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September 16, 2013 Articles

Three Years Later: Examining the Rule 26 Amendments

There's an elephant in that rising fog! A look at the lingering questions

by Maria-Vittoria G. Carminati

On December 1, 2010, Federal Rule of Civil Procedure 26 was amended to decrease the scope of discoverability for communications between attorneys and their testifying experts. The new Rule 26 governs "all proceedings" pending on December 1, 2010, as long as application of the rule is "just and practicable." Ever since 1993, litigators have been well aware that all communications with testifying experts, and any draft expert reports and related notes, were discoverable. However, in 2010, Rule 26 was amended to create protections for draft expert materials and certain limited attorney-expert communications. Specifically, the new Rule 26 only requires production of communications between attorneys and experts if they deal with compensation, "facts or data," or assumptions. Prior to 2010, Rule 26 required production of all "data or other information" considered by the expert in reaching his or her opinion. This begs the question, three years after enactment of the amendments, what have the amendments really meant?

On the one hand, there has been increasing clarity about the protective effect of the amendments. Overall, courts have recognized the increased protections afforded attorney-expert communications. On the other hand, one question remains unanswered. Although courts have interpreted Rule 26 on several occasions, there is still no authority on the proverbial "facts or data" elephant in the room. What is the "other information" that was discoverable before but is no longer discoverable because not "fact or data"? That is a lingering, unanswered, and very important question.

Extending Privilege
Federal Rule of Civil Procedure 26(b)(4) was amended by the addition of two new sections: (B) and (C). Rule 26(b)(4)(B) now protects "drafts of any report or disclosure" required to be made under Rule 26, "regardless of the form in which the draft is recorded." Rule 26(b)(4)(C) protects communications between experts and attorneys except communications that relate to compensation, facts or data, or assumptions. Rule 26(b)(4)(C) therefore extends work-product protection to communications between a party's attorney and that party's testifying expert, except to the extent such communications (1) relate to the expert's compensation, (2) identify facts or data provided by the party's attorney and considered by the expert in forming his or her opinions, or (3) identify assumptions provided by the party's attorney and relied on by the expert in forming his or her opinions. Innovative Sonic Ltd. v. Research in Motion, Ltd., No. 3:11-CV-0706-K, 2013 WL 775349, at *2 (N.D. Tex. Mar. 1, 2013) (citing Fed. R. Civ. P. 26(b)(4)(C) advisory committee notes, 2010 amend.). The particular amendment that was expected to cause the most change was the addition of the term "facts or data" in the second category to replace the pre-2010 language requiring disclosure of "the data or other information considered by the witness in forming" his or her opinions (emphasis added).

What Does It Mean?
Courts have recognized the amendments' purpose as protecting attorneys' work product. The Northern District of Illinois observed that Rule 26 was amended to clarify that "disclosure of theories or mental impressions of counsel is not required." Allstate Ins. Co. v. Electrolux Home Prods., Inc., 840 F. Supp. 2d 1072, 1077–78 (N.D. Ill. 2012). The Eastern District of Pennsylvania likewise noted that the purpose of the Rule 26 amendments was to "limit disclosure to materials of a factual nature and to protect against disclosure of counsel's work product." Fialkowski v. Perry, Civ. No. 11–5139, 2012 WL 2527020, at *4 (E.D. Pa. June 29, 2012). The 2010 amendments were, in essence, an effort to "rein in" courts that had held Rule 26's disclosure requirements to trump all privilege claims. See, e.g., Reg'l Airport Auth. of Louisville v. LFG, LLC, 460 F.3d 697, 717 (6th Cir. 2006). As aptly described by the District Court for the District of Columbia and reiterated by the Southern District of New York, "[t]he bright-line rule is no longer valid." Yeda Research & Dev. Co., Ltd. v. Abbott GmbH & Co. KG, No. CIV.A. 10-1836 RMC, 2013 WL 2995924, at *8 (D.D.C. June 7, 2013); In re Methyl Tertiary Butyl Ether (MTBE) Prods. Liab. Litig., No. 04 CIV. 4968, 2013 WL 3326799 (S.D.N.Y. June 28, 2013). The result is that "attorneys' theories or mental impressions are protected, but everything else is fair game." MTBE, 2013 WL 3326799, at *8 (internal citations omitted).

