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    January
    01
    2015

    Federal Rules of Civil Procedure: Changes May Affect Wisconsin Practice

    Proposed amendments to the Federal Rules of Civil Procedure, if approved by the U.S. Supreme Court, will take effect in December 2015. State Bar members can help shape development of Wisconsin’s Rules of Civil Procedure by studying the proposed federal rule changes and contacting the Judicial Council with their comments and suggestions.

    William Gleisner & Michael Fitzpatrick

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    courthouseThe United States Judicial Conference (the Conference) is the principal policy-making body of the federal court system. One of its primary functions is to “carry on a continuous study of the operation and effect of the general rules of practice and procedure in use within the federal courts.”1 The Conference works through a number of advisory committees, including the Advisory Committee on Federal Rules of Civil Procedure. In May 2010, that committee convened what has come to be called the Duke Conference, at Duke University, “for the specific purpose of examining the state of civil litigation in federal courts and exploring better means to achieve … [the] goal of the just, speedy, and inexpensive determination of every action.”2 As a result of work stemming from the Duke Conference, the committee adopted a number of proposed amendments to the Federal Rules of Civil Procedure. The committee’s final proposed amendments were completed in May 2014 and adopted by the Conference in September 2014. If approved by the U.S. Supreme Court, the rules could go into effect as early as Dec. 1, 2015, although that date could change if Congress objects to the rules as proposed.3

    Even if you don’t practice in federal court, you should learn about the proposed amendments. The Wisconsin Rules of Civil Procedure are not the same as the Federal Rules of Civil Procedure, and the Wisconsin rules do not automatically change when the federal rules change. Nonetheless, for decades the Wisconsin Supreme Court has held that federal decisions construing procedural counterparts to the Wisconsin Rules of Civil Procedure are persuasive authority.4 In addition, there has been a trend in recent years to conform Wisconsin procedural rules to their federal counterparts.

    How Wisconsin Formulates Procedural Rules

    To understand how the new federal rules could affect the Wisconsin rules in the near future, it is important to review how Wisconsin Rules of Civil Procedure are enacted and amended from time to time. Before 1976, Wisconsin courts operated according to the Field Code, written in the 1840s and adopted in Wisconsin in 1856.5 In 1976, Wisconsin’s rules were substantially revised.6 Since then, the Wisconsin rules have been revised according to a procedure that differs from the procedure used by the U.S. Judicial Conference. While both the Wisconsin Legislature and the Wisconsin Supreme Court can enact rules that affect the practice of law in Wisconsin courts, shortly after the 1976 revision to Wisconsin’s rules, the Wisconsin Supreme Court was vested with primary responsibility for adopting rules of pleading and practice in Wisconsin courts.7

    William C. Gleisner IIInet wgleisner sbcglobal William C. Gleisner III, Marquette 1974, is with Pitman, Kyle, Sicula & Dentice, Milwaukee. He has been a member of the Wisconsin Judicial Council since 2008 and was one of the principal drafters of Wisconsin’s new e-discovery rules. He coauthored eDiscovery & Digital Evidence with Marquette Law School Professor Jay Grenig. He has provided of counsel assistance to law firms nationwide concerning e-discovery issues.

    Michael R. Fitzpatrickgov michael.fitzpatrick wicourts Hon. Michael R. Fitzpatrick, Drake 1984, is a Rock County Circuit Court Judge and a member of the Wisconsin Judicial Council and the Civil Jury Instruction Committee. He previously was on the Civil Judicial Benchbook Committee and frequently speaks at seminars on evidence and civil procedure topics, including Daubert and e-discovery.

    The supreme court is directed by Wis. Stat. section 751.12(5) that “[t]he judicial council shall act in an advisory capacity to assist the court in performing its duties under this section.” So, the manner in which procedural rules (and rules of evidence) are adopted in Wisconsin also involves an understanding of the Wisconsin Judicial Council. The Judicial Council operates under its own statutory mandate.8 According to Wis. Stat. section 758.13(2), the Judicial Council must “(a) Observe and study the rules of pleading, practice and procedure, and advise the supreme court as to changes which will, in the council’s judgment, simplify procedure and promote a speedy determination of litigation upon its merits;… (g) Recommend to the supreme court, legislature and governor any changes in the organization, operation and methods of conducting the business of the courts that will improve the efficiency and effectiveness of the court system and result in cost savings.” Thus, many procedural rules (and rules of evidence), and amendments to rules, originate in the Judicial Council.

