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Planning for Discovery at the Pleading Stage

Monette Davis

Planning for Discovery at the Pleading Stage
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Discovery is a significant part of the litigation process in federal court. Rule 26(b)(1) of the Federal Rule of Civil Procedure lets parties obtain discovery on any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case. Rule 401 of the Federal Rules of Evidence says that evidence is relevant if it has any tendency to make a fact more or less probable.

When raising claims and defenses to a complaint, attorneys should be vigilant and anticipate the consequences from this broad scope of discovery. Some claims and defenses may seem wise when first raised, but unwise when they open up discovery into sensitive areas. A tactical approach should be taken if an attorney desires to later withdraw the claims and defenses. But if that tactical withdrawal fails, the relevant discovery must be produced.

A recent decision from the U.S. District Court for the Eastern District of California, Timmerman Startlite Tracking, Inc. v. Ingredion Inc., provides an example of how the effort to limit claims and defenses may fail. In Timmerman, the defendant had alleged that its performance under certain contracts was excused by economic conditions. As a result of those affirmative defenses, the plaintiff served the defendant with several requests for production of the defendant's financial information. The defendant then attempted to protect its financial information from disclosure by offering to waive its defenses of economic impossibility and impracticability. The plaintiff rejected the offer.

When the discovery dispute came before the court, the defendant argued that, because it offered to waive its defenses, the plaintiff's requests for production were irrelevant and its motion to compel was moot. However, the plaintiff argued that because the discovery at issue was relevant to its claim, it did not moot the discovery at issue in the motion to compel. The court found that the plaintiff was indeed entitled to discovery relevant to its claims, and the defendant could not avoid discovery into its financial information. The court ordered the defendant to turn over all communications and documents relating to the defendant's contentions that economic conditions excused its performance under the parties’ contracts.

Timmerman is a lesson that attorneys should be wary when raising certain claims and defenses and consider the possibility of opening the door to the production of sensitive information. This can be avoided by being proactive and contemplating the consequences of raising such claims and defenses beforehand. If such claims and defenses are raised and the attorney later decides to withdraw them, the attempt to correct the error may fail in court. This will ultimately result in the necessary production of documents that may be harmful to a defendant's case.