Cooperation and proportionality have been explicitly or implicitly required by the Federal Rules of Civil Procedure (FRCP) for decades yet have been conspicuously missing from practice. Despite the fact that discovery was intended to be managed by the parties, judicial, instead of party, management of discovery, has become the norm and voluntary party cooperation often the exception. A variety of factors, including decreased corporate legal budgets, an overburdened Judiciary and federal budget sequestration, are turning the tide toward an increased focus on ways to encourage proportionality and force litigants to cooperate in the implementation and execution of discovery in federal civil litigation. For example, courts have increased their enforcement of existing rules and enacted local rules designed to encourage cooperation and proportionality. Academic publications and seminars, likewise, offer guidance on discovery practices designed to decrease the cost of litigation. More recently, Congress has promulgated proposed amendments to the FRCP that would put further limits on discovery. The nirvana state where a fair result can be litigated at a fair price may remain elusive, but in some courts, such as the Northern District of California, dreams are turning into action.
For nearly 75 years, the guiding purpose of the FRCP as stated in Rule 1 has been “that they should be construed to secure the just, speedy, and inexpensive determination of every action and proceeding.” While applicable to civil procedure generally, and not focused specifically on electronic discovery, Rule 1 was intended to encourage open discovery between the parties to prevent surprise at trial. Fast forward from 1938 to 1993, the words “and administered” were added to the second sentence of Rule 1 (“that they should be construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding.”) in recognition of the court’s and attorneys’, as officers of the court, duty to ensure litigation is resolved fairly without undue cost or delay.
Despite these clarifications to existing rules, practitioners continued to test the boundaries of these procedural rules in order to zealously (and appropriately) advocate for their clients. As a result, discovery as a litigation tactic became, and often still is, the hallmark of federal civil litigation. Continued unabated and exacerbated by the exponential growth in the volume of discoverable electronically stored information (ESI), the cost of discovery in federal litigation, in many cases, outpaces the total value of a particular case. This phenomenon limits access to the federal courts for many, if not most, civil litigants and creates a Hobbesian Choice for many litigants when deciding whether to settle a case or fight it on the merits.
Seeking to achieve the same end, and offer guidance to courts and practitioners, the Sedona Conference published its Cooperation Proclamation in July 2008. The Cooperation Proclamation emphasized that cooperation is consistent with zealous advocacy and implored the bar to channel their advocacy skills to litigating on the merits (instead of dilatory discovery tactics) by engaging in cooperative discovery to achieve the goals of Rule 1.
The “inexpensive” mandate of Rule 1 turns on proportionality. Proportionality is expressly required by Rule 26, the rule governing a party’s duty to disclose. As a general matter, Rule 26(b)(1) entitles parties to fairly broad discovery – “parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense…. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.”
However, it has not been without limits. Starting in 1970, courts were empowered to limit the scope of discovery. Rule 26(b)(1) was modified to include the restriction that “All discovery is subject to the limitations imposed by Rule 26(b)(2)(C).” Rule 26(b)(2)(C) in turn provides that “A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost.” A requesting party, on good cause shown, may still receive court ordered discovery from ESI sources proved inaccessible by a producing party on a motion to compel or protective order. However, the proportionality limitations of Rule 26(b)(2)(C) still apply and “[t]he court may specify conditions for the discovery”.
Despite the new limits implemented in 1970, the costs and burdens of discovery continued. Yet, the 1980 Amendments to Rule 26 were not as sweeping because the Advisory Committee believed that discovery abuses could be managed on a case-by-case basis. This belief, however, was short-lived. In 1983, in light of the dramatic increase in the overuse of discovery and evasive responses to reasonable requests, contrary to the spirit of the rules as set forth in Rule1, Rule 26 was amended to mandate courts to, sua sponte or on motion, limit “the frequency or extent of” otherwise allowable discovery in certain instances. More specifically, as a result of these amendments, courts were now required to conduct a proportionality analysis and consider if (1) the requested discovery is duplicative or obtainable from a source that is cheaper and less burdensome; (2) the requesting party had enough time to obtain the requested discovery; or (3) the burden or expense of the requested discovery exceeds its benefit in light of case needs, amount at stake, party resources, importance of issues, and importance of the discovery to those issues.
Like it did for cooperation, the Sedona Conference also created a roadmap for managing the scope of discovery. The Sedona Conference called this roadmap the Principles of Proportionality. Just as the Cooperation Proclamation reminded the bar of the goals of Rule 1, the Principles of Proportionality similarly reiterated the three factors that are considered in a proportionality analysis under Rule 26(b)(2)(C). Additionally, it outlined approaches for balancing the burdens and benefits of particular discovery, such as sampling to assess the value of a data set or applying technology to reduce potentially discoverable data volumes. The Sedona Conference understood though that implicit in this proportionality analysis is reasonableness, not perfection.
