TRANSCRIPT OF PROCEEDINGS

HERITAGE REPORTING CORPORATION

Official Reporters

1220 L Street, N.W., Suite 600

Washington, D.C. 20005-4018

(202) 628-4888

contracts@hrccourtreporters.com

In the Matter of: )

 )

PUBLIC HEARING ON PROPOSED )

AMENDMENTS TO THE FEDERAL )

RULES OF CIVIL PROCEDURE )

JUDICIAL CONFERENCE ADVISORY )

COMMITTEE ON CIVIL RULES )

 )

Pages: 1 through 314

Place: Washington, D.C.

Date: November 7, 2013 
1

Heritage Reporting Corporation

(202) 628-4888

BEFORE THE ADMINISTRATIVE OFFICE OF THE U.S. COURTS

In the Matter of: )

 )

PUBLIC HEARING ON PROPOSED )

AMENDMENTS TO THE FEDERAL )

RULES OF CIVIL PROCEDURE )

JUDICIAL CONFERENCE ADVISORY )

COMMITTEE ON CIVIL RULES )

 )

Thursday,

November 7, 2013

The parties met, pursuant to notice, at 9:00 a.m.

BEFORE: HONORABLE DAVID G. CAMPBELL, CHAIR

APPEARANCES:

Committee Members and Reporters:

HON. PAUL S. DIAMOND

DEAN ROBERT H. KLONOFF

LAURA A. BRIGGS, Esquire

HON. ARTHUR I. HARRIS

HON. GENE E.K. PRATTER

PETER D. KEISLER, Esquire

HON. JOHN G. KOELTL

PROF. DANIEL R. COQUILLETTE

HON. JEFFERY S. SUTTON

PROF. EDWARD H. COOPER

PROF. RICHARD L. MARCUS

HON. PAUL H. GRIMM

HON. SCOTT M. MATHESON, JR.

HON. STUART F. DELEREY

ELIZABETH CABRASER, Esquire

HON. SOLOMON OLIVER, JR. HON. DAVID E. NAHMIAS

HON. ROBERT MICHAEL DOW, JR.

JOHN M. BARKETT, Esquire

PARKER C. FOLSE, Esquire
2

Heritage Reporting Corporation

(202) 628-4888

Speakers:

JACK B. McCOWAN, JR., Gordon & Rees LLP

JEANA M. LITTRELL, FedEx Express

JOHN C.S. PIERCE, Butler Pappas Weihmuller Katz

 Craig LLP

ALTOM M. MAGLIO, Maglio Christopher & Toale

DAVID R. COHEN, Reed Smith LLP

CORY L. ANDREWS, Washington Legal Foundation

MARY MASSARON ROSS, Plunkett & Cooney

PAUL D. CARRINGTON, Duke University School of Law

JONATHAN M. REDGRAVE, Redgrave LLP

PAUL J. STANCIL, University of Illinois at Urbana- Champaign

THOMAS Y. ALLMAN

DANIEL C. HEDLUND, Committee to Support Antitrust

 Laws

ANNA BENVENUTTI HOFFMAN, Neufeld Scheck & Brustin,

 LLP

PETER E. STRAND, Shook, Hardy & Bacon LLP

DAN TROY, GlaxoSmithKline

BURTON LeBLANC, American Association for Justice

WAYNE B. MASON, Sedgwick LLP

DARPANA M. SHETH, Institute for Justice

ROBERT L. LEVY, Exxon Mobil Corporation

MICHELLE D. SCHWARTZ, Alliance for Justice

ANDREA VAUGHN, Public Justice Center, Inc.

BARRY H. DYLLER, Dyller Law Firm

ALEXANDER R. DAHL, Brownstein Hyatt Farber Schreck

LILY CLAFFEE, U.S. Chamber of Commerce

JOHN F. KARL, JR., McDonald & Karl

STEPHEN Z. CHERTKOF, Heller, Huron, Chertkof &

 Salzman, PLLC

JENNIFER I. KLAR, Relman, Dane, & Colfax PLLC

NICHOLAS WOODFIELD, The Employment Law Group

ROBERT C. SELDON, Seldon Bofinger & Associates,

 P.C.

MARC E. WILLIAMS, Lawyers for Civil Justice

JOHN P. RELMAN, Relman, Dane, & Colfax PLLC

MALINI MOORTHY, Pfizer, Inc.

JONATHAN SMITH, NAACP Legal Defense and Education

 Fund, Inc.

WENDY R. FLEISHMAN, Lieff Cabraser Heimann & 

 Bernstein

PATRICK M. REGAN, Regan Zambri Long & Bertram

MICHAEL C. RAKOWER, New York State Bar Association

WADE HENDERSON, The Leadership Conference on Civil

 and Human Rights
3

Heritage Reporting Corporation

(202) 628-4888

Speakers: (Cont'd.)

JANE DOLKART, Lawyers' Committee for Civil Rights

 Under Law

FRANK L. STEEVES, Emerson

JOSEPH M. SELLERS, Cohen Milstein
4

Heritage Reporting Corporation

(202) 628-4888

1 P R O C E E D I N G S

2 (9:00 a.m.)

3 JUDGE CAMPBELL: Good morning. We 

4 appreciate everybody being with us this morning. 

5 We're going to try to start in one minute so that we 

6 can stay on schedule through the day.

7 Welcome to all the committee members who 

8 we've not had an opportunity to greet, and thank you 

9 for everybody else who is here. We very much 

10 appreciate your being with us this morning. We 

11 appreciate your input and your interest in the 

12 committee's work.

13 I think I speak on behalf of the committee 

14 when I say that we genuinely need your input, and we 

15 value what you are going to be sharing with us. This 

16 is very much an effort on the part of the committee to 

17 be educated, and you are the experts who can help 

18 educate us on the things that we are considering.

19 We want you to know that we are reading the 

20 written submissions that have been coming in. It's a 

21 big job. There are lots of them. We will continue to 

22 do that. So, if you have additional thoughts you want 

23 to put in writing and submit them, we will read them 

24 all and we will consider them carefully.

25 I think it goes without saying that on the 
5

Heritage Reporting Corporation

(202) 628-4888

1 proposals that have been issued there have been no 

2 final decisions made. This is very much a work in 

3 process, and the public comment process is perhaps the 

4 most critical part of it.

5 So we are very interested in the input we 

6 are going to receive today and appreciate your 

7 willingness to be here. Unfortunately, we've got so 

8 much interest that we are going to have to limit the 

9 time of everybody who speaks today. We have 41 

10 individuals slated to speak today. I think we could 

11 have had more if we had allowed room, but we just 

12 didn't have room.

13 If we're going to finish by 5:30 this 

14 evening and we stay on schedule, that means we can 

15 hear comments of five minutes from you and then have 

16 five minutes for questions from the committee 

17 afterward. And so we're going to run on that 

18 schedule. We know you cannot say everything you would 

19 like to in five minutes, but again, to the extent you 

20 can't say it here, if you submit it in writing, we

21 will absolutely read it and consider it carefully.

22 We have lights that are going to help keep 

23 us on time. There's a light on the podium. There's 

24 one in front of me. And I'm told that at four minutes 

25 the yellow light will come on and at five minutes the 
6

Heritage Reporting Corporation

(202) 628-4888

1 red light will come on, and then it will be my job to 

2 keep the committee questions to five minutes so we can 

3 get to the next speaker on time. And along those 

4 lines, for committee members, obviously I think we 

5 need to resist the urge to talk too much and try to 

6 put our questions as pointedly and as briefly as we 

7 can.

8 So, with that introduction, we are going to 

9 get started. The first speaker I have listed is Jack 

10 McCowan. And, sir, if you could, and all the 

11 speakers, just introduce yourself and your affiliation 

12 if you have one, and we will get going.

13 MR. McCOWAN: Thank you very much. Good 

14 morning, ladies and gentlemen of the committee. It's 

15 a real pleasure to be here, an honor to be here to 

16 offer a few thoughts on the rule changes that you're 

17 proposing.

18 My name is Jack McCowan. I'm from San 

19 Francisco. I'm with the law firm of Gordon & Rees. A 

20 little background so you know where I'm coming from. 

21 I'm a defense lawyer that's been practicing for about 

22 38 years, and I have limited my practice to the 

23 defense of civil cases.

24 I am a member of the board of directors of 

25 the DRI, an association of defense lawyers that 
7

Heritage Reporting Corporation

(202) 628-4888

1 numbers over 22,000 folks here in the United States 

2 and abroad. I'm a faculty member, an adjunct faculty 

3 member at the University of California Hastings 

4 College of Law in San Francisco where I have the 

5 privilege of coteaching with a plaintiff's lawyer a 

6 personal injury litigation class.

7 My practice over the last 25 years has been 

8 primarily devoted to the defense of manufacturers of 

9 medical devices, pharmaceuticals, and other products. 

10 My practice is both in state and in federal courts. 

11 I've tried medical device cases in state and in 

12 federal courts. In California, for instance, our rule 

13 on the scope of discovery is almost identical to Rule 

14 26.

15 I have been retained by manufacturers over 

16 the years of medical devices and pharmaceuticals in 

17 multi-plaintiff litigation in courts and also in 

18 coordinated cases in California. And one of the 

19 things that I did early on in my career in product 

20 device cases is I had the honor of being trial counsel 

21 in California for over 35 different cases and 

22 consulted on the job on that basis.

23 JUDGE CAMPBELL: Mr. McCowan, can I 

24 interrupt you just briefly? Can folks in the back 

25 hear what he is saying? Yeah. I'm not sure that mike 
8

Heritage Reporting Corporation

(202) 628-4888

1 is as sensitive as we need it. Why don't we see if we 

2 can make an adjustment so everybody can hear.

3 (Pause.)

4 MR. McCOWAN: I would like to address --

5 that sounds better. I would like to address today 

6 just the proposed changes to Rule 26. That would be 

7 my focus. And first let me say that I support the 

8 committee's goals of advancing early and effective 

9 judicial case management, proportional discovery, and 

10 attorney cooperation.

11 If these goals are achieved, I believe 

12 progress will be made in reducing the high cost of 

13 discovery for all parties in litigation without 

14 adversely affecting the rights of plaintiffs or 

15 defendants to have their cases tried before a jury.

16 I don't think it can be questioned that the 

17 cost of discovery even for companies with significant 

18 means drives the settlement of claims that would 

19 otherwise be tried before a jury or a judge. I have 

20 been involved in scores of multi-plaintiff personal 

21 injury cases in which my clients have opted to settle 

22 cases that should have been tried in my judgment 

23 primarily because of the sheer volume of the cases and 

24 the costs of preparing those cases for trial.

25 In the majority of the mediations in which I 
9

Heritage Reporting Corporation

(202) 628-4888

1 participated over the years, I often hear the mediator 

2 say isn't it more expensive to prepare this case to 

3 try and to try than the settlement offer that's now on 

4 the table. There's no question that we hear that all 

5 the time, but in my judgment, the driving of the costs 

6 of the litigation should not be the reason the case is 

7 settled.

8 If the proposed changes to Rule 26 that 

9 incorporate the concept of proportionality of 

10 discovery and eliminate the phrase "appears reasonably 

11 calculated to lead to the discovery of admissible 

12 evidence" are adopted, I believe a great deal of money 

13 and time will be saved and will inure to the benefit 

14 of both plaintiffs and defendants.

15 I've been involved in many product liability 

16 cases involving medical device, pharmaceutical, and 

17 automotive products where plaintiff's counsel have 

18 successfully argued that discovery of information on 

19 products totally unrelated to the product involved in 

20 the case must be produced because the documents are 

21 reasonably calculated to lead to the discovery of 

22 admissible evidence.

23 The phrase is too broad to define. Because 

24 of the overbreadth of this phrase, companies and their 

25 attorneys spend untold hours and money searching for 
10

Heritage Reporting Corporation

(202) 628-4888

1 documents and other products that are almost never 

2 placed on an exhibit list at trial. In most cases, 

3 motions in limine are successful in preventing these 

4 documents from being used at trial, yet the damage in 

5 my opinion has already been done in lost productivity 

6 of the company, costs associated with the outside 

7 vendors who process the documents, and higher fees 

8 paid to defense lawyers to try to keep these documents 

9 from being disclosed or out of evidence.

10 Despite the fact that proportionality of 

11 discovery is a concept that is already within the 

12 rules, the courts in my opinion are still using orders 

13 or issuing orders that are way too broad. One example 

14 is an order issued by a magistrate judge just last 

15 month in a case in Florida called McLane v. Ethicon 

16 Endo-Surgery. It's a case pending in the Middle 

17 District of Florida.

18 The case involves an alleged defective 

19 staple that failed to secure an incision in the 

20 plaintiff's colon. Plaintiff in its eighth request 

21 for production sought adverse event reports and other 

22 documents not only for the product that Plaintiff 

23 received but for every predicate product or device on 

24 which the FDA relied to clear that product for 

25 marketing as a substantially equivalent product to 
11

Heritage Reporting Corporation

(202) 628-4888

1 predicate devices.

2 Substantial equivalence under the FDA rules 

3 is a term of art that's used in clearing new products 

4 for the market under section 510(k) of the 1976 

5 Medical Device Amendments. It does not mean that the 

6 predicate product is identical to the product being 

7 proposed. The proposed device can be substantially 

8 equivalent for FDA purposes even if its technology is 

9 substantially different than the technology of the 

10 predicate devices upon which the FDA decides whether 

11 to put the product on the market.

12 In order for FDA to grant 510(k) approval, 

13 it demands only comparability of performance, not 

14 design, with the predicate device. But it does not 

15 require that they have the same type of technology. 

16 Defendant in that case presented facts in its 

17 opposition about the major ways in which the 

18 technological characteristics of the device in 

19 question that was implanted in the plaintiff differed 

20 from the two predicate devices which plaintiffs sought

21 discovery. These facts included the ability to bend, 

22 the method of closing the wound, reloadability, staple 

23 configuration, tissue cutting, trigger and handle 

24 design, and staple formation.

25 Despite these facts, the court apparently 
12

Heritage Reporting Corporation

(202) 628-4888

1 ignored this testimony given in affidavits, and the 

2 court granted plaintiff's motion, and defendant was 

3 ordered to produce the documents related to the 

4 predicate products.

5 It's clear from the ruling that the court 

6 relied solely on a case that referred to the 

7 "reasonably calculated" language in Rule 26(b)(1). 

