Washington Lawyer

Important Amendments to the Federal Rules of Civil Procedure

From Washington Lawyer, October 2015

By Ted Hirt

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Litigators who practice in the federal district courts soon will encounter very significant amendments to the Federal Rules of Civil Procedure. These amendments, which likely will become effective on December 1, 2015, will change many aspects of pretrial and discovery practice in the district courts.[1] Now is the time for attorneys to become familiar with the amendments and be prepared to apply them effectively in their civil cases when the changes go into effect.[2]

What are the objectives of these amendments? Briefly stated, the federal judiciary hopes that the amendments will fulfill the goals of Civil Rule 1—the "just, speedy, and inexpensive" resolution of district court cases. Several case deadlines are, therefore, accelerated.

The amendments also reflect a renewed emphasis on the commitment of the parties and the courts to undertake and oversee, respectively, discovery that is "proportional" to the needs of a particular case. The challenge for litigants will be how to obtain the discovery they need in their cases in a manner that is less burdensome and more cost-effective.

The amendments also reflect the understanding that contemporary civil litigation may involve so-called "electronic discovery"—parties are increasingly demanding electronically stored information (ESI) as part of their discovery. Amended Rule 37(e) is designed to address the perceived problem of overpreservation of ESI by parties and prospective parties to litigation, and the fear of the imposition of serious sanctions against such parties due to the loss or deletion of ESI that is potentially relevant to the civil litigation.

This article describes the principal features of the amendments, including some of the background to their adoption. Throughout the article, I have included quotations from the rule text, as well as quotations from and references to the Notes that accompany each amendment. Practitioners should consult the Notes as they explain the meaning and application of the Rules. At the conclusion of the article, I have provided several recommendations for "best practices" that attorneys may consider when they apply the Rules amendments in their cases.

Background to the Development of the Amendments

The amendments are the results of a multiyear review by the Judicial Conference Advisory Committee on Civil Rules. In May 2010, the committee convened an important conference at Duke University School of Law, attended by over 200 judges, practitioners, and academics. The committee concluded that there was "nearly unanimous agreement that the disposition of civil actions could be improved, reducing cost and delay, by advancing cooperation among the parties, proportionality in the use of available procedures," including discovery, and "early and active judicial case management."[3] The committee also concluded that although there was "widespread agreement" that the present Civil Rules structure is "basically sound," the committee intended to pursue "careful changes that will advance the goals of cooperation, proportionality, and active judicial case management."[4]

The proposed amendments, published in August 2013, elicited over 2,300 comments. The committee also held three public hearings on the proposed rules changes. Based on the comments and testimony, the committee proposed extensive amendments to the case management and discovery rules.

The committee concluded, inter alia, that there needs to be "greater emphasis" on proportionality in discovery in district court cases.[5] The committee found "widespread support" at the Duke conference "for the proposition that discovery should be limited to what is proportional to the needs of the case."[6] The committee also determined that it should proceed with proposed amendments that would advance the objective of "early and active case management," and, in Rule 1, to emphasize the cooperation of the court and the parties in the conduct of litigation.[7]

Finally, the committee decided to amend Rule 37(e), which addresses the loss of ESI requested in discovery, by crafting a rule that resolves an inconsistency in circuit case law concerning the culpable loss of ESI, and that may reduce the pressures on many potential litigants to overpreserve ESI.[8]

Rule 1: Enhancing Cooperation

Rule 1 is amended to state that the Civil Rules are to be "construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding." (Emphasis added as to new text). The committee Note explains that, "just as the court should construe and administer these rules to secure the just, speedy, and inexpensive determination of every action, so the parties share the responsibility to employ the rules in the same way."

While the committee expressed its understanding that today most lawyers and parties cooperate in litigation, "discussions of ways to improve the administration of civil justice regularly include pleas to discourage over-use, misuse, and abuse of procedural tools that increase cost and result in delay." The committee added that "[e]ffective advocacy is consistent with—and indeed depends upon—cooperative and proportional use of procedure."

