2013 E-Discovery Year in Review: Part 1
A quiet year in the courts as the profession appears to accept that EDD is here to stay.
Editor's note: This is part one of two parts.
Last year was surprisingly quiet on the electronic data discovery front. No earth-shattering opinions, no imprisoned spoliators, and barely a whimper from reported decisions related to parties' chosen form of production. Perhaps the bench and bar are getting more sophisticated and technology savvy. Or perhaps the courts implicitly recognized the current state of flux, what with the proposed amendments to the Federal Rules of Civil Procedure that specifically address EDD. Or possibly, the industry is evolving from what was once considered cutting-edge and novel to what is emerging as best practices.
FRCP AMENDMENT PROGRESS
Last year saw a tremendous amount of progress by the Federal Rules Committee as they revised proposals for updated EDD-related provisions of the FRCP. Two significant proposed changes concern a revised definition of the scope of permissible discovery and a clarification of the standards for awarding sanctions due to spoliation of documents.
Under the proposed framework, discovery would be limited to matters that are "relevant to any party's claim or defense and proportional to the needs of the case," essentially moving the proportionality factors currently in Rule 26(b)(2)(C)(iii) to Rule 26(b)(1) which addresses the general scope of discovery. (Proposed changes in italics.)
Furthermore, the proposed amendments, while acknowledging a party's right to obtain non-privileged material related to claims or defenses, delete the reference to discovery of the "existence, description, nature, custody, condition, and location" of documents and "any matter relevant to the subject matter involved in the action. See FRCP 26(b)(1). There is no consensus as to the significance of these omissions.
The proposed amendments would also exclude from the scope of permissible discovery documents that are merely "reasonably calculated to lead to the discovery of admissible evidence" and discovery that might otherwise be allowed under local rules. These changes would address the growing concern throughout courts and among litigators that discovery has become unwieldy and overly expensive.
In addition, Rule 37's "safe harbor" provision would be eliminated altogether and replaced by a tiered approach. Under the proposed rule, if a party failed to preserve information when it anticipated litigation, the court could award "curative measures" (e.g., additional discovery or payment of expenses and fees) or impose harsher "sanctions," and "sanctions" are only available if the party's actions: "(i) caused substantial prejudice in the litigation and were willful or in bad faith; or (ii) irreparably deprived a party of any meaningful opportunity to present or defend against the claims in the litigation."
The proposed amended rule sets forth factors for courts to consider in assessing a party's conduct, including whether the failure to preserve was "willful or in bad faith." These changes are designed to address the current inconsistency across circuits as well as the perception that there is a local patchwork of standards across the country (and often within a single district).
Notably absent from the current proposed amendments (that are subject to public comments, via written submissions and three public hearings) are clarifications as to when the duty to preserve is triggered as well as a definition for the term "willful," which has been interpreted by courts to include everything from simple carelessness to intentional misconduct.
Under the current state of the law, identical conduct can result in a wide variance in sanctions depending upon the court and jurisdiction. For example, in In re Pfizer Inc. Securities Litigation, U.S. Magistrate Judge Henry Pitman declined to award sanctions for negligent conduct and echoed a reminder from the Second Circuit's 2012 Chin v. Port Authority, Nos. 10–1904, 10–2031 (2d Cir. 2012) decision that a "finding of gross negligence merely permits, rather than requires, a district court to give an adverse inference instruction" or to award other sanctions. No. 04-Civ.-9866 (S.D.N.Y. Jan. 8, 2013).