8 There was no discussion of the evidence that was 

9 offered by the defendant about why the predicate 

10 products were not similar to the product in question 

11 in the case. The result was the court-ordered 

12 discovery concerning other dissimilar products and 

13 adverse events.

14 In my judgment, if the "reasonably 

15 calculated" language were not in the rule, the 

16 defendant in that case would have had a better chance 

17 of preventing this overreaching discovery. Had the 

18 court limited the discovery to design and 

19 manufacturing and adverse events and documents 

20 generated by the company for the product that was in 

21 the lawsuit, the plaintiff would have had sufficient 

22 evidence to try to prove his case.

23 If rulings like this one, which came out in 

24 Florida but is not an isolated incident, are allowed 

25 to stand, they could potentially expand discovery to 
13

Heritage Reporting Corporation

(202) 628-4888

1 predicate devices and their adverse event reports in 

2 every case in which a product in question is approved 

3 for marketing under 510(k), and that includes

4 approximately 99 percent of all medical devices on the 

5 market today.

6 In this case, the predicate devices were 

7 manufactured by the defendant, Ethicon, but that's not 

8 always the case. A manufacturer in offering a product 

9 to the FDA for approval can rely on predicate devices 

10 by other companies. So, with rulings like the one in 

11 McLane, there is good reason to believe that 

12 manufacturers of predicate devices not involved in the 

13 lawsuit could be asked to produce documents on their 

14 products just because a manufacturer of a later 

15 approved product referenced their product.

16 JUDGE CAMPBELL: All right, Mr. McCowan, we 

17 have just under a minute left if we're going to have 

18 any questions. Did you have any final wrap-up points 

19 you wanted to make?

20 MR. McCOWAN: The only thing I wanted to 

21 say, Your Honor, is I believe that this rule if it is 

22 adopted, if we change the proportionality of 

23 discovery, move it into the rule, and if we remove the 

24 language of the "reasonably calculated to lead to the 

25 discovery of admissible evidence," we will go a long 
14

Heritage Reporting Corporation

(202) 628-4888

1 way in reducing the costs of discovery for all 

2 parties, which will inure to the benefits of 

3 plaintiffs and defendants.

4 JUDGE CAMPBELL: All right. Thank you, Mr. 

5 McCowan. We've used just about all of the time, so we 

6 won't ask questions of you, but we appreciate your 

7 comments.

8 MR. McCOWAN: Thank you very much.

9 JUDGE CAMPBELL: Ms. Littrell?

10 MS. LITTRELL: Thank you. My name is Gina 

11 Littrell. I am the vice president of employment 

12 litigation for FedEx Express, the world's largest 

13 express transportation company. We appreciate the 

14 committee's work in bringing forward these proposals 

15 for comment and testimony, and thank you for the 

16 opportunity to appear this morning.

17 At FedEx Express, we rely almost exclusively 

18 on in-house attorneys and legal professionals to 

19 litigate cases in state and federal courts in the 

20 United States involving business transactions, 

21 employment discrimination, and allegations of wage and 

22 hour violations.

23 With regard to proposed amendments 

24 characterized as case management proposals, we are 

25 particularly supportive of proposed Rule 26(d)(2) to 
15

Heritage Reporting Corporation

(202) 628-4888

1 allow for the early exchange of discovery requests. 

2 We believe cases will get to resolution more 

3 efficiently and with less ancillary litigation, and 

4 for these reasons, we would not limit the exchange of 

5 early discovery to simply requests for production.

6 With respect to the proposed amendments 

7 categorized as proportionality proposals, I'd like to 

8 focus on the proposed amendments to 26(b), 26(c), and 

9 34. We support the proposed Rule 26(b)(1) revisions 

10 to clarify the appropriate scope of discovery and 

11 respectfully disagree with those who have cautioned 

12 that the revisions represent a monumental sea change 

13 that will impede plaintiffs' ability to obtain vital 

14 discovery.

15 On the contrary, the current version of Rule 

16 26 already places the burden on the requesting party 

17 to ensure and certify that requests are proportional. 

18 So some are questioning whether the amendment is 

19 really needed. It's been suggested we just need to 

20 better educate judges on the existing rules. We 

21 submit that there is no better education for judges 

22 and litigants than moving the proportionately 

23 requirement to the most prominent part of the rule, 

24 and we believe that doing so will result in fewer 

25 motions.
16

Heritage Reporting Corporation

(202) 628-4888

1 The emphasis on proportionality is 

2 particularly necessary now given the emerging trend of 

3 discovery on discovery through which requesting 

4 parties seek extensive information regarding the 

5 thousands of software applications and systems in use, 

6 details of preservation capabilities and efforts. And 

7 this discovery on discovery campaign particularly is 

8 disproportional because it typically precedes any 

9 discovery on the actual allegations in the complaint.

10 In response to the suggestion that the 

11 proposed amendments to Rule 26(b) would particularly 

12 prejudice plaintiffs in employment discrimination 

13 claims, it's important to note that employment 

14 discrimination claims governed by federal law cannot 

15 be litigated by charging parties until they have first 

16 brought their claims to the Equal Employment 

17 Opportunity Commission, which has investigative 

18 powers, subpoena authority that is far broader than 

19 the scope of discovery provided by the Federal Rules 

20 of Civil Procedure.

21 The need for proposed Rule 26(c) amendment 

22 to add explicit recognition of the courts' authority 

23 to allocate discovery costs was recently demonstrated 

24 in a putative commercial class action brought against 

25 FedEx by a retail shipper. The amount in controversy 
17

Heritage Reporting Corporation

(202) 628-4888

1 if the class is not certified is about 7- or $8,000. 

2 We don't think the class will be properly certified 

3 because the issues are individual that would require 

4 an inquiry into each shipment to determine if human 

5 error caused the alleged overcharge.

6 But at our own expense, we have produced 

7 more than a million pages of ESI from the 20 key 

8 custodians plaintiff identified covering a six-year 

9 time period. We spent more than $150,000 for contract 

10 attorneys to assist with review, plus an equal value 

11 of in-house resources.

12 Plaintiff recently asked the magistrate 

13 judge for a preemptive ruling that FedEx would have to 

14 bear the costs of production of ESI from any 

15 additional custodians. The magistrate judge reserved 

16 ruling until an actual motion is filed but said his 

17 preliminary inclination would be to require FedEx to 

18 bear the costs because that's the general rule. 

19 Clearly we think that courts need specific 

20 authorization within the rules to shift costs in 

21 appropriate circumstances.

22 We oppose the proposed Rule 34 amendment to 

23 require responding parties to state whether any 

24 documents are being withheld based on objections. 

25 This amendment would definitely encourage ancillary 
18

Heritage Reporting Corporation

(202) 628-4888

1 litigation because although the proposed rule itself 

2 would not require the identification of withheld 

3 documents, an affirmative statement that documents are 

4 being withheld will undoubtedly be followed by a 

5 request to identify each and every document withheld 

6 and ancillary litigation over the sufficiency of the 

7 corporation's disclosure.

8 Again, especially in light of the emerging 

9 trend of discovery on discovery efforts, we urge the 

10 committee to reconsider the proposed Rule 34 

11 amendment.

12 FedEx Express is a member of the Lawyers for 

13 Civil Justice. We support the positions taken with 

14 regard to proposed Rule 37(e) and LCJ's public 

15 comment. We also urge the committee to adopt the 

16 recommendation of the Duke Law Center for Judicial 

17 Studies requiring a showing of some degree of 

18 prejudice before curative measures may be ordered for 

19 the loss of ESI.

20 With regard to the concerns expressed that 

21 courts will interpret willful to include intentional 

22 acts, including an auto-delete function, please 

23 consider that if meeting our preservation obligations 

24 requires discontinuance of auto delete for all systems 

25 and users, not just those subject to a litigation 
19

Heritage Reporting Corporation

(202) 628-4888

1 hold, the stated purpose of the rules to ensure the 

2 just, speedy, and inexpensive determination of every 

3 action will be frustrated, if not defeated, because 

4 we're already pushing the limits of the industry 

5 leading technology for finding responsive ESI, and 

6 multiplying the quantity of data for each custodian 

7 would cripple the search.

8 I see that I am out of my allotted time, so 

9 I will thank the committee again and take any 

10 questions.

11 JUDGE CAMPBELL: Thanks, Ms. Littrell.

12 Are there questions? Rick.

13 PROF. MARCUS: Ms. Littrell, one of the 

14 things that some have said about the 26(b)(1) change 

15 is that it would somehow affect the burden of showing 

16 whether discovery is or is not proportional. Do you 

17 think that's true, and would you be expecting to take

18 that position if the rule change were made?

19 MS. LITTRELL: Professor Marcus, that burden 

20 is already in Rule 26. Rule 26(g) requires a 

21 certification of each requesting party that their 

22 request is proportional to what's at stake in the 

23 case. And that isn't just limited to the amount in 

24 controversy but whatever is at stake in the case. So 

25 the rules already require that the proposed change 
20

Heritage Reporting Corporation

(202) 628-4888

1 will not give responding parties a new argument.

2 JUDGE CAMPBELL: I have a question, Ms. 

3 Littrell. You expressed concern that if a party 

4 producing documents is required to say whether or not 

5 they're withholding anything you'll get a follow-on 

6 request saying what are you withholding. What 

7 prevents parties from doing that now? And do you see 

8 parties asking that question?

9 MS. LITTRELL: We don't. I was surprised, 

10 Your Honor, to see this proposed amendment. This has 

11 not been an issue in our practice. We properly pose 

12 objections. Typically we get, as an example, tell us 

13 every or produce every policy and procedure at FedEx. 

14 Well, with 100,000 employees in hundreds of 

15 locations, it's impossible and just not relevant to 

16 produce every policy and procedure.

17 So we typically respond and say your request 

18 is overly broad. Here are the policies that relate to 

19 the specific claims. Your client was terminated for a 

20 violation of our acceptable conduct policy. Here is 

21 the acceptable conduct policy. It seems obvious that 

22 there are other policies, and sometimes we have 

23 negotiations with requesting parties. But I have not 

24 seen that this issue of we can't tell what you're not 

25 giving us is a problem. I was surprised by the 
21

Heritage Reporting Corporation

(202) 628-4888

1 amendment but concerned about how it would be used in 

2 practice.

3 JUDGE CAMPBELL: All right. We have about a 

4 minute left. Any other questions for Ms. Littrell?

5 MR. BARKETT: I think the problem --

6 JUDGE CAMPBELL: Push the button, John, 

7 would you? Push it, and it should be on.

8 MR. BARKETT: There it goes. The problem in 

9 Rule 34 that the committee encountered was the 

10 situation where boilerplate objections are being made 

11 routinely in response after response after response 

12 after response, and it's just impossible to know, so I 

13 make an objection that privileged, work product, 

14 overbroad, unduly burdensome, subject to these 

15 objections we're producing. Is that what your folks 

16 do when they make responses? Do you follow that 

17 format?

18 MS. LITTRELL: Yes. And we shouldn't.

19 (Laughter.)

20 MS. LITTRELL: You know, I just have to be 

21 honest. I think that if we'll allow this early 

22 exchange of discovery requests, then when the parties 

23 get together for the 26(f) conference, they can work 

24 through these things. And generally speaking, yes, we 

25 do the boilerplate objections, and then the requesting 
22

Heritage Reporting Corporation

(202) 628-4888

1 party calls. We work out a compromise. And this is 

2 not really a problem, but to move it further into the 

3 beginning of the case I think will solve a lot of 

4 this.

5 JUDGE CAMPBELL: All right. Thank you, Ms. 

6 Littrell. We've run out of time. We very much 

7 appreciate your comments.

8 Mr. Pierce?

9 MR. PIERCE: Thank you very much. Good 

10 morning. My name is John Pierce. I'm an attorney in 

11 Mobile, Alabama, practicing with the firm of Butler 

12 Pappas. I am here on behalf of myself, my firm, and 

13 my clients. I'm also here on behalf of DRI and its 

14 23,000 members. I'm the chair of DRI's Trial Tactics 

15 Committee, and what we do as a committee is we seek to 

16 teach best practices in an age when more and more 

17 cases are not being tried. And the trend is not to 

18 try cases, and for those of us like me that enjoy 

19 trying cases and believe that you get your best 

20 outcomes with jury trials, that's a bad thing.

21 The Trial Tactics Committee and DRI are 

22 committed to preserving the right to a civil trial by 

23 jury. That's one of our key missions. And one of the 

24 things that the amendments that this group has put 

25 together will do is that it puts the focus back on the 
23

Heritage Reporting Corporation

(202) 628-4888

1 merits of the case and not on money. Too often cases 

2 are settled because discovery is expensive and 

3 litigation is expensive, and we need a way to bring 

4 the focus back to the merits and not money.

5 Just by way of background, I'm a bit of a 

6 generalist in my practice. I try cases in state and 

7 federal court, in Alabama, the Florida panhandle, and 

8 in southern Mississippi. I try cases on behalf of 

9 some larger companies, but most of my work is for 

10 small companies, subchapter Ss, mom-and-pop 

11 drugstores, compounding pharmacies, transportation 

12 companies, companies that build things, construction 

13 companies, clients like that that one of the key 

14 drivers in litigation involving clients like that is 

15 cost.

16 And cost cuts both ways. And it's not just 

17 money, but it's time and opportunity costs and 

18 resources. Preservation and production of discovery 

19 material is one of the key elements of those costs. 

20 And so I and the constituents I represent are in favor 

21 of the limitations of the number of depositions, the 

22 limitations on the discovery tools like requests for 

23 production, requests for interrogatories, requests for 

24 admission, in order to make lawyers sit and think 

25 about their cases at the very outset.
24

Heritage Reporting Corporation

(202) 628-4888

1 I'll tell you I'm also a big fan of the 

2 concept of early case management, of getting in before 

3 the judge early on in a case, early Rule 16 issuance 

4 of scheduling orders, and the idea that you have to go 

5 to the court with a conflict before you file a 

6 discovery motion.

7 There's been some mention in some of the 

8 papers that have been filed with the committee that 

9 defendants love discovery disputes and they love to 

10 throw a bunch of paper out. I'll tell you my clients 

11 do not like discovery disputes. They do not like 

12 paying for discovery disputes. And so if we can get 

13 the judge on the phone kind of like you do -- in 22 

14 years of practice, I've only done this a few times, 

15 but in a deposition sometimes you have to get the 

16 judge on the phone. That resolves the issue. There's 

17 no briefing. That is a wonderful tool that this 

18 committee has recommended, to have early scheduling, 

19 early scheduling conferences and informal conferences.