    Issues regarding rules of civil procedure are referred to the Judicial Council’s Standing Evidence & Civil Procedure Committee. Deliberations are conducted in that committee and often input is solicited from interested stakeholders. Occasionally, the chair of the Evidence & Civil Procedure Committee9 will appoint to the committee ad hoc members who have specialized knowledge concerning a particular issue.

    Once action on a proposed rule has been taken by the Evidence & Civil Procedure Committee, it goes to the full Judicial Council. If the Council approves the committee’s action, the Judicial Council can propose the rule to either the legislature or the supreme court. Most often, procedural rules are referred to the Wisconsin Supreme Court, which will then hold a public hearing on a rule proposal from the Judicial Council. After the public hearing, the supreme court will customarily hold a public administrative conference on a proposed rule and either approve or disapprove the rule or remand it to the Judicial Council for further consideration.

    Recent Trends in Wisconsin Rule Making

    Both the Judicial Council and some Wisconsin Supreme Court justices have recently expressed a preference for following the federal model when adopting or modifying a rule. There are several reasons for this trend, but the primary one has to do with the availability of legal precedents. When a federal rule is considered for adoption in Wisconsin, it has already been the subject of significant judicial gloss in federal courts and other state courts that have adopted a federal model. Thus, Wisconsin courts and counsel have significant authorities available to assist them with interpreting and applying new or amended rules. It is believed this benefits both bench and bar.10 However, if there are significant reasons to depart from a federal model, or retain a Wisconsin rule, nothing prevents that departure or retention.

    Any possible future discussion of adoption of these changes to Wisconsin’s discovery rules may include whether there are problems in Wisconsin courts that necessitate such change.

    If the U.S. Supreme Court approves the proposed federal rules and Congress does not object, those new rules can go into effect in December 2015. Members of the Wisconsin bench and bar should reflect on the proposed amendments to the Federal Rules of Civil Procedure recently adopted by the U.S. Judicial Conference. The authors express no opinion about the new proposed federal rules, but it is time to start a dialog in Wisconsin about whether the latest proposed federal model should be adopted for Wisconsin courts. Develop your thoughts on whether the proposed federal model is appropriate for Wisconsin courts. If you wish to be heard, email your State Bar representatives on the Judicial Council11 or contact the Wisconsin Supreme Court if a petition is filed to adopt any of these rules.

    Background of the Proposed Federal Rules

    For some time following the 2010 Duke Conference, it was thought that the proposed new rules were solely the result of dissatisfaction with the 2006 federal e-discovery rules. For example, one commentator has stated that abuses stem from the fact that “instead of simplifying the process, the 2006 [e-discovery] amendments seem to have generated more satellite litigation than ever before about preservation and production issues.”12 However, e-discovery was only part of the problem that led to the Duke Conference. The proposed new rules involve far-reaching changes to discovery procedure, and judicial management of discovery, which cannot be explained as a reaction to e-discovery abuse. To be sure, there is one significant change to e-discovery procedure, but that is not the core of the proposed new federal rules.

    The proposed new rules, and the Conference’s analysis, are contained in a June 14, 2014, memorandum from Judge David Campbell (chair of the Advisory Committee on Federal Rules of Civil Procedure) to Judge Jeffrey Sutton (chair of the Judicial Council Committee on Rules of Practice and Procedure).13 The Campbell memorandum contains an excellent and detailed discussion of the proposed rules and the specific language adopted.

    Substance of the Proposed Federal Rules

    The Duke Conference gave rise to several early proposals for changes to the discovery rules. Those proposals included the following: limit depositions to five per case; reduce the length of an oral deposition to six hours; reduce interrogatories to 15 per case; and limit requests to admit to 25 per case.14 In the words of the Campbell memo, these proposals “encountered fierce resistance.”15

    Therefore, a different approach was undertaken to achieve what the Advisory Committee called the key Duke Conference conclusions. These key conclusions are easy to express: “What is needed can be described in two words – cooperation and proportionality – and one phrase – sustained, active, hands-on judicial case management.”16 What follows are the more important proposed changes to the federal rules that have been forwarded to the U.S. Supreme Court.

