With the conclusion of the Federal Rules Advisory Committee’s public comment period last month, the first leg of what The Legal Pulse has described as the long and winding road to reform of the federal rules for discovery is now over. We have at last reached the “end of the beginning,” to borrow Churchill’s phrase.
Comments contributed by the business community conveyed the consistent message that the current rules encourage over-preserving documents, a practice that ill-serves the interests of justice. The committee record is replete with anecdotes demonstrating this point, but it had lacked aggregate data until recently. Enter a Preservation Costs Survey conducted by Professor William Hubbard (my former contemporary at the University of Chicago Law School who has returned to teach there now), which thoroughly documents systematic over-preservation of electronic materials and its profound costs. A summary of Professor Hubbard’s findings is available here.
Business Defendants’ Stories. In its comment to the Advisory Committee, 307,000-employee General Electric noted that in order to preserve information contained in emails alone, it is “faced with a universe of approximately 4,770 terabytes” of data. (Just 10 terabytes, by comparison, is roughly enough storage for the Library of Congress’s entire book collection.) The comment cited one example from 2011 in an instance where litigation had not yet been filed. GE incurred “fees of $5.4 million to collect and preserve 3.8 million documents totaling 16 million pages.” The company also reported it must spend over $100,000 a year to simply maintain those documents.
Pfizer explained in its comment that it currently has over 300 active legal holds in place impacting over 80,000 employees. It preserves 5 billion emails, and expects that amount to grow by 1 billion per year. Allstate reported that in the past 5 years it has spent over $17 million on e-discovery costs alone.
Ford provided several case studies in its comment, including one arising from a suit in Montana. There, Ford’s legal staff invested more than 800 hours and paid outside lawyers $2 million to produce nine computer hard drives containing 360 gigabytes of documents and 1,200 witness transcripts from past lawsuits. The plaintiff was unsatisfied with Ford’s production and filed a motion for sanctions, which the court denied. In the end, the plaintiff sought to introduce one document from the massive trove it requested from Ford. Continue reading
When we noted the beginning of the comment period for the Federal Rules Advisory Committee’s proposed amendments to the Federal Rules of Civil Procedure governing the discovery process with a post last August, the February 15 deadline seemed eons away.
But in mere two weeks, that stretch of the long-and-winding road that is Federal Rules reform will have come and gone. Along the way, WLF has been privileged to testify before the Advisory Committee last November and was the first public interest organization to file public comments with it last October. In order to inform the discussion and explain why the Rules reform effort is so vitally important, WLF published a “Conversations With” paper earlier this month featuring former Attorney General Dick Thornburgh, University of Denver’s (and former Colorado Supreme Court Justice) Rebecca Kourlis, and Goldberg Segalla LLP partner John Jablonski.
In a recent Corporate Counsel magazine, GlaxoSmithKline General Counsel Dan Troy authored a must-read article on e-discovery reform, “Changing Federal Rules to Reduce Discovery Costs.” WLF is honored to have Dan as a member of our Legal Policy Advisory Board. He brought the emerging effort to reform the Federal Rules to our and the public’s attention four years ago by authoring a WLF Legal Backgrounder along with GSK Assistant General Counsel John O’Tuel entitled A Toolkit For Change: How The Federal Civil Rules Advisory Committee Can Fix A Civil Justice System “In Serious Need Of Repair”. In his Corporate Counsel article, Dan focused on the extreme costs of document preservation in the digital age, and the need to not only adopt proposed amendments to Rule 37(e), but also further strengthen the standard for imposing sanctions for “spoliation.” In terms of the preservation burden, he wrote:
As just one example of the amounts of data at issue, my own company, GlaxoSmithKline, has preserved 57.6 percent of its company email, amounting to 203 terabytes of information. This would be 20 times the amount of the printed collections of the Library of Congress.
Cross-posted by Forbes.com at WLF’s contributor page
As the process of amending the Federal Rules of Civil Procedure (FRCP) enters a critical juncture, most discussion and attention (including here at The Legal Pulse) have deservedly focused on proposed changes to rules governing the pre-trial discovery process. However, one particular proposed change, overlooked for the most part, would require plaintiffs alleging patent infringement to provide more information in their initial complaints. The Advisory Committee on Civil Rules proposes to abrogate Rule 84 and along with it, the sample complaint forms to which the rule refers, including one relating to patent suits: Form 18.
What Is Form 18? This form has become well-known to patent litigants, especially accused infringers. The judiciary created Form 18 in 1938. It permits plaintiffs to provide a bare minimum of information: a jurisdictional statement, general assertion of patent ownership, a claim of infringement, and a request for relief. A complaint crafted in compliance with Form 18 would thus be in accord with another Federal Rule of Civil Procedure, Rule 8, which dictates pleading standards. In its 2007 Bell Atlantic v. Twombly and 2009 Ashcroft v. Iqbal rulings, the Supreme Court found that the then-existing interpretation of Rule 8—that some relief is “possible”—was incorrect and ruled that plaintiffs must demonstrate that its version of the events is “plausible.” The Court pointedly said that Rule 8 “demands more that an unadorned, the-defendant-unlawfully-harmed-me accusation.”
Form 18 Trumps Rule 8. Patent infringement complaints drafted in minimal conformance with Form 18 are decidedly “unadorned.” Defendants are denied fair notice of their alleged violation, a fault which is magnified exponentially in some patent litigation, such as suits brought by “patent-assertion entities.” As stated in a 2011 letter urging the Administrative Office of the U.S. Courts to address Form 18′s flaws:
[Its] limitations are immediately apparent when the template is used—as is frequently the case—to accuse an entire website or channel of commerce of infringing, in some unspecified manner, a method or software patent. Continue reading
Cross-posted at WLF’s Forbes.com contributor page
Today, the Committee on Rules of Practice & Procedure (“Standing Committee”) of the Judicial Conference of the United States formally released a package of proposed amendments to the Federal Rules of Civil Procedure (“FRCP”) governing the pre-trial discovery process. As has been the case with past efforts to alter the FRCP, the process of preparing these changes has been painstakingly slow and mostly (and perhaps consciously) removed from public view. The six-month public comment period is a critical stop on this long and winding road.
Proposed Amendments. For the second time in less than a decade, the federal judiciary and litigants are pursuing FRCP changes aimed at controlling the explosion of electronically stored documents (aka “e-discovery”). A 2009 study by the American College of Trial Lawyers and the Institute for the Advancement of the American Legal System (“ACTL/IAALS study”) made the case that discovery had become an end unto itself, rather than a means to conduct litigation. A 2010 conference at Duke University addressed this report and the larger problems with the scope, burden, and cost of discovery and document retention.
From that conference and subsequent work by an Advisory Committee on Civil Rules arose a group of changes to the FRCP, including amendments to Rules 1, 26, and 37. The proposed amendments promise progress in addressing the scope of discovery and devising a uniform approach to sanctioning parties for willful failure to preserve documents. Bloomberg BNA published a good overview of the proposal. Continue reading