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DRI Continues its Advocacy for Improvements to the Civil Justice System
June 13, 2014
Times change and so must our rules of civil procedure.

DRI is a leader in the process of public and written comment to the proposed amendments to the Federal Rules of Civil Procedure.  The federal Advisory Committee on Civil Rules and its subcommittees have been working tirelessly to update the Federal Rules of Civil Procedure.  Last fall, proposed amendments were published and the Advisory Committee solicited written comments.  Hundreds of written comments were submitted to the Advisory Committee, including comments by DRI and by individual DRI members.  Additionally, the Advisory Committee held three public hearings in order to help it assess the impact that the proposed rules will have on civil cases.  I was privileged to participate in one of the public hearings  

At the conclusion of the written public comment period and the public hearings, the Advisory Committee deliberated further and, in mid-April, made several additional changes to the proposed amendments based upon comments it had received during the comment period. Two of the most significant proposed changes are in Rules 26(b) and 37(e).  The new proposed amendment to Rule 26(b) is as follows:

Rule 26(b)  Discovery Scope and Limits.

(1)  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. 

Note that "...appears reasonably calculated to lead to the discovery of admissible evidence" has been deleted.  The committee's comment states that this phrase has been used by some, incorrectly, to define the scope of discovery.  The new rule restores the proportionality factors to their original place in the rule in defining the scope of discovery. 

The Advisory Committee also heard and read hundreds of comments relating to Rule 37(e) and electronically stored information (“ESI”).  The Committee recognizes that there is a significant split in the circuits relating to adverse inference instructions which, in some circuits, are imposed when there has been a negligent or grossly negligent loss of ESI, but in other circuits adverse inference instructions are given only upon a showing of bad faith conduct.  The Committee heard many comments and was convinced that the disparate treatment of parties relating to loss of ESI causes over-preservation of ESI. 

The new proposed rule makes it clear that the court may order measures not greater than necessary to cure the loss of ESI.  Upon finding of prejudice to another party caused by the loss of ESI, the court may order measures no greater than are necessary to cure the prejudice.  And, only upon finding that the party acted with the intent to deprive another party of the information's use in the litigation, may the court presume that the lost information was unfavorable to the party, instruct the jury that it may or must presume the information was unfavorable to the party, or dismiss the action or enter a default judgment. 

In applying Rule 37(e), the court should consider all relevant factors, including the extent to which the party was on notice that litigation was likely and that the information would be relevant; the reasonableness of the party's efforts to preserve the information; the proportionality of the preservation efforts to any anticipated or ongoing litigation; and whether, after commencement of the action, the party timely sought the court's guidance on any unresolved disputes about preserving discoverable information. 

The proposed comment states that loss of information through the routine, good-faith operation of an electronic information system will not support any curative measures under the new rule if it occurs before a duty to preserve arises.  If the loss occurs after the duty to preserve arises, the court can address the loss with the curative measures set forth in the new rule.  Further, the comment makes clear that severe measures such as adverse-inference instructions, dismissal, or default judgment are available only if the court finds the information was lost with the intent to deprive another party of the information's use in the action. 

Clearly, the proposed amendments to Rule 37(e) will settle the split in the circuits and help give our clients better direction as they preserve ESI.

The next step in the rules amendment process is for the Advisory Committee on Civil Rules to submit proposed amendments to the Committee on Rules of Practice and Procedure ("Standing Committee").  If the Standing Committee approves the amendments, the proposed amendments go to the Judicial Conference, and, if approved, then the United State Supreme Court, and, if approved, then to Congress.  If Congress does not act, the new rules would go into effect in December 2015. 

These amendments will improve the administration of justice will give more certainty to litigants, and, hopefully, will make litigation less expensive.  DRI, its officers and members are proud to continue to advocate for improvements in our civil justice system.

Neva G. Lusk