If you have been following my previous posts regarding possible amendments to the Federal Rules of Civil Procedure (Rules), then you know I promised a special interview with former United States Magistrate Judge Ron Hedges. The timing of the discussion is perfect considering that a “mini-conference” is being hosted by a Federal Rules Discovery Subcommittee today (September 9th) in Dallas, TX. The debate will focus on whether or not the Rules should be amended to address evidence preservation and sanctions. I am attending the mini-conference and will summarize my observations as part of my next post. In the meantime, please enjoy reading the dialogue below for a glimpse into Judge Hedges’ perspective regarding possible Rule amendments.
Nelson: You were recently quoted in a Law Technology News (LTN) article written by Evan Koblentz as saying, “I don’t see a need to amend the rules” because these rules haven’t been around long enough to see what happens. Isn’t almost five years long enough?
Judge Hedges: No. For the simple reason that both attorneys and judges continue to need education on the 2006 amendments and, more particularly, they need to understand the technologies that create and store electronic information. The amendments establish a framework within which attorneys and judges make daily decisions on discovery. I have not seen any objective evidence that the framework is somehow failing and needs further amendment.
Nelson: You also said the “big problem” is that people don’t talk enough. What did you mean? Hasn’t the Sedona Cooperation Proclamation made a difference?
Judge Hedges: The centerpiece of the 2006 amendments (at least in my view) is Rule 26(f). I think it is fair to say that the legal community’s response to 26(f) has been, to say the least, varied. Civil actions with large volumes of ESI that may be discoverable under Rule 26(b)(1) cry out for extensive 26(f) meet-and-confer discussions that may take a number of meetings and require the presence of party representatives from, for example, IT. There is an element of trust required between adversary counsel (with the concurrence of the parties they represent) that may be difficult to establish – but some cooperation is necessary to make 26(f) work. Overlay that reality with our adversary system and the duty of attorneys to zealously advocate on behalf of their clients and you can understand why cooperation isn’t always a top priority for some attorneys.
However, “transparency” in discussing ESI is essential, along with advocacy and the need to maintain appropriate confidentiality. That’s where the Sedona Conference Proclamation can make a big difference. Has the Proclamation done that? It’s too early to reach a conclusion on that question, but the Proclamation is often cited and, as education progresses in eDiscovery, I am confident that the Proclamation will be recognized as a means to realize the just, speedy, and inexpensive resolution of litigation, as articulated under Rule 1.
Nelson: You also mentioned that the Federal Rules Advisory Committee might be running afoul of the Rules Enabling Act. Can you explain?
Judge Hedges: There is a distinction between “procedural” and “substantive” rules. The Rules Enabling Act governs the adoption of the former. Rule 502 of the Federal Rules of Evidence is an example of a substantive rule that was proposed by the Judicial Conference. However, since Rule 502 is a rule dealing with substantive privilege and waiver issues, it had to be enacted into law through an Act of Congress. I am concerned that proposals to further amend the Federal Rules of Civil Procedure may cross the line from procedural to substantive. I am not prepared to suggest at this time, however, that anything I have seen has crossed the line. Stay tuned.
Nelson: If you had to select one of the three options currently being considered (see page 264), which option would you select and why?
Judge Hedges: To start, I would not choose option 1, which presumes that the Rules can reach pre-litigation conduct consistent with the Rules Enabling Act. My concern here is also that, in the area of electronic information, a too-specific rule risks “overnight” obsolescence, just as the Electronic Communications Privacy Act, enacted in 1986, is considered by a number of commentators to be, at best, obsolescent. Note also that I did not use the word “stored” when I mentioned electronic information, as courts have already required that so-called ephemeral information be preserved. Nor would I choose option 2. Absent seeing more than the brief description of the category on page 264, it seems to me that option 2 is likely to do nothing more than be a restatement of the existing law on when the duty to preserve is “triggered.”
So, by default, I am forced to choose option 3. I presume a rule would say something like, “sanctions may not be imposed on a party for loss of ESI (or “EI”) if that party acted reasonably in making preservation decisions.” There are a number of problems here. First, in a jurisdiction which allows the imposition of at least some sanction for negligence, all the rule would likely do is be interpreted to foreclose “serious” sanctions. Isn’t that correct? Or is the rule intended to supersede existing variances in the law of sanctions? At that point, does the rule become “substantive”? Second, how will “reasonableness” be defined? Reasonableness supposes the existence of a duty – in this case, a duty to preserve. For example, is there a duty to preserve ephemeral data that a party knows is relevant? We come back full circle to where we began.
Remember, Rule 37(f) (now 37(e)) was intended to provide some level of protection against the imposition of sanctions, just as the categories are intended to. Right? And five years later 37(e) remains defined variously to be a “safe harbor” or a “lighthouse” by some lawyers such as Jonathan Redgrave or an “uncharted minefield” by others like me.
Nelson: What about heightened pleading standards after the Iqbal and Twombly decisions? Do these decisions have any relevance to electronic discovery and the topic at hand?
Judge Hedges: Let me begin by saying that I am no fan of Twombly or Iqbal. The decisions, however well intended, have led to undue cost and delay all too often. Not only is motion to dismiss practice costly for parties, but it imposes great burdens on the United States Courts and, as often as not, leads to at least one other round of motion practice as plaintiffs are given leave to re-plead. All the while, parties have preservation obligations to fulfill and, in the hope of saving expense, discovery is often stayed until a motion is “finally” decided. I would like to see objective evidence of the delay and cost of this motion practice (and I expect that the Administrative Office of the United States has statistical evidence already). I would also like to see objective evidence from defendants distinguishing between the cost of motion practice and later discovery costs.
Putting all that aside, and if I had to accept one option, I would choose to allow some discovery that is integrated to the motion practice. First, even without the filing of a responsive pleading, there should be a 26(f) meet-and-confer to discuss, if nothing else, the nature and scope of preservation and the possibility of securing a Rule 502(d) order. Second, while I have serious concerns about “pre-answer discovery” for a number of reasons, I would have the parties make 26(a)(1) disclosures while a motion to dismiss is pending or leave to re-plead has been granted in order to address the likely “asymmetry of information” between a plaintiff and a moving defendant. Once the disclosures are made, I would allow the plaintiff to secure some information identified in the disclosures to allow re-pleading and perhaps obviate the need for continued motion practice.
All of this would, of course, require active judicial management. And one would hope that Congress, which seems so interested in conserving resources, would recognize the vital role of the United States Courts in securing justice for everyone and give adequate funding to the Courts.