Proposed amendments to the Federal Rules of Civil Procedure are set to take effect on December 1, 2015, with significant changes to the scope of discovery and the duty to preserve relevant evidence. The amendments are aimed at reducing the burden of discovery, primarily by requiring that discovery be proportional to the needs of each case and by heightening the showing required to obtain sanctions for the failure to preserve evidence.
The amendments implement proportional discovery by substantially altering Rule 26(b), which governs discovery scope and limits. The current Rule 26(b) has a broad scope and few limitations on discovery, allowing discovery of (1) “any nonprivileged matter that is relevant to any party’s claim or defense,” (2) of “any matter relevant to the subject matter involved in the action” upon a showing of good cause, and (3) of inadmissible information “if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Many courts have broadly interpreted this rule, particularly the clause allowing discovery that “appears reasonably calculated to lead to the discovery of admissible evidence,” permitting discovery into virtually anything that might lead to admissible evidence.
The proposed amendments to Rule 26(b) place new limits on the scope of discovery, restricting discovery to that which is “proportional to the needs of the case.” The proposed rule states 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 amount in controversy, the importance of the issues at stake in
the action, 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.
Preliminary Draft of Proposed Amendments to the Federal Rules of Bankruptcy and Civil Procedure (Aug. 2013), at 289 (available at http://www.uscourts.gov/rulesandpolicies/rules.aspx) (“Proposed Amendments”).
While the current version of Rule 26(b)(2)(C)(iii) addresses considerations regarding the costs and benefits of discovery, that subsection requires a court order to limit the scope of discovery. The amended rule moves these considerations into the subsection of Rule 26(b) that defines the scope of permissible discovery in the first instance. As the Committee on Rules of Practice and Procedure explains, “[a]lthough the considerations are familiar, and have measured the court’s duty to limit the frequency or extent of discovery, the change incorporates them into the scope of discovery that must be observed by the parties without court order.” Proposed Amendments at 296.
In addition to adding this language, the amended Rule 26(b) deletes two clauses. The first allowed a court, for good cause, to order “discovery of any matter relevant to the subject matter involved in the action,” regardless of whether it was relevant to a claim or defense. Fed. R. Civ. P. Rule 26(b). And the second allowed discovery of relevant but inadmissible information “if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. Id. The deletion of these two clauses does not mean that discovery along these lines will necessarily be prohibited. Instead, according to the Committee notes, such discovery is allowed as long as it is “otherwise within the scope of discovery, namely that which is relevant to a party’s claim or defense and proportional to the needs of the case.” Proposed Amendments at 297.
It is difficult to predict the precise effect these rules will have on the scope and burden of discovery, but certainly the new rules will provide support for litigants that favor more narrowly tailored discovery. The new rules also provide an incentive to parties to decide, at an early stage, which areas of discovery are most important to their claims and defenses and adjust their discovery requests accordingly. The proposed amendments do not take effect until December 2015, but in the meantime, litigants should consider placing greater emphasis on the proportionality limitations already present in Rule 26(b)(2)(C)(iii), as these arguments may have more traction given the impending rule changes.
In addition to changing the scope of discovery, the proposed rules replace completely Rule 37(e), which addresses sanctions for the failure to preserve discoverable information. The new Rule 37(e) provides clearer and more uniform guidance to courts and litigants regarding which evidence must be preserved and under what circumstances sanctions are appropriate.
The current Rule 37(e) states that “[a]bsent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.” The Committee, in its notes explaining its new version of this rule, states that it “has been repeatedly informed of growing concern about the increasing burden of preserving information for litigation, particularly with regard to electronically stored information.” Proposed Amendments at 317. Because federal courts across the country have developed divergent interpretations of the rule, “potential parties cannot determine what preservation standards” will apply and have resorted to “[e]xtremely expensive overpreservation” in order to avoid the risk of sanctions. Id.
The new Rule 37(e) addresses these concerns by providing clearer, uniform guidance about parties’ preservation obligations and the requirements for sanctions, allowing courts to order limited remedies for minor violations and reserving harsher sanctions for egregious violations. Under the proposed rule, a court may impose sanctions on a party for failing to comply with its preservation obligations only if the court finds that the party’s actions either (1) “caused substantial prejudice in the litigation and were willful or in bad faith” or (2) “irreparably deprived a party of any meaningful opportunity to present or defend against the claims in the litigation.” Id. at 314-15. The possible sanctions are set forth in current Rule 37(b)(2)(A) and include striking claims or defenses, striking pleadings, staying proceedings, dismissing the action, ordering a default judgment, or holding a party in contempt. But in the absence of willfulness, bad faith, or irreparable harm to the opposing party’s case, the court may impose milder remedies, including permitting additional discovery, ordering curative measures, or ordering the party to pay reasonable expenses and fees caused by the failure to preserve. Id. at 314-15.
In determining whether a party should have preserved the information at issue and whether the party’s conduct was willful or in bad faith, the proposed rule requires courts to consider “all relevant factors,” including (1) the extent to which the party was on notice of the litigation; (2) the reasonableness of the party’s efforts to preserve the information; (3) whether the party received a request to preserve information, whether the request was clear and reasonable, and whether the parties consulted in good faith about the scope of preservation; and (4) whether the party timely sought the court’s guidance on any disputes regarding preservation. Id. at 316-17. Although the new rule will not provide any bright lines for determining what potential litigants should and should not preserve, the Committee states that the “amended rule is designed to ensure that potential litigants who make reasonable efforts to satisfy their preservation responsibilities may do so with confidence that they will not be subjected to serious sanctions should information be lost despite those efforts.” Id. at 318.
Other proposed amendments that may lessen the burden of discovery include reducing the length of depositions from seven to six hours under Rule 30, reducing the number of interrogatories from twenty-five to fifteen under Rule 33, and limiting parties to twenty-five requests for admission under Rule 36.
The public comment period for the proposed amendments closed on February 15, 2014. The proposed amendments, however, have not yet been approved by the Committee, the Judicial Conference, or the Supreme Court of the United States, all of which must approve the proposals before they take effect.