Editor: Please tell us some of the highlights of the recent LCJ meeting in New York City.
Marchetti: This was really an excellent membership meeting for LCJ in that the program was current and informative, and the turnout was also superb. There were some 150 corporate counsel and defense lawyers in attendance, including nearly 35 non-member corporate guests whom we were very pleased to have with us. I believe this was our best- attended meeting ever!
The program included a General Counsel’s Roundtable which featured distinguished speakers such as Ed O’Keefe, general counsel for Bank of America; Jeff Jackson, general counsel of State Farm; Tim Pratt, general counsel of Boston Scientific; and Brad Lerman, senior vice president for litigation at Pfizer. The program also included such stars as Professor Richard Marcus, associate reporter to the Advisory Committee on Civil Rules and Gov. Pete Wilson, former governor of California, as well as other corporate counsel and defense lawyers from all across the nation.
We were also joined by the leadership of the Defense Research Institute (DRI), the Federation of Defense and Corporate Counsel (FDCC), the International Association of Defense Counsel (IADC) and the Association of Defense Trial Attorneys. These organizations play a vital role in supporting LCJ’s legislative program.
One of the highlights for us was certainly hearing from Professor Marcus, who was able to give us a bit of an insider’s perspective on the activities of the Rules Committee and how he views topics that are of particular concern to our members.
Editor: What were the key topics addressed and how do you feel the attendees reacted?
Marchetti: We covered legal issues, and some speakers addressed more general political topics. For example, Governor Wilson provided his perspective of the upcoming November elections and the impact on legal reform while Professor Marcus limited his remarks to how our procedural rules might be improved to better serve the legal system. Our GCs and corporate members discussed issues that have been at the center of LCJ’s agenda, including procedural rule reform, the overregulation of the financial services industry, the effect of digital technology on the legal profession and newly set restrictions on commercial advertising. These are topics that really resonate with our membership. So, the reaction was very interactive, with many attendees not only asking questions but also sharing with others some of their own business experiences as they related to the topics at hand.
Editor: What is the purpose of the online State E-discovery Survey you recently circulated to defense and corporate counsel around the nation, and what has been the response?
Marchetti: The purpose of the survey is to assist LCJ, which, in conjunction with DRI, IADC, and FDCC, has initiated a “State E-Discovery Program” that will identify opportunities and initiate rulemaking or legislative action to minimize the costs and burdens associated with the preservation, production and discovery of electronic information in the states. New federal and state e-discovery rules implemented in 2006 were expected to help reduce excessive litigation costs, but there’s evidence that these new rules haven’t been as effective as expected in reducing costs and burdens or in increasing the efficiency of litigation. This survey will help us identify those states where rulemaking reform is needed most as well as opportunities that may be available to us. And with that, we can have a powerful impact in supporting improvements in the civil justice system nationwide.
So far, we’ve had a decent response to the survey. But the more responses we get, the more effective we can be. The survey itself is short and takes about 15 minutes to complete, so we encourage people to visit the website at http://220.127.116.11/SED/ and take the survey for themselves.
Editor: Why is it important that LCJ address rising e-discovery costs with so many other competing legal reform priorities?
Marchetti: While there are certainly many important legal reform issues that deserve to be addressed, electronic discovery is one particular issue that continues to evolve and grow in importance and that has really begun to dominate litigation in federal and state courts. Under current rules, businesses have very little guidance in terms of specific preservation and discovery obligations and, therefore, find themselves in the costly, burdensome position of having to over-preserve for fear of spoliation sanctions. A letter to the Advisory Committee on Civil Rules from Microsoft Corporation quoted an average ratio of one single-page trial exhibit per every 1,000 pages produced, which equates to some 340,000 pages preserved per each one-page exhibit! Preserving electronic information on this scale is unsustainable for companies. The need to set reasonable standards is urgent.
Editor: What do you expect to come of the upcoming Congressional hearing on civil discovery, and why is this hearing such a significant milestone for LCJ?
Marchetti: Since the Duke Conference in May, 2010, LCJ has been at the forefront of supporting revisions to the Federal Rules of Civil Procedure (FRCP) and of stressing the importance of rule reform to a healthy balanced economy. We’ve submitted many comments to the Advisory Committee on Civil Rules regarding this issue, most recently a comment titled The Time is Now: The Urgent Need For E-Discovery Rule Reforms, which outlines not only the problems at hand, but also some proposed solutions.
