Mark Michels, director, Deloitte Financial Advisory Services
Image courtesy of Deloitte
The International Trade Commission has taken a significant step on its path to reform by issuing a Notice of Proposed Rulemaking (hereinafter, Notice) addressing 1) discovery, including electronically stored information discovery and 2) privilege issues. See 77 Fed. Reg. 60952 (October 5, 2012). According to the Notice, the ITC is taking this action to address concerns about the scope of discovery in proceedings under section 337 of the Tariff Act of 1930 (19 U.S.C. 1337). The ITC's stated objective in promulgating these rules is "to reduce expensive, inefficient, unjustified, or unnecessary discovery practices in agency proceedings while preserving the opportunity for fair and efficient discovery for all parties." 77 Fed. Reg. 60952. Comments on the proposed rule are due no later than December 4, 2012. The ITC's ordinary practice is to publish the final amendments 30 days prior to their effective date, which means that the final rules may come into effect, at the earliest, in early 2013.
In "The ITC's Long, Weary Road to E-Discovery Reform," in the July 6, 2012, issue of Law Technology News, described the effort the ITC has taken over the past several months to solicit information and input from the bench and bar on discovery reform.
In addition to the Notice, the ITC issued a press release, "E-Discovery — Commission Takes a Step Forward," detailing other actions "to mitigate unnecessary burdens and costs to the parties in section 337 investigations and to third parties, and to reduce motions practice before the ALJs." According to the press release, the ITC is also considering: 1) a pilot program where Administrative Law Judges will test discovery meet and confer processes, 2) a model protective order, including a source code provision, and 3) encouraging the ALJs to incorporate provisions regarding production of metadata into the ALJ's ground rules. (The ALJ's "ground rules" are similar to standing orders judges may issue to supplement local rules and federal or state rules.)
The ITC's discovery rules are codified at 19 C.F.R. Part 210, Subpart E and these rules currently have no provision similar to Federal Rules of Civil Procedure 26(b)(2)(B) or 26(b)(2)(C), which deal with limitations on discovery and 26(b)(5), which addresses privilege claims. The ITC's proposed rules add provisions similar to FRCP 26(b)(2)(B), 26(b)(2)(C), and 26(b)(5).
The proposed rules would amend section 210.27 by adding section 210.27(c) Specific Limitations on Electronically Stored Information. The proposed subsection (c) would state that a person need not provide discovery of electronically stored information from sources that the person identifies as not reasonably accessible because of undue burden or cost. Proposed 210.27(c) tracks fairly closely FRCP 26(b)(2)(B). According to the Notice's Background discussion, the ALJ may impose discovery conditions including, so called, "cost shifting" on the requesting party. Furthermore, the Notice states "that the case law developed under Federal Rule of Civil Procedure 26(b)(2)(B) would provide guidance for application of proposed subsection [210.27] (c)."
The proposed rules would also amend ITC discovery rules by adding section 210.27(d) General Limitations on Discovery. Section (d) is similar to FRCP 26(b)(2)(C), the so-called "proportionality" provision. The section (d)(1) and (d)(2) language almost identically tracks FRCP 26(b)(2)(C)(i) and (C)(ii), which empower the tribunal to limit discovery that is, among other things, unreasonable, cumulative, or duplicative, or if the requesting party had ample opportunity to obtain the requested information.
210.27(c)(4) departs from FRCP 26(b)(2)(C)(iii) in some material respects. Section (c)(4) provides that the ALJ must limit discovery if the ALJ determines that "the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the investigation, the importance of the discovery in resolving the issues to be decided by the Commission, and the public interest."
"The public interest" provision has no corresponding analog in the FRCP and has no explanation in the Notice. Without clarification, this provision could potentially inject some uncertainty into the rule because the ALJ typically does not have the authority to take public interest evidence unless specifically authorized by the Commission. See 19 C.F.R. § 210.50(b)(1). The ITC may decide to address this issue in the final rule.
FRCP 26(b)(2)(C)(iii) provides that the court must limit discovery if the court determines that the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues. Proposed section 210.27(c)(4) does not include the FRCP provision: "the amount in controversy, the parties' resources, the importance of the issues."
While the Notice states expressly that case law related to FRCP 26(b)(2)(B) would provide guidance for proposed section 210.27(c), the notice does not say that the case law developed under FRCP 26(b)(2)(B) would provide guidance to subsection 210.27(d). It is not clear whether this omission was intentional or not. This uncertainty may potentially be addressed in the final rule.
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