Civil Justice Reform - Law Firms Comparing Litigation In Federal And State Courts: That Needs To Be Fixed In New Jersey State Courts

Thursday, December 1, 2005 - 01:00
St. John & Wayne, LLC
Bryant K. Aaron

Editor: What are your areas of practice?

Aaron: I practice in the areas of commercial and business litigation and products liability litigation. I handle matters involving breach of contract, business torts, RICO and franchise disputes. I am admitted to practice in the state and federal Courts of New York, New Jersey and Pennsylvania. I am also a member of the Million-Dollar Advocates Forum, which consists of trial lawyers who have achieved a trial award or settlement of a million dollars or more.

Editor: What advice do you give clients about electronic discovery?

Aaron: One of the things I counsel clients to do is to be diligent and willing to commit the time and resources to ensure that there is an adequate document retention plan in place before any litigation. I also remind them that they should update that plan as new technology is introduced. Often new technology will be rolled out, but no one will think to go back to look at that plan to make sure the new technology has been taken into consideration. For example, cell phones and PDAs, like blackberries, are often a source of valuable electronic information. A company needs to make sure that the retention policy addresses these media and that there are policies in place to track and retain the information. If relevant information is lost or destroyed during the course of a litigation, the adverse party may be able to make a colorable claim that the company willfully destroyed discoverable information.

Editor: How do you feel about the proposed amendment to Federal Rule 26(f) that requires the parties to sit down together before discovery to agree on some form of procedure or protocol to govern discovery of electronic information.

Aaron: I think it will improve the situation. However, it is not going to have much effect in New Jersey federal courts because our local rules already include a similar requirement. When you confer with the other side, you can flesh out what electronic information you have and what information they may need. That saves the client a lot of money and a lot of unnecessary motion practice. It also avoids future problems because after two years of litigation, you do not want to find out that you did not retain the information that the other party wanted. Although you may not know at the beginning the full parameters of discovery because new issues always come up in the course of litigation, nevertheless, at the initial conference, you should try to commit the adverse party as much as possible to the types and nature of the electronic information being sought and then memorialize this in a letter. This way, if information stored in an electronic format is later destroyed in the normal course of business, you have evidence that the adverse party never requested it and never put your client on notice to preserve the information.

Editor: Are the rules at the New Jersey state court level equally sophisticated?

Aaron: Unfortunately they are not. Even though the New Jersey state courts often look to federal rules for guidance, the state court rules are not as comprehensive as the federal rules with respect to electronic discovery. In New Jersey, the federal courts have appointed a standing committee to review issues relating to electronic discovery. It includes both judges and practitioners. My partner Karol Corbin Walker is on that committee.

Our firm is involved in other ways as well. I am a member and my partner Paul Drobbin is the chair of the Business and Commercial Litigation Committee of the New Jersey State Bar Association and the Committee has examined electronic discovery issues. My firm is also involved in educational programs on litigation issues. My partners David Philips and Robin Gnudi and I presented a seminar for New Jersey ICLE earlier this month on issues related to complex litigation. I spoke at length about electronic discovery and the potential pitfalls a client may face.

Editor: Is junk science still a problem after Daubert?

Aaron: We represent a number of suppliers and manufacturers of equipment. I have seen reluctance in the state courts to follow Daubert. The federal courts are more willing to apply the Daubert principles to screen out junk science, which I think has helped to discourage plaintiffs from bringing groundless cases in the federal courts. In my experience, Daubert has been applied by the New Jersey state courts in toxic tort matters. However, in products cases, I continue to see testimony from individuals who should not have been allowed to testify. For example, recently in a state court products liability case, the court was inclined to allow a speech pathologist to testify about the cognitive speech difficulties of a youngster who had been injured by a product, even though plaintiff's own neurologist could not make that causal connection. I think you are less likely to encounter this kind of situation in a federal court.

Editor: How do you feel about the campaign being launched by plaintiffs' counsel to limit the use of court ordered protective orders and confidentiality agreements?

Aaron: I think that protective orders are critical in business litigation. I have found that often judges will issue a protective order covering confidential information or trade secrets. That is one of the most important things you can obtain for a client early in discovery. If you are litigating against a competitor, it is critical to maintain important trade secrets. Earlier this year, the New Jersey Federal District Court adopted L. Civ. R. 5.3 which governs protective orders and public access to information filed with the court.

Editor: Do you feel that the courts are making a serious effort to limit unnecessary or overly broad discovery?

Aaron: That is certainly the case in federal court because the magistrates have a tighter control over their calendars. When it is clear that the plaintiff is taking a shotgun approach and looking for too much information, federal magistrates are more likely to limit the scope of discovery. Therefore, plaintiffs in the federal courts are less likely to succeed in trying to raise the settlement value of a case by causing the defendant to incur substantial costs involved in having employees search for information that has no relevance to the case. In New Jersey state courts, unless your case is managed by a particular judge, motions to limit overly broad discovery may be handled by different judges throughout the litigation and you are more likely to end up with inconsistent results.

Editor: Have you encountered cases where the cost of discovery is shifted to the requesting party?

Aaron: I have seen it in connection with electronic discovery, but only on a very limited basis. When the party receiving the request can show that it is an onerous burden to obtain the information because it is in a format that is not easily retrievable, a federal court is likely to apply a balancing test. The court will consider whether the request is tailored to discovery of relevant information, and balance the cost of producing the information in comparison to the amount in controversy. If it costs $300,000 to get the information and the case is worth only $100,000, the cost is more likely to be shifted. I have not seen cost shifting in New Jersey state courts - I understand it rarely occurs and when it does there is a much heavier burden on the party requesting cost shifting.

Editor: Both New York and Pennsylvania have business courts. Should New Jersey consider a business court?

Aaron: Yes, there is a real need for business courts in our New Jersey state court system. This state is home to many national and international corporations and as a result there is a fair amount of complex litigation in the state. A commercial court saves clients money because the judges assigned to a commercial court become more familiar with business and business disputes and develop the know-how to settle or otherwise resolve such cases. This is confirmed by my experience handling cases in the Commercial Division in New York City. In a complex commercial case, it is much better to appear before a judge who regularly handles business issues as opposed to being before a judge who is unfamiliar with those issues. Also, in both New York City and Philadelphia, there is an ADR program associated with their business courts that includes mediators and arbitrators familiar with commercial matters. This offers advantages to both parties because disputes can frequently be resolved through ADR without destroying ongoing business relationships.

Not only does New Jersey lack business courts, but judges in our state court system do not receive adequate compensation. This makes it difficult to attract and retain judges who have the talent and background to adjudicate the complex business cases that arise in this state. Partners from this firm have supported the efforts of state and local bar associations to increase judges' salaries. The New Jersey State Bar Association has been instrumental in advocating the creation of a business court in New Jersey.

Editor: What has been your experience with interlocutory appeals?

Aaron: If you look at New York, the Appellate Division there considers a large number of appeals on a variety of issues. If New Jersey State appellate courts were more willing to take those appeals, lawyers would make them more often. This would go a long way toward reducing the cost of litigation by purging the system of cases that should not have been permitted to go forward and by correcting errors at the trial level at an early date.

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