Tag Archives: production

Major Possible Changes to Federal Discovery Rules

Corporate Counsel reported about a very important and significant change that might occur next year.  Here are the highlights of the proposed amendments (starting on Page 91 of 322).

The e-discovery rules may change once again by next year.  The United States Court’s Advisory Committee on Civil Rules voted last week to send proposed amendments to the Standing Committee on Rules of Practice and Procedure.  The Standing Committee will consider approving or rejecting the proposal in early June.

The most significant proposals would narrow the scope of discovery under Rule 26; impose or reduce numerical limits on written discovery and depositions under Rules 30, 31, 33, and 36; Rule 37 will adopt a uniform set of guidelines regarding sanctions when a party fails to preserve discoverable information; and Rule 34 will tighten the rules governing responses for production of documents.

Rule 26’s proposed amendments are as follows:

  • Rule 26(b)’s proposed amendment restricts the defined scope of discovery to information that is “proportional to the needs of the case.”  The language is as follows:

    “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.

    These proportional considerations are currently listed in Rule(b)(2)(c)(iii).  This amendment would mandate adherence by the parties without court intervention.

  • Rule 26(b)’s proposed amendment would delete the following sentences:

    (1) “For good cause, the court order discovery of any matter relevant to the subject matter involved in the action.  Relevant information need not be admissible at trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.”

  • Note, that the proposed amendment for Rule 26(b) states that “Information within this scope of discovery need not be admissible in evidence to be discoverable.
  • Rule 26(c) (protective orders) adds “or the allocation of expenses.”

Rules 30’s and 31’s proposed amendments are as follows:

  • The number of depositions (oral and written) would be reduced from 10 to 5.
  • The limit of an oral deposition is reduced to 6 hours.
  • The number of written interrogatories would change from 25 to 15.
  • The number of requests will be 25, except for requests relating to the genuineness of documents.
  • There will be a presumptive limit on the number of Requests for Admissions a party may serve.
  • A court order or a stipulation by the parties may increase the limits on any numerical discovery.

Rule 34’s proposed amendments (which govern the production of documents and electronically stored information) are as follows:

  • The objections to document requests must be stated with specificity.  This requirement has already been applied to interrogatory responses under Rule 33.
  • When the responding party must state that it will produce the requested documents (instead of permitting inspection), the production must be completed by the date for inspection stated in the request or by a later reasonable time stated in the response.
  • A party objecting to a document request must state whether any responsive materials are being withheld on the basis of the objection.

Rule 37(e)’s proposed amendment (which concern sanctions for failure to preserve discoverable information) state:

  • A court may impose sanctions when it finds that a party failed to preserve information that should have been preserved for litigation.  The sanctions includes remedies and curative measures that are not considered “sanctions,” such as allowing additional discovery, requiring a party to recreate or obtain the information that it lost, or ordering a party to pay reasonable expenses resulting from the loss of information.
  • The court may also impose sanctions listed in Rule 37(b)(2)(A) when to address preservation failures.  These sanctions include issue or evidence preclusion, the striking of pleadings, the dismissal of the action in whole or in part, and an adverse inference.
  • The court may impose sanctions or order an adverse jury instruction only if it finds that the failure to preserve caused “substantial prejudice” in the litigation and was “willful or in bad faith.” or that the failure to preserve “irreparably deprived a party of any meaningful opportunity” to litigate the claims in the action.

 

via On the Cusp of Major Changes to E-Discovery Rules.

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Zubulake revisited: Shifting standards in e-discovery

InsideCounsel has a very insightful article regarding the changes in Zubulake.  As previously addressed, the Zubulake cases are the leading guide posts of electronic discovery.  Nevertheless, recent case law signals potential departures from Zubulake.

InsideCounsel’s article states as follows:

 

Litigation holds 101

While the American concept of the litigation hold (also known as legal hold) received a passing reference in the advisory notes to the 2006 Federal Rule of Civil Procedure (FRCP) amendments, it was not until Zubulake, and later, Pension Committee, that courts connected the legal hold to the spoliation sanction framework.

Generally, sanctions are warranted when a party with control over discoverable information and under a duty to preserve acted with a culpable state of mind when destroying or losing relevant information. Once a party has established spoliation, a court must assess which sanction (ranging from further discovery to dismissal) aligns with the culpability of the spoliating party and the prejudice caused.

In Pension Committee, the court held that failing to issue a litigation hold is gross negligence per se. The court found that not only can relevance and prejudice be presumed when a spoliating party is grossly negligent, but that an adverse inference instruction was the appropriate sanction in that case.