In the hopes that parties may have their day in court, the current proposed amendments to the FRCP aim to reduce the scope of discovery, the most costly and time-consuming component of litigation, and explicitly require party cooperation and proportionality as a means of doing so. Most notably, the proportionality factors in Rule 26(b)(2)(C) would be moved up into the Rule 26(b)(1) to require proportionality without court intervention, and the overall scope of discovery would be limited to that relevant to the parties’ claims or defenses, with courts no longer able to extend it to the subject matter of action. Additionally, proposed Rule 1 further refines the second sentence with the phrase “and employed by the court and the parties” to emphasize the obligation of parties, not simply the courts, to further its goals (“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.”). The Committee Note explains that “Effective advocacy is consistent with — and indeed depends upon — cooperative and proportional use of procedure.” These further proposed amendments to the discovery rules, however, would not take effect until December, 2015 at the earliest.
Although the amendments if enacted would certainly have an impact on cooperation and proportionality, certain judicial districts have already implemented their own rules of cooperation and proportionality. Effective Nov. 27, 2012, the Northern District of California issued a revised standing order detailing the information required in all joint case management statements. The revised Order expressly requires cooperation by the parties and proportionate discovery and incorporates ESI Guidelines and an ESI Checklist to illustrate what is expected and how to comply. These new rules also included a Model Stipulated Order for the discovery of ESI in a federal civil case.
Under the revised standing order for all judges of the Northern District of California, parties must now certify in the Joint Case Management Statement that they have reviewed the Northern District’s ESI Guidelines and discussed ESI-related discovery issues as part of the Rule 26(f) conference. To facilitate the meet-and-confer process, the Northern District strongly encourages parties to use the ESI checklist, which covers such issues as document preservation, search parameters and format of production. Parties are further encouraged, should they decide to enter into a stipulated e-discovery order, to use the Model Stipulated Order also provided by the court.
Some important highlights from the newly issued guidelines in the Northern District of California:
- Parties are not required to use preservation letters. But if a party does, the Court discourages the use of overbroad preservation letters. Instead, the letter should provide as much detail as possible;
- Parties should consider identifying data from sources that possibly contain relevant information; but that the parties nevertheless decide, under principles of proportionality, should not be preserved for collection, review and production in the case;
- Phasing of discovery is encouraged so that discovery occurs first from sources most likely to contain relevant and discoverable information, and is postponed or avoided altogether from sources less likely to contain relevant and discoverable information;
- E-Discovery Liaison – Each party SHALL designate an e-discovery liaison who will be knowledgeable about and responsible for discussing their respective ESI.
- Judicial Expectations of Counsel – it is expected that counsel will be familiar with all ESI provisions contained in FRCP 26, 33, 34, 37, 45 and FRE 502; advisory committee report on the 2006 amendments to the federal rules; and these ESI Guidelines, the ESI checklist and ESI model protocol.
Parties who meaningfully incorporate these new rules can use the opportunity to focus discovery on what is needed for a particular case. When faced with these new limits on discovery, it is critical to know that what you are producing and receiving supports your claims and defenses, and is what you’ll need at trial. Considering these needs early on will help parties craft a proportionate discovery plan to fit the needs of a particular case. One way this is achieved is through the use of a jointly submitted document production or ESI protocol, like the Northern District’s Model Stipulated Order. By specifying in a protocol, for example, the collection and production procedures for particular data sources (e.g., source code or email), or for the timing and sequencing of discovery (e.g., prioritizing production of non-custodial sources before custodial sources), the parties clearly define their mutual discovery obligations. Such protocols are cooperation and proportionality in action that frame the issues upfront and minimize surprises and accusations later on in discovery. This is particularly helpful in courts, like the Northern District of California, which are increasingly holding parties accountable for amicably resolving discovery disputes before entertaining motion practice because the framework is already established.
As a result of these revised rules and mandates, we are beginning to see cooperation among litigants more regularly in practice. In addition to the efforts of groups such as the Sedona Conference, this movement toward cooperation and proportionality in federal civil litigation is due in large part to increased judicial enforcement of existing rules, promulgation of local rules or standing orders, as well as corporate clients insisting on decreased legal budgets. Of course, change takes time and while the federal bar is gradually moving away from a “battle at all cost and on every front” mentality, there is still a “you first” hesitation at play in implementing cooperation and proportionality in practice. The FRCP has always required parties to work towards a fair, quick and cheap resolution on the merits. With these revised rules, protocols, proclamations and principles, we have the means for making many of the necessary changes – but of course, that means first changing behavior.