Finally, the committee emphasized that the amendment "does not create a new or independent source of sanctions," and "[n]either does it abridge the scope of any other of these rules."

Accelerated Case Deadlines and Active Case Management

An important objective of the amendments is to reduce the cost and delay that can occur at the beginning of the litigation. Recognizing the adage that "time is money," the amendments shorten several crucial deadlines in the early phase of a case.

First, the plaintiff's deadline to serve the complaint is accelerated. Rule 4(m) currently provides that if a defendant is not served within 120 days after the complaint is filed, the court "must dismiss the action without prejudice against that defendant," or order that service is to be made within a prescribed period.

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Under the amended rule, however, the deadline to effect service will be reduced by 30 days—service must be accomplished within 90 days after the filing of the complaint. The Note recognizes that the new "presumptive time" for service "will increase the frequency of occasions" in which the time limit will be extended for "good cause." The Note explains that additional time may be needed, for example, "when a request to waive service fails," a defendant is "difficult to serve," or the United States Marshals Service is to make service in an in forma pauperis action.

Second, the deadline for the district court's issuance of its Rule 16(b)(2) scheduling order is accelerated by 30 days. Under the current rule, the district court must enter that order "within the earlier of 120 days after any defendant has been served with the complaint or 90 days after any defendant has appeared." The amendment will reduce those time periods to 90 days and 60 days, respectively. The 30-day acceleration is significant because, under Rule 26(f), the parties must "meet and confer" at least 21 days before a scheduling conference is to be held or a scheduling order is due. The acceleration of the deadline for the scheduling order will create an equivalent acceleration of the deadline for the parties to develop the proposed scheduling order and also to provide their initial disclosures under Rule 26(a)(1)(C).

Practitioners will want to keep in mind that this acceleration may not occur in every case. A judge may issue the scheduling order at a different time if the judge "finds good cause for delay." The committee recognized that there may be situations in which the parties "cannot prepare adequately for a meaningful Rule 26(f) conference." More time may be needed in cases involving "complex issues, multiple parties, and large organizations, public or private."

Next, Rule 16(b)(1)(B) eliminates language that authorizes the holding of a scheduling conference "by telephone, mail, or other means." The committee wanted to encourage in-person conferences so that the court and counsel for the parties can actively engage in their case management discussions.

Rule 16(b)(3)(B) and Rule 26(f)(3)(C) and (D) are amended to identify three important topics that are to be addressed by the parties and the court as part of their case management: (1) the preservation of ESI (a highly important issue given today's world of electronic discovery);(2) agreements reached under Federal Rule of Evidence 502 as to the non-waiver of specific privileges;and (3) the possibility of the parties agreeing that there will be pre-motion conferences before the filing of motions to resolve discovery disputes under, for example,Rules 26(c) and 37.

Many counsel already discuss ESI preservation and the suitability of entering into court-approved agreements concerning the non-waiver of the attorney–client privilege and work product protection in conjunction with the exchange of discovery materials, but the amendment will raise the visibility of these important topics. Similarly, although judges in the District of Columbia-area federal district courts typically do not convenepre-motion conferences, the amendment is an opportunity—if practitioners conclude that the new procedure will be useful—to incorporate such conferences into individual Rule 16(b) orders.[9]

Finally, under the existing Rules there is a "moratorium" on the service of discovery at the very beginning of the case. That moratorium is reflected in Rule 26(d)(1), which states that a party may not request discovery "from any source before the parties have conferred as required by Rule 26(f)," except in proceedings exempted from initial disclosure under Rule 26(a)(1)(B), or when authorized by the Rules, by stipulation, or court order.

