Fight Runaway E-Discovery Costs: How You Can Help

Monday, April 5, 2010 - 01:00

Editor: Why do you believe that it is appropriate to pursue fundamental revisions to the Federal Rules of Civil Procedure?

Martin: Large, complex, and difficult-to-manage cases often result in excessive legal fees and costs, much wasteful and unnecessary discovery, and abusive litigation tactics designed primarily to coerce settlements. These pervasive problems demand reform of court rules of civil procedure. While the precise fixes may engender vigorous debate, there is general and widespread agreement that the current system is not working and some of the current procedural rules, especially those related to discovery, are no longer workable for modern litigation.

All of us recognize that our civil justice system cannot properly function without procedural rules that promote a fair and just resolution of disputes. Those at companies large and small can all relate to out of control discovery in civil cases which is so expensive that it effectively prevents parties from litigating legitimate disputes. And we are all too familiar with notice pleading standards that provide easy access to the federal courts and an open door to virtually unlimited e-discovery.

In the Twombly and Iqbal cases, the U.S. Supreme Court grappled with the increasingly apparent problem that notice pleading coupled with broad discovery is becoming more and more unworkable in the face of modern litigation realities - the same problem with which the Federal Rules Advisory Committee must now grapple. An effective answer to this problem can be found in the approach taken in the Final Report of the Joint Project of the American College of Trial Lawyers (ACTL), the Institute for the Advancement of the American Legal System (IAALS), and in the Pilot Project Rules of the IAALS.

The ACTL and IAALS approach recognizes that fundamental changes should be made in procedural rules that underpin both the federal and the state civil justice systems. The overall message of the ACTL and IAALS approach is that our "civil justice system is in serious need of repair" and offers a solution.

Editor: Why do you believe that this is the right time for procedural rule reform?

Martin: Procedural rules problems should be viewed from a historical perspective. The first several decades of litigation under the Federal Rules, enacted in 1938, have been called the "golden age" because e-discovery had not yet burgeoned with the growth of computers, copy machines and e-mail. As a result, the system was widely viewed as working well. But as early as 1951, it had become apparent that some big and protracted cases were not being handled in accord with the desire articulated in Rule 1 of the Federal Rules of Civil Procedure Advisory Committee for a speedy, just, and inexpensive determination on the merits. Despite the 1966 amendments, by the 1970s increasing dissatisfaction with the civil justice system led to calls for reform, and the problems have steadily escalated ever since.

Editor: But aren't the courts moving toward modifying the procedural rules on an "as needed basis" as evidenced by Twombly and Iqbal ?

Martin : In those cases, the U.S. Supreme Court concluded that under the present system of notice pleading and broad discovery, the federal rules were failing, in key ways, to ensure the just, speedy, and cost-effective determination of every action.

Amendment of the rules will allow the Federal Rules Advisory Committee to consider the broad, "architectural" issues and options in a way that judges deciding individual cases cannot. Attempting to balance the workings of notice pleading and discovery, developing methodologies for staged or summary resolution of cases, redefining the premises and focus of discovery, further refining the treatment of e-discovery - all of these issues call for comprehensive reform.

Editor: Assuming the goal of the procedural rules should be to facilitate "achieving the just resolution of every civil action," what do you think should be the core procedural rule elements to which reform should be directed?

Martin: Let me highlight three of these reforms we are supporting, which I consider to be most important:

I. Notice pleading should be replaced by fact-based pleading. The Report recognizes that a major cause of the inefficiency and cost of litigation, especially in discovery, is the current federal system, which countenances "notice" pleading followed by discovery of anything that may be relevant to the subject matter of the case. The Report's Principles recognize that this system discourages ever getting to the nub of a lawsuit;

II. Limit the Scope of Discovery: This principle focuses discovery where it should be: the claims and defenses in the action. Discovery should not be an end in itself; it should be merely a means to facilitating a just, efficient, and inexpensive resolution of disputes. Overall I was very pleased that the Report concluded that discovery must be limited, and it underscored problems associated with unending discovery, especially when combined with notice pleading. Discovery is very expensive and time consuming and substantial abuse occurs. Limiting the scope of discovery to allow only that discovery which will enable a party to prove or disprove a claim or defense or to impeach a witness will return the Rules to their original purpose and will solve many of the problems that have developed in litigation over the last 30 years.

