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Litigation Publications IMPLEMENTING THE MOST RECENT FEDERAL RULES CHANGES: CHARTING THE COURSE THROUGH TREACHEROUS WATERS Effective December, 2000, a sea change occurred in the Federal Rules governing some of the most significant pretrial procedures. This article discusses case law implementing three of these rules changes and provides practical advice for navigating these uncharted and treacherous waters. It focuses on the new mandatory initial disclosures provided in Rule 26(a) and related draconian consequences of failure of compliance; the new scope of discovery in Rule 26(b)(1); and the new limits on depositions in Rule 30(d). Mandatory Disclosure In 1993, the Federal Rules of Civil Procedure were amended to provide for mandatory disclosure of the identity of all persons and documents "relevant to disputed facts alleged with particularity in the pleadings." As the Advisory Committee Notes ("Notes") explained, this requirement applied to all individuals and documents "whether or not supportive of its [a party’s] contentions in the case." The 1993 amendments included mandatory disclosure of the identity of people and documents harmful to your case, even when opposing counsel never asked for such information. Supreme Court Justice Antonin Scalia described this radical shifting of the discovery burden as "potentially disastrous." To mollify Justice Scalia, and those who agreed with him, the 1993 amendments included a provision allowing any federal district to opt out of the mandatory disclosure requirements. More than half of the judicial districts did opt out, balkanizing the federal rules on this crucial requirement. (2) Because of the requirement that a party disclose harmful information, Rule 26(a) came to be known in some circles as the "heartburn rule." The 2000 amendment to Rule 26(a) has provided relief by limiting this mandated disclosure to information about people, documents and tangible things "the disclosing party may use to support its claims or defenses, unless solely for impeachment . . ." As the Notes make explicit: "The scope of the disclosure obligation is narrowed to cover only information that the disclosing party may use to support its position . . ." The Notes further define "use" to include any use at a pretrial conference, intended use in discovery (apart from use to respond to a discovery request), in support of a motion, or at trial. This obligation includes, for example, disclosure of all documents a party intends to use in questioning witnesses during depositions, and also attaches to witnesses and documents a party intends to use "if the need arises." Accordingly, you have the right to object, for example, to the affidavit of an individual or to a document supporting or opposing a motion for summary judgment if that individual or document should have been disclosed pursuant to Rule 26(a) but was not; to the use of a similarly non-disclosed documents or tangible things at a deposition other than for impeachment; and to the testimony at trial of a non-disclosed individual or use at trial of non-disclosed documents or tangible things if they are within the ambit of Rule 26(a). Of course, any pre-trial objections (and, in certain circumstances, even trial objections) may be cured if opposing counsel supplements disclosure as provided in Rule 26(e). Rule 26(a) is no longer subject to an opt-out provision: the 2000 amendment invalidates not only formal local rules but also informal "standing" orders of an (3) individual judge or court that purport to create exemptions from -- or limit or expand -- the mandated disclosure. Case-specific orders remain proper, however, and are expressly required if a party successfully objects that initial disclosure is not appropriate in the circumstances of the action. In addition, the parties can stipulate to forgo this disclosure. But even when counsel so stipulate, under Rule 16 the court can order exchange of similar information in managing the action. A party can object to Rule 26(a) disclosure as inappropriate, but must raise that objection during the Rule 26(f) conference and include that objection in the Rule 26(f) report. If no such objection is raised, the time for mandatory disclosure is at or within fourteen days after that conference. Before commencing an action in federal court, prepare this mandatory disclosure. Such preparation requires you to conduct a thorough investigation of your claim before instituting suit, an investigation you should conduct in any event. Remain cognizant of the fact that you can still file discovery motions to obtain what is not required to be disclosed by opposing counsel pursuant to Rule 26(a). Also, be aware of your opportunity -- and obligation -- to provide supplemental mandatory disclosures as provided in Rule 26(e). Of course, opposing counsel has corresponding obligations to supplement mandatory disclosure. Compliance with mandatory disclosure