Departures from Zubulake

In 2012, in Chin v. Port Auth. of New York & New Jersey, 11 plaintiff employees sued the defendant employer for alleged civil rights violations. In discovery, the plaintiffs learned that the defendant failed to implement a document retention policy, which resulted in the spoliation of at least 32 folders used to make promotion decisions from August 1999 to August 2002. The plaintiffs also learned that the defendant failed to issue a litigation hold regarding the promotion folders at any point between 2001 and 2007, and thus argued that this inaction amounted to gross negligence. However, the court rejected the argument that a failure to institute a litigation hold automatically constitutes gross negligence per se, contrary to the rule of Zubulake.

Instead, the court ruled in favor of a case-by-case approach, in which failure to preserve documents is one of multiple factors in the determination of whether to issue sanctions. In the end, the court upheld the district court’s conclusion that an adverse inference instruction was inappropriate in light of the limited role of the destroyed folders in the promotion process, as well as the plaintiffs’ ample evidence regarding their relative qualifications when compared with the officers who were actually promoted.

What does it all mean?

Chin established that, depending on the facts, if a party acts reasonably and in good faith to preserve documents, it may be off the hook for severe sanctions. However, many commentators have argued that this does not change best practices—that parties should still issue a written litigation hold in accordance with Pension Committee.

For large organizations that touch many jurisdictions (many of which still follow Zubulake), corporate counsel should not disband their litigation hold systems just yet—in fact, they probably do not want ever to disband them. The litigation hold is an incredible powerful and defensible means to preservation. Large organizations often must track many custodians storing potentially relevant information on complicated IT systems. Corporations derive substantial benefits from being able to maintain holds, as well as being able to internally track multiple simultaneous preservation obligations.

It is worth noting, however, that not every case, or company, is the same. Should a tight-knit company of a few employees in a non-complex litigation have to issue a written legal hold in order to be safe from sanctions? As case law in 2013 develops, perhaps litigants in these types of cases will take a second look at the role of the litigation hold.

A breath of “reasonable” fresh air

On the topic of preservation, case law developments are not the only item on the horizon for 2013. The discovery subcommittee tasked with developing potential FRCP rule changes has been scrutinizing the preservation topic. In one possible version amending FRCP 37, the drafters adopted a factor-based approach to determining culpability. While one factor looks at the reasonableness of a party’s efforts to preserve the information, “including the use of a litigation hold,” another factor includes “the proportionality of the preservation efforts to any anticipated or ongoing litigation.” On Nov. 2, 2012, when the Advisory Committee voted to adopt the subcommittee’s proposal, a common opinion was that even this minor reference to the litigation hold should be omitted or reverted to the commentary to underscore the factor-based nature of draft Rule 37. As we continue down the road to Federal Rule amendments, it is becoming clear that the gold standard of Zubulake may be shifting in the coming year.

via Zubulake revisited: Shifting standards in e-discovery.

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Waiver of Attorney-Client Privilege

This is an illustrative case as to why attorneys want to take precautions when producing discovery.  The case is Inhalation Plastics, Inc. v. Medex Cardio-Pulmonary, Inc., No. 2:07-CV-116, 2012 WL 3731483 /0S.D. Ohio Aug. 28, 2012).

In this case, the court held that privilege had been waived as to 347 pages of inadvertently produced emails where, among other things, Defendant failed to establish the reasonableness of the precautions taken to prevent the disclosure and “failed to take adequate measures to rectify or mitigate the damage of the disclosure.”

Here, Defendant did not stamp any documents as confidential.  Upon reviewing the documents at issue, the court held that those documents were covered under the attorney-client privilege.  However, the court found that the privilege had been waived.  The court highlighted the following facts:

  • Defendant’s lack of specificity as to who conducted the review and how the review was conducted.  The general assertion that multiple lawyers reviewed it was not enough.
  • Defendant failed to produce a privilege log during discovery;
  • 4.6% of the documents were inadvertently produced, which the Court found to be “relatively high.”

In sum, the Court opined:

After balancing the required factors, the Court concludes that Medex waived the attorney client privilege otherwise applicable to the 347 documents in the May 30 production.  To summarize, the Court finds that Medex did not take reasonable precautions to protect its privileged information, the number of documents disclosed is significant, no privilege log was provided at the time of disclosure, the contents of some of the documents may be relevant to the heart of the dispute, and Medex made insufficient attempts to mitigate its damage even after it learned of the disclosure.

via Inadvertent Production Results in Waiver of Attorney-Client Privilege as to 347 Pages of Emails : Electronic Discovery Law.

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