About once a year, our firm librarian drops off a revised edition of the Federal Rules of Civil Procedure. I take the new copy, shelve it, and recycle my old copy. Usually, the revisions in the new edition live quietly on my shelf. But this year’s edition was different. A set of changes to the Federal Rules that had been bubbling to the surface for nearly five years finally went into effect on December 1, 2015. In a world in which rules changes are typically gradual and incremental, these changes are relatively major.
This article focuses on the most significant of the December 2015 changes – those that are intended to make civil litigation more efficient by compressing early case management deadlines, streamlining discovery planning, narrowing discovery, and revamping the rules regarding the preservation of electronically stored information. The article discusses the changes to the rules themselves as well as the Advisory Committee Notes corresponding to each change. As is often the case with rules, the devil is in the details. But in this case, the most useful details aren’t necessarily in the rules, but buried in the Notes.
Rule 1 Modified to Obligate the Parties to Cooperate in Securing Just, Speedy, and Inexpensive Resolution
At first glance, it’s tough to get too excited about the change to Rule 1. But with the addition of eight words, the change to Rule 1 injects into the rules a requirement of cooperation among the parties in dealing with discovery. Now there can be no dispute that the parties, as much as the courts, have an obligation to administer the rules in a way that will secure just, speedy, and inexpensive resolution.
Practically speaking, new Rule 1 could be ubiquitously cited in discovery correspondence, motions, and court orders to drive home the point that the parties have an obligation to cooperate. Judges may use the rule change to stress this obligation instead of immediately burdening the court with discovery disputes. The amendment could also manifest itself in more-stringent standing order and local rule requirements to preplan discovery and meet and confer regarding disputes. That said, the Notes make clear that the amendment is not intended to create an independent source of sanctions; a party seeking sanctions for discovery abuse will need to tie its request to another rule.
Rules 4 and 16 Modified to Reduce Early Case Delay by Shortening the Time for Serving a Summons and Issuing the Scheduling Order
Rule 4 governs issuance and service of the summons. Before the December amendment, a plaintiff was presumptively given 120 days to serve a summons after the complaint was filed. To reduce delays at the outset of cases, Rule 4 has been amended to shorten that time to 90 days. The Notes recognize, however, that this shortened presumptive time for service may increase the frequency of extensions for good cause, for example, when a request to waive service fails or a defendant is difficult to service.
Rule 16 sets procedures for early case management. The December amendments shorten the time for the court to issue a scheduling order by 30 days. Again, this presumptive deadline is extendable. The Notes acknowledge that cases involving complex issues, multiple parties, and large organizations may need extra time to establish meaningful collaboration between counsel and those who can supply the needed information.
These changes in Rules 4 and 16 have several practical implications. Plaintiffs who intentionally delay service with the hope of negotiating a pre-litigation resolution will need to move more quickly. Also, because the court could issue its scheduling order sooner, the parties will need to submit their Rule 26 discovery plan earlier, and deadlines such as discovery cut-offs and expert report submissions could also come earlier. In short, the compression of the early case schedule will require parties to promptly dig into the case.
Rules 16 and 26 Amended to Require the Parties’ Discovery Plan to Address ESI Preservation and Inadvertent Disclosure
The amendments to Rule 26(f)(3) include substantive changes to the discovery plan that the parties must submit to the court following their discovery conference. The parties’ plan now must state their views on preservation of electronically stored information (ESI). It must also indicate whether they want the court to enter into an order any agreements the parties may have reached under Federal Rule of Evidence 502 regarding limitations on waivers due to the inadvertent disclosure of attorney work product and attorney-client communications. This is a significant point because incorporation of a Rule 502 agreement into a court order may expand its reach vis-à-vis third parties and in other actions.