can have a salutary effect. According to a study on the effect of the 1993 amendment to Rule 26(a) conducted by the Federal Judicial Center, a major research arm of the federal courts: "Far more attorneys reported that initial disclosure decreased litigation expense, time from filing to disposition, the amount of discovery, and the number of discovery disputes. . . . [and that] initial (4) disclosure increased overall procedural fairness, the fairness of the case outcome, and the prospects of settlement. . . ." To date, very few cases discuss the scope of mandatory disclosure following the 2000 amendments. Some of these cases hold as follows: Mandatory disclosure does not apply to anyone whom the disclosing party does not intend to use as a witness. Mandatory disclosure does not expressly require disclosure of work product, or even specification of individual documents -- all that is required is disclosure of documents by category and location. Where plaintiffs were willing to defer mandatory disclosures, and defendants had filed a motion to dismiss the action, defendants could defer production of insurance policies, as otherwise required by Fed. R. Civ. P. 26(a)(1)(D), until the court ruled on their motion to dismiss. The consequences of failing to disclose as provided in Rule 26(a) and 26(e) can be dire. Rule 37(c)(1), as amended, provides that a party which "without substantial justification fails to disclose information required by Rule 26(a) or 26(e)(1), or to amend a prior response to discovery as required by Rule 26(e)(2), is not, unless such failure is harmless, permitted to use as evidence at a trial, at a hearing, or on motion any witness or information not so disclosed." In addition to or in lieu of this sanction, Rule 37(c)(1) further provides that the court, on motion and after affording an opportunity to be heard, may impose other sanctions, including
(5)
Beyond all thee drastic remedies, the court can award reasonable expenses, including attorney’s fees, caused by the failure to comply with the mandated disclosure. So, if you determine that you failed to disclose the identity of an individual, document or tangible thing you may use in pre-trial proceedings or at trial, promptly supplement your Rule 26(a) disclosure as provided in Rule 26(e). Courts have imposed Rule 37 sanctions implementing the 2000 amendments. In one case, the court held that the failure of a corporate defendant’s principal to disclose his true identity and home address in the Rule 26(a) mandatory disclosures without substantial justification, instead making false and misleading disclosures, warranted sanctions. The court noted that the false and misleading information frustrated the obvious purpose of Rule 26(a)(1)(A), which is "to give the opposing party information as to the identification and location of persons with knowledge so that they can be contacted in connection with the litigation, either for purposes of serving a proposed amended complaint (as occurred in this case) or for being interviewed or for being deposed or for doing background investigation." In another case, the court excluded at trial a videotape containing flammability demonstrations prepared by plaintiff’s expert in a products liability action, noting that (6) Rule 37(c)(1) was amended in December 2000 to make clear that failure to comply with Rule 26(e)(2)’s duty of supplementation is also sanctionable. That videotape evidence had not been timely disclosed. The court determined that the supplementation came too late to be seasonable, and that the defendant’s pretrial preparations would have been compromised if the videotapes were allowed. Factors to be considered in determining whether to exclude evidence for failure to comply with discovery obligations are (1) whether it would prejudice or surprise to the opposing party if allowed; (2) whether any such prejudice is curable; (3) whether it would disrupt the orderly and efficient trial of the case or other cases in the court if the evidence were allowed; and (4) whether the failure of compliance was the result of bad faith or willfulness. Scope of Discovery For over six decades, the scope of discovery in federal court has been any matter "relevant to the subject matter involved in the pending action." The 2000 amendment to Rule 26(b)(1) alters that well-defined standard by providing that the scope of discovery is limited to any matter "relevant to the claim or defense of any party" and that only upon a showing a good cause will the court order discovery of any matter "relevant to the subject matter involved in the action." The Notes acknowledge that the "dividing line between information relevant to the claims and defenses and that relevant only to the subject matter of the action cannot be defined with precision." According to one commentator, however, this amendment "does not effect a dramatic change in the scope of discovery. In part, it is designed to (7) involve judges in cases that