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May 23, 2017 Articles

Practical Advice on the Management of Complex Litigation

Rule 26(f) of the Federal Rules of Civil Procedure serves as a powerful guide.

By Ronald Hedges and Tracy A. DiFillippo

Rule 26(f) of the Federal Rules of Civil Procedure serves as a powerful guide to the management of complex litigation because many judges and attorneys focus on this rule when managing such litigation. Indeed, Rule 26(f) provides a checklist of “things” to think about in whichever court, state or federal, complex litigation is pending. In turn, Rule 26(f) lays a foundation for the initial scheduling order that the assigned judge will issue under Rule 16(b). This article will provide some practice pointers for parties who are involved in complex litigation and the attorneys who appear on their behalf. 

Complex Litigation Hypothetical
Let’s start with a “simple” hypothetical: Assume there was a discharge of a toxic chemical from a facility. The chemical wound up in navigable rivers and groundwater and affected the water supply for adjacent communities. The discharge also impacted the health of individuals who were exposed to the chemical and the value of properties downstream from the discharge. Not surprisingly, all of this led to enforcement actions by state and federal agencies as well as class and individual actions for personal injuries and damage to property. The various plaintiffs asserted claims against the owner and operator of the facility, as well as the manufacturer of the chemical and others. The defendants, in turn, filed third-party complaints against others, including insurers that declined coverage for the discharge. All motions brought by the defendants and third-party defendants have been resolved, all answers have been filed, and several dozen attorneys are meeting in a courthouse to work out a discovery plan to submit to the assigned judge. Let’s also assume that if there is no federal question or diversity jurisdiction and this action is pending in state court, the parties have been ordered or have agreed to follow Rule 26(f).

Topics for Deliberation
Below are some topics that the judge might expect the parties to discuss and report (some of which might be “beyond” what is required by Rule 26(f)) and some responses or considerations that a practitioner might contemplate.

Consolidation of actions could have positive and negative ramifications. Should the various civil actions that have survived motions be dismissed or be consolidated or otherwise coordinated for discovery? This would allow one judge to manage everything and provide the parties with a single judge to work with. Attorneys may be cautious in agreeing to consolidation or coordination because the judge that is assigned to handle the consolidated or coordinated cases may not be as favorable to their position as the judge currently assigned to the case.

Stipulations could streamline discovery. Are there any stipulations to which the parties might agree under Rule 26(c) or a state equivalent that would resolve any question of fact or provide for some “streamlining” of discovery?

Such stipulations would enable the judge and the parties to focus on discovery of disputed and material facts. Attorneys should consider such stipulations to reduce discovery burdens, including motion practice, which would reduce the costs and expenses incurred by their clients.

Parties could be grouped for coordination purposes. Might the parties be “grouped” in any way for purposes of coordination? For example, might property owners or individuals alleging personal injuries be considered as separate groups? What about insurers and manufacturers?

Such groupings could accomplish several things. First, lead or coordinating attorneys might be designated to speak for their groups on common issues. Second, discovery requests common to each group might be designed. The judge could then pick and choose among groups for purposes of periodic conferences about matters unique to a group rather than require everyone to be present. Attorneys may see this as beneficial to some clients that are smaller players in the litigation, which would save their clients costs and fees; however, attorneys should be aware that the bigger players may see this as an opportunity to focus on their own interests and may harm the others in the group.

Bifurcation could provide cost-saving opportunities. Should there be phasing or sequencing of discovery or separate discovery tracks? Would bifurcation of liability and damages be worthwhile?

Doing so would create “firebreaks” in the litigation and afford opportunities for the judge to broach possible settlement or dispositive motions prior to what might be costly and time-consuming discovery related to damages. Attorneys that have clients that are dependent on collecting from a specific source, e.g., insurance, may see bifurcation as an opportunity to have that phase separated in order to determine if it is worth continuing the expense of the complex litigation.

Limitations on the scope of discovery could benefit cost and time factors. Can the parties reach agreement on the scope of discovery? For example, can the parties agree on the temporal and “spatial” limits of preservation of electronically stored information (ESI)?

Agreement on ESI as well as “paper” and physical items might reduce the costs associated with retention and allow the parties and the judge to focus on what is important. Attorneys should seriously consider entering into an ESI protocol early in the case as this alleviates costly and time-consuming discovery and motion practice.

The positives and negatives of subpoenas to nonparties should be weighed. When and how should subpoenas issue to nonparties who have relevant information?