20 And in the early scheduling conferences, you 

21 get around a lot of this problem that's been raised by 

22 some of the opponents to these amendments about we're 

23 not going to get enough discovery, we can't fully 

24 develop the facts of our case. There's a relief valve 

25 built in that allows you to raise that with the judge 
25

Heritage Reporting Corporation

(202) 628-4888

1 early on so you're thinking about your case.

2 With regard to proportionality and cost 

3 allocation, certainly the constituency that I 

4 represent is in favor of the amendments to Rule 26 and 

5 Rule 37. There are others that will speak about that 

6 in greater detail, but it brings more fairness. It 

7 limits what both sides get to do, not just one. It 

8 doesn't favor big defendants.

9 A lot of times references are made to David 

10 versus Goliath. And I watched the hearings in front 

11 of the Senate Judiciary Committee on Tuesday. A lot 

12 of times I'm David. I have a very well-organized bar 

13 against me, and so, you know, I'm the David that is 

14 getting crippled by discovery costs. Reducing the 

15 amount of information that is exchanged through 

16 discovery reduces the cost, but I don't think it 

17 reduces the quality of the trial.

18 Needles in haystacks. How much are we 

19 willing to spend to find needles in haystacks, these 

20 peripheral, marginal facts that really don't bear on 

21 the substance of a case? I take issue with some of 

22 the overtones in some of the documents that have been 

23 submitted that seem to question judges in their 

24 exercise of discretion. I've tried cases in federal 

25 courts for 22 years. I find that we have a federal 
26

Heritage Reporting Corporation

(202) 628-4888

1 judiciary that is highly dedicated to the job at hand. 

2 It is engaged and involved. And so to give them an 

3 opportunity to be involved earlier I think is a good 

4 thing.

5 My time is about up. I will tell you this. 

6 There's going to be spillover into the state courts 

7 from what happens here, and what's happening here is a 

8 good thing. You are not closing the door to 

9 litigation. By reducing costs, you're opening the 

10 door for people like the constituency that I 

11 represent.

12 JUDGE CAMPBELL: All right. Thank you, Mr. 

13 Pierce. Are there questions from members of the 

14 committee?

15 (No response.)

16 JUDGE CAMPBELL: All right. Thank you very 

17 much for your comments.

18 Mr. Maglio?

19 MR. MAGLIO: Good morning. My name is Altom 

20 Maglio, and I'm a small-firm attorney from Florida, 

21 and I represent patients in medical product liability 

22 suits, and I'm here today on my own behalf.

23 First I'd like to thank the committee for 

24 the imminent changes to Rule 45. I believe these 

25 changes will simplify discovery to the benefit of all, 
27

Heritage Reporting Corporation

(202) 628-4888

1 and these changes are clearly a step in the right 

2 direction. Unfortunately, some of the changes being 

3 contemplated today are not. These changes I strongly 

4 believe will have drastic, unintended, and very 

5 negative consequences.

6 My clients are typically injured by a failed 

7 medical device. They face mounting medical bills, are 

8 out of work, and often in constant pain. They go to a 

9 lawyer typically because their doctor told them to. 

10 The manufacturer of the product is almost always an 

11 enormous multinational corporation. David versus 

12 Goliath was just mentioned, and this is your typical 

13 or your textbook David versus Goliath situation.

14 Some manufacturers do take responsibility 

15 for injuries caused by their product. Unfortunately, 

16 these days that response is more the exception than 

17 the rule. The typical multinational response is a 

18 scorched-earth defense. Deny everything. Discovery 

19 is essential in these cases. Proof that the product 

20 works or doesn't work often can only come from the 

21 manufacturer. The proof is often the amount and type 

22 of other product failures.

23 This information is almost never publicly 

24 available. Only the manufacturer has it. If the 

25 product failure shows that a product is defective, 
28

Heritage Reporting Corporation

(202) 628-4888

1 then my job is to turn to what the company knew and 

2 when it knew it. This is fought, as you can well 

3 imagine, even harder.

4 And let's talk about the business of law and 

5 contingency fee practice specifically. I get paid a 

6 percentage of what my client receives, if anything. 

7 When I take a deposition, I don't get paid by the 

8 hour. In fact, I pay the expenses of the deposition 

9 out of my own pocket. I have zero incentive to take 

10 unnecessary depositions. Likewise, once I get the 

11 information I need in deposition, I have no incentive 

12 to take an extra minute of deposition, much less fill 

13 up seven hours. If the proposed rule changes are 

14 intended to stop contingency fee attorneys from 

15 conducting unnecessary discovery, don't bother. 

16 Economics already does.

17 The proposed rule changes send the message 

18 to magistrates and judges that they have been allowing 

19 too much discovery. However, real discovery is 

20 absolutely necessary for my clients to prove their 

21 cases. Real discovery is necessary for justice to be 

22 done. The proposed rule changes sends a message to 

23 judges and magistrates that they erred when they 

24 allowed real discovery. Getting back to the David 

25 versus Goliath analogy, they take the rock for David's 
29

Heritage Reporting Corporation

(202) 628-4888

1 slingshot away and replace it with a pebble.

2 Equally problematic to the administration of 

3 justice is the limiting of the scope of discovery by 

4 the five-part proportionality test. There will be

5 immense unintended consequences if this change is 

6 made. Almost every discovery request will require a 

7 hearing on proportionality. Judicial dockets will be 

8 clogged with these proportionality hearings. Far from 

9 making the administration of justice more efficient 

10 and less expensive, goals I greatly applaud, they will 

11 have the exact opposite effect.

12 The proportionality change is unnecessary. 

13 Defendants are not shy about making proportionality 

14 objections. Almost every discovery request, well, 

15 many discovery requests raise an overly burdensome 

16 objection often as a default response. If unresolved, 

17 the defendant then has to explain to the magistrate or 

18 judge why the discovery is overly burdensome and 

19 convince the court.

20 This rule change turns that on its head. 

21 The injured patient, my client, now has to show why 

22 producing the requested information is not overly 

23 burdensome or expensive to the defendant. Almost 

24 certainly the only way to be able to show this will be 

25 by conducting discovery on discovery.
30

Heritage Reporting Corporation

(202) 628-4888

1 Finally, moving the proportionality analysis 

2 to the fore creates a perverse incentive for a 

3 defendant to make any potentially incriminating 

4 information as burdensome and as expensive as possible 

5 to locate and collect. Then the defendant may not 

6 have to produce it in litigation. They get to keep 

7 their skeletons hidden, and this is certainly not 

8 going to make justice more efficient or less 

9 expensive.

10 Please carefully consider these proposed 

11 changes. They are not minor. They are not modest. 

12 They are drastic, and they will not help the cause of 

13 justice. Thank you.

14 JUDGE CAMPBELL: Thank you, Mr. Maglio.

15 Are there questions from the committee? 

16 Judge Koeltl?

17 JUDGE KOELTL: Do you find yourself usually 

18 having to take more than 10 depositions in a case?

19 MR. MAGLIO: Unfortunately, Your Honor, in a 

20 hard-fought case, I would say that the first five 

21 depositions are typically of the witnesses put -- and 

22 answers to interrogatories by a defendant described as 

23 those with the most knowledge about the case. That 

24 invariably turns out not to be the case. They are not 

25 at all knowledgeable about anything other than 
31

Heritage Reporting Corporation

(202) 628-4888

1 typically marketing, and it takes those five 

2 depositions to even begin to figure out who you're 

3 supposed to depose and who actually has knowledge.

4 And quite frankly, oftentimes 10 are 

5 insufficient. But on the flip side of it, Your Honor, 

6 I mean, these depositions don't always take seven 

7 hours. Oftentimes they're fairly quick once you 

8 realize you've got the wrong guy.

9 JUDGE KOELTL: But when you need to take 

10 more than 10 depositions, do the parties usually agree 

11 or does the judge grant you leave to take more than 10 

12 depositions?

13 MR. MAGLIO: Well, it's certainly seen by 

14 the judiciary, by the magistrates and judges, as a 

15 yardstick as kind of what's supposed to be done in a 

16 typical case. And I have the burden to explain to 

17 them that this is not a typical case, that this is 

18 much more complex than your usual case and thus more 

19 discovery than typically allowed is necessary.

20 JUDGE KOELTL: But you do get it. The 

21 judges typically give it, right?

22 MR. MAGLIO: But it's a fight. It's a 

23 fight. And I in my practice have been successful in 

24 getting it when necessary. But quite frankly, with 

25 this rule change, I fear that that will not be the 
32

Heritage Reporting Corporation

(202) 628-4888

1 case.

2 JUDGE CAMPBELL: Other questions? 

3 Professor?

4 PROF. MARCUS: I'm interested in your 

5 expanding a bit on the 26(b)(1) proposed change. I'd 

6 like you to explain why that change produces the shift 

7 in burden regarding burden that you say it will 

8 produce and where that comes from in the proposal 

9 that's out for comment.

10 MR. MAGLIO: Well, that comes from shifting 

11 it from the limitations on discovery to the scope of 

12 discovery and from a lay attorney perspective and 

13 envisioning how courts, magistrates and judges, line 

14 magistrates and judges will look at this. It 

15 certainly seems to shift the burden from the 

16 responding party to the discovery request to the party 

17 that's making the discovery request. The party that's 

18 making the request now has the burden of showing that 

19 it is within the scope of permissible discovery.

20 JUDGE CAMPBELL: Other questions?

21 (No response.)

22 JUDGE CAMPBELL: All right. Thank you very 

23 much, Mr. Maglio.

24 Mr. Cohen?

25 MR. COHEN: Good morning. My name is David 
33

Heritage Reporting Corporation

(202) 628-4888

1 Cohen, and I'm with the law firm Reed Smith, and I 

2 head the records and e-discovery practice group at 

3 Reed Smith. I'm here today. I have not checked my 

4 views with my clients or my law firm, so I have to say 

5 they're my own views, but they're my views based on 30 

6 years of experience, primarily representing companies, 

7 from small to large companies, mostly on the defense 

8 side but periodically on the plaintiff's side.

9 But I have a real view of discovery based on 

10 30 years of experience and focusing on e-discovery. 

11 It originally wasn't my intention to focus on 

12 discovery. I hoped to try cases. But when I got to 

13 my law firm and started working on big cases, I 

14 quickly learned that very few cases actually go to 

15 trial.

16 At the time -- I graduated from Harvard Law 

17 School 30 years ago -- I think the statistics were 

18 about 10 percent of federal cases went to trial. I 

19 saw that drop to less than 5 percent. And just before 

20 coming here, I went on the federal court website to 

21 see what the percentage is now of the federal civil 

22 cases that actually go to trial. The latest 

23 statistics for 2011 are posted: 1.1 percent of cases 

24 reach trial, in 2010 1.1 percent, 2009, 1.2 percent. 

25 So about 1 percent of cases are making it all the way 
34

Heritage Reporting Corporation

(202) 628-4888

1 to trial. And from my observation of hundreds of 

2 cases over my career, maybe thousands of cases, the 

3 main reason is the expense, and the main driver of 

4 that expense is the cost of discovery.

5 We need to do something about the cost of 

6 discovery. Our clients are settling cases all the 

7 time because the discovery costs are out of 

8 proportion. It's not about the merits anymore. It's 

9 about how much it costs to try cases. And parties are 

10 fleeing our courts and they're going to alternative 

11 dispute resolution and other mechanisms to escape 

12 this.

13 So I'm speaking out today in favor of the 

14 amendments to Rule 26(b)(1), and I'll also say a quick 

15 word about Rule 37(e). I believe those amendments are 

16 very positive as well. And I just want to give you a 

17 couple of personal insights into what's going on with 

18 discovery right now.

19 My practice group at Reed Smith, which I 

20 started there about three years ago, now employs 65 e21 discovery attorneys. And we call them e-discovery 

22 attorneys, but what they're job is is to review 

23 documents every minute, every hour, every day, eight 

24 hours a day, five days a week, 50 [sic] days a year. 

25 We have 65 attorneys. That's all they do pretty much 
35

Heritage Reporting Corporation

(202) 628-4888

1 is review documents, and that is because of this.

2 Now that wouldn't be so bad if the documents 

3 they were reviewing were actually going to lead to 

4 resolving disputes. But my experience is this matches 

5 what I've seen in statistics that have been gathered 

6 by big companies. Of the documents we typically 

7 produce in litigation, less than .1 percent are 

8 actually used as exhibits in depositions or trials. I 

9 pulled that statistic from an LCJ survey I saw in 

10 2010, but that matches my subjective judgment of what 

11 I see in litigation.

12 Specifically, in most of our cases these 

13 days, we start with more than a million pages of 

14 documents, and only a small proportion of those are 

15 used as deposition or trial exhibits. And if you look 

16 at the broader picture of the expenses that our 

17 clients are facing to preserve documents and then 

18 provide documents to us that we have to review, I saw 

19 a statistic Microsoft calculated that 1 out of 340,000 

20 is the proportion of documents that are actually used 

21 in a case versus the number that they preserve.

22 Companies today are spending millions of 

23 dollars, U.S. companies are spending millions of 

24 dollars, to preserve documents that are never going to 

25 be used in litigation, and it's putting our companies 
36

Heritage Reporting Corporation

(202) 628-4888

1 in a competitive disadvantage compared to other 

2 companies around the world. And we have a global 

3 marketplace. We need our companies to be in a 

4 position to compete.

5 Just one other comment on 26. A couple 

6 years ago I convinced my firm to invest in predictive 

7 coding technology, otherwise known as technology8 assisted review, with the idea that this would help 

9 cut down the costs, cut down how much review is 

10 needed. But having made that investment, we're 

11 finding that we frequently can't use it because we 

12 can't get the other side to agree. In many cases I 

13 can't even convince case teams to try, or they know 

14 it's impractical because they're facing cases in 25 

15 different jurisdictions on behalf of the client and 

16 they know they'd have to get all 25 judges or opposing 

17 counsel, in some cases multiple opposing counsel, to 

18 agree to be able to use this technology.

19 Plaintiffs have very little incentive to 

20 agree to that technology if it's going to reduce the 

21 burden on the defendant because they know that this is 

22 great leverage for them that the defendants have this 

23 burden, and that leads to settlements.

