Why Rule Reform? Why Now?

Wednesday, December 18, 2013 - 12:03

On December 5, the general counsel of four major American corporations urgently called upon their outside counsel to fully engage in the ongoing effort to support the proposed revisions to the Federal Rules of Civil Procedure pertaining to discovery and e-discovery. Their clarion call, issued during the Lawyers for Civil Justice membership meeting’s General Counsel’s Roundtable, symbolizes the strong and growing support among chief legal officers of major American corporations to address fundamental problems associated with discovery. Eli Lilly’s Michael Harrington, Boston Scientific’s Tim Pratt, Altec’s Rob Hunter and Allergan’s Arnold Pinkston trumpeted many of the themes that other LCJ members have echoed for years – specifically, that the impact of open-ended discovery is hitting their companies’ bottom line and that the burdens and expense associated with e-discovery are disruptive to business operations and their ability to compete globally. In addition, each expressed the acute need for a bright-line test to help determine what their discovery obligations are.

From the unique vantage point of the position of general counsel, the Roundtable participants assessed the strengths and weaknesses of the American system of justice. They explained that it is valuable to study the experience of their competitors in other countries in order to improve efficiency and quality at home. While acknowledging certain strengths of the American system, they heaped criticism on our system of discovery, which is unique in the world. In many European countries and in Japan, there is no real process for discovery. Without discovery, there can be no fishing expeditions in the hope of finding a “smoking gun,” and litigants cannot attempt to run up an opponent’s costs by making sweeping demands for information. As a result of our open-ended and costly discovery, cases are often driven by litigation costs rather than the merits.

In examining the proposed Rule revisions, the Roundtable participants echoed the views of many who have already testified at hearings on the Rules. They cited both the proposed revisions to Rule 26 governing the scope of discovery and the proposed revisions to Rule 37(e), which regulates sanctions for failure to preserve discoverable information, as the two that would have the most profoundly beneficial and dramatic impact. Most importantly, they called upon corporate and defense counsel to get engaged and express their views on the proposed rules – now!

There are reasons to be hopeful. The LCJ Rules Project has witnessed substantial progress in the last two years. For example, in three key areas, Rule amendments that LCJ has been advocating are now under serious consideration. These include (1) a new sanctions Rule that requires willfulness or bad faith, which was published as part of the current proposed revisions; (2) limits on the scope of discovery based on need and relevance to the claims and defenses that specifically incorporate proportionality standards (which were tentatively approved); and (3) cost allocation provisions that would reverse current perverse cost incentives.

The current political environment in Congress and in many state legislatures offers little opportunity for serious national civil justice reform. Congressional inaction is a by-product of both a divided government and stiff resistance by a politically entrenched plaintiffs' bar. Therefore, it is important for both corporate counsel and defense attorneys to engage in the current federal rule-making process. In fact, similar LCJ rules advocacy programs have resulted in many significant reforms in both the legislative and the rule-making arenas. For more than 20 years, LCJ has enjoyed a successful record of supporting key judicial conference committees to improve expert evidence standards embracing the Daubert line of decisions. LCJ has also been at the forefront of opposition to anti-protective orders legislation in Congress and in the states – legislation that would have unnecessarily obliterated corporate defendants’ fundamental privacy and property rights. More recently, LCJ recommended a new Rule of Evidence (Rule 502) to prevent the unwarranted disclosure of information subject to the attorney client privilege or the work product doctrine. Congress enacted Rule 502 into law in 2008.

With respect to the current set of proposed rules, the Rules Committee has embraced some but not all of the discovery revisions advocated by LCJ. More progress is needed, and more support by the defense bar is an essential ingredient to counter the strong opposition of the plaintiffs' bar. The current public comment period and the series of hearings provide additional critical opportunities for the defense bar to be heard. Through interactive engagement with key judges and their rule-making committees, and the submission of formal comments and position papers, you can work with LCJ to seize upon unique opportunities to educate judges in the need for specific rule reforms. It is vital that corporate and defense counsel support this effort to ensure more fair and balanced discovery rules.

Barry Bauman
Executive Director, Lawyers for Civil Justice