Civil Justice Reform - Law Firms Greenberg Traurig: Partnering With Corporate America For Civil Justice Reform

Tuesday, November 1, 2005 - 01:00
Greenberg Traurig LLP
Philip R. Sellinger

Editor: Philip, do you feel that junk science is still a problem?

Sellinger: Yes, junk science is still very much a problem. Even though Daubert, Kumho Tire Co. and Rule 702 of the Federal Rules of Evidence set forth relatively clear standards governing the admission into evidence of expert testimony, many judges are still inclined to admit expert testimony that only marginally meets those standards. This is particularly true in state courts, which do not apply the federal standards. Even some federal court judges are uninclined to preclude expert testimony, probably just as a matter of ingrained habit.

Editor: What can be done to improve the situation?

Sellinger: Good lawyers can always be expected to challenge the admission of questionable science at the trial court level as part of an overall case strategy. Corporate America can help ensure high standards for scientific testimony by supporting and encouraging defense counsel to challenge questionable science, not only in the trial courts, but also at the appellate level. Taking a denial of a sound Daubert motion up on appeal will help generate good reported opinions that will have precedential value in the trial courts. Filing amicus briefs is another way to promote sound science in the courtroom. The Atlantic Legal Foundation files amicus briefs challenging junk science in cases around the country. In filing such briefs, the Foundation generally represents groups of very prominent scientists, including Nobel Prize winners, in the applicable disciplines. The Foundation's efforts have significantly contributed to curbing the use of junk science. Greenberg Traurig is proud to be a major financial supporter of the Foundation and to be represented on its board of directors.

Editor: What has your experience been with the current treatment of electronic discovery?

Sellinger: The costs of complying with electronic discovery are often huge. Because the current rules were drafted before the days of massive e-discovery requests, they provide virtually no guidance in this area. For example, a party is left to determine on its own the appropriate method of preserving e-stored information and, in doing so, runs the risk of being second-guessed by the court. Alternatively, a party may try to negotiate ground rules with adverse counsel, but that can create a whole new range of problems.

As a practical matter, parties should address the preservation of e-stored information much differently from the way they address its production. Under the current rules, the safest course is to preserve very broadly. This permits a party to be more aggressive with respect to production because, if questioned, the party can go back and produce more broadly. If the party had not preserved broadly, however, it would be unable to augment its production and would find itself at significant risk for sanctions.

The current rules also give no guidance with respect to the effect inadvertent production of otherwise privileged documents has on the attorney client privilege. The rules also do not address a party's obligation to produce e-stored information that is not reasonably accessible without incurring significant costs.

Editor: Does the current lack of guidance create exposure to unreasonable penalties for a perceived lack of cooperation?

Sellinger: Yes. This was illustrated by the well-publicized Zubulake cases, a series of seven published decisions by Judge Scheindlin in New York federal court. The Zubulake decisions, and several recent similar cases, sent a shock wave through corporate America because among the sanctions imposed by the court was a jury instruction that the destroyed evidence could be presumed unfavorable. Being confronted with such a presumption is the worst scenario a trial lawyer can face.

Editor: Would the proposed amendments help federal courts address these issues in an appropriate and consistent way?

Sellinger: Yes. Let me give some examples that relate specifically to the issues I've mentioned. First, to remedy the current e-discovery situation, which, as I've noted, is fraught with uncertainty, the proposed rule provides a rational process wherein the parties and the court can sit down early to formulate a framework for addressing e-discovery. As for the inadvertent production of privileged material, which is recognized as virtually inevitable given the nature of e-discovery, the proposed rule creates a procedure for asserting the privilege after production. The new rule would also require a court order to obtain e-stored information that is not reasonably accessible without undue burden or cost. In addition, the proposed rule contains a "safe harbor" provision that, absent exceptional circumstances, expressly prohibits courts from imposing sanctions on a party for failing to provide e-stored information lost as a result of routine good faith operation of its e-information system.

Lawyers for Civil Justice is to be congratulated for its efforts to reflect the concerns of corporate America in the lengthy process that led to the development of the proposed rule. LCJ's efforts demonstrate the willingness of the defense bar to partner with its corporate clients to achieve reforms that will improve the litigation process. We are happy that the financial support our firm has given LCJ and its e-discovery committee - one of the major driving forces behind the rule amendments - has helped advance this process.

Editor: Do you or your firm plan to promote adoption of similar rules on a state level?

