editor responsible for this story: Carol Eoannou at ceoannou@bna.com.

Old Cereal In New Box? 

Discussion of the proposed Rules continued Feb. 3 at Legal Tech New York at a session entitled “The Judges Speak: Why the Proposed FRCP Amendments May Not Change Anything.”

The judicial panelists were in agreement that with the exception of Rule 37, the balance of the discovery-focused rules changes simply emphasize and make explicit various party requirements and judicial powers that have existed within the Rules for years, but have been infrequently invoked in practice.

Elizabeth Laporte, Chief U.S. Magistrate Judge from the Northern District of California, went so far as to approvingly characterize the work of the Rules Committee as “a consciousness-raising exercise.”

Laporte was particularly enthusiastic about the new emphasis on cooperation reflected in revised Rule 1, a viewed shared by fellow panelists Frank Maas, Chief U.S. Magistrate Judge from the Southern District of New York, Ronald J. Hedges and Andrew J. Peck, U.S. Magistrate Judge from the Southern District of New York.

Laporte noted that new language in Rule 1 makes clear that the responsibility for the orderly progression of a case is shared by the court and the parties, a distinction she finds particularly appropriate as “discovery remains a largely party-managed process.” She also noted that given the complexities of dealing with electronically stored information, courts can't proceed in this regard on their own.

Peck pointed out that the clearest statement on the need for cooperation and proportionality is contained in the Committee Note to Rule 1. He observed that “cooperation” appeared in the text of an early version of the Rule, but was removed due to fear that it would spawn the type of increased motions practice that followed the revisions to Rule 11. He is confident, however, that the placement of the cooperation reference in Rule 1 and the Note will “set the stage for cooperation throughout the life of the case.”

All the panelists expressed confidence that the Rules will be enacted on December 1.