New Rule 26(d)(2) will abrogate in part that moratorium. Once 21 days have elapsed after service of the summons and complaint on a party, Rule 34 requests may be delivered to that party by any other party, and by that party to any plaintiff and any other party that has been served. The committee Note explains that the purpose of this amendment is to "facilitate focused discussion during the Rule 26(f) conference." Discussions at the parties' conference "may produce changes in the requests."

The Rule prescribes that the "delivery" of Rule 34 requests does not count as service. Instead, the requests are considered to be served at the first Rule 26(f) conference and, under amended Rule 34(b)(2)(A), the time to respond to the requests will begin to run from that service. The Note explains that the party's "advance scrutiny" of requests delivered before the Rule 26(f) conference "should not affect" a court's decision whether to allow the party additional time to respond to the requests.

An important objective of the amendments is to reduce the cost and delay that can occur at the beginning of the litigation. Recognizing the adage that "time is money," the amendments shorten several crucial deadlines in the early phase of a case.

Rule 26(b) and (c): Proportionality and Relevance

Perhaps the most significant reform to civil discovery embodied in these amendments is a renewed emphasis on "proportionality." Amended Rule 26(b)(1) will expressly place proportionality within the scope of permissible discovery—"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." (New text emphasized). This change not only will make proportionality more prominent in the Rule text, but it also will "tie" proportionality directly to relevance.

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A corollary to this amendment is the refinement and transfer of some text from Rule 26(b)(2)(C)(iii) to Rule 26(b)(1), that is, "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."

What is the rationale for this change? The Note explains that, although proportionality has been a feature of the Rules since 1983, the amendment "restores the proportionality factors to their original place in defining the scope of discovery." Moving the proportionality factors will make them more prominent, and, hopefully, will encourage the parties and the courts to take them into account in discovery. This change "reinforces" the obligation of the parties to consider these factors in making discovery requests, responses, or objections. Rule 26(g) provides that an attorney's signature on a discovery request, response, or objection is a certification that the paper at issue is, inter alia, neither unreasonable nor unduly burdensome or expensive, nor interposed for any improper purpose.

Significantly, the amendment "inverts" the order of the first two proportionality factors, that is, the "amount in controversy" is now the second factor in the list, placed after "the importance of the issues in the litigation." The committee concluded that the amount in controversy is not the foremost concern in evaluating proportionality. The parties' "relative access to relevant information" is a new proportionality factor, addressing "information asymmetry." One party, often an individual plaintiff, may have very little discoverable information, while the other party may have substantial information. The Note explains that in practice "these circumstances often mean that the burden of responding to discovery lies heavier on the party who has more information, and properly so."

The emphasis on proportionality may be particularly significant in cases that do not involve monetary relief. In public policy cases, other factors may have much more importance. The Note also explains that the court and the parties must pay close attention to the impact of discovery on the parties' resources. Discovery is not to become a war of attrition or a device to coerce a party.[10] The Civil Rules Committee also was well aware of the ubiquity of electronic discovery in today's civil litigation, which the committee identified as the result of the "information explosion" of recent decades.

The Note explains that this amendment does not place the burden of proving proportionality on the party seeking discovery, and it cautions against boilerplate objections that requested discovery is disproportionate. Instead, the parties must realistically evaluate the burden or expense of proposed discovery. The Note cites the potential availability of computer-based methods of searching ESI as an opportunity to reduce that burden or expense.

A second proposed reform of discovery is the elimination of the potential wide-ranging scope of discovery at any matter "relevant to the subject matter" of the action. Today, under current Rule 26(b)(1), parties are entitled to discovery of matters relevant to the "claims or defenses," but a court, for "good cause," can order discovery relevant to the action's subject matter. Under the amendment, discovery will be limited to the party's claims and defenses. The committee concluded that the "good cause" language is "rarely invoked" and "[p]roportional discovery relevant to any party's claim or defense suffices . . . ."