Paralleling these changes, Rule 16(b)(3)(B) is amended to provide that the court may include in its scheduling order requirements for ESI preservation and any agreements that the parties may have reached under Federal Rule of Evidence 502. In addition, courts may include a requirement that any party filing a discovery motion must first request a conference with the court. The Notes posit that many judges who hold conferences find them effective in resolving most discovery disputes without the delays and burdens of a formal motion. Keep in mind that these amendments to Rule 16(b)(3)(B) are permissive in nature; the court is not required to address them in the scheduling order.
Changes to the Scope of Discovery: FRCP 26(b)(1)
Rule 26(b)(1) defines the scope of discovery permitted under the Rules. In what may be the most universally impactful amendment among the December amendments, Rule 26(b)(1) has changed in four ways:
1. Proportionality Factors Restored
Proportionality factors that were originally introduced in 1983 as part of Rule 26(b)(1), but were subsequently moved to and minimized in other rule subparts, have been restored to their original place. The factors identify what may be considered in determining whether discovery is proportional to the needs of the case. The Notes acknowledge that this repositioning of the proportionality factors was not intended to require a party seeking discovery to address each and every factor. It was also not intended to give a responding party the green light to make boilerplate objections based on proportionality.
With respect to the proportionality factors themselves, the Notes stress that no single factor necessarily overshadows the rest. The amount in controversy is only one factor that must be balanced against other factors, such as the importance of the issues at stake as measured in philosophic, social, or institutional terms. The Notes state that “the rule recognizes that many cases in public policy spheres, such as employment practices, free speech, and other matters, may have importance far beyond the monetary amount involved.”
2. Discovery of Sources Removed
This amendment deletes language regarding the discovery of sources of information (e.g., existence, description, nature, custody, condition, and location of any documents). The Notes mention that while this information is discoverable where appropriate, it is so entrenched in practice that it is unnecessary to clutter the rule with examples. The Notes also point out that although the language was removed, the formerly cited discovery sources of information may still be discoverable where appropriate.
3. “Subject matter” language deleted
This amendment deletes the provision that permits a court, for good cause, to order discovery of any matter “relevant to the subject matter involved in the action.” The Notes comment that this provision was rarely invoked, and that proportional discovery relating to claims and defenses suffices.
4. “Reasonably Calculated” language deleted
Finally, the phrase “reasonably calculated to lead to the discovery of admissible evidence” has been deleted. The change is a reaction to the misuse of the phrase to characterize the scope of discovery, instead of its actual purpose of preventing objections to relevancy based on admissibility. The amendment is intended to eliminate this reading of Rule 26(b)(1) while preserving the rule that inadmissibility is not a basis for opposing discovery of relevant information.
The effect of these changes to Rule 26(b) could be profound. At the highest level, the amendments certainly suggest an effort to rein in discovery. The restoration of the “proportionality factors” as a qualifier on information “relevant to any party’s claim or defense” can only be viewed as an effort to encourage the parties to narrow their discovery requests, or as the Notes state, “deal with the problem of over-discovery.” Practically, the amendments provide new ammunition against overly broad discovery requests. We can expect that litigants responding to discovery will object on proportionality grounds. This, of course, opens the door to the possibility of more-frequent discovery disputes and the need for more court involvement as the parties hash out bounds of proportionality. The Notes recognize as much: “The rule contemplates greater judicial involvement in the discovery process and thus acknowledges the reality that it cannot always operate on a self-regulating basis.”
Another practical effect of the change is that some attorneys may need to update their arsenal of objections when responding to discovery requests. Many attorneys still used the “reasonably calculated” language as a basis for objecting to requests as overly broad. That practice is no longer effective since the “reasonably calculated” language has been eliminated for the specific reason that it was never intended to define the scope of discovery.
Addition of Early Document Requests: FRCP 26(d)(2)
The December amendments introduced an exception to the discovery moratorium that typically requires the parties to hold their Rule 26(f) conference before issuing discovery. New Rule 26(d)(2) provides that either party may issue early Rule 34 requests for documents 21 days after service of the summons and complaint. Although the early requests are not deemed served until the parties hold their Rule 26(f) conference, the idea is that with the requests in hand, the planning conferences will be more productive and allow the parties to negotiate with some knowledge of what discovery will be requested.