    Rule 26. Duty to Disclose; General Provisions; Governing Discovery

    (b) 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 importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, 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.17

    At first blush, this does not appear to be all that revolutionary. However, note that this new rule does not contain the following language familiar to Wisconsin attorneys: “Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Instead, new Rule 26(b)(1) contains the following language: “Information within this scope of discovery need not be admissible in evidence to be discoverable.” This generated a good deal of controversy during the public comment period and might prove problematic to Wisconsin attorneys.18 According to the Campbell memo:

    “This change is intended to curtail reliance on the ‘reasonably calculated’ phrase to define the scope of discovery. The phrase was never intended to have that purpose. The ‘reasonably calculated’ language was added to the rules in 1946 because parties in depositions were objecting to relevant questions on the ground that the answers would not be admissible at trial. Inadmissibility was used to bar relevant discovery. The 1946 amendment sought to stop this practice with this language … Despite the original intent of the sentence and the 2000 clarification, lawyers and courts continue to cite the ‘reasonably calculated’ language as defining the scope of discovery. Some even disregard the reference to admissibility, suggesting that any inquiry ‘reasonably calculated’ to lead to something helpful in the litigation is fair game in discovery. The proposed amendment will eliminate this incorrect reading of Rule 26(b)(1) while preserving the rule that inadmissibility is not a basis for opposing discovery of relevant information.”19

    Another interesting concept in the proposed new Rule 26(b)(1) is a discussion of “proportionality” in discovery. The proposed rule, quoted earlier, states that discovery is to be “proportional to the needs of the case.” The factors a federal court would weigh in determining proportionality are 1) the importance of the issues in the action; 2) the amount in controversy; 3) relative access of the parties to the information requested; 4) their resources; 5) the importance of the proposed discovery in resolving issues; and 6) whether the expense outweighs likely benefits of the discovery.

    These concepts of proportionality have been expressed for many years in the Federal Rules of Civil Procedure.20 The reason for the change in Rule 26 is to put a new emphasis on proportionality. Also, the factors have been rearranged in their order in the proposed rule.

    According to the Campbell memo: “This rearrangement adds prominence to the importance of the issues and avoids any implication that the amount in controversy is the most important concern.”21 The Committee Note is careful to state that this change does not place a burden of proving proportionality on the party seeking discovery.22 The Note also clarifies that this change does not authorize boilerplate refusals to provide discovery on the ground of proportionality, “… but should instead prompt a dialog among the parties and, if necessary, the Court, concerning the amount of discovery reasonably needed to resolve the case.”23

    While these ideas of proportionality in discovery have been in the Federal Rules of Civil Procedure for years, the proportionality concept has not been stated in any Wisconsin rules. Granted, in a Wisconsin Supreme Court Note with the recent changes to Wis. Stat. section 804.01 on e-discovery, the court stated the following: “In determining whether to issue an order relating to discovery of electronically stored information, the Circuit Court may compare the costs and potential benefits of discovery.” Also, at least two Wisconsin Court of Appeals cases have considered proportionality in discovery (without using that phrase).24 However, outside e-discovery, the concept of proportionality in discovery in Wisconsin is generally undeveloped.

    Any possible future discussion of adoption of these changes to Wisconsin’s discovery rules may include whether there are problems in Wisconsin courts that necessitate such change. Also, the discussion should consider the potential costs and benefits, and, as the Federal Advisory Committee notes, whether “… more proportional discovery will decrease the cost of resolving disputes without sacrificing fairness.”

    Campbell reports on other changes concerning Rule 34, changes that are designed to facilitate the discovery of electronically stored information (ESI) and that could also change practice somewhat in Wisconsin. According to Campbell:

    “The Committee proposes three amendments to Rule 34…. The first requires that objections to requests to produce be stated ‘with specificity.’ The second permits a responding party to state that it will produce copies of documents or ESI instead of permitting inspection, and should specify a reasonable time for the production.… The third amendment to Rule 34 requires that an objection state whether any responsive materials are being withheld on the basis of the objection.”25

    The Campbell memo also addresses enhanced judicial management through proposed changes to Federal Rule of Civil Procedure 16. These can be summarized as follows: 1) Cases are resolved faster and with less expense when a magistrate judge or district court judge manages the cases early and actively; 2) scheduling conferences must be held early in the case and more often; 3) preservation of ESI is to be addressed at the case management conference; and 4) a new topic at case management conferences is “whether the parties should be required to request a conference with the court before filing discovery motions.”26

    The first two proposed changes to FRCP 16 are consistent with the Federal Advisory Committee’s observation that “[o]ne area of consensus in the various surveys … was that district or magistrate judges must be considerably more involved in managing each case from the outset … and shape the discovery to the reasonable needs of the case.”27

    FRCP 16 is roughly equivalent to Wis. Stat. section 802.10(c). That Wisconsin rule already has a general requirement to discuss discovery of ESI with the court.28 Any discussion of the adoption of more active management in all civil cases by Wisconsin circuit court judges should consider its possible advantages when weighed against practicalities of additional case management.