The amended rule also eliminates the statement that discovery may include "the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter." The Note explains that because the discovery of such information is "so deeply entrenched" in practice, it is no longer necessary to mention these examples in the Rule. Discovery of such information should still be permitted under the amended rule "when relevant and proportional to the needs of the case." For example, a request for ESI "may require detailed information about another party's information systems and other information resources."

Amended Rule 26(b)(1) also eliminates a familiar sentence: "Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." The Rule will state that "[i]nformation within this scope of discovery need not be admissible in evidence to be discoverable." The committee concluded that the current terminology has been used incorrectly to define the scope of discovery.

Finally, amended Rule 26(c)(1)(B) includes an explicit reference to the district court's authority to allocate the expenses of discovery. The Note observes that the court's authority to enter such orders exists today, and the courts already exercise this authority. The Note explains that "[e]xplicit recognition will forestall the temptation some parties may feel to contest this authority." The Note, however, then cautions that recognizing the existing authority "does not imply that cost-shifting should become a common practice," and that parties should "continue to assume" that the responding party ordinarily bears the costs of responding to discovery.

Perhaps the most significant reform to civil discovery embodied in these amendments is a renewed emphasis on "proportionality."

Specificity in Objections to Rule 34 Requests

The new amendments include several important modifications to the rules that prescribe how parties should respond to document requests, including for ESI, under Rule 34. First, Rule 34(b)(2)(B) will require the parties to be more specific in their responses to document requests.The party's response "must either state that inspection [of documents] and related activities will be permitted as requested or state with specificity the grounds for objecting to the request, including the reasons." The responding party may state that it will produce copies of documents or ESI instead of permitting inspection. The production "must then be completed no later than the time for inspection specified in the request or another reasonable time specified in the response." Rule 34(b)(2)(C) states in pertinent part that an objection "must state whether any responsive materials are being withheld on the basis of that objection."

The amended Rule is intended to clarify how parties express their objections to Rule 34 requests and withhold information based on the objections. The Note observes that the amendment "should end the confusion that frequently arises when a producing party states several objections and still produces information, leaving the requesting party uncertain whether any relevant and responsive information has been withheld on the basis of the objections."

The Note provides specific advice on how parties can satisfy their obligation to provide specific objections to Rule 34 requests. An objection "may state that a request is overbroad, but if the objection recognizes that some part of the request is appropriate the objection should state the scope that is not overbroad." The Note identifies examples of such a response, such as "a statement that the responding party will limit the search to documents or electronically stored information created within a given period of time prior to the events in suit, or to specified sources." The Note explains that when there is such an objection, "the statement of what has been withheld can properly identify as matters 'withheld' anything beyond the scope of the search specified in the objection."

The Note also explains that the producing party "does not need to provide a detailed description or log of all documents withheld, but does need to alert other parties to the fact that documents have been withheld and thereby facilitate an informed discussion of the objection. An objection that states the limits that have controlled the search for responsive and relevant materials qualifies as a statement that the materials have been 'withheld.'"

The amendment to Rule 34(b)(2)(B) also reflects what the committee described as the "common practice of producing copies of documents or electronically stored information rather than simply permitting inspection." The Note instructs that the response "must state that copies will be produced." The Note also states that the "production must be completed either by the time for inspection specified in the request or by another reasonable time specifically identified in the response. When it is necessary to make the production in stages the response should specify the beginning and end dates of the production."

Rule 37(e): Measures for the Loss of ESI

Under current Rule 37(e), "[a]bsent exceptional circumstances" a party is not culpable for the loss of ESI caused by the routine, good-faith operation of a computer system. The rule is being replaced because it has not adequately addressed the serious problems resulting from the "exponential growth" in ESI volume, and because circuit courts use significantly different standards for imposing sanctions on parties who fail to preserve ESI.[11] The new rule forecloses reliance on a court's inherent authority to impose sanctions, but it does not displace preservation obligations imposed by statute or regulation, or by state law tort causes of action. The amendment applies to ESI, not to physical documents or tangible objects.

