Norton Rose Fulbright: Proposed FRCP E-Discovery Amendments v.2.0


By  David J. Kessler, Keith Matthew Angle and Jami Mills Vibbert

On August 15, 2013, the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States published the Preliminary Draft of Proposed Amendments to the Federal Rules of Bankruptcy and Civil Procedure for public comment.  The proposed amendments would modify Rules 1, 16, 26, 30, 33, 34, 36, and 37, among others.  The proposals could have far reaching effects, particularly regarding discovery.  They address several facets of discovery, including, but not limited to, the scope of discovery, sanctions for spoliation, the timing of productions, and how scheduling conferences are to be conducted.  In fact, these amendments are the most significant discovery rule changes in Federal Court since the "first e-discovery amendments" of December 2006.

If the Rules and Standing Committee approve the amendments with little or no change after the public comment period and the Judicial Conference approves them and the Supreme Court of the United States approves them and Congress takes no action to block the amendments, then the earliest these amendments could go into effect is December 1, 2015.

This article is meant to summarize most of the amendments that will change discovery practice in Federal Courts.

Providing comments and testimony

All written comments and submissions are due by Saturday, February 15, 2014, and may be submitted electronically or by mail (directions on how to submit comments are located at the end of this article).  There is also a chance to present testimony regarding the proposed amendments at one of three hearings:  Thursday, November 7, 2013, in Washington, D.C.; Thursday, January 9, 2014, in Phoenix, AZ; and Friday, February 7, 2014, in Dallas, TX.  All comments and testimony are made part of the official record and are available to the public.  If you wish to testify, you must notify the Judicial Committee at least 30 days before the scheduled hearing. 

I. Scope and purpose            

Rule 1

Rule 1.    Scope and Purpose

These rules govern the procedure in all civil actions and proceedings in the United States district courts, except as stated in Rule 81.  They should be construed, and administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.

Synopsis

The Rule has been amended to include a specific reference to the "parties."  According to the Committee Note, this means that parties "share responsibility" with the courts to pursue discovery in a way that achieves the goals of the "just, speedy, and inexpensive determination" of legal actions.  Commentators consider the addition of "employed" to transform Rule 1 from an aspirational lens that instructs the bench and bar on how to interpret the Federal Rules of Civil Procedure into a specific instruction to use the Rule to obtain this goal.  Though this change to the Rule seems small, the new Committee Note ends with the following:  "Effective advocacy is consistent with – and indeed depends upon – cooperative and proportional use of procedure."  Because cooperation is not defined in the Committee Note and there is lack of agreement about what constitutes effective and reasonable cooperation, this amendment may lead to disputes and court opinions as the bench and bar interpret this proposed addition.  Importantly, because it is included in the Committee Note to Rule 1, parties may argue it applies across the discovery rules.

II. The scheduling order

Rule 16

Rule 16.    Pretrial Conferences; Scheduling; Management

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  1. Scheduling.
    1. Scheduling Order. Except in categories of actions exempted by local rule, the district judge — or a magistrate judge when authorized by local rule — must issue a scheduling order:
      1. after receiving the parties' report under Rule 26(f); or
      2. after consulting with the parties' attorneys and any unrepresented parties at a scheduling conference.
    2. Time to Issue.  The judge must issue the scheduling order as soon as practicable, but unless the judge finds good cause for delay, the judge must issue it within the earlier of 90 days after any defendant has been served with the complaint or 60 days after any defendant has appeared.  
    3. Contents of the Order.

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  1. Permitted Contents.  The scheduling order may:

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  1. provide for disclosure, discovery, or preservation of electronically stored information;
  2. include any agreements the parties reach for asserting claims of privilege or of protection as trial-preparation material after information is produced, including agreements reached under Federal Rule of Evidence 502;
  3. direct that before moving for an order relating to discovery, the movant must request a conference with the court;

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Synopsis

By deleting the final phrase, "by telephone, mail, or other means," Rule 16(b)(1) now provides that if a scheduling order is not issued based upon the report of the parties' Rule 26(f) meet and confer, then a scheduling conference must be held involving direct simultaneous communications between the parties.  It is no longer sufficient to communicate solely through written means, such as back-and-forth emails, to draft the order.  This change is to encourage more direct management of discovery issues by the court earlier in the matter to support more robust and detailed discovery conversations in 26(f) conferences, which has been a hallmark of the Rules since 2006.  However, emerging studies and papers indicate that early discovery discussions may do more harm than good because it is impossible for parties to inform themselves appropriately for the negotiations.  See, e.g., H. Christopher Boehning & Daniel J. Toal, Are Meet, Confer Efforts Doing More Harm than Good?, N.Y. L.J., July 31, 2012, at 1.