However, "fair game" doesn't mean free rein. The increased protections are construed very narrowly and still apply to facts or data "considered," not actually relied on, by the experts to reach their conclusions. First, courts have held that the term "considered" in post-2010 Rule 26, which remained unchanged after 2010, "should be construed expansively in favor of the party seeking discovery. . . ." Id. Therefore, "courts should order disclosure when there is at least an ambiguity as to whether the materials informed the expert's opinion" as a testifying expert. Id. Second, as noted by the advisory committee, the intent of the Rule 26 changes was to limit disclosure to "facts or data" while interpreting those terms very broadly:

The refocus of disclosure on "facts or data" is meant to limit disclosure to material of a factual nature by excluding theories or mental impressions of counsel. At the same time, the intention is that "facts or data" be interpreted broadly to require disclosure of any material considered by the expert, from whatever source, that contains factual ingredients. The disclosure obligation extends to any facts or data "considered" by the expert in forming the opinions to be expressed, not only those relied upon by the expert.

Fed. R. Civ. P. 26 advisory committee's note, 2010 amend. (emphasis added).

Based on the advisory committee notes, attorneys could be wary of discussing any "facts or data" implicated by their case, because such communications would "contain[] factual ingredients." Although that is a possible interpretation, it would in large part gut the supposed changes brought by the 2010 amendments.

Aside from that issue, to understand the effects of Rule 26 it is important to remember that, to the extent the rule now recognizes a qualified privilege, such qualified privilege—like any other—can be waived. Under the new rule, communications between an attorney and a witness required to provide a report are protected by the work-product doctrine but facts or data considered by experts in forming their opinions are outside the scope of work-product protection. As a result, and as eloquently summarized by the Southern District of New York, "furnishing work-product of a factual nature to a testifying expert constitutes implied waiver of work-product protection to the extent that the expert considers the facts or data disclosed in forming her opinion." Id.

In March 2013, the Northern District of Texas addressed the issue of "waiver of privilege" for communications between an attorney and a testifying expert. The court first discussed the fact that discovery regarding attorney-expert communications outside those identified by the post-2010 Rule 26 would only be permitted "in the 'rare' case where a party establishes it has a substantial need for the discovery and cannot obtain the substantial equivalent without undue hardship." Innovative Sonic Ltd. v. Research in Motion, Ltd., 2013 WL 775349, at *2 (citing Rule 26(b)(4)(C) advisory committee's notes, 2010 amend., subdiv. (b)(4)).

Notwithstanding this statement, the court went on to note that such privilege is not absolute and can be waived. In particular, if the information is provided to a testifying expert for use in forming his or her opinions, "otherwise-protected information and materials [would become] subject to discovery." Id. (multiple citations omitted). The court, largely copying and pasting Rule 26's language and inserting party names, then held that the moving party was entitled to attorney-expert communications about (1) compensation, (2) facts or data considered, and (3) assumptions actually relied on. The opinion did not analyze the distinction between "facts or data" as opposed to "other information," and therefore, although recognizing increased protections, did not provide guidance as to the limits of those protections.

In Fialkowski v. Perry, No. 11–5139, 2012 WL 2527020, at *4 (E.D. Pa. June 29, 2012), the Eastern District of Pennsylvania held that Rule 26 will trump "all claims of privilege." Likewise, the District of New Jersey court in Graco, Inc. v. PMC Global, Inc., No. 08–1304 FLW, 2011 WL 666056, at *8 (D.N.J. Feb. 14, 2011), held that Rule 26 requires disclosure of all materials considered by a testifying expert regardless of attorney-client or work-product privilege. Neither of these courts delved into the distinction between "other information" and "facts or data" or how those terms applied in their respective disputes.

In 2011, the Northern District of Illinois denied a motion to compel production of materials exchanged between an attorney and an expert. The court reviewed the documents in camera and held that they "contain[ed] neither 'facts or data' nor 'assumptions that the party's attorney provided'" and were therefore "not discoverable. . . .'" Sara Lee Corp. v. Kraft Foods Inc., 273 F.R.D. 416, 420–21 (N.D. Ill. 2011). The court reached this conclusion because none of the communications contained "facts, data, or assumptions that [the expert] could have considered in assembling his expert report. . . ." Therefore, the party resisting discovery had no duty to disclose such information. Id. (citing Fed. R. Civ. P. 26(a)(2)(B), (C)). The court concluded that the moving party could "effectively probe the reliability of an expert through normal cross-examination and testimony from other experts." Id. (internal citation omitted). The opinion did not provide additional language to understand when something is "fact, data, or assumption" as opposed to "other information" that would have been discoverable prior to 2010.

