In their mutual e-discovery capacities, Jennifer A. Brennan of iDiscovery Solutions and Wendy Butler Curtis of Orrick align their clients’ litigation goals with their discovery obligations. Their roles give Brennan and Curtis a front-row seat to the early impact of the changes to the federal rules that took effect on December 1. Their remarks, which have been edited for length and style, provide insight and practical guidance on how the FRCP amendments are playing out in day-to-day practice.
MCC: How do the amendments impact discovery disputes in cases pending as of December 1, 2015?
Brennan: The presumption is that the new rules govern all pending proceedings unless their application would be unjust or impracticable. This presumption is consistent with the Supreme Court order Chief Justice Roberts included when he transmitted the proposed rule amendments to Congress and with 28 U.S.C. § 2074(a).
Since December 1, I’ve seen at least a half dozen written opinions applying the new rules to address the scope of discovery under Rule 26, objections to discovery under Rule 34 and spoliation sanctions under Rule 37. In most of these cases, the court has considered the parties’ arguments under the amended rules, even though the discovery dispute or the conduct at issue arose in a case that was pending prior to December 1. However, in Stinson v. City of New York in the Southern District of New York, the court declined to apply the amended Rule 37(e) to determine spoliation sanctions, finding its application would not be just and practicable.
In many of those cases, the court has been quick to point out instances where the request for discovery or the discovery responses failed to comport with the amended rules. Attorneys should be on notice that discovery and spoliation will likely be evaluated according to the amended rules unless there is a strong argument disfavoring application.
MCC: What changes have you seen thus far in your practice as a result of the FRCP amendments? Wendy, let’s start with you.
Curtis: I’ve had two hearings on discovery disputes since the first of the year. In both cases, the judges opened the hearings with discussion of the amendments to the rules. In one, the judge counseled the parties that he had reviewed closely Chief Justice Robert’s 2015 Year-End Report on the Federal Judiciary and the amendments to the federal rules and, in accordance with this report, intended to conduct early and active case management. He further emphasized the role of proportionality and the expectation that the parties conduct themselves consistent with Rule 1.
In the second hearing, on a motion for Rule 37 sanctions, the judge denied the request for sanctions applying the amended Rule 37 and emphasized the importance of proportionality in his ruling.
MCC: Rule 26 requires that discovery must be “relevant to any parties’ claim or defense and proportional to the needs of the case.” How has the emphasis on proportionality affected the courts’ analysis of the proper scope
Brennan: To start off with, proportionality is not a new concept under Rule 26. The prior rules gave the court the power to narrow the scope of discovery of relevant information if the cost of complying with the discovery request outweighed the utility of the information. Proportionality has changed under the new rule in that the consideration of proportionality is now part of the very definition of permissible discovery. And while monetary stakes are one of the factors to consider, cost is not the only factor to consider, or even the first factor to consider, when weighing proportionality.
The first factor under the amended Rule 26 is whether the discovery is “proportional to the needs of the case, considering the importance of the issues at stake.” The language refocuses the parties on what issues are at the heart of the claims and defenses and whether the discovery addresses those issues. Additionally, the old rule contained language often used by a party seeking to broaden the scope of discovery, which is that it was “reasonably calculated to lead to the discovery of admissible evidence.” That portion of Rule 26 has been eliminated. The commentary explains that the language was originally placed in the rule to permit the discovery of information that ultimately would be inadmissible at trial, such as hearsay testimony solicited during a deposition. That sentence was never intended to define or broaden the scope of discovery and has been removed to emphasize issues of relevancy and proportionality.
In the decisions published since December 1 applying the amended Rule 26, the emerging theme I see is active judicial management. The court is walking through the amended rule and highlighting the need for proportionality. For instance, in Henry v. Morgan’s Hotel Group from the Southern District of New York, the court declined to grant a Rule 45 subpoena because the discovery request for “all documents and communications” was determined to be overly broad and the requested information was not relevant to the disputed issues.
