Observations On Policy Issues Discussed At The Lawyers For Civil Justice November Meeting

Wednesday, December 12, 2012 - 16:01

The Editor interviews John H. Martin, Partner, Thompson & Knight LLP, former President of DRI –The Voice of the Defense Bar and Lawyers for Civil Justice (LCJ).

Editor: Tell us about us about your practice and your association with LCJ and with DRI.

Martin: I have been a defense lawyer for over 30 years, handling primarily cases involving airlines, aviation products and pharmaceutical products and defending law firms in legal malpractice cases. I handle other commercial cases, but these constitute the bulk of my current practice. Much of my practice is in federal courts, although I also have a number of cases in Texas state courts.

I served as president of Lawyers for Civil Justice from May 2010 to May 2011. My firm has been an associate member for about ten years. I served on the LCJ board of directors during the period of time when I was a DRI and LCJ officer. Previously, I served as president of DRI.

Editor: Why should the scope of e-discovery be limited? Should it presumptively be limited to information available in the ordinary course of business?

Martin: Yes, I believe that parties should not have to go to extreme expense to produce electronically stored information that is not readily available and that can only be achieved by going into backup systems or other systems that make retrieval very expensive. The burden should be on the party making the request for such information to show that it is necessary.

Editor: Should e-discovery costs be borne by the requesting party?

Martin: I can speak from experience. Since 1999, Texas has dealt with that issue in its Rule 196.4. It states that if a party wants to obtain information that is not readily available in the ordinary course of business, the requesting party has to pay the applicable discovery costs. There is no reason to require that the party responding to discovery bear that expense. The Rule cuts down on what is requested because it forces parties requesting electronically stored data to think about what they are requesting and to decide whether they really need it.  

I am not aware of any complaints from the plaintiffs’ bar. That the Rule works well is also evidenced by the fact that there have been very few appellate decisions about the Rule. Because it is an effective way of deterring parties from requesting electronically stored information that they really do not need, it greatly reduces the costs of discovery. Because it is simple and effective, I would like to see the federal courts adopt something similar.

Editor: Why should the preservation obligation be limited primarily to information that is relevant, material and proportional to the claims and defenses with an emphasis on what is necessary to the conduct of the business?

Martin: There is wide agreement in all segments of the bar and the judiciary that civil litigation takes too long from start to finish and that it costs too much. The result is that we have very few jury trials and many cases are settled based on cost considerations not related to the merits of the case.

The horrific cost of extensive e-discovery cannot be justified by the results obtained. Very little of the information obtained is ever used. The cost of discovery would go down and we would have a much better civil justice system if the courts limited, either by rule or by judicial intervention, the scope of discovery.

Do you see any progress in this direction?

Martin: I attended the Duke conference in 2010. It is clear that the Federal Rules Advisory Committee is seriously considering placing more limitations on discovery. This includes more effective implementation of the proportionality requirement in the current Federal Rules. As it stands now, very few judges really enforce or even consider that provision. Some judges have commented that they rarely hear lawyers even make a proportionality argument. I am encouraged by the fact that the Federal Rules Advisory Committee seems very serious about strengthening the rules by requiring a showing of proportionality with respect to discovery.

Editor: Why should spoliation sanctions be imposed only for willful conduct carried out for the purpose of depriving another party of the use of the destroyed evidence that results in actual prejudice to the other party?

Martin: It is very easy for a party to inadvertently destroy or otherwise make it difficult for the other party to obtain electronically stored information. Parties should not be punished with severe sanctions for inadvertent and unintentional destruction of evidence that might or might not be relevant. Obviously, parties that deliberately destroy evidence should be punished. However, there should be a sharp distinction between willful misconduct and merely negligent conduct.

At one time, Texas experienced a lot of satellite litigation regarding sanctions. The sanctions rules in Texas have gone through several different revisions. As a result, there are far fewer sanctions motions and far less satellite litigation. Most situations where sanctions are currently imposed involve violation of a court order.

Obviously, if a party willfully destroys or alters evidence, there will be a spoliation instruction given to the jury. Our rules work well, and I have not heard any complaints about the state rules from the plaintiffs’ bar.

Editor: Why should court rules be adopted that would implement the “plausibility” pleading standard in Twombly and Iqbal to include more than mere notice pleading?

Martin:  Defendants deserve to know why they are being sued, and they deserve to know that very early in the litigation. I’ve seen too many instances where clever plaintiffs’ lawyers have hidden the ball and not disclosed the true nature of their claim until very late in the case when it is then too late to mount a meaningful defense. The best way to achieve fairness in the system is to require parties to plead their theories and to plead the facts on which they base their theories early in the case rather than waiting until a lot of discovery is conducted. In Texas, we still have notice pleading. We don’t have any rule changes or case law that has reflected or incorporated Twombly or Iqbal. I would like to see that, but it has not happened yet.

The situation is quite different in the federal courts. I am relying on the doctrine enunciated in those decisions in a federal case that I am currently handling.

Editor: Why should mandatory appeal be applicable to certification and removal decisions with respect to class actions?

Martin: Once a class is certified, as a practical matter that often is the end of the case. After certification, the cost of defending against a class claim becomes extremely expensive. In the federal courts a defendant very often must wait until the case is tried on the merits before it can challenge an improper certification. There are exceptions to that, but in general that is the way it works.

Obviously, the current situation is very unfair. It would be much better if an interlocutory appeal were mandatory with regard to class certification. Section 51.014(a)(3) of the Texas Civil Practice & Remedies Code provides for interlocutory appeal from an order that certifies or refuses to certify a class, and federal law should provide for that, too. 

Editor: Why do the Wal-Mart certification standards to include merits scrutiny and meaningful relief for putative class members need to be confirmed?

Martin: There have been too many class actions where the only winners are the plaintiff’s lawyers. I’ve been a class member in various matters where I have gotten five dollars for cell phone service or some other petty award. As a practical matter, the only beneficiaries are counsel for the class. The courts are beginning to realize this and are questioning so-called entrepreneurial class actions that burden the court system and do not materially benefit anyone but the lawyers.

Editor: Should putative class members have the right to choose their own lawyer?

Martin: I think everybody should have the right to choose his or her own lawyer. That is certainly not always clear in the class action context.

Editor: Why does the authority of the courts to preclude overlapping, duplicative class actions need to be confirmed?

Martin: A defendant can now be subject to overlapping or duplicative class actions in both state and federal court because of the way things stand now. It is obviously not fair to the defendant to have overlapping class members pursuing litigation both in the state and federal court systems.

Please email the interviewee at john.martin@tklaw.com with questions about this interview.