present problems with the scope of discovery. The present standard --‘relevant to the claim or defense of any party’ -- is still a very broad one." Nevertheless, this new standard has been the subject of criticism. There is no established body of law defining it, whereas there is an established body of law defining the old standard. The concern is that this new standard will spawn innumerable discovery disputes, thereby squandering judicial energy, and might undermine the traditional notice pleading regime the Advisory Committee established in the original Federal Rules in 1938 and that federal judges have steadfastly maintained over the past six decades. One trial judge who opposed this change predicted ten years of litigation to determine the application of new Rule 26(b). Indeed, one of the members of the United States Judicial Conference’s Advisory Committee on Civil Rules who opposed it, has written: "I fear that the amendment may lead to little positive change by way of curbing cost and excess in federal discovery, while increasing purely procedural contention over the multiple and vague terms in the revised rule. These fears are partly because I see the amendment, seemingly aimed at making discovery more targeted, as fitting uneasily within the general federal regime of liberal notice pleading and still-broad discovery." According to the Notes, the twin purposes of this amendment are to limit discovery to matters raised in the pleadings, thereby restricting fishing expeditions (and signaling to the parties that they have no entitlement to discovery to develop new claims or defenses that are not already identified in the pleadings), and to involve the court more actively in regulating the breadth of sweeping or contentious discovery. This new standard may promote ancillary litigation over the scope of discovery but, to date, there are not many reported decisions on this issue. As a practical matter, this new standard (8) may encourage plaintiffs’ counsel to draft fact-based pleadings with broader allegations as well as some doubtful claims, rather than merely providing notice-type pleadings (despite the provisions of Rule 8), to gain access to a wider range of discovery. Such pleadings may foster more Rule 11 and Rule 12(b) motion practice. In the few dozen cases so far that discuss this new discovery standard, judges have variously described its effect. The scope of discovery "has been narrowed by some degree and . . . relevance is more closely tied to the actual allegations contained in the complaint," although "it is not necessary for every discovery request to have some reference point in the pleadings." Noting that the meaning of this amendment will only "be settled over time," one judge observed that even though "a narrowing has taken place," "[n]one of the decisions suggest [sic] that amended Rule 26(b)(1) will bring about a dramatic effect on the scope of discovery." Indeed, some judges have taken a liberal view of discovery despite this amendment. "Even after the recent amendments . . . courts employ a liberal discovery standard . . . The minimal showings of relevance and admissability hardly pose much of an obstacle for an inquiring party to overcome . . . ." Even under the amended rule, relevancy "is broadly construed, and a request for discovery should be considered relevant if there is ‘any possibility’ that the information sought may be relevant to the claim or defense of any party . . . When the discovery sought appears relevant on its face, the party resisting the discovery has the burden of establishing the lack of relevance by demonstrating that the requested discovery (1) does not come within the broad scope of relevance as defined under Fed. R. Civ. P. 26(b)(1), or (2) is of such marginal relevance (9) that the potential harm occasioned by discovery would outweigh the ordinary presumption in favor of broad disclosure." A comprehensive analysis of the new discovery standard is found in Thompson, et al. v. Department of Housing and Urban Development, et al. In that case, the court observed that the most valuable reference is the pleadings, but that they are only a starting point, since a variety of types of information not directly pertinent to the incident in suit could be relevant to the claims or defenses raised in a given action. The court suggests that the practical solution to implementing the new standard is to focus more on whether the requested discovery makes sense in light of the Rule 26(b)(2) factors, than to attempt to divine some bright line distinction between the old and new rule. Accordingly, counsel should not take an overly rigid view of the narrowed scope of discovery. After an exhaustive analysis of these and other cases considering discovery under the amended rules, one commentator concluded: (1) in nearly all instances, it appears that the outcomes would have been the same before the amendment; (2) plaintiffs have fared better than defendants, both when