Discovery from nonparties might seek information that is highly relevant or of marginal value. Deferring discovery of the latter from nonparties would further the goal of focusing on important aspects of the case. It is beneficial for attorneys to first seek written discovery responses from parties regarding the information related to nonparties and then balance the expense of seeking further discovery from nonparties through subpoenas.

Parties could benefit if discovery precedes depositions. Should written discovery be completed before depositions?

This would allow the judge to resolve any disputes related to that discovery before depositions are conducted. For many attorneys, the practice is to seek written discovery before conducting depositions, but many parties continue to assert boilerplate objections in response to written discovery, which increases the expense and delays the process through discovery motion practice. However, depositions are only helpful if the parties have received relevant documents.

Think outside the formal motion practice box. How should discovery disputes be presented to the judge? Is formal motion practice necessary? Might the judge entertain informal letter submissions or the like?

Such procedures would conserve the resources of the parties and enable the judge to resolve disputes on an expedited basis. Because many attorneys use the formal motion practice procedure as a delay tactic, it may be beneficial to have a judge hold telephone conferences to address discovery disputes.

Confidentiality concerns should be a consideration. Is a confidentiality order under Rule 26(c) or its state equivalent beneficial?

Such an order would protect information, deemed confidential by a party, from disclosure to the public and could be “blanket” in nature and require only a certification that demonstrated good cause for protection. (Bear in mind, however, that such an agreement or order should only address discovery and not the sealing of filed materials or proceedings.) Confidentiality orders are necessary to alleviate discovery disputes on the issue of confidential documents.

Attorney-client privilege and work product protections could benefit with agreements. Can the parties reach agreement on the protection of attorney-client privilege or work product that might be inadvertently disclosed during discovery? Assuming that the privilege log required by Rule 26(b)(5)(A) or a state equivalent might encompass a large volume of materials, could the parties agree on categorical or truncated descriptions of the materials with disputes about designations presented to the judge for categorical rulings? Should nonwaiver agreements be entered into pursuant to Federal Rule of Evidence 502(e) or whatever state equivalent might exist, and should that agreement be embodied in a 502(d) order?

Such agreements and orders would protect against waiver by inadvertent production and establish a framework for resolution of any disputes that might arise. With the volume of documents generally involved in complex litigation, such agreements are beneficial because many clients put limits on attorneys in reviewing documents for privileged information.

Parties should consider the various aspects of settlement discussions. When might the parties think it appropriate to discuss settlement rather than continued litigation? Should groups of parties engage in settlement discussions at different times? Would settlement discussions be appropriate before any discovery or after limited and focused discovery? Who should preside over settlement discussions? The judge, assuming he can fit such discussions into his calendar? A mediator agreed to by the parties or selected by the judge?

Agreement on the timing and scope of settlement discussions would allow the judge to balance the need to resolve the litigation with the practicality of allowing discussions—with or without stays of certain discovery to facilitate the discussions. Generally, in complex litigation cases, it is best to have settlement discussions after documents are exchanged and reviewed but before depositions are conducted. However, sometimes key depositions may be necessary to assist parties in understanding the allegations or defenses in a case. Because many judges do not have the time to devote to settlement conferences, private mediation is recommended, especially early in the case.

Parties should consider the what and when of dispositive motions. When should dispositive motions be filed? Might parties reach agreement on facts relevant to such motion practice? If discovery has been bifurcated and the judge is willing, should discovery of damages be stayed pending the outcome of the motions?

Such agreements would facilitate the scheduling of motions by the judge and reduce briefing on issues about which there is no genuine dispute of material fact. If there is a straightforward issue that may be properly disposed of through a dispositive motion, attorneys should focus discovery on that issue and immediately file the motion as this may help facilitate settlement on the remaining issues.

This list of topics and responses is not all-inclusive. Rather, it is intended to suggest approaches to topics that may (and should) arise at a Rule 26(f) conference. Rule 26(f) should be seen as a means by which the judge, the attorneys, and the parties can further the goal of Rule 1: “the just, speedy, and inexpensive determination” of a complex action. Of course, just, speedy, and inexpensive are relative terms, especially in the context of complex litigation. Nonetheless, there is no reason why attorneys cannot cooperate among themselves and assist the judge in scheduling and managing an action with multiple attorneys and parties.

Ronald Hedges is senior counsel with Dentons in New York, New York. Tracy A. DiFillippo is a partner at Armstrong Teasdale LLP in Las Vegas, Nevada. This article is excerpted and reprinted with permission from the May 22, 2017, edition of the New York Law Journal (© 2017 ALM Media Properties, LLC. All rights reserved.).

Copyright © 2017, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).