September 30, 2013
Committee on Rules of Practice and Procedure
Thurgood Marshall Building
Administrative Office of the United States Courts
One Columbus Circle, NE
Washington, DC 20544
Re: Proposed Amendments to Rule 26
To the Members of the Committee:
I am the Managing Partner of Litigation at Herman Herman Katz in New Orleans, Louisiana, where I teach Complex Litigation as an adjunct professor at Tulane Law School and the Advanced Torts Seminar on Class Actions at Loyola University School of Law. I am the author of America and the Law: Challenges for the 21st Century (Austin & Winfield 1998), and have frequently lectured and published on complex litigation, discovery, e-discovery, spoliation, ethics and professionalism, trial advocacy, consumer fraud, insurance, class actions, product liability, tobacco litigation, and HMO litigation. I currently serve as the Lawyer Chair for one of the Louisiana Attorney Disciplinary Board Hearing Committees, am President-Elect of the Louisiana Association for Justice, a past Chair of the AAJ State Delegates, a past member of the Southeast Louisiana Legal Services Board, and a past President of the Civil Justice Foundation.
While I have a fairly significant amount of experience representing corporate defendants, I submit these comments principally on behalf of individuals and families who bring civil actions for damages. Having participated in In re: Vioxx, MDL No. 1657, and In re: Chinese Drywall, MDL No. 2047, I was appointed to the Plaintiffs’ Steering Committee in In re: Express Scripts, MDL No. 1627, and In re: Cox Enterprises Set-Top Box, MDL No. 2048, and currently serve as one of two Co-Liaison and Co-Lead Class Counsel for the Plaintiffs in In re: Deepwater Horizon Litigation, MDL No. 2179.
Proposed Changes to Federal Rule of Civil Procedure 26(1)
The proposal to effectively shift the burden to the plaintiff to establish that the “likely benefit” of the proposed discovery is not outweighed by “the burden or expense” will result in one of two situations, neither of them desirable: (a) the plaintiffs will be entitled to conduct preliminary discovery regarding defendant’s claims of burden or expense, adding yet another layer of time, expense and delay; or (b) the plaintiffs will not be entitled to conduct preliminary discovery regarding defendant’s claims of burden or expense, and thereby risk dismissal of the action based solely on the untested assertions of one party regarding the existence and nature of potentially relevant evidence.
This construct ignores the extreme disparity in knowledge that generally exists between the plaintiff and the defendant at the start of the case, and effectively asks the plaintiff to use a “crystal ball” to anticipate where relevant facts might be found. To the extent that a plaintiff is required to attempt to make a showing without the opportunity to conduct at least preliminary discovery on the issue, the construct is a repudiation of the adversarial system, and could arguably raise Rules Enabling Act and Due Process concerns.
I do not in any way suggest that corporate defendants or their counsel will make intentional misrepresentations to the plaintiffs or to the Court. However, a general disincentive will dissuade a defendant and its counsel (who has a duty of loyalty and obligation to be a zealous advocate under the Professional Rules) from conducting a thorough investigation, from asking the tough questions, and from disclosing potentially relevant and material information to opposing counsel and to the Court.
Reasonable minds frequently disagree regarding the potential relevance of particular facts – as well as what may or may not constitute a “burden”.
Where one party – particularly a self-interested party – has the opportunity to unilaterally define whether or what relevant evidence exists, and the extent to which that party believes it would be burdensome to produce it, I predict that material injustice will result.
Without suggesting that opposing counsel were doing anything other than responsibly representing the interests of their clients, my experience has been that the untested contentions of defense counsel at the inception of litigation frequently prove to be incorrect and/or incomplete. I will provide a few poignant examples:
a. Schultz v. Texaco. An ERISA action was filed by former Texaco “perma-temps” alleging that they were entitled to benefits under the Texaco Employee Benefit Plans. In seeking dismissal under Rule 12, Texaco based its motion on the Summary Plan Descriptions (SPDs) that some plaintiffs had received. Based on the dates of those plan documents, and the language contained therein, the court granted Texaco’s motion. Fortunately, the court denied Texaco’s motion with respect to breach of fiduciary duty claims, which proceeded to discovery. During the discovery process, it was revealed that Texaco’s Plans had actually been materially amended during the limitations period, and plaintiffs were ultimately successful under the language of those Plans. There was no way for the plaintiffs to know about these amendments, and Texaco’s counsel did not disclose their existence in seeking dismissal from the court. Had the case been decided solely on the evidence presented by defense counsel, absent discovery, a material injustice would have occurred.
b. Marchesani v. Pellerin-Milnor. A worker was severely injured when a dye machine that he was walking past exploded, spewing hot chemicals and steam all over his body. The defective dye machine was manufactured in Louisiana; the injury occurred in Tennessee. Initially, the case was dismissed by the District Court, based on Tennessee’s 10-year statute of repose. After the dismissal was reversed by the U.S. Fifth Circuit Court of Appeals, the case proceeded to discovery, where it was learned that Pellerin-Milnor (in addition to manufacturing and selling the machine to the plaintiff’s employer) actually serviced the dye machine in question within the 10-year repose period. This couldn’t have been reasonably known to the plaintiff when he filed suit, and was not disclosed by defense counsel in seeking dismissal from the court. Had the statute of repose decision not been reversed on legal grounds, a material injustice would have occurred.