III. We also agree that discovery must be proportional to what's at stake in the litigation and that discovery must be justified by the needs of the case. Proportionality is one of the key themes that run throughout the ACTL Final Report as it lays out in its 29 principles. "Proportionality" should be a key feature especially in the age of email and computerized documents. At its core, we question a system that produces discovery which exceeds the value of a given case. So I applaud the Task Force for recognizing that the civil justice system can only work fairly and equitably when they recognize that discovery in simple cases does not merit the same depth or scope of discovery as cases that involve more complex issues. Discovery is not the purpose of litigation.

Editor: How can our corporate counsel readers and viewer help in reducing the burden of e-discovery?

Martin: LCJ urges corporate counsel to provide data and anecdotal experiences that will demonstrate disproportionate cost of discovery relative to the value of the case in which the expense is incurred. All of this information indirectly demonstrates the inefficiency or excessive cost associated with overbroad discovery. We encourage corporate counsel and their law firms to provide this type of information to Bruce Parker at brparker@venable.com. This information will help LCJ prepare a white paper to be submitted to the Federal Rules Advisory Committee conference at Duke University Law School in May, but you should continue to send your information to Bruce because the White Paper is a work-in-progress which will continue to be used to bolster the case for reform as the proposals for reform wend their way through the lengthy processes of the Federal Rules Advisory Committee and the Judicial Conference. It can also be of critical importance in accomplishing reform in state court systems as well.

Editor: Why do you think LCJ's history enables it to lead in such rule reform initiatives?

Martin: LCJ has a very long history of supporting favorable procedural and evidentiary rule amendments. Our 20 years of success in this area has been unique, and there is simply no other legal reform organization that I know of that has been so dedicated to procedural rule reform or enjoyed a similar record of success. Two recent examples demonstrate LCJ's success:

LCJ played a major role in bringing about the passage of Federal Rule of Evidence 502 which was designed to prevent the unwarranted waiver of the attorney-client privilege and work product protections through the inadvertent disclosure of privileged information.

LCJ was at the vanguard of educating federal judges on the need for reform of e-discovery rules. LCJ's E-Discovery Working Group was very instrumental in supporting clear, concise and meaningful amendments to the Federal Rules of Civil Procedure to address several issues unique to discovery of electronic information. We were strong advocates of the two tier architecture of the recently enacted discovery amendments.

Editor: Why do you believe that LCJ is so uniquely suited to these initiatives?

Martin: LCJ's unique feature is its partnership between corporate counsel and defense practitioners who share the philosophy of volunteerism to improve the civil justice system. But even more important is the leadership of LCJ which allows us to network with the three leading defense organizations nationwide to effectuate change. DRI-The Voice of the Defense Bar, the Federation of Defense and Corporate Counsel, and the International Association of Defense Counsel all have dedicated resources to assist LCJ in states as the need for help arises. For example, LCJ recently responded to a request in South Carolina for a defense practitioner to testify before the state senate in support of pending civil justice reforms.

Editor: Some people say that defense lawyers benefit from the status quo and that they don't really support reforms which result in diminution of their case load or what is charged to their clients. How do you respond to this?

Martin: Defense lawyers and corporate counsel have different perspectives on some issues, but both groups come together when there is a common agenda which embodies reasonable reforms designed to level the playing field between plaintiffs and defendants. If you look at the reforms supported by LCJ through the years - e-discovery reform to reduce financial costs, support of judicial authority to issue protective orders, and broad-based procedural rule reform to clarify the issues important in a case at the outset - then you will find that there is near unanimity in support of the goals that we have expressed.

Editor: Tell us about your experience as a leader of other defense bar organizations that will help you when you become President of LCJ.

Martin: I served as president of DRI-The Voice of the Defense Bar in 2007-2008. During and after my term, DRI continued its policies of providing active support for the work of LCJ and worked closely with LCJ to implement many of its current initiatives. Before that I served as an officer of DRI, a member of its Board of Directors and Texas State Representative. I was President of the Texas Association of Defense Counsel from 1996 to 1997.

Editor: How can individual defense lawyers join LCJ?

Martin: Law firms are invited to join LCJ. We have all 65 openings for law firm associate memberships currently filled, but interested individuals should notify LCJ Executive Director Barry Bauman of their interest in joining so that they can submit an application when vacancies occur. These can be submitted either by calling the LCJ Washington office at 202/429-0045 or submitting an application form to Barry at bbauman@ lfcj.com.