The hearing is significant for LCJ because it allows Congressional Judiciary Committee members an opportunity to more fully examine these issues and the impact of America’s civil justice system on the health of the economy. The hearing is likely to cover issues including the costs and burdens faced by litigants, particularly in the areas of preservation and discovery of information; the impact of those costs on the competitiveness of American companies; and the magnitude of the potential cost savings – money that would better be spent on improving products and services and on creating jobs. We fully support developing rule-based solutions that would help relieve some of these burdens corporations are shouldering today, and we are very pleased that Congress is taking a closer look.
Editor: Were you encouraged by Professor Rick Marcus’s briefing on the current FRCP initiative, and do you think the various Judicial Conference committees are making real progress on rule revisions?
Marchetti: We were so pleased to have Professor Marcus join us at the meeting. He and members of the Advisory Committee have clearly demonstrated their willingness to hear opinions from all sides and to give all of LCJ’s official comments a close review. He and the other members of the Committee are expected to meet again in March of 2012, and I am encouraged that they will give our reform proposals due consideration and that, as they deliberate, they will keep in mind both the interest of America’s business community and the health of its economy. The rise of digital information has certainly had a profound effect on the legal profession, and I know that the Committee is working hard to ensure the procedural rules underlying the legal system will reflect the tremendous changes that have occurred in recent years.
Editor: What do you think will be the major components of a rule "revamp,” and when can we expect this to be enacted?
Marchetti: LCJ has consistently advocated rule reforms focused on clarifying guidelines with regard to four key issues related to discovery: trigger, scope, sanctions and cost allocation. Current common law rules are too inconsistent and too inadequate to meet the challenges of exponentially increasing amounts of information. Without the addition of clear guidelines, corporations will continue to shoulder undue costs and burdens in discovery. In fact, preservation and discovery have become so expensive and unreasonably time consuming that many believe that litigants no longer have access to just, speedy and inexpensive resolution of disputes. We believe the Committee could help alleviate this problem by adopting clear, direct rule reforms that eliminate excessive preservation and discovery costs for plaintiffs, defendants and third parties. And while I can’t say exactly when these rule reforms will be enacted, I can say that we are encouraged by the Advisory Committee’s willingness to hear this point of view. We firmly believe that we’ve been as helpful as possible in providing them with the kind of useful, substantive materials they might need during the rulemaking process.
Editor: Some say that procedural rulemaking is not a very “sexy” or attractive civil justice reform issue from the standpoint of enlisting additional support for legal reform. Why do you think it is so important, and what is the general reaction to this initiative?
Marchetti: I agree that, at first glance at least, procedural rulemaking may not be the sexiest civil justice reform issue, but it’s certainly is one of the most important, and there are several reasons why. Right now, corporations conducting business in America are fighting to maintain a competitive edge in the global marketplace. In order to compete globally, corporations need clear guidelines with respect to discovery and preservation; reasonable cost allocation standards; and the means to protect sensitive and proprietary information from exposure in litigation. Taken together, these issues can become very complex, even overwhelming, and I think it’s in the complexity that some of the appeal is lost. But, at its core, this issue is more than flashy or important; it is absolutely vital to the health of our nation’s economy.
Editor: Are you concerned that the rules rewrite might actually represent a step backward, and what steps is LCJ taking to ensure the success of the program?
Marchetti: There is always some risk in moving toward reform, but the overwhelming sentiment expressed by Advisory Committee members is that there is a growing recognition that the patchwork of rules has not kept up with the needs of the 21st century information age. With this as a starting point, I am optimistic that the process will ultimately yield to significant improvements.
Editor: What are some of the important initiatives that LCJ will address in the first half of 2012?
Marchetti: We will want to continue our primary focus on improving state e-discovery rules and the FRCP as I’ve described. However, our members are challenging us also to address both new issues, such as activist attorneys general and the criminalization of innocent corporate behavior, as well as the regulatory burdens and associated litigation that stems from overregulation. There are so many areas that offer LCJ a real opportunity to expand its agenda.
Editor: What will be some of the highlights when LCJ meets again next year?
Marchetti: We meet in early May in Washington DC, and this meeting is likely to have more of a legislative focus so that we can take advantage of the opportunities in the Capital City to hear from key legislators and other prominent policymakers. I also anticipate that we will have more states in which we are working on e-discovery, and the FRCP initiative will be far enough along that we can begin to recognize what some of the new rules that are being proposed will look like. It should be a very exciting meeting.