Amended Rule 37(e) only applies if ESI "that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it." If the ESI was lost without fault or before any duty to preserve the ESI existed, the rule will not apply. A court may impose "measures"—the term "sanctions" is no longer used—to rectify the loss only if that ESI "cannot be restored or replaced through additional discovery." If discovery succeeds, "no further measures should be taken." Discovery of ESI that the producing party otherwise would identify as not reasonably accessible because of undue burden or cost under existing Rule 26(b)(2)(B) may have to be produced.

Under Rule 37(e)(1), the court, "upon finding prejudice" to the other party, may order "measures no greater than necessary to cure the prejudice." The committee explained that these measures include precluding the party that failed to preserve ESI from presenting certain items of specific evidence, or permitting the parties to present evidence and argument to the jury regarding the loss of ESI.

Under Rule 37(e)(2), a court may apply harsher measures, but the intent of the wrongdoer is critical. The court may, "only upon finding that the party acted with the intent to deprive another party of the information's use in the litigation," take other specified steps: (1) presume that the lost information "was unfavorable to the party," (2) "instruct the jury that it may or must presume that the information was unfavorable to the party," or (3) dismiss the action or enter a default judgment. Courts should not use these measures if the lost ESI "was relatively unimportant," or if Rule 37(e)(1) measures "would be sufficient to redress the loss." The "specific intent" standard resolves an inter-circuit split on what state of mind of a party who has deleted or destroyed ESI will "trigger" measures to rectify the problem; the negligence standards used by some courts are rejected.

Preservation will be evaluated under a "reasonableness" standard. The committee acknowledged both the "ever-increasing volume" of ESI and the "multitude of devices" that generate ESI. Moreover, as is now the case under current Rule 37(e), the "routine, good-faith operation of an electronic information system would be a relevant factor" for the court to consider in evaluating whether a party failed to take reasonable steps to preserve the lost information.And, addressing the question of whether some parties may be more able to preserve ESI than other parties, the committee observed that a court "should be sensitive to the party's sophistication with regard to litigation in evaluating preservation efforts;some litigants, particularly individual litigants, may be less familiar with preservation obligations than others who have considerable experience in litigation." In addition, courts "should be sensitive to party resources;aggressive preservation efforts can be extremely costly, and parties (including governmental parties) may have limited staff and resources to devote to those efforts."

Other Amendments

Two other amendments deserve brief mention. Rule 55(c) is amended to clarify that a court is to apply Rule 60(b), which permits the setting aside of final judgments, in the context of only final default judgments. Rule 84, which prescribes the forms used in district courts, has been essentially abrogated, except for the forms that apply to the waiver of service of process under Rule 4(d)(1). Practitioners can consult the Web site of the Administrative Office of the United States Courts, among other sources, for forms to use in their district court cases.

Advice for Practitioners

We can anticipate that the new amendments will result in substantial changes to district court practice. First, attorneys will need to adjust to the accelerated case scheduling. This will mean more intensive attorney preparation and earlier client consultation. If more time is needed, the party will have to convince the judge that there is "good cause" for delay of the scheduling conference.

Attorneys also will need to devote particular attention to the important refinements in relevance and proportionality as they craft and respond to discovery. Attorneys also should become more proactive in advocating, and substantiating, why discovery is or is not "proportional" in their cases. The challenge will be how to articulate the right amount of discovery for the case. In responding to document requests, attorneys will need to be clear as to the scope and timing of their planned productions. They must avoid boilerplate objections.

The modification in the "intent" standards for when measures can be imposed against parties for their wrongful destruction of ESI may provide considerable relief to parties who have been forced to overpreserve their sources of electronic data. Parties, whether individuals, corporations, or other entities (public or private), will have the challenge of deciding what preservation may be proportional to reasonably anticipated litigation. Hopefully, courts will uphold preservation decisions that are reasonable. But I recommend that organizations do not relax their normal procedures or practices in the preservation of ESI that may be requested in discovery. If ESI is lost through fault, it still may be necessary to determine why that happened, so that the severe measures described in Rule 37(e)(1) or (e)(2) are not imposed. The documentation of an entity's information storage and retention systems, and how electronic discovery production is conducted, remains critically important.