seeking and resisting discovery; (3) courts have paid considerable attention to the Committee Note to this amendment, generally to allow discovery; and (4) the decisions often seem to rely on additional factors, such as the apparent burdensomeness of discovery sought, rather than focusing narrowly on the definition of "claim or defense." To try to make sense of all this, another commentator suggested the following test: "An item of information sought is relevant to a claim or defense if the requesting party can articulate a logical relationship between the information sought and possible proof or refutation of the claim or defense at trial." (10) There are very few decisions defining "good cause" required for an order allowing discovery under the old standard of "any matter relevant to the subject matter involved in the action." They reveal no pattern except that mere speculation about what discovery might turn up does not suffice. A prudent approach for advocating good cause under amended Rule 26(b)(1) is demonstration of a reasonable need for the material sought by articulating the reasons (1) the information is important to the case; (2) the information is at least potentially likely to emerge from the requested discovery; and (3) permitting the discovery will be more consistent with full factual development and accurate adjudication rather than furthering such discovery vices as increased cost, delay, or harassment. Even if the requesting party makes this showing, the opponent may still be able to avoid discovery if it can demonstrate that the burden of subject-matter discovery outweighs its benefit, and may seek a protective order where appropriate. Limits on Depositions The 2000 amendment to Rule 30(d)(2) limits a deposition to "to one day of seven hours," unless otherwise authorized by the court or stipulated by the parties; or if additional time, consistent with Rule 26(b)(2), is needed for a fair examination of the deponent; or if the deponent, another person, or other circumstance impedes or delays the examination. According to the Notes, this presumptive limit of seven hours contemplates that there will be reasonable breaks during the deposition (not counted toward the seven hours), and that "preoccupation with timing is to be avoided." Factors set forth in the Notes justifying a longer deposition include examinations covering events occurring over a long period of time; questioning about numerous or lengthy documents not read by the deponent despite receiving them in advance; (11) questioning on documents that had been requested but not produced; questioning by multiple lawyers in multi-party cases, so long as the questioning is not duplicative; questioning by the lawyer for the witness; and questioning of expert witnesses for full exploration of the theories upon which the expert relies. In Sabre v. First Dominion Capital, LLC, the court addressed whether the presumptive seven-hour limit applies cumulatively to testimony by a witness deposed in both an individual capacity and as a corporate representative under Rule 30(b)(6), or whether two independent seven-hour periods apply. Reasoning that if only one seven-hour period applied, there would be substantial potential for over-reaching, the court held that two independent seven-hour periods apply. The court observed that, for example, "any entity that wanted to limit the testimony of an individual could accomplish that goal by designating the individual as a 30(b)(6) witness; under defendant’s interpretation, every minute spent conducting the 30(b)(6) deposition would be deducted from the time available to probe the witness’s individual knowledge. Conversely, defendants’ interpretation would also permit an entity to curtail 30(b)(6) examinations by designating as a 30(b)(6) witness a person who previously testified for six hours as an individual and has only one hour left on his or her presumptive seven-hour clock. An interpretation that would lead to such absurd results must be rejected." The court was quick to note, however, that there is no carte blanche to depose an individual for seven hours as an individual and another seven hours as a 30(b)(6) witness: "In the case of many closely held corporations, the knowledge of an individual concerning a particular subject also constitutes the total knowledge of the entity. In such a situation, the witness could simply adopt the testimony he or she provided in a former (12) capacity, thereby obviating the need for a second deposition. In addition, if the questioning at any deposition becomes repetitive or is otherwise conducted in an oppressive manner, the aggrieved party can apply for a protective order." The court in Miller v. Waseca Medical Center followed Sabre in two consolidated cases where the question was whether one seven-hour period or two applies as to one witness. "The mere fact that these cases might have proceeded separately does not establish that 14 hours is the appropriate length for a deposition of a witness common to both cases. By the same logic, the fact that the two cases have now been consolidated into one also does not establish that it is proper that no deposition last more than seven hours. Rather, the Court is called upon in each case to make a fact-intensive inquiry as to whether a particular witness should or should not be required to submit to questioning that exceeds seven hours in length. The Notes of Advisory Committee to the 2000 amendments suggest some of the factors to consider, but their most important advice is in a single sentence: ‘preoccupation with timing is to be avoided.’ " In Miller, defendants contended that they needed additional time to take depositions because plaintiffs tended to provide narrative answers to "yes" or "no" questions and defendants complained about the length of time that elapsed between questions and answers in the depositions. (The transcript was prepared in such a way as to permit an analysis of the elapsed time between question and answer.) Even though the court noted that "it remains unclear precisely why the amendment is necessary at this particular time" because "[w]hen the length of depositions creates difficulties, judges can invoke Federal Rule 30 or match temporal restrictions with a specific lawsuit’s (13) requirements in pretrial conferences," the court recognized its "duty to enforce it now that it has been adopted." After an exhaustive analysis of the deposition record, the court in Miller held that, under the circumstances, additional time was needed for a fair examination of the deponent, and that circumstances had impeded or delayed the examination. Defendants had sought an order that each plaintiff submit to "an extension of two, seven-hour days for their depositions." The court declined to issue an order for a specific number of hours. Instead it admonished the parties: "It is to be expected that the depositions will be completed promptly, and that counsel for Defendants will refrain from repetition, and will not use an unreasonable period of time. It is also expected that Plaintiffs will answer questions directly, and their counsel will refrain from unnecessary colloquy." The court also observed that each party is protected by Rules 30(d) and 37 in the event of abuse. Strategies in light of this seven-hour limit include the following:
(14)
The amendment to Rule 30(d)(1) provides that any objection during a deposition must be stated concisely and in a non-argumentative and non-suggestive manner, and that a person may instruct a deponent not to answer only when necessary to preserve a privilege, to enforce a limitation directed by the court, or to present a motion under Rule 30(d)(4). Rule 30(d)(4) provides relief if a deposition is being conducted in bad faith, or in such a manner as unreasonably to annoy, embarrass, or oppress the deponent or a party, including an award of expenses under Rule 37(a)(4). In Miller, the court referred to this amendment to Rule 30(d)(1). Defendants contended that counsel for plaintiffs "inappropriately intruded on the depositions by making personal remarks and ad hominem attacks on opposing counsel" and sought relief under this amendment. The court held that "as a procedural matter, a party may instruct a witness not to answer a question at a deposition under limited circumstances, but as a substantive matter, the party does so at its own peril if it is wrong on the merits of its objection." (15) As a practical matter, this amendment to Rule 30(d)(1) merely codifies a substantial body of case law limiting objections at depositions. It does, however, provide national uniformity on this issue, a rule-based rather than merely a case-based response to obstreperous counsel at a deposition, and relief for improper objections at depositions if the requirements of Rule 30(d) (3) are met (i.e., any impediment, delay, or other conduct frustrating the fair examination of the deponent). As case law develops, the contours of the 2000 amendments will be shaped with greater precision. The guiding principle underyling all these rule changes is well expressed in the Notes. Even though only addressed to the presumptive seven-hour limit, the following statement provides the best navigational guidance: "It is expected that in most instances the parties … will make reasonable accommodations to avoid the need for resort to the court." This approach benefits the court as well as the litigants. As one grateful federal judge commented: "Since I have written nothing on this issue [raised by the amended rules discussed in this article] . . . because the parties resolve the problem, I’m perfectly happy under these circumstances with the amendments." So, whenever possible, resolve by stipulation the various issues these amendments present. Failing such resolution, take advantage of these amendments, including court intervention when necessary, and, when appropriate, seek sanctions pursuant to Rule 37. |