24 What we need to do right now, the focus of 

25 the rules, 26(b)(1), the focus is on what may lead to 
37

Heritage Reporting Corporation

(202) 628-4888

1 relevant evidence or what may be relevant. That is 

2 too narrow a standard. We have to look at the other 

3 side of the equation too. We have to level the 

4 playing field by not only looking at the relevance but 

5 also the costs. And that's what the amendment to 

6 26(b)(1) does.

7 Yeah, the rules are already there in 26(g), 

8 but all of us practicing know that most courts ignore 

9 it. Moving it to 26(b)(1) is going to get folks' 

10 attention, and people are going to start controlling 

11 discovery, making sure it's reasonable, making sure 

12 that parties get what they need but that costs are 

13 also considered.

14 And then just very briefly on Rule 37(e), I 

15 think that rule is absolutely necessary because it has 

16 gotten to where in major litigation sanctions motions 

17 are being used as a tactic. There's all kinds of 

18 satellite litigation, and the stakes are so high that 

19 parties are afraid to make reasonable judgments. 

20 Where do I cut off the preservation? Is it enough to 

21 preserve for 100 witnesses, or do I have to preserve 

22 for 1,000 because some court is going to second-guess 

23 me later and I'm going to be labeled as a spoliator of 

24 evidence.

25 The thing about Rule 37(e), which the 
38

Heritage Reporting Corporation

(202) 628-4888

1 committee wisely has done, is has left in remedial 

2 measures so that parties can still get additional 

3 discovery if they need it, even attorney's fees, the 

4 things that we used to call sanctions but we're no 

5 longer placing that bad label on it when you don't 

6 have bad conduct to go with it.

7 And my only other comment on 37(e) is that I 

8 caution the committee to be careful about the existing 

9 language in 37(e)(2)(A) which requires in order for 

10 there to be sanctions for the failure to preserve or 

11 produce to be willful or in bad faith. Some courts 

12 have interpreted willful very differently than most of 

13 us think of willful.

14 If you just as part of ordinary document 

15 maintenance don't turn off auto delete, that could be 

16 intentionally deleting things, and courts in the 

17 Second Circuit, the recent case of Sekisui and the 

18 Residential Funding line of cases, even if you weren't 

19 doing that because of litigation, even if you weren't 

20 trying to hide evidence, even if you weren't aware of 

21 the litigation, that's willful just because it was a 

22 willful decision to follow your document retention 

23 policy and eliminate obsolete data.

24 So I think that rule ought to be changed to 

25 say the failure has to be willful and in bad faith, or 
39

Heritage Reporting Corporation

(202) 628-4888

1 there ought to be a definition of willful that 

2 actually means intentionally hiding evidence. Thank 

3 you very much.

4 JUDGE CAMPBELL: All right. Thank you.

5 Questions? Judge Grimm?

6 JUDGE GRIMM: I think you just may have 

7 answered the question that I had.

8 JUDGE CAMPBELL: Could you use the mike, 

9 Judge Grimm, just so folks in the back can hear.

10 JUDGE GRIMM: Thanks. I think you may have 

11 answered the question that I wanted to ask you most, 

12 which was if the formula continues to be willful or 

13 bad faith what the definition would be. And you are 

14 saying it would be a definition that requires some 

15 connection between the shortcoming on the part of the 

16 party that should have preserved and an awareness that 

17 that would have caused information that might be 

18 relevant to be destroyed. An intentionality is what 

19 you're saying.

20 MR. COHEN: Exactly. And that is how some 

21 courts interpret it now. But what you have is split 

22 between the circuits. You never know where your case 

23 is going to go to trial sometimes. And so we need 

24 that to be uniform, and I think a definition of 

25 willful or simply adding the word "and" will help 
40

Heritage Reporting Corporation

(202) 628-4888

1 solve that problem.

2 JUDGE GRIMM: Another question just to 

3 follow up on that real quickly. Have you found that 

4 when you and your firm did use the technology-assisted 

5 review that it did drive down the costs of reviewing, 

6 particularly with ESI?

7 MR. COHEN: Yes. When we can use it, it 

8 does drive down costs, but that's I would say in 20 

9 percent or fewer of our cases so far, and the reason 

10 we haven't even tried in some other cases is because 

11 of the fear that just having to convince the other 

12 side, fight about it, et cetera, would cost more than 

13 the savings. And we've seen that in cases like the 

14 Clean Products case in Illinois where they spent so 

15 much time fighting about it they eventually abandoned 

16 trying to even use it. So there's a lot of fear of 

17 actually driving up the cost for motions practice 

18 because there's no balance now between cost and 

19 benefit in discovery the way it's actually applied.

20 JUDGE GRIMM: Thank you very much.

21 JUDGE CAMPBELL: We've got about 30 seconds. 

22 Judge Oliver, did you have a question?

23 JUDGE OLIVER: Yes.

24 JUDGE CAMPBELL: Push the button if you 

25 would.
41

Heritage Reporting Corporation

(202) 628-4888

1 JUDGE OLIVER: I don't think you spoke about 

2 this, but I was interested in your opinion. I know 

3 some cases are probably simple, but I'm sure that you 

4 also do some that are somewhat more complex and more 

5 involved. What is your view about the five deposition 

6 limit or proposed limit? Do you think that's actually 

7 enough depositions, that's all you need in most of 

8 your cases?

9 MR. COHEN: In most of the cases that my 

10 firm handles, they tend to be bigger cases. There 

11 tend to be more depositions. Even with the 10-

12 deposition limit, very often there's more. So I think 

13 judges are used to applying discretion.

14 The thing I like about having some limits is 

15 it gets people thinking about the depositions. And 

16 while there are some contingent attorneys who do have 

17 motivation to only take necessary depositions, we also 

18 face all kinds of commercial cases where they're not 

19 contingent fee cases. And believe me, I've seen a 

20 lot. I've seen multiple-day depositions, and I think 

21 most depositions that take seven hours can be done in 

22 six and most cases that have 20 depositions can use 

23 far fewer.

24 So I like the idea of that change to start 

25 the conversation and get people thinking, but I think 
42

Heritage Reporting Corporation

(202) 628-4888

1 most judges when shown good cause are going to grant 

2 the extra depositions. And frankly, the parties 

3 usually agree to that when they know that there's good 

4 reason for more depositions in big cases.

5 JUDGE CAMPBELL: All right. Thanks very 

6 much, Mr. Cohen.

7 Mr. Andrews?

8 MR. ANDREWS: Thank you very much, and good 

9 morning. It's a pleasure to be here, and I'd like to 

10 commend the work that you've done. It's tiring work 

11 I'm sure, and it shows in the product, in the proposal 

12 that you put forward, and I think I speak on behalf of 

13 everyone on this side of the room in just saying thank 

14 you for those efforts.

15 I'm here today on behalf of the Washington 

16 Legal Foundation. WLF is now in its 36th year as a 

17 public interest law and policy center. We advocate in 

18 favor of free enterprise, limited accountable 

19 government, and individual rights. WLF has a 

20 longstanding interest in the work of this committee 

21 and in its central role in shaping federal practice 

22 and procedure, and I'd like to use my time today to 

23 discuss sort of the macro view, the big picture.

24 WLF did submit formal comments a month ago 

25 today actually on the specific proposals, and today 
43

Heritage Reporting Corporation

(202) 628-4888

1 what I'd like to do is leave you with the main point, 

2 and that main point is that the status quo is 

3 completely unacceptable.

4 Everyone agrees that discovery-related 

5 litigation costs are a competitive drag on the 

6 American economy. The exponential growth in 

7 discovery-related litigation, it doesn't merely 

8 deplete the coffers of Fortune-500 companies. Massive 

9 litigation costs can decimate small and medium-sized 

10 businesses, many of whom can't afford to hire someone 

11 to get on a plane and come up here and testify to you. 

12 And all of these costs, large and small, are passed 

13 along to every American every day in the form of 

14 higher priced goods and services.

15 In fact, it's interesting to note, but 

16 there's a story on the AP wire today that says despite 

17 relatively stable inflation over the last several 

18 years the cost of goods and services continues to 

19 rise.

20 Now it would be bad enough if that was the 

21 end of the story, but it isn't, and the reason it 

22 isn't is because we are now competing in a global 

23 market. Global businesses have many choices in 

24 deciding where they'd like to locate their research 

25 and development facilities, their factories, their 
44

Heritage Reporting Corporation

(202) 628-4888

1 global headquarters. Survey after survey shows that 

2 litigation costs here are higher than anywhere else. 

3 And the costs of litigation, driven primarily by 

4 discovery costs, is well recognized as a disadvantage 

5 to bringing business investment here in the United 

6 States, and in an increasingly global competitive 

7 market, this is something that our nation cannot 

8 afford.

9 The excessive costs of the U.S. legal system 

10 don't simply deter foreign investment in America, but 

11 they also disadvantage American companies who are 

12 seeking to compete overseas. Because American 

13 companies tend to locate their operations here and 

14 disproportionately conduct their business here, they 

15 are uniquely vulnerable to the high costs of American16 based litigation.

17 America's global competitors almost always 

18 enjoy lower costs in their home country's legal 

19 system, and as a result, when an American company 

20 competes elsewhere, that company is at a peculiar 

21 disadvantage.

22 Now, given all the talk of David and 

23 Goliath, I think it's also important to remember that 

24 the proposed reforms you're considering today are 

25 about issues of fundamental fairness. And if it's 
45

Heritage Reporting Corporation

(202) 628-4888

1 fundamental fairness that we're after, so-called deep2 pocketed litigants should not be denied the benefit of 

3 otherwise sensible discovery limits. The fact that an 

4 injustice is visited on litigants with a high net 

5 worth is no more reason to ignore it than if an 

6 injustice is visited on low net worth litigants. 

7 After all, justice means justice for all, not merely 

8 for some.

9 So no litigant should be essentially forced 

10 to settle an unfounded substantive claim simply 

11 because the discovery costs of defending the action on 

12 the merits are too high and far too lopsided to permit 

13 a just resolution of the dispute.

14 In conclusion, I think this is a time of 

15 great promise for the committee and for American 

16 justice. You can accomplish much needed change in the 

17 way that federal litigation is conducted and 

18 ultimately in the way state litigation is conducted 

19 and also, more importantly perhaps, in the way that 

20 American citizens and the world come to view the 

21 administration of justice.

22 Burdensome litigation costs are an 

23 unnecessary drain on American businesses who are 

24 already deeply impacted by economic hardships. 

25 Today's overly broad discovery regime imposes a heavy 
46

Heritage Reporting Corporation

(202) 628-4888

1 burden with very little corresponding benefit. 

2 Without any sacrifice to the pursuit of justice, the 

3 modest revisions to the rules you propose will go a 

4 long way towards reducing overall costs and improving 

5 federal litigation practice. These are modest 

6 revisions. They're modest, they're incremental,

7 they're common sense. They're not radical. They're 

8 not draconian.

9 And with that, I yield the balance of my 

10 time.

11 JUDGE CAMPBELL: Thank you, Mr. Andrews.

12 Questions from the committee? John?

13 MR. BARKETT: Is this still on? Yes. When 

14 I was in law school, I had a civil procedure professor 

15 named James William Moore who said to us that there 

16 was no such thing as a debtor who isn't one day also a 

17 creditor. We were discussing the Sniadach case in the 

18 Supreme Court at the time. And I was just interested 

19 in your remarks about litigation. I've seen antitrust 

20 cases and patent cases where World War III would be an 

21 apt description to describe two very large companies 

22 on both sides taking advantage of these rules in 

23 incurring the costs of litigation that you are now 

24 describing.

25 So there are different obviously categories 
47

Heritage Reporting Corporation

(202) 628-4888

1 of cases out there, but do you acknowledge that in 

2 fact part of the reason why costs are so great can be 

3 attributed in fact to people that just want to win in 

4 big stakes litigation involving very large companies?

5 MR. ANDREWS: Sure, absolutely. There's no 

6 discounting the role of psychology in litigation. My 

7 current practice is primarily appellate, but before 

8 that I was a complex commercial litigator in your neck 

9 of the woods at White & Case in Miami, and before that 

10 I saw federal law practice from the other side as a 

11 law clerk for two years with District Judge Steven 

12 Merryday. And routinely, as most district judges do 

13 at least in the Middle District, he would order the 

14 parties to mediation. And one of our mediators has on 

15 his office a map of Napoleon's invasion of Russia, and 

16 it shows month, the numbers of troops, and how they're 

17 completely decimated all the way through to the end.

18 And he shows that to the parties who come to 

19 try to mediate these settlements to try to get them to 

20 understand that sometimes these suits are not really 

21 about the merits as much as they are about winning. 

22 So I think I certainly appreciate your point.

23 JUDGE CAMPBELL: Other questions? Judge 

24 Pratter?

25 JUDGE PRATTER: Mr. Andrews, you wrote a 
48

Heritage Reporting Corporation

(202) 628-4888

1 very lengthy letter, and among the suggestions, while 

2 you applauded the limits that are proposed, you said 

3 that you actually would suggest further limits. of 

4 what variety and of what quantity?

5 MR. ANDREWS: Oh. Well, certainly I wasn't 

6 suggesting further limits on the numbers of discovery 

7 devices. One of the concerns that were expressed in 

8 our comments was the attempt to sort of change the 

9 culture and change the habits of practice with the 

10 scope of discovery.

11 I know the committee already feels that it 

12 made clear that the scope of discovery isn't items 

13 reasonably calculated to lead to the discovery of 

14 relevant evidence, but that didn't catch on. And so 

15 one suggestion that we made and I think that some 

16 others have made is that you might consider adding a 

17 materiality element as well so that it would be 

18 relevant and material. That way it will sort of 

19 signal the change in paradigm that I think is 

20 necessary to get day-to-day litigants and some judges 

21 to get away from that language that's very unhelpful.

22 JUDGE PRATTER: So you're not really urging 

23 numerical, further numerical adjusting?

24 MR. ANDREWS: Oh, absolutely not. No, 

25 ma'am.
49

Heritage Reporting Corporation

(202) 628-4888

1 JUDGE PRATTER: Okay.

2 MR. ANDREWS: No, ma'am.

3 JUDGE CAMPBELL: All right. Thank you very 

4 much, Mr. Andrews.

5 Ms. Ross?

6 MS. ROSS: Good morning. Thank you for 

7 allowing me to appear. I'm here today in my capacity 

8 as immediate past president of DRI, and DRI is an 

9 organization, as somebody already said, of 22,000 

10 lawyers who defend businesses and individuals in civil 

11 litigation. Part of our mission is to work to assure 

12 a fair and balanced civil justice system. That's one 

13 of the key goals that our organization was created for 

14 some 50 years ago, and it continues to be a key part 

15 of what we try to accomplish.