Sellinger: I serve as Chair of the Lawyers Advisory Committee to the federal bench in New Jersey. That Committee developed a local court rule addressing e-discovery that preceded the proposed federal rule. That the New Jersey court was one of only a handful of federal courts in the country to adopt such a rule reflects New Jersey's leading role in this area, and it is an appropriate role since New Jersey has the third largest concentration of Fortune 500 companies in the country. Greenberg Traurig will continue to help develop rules on the state level and will be supportive of LCJ's state-oriented efforts.

Editor: Talking about discovery in general, are federal and state judges doing a good job of limiting discovery when overly broad? Do they shift costs to those demanding broad discovery?

Sellinger: This very much depends on the particular judge, whether federal or state. Some judges permit the broadest conceivable discovery regardless of the cost to the producing party. Other judges are more sensitive to the costs of production and seriously weigh the probative value of the evidence against the costs of production. Very few judges shift the cost of production to the demanding party. In the area of e-discovery, one of the important provisions of the proposed federal rule is the recognition that courts should consider cost-shifting in appropriate circumstances.

Editor: Have you encountered class action abuses? Are judges adequately policing certifications? Do defendants have an adequate opportunity to present meritorious defenses rather than being pushed by the judge into a settlement?

Sellinger: Any company that encounters class actions today has also encountered abuses. The Class Action Fairness Act was designed to limit some of the most egregious class action cases by federalizing class actions that have a national impact. That was an important step. Nonetheless, some defendants sued in state court after passage of the Act appropriately decided not to remove the case to federal court (although it is removable) because they believed that the state judge assigned to the case would apply the class certification standards properly. In this regard, I would note that, although federal courts generally scrutinize class certification applications more rigorously than state judges, many federal judges certify fairly liberally.

The real problem is that, once a class is certified, the potential exposure becomes so high that companies hesitate to defend the case on its merits, even if they have very strong defenses. As a result, many companies feel compelled to settle once the class is certified. Indeed, cases are often settled even before the class certification hearing. Companies need to draw a line in the sand, so to speak, by looking for appropriate cases in which to contest class certification and even to contest a certified class on the merits. This takes courage, but not doing so simply encourages further proliferation of the unmeritorious class actions that all companies face today.

Hopefully, the Illinois Supreme Court's decision in State Farm v. Avery, which overturned a trial court certification where jurisdictional requirements were not met, will lead appellate courts in other states to more carefully police their lower courts' lax certification decisions. Congressional enactment of HR-420, the Lawsuit Abuse Reduction Act, would also be helpful. That Act brings back mandatory sanctions for filing frivolous claims and bans courts from entertaining cases that do not involve their jurisdiction. These provisions would apply in both federal and state cases involving interstate commerce.

Editor: Is there a failure to adequately compensate judges or to provide courts with adequate resources? What are you doing to improve the situation?

Sellinger: Federal and state judges today are paid far less than most first-rate lawyers are able to earn in private practice or in-house positions. As a result, many judges are forced to retire early so that they can put their children through college and otherwise support their family. Those willing to make the financial sacrifice that serving as a judge entails are performing a valuable public service and should be commended. On a more long-term basis, however, this perpetual underpayment of our judiciary creates a risk that judgeships will increasingly be accepted by lawyers who are not at the top end of the profession and for whom becoming a judge may actually result in a pay raise. Companies today are rightfully concerned over the rising cost of litigation. Proper judicial decisions made in a timely manner in the kinds of matters we have been discussing in this interview can result, not only in reduced litigation expense, but can also vastly improve the likelihood of fair and reasonable outcomes. Corporate America thus has a great stake in encouraging only the best and the brightest people to serve as judges. The Lawyers Advisory Committee to the Federal Bench in New Jersey supports judicial pay raises whenever that issue arises.

Editor: Is there a need for commercial or business courts in states that have not yet introduced them? (New Jersey is a prominent example since all of the nearby states have such courts.)

Sellinger: Complex commercial class actions or other business litigation where the exposure runs into the hundreds of millions of dollars should not be decided by a judge whose typical case load involves negligence and personal injury cases. Justice is better served where judges specialize in the type of case being addressed. My experience with business courts has been very favorable. However, being in such court should not require the voluntary opt-in of both parties. I am currently involved in a litigation in a southern state that has just created a business court where this is the case. Voluntary opt-in encourages all sorts of gamesmanship based on evaluating outcomes with the business court judge as compared to the judge who might otherwise be assigned to the case. For example, a party whose case is weak may refuse to opt-in, feeling that it would fare better with a judge who lacks a good understanding of business law or practices. From a public policy standpoint, that is obviously an undesirable result.

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