A Summary of the Upcoming FRCP Amendments

Earlier this year, proposed amendments to the Federal Rules of Civil Procedure were submitted to the United States Supreme Court for review following a years long process that began in 2010.  The proposed amendments will become effective on December 1, 2015 barring any action by either the Supreme Court or Congress to modify them.

Circuit splits and a lack of uniform standards have plagued eDiscovery for some time. The proposed amendments attempt to bring uniformity to the body of eDiscovery law that has been developing since the early 2000s.  The proposed amendments also seek to address litigants’ concerns that eDiscovery has in the past been used as a weapon to force settlement upon those who cannot afford to engage in the process.  To that end the proposed amendments address proportionality and the scope of discovery.  

These amendments will most likely eventually be adopted by various States as well.  For a full discussion by the Advisory Committee on Federal Rules of Civil Procedure and a list of all of the Committee’s proposed amendments, see the March 2014 and September 2014 Reports of the Judicial Conference Committee on Rules of Practice and Procedure, available here [http://www.uscourts.gov/rules-policies/records-and-archives-rules-committees/committee-reports].

Below is a summary of  several of the amendments that will affect electronic discovery in the Federal Courts.  

Proposed Rule 1

Proposed Rule 1 reads:

These rules govern the procedure in all civil actions and proceedings in the United States district courts, except as states in Rule 81.  They should be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.

This change, the Committee commented, emphasizes that “just as the court should construe and administer these rules to secure the just, speedy, and inexpensive determination of every action, so the parties share the responsibility to employ the rules in the same way.”  Even with this small change, the Committee demonstrated the larger theme of these proposed amendments: proportionality.  The Committee noted that “[e]ffective advocacy is consistent with – and indeed depends upon – cooperative and proportional use of procedure.”

Proposed Rule 26(b)(1)

The proposed amendment to Rule 26(b)(1) would move considerations of proportionality in Rule 26(b)(2)(C)(iii) to Rule 26(b)(1) in order to emphasize its importance to both litigants and the Court.  The proposed amendment to Rule 26(b)(1) reads:

Scope in General. Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable. — 

This amendment, the Committee commented, “restores the proportionality factors to their original place in defining the scope of discovery.”  Although the proportionality factors were originally added in 1983, there has been a general belief that both litigants and the Court often overlooked this requirement.  Hence, the Committee gave the factors more prominent placement in the proposed rule.  In addition, a new proportionality factor was added.  The proposed rule would require the Court to consider “the parties’ relative access to relevant information.”  This factor addresses those cases in which one party has very little information and the other party has vast amounts, such that the burden of responding to discovery will be greater for the second party.

By keeping discovery in check and ensuring that any discovery requested is proportional to the amount in controversy and the scope of the action, the proposed rule also seeks to limit those circumstances where high volume discovery was used as a weapon to induce settlement.  The Committee recognized that electronic discovery continues to exacerbate attempts at proportionality.  To that end, the Committee recommended “close judicial involvement in the cases that do not yield readily to the ideal of effective party management.”  Reemphasizing the court’s role in effective case management, the Committee noted that there will be “important occasions for judicial management, both when the parties are legitimately unable to resolve important differences and when the parties fall short of effective, cooperative management on their own.”  To this end Rule 26’s revamped proportionality test reflects Rule 1’s mandate that the court and the parties cooperate to ensure the just, speedy and inexpensive determination of civil actions.

Perhaps most importantly, absent from the proposed Rule 26(b)(1) is the oft-cited phrase “reasonably calculated to lead to the discovery of admissible evidence,” which the Committee noted has created problems in defining the scope of discovery.  By removing that language and inserting in its place the phrase “[i]nformation within this scope of discovery need not be admissible in evidence to be discoverable,” the Committee removed confusing language while ensuring that valid discovery is not opposed solely on the basis that is does not lead to admissible evidence.

Proposed Rule 34(b)(2)(B)

Of note is a small change to Rule 34 which reflects the “common practice of producing copies of documents or electronically stored information rather than simply permitting inspection.”

This amendment is a long time coming as “Inspection” is vestigial language from a time when paper productions were the norm.

Proposed Rule 37(e)

Substantial changes are proposed for Rule 37(e) governing the failure of preserve electronically stored information or “ESI”:

 Preserve Electronically Stored Information.    If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:

(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or

(2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:

(A) presume that the lost information was unfavorable to the party;

(B) instruct the jury that it may or must presume the information was unfavorable to the party; or

(C) dismiss the action or enter a default judgment.

Rather than addressing in detail the many different situations which may arise upon an alleged failure to preserve evidence, the proposed rule instead establishes a framework for courts that outlines the different actions a court may take where a party has failed to meet its duty to preserve evidence. Proposed Rule 37(e) does not seek to create a duty to preserve; it instead relies on the common law duty to preserve information when litigation is reasonably anticipated.  Although there was some discussion as to removing any duty to preserve until an action is actually filed, the Committee believed that such a change would cause information necessary for litigation to be lost.

The proposed rule also directs the Court to consider whether additional discovery would cure a party’s failure to preserve, whether by restoring or replacing the information that was lost.  In addition, there should be some consideration of whether the information sought was either only marginally relevant or duplicative of other information gathered.

The proposed rule seeks to eliminate a circuit split as to when the loss of ESI may justify the imposition of an adverse inference.  Under proposed subdivision (e)(2), before drawing any adverse inference, a court must find that a party “acted with the intent to deprive another party of the [lost] information’s use in the litigation.”  This high standard of culpability reflects the Committee’s adoption of the “traditional rationale” that when a party destroys evidence in order to prevent its use in litigation, one may reasonable infer that the destroyed information was unfavorable to the party who destroyed it.  Under this rationale, mere negligence is not enough to justify an adverse inference.  Notably, there is no separate requirement under proposed subdivision (e)(2) that the court find prejudice to the opposing side; prejudice is inferred from the loss of favorable information.

Finally, the Committee’s note to subdivision (e)(2) cautions courts that a finding of intent to deprive another party of lost information does not require a court to impose the subdivision’s severe measures.  Instead, the “remedy should fit the wrong, and the severe measures authorized by this subdivision should not be used when the information lost was relatively unimportant or lesser measures . . . would be sufficient to redress the loss.”

The Committee has obviously taken steps to stress the importance of proportionality while streamlining the sanctions framework.  It will be interesting to see the actual effect of the proposed amendments once they are in place.  The hope is that the amendments allow parties to litigate while keeping discovery costs affordable and reasonable.