16 And our members have a strong desire to 

17 preserve merits-based jury system as a way of 

18 resolving disputes. They believe very strongly that 

19 our system of justice has been a wonderful system of 

20 justice. It has allowed for people to rely upon 

21 contracts, for people with injuries to pursue their 

22 injuries and get legal remedies that are available, 

23 and for those who are charged with violations to 

24 defend themselves when the claims are not merit-based.

25 What we see happening, and this has become 
50

Heritage Reporting Corporation

(202) 628-4888

1 really apparent to me over the last year as I've 

2 traveled around the United States and also in Europe 

3 speaking with our members and speaking also with the 

4 over 50 state and local defense organizations that are 

5 affiliated with DRI, is a huge concern about the state 

6 of the civil justice system and the fact that our 

7 clients are in many instances fleeing the system for 

8 private arbitrations or are settling cases rather than 

9 pursuing them on the merits because of a concern about 

10 cost.

11 And so I applaud the committee for really 

12 wrestling with these issues and putting out proposals 

13 that we think will improve the situation and will help 

14 to make sure that litigation is not about discovery, 

15 it's not about setting up your opponent for some claim 

16 of discovery abuse. It's about finding an efficient 

17 way the key information that will allow the case to be 

18 resolved on the merits. That should be the goal, and 

19 we think these rules are moving in the right 

20 direction.

21 I want to also address concerns that I know 

22 some people have raised in the papers, and this is 

23 based a little bit on part of my practice that has 

24 been a significant part in some years at least, and 

25 that is the whole area of civil rights. I know there 
51

Heritage Reporting Corporation

(202) 628-4888

1 has been expressed a concern that perhaps changing

2 these is going to impact civil rights claims.

3 I speak with respect to this as the author 

4 of an American Bar Association multi-author -- the 

5 editor of a multi-author treatise on 42 U.S.C. ' 1983 

6 called Sword and Shield and as someone who has been 

7 involved in representing both municipal governments as 

8 well as individuals suing governments in the area of 

9 42 U.S.C. ' 1983 in civil rights claims for virtually 

10 my whole career, and let me just say a word about the 

11 kinds of clients.

12 Some of my municipal clients are very tiny 

13 townships. I think probably the smallest and with 

14 least resources municipal client I ever represented 

15 was a very small rural township where the township 

16 clerk had the city records in a room in his barn 

17 because they didn't have any buildings. They don't 

18 have a lot of resources in that circumstance.

19 And at the same time, I have represented 

20 major metropolitan areas. I also represented the 

21 property owners suing Wayne County, a fairly large and 

22 well-heeled county at one time, not so much now, in 

23 bringing their claim that the Michigan constitution 

24 did not permit taking of private property for private 

25 use, sort of the Kelo case at the U.S. Supreme Court. 
52

Heritage Reporting Corporation

(202) 628-4888

1 Our case was Wayne County v. Hathcock. I'm lucky to 

2 say we won, unlike the property owners in the U.S. 

3 Supreme Court.

4 But the point of making these comments about 

5 my experience is to say in the area of government 

6 civil rights kinds of litigation, I do not see these 

7 as being a problem whether I would be representing the 

8 individual or the government. And I think it's 

9 important to keep in mind in the area of civil rights 

10 how much government information is freely and widely 

11 available.

12 First of all, the FOIA statutes that most 

13 states have and the U.S. Government has make tons and 

14 tons of information readily available. Secondly, 

15 governments operate in the public eye. Their meetings 

16 are public. Their decision-making process is public. 

17 Their minutes are public. All of that is public. And 

18 even in some of the areas of individual claims, such 

19 as the many, many claims that arise in local lockups 

20 or jails or involving police, today so many of those 

21 claims the governments are using videos, video 

22 monitors, and the jail lockup's video monitors on the 

23 police cars, and that plus the testimony of a fairly 

24 limited number of people is enough to prove or 

25 disprove those claims.
53

Heritage Reporting Corporation

(202) 628-4888

1 So I think these rules would be helpful both 

2 to those bringing suits and to those defending suits 

3 because governments are struggling, as are 

4 individuals, with the economics, and what we want in 

5 those very important cases is the ability to get the 

6 key information, have a merits-based resolution of the 

7 dispute, and not have people having to settle their 

8 claim in a somewhat unsatisfactory way because the 

9 costs are too high to proceed.

10 I'm happy to answer any questions.

11 JUDGE CAMPBELL: All right. Thanks, Ms. 

12 Ross.

13 Dean Klonoff?

14 DEAN KLONOFF: In the 1983 cases that you've 

15 handled --

16 JUDGE CAMPBELL: I'm not sure your mike is 

17 on, Bob.

18 DEAN KLONOFF: In the 1983 cases that you've

19 handled, roughly what percentage were done with five 

20 or fewer depositions?

21 MS. ROSS: You know, I'm not going to be 

22 able to be entirely accurate about the number of 

23 depositions. My work on them has been more at the 

24 appellate level than at the trial level, so I'm aware 

25 of the number of depositions obviously. I think many 
54

Heritage Reporting Corporation

(202) 628-4888

1 of them are not huge number deposition cases, but I 

2 don't want to give you a special number because I 

3 didn't go back and look and I don't want to be 

4 inaccurate.

5 JUDGE CAMPBELL: Judge Diamond?

6 JUDGE DIAMOND: Has the DRI with its many 

7 members considered reducing litigation costs by 

8 reducing the fees they charge, whether it's reducing 

9 their hourly rates or figuring a different way to get 

10 paid besides hourly?

11 MS. ROSS: I would say that certainly DRI as 

12 an organization is not in the business of aligning its 

13 members' rates. I think that would have some legal 

14 consequences that we try very hard to stay away from. 

15 But I can tell you that we have many discussions about 

16 the business of legal practice, and it is uniformly 

17 agreed that our members are experiencing serious 

18 pressure on their rates. Many of the clients that our 

19 members work for are extracting significant rate 

20 reductions. Many of our members are now working very 

21 often on alternative fee arrangements. They could be 

22 capped fees. They could be a lower hourly rate with a 

23 success bonus. They could be a single lump-sum amount 

24 for a certain number of cases to be handled over the 

25 course of a year. All of those changes are happening 
55

Heritage Reporting Corporation

(202) 628-4888

1 in the litigation industry in defense firms all across 

2 this country and are causing a reduction in the legal 

3 spend. I think that's a fair statement.

4 JUDGE CAMPBELL: Other questions? Judge 

5 Oliver.

6 JUDGE OLIVER: Just very briefly just 

7 following up on Dean Klonoff's question. I don't mean 

8 to push you too far, but my question to you is if 

9 you're dealing with a 1983 case, let's say excessive 

10 force or something like that, and you have to deal 

11 both with liability issues generally as well as with 

12 policy and custom kinds of issues, do you think five 

13 depositions would likely be enough?

14 MS. ROSS: I think very often five or 10 

15 would be enough, but again, my practice is more 

16 appellate. I would say this. The policies, you know, 

17 that's paper discovery. Often in policymaker cases 

18 the information is going to be available. And then 

19 it's targeted individuals that you can figure out from 

20 the structure of the government which is fully 

21 available.

22 Let me add this point about a distinction in 

23 the government arena versus the private corporation. 

24 When you're looking at the government, the government 

25 structure, who is in command formally, who are the 
56

Heritage Reporting Corporation

(202) 628-4888

1 people, including their job descriptions and what 

2 they're doing, that information is available through 

3 FOIA. And so a lot of that preliminary work at 

4 figuring out who the key players are can be done 

5 through these other mechanisms so that then the actual 

6 discovery can and should be very targeted.

7 JUDGE CAMPBELL: All right. Thank you very 

8 much, Ms. Ross.

9 Professor Carrington?

10 PROF. CARRINGTON: Thank you very much. I 

11 guess I should identify myself. I am a retired 

12 professor. I spent eight years as the reporter for 

13 this committee back in ancient times, and it was a 

14 wonderful adventure. I was appointed by Warren Burger 

15 to that role and continued with a number of different 

16 federal judges, all of whom were very dedicated to the 

17 work of the committee, and I thoroughly enjoyed it.

18 But there was an adversary process at work. 

19 One of the things that happened in the first couple 

20 of years that I was a reporter was there appeared on 

21 the scene something called the Competitiveness 

22 Commission, which was led by Vice President Quayle on 

23 the appointment of President Bush, and I attended a 

24 couple of their sessions, and one of the things that I 

25 was asked informally on such events was couldn't we 
57

Heritage Reporting Corporation

(202) 628-4888

1 just get rid of Rules 26 through 37. Wouldn't that 

2 make the whole system a whole lot better if we just 

3 got rid of discovery, because it costs a whole lot of 

4 money, and it makes American business less profitable, 

5 and consequently we can't compete as well in the 

6 international global market. And we were hearing a 

7 little about this sort of thing just a few minutes 

8 ago, an echo of that same notion.

9 It was ultimately resolved in a way. There 

10 were a lot of minor changes made in the rules, some of 

11 which I served as draftsman for. And one of them did 

12 have to do with the idea that an attorney had a duty 

13 to make a disclosure. If you already had the document 

14 and you knew perfectly well the other side needed it, 

15 you ought to turn it over.

16 That was proposed by one of the members of 

17 the committee, and we put it in the rules, and it did 

18 go to the Supreme Court. Everybody said it was okay. 

19 It went through and was presented to Congress. And 

20 sometime after that the president of the American Bar 

21 Association exploded at the idea of our trespass on 

22 the adversary tradition, and he actually went to the 

23 House of Representatives and got them to vote 365 to 

24 nothing that the rule that I had drafted for the 

25 committee and was going through the process to that 
58

Heritage Reporting Corporation

(202) 628-4888

1 point should not become the law of the United States.

2 But they didn't get to the Senate in time 

3 and so the rule did become the law. And I hold the 

4 distinction of having written a law that became the 

5 law of the United States, notwithstanding the fact 

6 that the House of Representatives voted 365 to nothing 

7 that it should not become law.

8 So I am a veteran of that kind of political 

9 process. I have written a short statement that I 

10 didn't get in the mail, but maybe I can just pass it 

11 around. It was something I did prepare for this 

12 presentation, and I thought maybe for the few minutes 

13 I'm here today I would like simply to emphasize the 

14 historical mission of this committee and of this 

15 function, what are the purposes of the rules, and to 

16 remind you that in the 19th century the United States 

17 and its legal system was in pretty deep trouble.

18 Things were kind of falling apart because of 

19 diverse conflicts that were arising in the national 

20 economy, that we had railroads and we had factories, 

21 but nobody was taking care of much of anything, and a 

22 lot of harm was being done to a lot of people, a lot 

23 of businesses, and as a result, there was a good deal 

24 of conflict, which led to the comment -- produced the 

25 comment by Roscoe Pound about the necessity of somehow 
59

Heritage Reporting Corporation

(202) 628-4888

1 or other getting to solve the conflict problems. And 

2 he was the author of the purposes of the rules, which 

3 was to convince everybody that their rights would be 

4 enforced, and everybody's rights are going to be 

5 enforced. And that really was the message of Roscoe 

6 Pound's statement. The American Bar Association 

7 bought into it, and that's what produced the Federal 

8 Rules, that enabling act, and where we got the rules 

9 in 1938.

10 And that is the principle expressed in Rule 

11 1, and I beg you to keep that very much on your minds, 

12 that our aim is to convince everybody that their 

13 rights will be enforced, whatever those rights, 

14 substantive rights may turn out to be. And to some 

15 extent, the efforts to economize on the process of 

16 course do have the potential to jeopardize somebody's 

17 interests. And I think you have to be very careful 

18 about what you're doing with the discovery process in 

19 that regard. And it may well be that the ABA will be 

20 back again if you are trying to make lawyers betray 

21 their clients in some way or do something that is seen 

22 not to be in the interest of their clients.

23 That was the problem we got into with the 

24 rule that I wrote, and I think there's still some 

25 little echoes in these present rules that do invite 
60

Heritage Reporting Corporation

(202) 628-4888

1 concern, particularly the amendment to Rule 1, which 

2 didn't appeal to me at all anyway, but particularly I 

3 think it kind of suggests that lawyers are supposed to 

4 be not too vigorous on behalf of their clients if it 

5 would somehow be a pain to the other side.

6 The cost of discovery is in many minds an 

7 inflated item. The Federal Judicial Center doesn't 

8 find the cost of discovery to be out of control in 

9 most cases. And the ones where we really can say 

10 obviously a lot of money is being wasted on discovery 

11 tend to be those big cases in which big enterprises 

12 are already on both sides of the case, and that 

13 sometimes does lead to them getting out of hand.

14 I have no doubt that one of the consequences 

15 of the discovery rules -- and not of the discovery 

16 rules but the Federal Rules and other -- the discovery 

17 process particularly is the elevation in hourly 

18 billing by American law firms. That idea really 

19 didn't catch on until about 1950, somewhere along in 

20 there, and the price just kept going up and up and up. 

21 And it is pretty amazing to think about somebody 

22 charging $10,000 for half an afternoon of deposition.

23 But a lot of that kind of expenditure goes 

24 on, and I do think that has been a problem. We get 

25 some reassurance from the current literature 
61

Heritage Reporting Corporation

(202) 628-4888

1 indicating that the value and the price of legal 

2 services is going down. The market has affected that, 

3 and it's harder to charge $1,000 a minute for your 

4 time than it used to be. Clients are more 

5 mistrustful, more likely to control the expenditure of 

6 time by their lawyers.

7 So the proportionality question is less of a 

8 problem than it is sometimes presented to be. And I 

9 urge you to be cautious about trying to save on 

10 discovery expenses at the cost of making individual 

11 rights harder to enforce. And there are a lot of 

12 detailed circumstances in which there's a risk of that 

13 happening.

14 The kinds of cases that are most likely most 

15 vulnerable to invocation of the idea of constraining 

16 disproportionality are going to be those cases in 

17 which an individual has a claim or a small business 

18 has a claim against a big enterprise and is trying to 

19 figure out what was going on out there, who was doing 

20 what to whom, and who is responsible for this. And 

21 that does run up the costs, no question.