Early Rule 34 requests may also allow parties to issue more-detailed litigation holds. Often there is a fundamental disconnect between what information one party believes should be preserved and what the other can foresee as relevant. Early Rule 34 requests provide a preview that could bridge this disconnect. At minimum, they could strengthen an argument that a party should have reasonably foreseen the relevance of the requested information.
While the purpose of early Rule 34 requests make sense, overly broad requests will do little to promote productive discovery planning and may only fan the flames of discovery disputes earlier than usual. In addition, because there is no requirement to respond to, or even discuss, an early Rule 34 request until after the first Rule 26(f) conference, an early request lacks the teeth needed to make a difference.
Responses and Objections to Document Requests: Rule 34(b)(2)
Rule 34(b) details the procedures for responding to Rule 34 requests for documents, including how a party must respond to the request and how it may object. The amendments to Rule 34(b)(2) sharpen the requirements for responding and objecting in several ways. First, the amendment adds that objections must be stated “with specificity,” reflecting the language in Rule 33 for objecting to interrogatories. This change is intended to curb the use of boilerplate objections that provide no real reason for the objection.
Second, the amendment addresses the common practice of producing copies of documents instead of making documents available for inspection. A party may indicate that it will produce copies of documents, but the party must complete the production no later than the time specified in the request, or by some other reasonable time specified by the party in the response. This change is intended to abate the problem of a party indicating that documents will be produced in due course, without actually committing to a specific date. However, because the amendment allows a party to specify “another reasonable time,” the impact of the change may be blunted. The Notes are silent on what amount of time is “reasonable.” At a minimum the amendments require a party to provide a date for production of documents and indicate whether they are withholding documents based on an objection.
Finally, the rule is amended to require that if a party objects, it must also state whether the objection serves as a basis for withholding documents. This change is intended to short-circuit the practice of simultaneously objecting to a request and producing responsive documents, which leaves the requesting party wondering whether some documents have been withheld on the basis of the objection.
Failure to Preserve ESI: Rule 37(e)
Rule 37 addresses discovery failures of many sorts, and subpart (e) was added in 2006 to deal with failures to disclose ESI. The December amendments overhaul the 2006 version of Rule 37(e) to address several of its shortcomings, which included (1) failing to harmonize inconsistencies among jurisdictions when dealing with lost ESI; (2) stating only what courts could not do in the event of lost ESI without providing any guidance on what measures the court could take; and (3) being ambiguous as to when a court could impose more punitive sanctions rather than less serious curative measures for lost ESI.
New Rule 37(e) presents a more affirmative approach to address lost ESI. First, the rule addresses when the court is permitted to take action for lost ESI. If the court is permitted to take action, then the rule outlines the measures the court may take, varying according to the level of prejudice caused by the lost ESI and the culpability of the party who failed to preserve it.
Threshold Factors
To determine whether a court may take action for lost ESI, the new rule sets forth four threshold questions:
- Is the information lost electronically stored (i.e., ESI)?
- Is the ESI the type of information that should have been preserved in the anticipation or conduct of litigation?
- Was the ESI lost because a party failed to take reasonable steps to preserve it?
- Is the lost ESI information that cannot be restored or replaced though additional discovery?
If the answer to any of these questions is “no,” then a court cannot take action under Rule 37(e). If the answer to each of these questions is “yes,” then the court may take action. The analysis then proceeds to the second half of the rule, which is designed to identify what measures the court may take.
