Inside Track: Concerned about Discovery Costs and Sanctions? Time to Speak Up:

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  • Concerned about Discovery Costs and Sanctions? Time to Speak Up

    In this article, Milwaukee lawyer Joseph Russell explains potential changes to the Federal Rules of Civil Procedure. He notes that any amendments at the federal level would likely be adopted by the Wisconsin Supreme Court in the near future.

    Joseph Michael Russell

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    Feb. 5, 2014 – The bench, bar and public has until Feb. 15, 2014, to comment on the proposed amendments to the Federal Rules of Civil Procedure. If approved, these amendments could dramatically reduce the scope and costs of discovery in federal cases, as well as limit sanctions for failure to preserve discoverable information.

    State-court practitioners should take notice as well. Once the federal amendments take effect, the Wisconsin Judicial Council will likely petition the Wisconsin Supreme Court to modify, in turn, Wisconsin’s civil discovery rules so that they reflect some – if not all – of the new federal amendments.

    Background on the Proposed Amendments

    On June 3, 2013, the Civil Rules Advisory Committee proposed amendments to Rules 1, 4, 16, 26, 30, 31, 33, 34, 36 and 37. These proposed amendments have been called the “Duke Rules” package because they emerged from a 2010 legal conference held at Duke University, where lawyers and judges discussed the discovery burdens litigants now face due to the huge quantity of electronically stored information (ESI) at issue in many cases.

    Narrowing the Scope of Discovery

    The overarching theme of the proposed amendments is to establish “proportionality” during the discovery phase. The key amendment, in this regard, is to the rule that governs the scope of discovery: Rule 26(b)(1). The amended rule would limit discovery so that it is “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 outweigh its likely benefit.”

    Joseph Russellcom jrussell vonbriesen Joseph Russell is a shareholder in the Litigation and Risk Management Practice Group at von Briesen & Roper S.C., Milwaukee. Reach him by com jrussell vonbriesen email or by phone at (414) 287-1414.

    Rule 26(c) would be amended to reflect the new “proportionality” standard by making explicit, for the first time, the court’s authority to enter a protective order that can allocate or shift the expenses of burdensome discovery between parties.

    Other amendments to the rules reflect the general aim of the Civil Rules Advisory Committee to streamline future discovery and reduce overall litigation costs: the presumptive number of depositions allowed by Rule 30 would be reduced to 5 from 10; the presumptive number of interrogatories allowed by Rule 33 would be reduced to 15 from 25; and the presumptive number of requests for admission allowed by Rule 36 would be capped for the first time at 25.

    Limiting Discovery Sanctions

    Recognizing that the maintenance and preservation of large quantities of ESI often places excessive burdens on litigants, the Civil Rules Advisory Committee also seeks to amend Rule 37(e) to clarify the standard by which a court may levy sanctions on a party that fails to preserve discoverable information.

    Amended Rule 37(e) would establish – except in the rare case in which a failure to preserve “irreparably deprived a party of any meaningful opportunity to present or defend against the claims in the litigation” – that a court can only sanction a party for failure to preserve relevant information if the failure is “willful” or in “bad faith” and if that failure caused “substantial prejudice” to the other party in the litigation. Thus worded, amended Rule 37(e) would reject the standard now employed in some jurisdictions, where negligence is considered an adequate degree of culpability to support discovery sanctions.

    The Remaining Approval Process

    Two public hearings have been held thus far on the proposed amendments. A third is scheduled for Feb. 7, 2014, in Dallas, Texas.

    Approximately 500 public comments have been provided to the Civil Rules Advisory Committee. Commenters include judges, solo practitioners, law firms, corporations and various lawyer organizations representing a wide spectrum of stakeholders.

    The proposed amendments would become effective on Dec. 1, 2015, if they are approved, with or without revision, by the Committee on Rules of Practice and Procedure, the Judicial Conference, and the Supreme Court, and if Congress does not act to defer, modify, or reject them.

    Potential Effects on Wisconsin’s Civil Discovery Rules

    Following the last significant amendments to the federal rules, the Wisconsin Judicial Council petitioned the Wisconsin Supreme Court to make similar amendments to Wisconsin’s civil discovery rules.1 Adopting the petition by a 4 to 3 vote, the Wisconsin Supreme Court promulgated the first specific rules addressing the conduct of electronic discovery, which became effective on Jan. 1, 2011.2

    These rules addressed, for example, court management of electronic discovery (802.10(3)(jm)), production of electronic business records and ESI (804.08(3), 804.09) and a safe harbor if ESI is lost as the result of the routine, good-faith operation of an electronic information system (804.12(4m)).

    If the current federal amendments now being proposed are approved and take effect, the Wisconsin Judicial Council will likely file a new petition with the Wisconsin Supreme Court requesting that Wisconsin’s civil discovery rules be amended, again, to reflect many of the new federal amendments. Although this process may take several years, the new federal amendments – and their subsequent interpretation by federal courts – will provide the primary basis by which Wisconsin’s rules may be modified.

    Conclusion

    Whether the proposed federal amendments are approved, rejected, or otherwise revised, the rules regarding civil discovery – at both the federal and state level – will continue to evolve as the vast quantity of ESI in our society continues to grow. Participating in the comment period is a good way to influence that evolution.

    The proposed amendments, rules committee reports, and other information are available at http://www.uscourts.gov/RulesAndPolicies/rules/proposed-amendments.aspx.

    Public comments can be submitted and reviewed electronically at http://www.regulations.gov/#!docketDetail;D=USC-RULES-CV-2013-0002. All comments are made part of the official record and are available to the public.

    Comments can also be submitted in writing to the following address: Committee on Rules of Practice and Procedure, Administrative Office of the United States Courts, One Columbus Circle, NE, Washington, D.C. 20544.

    Endnotes

    1 Wis. Sup. Ct. Petition 09-01 (amended Mar. 19, 2010).

    2 Wis. Sup. Ct. Order 09-01, 2010 WI 67, __ Wis. 2d __ (eff. Jan. 1, 2011); Wis. Sup. Ct. Order 09-01, 2010 WI 67, __ Wis. 2d __ (eff. Jan. 1, 2011).