The rules advisory committee of the Judicial Conference of the United States (“Advisory Committee”) proposed a variety of important and potentially destructive changes to the federal rules on Aug. 15, 2013, These proposed amendments would substantially alter the civil litigation discovery process in a manner extremely prejudicial to plaintiffs who bring cases against large powerful defendants.
When the Federal Rules of Civil Procedure were first promulgated more than 75 years ago, the drafters intended a broad, liberal standard governing the discovery process. As New York University School of Law Professor and noted civil procedure expert Arthur Miller noted in recent testimony before a U.S. Senate subcommittee hearing, the federal rules reflect a policy favoring access by citizens to the federal courts and aim to have cases resolved on their merits rather than stymied by procedural technicalities.
But Miller observes that the last 25 years have seen more and more procedural and technical roadblocks established, preventing cases from ever reaching juries and thereby limiting access to justice.
Federal Rule 26(b)(1) is emblematic of the rules drafters’ intent to promote a broad, liberal discovery process, holding that civil litigants may “obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense.” Without the ability to seek nonprivileged information broadly, plaintiffs could not prove their case since defendants are usually the parties in possession of the material evidence.
Of particular note and one which should sound the alarm bells for civil litigators representing plaintiffs, the Advisory Committee proposal contemplates changing the federal rules to a system where the party requesting discovery pays for the resulting costs of the request. The proposed “requester-pays” rule would be disastrous for plaintiff’s lawyers and the families and injured victims they represent. Under the guise of cost containment and purported purpose of expediting pretrial litigation, the proposed rules will severely limit plaintiffs’ ability to litigate disputes.
In nearly all cases, injured victims and their families have fewer resources at their disposal than the parties responsible for their injuries and damages. The wrongdoers are also almost always in possession of the evidence the plaintiff needs in order to prevail on a claim. Plaintiff lawyers, especially those working on public interest and civil rights matters, often represent clients on a contingency fee basis. They usually do not enjoy the resources of a $1,000-per-billable-hour law firm, who can marshal armies of Ivy League lawyers to bury opponents in paperwork and documents.
Large defense firms understand this power asymmetry and their litigation tactics are designed to impose exorbitant costs on plaintiffs’ firms and to delay or prevent a trial on the merits. A system where plaintiffs must pay for the cost of discovery production would be nothing short of catastrophic for injured victims who rely on contingency fee representation to retain an attorney. Were plaintiffs required to finance the “document dumps” deployed by defense firms and other similar dilatory tactics, a plaintiff lawyer’s ability to economically handle a wide variety of claims and victims would be dramatically curtailed. The direct result will be lessened access to the courts by ordinary American citizens.
The possibility of fewer claims by injured victims is incentivizing individuals, industry groups, and law firms that would benefit from this outcome to speak out in favor of the proposed changes to the federal rules. In a Wall Street Journal op-ed published Jan. 21, 2014, former Arizona Republican Senator John Kyl claimed that a system where a discovery requester pays for the request “lets a party decide to pay and get certain information if it really needs it. It also eliminates the temptation to make overly broad requests to impose costs on the other side to coerce a settlement.” The large Washington, D.C.-based law firm Covington & Burling hired former Sen. Kyl as a senior advisor. Covington counts among its clients some of the largest multinational corporations that stand to gain a significant tactical advantage from a requestor-pays discovery system. This conflict of interest was not disclosed in former Sen. Kyl’s op-ed.
As any trial lawyer who has litigated a case against a large corporation can attest, defense law firms routinely employ strategies that drive up the cost of legal action entirely on their own volition. The corporate defense law firms, who bill breathtakingly high hourly rates, have an incentive to charge for as much of their attorneys’ time as possible. Indeed, motions and tactics designed to delay and drag out the litigation process are part of the standard operating procedure. In addition, burying important information among a sea of documents is a common tactic deployed by defense firms that drives up the cost of discovery and litigation.
In his Journal op-ed, former Sen. Kyl notes that “only one-tenth of 1% of the material produced in discovery was used at trial” as if the problem were not self-created by defense firms burying opponents in irrelevant discovery production. Trial lawyers would happily support a rule backed by sanctions requiring large defendants to produce precisely relevant material and refrain from burying plaintiffs in a blizzard of extraneous documents and information. But that is not the proposal before the Advisory Committee.
Defense law firms and their corporate clients continually complain about the costs associated with the discovery process. These parties cite e-discovery and its associated expenses of preserving and producing electronically-stored information as an enormous problem holding American businesses back. One would think after reading the voluminous comments and discussion on the federal rules changes manufactured by corporate interests that discovery costs are the albatross hanging around America’s neck, the removal of which will free our economy to soar to new heights of prosperity and innovation. Calling it an “injustice,” former Sen. Kyl claims in the Journal op-ed that litigants are “fleeing U.S. courts for other forums of dispute resolution” and that American companies “are losing their competitive advantage because the costs of resolving disputes here are needlessly inflated.”
The only problem? There’s no proof. Many litigants are forced to resolve disputes through “other forums” like arbitration due to the ubiquity of mandatory arbitration clauses buried in the fine print of everything from credit card agreements to employee handbooks. Large corporations and the law firms that represent them are the parties who push the expansion of forced arbitration, because it favors their interests and not that of the consumer. Like increased discovery costs, the belief that litigants are “fleeing” courts is caused in part by the actions of defense firms and their large corporate clients.
