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Proposed Federal Rules Changes Fuel Debate

The amendments proposed by the Advisory Committee that relate to discovery primarily seek to enhance the means of keeping discovery proportional to the action. The changes are intended to limit the scope of discovery and help do away with the “gotcha game” often played out in today’s courtroom when large volumes of electronically stored information (ESI), costly to process, review and produce are in play for either or both parties.Although current language addressing proportionality now exists in the Rules, namely in Rule 26(b)(2)(C)(iii), the Advisory Committee notes in its Report to the Standing Committee that prior Rules changes intended to address disproportionate discovery didn’t realize the “hopes of its authors” in limiting the scope of discovery. They note that “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.”

They have thus transferred the proportionality analysis required by Rule 26(b)(2)(C)(iii) to Rule 26(b)(1), which discusses Scope in General, amending 26(b)(2)(C) (iii) to cross-refer back to (b)(1). The assumption is that appropriate limitations by the court on discovery will be more likely to ensue since “the court still must limit the frequency or extent of proposed discovery, on motion or on its own, if it is outside the scope permitted by Rule 26(b)(1).”

In additional support of the proportionality notion, the Committee recommends eliminating the current provision in 26(b)(1) that allows the court to order “discovery of any matter relevant to the subject matter” so that proportional discovery “relevant to any party’s claim or defense suffices.”

The proposed amendment to Rule 37(e) seeks to address concern for the cost and burden of preservation and the sanctions that sometimes result. The revision would prohibit sanctions for failure to preserve discoverable information unless the failure was “willful or in bad faith” and causes “substantial prejudice,” establishing a more uniform national standard and rejecting the idea of sanctions for negligence if a party takes reasonable and proportionate preservation measures. If it functions as intended, the amendment would reduce both the costs associated with over-preservation that is done to protect against allegations of spoliation and the litigation that has occupied the counsel and the courts on that topic.

Not surprisingly, the defense bar, whose clients are generally more likely to have large ESI volume, supports these changes or think they haven’t gone quite far enough to address the onerous e-discovery burdens their clients currently face. The public comment of Lawyers for Civil Justice reflecting those views can be found here. Plaintiffs, meanwhile, argue that the change to Rule 26(b) will make it more difficult to get essential discovery and will handicap their side in complex litigation and in cases where the defendant holds a disproportional amount of information. A fact sheet from the Center for Justice and Democracy at New York Law School reflecting this position can be found here.

Whether or not the proposed changes will fundamentally alter discovery if accepted in their current formulation is subject to debate on its own, but the impetus to address the issues that exploding volumes of ESI cause in the courtroom are clearly on the Committee’s radar.

The public comment period, which began last August, will continue through February 15, 2014. There are also three public hearings, one coming up in Washington, D.C. on November 7th and the others in early 2014 in Phoenix and Dallas, which are sure to add additional insight into the challenges currently faced by litigants and counsel on both sides.

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