The December 2015 amendments have considerable promise to effectuate Rule 1's objectives. The litigants and their counsel and the courts now have the challenge and opportunity to make the objectives a reality in federal district court litigation.

Ted Hirt is a Washington, D.C., attorney who has written on the federal civil rules, electronic discovery, and related issues. The views he expresses are entirely his own.

Notes

[1] Under the Rules Enabling Act,28 U.S.C. § 2074, the U.S. Supreme Court prescribes rules amendments to go into effect "no earlier than December 1" of the year in which the Court transmits the amendments to Congress for its review. The amendments will become effective unless Congress blocks them. The amendments as transmitted by the Supreme Court to Congress on April 29, 2015, can be accessed through the Court's Web site at www.supremecourt.gov/orders/courtorders/frcv15(update)_1823.pdf.

[2] The Supreme Court's April 29, 2015, order states that the amendments "shall govern in all proceedings in civil cases thereafter commenced and, insofar as just and practicable, all proceedings then pending."

[3] See Memorandum from the Honorable David G. Campbell, Chair, Advisory Committee on Civil Rules, to the Honorable Jeffrey S. Sutton, Chair, Committee on Rules of Practice and Procedure, May 2, 2014, at 1, 3 (hereinafter "May 2, 2014 Memo"), available at www.uscourts.gov/rules-policies/archives/agenda-books/committee-rules-practice-and-procedure-may-2014. The committee also submitted a revised explanation of the amendments in a second transmittal to the Standing Committee. See Memorandum from the Honorable David G. Campbell, Chair, Advisory Committee on Civil Rules, to the Honorable Jeffrey S. Sutton, Chair, Committee on Rules of Practice and Procedure, June 14, 2014, at 2–18, available at www.uscourts.gov/rules-policies/pending-rules-amendments.

[4] May 2, 2014, Memo at 3–4.

[5] Id. at 7.

[6] Id. at 5,7

[7] Id. at 3–4, 13–14, 15–16.

[8] Id. at 35.

[9] Civil Rules 26(c)(1) and 37(a)(1) already require a party to certify that it has consulted the other party as a condition of filing a motion for a protective order or a motion to compel. The local rules for the District of Maryland and the Eastern District of Virginia require counsel to confer, and to certify that they conferred, about discovery disputes, seeD. Md.Local Rule 104.7;E.D. Va. Local Civil Rule 37(E), and Principles 12 and 15 of the D.C. Bar's Voluntary Standards for Civility in Professional Conduct (which are Appendix B to the District of Columbia's local rules) encourage that consultation. The rules in the three jurisdictions do not mandate or address pre-motion conferences. The District of Maryland rules include provisions for the non-waiver of privileged information provided in discovery. See D. Md. Local Rule 104.14 and Appendix D.

[10] "Proportionality" will apply not only to document or ESI requests, but also to requests to exceed the number or duration of oral depositions, see Rule 30(a)(2) and (d)(1), to exceed the number of depositions on written questions, see Rule 31(a)(2), and to exceed the number of interrogatories under Rule 33(a)(1).

[11] Contrast the Second Circuit's negligence standard, see Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99, 108 (2d Cir. 2002), with the Fifth Circuit's bad faith standard, see Condrey v. Suntrust Bank of Georgia,431 F.3d 191, 203 (5th Cir. 2005). The District of Columbia Circuit also appears to apply a negligence standard. See Grosdidier v. Broadcasting Bd. of Governors, Chairman, 709 F.3d 19, 108 (D.C. Cir. 2013), cert. denied sub nom. Grosdidier v. Isaacson, 134 S.Ct. 899 (2014).