Rule 16(b)(2) reduces the time by which a scheduling order must be issued to 90 days after service of the complaint (not 120 days) or 60 days after any defendant has appeared (not 90 days).  Similar to the change to Rule 4(m), the revision is intended to reduce delay at the beginning of the litigation.  Some flexibility is built into the new Rule and allows a judge to delay the process for good cause, but the Committee Note states "in most cases it will be desirable to hold at least a first scheduling conference in the time set by the rule." 

Under revised Rule 16(b)(3), the Rules now explicitly permit the incorporation of three new items in the scheduling order:

  • In subsection (iii), the topic of preservation is now specifically identified (along with disclosure and discovery) as an issue that may be governed by the scheduling order.  Adding preservation to the Rule should promote agreements between the parties regarding the scope of preservation in the case.
  • In subsection (iv), the Rule now encourages incorporation of agreements under Rule of Evidence 502 regarding protection of privileged information.
  • In subsection (v), the Rule provides that the scheduling order may require parties to conduct an informal court hearing on discovery disputes before they are allowed to file a discovery motion. 

Of the above amendments, the revision to Rule 16(b)(2) makes the most noticeable change to procedure by reducing the times permitted for issuing the scheduling order.  The other changes to Rule 16 reflect procedures already present in the local rules of some federal courts that are becoming more common in federal practice.  As these proposed amendments are publicized during the review process, parties should be prepared to see more judges applying these "options" as standard elements of the scheduling order.  

III. Scope of discovery

Rule 26

Rule 26.    Duty to Disclose; General Provisions Governing Discovery

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  1. Discovery Scope and Limits.
    1. Scope in General Unless otherwise limited by court order, the scope of discovery is as follows:  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 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.  Information within this scope of discovery need not be admissible in evidence to be discoverable.
      1. When Permitted.  By order, the court may alter the limits in these rules on the number of depositions, and interrogatories, and requests for admissions, or on the length of depositions under Rule 30.

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  1. When Required.  On motion or on its own, the court must limit the frequency or extent of discovery if it determines that:

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  1. the proposed discovery is outside the scope permitted by Rule 26(b)(1).

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  1.  Protective Orders.
    1.  In General.  * * *  The Court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following:

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  1. specifying terms, including time and place or the allocation of expenses, for the disclosure or discovery;

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  1. Timing and Sequence of Discovery.
  1.  Timing.  A party may not seek discovery from any source before the parties have conferred as required by Rule 26(f), except:
    1. in a proceeding exempted from initial disclosure under Rule 26(a)(1)(B),; or
    2. when authorized by these rules, including Rule 26(d)(2), by stipulation, or by court order.
  2. Early Rule 34 Requests.
    1. Time to Deliver.  More than 21 days after the summons and complaint are served on a party, a request under Rule 34 may be delivered:
      1. to that party by any other party, and
      2. by that party to any plaintiff or to any other party that has been served.
    2. When Considered Served.  The request is considered as served at the first Rule 26(f) conference.
  3.  Sequence.  Unless the parties stipulate orthe court orders otherwise for  the parties' and witnesses' convenience and in the interests of justice:
    1. methods of discovery may be used in any sequence; and
    2. discovery by one party does not require any other party to delay its discovery.

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  1.  Conference of the Parties; Planning for Discovery.

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  1.  Discovery Plan.  A discovery plan must state the parties' views and proposals on:

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  1. any issues about disclosure, or discovery, or preservation of electronically stored information, including the form or forms in which it should be produced;
  2. any issues about claims of privilege or of protection as trial-preparation materials, including — if the parties agree on a procedure to assert these claims after production — whether to ask the court to include their agreement in an order under Federal Rule of Evidence 502;

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Synopsis

Arguably, the most important proposed change to Rule 26 reflects the Committee's desire to promote proportionality by lifting the language from current Rule 26(b)(2)(C) and inserting it into Rule 26(b)(1).  A corresponding change was made to Rule 26(b)(2)(C)(iii) to cross-reference Rule 26(b)(1), keeping the requirement from the prior Rule that the court remains under a duty to limit discovery to the extent it exceeds the scope as defined in Rule 26(b)(1), even without a motion by either party.  The Committee also attempted to address its proportionality concerns by adding an explicit recognition, in Rule 26(c)(1)(B), of protective orders that allocate expenses for discovery, which will explicitly allow the courts to shift costs even where the responsive documents are not located in data sources not reasonably accessible under Rule 26(b)(2)(B).

Another proposed amendment to Rule 26(b)(1) that limits the scope of discovery removes the authority of the court to extend the scope of discovery from "matter that is relevant to any party's claim or defense" to "any matter relevant to the subject matter involved in the action."  Discovery must be limited, then, to the parties' claims and defenses.  As the Committee Note recognizes, "[p]roportional discovery relevant to any party's claim or defense suffices" because a party may amend its pleadings to add a new claim or defense should that be necessary.  This amendment should further focus courts and parties on information relevant to the merits of the disputes and not on satellite issues. 