The court in Gilead Sciences v. Merck in the Northern District of California engaged in a similar analysis and declined to grant additional discovery. There the court found no reason had been provided to doubt the proof tendered by the plaintiff, and given the cost and potential delay, additional discovery on that topic was precisely the kind of disproportionate discovery that both the old Rule 26 and the new Rule 26 were intended to preclude.
MCC: What are your practical tips for complying with the Rule 34 requirement that an objection must state whether responsive materials are being withheld?
Curtis: The commentary to Rule 34 recognizes that agreements regarding search terms, custodians or date range may satisfy the requirement to describe information withheld. Where parties are unable to reach agreement on these issues, the responding party may elect to enumerate in their responses the search terms, custodians and date range used to generate the document production. Where the parties memorialize agreement on these points in an ESI protocol, the responding party may incorporate by reference the ESI protocol in their responses.
Remember to include a statement that any document withheld based on privilege will be noted on the privilege log. In cases where production will be made on a rolling basis, the response should include the estimated dates that the production will begin and end.
Also, there is a requirement to state whether information will be made available by production or inspection. In most circumstances, parties will produce copies of documents, but there are still situations where, such as with source code, the parties meet their obligations through inspection. In these circumstances, responses should indicate what subset of information will be produced via inspection rather than production.
MCC: Do you have suggestions for complying with the Rule 34 prohibition of boilerplate objections?
Curtis: As you say, boilerplate objections are now prohibited, so it’s important to be thoughtful and judicious in the use of general objections.
Overbroad objections should state with specificity both what about the request is overly broad, as well as whether anything will be produced in response and why. The objection should provide as many specifics as possible, such as estimated expense, disruption to business, estimated volumes of responsive information and/or why the information is not related to the lawsuit.
Another common burden objection is that the information sought is duplicative. If making this objection, describe the information already produced or to be produced that makes the objectionable request duplicative.
Finally, if you encounter requests for production seeking “any and all documents” on a particular subject, remember that the case law and the Advisory Committee Notes to the rules recognize that such requests are most often impermissible. Thus, the responding party may object or seek relief from the court, citing violations of both Rule 1 and 26(g)(1)(B)(iii).
Brennan: The bottom line is be as specific as possible when responding to Rule 34 discovery. Answer the portions of the request that are not overbroad. If you need to, indicate how you are narrowing the scope of the original request by your response.
Additionally, I wouldn’t say that the amended Rule 34 is a prohibition on all general objections you might make in response to a discovery request. For example, if a request calls for a legal conclusion or if you are not producing information on the basis that it’s not reasonably accessible, those would be permitted, but again, with specificity as to what is being withheld and why.
Curtis: Adding to that, be cautious about making the inaccessibility objection as a general objection. It is unlikely all information responsive to a set of requests is inaccessible. Thus, inaccessibility objections, where applicable, will generally need to be made in response to a particular request for production.
Another pitfall to avoid is making general objections without explaining what is being withheld as a result of the objection. For example, we often see objections to definitions of the terms “you” or “your.” If the requesting party’s definition includes all subsidiaries around the world and this is overly broad, a general objection describing the global footprint of the party may be appropriate to establish the burden and overbreadth. If the party is limiting the scope of production to documents from the U.S. entity only, the objection should affirmatively state this.
Finally, when making general objections, make clear whether the general objection applies to all the requests or a subset. Unfortunately, I have seen parties include old boilerplate general objections that do not apply to a single request.
Brennan: A good example of this type of boilerplate objection is that the request is not “reasonably calculated to lead to the discovery of admissible evidence.” These types of boilerplate language should be deleted from your template document.
Curtis: Agreed. That language is the former language of Rule 26, so it’s a very conspicuous use of an obsolete boilerplate objection.
MCC: The changes to Rule 37 governing spoliation sanctions have received a lot of attention. What are your thoughts on the new rule?
