Bar News - July 20, 2016
Federal Practice & Bankruptcy: Federal E-Discovery Rule Amendments: What You Need to Know
By: Elsabeth McGohey
Amendments to the Federal Rules of Civil Procedure that went into effect Dec. 1, 2015 – frequently referred to as “e-discovery amendments” – created two important changes for federal court practitioners.
First, the amendments to Rule 26 changed the focus of the scope of discovery to emphasize proportionality of the discovery sought to the needs of the case. Second, the amendments to Rule 37 made significant changes to the standard for spoliation based on failure to provide electronically stored information.
Other rule changes, such as changing the time for service of the complaint, scheduling of case management conferences and service of requests for production, support these two primary rule changes.
Ultimately, the amendments are intended to reduce litigation costs, reduce e-discovery spoliation battles, and focus litigators and the bench on the truth of the matter, and how to arrive at the truth of the matter without wasting each other’s resources.
FRCP Rule 26 (b)(1)
Rule 26 now limits the scope of discovery as follows: Parties may obtain discovery regarding any non-privileged matter that is relevant to any party’s claim or defense “and (1) proportional to the needs of the case, considering the importance of the issues at stake in the action, (2) the amount in controversy, (3) the parties’ relative access to relevant information, (4) the parties’ resources, (5) the importance of the discovery in resolving the issues, and (6) 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.”
This rule change should not dramatically impact the way federal discovery issues are handled, in the sense that there has always been a requirement that discovery not be “overly burdensome.” Under the old Rule 26(c), a motion for a protective order could have been filed claiming that a particular discovery request created an undue burden because it was not proportional to the needs of the case. Now, proportionality must be considered before the information falls within the scope of discovery, and judges applying the new rule must address proportionality as part of their decision.
Although the rule changes should not be a dramatic change, the revision recognizes that “gotcha” games of burdensome discovery, whether asking for or receiving too much information under the old rule, were driving settlements as much or more than the merits of cases. Litigation costs are dramatically affected by the universe of information involved in the case, particularly when electronically stored information is at issue.
Under the new rule, instead of asking for the universe of information, litigators must focus on the information that is relevant to claims and defenses and within the six-factor analysis required by the rule. Importantly, justification of a discovery request by reference to its ability “to lead to the discovery of admissible evidence” has been eliminated and replaced by the proportionality analysis.
For guidance on application of the six factors enumerated in Rule 26, practitioners should be aware of the guidelines published by Duke Law School, which may be persuasive in light of Duke Law School’s active role in creating the e-discovery amendments. Guidelines and Practices for Implementing the 2015 Discovery Amendments to Achieve Proportionality, Judicature, Vol. 99, Issue 3; page 47 (2015).
FRCP Rule 37 (e)(1)
Changes to Rule 37 shift the emphasis of the analysis for potential sanctions from the “good faith operation” of an electronic information system, to steps taken to preserve electronic information in anticipation of litigation. Although Rule 37(e)(1) provided a safe harbor for good faith of the parties in operating their routine electronic information systems, new Rule 37(e)(1) focuses on the reasonableness of steps taken to preserve electronic information. The new rule provides as follows:
“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.”
The rule change recognizes the burdens associated with electronic discovery and the likelihood that substantial electronic information will not and cannot be preserved in the ordinary course. The rule created a three-part analysis: (1) was it “information that should have been preserved;” triggering a duty to preserve?; (2) can the prejudice of the loss of information be cured, for example by reproducing the information from another source?; and (3) if the prejudice cannot be cured, and the court finds that a party acted to deprive another party of the information, should the sanction be an adverse presumption, an adverse inference jury instruction or dismissal? The rule still has a safe harbor for those taking reasonable steps to preserve information, although litigants will have to demonstrate those reasonable steps. The advisory committee notes reflect that the rule is intended to foreclose reliance on state law and inherent authority of the Court to craft sanctions.
The 2015 E-Discovery Amendments are supposed to reduce litigation costs. The narrowing of discovery to matters proportional to the needs of the case and the simplified analysis of sanctions for destruction of electronic information certainly promise some less costly disputes. Discovery battles will still be waged, and judges will still be called upon to end the battles, but with concerted effort by the bench and bar, the rules give litigants the power to reduce the cost of warfare.
Elsabeth McGohey is a solo trial attorney in Manchester. She has litigated cases in the state and federal courts of New Hampshire since 2006. Her current practice focuses on representation of consumers and injured persons.