The final major discovery scope amendment to Rule 26 deletes the language that allowed discovery of inadmissible information reasonably calculated to lead to the discovery of admissible evidence.  The Committee expressed concern that this provision allowed parties to defeat the limits otherwise governing the scope of discovery.  To address this concern, the revised Rule removes the "reasonably calculated" language and adds that discovery within the scope defined by Rule 26(b)(1) "need not be admissible in evidence to be discoverable."  In essence, parties and courts were misconstruing the original language and using it as another way to expand discovery even further away from information relevant to the claims and defense.

The Committee also proposes to revise Rule 26 to address the delay that may occur in the early stages of litigation.  The proposed change to Rule 26(d)(1)(B) would allow a party to serve Rule 34 requests for production 21 days after being served, despite the fact that no Rule 26(f) conference will have yet occurred.  The amendment "is designed to facilitate focused discussion during the Rule 26(f) conference."

Finally, the proposed changes to Rule 26(f)(3) reflect the parallel changes to Rule 16(b)(3) regarding additional items to be included in the discovery plan (as discussed above), including, in particular, the use of Rule 502(d) orders to limit waiver of privilege.

IV. Document production

Rule 34

Rule 34.    Producing Documents, Electronically Stored Information, and Tangible Things, or Entering onto Land, for Inspection and Other Purposes

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  1.  Procedure.

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  1. Responses and Objections.

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  1. Time to Respond.  The party to whom the request is directed must respond in writing within 30 days after being served or — if the request was delivered under Rule 26(d)(2) — within 30 days after the parties' first Rule 26(f) conference.  A shorter or longer time may be stipulated to under Rule 29 or be ordered by the court.
  2. Responding to Each Item.  For each item or category, the response must either state that inspection and related activities will be permitted as requested or state the grounds for objecting to the request with specificity, including the reasons.  The responding party may state that it will produce copies of documents or of electronically stored information instead of permitting inspection.  The production must then be completed no later than the time for inspection stated in the request or a later reasonable time stated in the response.
  3. Objections.  An objection must state whether any responsive materials are being withheld on the basis of that objection.  An objection to part of a request must specify the part and permit inspection of the rest.

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Synopsis

As the Committee Note makes clear, the proposed amendments to Rule 34 are "aimed at reducing the potential to impose unreasonable burdens by objections to requests to produce."

The main change to Rule 34 reflects a change to the amount and type of information a party must include in any objection to a request for production to address concerns about general objections that leave the requesting party unsure of whether, and what, materials the producing party withheld.  Specifically, proposed Rule 34(b)(2)(B) would require that a party object to a Rule 34 request "with specificity," and reflects similar language already found in Rule 33.  Some courts have already implicitly found this requirement in Rule 34.  See, e.g., Mancia v. Mayflower Textile Servs. Co.,253 F.R.D. 354, 356 (D. Md. 2008).

Proposed Rule 34(b)(2)(C) requires that a Rule 34 objection "must state whether any responsive materials are being withheld on the basis" of the party's objections.  The Committee Note indicates that a statement of the limits that controlled the search for responsive and relevant information "qualifies as a statement that the materials have been 'withheld.'"  This is meant to foster meaningful communication between the responding party and the requesting party about what the responding party intends to produce so that the requesting party need not wait until the end of the production to realize that the responding party was not going to produce certain documents.  In theory, this would allow the requesting party to engage the responding party in a discussion on the scope of its objections earlier in the process to avoid unnecessary duplication of discovery effort.

Actual production of documents has been addressed in proposed Rule 34(b)(2)(B), and the changes would require a party producing copies of documents to so state in its response and to state a reasonable time within which it will produce such copies (or that it will produce during the time stated in the requests for production).  The Committee Note specifically references making rolling productions, and it indicates that a party's response should include beginning and end dates for such productions.  Presumably, a reasonable time for production would be very fact specific, as well as case, and even request, dependent.  It is not clear how this proposed Rule change would affect phased discovery or the production of documents from not reasonably accessible data sources that are to be addressed only after data is collected and produced from more cheaply accessible sources.

Finally, Rule 34(b)(2)(A) sets the time to respond to the requests served pursuant to Rule 26(d)(2) as 30 days after the first Rule 26(f) conference.

V. Requests for admission

Rule 36

Rule 36.    Requests for Admission

  1.  Scope and Procedure.

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  1. Number.  Unless otherwise stipulated or ordered by the court, a party may serve no more than 25 requests to admit under Rule 36(a)(1)(A) on any other party, including all discrete subparts.  The court may grant leave to serve additional requests to the extent consistent with Rule 26(b)(1) and (2).