c. Byrd v. Aaron’s. Plaintiffs brought suit against Aaron’s alleging that the company obtained and maintained personal information regarding (and without the knowledge or consent of) customers who leased computers. The defendant repeatedly represented to plaintiffs’ counsel and to the court that it did not maintain control over its franchisees. In advance of a 30(b)(6) deposition, the defendant refused to produce any of the relevant e-mails requested, stating, among other things, that it was “unduly burdensome”. At the deposition, the witness could not explain what steps the company had taken to attempt to identify relevant e-mails, (even though the company had stated on its website that it was conducting a “thorough investigation” into the allegations), and continued to represent that there weren’t any easy solutions on the franschisee e-mails. However, when a second deposition of a third-party was taken, it became clear that the e-mails requested were easily searched, identified, segregated and retrieved. Thereafter, 185,000 e-mails relating to the franchisee’s activities were produced, belying both claims. Not only were these e-mails relevant to the issue of control, but they directly evidenced the exact misconduct that was central to the claims at issue in the litigation. Had plaintiffs or the court accepted the defendant’s initial representations, a material injustice would have occurred.
d. In re: Express Scripts Pharmaceutical Benefit Management Litigation. Following initial Rule 12 motion practice, the defendant refused to produce any meaningful responses to plaintiff’s discovery requests, alleging that the discovery requests were “overbroad, burdensome, and, to the extent they are relevant, any relevance the responses might hold is outweighed by the burdensomeness of responding to the requests.” Fortunately, the court overruled these objections, noting that Express Scripts had not submitted any evidence in support of “conclusory objections”. (Of course, there are many courts who accept these types of conclusory objections by counsel, without requiring evidentiary support; the Proposed Rule encourages these very types of objections at the outset of the litigation, and may or may not provide a means by which they are adequately tested.) Later in the discovery process, there were numerous objections interposed with respect to the existence, accessibility and/or alleged burdens of producing relevant electronically-stored information. However, when the deposition of defendant’s IT and other relevant personnel were taken, it became obvious that the information was readily accessible and available. (Ultimately, the Court ruled for plaintiffs under one of the several breach of fiduciary duty claims.) If the parties, and the court, had simply taken the contentions of defense counsel at face value, a material injustice would have occurred.
e. Tylenol Litigation. In several consolidated personal injury and wrongful death actions against the makers of Tylenol, the defendants produced to the plaintiffs millions of pages of documents, but did not produce – or even disclose the existence of – an 1,800 page index, explaining in minute detail how the documents were organized. The failure of the defendants to provide plaintiffs’ counsel with the index resulted in over 18 months of delay, as they tried in vein to understand and categorize the produced documents essentially in a vacuum, when a “road map” existed (and, in fact, had been previously produced to other litigants in other cases). Ultimately the plaintiffs discovered the existence of the index through their own outside investigation, brought the issue to the court, and the defendants were compelled to produce the index, and to re-process and re-produce all of their documents in a manner consistent with the organization set forth therein. This index, and the associated documents, were directly relevant and material to the substantive issues, and there was no “burden” to the defendants, who had already identified and organized these documents for their own purposes and for production in previous litigation. In addition to the waste of litigant and court time and resources in dealing with these discovery issues and delays, had the plaintiffs not discovered the existence of the index through outside investigation, a material injustice would have occurred.
Again, I do not in any way suggest that any defense counsel in any of these cases was doing anything other than zealously representing his or her client’s interests. However, these are just a few of the many examples which demonstrate what can happen when one party has the ability to unilaterally dictate the scope of information subject to review by the opposing party – and ultimately therefore the evidence to be considered by the court.
The proposed amendments, if adopted, would greatly foster the potential for additional, albeit unintentional, injustices; may tempt good lawyers to cross the line; and will aid and assist those few unscrupulous lawyers and companies who do have a win-at-all-costs mindset.
Putting aside intentional efforts by litigants to deceive opposing counsel or the courts, experience has shown that there are material, sometimes game-changing, facts and evidence, which only come to light – (or, in some cases, suspicions which can only be confirmed) – through an adversarial discovery process.
Many of these facts are not known, and cannot reasonably be foreseen, by the plaintiff, (and in many cases not even by the defendant or its counsel), when the litigation begins. An honest litigant with an ethical and professional attorney acting in good faith is still not generally going to look for, identify, or voluntarily disclose the same facts and evidence that the opposing counsel would seize upon, if given the opportunity.
If that opportunity is predicated upon yet an additional layer of discovery, it will only increase the burden on the litigants and the courts. If, on the other hand, that opportunity can be preempted by the unilateral assertions of one party, material injustice will result.
I appreciate the Committee’s time and consideration.
Stephen J. Herman
[NOTE – The full version of the actual letter available in PDF (see above) includes footnotes with additional citations, quotes and other observations or references.]