The Notes discuss several useful nuances to the threshold factors. For example, they explain that the requirement that the lost ESI be of the type that “should have been preserved” is based on the common-law duty that litigants have to preserve relevant information when litigation is reasonably foreseeable. The Notes discuss that reasonable foreseeability may depend on the extent to which a party was put on notice of litigation, and on the party’s conception of the scope of information that may be relevant to the litigation. The Notes acknowledge that a party may only have limited information regarding prospective litigation and the scope of relevant information such that “it is important not to be blinded to this reality by hindsight arising from familiarity with an action as it is actually filed.” In other words, what may seem clearly foreseeable after a case is filed and a detailed complaint is served may not have been as reasonably apparent before the case was filed, when the party first learned that it may get sued.
New Rule 37(e) does not apply to ESI that was lost despite reasonable efforts to preserve. So, whether a party took reasonable efforts will be a focus and probable source of debate. The Notes acknowledge that “perfection in preserving all relevant electronically stored information is often impossible.” Although the new rule deleted reference to the “routine, good-faith operation of an electronic information system,” the Notes point out that it could still be a relevant factor in considering whether a party failed to take reasonable steps.
The concept of “proportionality” – the showcase of the amendments to Rule 26(b) – bleeds through to Rule 37(e). The Notes explain that proportionality is another factor in evaluating whether a party failed to take reasonable steps and that courts should be sensitive to party resources. For example, the Notes discuss that a less costly approach to preservation may be reasonable if it is as effective as more costly forms. The Notes also make specific reference to social media, suggesting that counsel should be familiar with their clients’ information systems and digital data – including social media – to address proportionality and preservation.
Court Action for Lost ESI
Once the threshold issues have been cleared, Rule 37(e) guides what measures a court may take for lost ESI, an analysis that hinges upon whether the court finds intent or prejudice. This stage of the rule asks the questions:
- Is there a finding that the party who lost the ESI acted with the intent to deprive the other party of the ESI’s use in the litigation?
- If there is no finding of intent, then did the loss nevertheless prejudice the other party?
The rule allows for more punitive measures if there is a finding of intent. The intent, however, must be specific – to deprive another party of the information’s use in litigation. So, for example, if an employee intentionally deletes computer files to declutter their hard drive, while the ESI may have been intentionally lost, it was not deleted with the intent to deprive another party’s use of the information in litigation as required by the rule. This amendment also settles a circuit split over whether negligent failure to preserve ESI can give rise to an adverse inference. Negligence without an intent to deprive does not permit an adverse inference or any of the other measures provided in Rule 37(e)(2).
If intent is found, then Rule 37(e)(2) applies and the court may take the more punitive measures set forth in subparts (A) through (C). These measures range from adverse inferences to dismissing the action.
If no intent to deprive is found, the party who has lost the ESI may still be on the hook if the court finds prejudice as a result of the lost ESI. If there is prejudice, then the court may order measures no greater than necessary to cure it. Unlike (e)(2), (e)(1) does not provide any specific measures, but the Notes point out that such measures cannot have the effect of any of the measures listed in (e)(2). Measures that may be appropriate upon a finding of prejudice include forbidding the party that failed to preserve information from putting on certain evidence, permitting the parties to present evidence and argument to the jury regarding the loss of the ESI, or giving a jury instruction to assist in the evaluation of lost ESI.
The rule is purposefully silent on which party bears the burden of proving intent or prejudice, or a lack thereof. Judges are left with discretion to assign burden depending on which party has the most relevant information regarding the lost information and the particular situation.
Conclusion
Many of these amendments go beyond the gradual and incremental approach to change that we are so accustomed to. The changes to the scope of discovery in Rule 26(b) and the rules for responding to discovery requests in Rule 34 will change the way many litigators have been operating for years. The amendments also give the parties a new discovery tool in the form of early Rule 34 requests. The amendments to Rule 37 also go a long way to harmonize how courts handle lost ESI, providing litigants more predictability and direction in their ESI preservation efforts. Whether these rule changes result in speedier and more-efficient resolution of cases will largely depend on how they are implemented and how judges react to varying interpretations of the changes. What is clear, however, is that the December 2015 amendments merit attention, and won’t be content sitting quietly on a shelf.