Brennan: The goal of the new rule is to create a uniform national standard for the imposition of sanctions due to the loss of evidence. Prior to December 1, the federal rules did not cover the power to issue sanctions, and instead that power resided in the courts’ inherent authority. As a result, there were dramatic differences across the circuits about spoliation. Some circuits required a showing of willfulness or bad faith before the court could issue a default judgment or an adverse inference, and other courts, such as the Second Circuit, permitted sanctions upon a finding of negligence.
The Rules Advisory Committee explicitly rejected the Second Circuit’s negligence standard in the Residential Funding v. DeGeorge Financial case and instead adopted the principle that severe sanctions are only permitted “upon a finding of intent to deprive another party of the information’s use in the litigation.” The new Rule 37 is intended to resolve the prior split in the circuits regarding sanctions.
Curtis: As stated by the commentary, new Rule 37(e) “authorizes and specifies the measures a court may employ if information that should have been preserved is lost, and specifies the findings necessary to justify these measures. It therefore forecloses reliance on inherent authority or state law to determine what certain measures should be used.” (Emphasis added). It remains to be seen, however, how courts will interpret this limitation on their inherent authority. In CAT3, LLC v. Black Lineage, Inc. in the Southern District of New York, and InternMatch, Inc. v. Nxtbigthing, LLC in the Northern District of California, the courts contemplated using their inherent authority as a basis to determine what findings would be necessary for a dispositive sanction.
Brennan: For example, in the CAT3 case, Magistrate Judge Francis crafted relief appropriate to the needs of the case. He found that spoliation did exist and issued an order precluding the spoliating party for presenting evidence at trial rather than one of the enumerated sanctions found in 37(e)(2).
Curtis: It is important to remember that Rule 37(e)(2) only limits courts’ authority to issue an adverse inference. Courts may still allow spoliation evidence to go to the jury absent a finding of destruction with the intent to prevent use in litigation. In fact, the commentary expressly states that Rule 37(e)(2) does not apply to jury instructions that do not include an adverse inference and “would not prohibit a court from allowing the parties to present evidence to the jury concerning the loss and likely relevance of information and instructing the jury that they may consider that evidence.” Nuvasive v. Madsen Medical illustrates this point. There the court found no intentional spoliation and therefore declined to issue an adverse inference, but it still permitted the party to present evidence to the jury regarding the loss of information.
MCC: Did the amendments provide sufficient clarity on questions of preservation?
Curtis: There is no rule devoted to preservation. However, the commentary to Rule 37 provides guidance. It states that proportionality applies to preservation; the standard for preservation is reasonableness, not perfection; and preservation decisions should not be evaluated through the lens of hindsight.
It is also interesting to note that the Advisory Committee Notes to Rule 37 instruct that it may be important for parties, where agreement is impossible, to seek judicial guidance on preservation. The notes go on to predict that preservation orders may be more common because Rules 16 and 26 were amended to encourage discovery plans and orders that address preservation.
This is a departure from the Advisory Committee Notes to the 2006 amendment to Rule 26. Then the Advisory Committee stated, “The requirement that the parties discuss preservation does not imply that courts should routinely enter preservation orders. A preservation order entered over objections should be narrowly tailored. Ex parte preservation orders should issue only in exceptional circumstances.”
Brennan: Rule 37 and the commentary invoke the concept of proportionate preservation. The standard under the new rule is whether “reasonable steps” were taken to preserve information in anticipation of litigation, including whether the efforts were proportionate to the need for information. Proportionality calls into play such issues as sensitivity to the parties’ resources, whether there are less costly forms of preserving information or whether preservation may interfere with necessary business functions.
I also think that requiring reasonable steps for preservation is a signal to corporate America to evaluate its data hygiene independent of litigation. What are the record-management policies? What data is being retained or not retained and why? What format is it being retained in, and how does that information relate to business needs and regulatory requirements? These are all important questions for companies to consider. There’s a need to ensure that data-retention policies are fair and sensible as part of everyday information governance before litigation strikes.
Jennifer A. Brennan, Director at iDiscovery Solutions. firstname.lastname@example.org
Wendy Butler Curtis, Chair of Orrick’s eDiscovery and information governance practice group. email@example.com
Published March 3, 2016.