What about Dual-Purpose Experts?
The general rule has usually been that providing otherwise privileged materials to a testifying expert, who then considers them in forming an opinion, will generally waive the privilege. Yeda Research & Dev. Co., Ltd. v. Abbott GmbH & Co. KG, No. CIV.A. 10-1836 RMC, 2013 WL 2995924 (D.D.C. June 7, 2013). But what if an expert is a testifying expert as to certain issues and a consulting expert as to others? According to a 2013 District of Columbia district court opinion, "[E]very court to address this 'multiple hats' problem has concluded that an expert's proponent still may assert a privilege over such materials, but only over those materials generated or considered uniquely in the expert's role as consultant." Id. at *7 (internal citations omitted) (collecting cases). And the scope of privilege must be "narrowly construed against the expert's proponent . . . ." Id. (internal citation omitted). As a result, any ambiguity is construed in favor of production. Id. (internal citations omitted).

Non-Reporting Experts
Rule 26 recognizes the existence of two types of experts: reporting experts and non-reporting experts. A reporting expert is one that has to provide a report because the expert was either specifically hired to provide an expert opinion or regularly does so as part of his or her job for one of the parties. As noted above, the newly amended Rule 26 explicitly protects communications between a party's attorney and reporting experts. But the rule is silent as to communications between a party's attorney and non-reporting experts. The reason is that, based on the 2010 advisory committee note to Rule 26, the advisory committee sought to make no changes to the protections accorded to communications between non-reporting experts and counsel.

In United States v. Sierra Pacific Industries, No. CIV S-09-2445 KJM EFB, 2011 WL 2119078 (E.D. Cal. May 26, 2011), the Eastern District of California addressed a situation where non-reporting experts were eventually designated as testifying experts by the U.S. government. The U.S. government argued that communications with non-reporting experts were privileged and that, in any case, these experts had been consulting experts, therefore not subject to disclosure. The court disagreed with the U.S. government on both accounts. Most relevant to the current discussion, the district court carefully analyzed the issue of non-reporting experts by reviewing advisory committee meeting notes leading up to enactment of the 2010 amendments. The court recognized that although sometimes discoverable, communications with non-reporting experts would not be "discoverable in all cases." Id. at *7.

In other words, the common law remained the same regarding applications of privilege to attorney-expert communications, if the expert is non-reporting. The determination of privilege is done on a case-by-case basis. In this case, the U.S. government had designated the experts as testifying experts. The court held this had waived any claim of privilege. As a result, the court compelled the U.S. government to produce "all documents and communications that [its experts] considered—that is, generated, saw, read, reviewed, and/or reflected upon—in connection with their analysis. . . ." Id. at *8. The court specified that its holding applied to all such identified documents and communications, "regardless of whether the documents ultimately affected their analysis," including "logistical communications." Id. Therefore, it appears that the carve-out exceptions of Rule 26 do not apply to non-reporting expert witnesses, who remain subject to blanket disclosure obligations.

So What's a Litigator Supposed to Do? Keep Your Headlights On!
The new Rule 26 only requires disclosure of communications about (1) compensation, (2) "facts or data" considered by the expert, and (3) assumptions relied on by the expert. Prior to 2010, Rule 26 required production of all "data or other information" considered by the expert in reach his or her opinion. The question that has yet to be squarely addressed, but will likely become important, is the difference between "other information" and "facts." Overall, litigators should be careful about assuming that Rule 26 now protects their communications with experts. The protection is by no means absolute. The fog might be lifting from the changes created by the 2010 amendments, but that fog is leaving behind an important—and unresolved—question: How will courts interpret the difference between the post-2010 term "facts or data" and the pre-2010 term "other information"? In other words, watch for that elephant!

Keywords: litigation, commercial, business, attorney-client privilege, communications, data, "other information," facts, work-product protection, disclosure, waiver, Rule 26, reporting experts, non-reporting experts

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