Consistent with limiting the scope of discovery found in the other Rule amendments, Rule 36 has been amended to include a presumptive limit of 25 on the number of requests to admit that a party may serve without court intervention.

VI. The sanctions

Rule 37(e)

Rule 37.    Failure to Make Disclosures or to Cooperate in Discovery; Sanctions

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  1. Failure to Preserve Discoverable Information.
    1. Curative measures; sanctions.  If a party failed to preserve discoverable information that should have been preserved in the anticipation or conduct of litigation, the court may:
      1. permit additional discovery, order curative measures, or order the party to pay the reasonable expenses, including attorney's fees, caused by the failure; and
      2. impose any sanction listed in Rule 37(b)(2)(A) or give an adverse inference jury instruction, but only if the court finds that the party's actions:
        1. caused substantial prejudice in the litigation and were willful or in bad faith; or
        2. irreparably deprived a party of any meaningful opportunity to present or defend against the claims in the litigation.
    2. Factors to be considered in assessing a party's conduct.  The court should consider all relevant factors in determining whether a party failed to preserve discoverable information that should have been preserved in the anticipation or conduct of litigation, and whether the failure was willful or in bad faith.  The factors include:
      1. the extent to which the party was on notice that litigation was likely and that the information would be discoverable;
      2. the reasonableness of the party's efforts to preserve the information;
      3. whether the party received a request to preserve information, whether the request was clear and reasonable, and whether the person who made it and the party consulted in good faith about the scope of preservation;
      4. the proportionality of the preservation efforts to any anticipated or ongoing litigation; and
      5. whether the party timely sought the court's guidance on any unresolved disputes about preserving discoverable information.

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Synopsis

New proposed Rule 37(e) addresses the issue of sanctions for failure to preserve discoverable information.  The current Rule is rarely (if ever) a successful defense against sanctions for spoliation and provides little guidance to litigants or the courts.  While in 2006 it was alluded to as the "safe harbor" provision, it did not perform that function and commentators have mockingly called it more of a land mine.  In the amendment, this "safe harbor" would be eliminated.

In addition, over time a variety of standards of culpability for spoliation sanctions have developed in the various Circuit Courts, ranging from mere negligence and gross negligence to recklessness and willful conduct.  Compare Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, 685 F. Supp. 2d 456 (S.D.N.Y. 2010), with Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp. 2d 598 (S.D. Tex. 2010).  See also Sekisui Am. Corp. v. Hart, __ F. Supp. 2d __, 2013 WL 4116322 (S.D.N.Y. Aug. 15, 2013).To remedy this divergence, the proposed amendment to Rule 37(e) replaces the current Rule entirely with a uniform standard of culpability.  The Rule takes a two-tier approach.  In the first tier, courts shall apply "curative measures" that do not amount to sanctions for spoliation, such as additional discovery or payment of expenses and attorney's fees that resulted from the spoliation.  In the second tier, traditional sanctions under Rule 37(b)(2)(A) or adverse inferences may be imposed if the preservation failures result in "substantial prejudice" and are caused by conduct that was "willful or in bad faith."  This is intended to do away with mere negligence and gross negligence leading to case-altering sanctions that follow the party and its counsel long after the case is resolved.

However, the proposed Rule creates an exception and allows sanctions for spoliation if a party is "irreparably deprived" of its ability to present or defend its case, even in the absence of willful or bad faith conduct (and, in theory, even in the absence of gross negligence or mere negligence).  The Committee Note states that this standard is supposed to be "more demanding" than "substantial prejudice" and is typically applicable to cases in which the only evidence of a critically important event is lost and cannot be recovered in any other way.  Obviously, if this clause is adopted, how this provision is interpreted will be significant to preservation jurisprudence.

Though the Rule does not expressly state what constitutes satisfactory preservation efforts, it lists a number of factors that the courts should consider when deciding if a litigant is subject to sanctions.  To paraphrase the Rule:  Was the party on notice that litigation was likely?  How reasonable were the party's efforts to preserve?  Did the party receive a clear, reasonable request to preserve?  Did the parties confer about the preservation?  Were the efforts to preserve proportional to the case?  Did the party seek guidance from the court on disputes about preservation? 

Because the Rule rejects the mere negligence and gross negligence standards adopted in some courts, it is likely to be somewhat controversial.  The Committee Note seems to anticipate this concern by stating:  "The amended rule is designed to ensure that potential litigants who make reasonable efforts to satisfy their preservation responsibilities may do so with confidence that they will not be subjected to serious sanctions should information be lost despite those efforts."

Instructions

To submit comments electronically, please follow the instructions provided at http://www.uscourts.gov/RulesAndPolicies/rules/proposed-amendments.aspx.  Hard copy submissions may be mailed to the Committee on Rules of Practice and Procedure, Administrative Office of the United States Courts, Suite 7-240, Washington, D.C. 20544.