    There are significant differences between the state and federal court systems. One difference is that, often, there is one federal magistrate judge available for every two federal district court judges. Magistrate judges are knowledgeable and insightful in their handling of discovery disputes, but those judicial resources are not available to Wisconsin circuit court judges. The volume of cases handled by a typical Wisconsin circuit court judge should also be considered when weighing the resources available against possible advantages of more active case management.

    One concrete issue regarding e-discovery is addressed in the proposed new rules. Campbell notes that “many entities described spending millions of dollars preserving ESI for litigation that may never be filed.”29 The proposed amendments to Rule 37(e) limit the scope of the rule to ESI and also change the concept of the duty to preserve (which is to be retained as defined in case law as arising when litigation is reasonably anticipated30) as follows:

    “The proposed rule applies if ESI ‘that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it.’ The rule calls for reasonable steps, not perfection. As explained in the Committee Note, determining the reasonableness of the steps taken includes consideration of party resources and the proportionality of the efforts to preserve. The Note also recognizes that a party’s level of sophistication may bear on whether it should have realized that information should have been preserved.”31

    The new proposed rules go to considerable lengths to ensure that future e-discovery disputes will be resolved in a far less draconian manner than has sometimes been the case. According to Campbell:

    “If reasonable steps were not taken and information was lost as a result, the rule directs that the next focus should be on whether the lost information can be restored or replaced through additional discovery. As the Committee Note explains, nothing in this rule limits a court’s powers under Rules 16 and 26 to order discovery to achieve this purpose. At the same time, however, the quest for lost information should take account of whether the information likely was only marginally relevant or duplicative of other information that remains available. Proposed Rule 37(e)(1) provides that the court, ‘upon finding prejudice to another party fromloss of the information, may order measures no greater than necessary to cure the prejudice.’ This proposal preserves broad trial court discretion to cure prejudice caused by the loss of ESI that cannot be remedied by restoration or replacement of the lost information. It further provides that the measures be no greater than necessary to cure the prejudice.”32

    The following is some of the language of new proposed Rule 37(e). Following the new rule is some of the commentary in the proposed advisory committee note.

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

    . . .

    (e) Failure to Preserve Electronically Stored Information…

    If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:

    (1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or

    (2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:

    (A) presume that the lost information was unfavorable to the party;

    (B) instruct the jury that it may or must presume the information was unfavorable to the party; or

    (C) dismiss the action or enter a default judgment.

    Committee Note: New Rule 37(e) replaces the 2006 rule. It authorizes and specifies 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 when certain measures should be used….

    Because electronically stored information often exists in multiple locations, loss from one source may often be harmless when substitute information can be found elsewhere….

    Many court decisions hold that potential litigants have a duty to preserve relevant information when litigation is reasonably foreseeable. Rule37(e) is based on this common-law duty; it does not attempt to create a new duty to preserve.The rule does not apply when information is lost before a duty to preserve arises.

    In applying the rule,acourt may need to decide whether and when a duty to preserve arose. Courts should consider the extent to which a party was on notice that litigation was likely and that the information would be relevant. A variety of events may alert a party to the prospect of litigation. Often these events provide only limited information about that prospective litigation, however, so that the scope of information that should be preserved may remain uncertain. It is important not to be blinded to this reality by hindsight arising from familiarity with an action as itis actually filed.

    Conclusion

    After much discussion and consideration, it appears that it is probable that the foregoing changes will be made next year to the Federal Rules of Civil Procedure. Time will tell if those changes are adopted by the Wisconsin Supreme Court for use in Wisconsin state court proceedings. However, it is time for Wisconsin attorneys to become familiar with the proposals and voice any concerns they may have to their representatives on the Judicial Council.

    Endnotes

    1 See www.uscourts.gov/FederalCourts/JudicialConference.aspx. Formed by Congress in 1922, the Conference is composed of a number of senior U.S. federal judges. Id.