22 So that is a caution that I wanted to 

23 express. The other items, well, I guess I have pretty 

24 much said what I have put out at little further length 

25 in that two-page statement, but --
62

Heritage Reporting Corporation

(202) 628-4888

1 JUDGE CAMPBELL: Professor, we will read 

2 this with care, but if I can ask you a question on 

3 something you just said?

4 PROF. CARRINGTON: Sure.

5 JUDGE CAMPBELL: One of the interesting 

6 dynamics in this process is that concern about access 

7 to justice is pushing on both sides of this. Those 

8 who are seeking to reduce the cost of litigation are 

9 doing so in part because so many people are priced out 

10 of federal court. They can't get in. They can't get 

11 a lawyer to take their case because it just costs too 

12 much to litigate. And part of the thought is if we 

13 can somehow try to reduce the cost, we will enable 

14 more people to come into federal court. And of 

15 course, the opposite side is saying you make these 

16 changes, you're going to preclude more people from 

17 federal court because they can't prove their case.

18 Do you have a thought on that tension and 

19 how we ought to be trying to balance those arguments?

20 PROF. CARRINGTON: Well, my sense is that 

21 the individual plaintiffs are not the ones who are 

22 complaining very much about the cost of presenting 

23 their cases or defending themselves and that it tends 

24 to be a problem primarily, not exclusively but 

25 primarily of big enterprises who are engaged in 
63

Heritage Reporting Corporation

(202) 628-4888

1 litigation of one kind or another and who necessarily 

2 have more individual officers and employees who are 

3 engaged in the controversy, and the price tends to get 

4 high.

5 And that tends to be -- I mean, the Federal 

6 Judicial Center's data tends to point in that 

7 direction. It's the disputes between big enterprises 

8 that really run off the charts for cost. And I'm not 

9 convinced that in an ordinary civil rights case that 

10 there's really a serious problem about excessive 

11 costs. There are undoubtedly some episodic cases, 

12 some odd ones here and there in which you encounter 

13 some extraordinary waste of time, but I'm not 

14 persuaded that the real purpose here is to save costs.

15 I think there is an underlying purpose that 

16 was expressed to me by the Quayle Commission, which 

17 was to make American business more competitive by 

18 protecting it from liability. And I think it's not 

19 always candidly presented that way, but I think that's 

20 a lot of what we're talking about.

21 JUDGE CAMPBELL: All right. John?

22 MR. BARKETT: Professor, I'm interested in 

23 your reaction to this question. When Edson Sunderland 

24 was put on the advisory committee, he was put on there 

25 in large part to draft the discovery rules, and he did 
64

Heritage Reporting Corporation

(202) 628-4888

1 that, draft the summary judgment rule, the pretrial 

2 conference rule, and I've wondered a lot if those 

3 rules -- and if Professor Sunderland were writing 

4 those rules today on a clean slate in an era where we 

5 have social medial and social media discovery on the 

6 plaintiff's side, which is becoming a very significant 

7 issue both in terms of preservation and spoliation, 

8 and an era where you've heard already about the amount 

9 of electronic discovery where we're not dealing with a 

10 few pieces of paper, where under Rule 34 originally 

11 there was a good-cause requirement when the rules were 

12 first adopted before you could even get documents.

13 Now we're in an era where judges have been 

14 basically taken out of the discovery process and we're 

15 dealing with large volumes of data that you need a 

16 vendor to help you with in many cases, including a lot 

17 of small cases.

18 How do you think the rules would have been 

19 written if the rules committee members were dealing in 

20 an environment that we're dealing with today where 

21 there are terabytes and even larger amounts of 

22 information on the corporate side. We've heard about 

23 the preservation costs. And even little people walk 

24 around with eight and 16 and 32 gigabyte devices in 

25 their pockets representing hundreds of thousands of 
65

Heritage Reporting Corporation

(202) 628-4888

1 files. I'm curious as to how you think Professor 

2 Sunderland would have dealt with something like that 

3 and how it might guide us based on your historical 

4 perspective.

5 PROF. CARRINGTON: Well, Edson Sunderland 

6 was a fine scholar and a good voice for the cause. I 

7 don't have a direct answer to your question. I mean, 

8 I think it's -- well, I'm not sure exactly what the 

9 question is. Edson Sunderland, yeah. Go ahead.

10 MR. BARKETT: Well, I'm interested in your 

11 reaction. I appreciate very much what you said, that 

12 you don't think the costs are really that great.

13 PROF. CARRINGTON: Yeah.

14 MR. BARKETT: I don't know when the last 

15 time was that you actually worked on a document 

16 production involving electronically stored 

17 information, whether on the plaintiff's side or the 

18 defense side, whether it's a small case or a large 

19 case. But I do recognize that these costs can get 

20 expensive.

21 PROF. CARRINGTON: Well, I'm sure they can 

22 in extraordinary cases.

23 MR. BARKETT: Well, I beg to differ with you 

24 there. It doesn't have to necessarily be that 

25 extraordinary. But that's my point is how familiar 
66

Heritage Reporting Corporation

(202) 628-4888

1 are you of what goes on day to day in both state 

2 courts and federal courts.

3 PROF. CARRINGTON: I'm not pretending to be 

4 engaged in daily litigation.

5 JUDGE CAMPBELL: Could we have you just back 

6 at the mike, Professor? We're sort of losing you.

7 PROF. CARRINGTON: Sure. I'm a senior 

8 citizen. I'm a little over the hill for all of this, 

9 and I grant you that I'm not into all of the 

10 technology. But I am aware of the fact that the same 

11 engineering that produces the technology also produces 

12 ways of tracing and tracking and getting information 

13 out of a huge pile of documents. And it also enables 

14 us, for example, if you don't want to read all the 

15 documents, you can hire somebody in Asia somewhere who 

16 can read English who can do this for a very small fee.

17 MR. BARKETT: But there's a cost associated 

18 with every one of those steps.

19 PROF. CARRINGTON: Oh, to be sure, there's a 

20 cost. Litigation is not free, and I didn't mean to 

21 suggest that it is. But the important step, more 

22 important step here in my view is to make sure that we 

23 are making a pretty full effort to enforce the rights 

24 of individual litigants.

25 One of the -- maybe if I can just take a 
67

Heritage Reporting Corporation

(202) 628-4888

1 moment. There's a wonderful book out recently that

2 inspires me to think about the kind of issues that 

3 this group puts together, and maybe some of you

4 have -- maybe all of you have read it, Why Nations 

5 Fail. It's written by economists, and it's got 

6 endorsements by a whole series of Nobel Prize-winning 

7 economists. And the point of the book is that if you 

8 want a country to work, you have to make sure you run 

9 a system that is inclusive, that gives ordinary 

10 citizens a sense that it's their country, it's their 

11 place, and they have a stake in it.

12 And if you don't do that, then you're going 

13 to have some serious problems. And they go all over 

14 the world with examples of countries that have fallen 

15 apart, others that have come together, a striking 

16 contrast of Botswana as a country that works and it's 

17 prosperous, although they don't have any natural 

18 resources and they don't -- it's just amazing right 

19 there in the middle of South Africa is a prospering 

20 little country. Why? Because everybody in Botswana 

21 thinks of themselves as having a dog in the fight, as 

22 having a stake in the enterprise. And somehow they 

23 got that way.

24 The contrast between North and South Korea 

25 is another one that they dwell on at some length and 
68

Heritage Reporting Corporation

(202) 628-4888

1 very persuasively, that the poorest people in Asia are 

2 in North Korea, and it's because the government is so 

3 full of itself and the people who are prospering 

4 control everything, and they control it to make sure 

5 that they continue to prosper and prosper more if 

6 possible, never mind what happens to ordinary folks.

7 And they go all over the world taking 

8 examples of this. And the change that occurred in 

9 England in 1688 was a change of that kind in which 

10 suddenly, suddenly all the citizens, all the subjects 

11 of the king felt that they had some role, some 

12 participation, some sense of mutual commitment that 

13 made it into a more prosperous nation than it had been 

14 before.

15 So I do think it is very important to pursue 

16 that objective, and the Federal Rules of Civil 

17 Procedure were designed to do precisely that. That 

18 doesn't answer all the questions. I don't pretend to 

19 say exactly what ought to be done. And as I say, I 

20 wrote one rule myself that the American Bar 

21 Association thought was terrible, and maybe it is. 

22 I'm not sure.

23 I would certainly not want to go very far 

24 down the road of burdening plaintiffs' lawyers with 

25 duties that will diminish their ability to bring their 
69

Heritage Reporting Corporation

(202) 628-4888

1 cases, and the amendment to Rule 1 troubled me on that 

2 ground. I didn't particularly like the idea of making 

3 the plaintiff's lawyer responsible for the outcome as 

4 under Rule 1. I mean, Rule 1 is a very good rule, and 

5 we want to make it as efficient as possible, but 

6 trying to impose an independent duty on the part of a 

7 lawyer representing the plaintiffs to try to save 

8 costs and prevent this from being too vigorous a 

9 dispute is I think subject to the same kind of 

10 complaint that was brought to the House of 

11 Representatives in my time.

12 JUDGE CAMPBELL: All right. Well, thank you 

13 very much, Professor Carrington.

14 PROF. CARRINGTON: Okay. Thank you, thank 

15 you.

16 JUDGE CAMPBELL: We are going to take a 15-

17 minute break. We will resume promptly at 10:43.

18 (Whereupon, a brief recess was taken.)

19 JUDGE CAMPBELL: Folks, let's get started if 

20 we can, please. It's 10:43.

21 (Pause.)

22 JUDGE CAMPBELL: Okay. We are going to 

23 continue with Mr. Redgrave.

24 MALE VOICE: Would you like me to shut the 

25 doors?
70

Heritage Reporting Corporation

(202) 628-4888

1 JUDGE CAMPBELL: Actually, in fairness to 

2 you, I'm going to go out and call folks in.

3 MALE VOICE: I'll get it.

4 JUDGE CAMPBELL: Okay.

5 MALE VOICE: We'll fight for the honor.

6 (Pause.)

7 JUDGE CAMPBELL: All right. Mr. Redgrave.

8 MR. REDGRAVE: Thank you, Your Honor, and 

9 it's a pleasure to be here. I appreciate the 

10 opportunity to address the committee. My name is 

11 Jonathan Redgrave. I'm a partner in Redgrave LLP. 

12 I'm here in the Washington, D.C. office. The views 

13 I'm expressing are mine and mine alone. I've had the 

14 privilege of litigating cases over the last 20-some 

15 odd years, a wide variety. I've certainly been 

16 involved in the big ticket litigation, but I've also 

17 done things from wrongful repossessions to small 

18 business-to-business disputes, to lawsuits involving 

19 employment rights, a wide variety of cases I've seen 

20 in my time.

21 And I've also been involved in the Sedona 

22 Conference Working Group on Electronic Document 

23 Retention and Production for years. I was the first 

24 chair for the first five years, and I'm currently a 

25 chair emeritus of that group.
71

Heritage Reporting Corporation

(202) 628-4888

1 I want to commend the Advisory Committee and 

2 especially the discovery subcommittee for its work on 

3 these proposed rules. I think it's a tremendous 

4 undertaking, and it has considered and addressed views 

5 and concerns from all angles.

6 While I'll be submitting written comments by 

7 the deadline probably in January, I want to provide 

8 specific testimony today on three subjects, the first 

9 being why I believe the committee should move forward 

10 with these rules; secondly, my particular views on the 

11 proportionality provisions of Rule 26; and then some 

12 views on Rule 37.

13 With respect to the imperative to act, I do 

14 not believe that we can wait forever for the ever15 elusive empirical data to develop. I've heard that 

16 and seen that in many of the comments. But we all 

17 know the famous quote attributed to Benjamin Disraeli. 

18 There are three kinds of lies: lies, damn lies, and 

19 statistics. Perhaps a fourth is the absence of 

20 statistics.

21 The absence of empirical data, especially in 

22 this age of electronic information that is continually 

23 developing at warp speed, is not a stop sign. In 

24 fact, there are many well-experienced voices in this 

25 room and amongst the judges around the country as well 
72

Heritage Reporting Corporation

(202) 628-4888

1 as practitioners and clients who have lived the past 

2 and the present and can help and understand what lies 

3 ahead and what needs to be done.

4 Indeed, I believe that the comments that 

5 arose at the Duke conference more than three years ago 

6 and in many of the written comments that have been 

7 submitted from disparate groups reflect a consensus 

8 that the civil rules governing discovery need further 

9 amendments.

10 I also commend the steady and deliberate 

11 pace that has been pursued by the committee and the 

12 discovery subcommittee. Anyone who thinks that this 

13 process is rushed has missed the first six-plus years 

14 of this movie.

15 Finally, I also believe that all parties, 

16 all parties in federal civil litigation, individuals, 

17 small businesses, state, local, and federal government 

18 agencies, as well as large businesses, will benefit 

19 from the proposed rules changes that adjust procedures 

20 to better honor Rule 1.

21 With respect to the 26(b)(1) amendments, in 

22 short, I support the proposed changes. This is not a 

23 radical change. This is a change that gives 

24 meaningful life to the promise of proportionality 

25 envisioned by the 1983 amendments.
73

Heritage Reporting Corporation

(202) 628-4888

1 In 1984, Professor Arthur Miller, obviously 

2 known as a contributing architect to the 1983 

3 amendments, said, "Redundancy and disproportionality 

4 most people would agree should be excised." Now, 

5 although Professor Miller may not have viewed these 

6 proposed changes in 2013 as favorably, the sentiment 

7 he expressed at the time in 1983 is absolutely true 

8 today and perhaps in my opinion more compelling than 

9 ever in light of the exponential growth of data that 

10 everyone has. It's not just large businesses.

11 Mr. Barkett noted earlier in his questioning 

12 about the vast growth of information in social media 

13 and in the cloud. This impacts everyone, individuals, 

14 and we're just beginning to see the tip of that 

15 iceberg and what that means and why proportionality is 

16 critical for all litigants.

17 I've been doing a lot of work on this in 

18 trying to write a law review article on the failed 

19 promise of proportionality, and I think there are 

20 three reasons why it has failed to meet the promise in 

21 1983. First, partisan courts quite frankly ignore the 

22 proportionality factors altogether. Haphazard 

23 arguments are made regarding burdens and needs, and 

24 there's no meaningful body of stare decisis.

