Duke: Providing Tools To Cope With E-Discovery Issues

Wednesday, June 2, 2010 - 01:00

Ms. Varner is a member of the Federal Rules Advisory Committee (Committee) and attended the Duke 2010 Conference on Civil Litigation on May 10 and 11 (Conference). The views expressed here are her own and not those of the Committee.

Editor: What was your general impression of the Conference?

Varner: The programs ran for ten hours each day and provided an immense amount of information. The Conference came about because, given the complexities of modern litigation, the Committee believed it was time to reexamine how the Federal Rules of Civil Procedure (Rules) are working. After all, the Rules became effective in 1938. Although there have been a number of amendments to the Rules since then, there have also been radical changes in how litigation is conducted and the technologies that have impacted it. The Committee's current effort seems quite timely.

The Committee wanted the Conference to be a starting point for its efforts. It wanted the most transparent kind of Conference. In terms of process, in order that many of those present at the meeting could be involved, the Committee left time at the end of every panel for audience interaction - and they got plenty of it. The fact that the Conference was webcast and made available to anybody anywhere in the country who wanted to find out what happened is impressive.

Editor: Tell us about various Pilot Programs.

Varner: We had information from federal courts that have tried different ways of facilitating and expediting litigation, as well as information from a number of interesting state court programs, such as Oregon's and Arizona's. There are pilot programs yet to be undertaken that will further improve the information base.

We have no mandate to make rules for the state courts, but we did find it very interesting to listen to them. I think some of the things they've done will be part of the discussions by the Committee going forward.

Editor: When do you see the work of the Committee being completed?

Varner: There did not seem to be much support for the proposition that we ought to throw away the present rule book and start over. The Committee will probably work on selected rules where there was the greatest consensus that amendment might be useful. The journey through the approval process will start when the Committee completes its consideration.

Editor: How helpful was the data produced at the Conference?

Varner: The collections of data by the Federal Judicial Center, IAALS, LCJ, The American College and the American Bar Association's Litigation section were all very important. Examination of this data took place in the Conference's two lengthy kick-off sessions. The data formed the backdrop for most of the discussions that followed.

There were inconsistencies in some of the findings in different surveys, which is perfectly predictable and understandable given that each one rested on a survey of lawyers who practice in different parts of the country in different kinds of litigation. The Committee had, however, more data than anyone has previously had the opportunity to work with. Everyone seemed to feel that all of the surveys were helpful in framing the issues.

One of the overriding themes that emerged in each of the panels is that the litigation system takes too long and costs too much. As one participant put it, there is customer dissatisfaction with a system that obviously is really important to us as a society.

The data confirmed that now is a good time to start looking hard at the Rules, namely, looking at how well they are working and determining what can be done to make litigation quicker, more efficient and less expensive.

Editor: How did the proposal that there be fact-based pleading fare?

Varner: My sense was thattheproposal to replacenotice pleading with fact-based pleading was probably the most controversial issue discussed at the Conference. It inspired lively debate. Those who don't want fact-based pleading argue that it might unduly impede access to the courts. Those who favor fact-based pleading believe that it would focus the court and the parties at an earlier stage on what the real issues are, thereby reducing discovery time and cost.

As with most complex issues, the devil is in the details and how you articulate any proposed change. The Seventh Circuit and the American College proposals are based on the concept that if you have facts, you ought to plead them.

These approaches seem to offer a middle ground that is both fair and useful. In an IAALS survey, Arizona practitioners by a quite strong majority believed that pleading known facts at the outset does focus everyone earlier on what matters in the case. The result is that the scope of discovery is narrowed. We had presentations from two or three different sources where fact-based pleading is currently in place. There seems to be no backlash in these jurisdictions that people aren't getting their cases heard in court.

Editor: Where did the Conference come out on the issue of proportionality?

Varner: Proportionality and preservation, the two "P" words, were probably the areas where, based upon the remarks of the panelists and audience, there may have been the greatest consensus. Current Rule 26(b)(2)(C) already allows a court to limit discovery based on proportionality. The panelists and the audience believed that this Rule is not used very often, if at all, and a number of persons thought the Rules should do more.

There also seemed to be a rough consensus at the Conference that proportionality is a watchword for preventing discovery from becoming a runaway process that consumes way too much time and energy.

Editor: What about preservation and the sanctions applicable to failure to preserve?

Varner: Preservation was the other point where there seemed to be rough consensus. For example, the panel that talked about electronically stored information (ESI) had people on it from every constituency that you can imagine; yet that panel did in fact reach a consensus that there were two areas that the Committee really needs to look at quite closely. The first is the scope and duration of the duty of preservation. The second is the issue of the standard by which sanctions should be imposed for failure to comply with the discovery rules, most particularly in e-discovery.

As to preservation, the panelists and audience seemed to feel that parties needed a clearer standard for how long and how much they need to retain. If there are no limits, old information can choke the system. One judge pointed out that ESI is changing and accumulating so fast that information today may be stored on third-party "server farms" that have automatic deletion processes. He said that in one case before him, a party had no emails on the subject of the case because they had been automatically discarded after 30 days by the server facility - a third party that was not even before the court.

Those attending the Conference seemed to be in agreement that clear standards are needed to govern sanctions for failures to preserve. The courts have reached different results. Some at the Conference advocated a standard of intent to deprive the other party of information. The panelists, including Judge Scheindlin, who authored the Zubulake decisions, urged the Committee to look carefully at that issue.

Editor: Let me ask you about the issue of allocating the costs of e-discovery.

Varner: Cost allocation is always something that generates great controversy. I personally would favor more robust use of the cost-shifting provisions already available under the Rules, which allow the court to impose conditions on what (and how much) discovery will be allowed. Unfortunately, those provisions are rarely invoked. One participant said he had found only one reported case where cost-shifting had been awarded under Rule 26.

Currently, there is at least more interest in talking about the issue, given the ever-increasing volume of ESI. As the amount of information continues to grow, the expense of searching for it grows, too.

One group at the Conference said, if you want to let me do the search myself, just open your door and let me come in and search; if you do that, I will pay whatever it costs me to do that search. However, I shouldn't be made to pay for decisions that you have made as to how the searches are run and more basically as to how the information is stored. I don't have any figures on this, but I think it is the exception rather than the rule that companies are letting their adversaries come in and search their databases as opposed to retaining control and autonomy over the search.

Another argument made against cost-sharing was that the one who propounds the discovery doesn't know what data the other side has or how it's stored. Thus it is difficult to make cost-benefit decisions when the information is unknown. Here again, proportionality comes into play, with cost-sharing being based on what is learned as discovery proceeds. I think LCJ and the American College both would support a notion that unlimited discovery ought not be the default position, that there should be some limitations on discovery at the front end, with additional discovery to be allowed upon petition to the court and a showing of why it is needed - with cost-sharing being considered at that time. There appears to be little disagreement: ESI has fundamentally changed the discovery landscape and made it vastly more expensive.

Please email the interviewee at cvarner@kslaw.comwith questions about this interview.