There’s also no proof that increased discovery expenses are caused by plaintiffs. Corporate defense law firms, with their teams of associates, churn out litigation motions and often resist discovery at all points in a case. The fact that these strategies are highly profitable for a firm billing the client on an hourly-fee basis should not be overlooked. Moreover, the degree to which these tactics and behaviors are responsible for the costs associated with the discovery process has not been the subject of empirical study. It is unjust to enact rules that will prevent individual plaintiffs from access to the courts on the basis of costs that may be self-inflicted by defendants.
The U.S. Senate Committee on the Judiciary’s Subcommittee on Bankruptcy and the Courts held a hearing on Oct. 29, 2013, on the proposed alterations to the federal civil procedure rules. In his testimony before the subcommittee, NYU Law Professor Arthur Miller was strongly critical of the proposed amendments to the federal rules.
“Discovery restrictions can negatively impact a citizen’s meaningful access to civil justice and impair the enforcement of many important public policies embedded in federal statutes,” Miller said. “Defense interests have made [e-discovery] the 800 pound gorilla in the debate in an attempt to justify the latest discovery limitations that have been put forth by the Advisory Committee. Once again one hears Chicken Little crying that the sky is falling. It is not.”
Large and wealthy corporations do not like the power of juries to hold them responsible for the injuries and damages they cause. But the anti-jury position and the associated initiatives to enact roadblocks to jury trials run contrary to the Constitutional foundations of this nation.
“The Founders intended the civil jury to serve as an institutional check on the wealthy and powerful. It did so by giving ordinary American people direct control over one element of government,” Sen. Sheldon Whitehouse (D-R.I.) stated during the Senate hearing on the proposed federal rule changes. “We should be very careful not to lightly cast such an institution aside in the name of judicial efficiency.”
Rather than tread carefully, the proposed amendments to the federal rules would act as a blunt instrument to the discovery process. Shifting the cost of discovery to plaintiffs would incentivize defendants to increase the self-created costs of producing documents. Thwarting a plaintiff’s meritorious claim would be as simple as creating millions of dollars in discovery costs that would be passed from the defendant to the plaintiff. The incentive to bury opposing parties in needless discovery costs presents a moral hazard, particularly where the defendant is in possession of the evidence needed to prosecute a claim.
In addition to the potential of shifting discovery costs to plaintiffs, the proposed amendments contemplate placing a new emphasis on proportionality in the discovery process. Under these rule changes, a proportionality test would include five factors:
This shift in focus would come at the expense of the traditional definition of discoverable relevant information as broad and liberal. The starting point for disputes over discoverable material would begin with limitations rather than the Rule 26(b) standard that discoverable material is any relevant information that “appears reasonably calculated to lead to the discovery of admissible information.”
Large and powerful corporations with unlimited resources will not bat an eye at these proposals.
When a lawsuit ensues between two mega-corporations, these parties can easily bear the cost of seeking, preserving, and providing material. With unlimited resources, complicated issues, and issues that are both important and significant from their subjective viewpoint, large corporations can pass the five-factor proportionality test with flying colors. However, this shift in discovery standards will come at great expense to individual plaintiffs who have been harmed by powerful, wealthy defendants.
During a Jan. 9, 2014 hearing held by the Advisory Committee in Phoenix on the proposed amendments to the federal rules, Anapol Schwartz partner Larry Coben suggested that if the proposals were enacted, the legendary Ford Pinto litigation would not have been succeeded. In the Ford Pinto case, the plaintiffs needed discovery information about prior car models similar to the Pinto and to learn how Ford studied the safety of these other models’ fuel systems. The plaintiffs could then compare the design process of other vehicles with the Pinto. Those discovery requests, Coben noted, would be based upon “not knowing what we are going to find.” Under the proposed rules, Coben stated that a critical 1978 internal Ford memorandum on fuel system design, integrity, and safety would not have been discoverable.
“By changing where proportionality is studied, you’re placing a burden on plaintiffs that you are not going to be able to meet. And you are challenging judges to make factual decisions about the scope of discovery without knowing what exists,” Coben testified during the Advisory Committee hearing. “And these things will make it very, very difficult, if not impossible, to be able to prove what we needed to prove in the Ford Pinto and in other product cases.”
Large defense law firms and their multinational-corporation clients are behind the new push to significantly alter the federal rules. These proposals will further narrow the scope of discoverable materials, will burden vulnerable plaintiffs with costs that often can be controlled by defendants, and shift the default focus of discovery from a position of broad, liberal rules to one in which each request for discovery is closely scrutinized and litigated over on the basis of proportionality. These drastic changes are being pushed without empiric evidences and, as Professor Miller noted in his Senate testimony, on the basis of anecdotes and impressionistic, superficial cost surveys.
These federal rules changes will further limit access to the courts by ordinary Americans, access which has already been severely restricted. The proposed changes are only the latest battle in an ongoing 25-year war on access to justice waged by means of forced arbitration clauses, heightened “plausibility” pleading standards in place of notice or simplified pleading, increased screening of expert witness testimony, and limitations on pretrial discovery.
These discovery rules are offered under the guise of cost containment and alleged efficiency. However, these are not benign procedural issues. Shifting the cost of discovery to plaintiffs and placing the emphasis for discovery on “proportionality” over broad, liberal requests will have a pernicious effect on injured plaintiffs who lack the armies of attorneys and resources of large corporate defendants. The cavalry isn’t coming and it’s up to trial lawyers and their clients who will be hurt by these rule changes to speak out.
Will Atkinson is a licensed attorney and the Technology and Marketing Director of the Washington, DC office of The Cochran Firm. He can be reached at Watkinson@cochranfirm.com and 202-682-5800.