    2 See www.uscourts.gov/uscourts/RulesAndPolicies/rules/Reports/ST09-2014.pdf, at page 4.

    3 See Tillman, “Federal Judiciary Approves Civil Discovery Rules,” Nat’l L.J., September 2014.

    4 Wilson v. Continental, 87 Wis. 2d 310, 316, 274 N.W.2d 679 (1979).

    5 Jay E. Grenig, 3 Wisconsin Practice Series – Civil Procedure § 101.2 (Thomson Reuters 4th ed. 2014).

    6 See Charles D. Clausen & David P. Lowe, The New Wisconsin Rules of Civil Procedure, 59 Marq. L. Rev. 1 (1976).

    7 Wis. Stat. section 751.12(1) reads in part: “The state supreme court shall, by rules promulgated by it from time to time, regulate pleading, practice, and procedure in judicial proceedings in all courts, for the purposes of simplifying the same and of promoting the speedy determination of litigation upon its merits. The rules shall not abridge, enlarge, or modify the substantive rights of any litigant.” However, Wis. Stat. section 751.12(4) provides: “This section shall not abridge the right of the legislature to enact, modify, or repeal statutes or rules relating to pleading, practice, or procedure.”

    8 The Judicial Council has 21 members including one supreme court justice, one court of appeals judge, four circuit court judges, one district attorney, members of the legislature, four attorneys selected by the State Bar and its president-elect, two citizens appointed by the governor, and designees of the director of state courts, the Wisconsin Attorney General, the Legislative Reference Bureau, the deans of the University of Wisconsin and Marquette Law Schools, and the State Public Defender.

    9 The current chair of the Evidence & Civil Procedure Committee is attorney Thomas L. Shriner Jr., who is both a partner at Foley & Lardner LLP and an adjunct professor at Marquette Law School.

    10 A recent example of this trend involves Wisconsin’s new e-discovery rules. With one exception (involving mandatory meet and confers under Wis. Stat. section 804.01(2)(e)), the new Wisconsin e-discovery rules were modeled closely on the federal rules adopted in 2006. In adopting elements of Wisconsin’s new e-discovery rules, the supreme court went so far as to incorporate elements of the relevant federal advisory notes directly into the Judicial Council Note.

    11 The State Bar representatives on the Judicial Council are attorneys Thomas Bertz, William Gleisner III, Jill Kastner, and Amy Wochos.

    12 Philip J. Favro, Getting Serious: Why Companies Must Adopt Information Governance Measures for the Upcoming Changes to the Federal Rules of Civil Procedure, 20 Rich. J.L. & Tech. 5 (Winter, 2014), ¶ 1.

    13 See www.uscourts.gov/uscourts/RulesAndPolicies/rules/Reports/ST09-2014.pdf, the full September 2014 report of the Judicial Conference Committee on Rules of Practice and Procedure. The referenced 75-page memorandum is contained in Appendix B-1 of that report. References to the report are hereinafter denominated “Campbell, at B-_.” For the convenience of the reader, a copy of the June 14, 2014 Campbell Memorandum can be downloaded from the State Bar’s website, at www.wisbar.org/SiteCollectionDocuments/Publications/Campbell-memo-2014-06-14_WL201501.pdf.

    14 Campbell, at B-4.

    15 Id.

    16 Id. at B-2 to -3.

    17 Id. at B-30 to -31.

    18 “The proposed Duke amendments were published as a package in August 2013 along with the other proposed amendments discussed in this report. More than 2,300 written comments were received and more than 120 witnesses appeared and addressed the Committee in public hearings held in Washington, D.C., Phoenix, and Dallas.” Id. at B-3.

    19 Id. at B-9.

    20 See Fed. R. Civ. Pro. 26(b)(2)(C)(iii).

    21 Campbell, at B-8.

    22 Id.

    23 Id.

    24 Vincent & Vincent Inc. v. Spacek, 102 Wis. 2d 266, 273, 306 N.W.2d 85 (Ct. App. 1981); Earl v. Gulf & W. Mfg. Co., 123 Wis. 2d 200, 206, 366 N.W.2d 160 (Ct. App. 1985).

    25 Campbell, at B-11.

    26 Id. at B-12.

    27 Id. at B-6.

    28 Wis. Stat. § 802.10(3)(jm).

    29 Campbell, at B-14.

    30 Id. at B-15.

    31 Id. at B-16.

    32 Id.




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