Civil Litigation Update: Federal Rules of Civil Procedure Substantially Amended.
On December 1, 2015, several amendments to the Federal Rules of Civil Procedure took effect. These amendments, which were initially proposed during the 2010 Federal Rules Advisory Committee meeting and adopted by the Supreme Court in April 2015, generally focus on three areas: 1) early case management; 2) the scope of discovery in federal civil litigation; and 3) the consequences associated with the failure to preserve electronically stored information. A complete copy of the amendments to the Federal Rules of Civil Procedure, can be read here.
I. Amendments regarding case management
The Supreme Court adopted amendments to Rules 1, 4, and 16 for the purpose of improving cooperation and encouraging active judicial case management.
A. Rule 1
Rule 1 has been amended to state that the Federal Rules of Civil Procedure “should 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). This amendment emphasizes that both the courts and parties to litigation share in the responsibility of ensuring the just, speedy, and inexpensive resolution of federal civil litigation. As explained by the Committee Notes, Rule 1 was amended to “discourage over-use, misuse, and abuse of procedural tools that increase cost and result in delay.”
B. Rule 4
The Supreme Court also adopted two amendments to Rule 4. First, as explained in more detail below, because the amendments abrogate Rule 84 and other official forms, Rule 4(m) was modified to directly incorporate Forms 5 and 6 of the previous version of the rules into Rule 4. Second, and more importantly, Rule 4(m) has been amended to shorten the time for service of a defendant from 120 days to 90 days. As explained in the Committee Notes, “[t]his change, together with the shortened times for issuing a scheduling order set by amended Rule 16(b)(2), will reduce delay at the beginning of litigation.”
C. Rule 16
With regards to Rule 16, the Supreme Court adopted several revisions to Rule 16(b). First, for Rule 16(b)(1), the Committee struck language which permitted a scheduling conference to occur “by telephone, mail, or other means.” The Committee believed that these scheduling conferences are “more efficient if the court and parties engage in direct simultaneous communication.” As explained by the Committee Notes, under the amended version of 16(b)(1), initial scheduling conferences “may be held in person, by telephone, or by more sophisticated electronic means” such as, videoconferencing.
Second, to coincide with the revisions to Rule 4(m), 16(b)(2) has been amended to require a court, absent good cause, to issue a scheduling order no later than 90 days after any defendant is served (shortened from 120 days) or 60 days after any defendant has appeared (shortened from 90 days).
Third, Rule 16(b)(3) was revised by adding three items to the list of permitted contents of a scheduling order: 1) the preservation of electronically stored information (“ESI”); 2) whether any agreements can be reached under FRE 502 regarding the disclosure of privileged information or materials protected as work product; and 3) the scheduling order may now “direct that before moving for an order relating to discovery, the movant must request a conference with the court.”
II. Amendments regarding the permissible scope of discovery
A. Rule 26
In an effort by the Committee to address the high costs of discovery, one of the most significant amendments has come to the permissible scope of discovery under Rule 26(b)(1). As currently written, Rule 26(b)(1) states:
(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—including 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. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. All discovery is subject to the limitations imposed by Rule 26(b)(2)(C).
As amended, Rule 26(b)(1) now reads:
(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.
(emphasis added).
The amendment did several things. First, it deleted language authorizing the court to “order discovery of any relevant subject matter involved in the action.” Instead, Rule 26(b)(1) was amended to provide that information is discoverable if it is both “relevant to any party’s claim or defense” and “proportional to the needs of the case” based on numerous factors including: 1) the importance of the issues at stake; 2) the amount in controversy; 3) the parties’ relative access to relevant information; 4) the parties’ resources; 5) the importance of the discovery in resolving the issues; and 6) whether the burden or expense of the proposed discovery outweighs its likely benefits. It should be noted that each of these factors, with the exception of one, were previously located in Rule 26(b)(2)(C)(iii) as factors used by the courts to limit discovery. However, as explained by the Committee Notes, “[t]he present amendment restores the proportionality factors to their original place in defining the scope of discovery. This change reinforces that the Rule 26(g) obligation of the parties to consider these factors in making discovery requests, responses, or objections.”
The rule also adds a new proportionality factor, to wit: “the parties’ relative access to relevant information.” The factor was added by the Committee to address situations of “information asymmetry” in which a party requesting discovery may have very little discoverable information and the other party may have vast amounts, including much which can readily be retrieved. As explained by the Committee, “[i]n practice these circumstances often mean that the burden of responding to discovery lies heavier on the party who has more information, and properly so.”
In addition, the amendment deleted from Rule 26(b)(1) language providing that “relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” The Committee noted that the phrase was used incorrectly by practitioners in some instances to define the scope of discovery. With the amendment, the scope of discovery has been clarified to make clear it is not tied to how probable the discovery of admissible evidence is.