25 Second, when parties have argued 
74

Heritage Reporting Corporation

(202) 628-4888

1 proportionality, they've missed the point of 

2 proportional discovery, the focus on the discovery 

3 device and whether it's worth the candle and instead 

4 just cite to a factor, it's a big case, or cite to a 

5 factor by itself without really tying it with a 

6 discovery device.

7 And third, I think the absence of a 

8 consistent mandated approach to proportionality causes 

9 the parties to seek and courts to default to a view 

10 that I'm not going to get reversed if I give too much 

11 discovery.

12 So why do the proposed rule changes help? 

13 First, I believe it reinforces the need to consider 

14 proportionality factors when addressing discovery in 

15 every case. It can no longer be ignored by parties or 

16 courts. The proposed deletion of existing language is 

17 likewise necessary to achieve this end.

18 Importantly, proportionality is employed in 

19 the amended rule, as I read it and understand it, it's 

20 still party and position neutral. Proportionality 

21 helps those seeking discovery as much as those seeking 

22 to limit discovery. What the rule does is require 

23 lawyers to do their jobs better.

24 What are the claims or defenses? How does a 

25 particular discovery request seeking relevant 
75

Heritage Reporting Corporation

(202) 628-4888

1 information move the ball forward? Is it worth that 

2 candle? And asking and answering these questions does 

3 not equate to a roadblock at all. They're fundamental 

4 questions that with appropriate answers can justify 

5 extensive discovery in those cases where it's needed, 

6 and that goes for whether it's in the context of a 

7 massive intellectual property rights dispute, an 

8 employment law fight, or even a civil rights context.

9 Proportionality is inherently and remains in 

10 this proposed rule infinitely elastic upon proper 

11 justification, and this rule doesn't inherently harm 

12 anyone or change the burdens.

13 With respect to Rule 37, I know I only have 

14 a few seconds possibly to address this. I believe 

15 that Rule 37(e) in its current formation has failed to 

16 live up to the promise. I think what the discovery 

17 subcommittee has done in formulating a new 37(e) is 

18 commendable, but I think there are still some issues 

19 with the drafting.

20 I suggested a year and a half ago a simpler 

21 formulation of the rule, and I may with all due 

22 respect submit something in my January written 

23 comments. But I think in terms of putting forth some 

24 ideas besides just less language, I think that the 

25 curative measures right now is untethered to any idea 
76

Heritage Reporting Corporation

(202) 628-4888

1 of culpability as well as prejudice. I think John 

2 Rabiej has submitted a comment in this regard. I 

3 think that it is worthy of consideration by the 

4 discovery subcommittee and this committee.

5 In terms of the bad faith or willful that's 

6 currently in (b)(1), I believe we should focus on one 

7 of those terms and define it, and I would pick bad 

8 faith. I think having the alternative terms leads to 

9 a sense of confusion, and I think that will lead to 

10 more disputes.

11 In terms of (b)(2)'s language, and I know 

12 several people are opposed to that in its entirety. I 

13 think the real harm here is in any meaningful 

14 opportunity to present or defend against the claims. 

15 That kind of concept, any meaningful opportunity, is 

16 far distant from what we at Sedona when we wrote the 

17 Sedona Principles talked about in terms of the 

18 materiality of loss. In other words, it mattered to 

19 the outcome for any sort of sanction. And I think 

20 when we're talking about these even larger sanctions, 

21 tying it back to materiality, you can say do they have 

22 an opportunity to present or defend a case or a claim. 

23 That's not really the issue. Did it make any 

24 difference? Was it going to make a difference to the 

25 outcome? And that's a more important test and a 
77

Heritage Reporting Corporation

(202) 628-4888

1 narrow one I admit, but I think it's the right one.

2 In terms of the 37(e)(2) factors, I do not 

3 believe they should be in the rule. I think that 

4 you've got five different factors that are purporting 

5 to define four different things that are not necessary 

6 to an understanding or an implementation of the rule. 

7 If I were in the committee, I would suggest putting 

8 them in the committee notes. And then I think finally 

9 the notion of the sanctions that are going to be 

10 opposed being the least severe available to do the 

11 job, that I believe should actually be elevated into 

12 the text of the rule itself.

13 Those are my comments, and I'd be happy to 

14 take any questions.

15 JUDGE CAMPBELL: Thank you.

16 Questions? Parker.

17 MR. FOLSE: I wanted to give you a chance 

18 to --

19 JUDGE CAMPBELL: Could you push the button, 

20 please, Parker?

21 MR. FOLSE: Thank you. I wanted to give you 

22 a chance to comment on two thoughts I had as I 

23 listened. You said that the proposed language in Rule 

24 26(b)(1) is party and position neutral. Would you 

25 agree that in a case in which there is an imbalance in 
78

Heritage Reporting Corporation

(202) 628-4888

1 the possession of information where one party has 

2 information that the other side needs to prove its 

3 case, but the reverse is not true, that the rule 

4 favors parties that are in possession of information 

5 that they don't want to disclose by giving them 

6 additional tools to resist discovery requests? So 

7 that's the first point.

8 And the second is you said that the language 

9 as phrased is infinitely elastic in that it still 

10 allows courts to provide and tailor discovery 

11 depending on the needs of the case. And I wondered if 

12 it is in fact infinitely elastic, then why do you 

13 believe the change in the language is going to work 

14 any kind of a change in the landscape of discovery and 

15 the costs of litigation?

16 MR. REDGRAVE: I'm happy to address both. 

17 With respect to the first one, I don't believe this is 

18 providing additional tools in a disparate situation of 

19 the one side having a lot of information and the other 

20 side not. I say that because the formulation in 1983 

21 of proportionality, and I can go back to some of the 

22 original concepts here, but there are a lot of 

23 students of the rules on the committee.

24 That last sentence on 26(b)(1) right now 

25 says the courts shall consider the 26(b), (c) or the 
79

Heritage Reporting Corporation

(202) 628-4888

1 renumbered factors over time with respect to 

2 proportionality considerations has already been in 

3 there. But what we've seen, and this is my caselaw 

4 research, is people haven't effectively used those.

5 So it's not a matter of additional tools now 

6 being given to let's say large corporations to beat 

7 down plaintiffs who want information. It's saying 

8 everyone needs to come to that consistent with the

9 Rule 26(g) obligation to say, hey, what is this case 

10 really about? What do I need?

11 So, in the instance here with respect to a 

12 true uniform application of proportionality, I think 

13 representing an individual, you can justify why I need 

14 whatever number of depositions or why we need 

15 discovery from X number of custodians or why we need 

16 information from certain databases. And it's getting 

17 more complex. It's not just turning over documents. 

18 But the idea of proportionality, as I said, helps both 

19 the requesting and the responding party in discovery.

20 That's why I say it's neutral. And I think 

21 what you're seeing in terms of, you know, a lot of 

22 arguments that it's going to be unfair. It is not 

23 some new roadblock because it currently exists as a 

24 tool. It's just not being uniformly applied and 

25 there's not a body of consistent practice about how to 
80

Heritage Reporting Corporation

(202) 628-4888

1 do this. And quite frankly, I think that development 

2 of this under this new rule will help those requesting 

3 parties better translate what they need for their 

4 claims to articulate why the discovery they seek from 

5 a large entity is proportional to give them the right 

6 of access to justice.

7 And I will say one of the important things 

8 from the last speaker was we do need a rule set that 

9 everyone believes gives them a fair shake in court, 

10 that they're not going to be overly burdened, but 

11 they're not going to be cut off from their rights. 

12 And I think this rule set does that balance.

13 Now the second question you asked with 

14 respect to the infinite elasticity, I think there is 

15 an element --

16 JUDGE CAMPBELL: If you could cover this in 

17 about 30 seconds, we would appreciate it.

18 MR. REDGRAVE: I'll cover it in 20 seconds.

19 JUDGE CAMPBELL: Okay.

20 MR. REDGRAVE: The infinite elasticity point 

21 is focused purely on the fact that the rule doesn't 

22 cut off anyone from the ability to argue and show 

23 their need in a particular case. It doesn't give a 

24 company a blanket power to say we're not doing it. 

25 That concept as prescribed in this rule just says 
81

Heritage Reporting Corporation

(202) 628-4888

1 everyone has to come to the table understanding you've 

2 got to deal with it both from a requesting and a 

3 responding side, deal with it responsibly, consistent 

4 with your duties, and if you can justify it based on 

5 that discussion, go to the judge, you can get enormous 

6 amounts of discovery if it's right for that case, 

7 whether it's civil rights, intellectual property, 

8 whatever it is.

9 JUDGE CAMPBELL: All right. Thank you. 

10 Peter Keisler has a brief question.

11 MR. KEISLER: Just one question. Could you 

12 elaborate, Jonathan, on why with respect to Rule 37, 

13 why materiality you think would be a narrower standard 

14 than irreparably deprive a party of any meaningful 

15 opportunity to present or defend against claims in the 

16 action? My instinct would be the opposite.

17 MR. REDGRAVE: In terms of -- well, there's 

18 a couple things here. Materiality as we use it in the 

19 Sedona world applied to all. There had to be some 

20 showing that for sanctions there is a breach of the 

21 duty to be fair. There's culpability and then there 

22 was material prejudice. So there is an element 

23 applying to all sanctions no matter what.

24 With respect to the specific term that you 

25 used there, the irreparable deprivation, that is 
82

Heritage Reporting Corporation

(202) 628-4888

1 pretty tight. But the of any opportunity to present, 

2 that becomes very loose as opposed to saying it was 

3 any -- not any opportunity to present. But 

4 irreparably deprived, or I would say actually had a 

5 material -- it was reasonably probable to have a 

6 material impact on the outcome. In other words, it 

7 really did change the outcome rather than your ability 

8 just to argue.

9 Does that make sense? I'm really saying 

10 it's that ability to argue that's -- anyone can say I 

11 could have argued, I should have argued and maybe that 

12 would make a difference to what I could have argued. 

13 I'm saying no, it should make a difference to what the 

14 outcome would have been.

15 MR. KEISLER: Although by definition here 

16 you're dealing here with something that people 

17 couldn't obtain and was lost or destroyed. So, you 

18 know, there could be an issue with applying that kind 

19 of standard to something where the content is not 

20 fully or even perhaps at all understood.

21 MR. REDGRAVE: That is absolutely right. 

22 There is a close alignment between those two standards 

23 and the reality that you're arguing about things that 

24 no one knows exactly what they were. I agree, that is 

25 a problem.
83

Heritage Reporting Corporation

(202) 628-4888

1 JUDGE CAMPBELL: All right. Thank you very 

2 much.

3 Professor Stancil?

4 PROF. STANCIL: Thank you. My name is Paul 

5 Stancil. I'm a professor of law at the University of 

6 Illinois. Before that, I practiced law for 10 years 

7 as a litigator at both large and small firms. My 

8 comments are informed by both perspectives. I should 

9 also note at the outset two things. One, I need to 

10 make sure I'm first because it makes me sound more 

11 intelligent next time instead of repeating what others 

12 have said; and second, that it's more difficult than I 

13 expected to come up and be critical of people and work 

14 that I deeply admire, but I'm going to go ahead and 

15 forge on with that as well.

16 So, on the flight from Chicago to Washington 

17 yesterday, I had the pleasure of sitting next to a 

18 young legal aid attorney and she was on her way to a 

19 conference here. We'll call her Angela. Angela 

20 represents homeowners who are facing mortgage 

21 foreclosure actions from their lenders.

22 As we talked, I realized I had to scrap my 

23 planned remarks in favor of a couple of stories she 

24 told me that I think highlight my concerns about the 

25 proposed amendments much better than the abstract 
84

Heritage Reporting Corporation

(202) 628-4888

1 academic account that I was going to offer.

2 I'm going to start with something maybe a 

3 little different than you're used to, a proposal to 

4 allow Rule 34 early request for production. As you 

5 might expect, Angela mentioned that her clients enjoy 

6 few advantages relative to their opponents. Mortgage 

7 lenders typically have a few more dollars in the bank 

8 even today than the homeowners who can't make their 

9 payments. But one thing the homeowners can do and 

10 their lawyers can do, they can turn the pressure up 

11 and impose costs by handling discovery requests just 

12 like we handle voting in Illinois: do it early and 

13 often.

14 (Laughter.)

15 PROF. STANCIL: She acknowledged that they 

16 often file requests at the earliest possible moment 

17 both because that puts the screws to their opponents 

18 and because they know their opponents can't do the 

19 same to them.

20 I'm concerned about the proposal to allow 

21 early submission of Rule 34 requests primarily because 

22 it will effectively move the most expensive part of 

23 many cases, document discovery, forward. One can 

24 characterize the period in between filing and the 

25 first Rule 26(f) conference as the calm before the 
85

Heritage Reporting Corporation

(202) 628-4888

1 storm, but it doesn't necessarily follow that we want 

2 the storm to arrive any earlier. It depends on 

3 whether we can use that calm to the net benefit of the 

4 society and the system. In my experience, the no5 discovery period is enormously valuable, not least 

6 because it allows adversaries to assess the strength 

7 of their claims and defenses without being distracted 

8 by the breeze generated as the discovery meter spins 

9 out of control.

10 If the proposed rule change is adopted, the 

11 realities of complex litigation dictate that for some 

12 cases the meter will start running more or less upon 

13 delivery no matter when the rules declare service to 

14 have taken place. Depending on the cases, it's likely 

15 to have one of two undesired effects. For cases 

16 involving potentially valid claims or defenses, it 

17 might stiffen the spine of the responding party, 

18 making them less willing to compromise despite their 

19 legal vulnerability.

20 For frivolous claims or defenses, something 

21 that seems to be a matter of significant concern, 

22 moving document discovery up makes filing suit and/or 

23 asserting the defense more attractive because the 

24 immediacy of cost imposition makes it more threatening 

25 to the adversary.
86

Heritage Reporting Corporation

(202) 628-4888

1 Second, I want to talk like many others 

2 about proportionality. Because I know very little 

3 about foreclosure litigation and defenses available to 

4 the homeowner, I asked Angela what percentage of her 

5 clients have valid legal defenses to lenders' claims. 

6 She indicated it was surprisingly high. In her 

7 experience, upwards of 80 percent of homeowners facing 

8 foreclosure have some good faith legal defense to the 

9 claim.

10 This does not mean, by the way, she's 

11 correct. This is just her perception, which is an 

12 important point. But she also noted that only a 

13 fraction of these defenses are obvious from the 

14 homeowner's own records and recollections. The 

15 remainder must be uncovered on discovery.