Rule 26(c)(1)(B) has been amended to add the “allocation of expenses” among the terms that may be included in a protective order issued by the court. As explained by the Committee, “[a]uthority to enter such orders is included in the present rule, and courts already exercise this authority. Explicit recognition will forestall the temptation some parties may feel to contest this authority.” However, “[r]ecognizing the authority does not imply that cost-shifting should become a common practice. Courts and parties should continue to assume that a responding party ordinarily bears the costs of responding.”
Further, Rule 26(d)(2) has been amended to allow a party to deliver Rule 34 requests for production in advance of the Rule 26(f) conference. However, the Committee noted that delivery does not count as service. Instead, requests delivered prior to the 26(f) conference will be considered served at the first 26(f) conference. Rule 34(b)(2)(A) was amended to reflect that if requests for production are delivered pursuant to Rule 26(d)(2), the responding party has 30 days from the date of the first Rule 26(f) conference to respond. It was Committee’s goal to facilitate focused discussion at the 26(f) conference
B. Rules 30, 31, and 33
Rules 30, 31, and 33 were each amended to reflect the proportionality factors now present in Rule 26(b)(1).
C. Rule 34
The Supreme Court adopted numerous amendments to Rule 34(b)(2), each with the goal of reducing the potential of a party to impose unreasonable burdens on the discovery process through the use of objections. Rule 34(b)(2)(B) was amended to clarify that boilerplate objections are unacceptable. Instead, an objecting party must state “with specificity the grounds for objecting to the request, including the reasons.” Relatedly, Rule 34(b)(2)(C) was amended to require that “[a]n objection must state whether any responsive materials are being withheld on the basis of that objection.” As explained by the Committee, “[t]his 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.”
III. Amendments regarding Electronically Stored Information
A. Rule 37
The amendments also saw the significant rewrite of Rule 37(e) regarding the preservation and loss of Electronically Stored Information (“ESI”). Rule 37(e) has been amended to state:
(e) Failure to Preserve Electronically Stored Information. If electronically stored information 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, and it cannot be restored or replaced through additional discovery, the court:
(1) upon finding prejudice to another party from the loss of the information, may order measures no greater than necessary to cure the prejudice; or
(2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:
(A) presume that the lost information was unfavorable to the party;
(B) instruct the jury that it may or must presume the information was unfavorable to the party; or
(C) dismiss the action or enter a default judgment.
While the rule carries severe consequences, its restrictions must be noted. First, the rule is limited to ESI which is both lost and cannot be recovered or replaced through additional means of discovery. Second, although rooted in the common law duty to preserve evidence in anticipation of litigation, as noted in the Committee Notes, the “rule applies only if the lost information should have been preserved in the anticipation or conduct of litigation and the party failed to take reasonable steps to preserve it.” Thus, if a loss of information occurs despite the party’s reasonable steps, the rule is inapplicable. Further, the Committee Notes provide a detailed analysis of factors which courts should take into consideration when determining reasonableness including the sophistication of the parties with regard to litigation, whether the ESI is in the party’s control, and a party’s resources. Finally, the remedial measures of the rule only take effect upon a finding of prejudice.
IV. Other Amendments
The Supreme Court adopted two other amendments to the Federal Rules of Civil Procedure. First, Rule 55(c) was amended to read, “The court may set aside an entry of default for good cause, and it may set aside a final default judgment under Rule 60(b).” The addition of the word “final” to clarify the interplay between Rule 54(b), Rule 55(c), and Rule 60(b). As explained by the Committee, “A default judgment that does not dispose of all of its claims among all parties is not a final judgment unless the court directs entry of final judgment under Rule 54(b). Until final judgment is entered, Rule 54(b) allows for revision of the default judgment at any time.” However, “[t]he demanding standards set by Rule 60(b) apply only in seeking relief from a final judgment.”
Finally, Rule 84 and the appendix of forms has been abrogated. The Committee explained, Rule 84 was adopted when the Civil Rules were established in 1938 “to indicate, subject to the provisions of these rules, the simplicity and brevity of statement which the rules contemplate.” The Committee note that “the purpose of providing illustrations for the rules, although useful when the rules were adopted, has been fulfilled,” and “recognizing that there are many excellent alternative sources for forms, including the website of the Administrative Office of the United States Courts, the websites of many district courts, and local law libraries that contain many commercially published forms, Rule 84 and the Appendix of Forms are no longer necessary and have been abrogated.” However, the Committee explained that “the abrogation of Rule 84 does not alter existing pleading standards or otherwise change the requirements of Civil Rule 8.”
The commercial litigation attorneys of Fuerst Ittleman David & Joseph have extensive experience litigating cases in federal court and working with the Federal Rules of Civil Procedure. You can contact us at contact@fidjlaw.com or via telephone 305.350.5690.