16 Finally, she noted that her biggest 

17 challenge in some ways was not the banks against whom 

18 she litigates but rather the judges in front of whom 

19 she appears. Liberal or conservative, the judges 

20 Angela sees have a decidedly low opinion of her 

21 clients. They of course couldn't even manage to make 

22 their mortgage payments. And they tend to believe 

23 that very few will have any sort of defense to a 

24 foreclosure action in the end.

25 While I applaud the Advisory Committee's 
87

Heritage Reporting Corporation

(202) 628-4888

1 attempt to address discovery cost concerns with the 

2 proportionality rule, I'm skeptical that any 

3 proportionality rule is going to get around two core 

4 problems that are inherent in the situation.

5 First, although it may be possible for many 

6 judges to perform reasonable proportionality analyses 

7 with respect to say the amount in controversy, those 

8 sorts of factors, it's unlikely in the extreme that 

9 those judges will be able to make any meaningful 

10 assessment of the likely value of the proposed 

11 discovery. Worse, any judge who thinks they can do so 

12 will almost certainly be influenced by his or her own 

13 priors regarding the type of claim at issue, and there 

14 is substantial reason to believe that those priors are 

15 unreliable even for the most committed and well16 meaning jurists.

17 Still worse, there is a serious correlation 

18 problem. The very cases in which the temptation will 

19 be strongest to reduce allowable discovery on 

20 proportionality grounds are those in which we should 

21 have the least confidence in judges' ability to assess 

22 certain of those relevant factors. They're typically 

23 the cases that involve significant informational 

24 asymmetry problems for the parties seeking discovery. 

25 In other words, they're the cases in which the 
88

Heritage Reporting Corporation

(202) 628-4888

1 proponent of discovery is least likely to be able to 

2 demonstrate ex-ante, as the previous speaker 

3 suggested, that the likely benefit of the discovery 

4 outweighs the burden or cost.

5 So in the absence of reliable data -- and 

6 I'll admit right off the bat that's a very confounding 

7 problem, how do you get reliable data on this -- but 

8 in the absence of reliable data, rather than judicial 

9 impressions regarding the likelihood that such 

10 discovery will bear fruit, it seems to me 

11 inappropriate to authorize the judge to invoke her own 

12 priors regarding the likely value of discovery. But 

13 that is exactly what the proportionality rule 

14 contemplates. And making it mandatory or sort of 

15 bringing more focus to it the way that these changes 

16 do I think is problematic.

17 I've written elsewhere about the risk of 

18 systemic bias by even the most well-meaning of judges, 

19 and this is certainly not my attempt to suggest that 

20 judges are anything other than people who do their 

21 very best day in, day out. But I believe this is a 

22 particularly salient problem, these biases, with the 

23 proportionality proposal as currently drafted. And I 

24 think I'm under five minutes for the first time in my 

25 life.
89

Heritage Reporting Corporation

(202) 628-4888

1 JUDGE CAMPBELL: Congratulations. All 

2 right. Questions?

3 PROF. STANCIL: Yes, sir?

4 MR. FOLSE: What is your view -- there have 

5 been some arguments made by prior speakers today that 

6 this really isn't a dramatic or a drastic change 

7 because the language still already exists in Rule 

8 26(g). You obviously have some concerns about the 

9 appearance of many of the same words in the proposed 

10 rule change to 26(b)(1). What is your view with 

11 respect to whether or not moving the language into 

12 26(b)(1) is or isn't a significant change?

13 PROF. STANCIL: So, when deciding whether to 

14 spend limited research funds on a ticket to 

15 Washington, it was my thought that maybe this ends up 

16 not being such a big deal that it counts along the 

17 side of not coming. In other words, I think that 

18 there are a number of cases in the rules where it 

19 turns out to be very difficult to move judges to 

20 change behavior, and so I don't see -- you know, it is 

21 possible that at the end of the day this is not much 

22 of a difference functionally.

23 At the same time, I think you are very 

24 deliberately in a very high profile way making this 

25 issue of proportionality much more salient to judges 
90

Heritage Reporting Corporation

(202) 628-4888

1 and to litigants to some degree. And so I hate to 

2 sort of dodge the question because I don't know what's 

3 going to happen. The one thing that I've learned --

4 and I hope you know any comment I give is that you 

5 need to be modest about this sort of stuff and see how 

6 it works out. I think, you know, Twombly and Iqbal

7 taught us some lessons along those lines as well. The 

8 sky it turns out maybe wasn't falling quite like some 

9 people predicted.

10 MR. FOLSE: I probably should have asked the 

11 question a little more carefully --

12 PROF. STANCIL: Yeah. I apologize.

13 MR. FOLSE: -- because it's not just the 

14 movement of the language, it's the movement and 

15 replacement of other language that is in 26(b)(1). 

16 But you may have answered the question already.

17 PROF. STANCIL: Yeah. I think I'm probably 

18 still going to stick with the answer.

19 MR. FOLSE: Right.

20 JUDGE CAMPBELL: All right. Judge Koeltl.

21 JUDGE KOELTL: You had mentioned that the 

22 legal aid lawyer liked to serve Rule 34 requests and a 

23 lot of them as early as possible. What would the 

24 change be under the proposed rule? Under the proposed 

25 rule, yes, the document requests could be served 
91

Heritage Reporting Corporation

(202) 628-4888

1 before the Rule 26(f) conference, but the requests 

2 only -- the time to respond to the request is measured 

3 from the 26(f) conference, and under the proposal, 

4 that same legal aid lawyer can have the 26(f) 

5 conference and serve, if it's that same diligent 

6 lawyer who wants to serve as much as possible as early 

7 as possible, you go to the 26(f) conference, you serve 

8 your 34 request and it's the same time to answer.

9 PROF. STANCIL: So I'll answer this more 

10 from the perspective of --

11 JUDGE KOELTL: Could I just add one other 

12 thing?

13 PROF. STANCIL: Yes, sir. I'm sorry.

14 JUDGE KOELTL: The comments that we've 

15 gotten from plaintiffs' lawyers almost uniformly 

16 applaud this rule because --

17 PROF. STANCIL: As I would expect.

18 JUDGE KOELTL: -- they want to move forward 

19 and they want to get their discovery requests out and 

20 they think it would be useful to do it. And some 

21 defendants say, well, we'd like to see what's going to 

22 be involved.

23 PROF. STANCIL: So a couple of responses. 

24 I'll speak at least to some degree as a former 

25 associate at a big law firm doing electronic discovery 
92

Heritage Reporting Corporation

(202) 628-4888

1 work in the earlier days of electronic discovery. 

2 With respect to what that timing gives you, yes, 

3 obviously it's not deemed served until the Rule 26(f) 

4 conference takes place. This is going to start that 

5 clock running. But I will also tell you that in the 

6 words of my 14-year-old daughter, my typical response 

7 when I saw a discovery request whenever it came across 

8 my desk was OMG. How in the world am I going to 

9 respond to this in the time I have? And if we thought 

10 the case was something that was likely to survive a 

11 motion to dismiss, something pretty much the norm in 

12 pre-Twombly or Iqbal era, we started work immediately 

13 on that, and that starts the clock running for the 

14 client, and it had some effect on the client's 

15 mentality as well.

16 With respect to the plaintiffs' lawyers, 

17 yeah. I don't want it to come across that I am a pro18 plaintiff witness. I think probably my 

19 proportionality comments are on balance more pro20 plaintiff than pro-defendant because I think it's more 

21 likely the dynamic I'm concerned with is going to 

22 affect plaintiffs there. But I actually think the 

23 opposite is true with respect to the Rule 34 request. 

24 I think moving that forward is likely to advantage 

25 plaintiffs over defendants disproportionately, and I 
93

Heritage Reporting Corporation

(202) 628-4888

1 think it's that -- so I don't want to suggest that 

2 there is any ideological valence to the sum of my 

3 comments. It's really two different things.

4 JUDGE CAMPBELL: All right. Thank you, 

5 Professor Stancil. We appreciate your comments.

6 Mr. Allman?

7 MR. ALLMAN: Good morning. My name is Tom 

8 Allman. I am I guess the third professor to talk to 

9 you today. I'm an adjunct professor at the University 

10 of Cincinnati College of Law. Prior to that I was 

11 general counsel of a very large chemical company for a 

12 decade that spanned the trend from documents to e13 discovery. And during that decade, I formed some 

14 fairly strong views about the role of preservation and 

15 was one of the folks that advocated that you should 

16 adopt what became Rule 37(e).

17 I also served along with John Barkett on the 

18 e-discovery panel at the Duke conference where we 

19 advocated both a preservation rule and a rule dealing 

20 with spoliation. You have before you now Rule 37(e), 

21 and I'm here to endorse it, and I'm also here to plead 

22 somewhat of an evolution of my thinking.

23 I originally proposed to you folks that you 

24 should take the existing Rule 37(e) and tweak it. And 

25 I and others, among them the Sedona conference, have 
94

Heritage Reporting Corporation

(202) 628-4888

1 suggested ways in which that could be done. You have 

2 chosen not to do so, and I have come to the conclusion 

3 that that is the correct decision, and I strongly 

4 support the enactment of Rule 37(e) with a certain 

5 amount of tweaks in that one as well, and the reason I 

6 do it is because of the role of inherent power.

7 In my view, the occupation of the field of 

8 spoliation sanctions by the current draft of Rule 

9 37(e) is such that it effectively cabins the 

10 sanctioning power of the judges and will discourage 

11 the unnecessary and overuse of inherent power to avoid 

12 the restrictions that you have placed into the rule. 

13 And if I could cite you to a case that really in my 

14 view just captures this very well, and that's The 

15 United States v. ALEO, which is 681 F.3d 290. And at 

16 page 310, Judge Sutton said, "A judge may not use 

17 inherent power to end-run a cabined power." And I 

18 take that as a very strong support for what your 

19 efforts are.

20 Let me tell you why I think what you're 

21 doing is the correct thing. In my view, the lack of 

22 uniformity among the Circuits on the issue of 

23 spoliation is an affront to the entire judicial system 

24 and it's having unnecessary consequences to both 

25 individuals and entities, and I believe that the goal 
95

Heritage Reporting Corporation

(202) 628-4888

1 of alleviating that confusion is worth the candle. To 

2 me, that's what you're trying to do, and that's worth 

3 it.

4 I believe that it will incentivize 

5 reasonable and proportional preservation conduct, not 

6 deincentivize it. I think it will help do it, and it 

7 will do it because it will allow people to have 

8 certainty in their preservation planning, especially 

9 in their primary conduct. It's often forgotten that 

10 so much of what happens in the preservation world at 

11 least happens before there is litigation. And it is 

12 that area of primary conduct that has always concerned 

13 me from day one and is the reason why I support the 

14 bill.

15 However, I must caution you that some of the 

16 factors and some of the wording in the committee note 

17 about the factors is roughly reminiscent of some of 

18 the unfortunate language in the 2006 committee notes 

19 that led into a per se world where the mere failure to 

20 institute a litigation hold, the mere failure to adopt 

21 a preservation standard that some federal judge felt 

22 should be applied universally to all cases was held to 

23 justify sanctions.

24 I think you need to address in the committee 

25 note that risk in ways that it will not have 
96

Heritage Reporting Corporation

(202) 628-4888

1 unintended consequences. I concede that close to what 

2 I'm saying is a possibility that you might want to 

3 consider dropping the factors out of the rules into 

4 the notes. And there is even a possibility of 

5 eliminating those factors for the reasons that one of 

6 the witnesses just suggested, that they're trying to 

7 do too much in those factors in a very complex and 

8 difficult field that is best left to folks like the 

9 Sedona conference. And I confess that I'm also a 

10 chair emeritus of the Sedona conference and so I'm 

11 somewhat biased. But I think we do a better job at 

12 Sedona of articulating the considerations of how to 

13 manage a litigation hold than you can in a rule that 

14 is fixed in time and only changed every 10 years.

15 Another quick comment about what you're up 

16 to. I take it that you are rejecting the Second 

17 Circuit decision in Residential Funding. John Barkett 

18 made that point at the November 2010 conference, rules 

19 committee conference. I sat behind him at the time he 

20 made it. It's an extraordinarily important point. 

21 But you need to think through the implications of that 

22 decision. It doesn't just mean that gross negligence 

23 does not justify sanctions. It also means that 

24 presumption shifting is not justified by gross 

25 negligence.
97

Heritage Reporting Corporation

(202) 628-4888

1 The discovery subcommittee felt that gross 

2 negligence was not equivalent to willful conduct, that 

3 they were quite different things. But some of these 

4 recent decisions do not agree, and so you're going to 

5 have to address that problem, perhaps by defining 

6 willfulness to include that extra element of willful 

7 intent to prevent the use of adverse information. 

8 Perhaps that's the way to do it. Or perhaps you're 

9 going to have to drop willfulness, or even as some 

10 have today suggested, link willfulness by the word 

11 "and" to bad faith.

12 Finally, dealing with Silvestri. I 

13 recognize your concerns about Silvestri, but I do not 

14 believe that Silvestri belongs in the Federal Rules. 

15 I believe that the best way of handling it is to 

16 introduce the key (e)(1) rule by the phrase "absent 

17 exceptional circumstances," much as we've done in 

18 current Rule 37(e), with success I might add, and I 

19 see no reason to believe that you cannot do that and 

20 then in the committee note explain the extraordinary 

21 circumstances that lead to the Silvestri exception, 

22 and it would not then be an exception. It would 

23 simply be a recognized principle of law which would 

24 exist outside the federal rule.

25 And in response to your penultimate 
98

Heritage Reporting Corporation

(202) 628-4888

1 question, if you don't do that, what, I would suggest 

2 too you might want to take a look at Rule 34(a), which 

3 distinguishes between documents and ESI and tangible 

4 things, and you might want to confine the rule just to 

5 documents and ESI. Not just ESI. I totally agree you 

6 cannot draw a line between documents and ESI, but you 

7 could draw it between documents and ESI and tangible 

8 things.

9 I don't recommend it. I don't like it. But 

10 if you're not willing to take away some of the 

11 temptation to equate (b)(2) with (b)(1) and make it 

12 sound as though if you don't like the fact that you 

13 can't find culpability, all you have to do is say the 

14 damage is irreparable and you can avoid the rule. I 

15 don't like that temptation, and I don't think it's 

16 fair to the judges to give that to them. Thank you.

17 JUDGE CAMPBELL: All right. Thank you. We 

18 have about two minutes for questions.

19 Judge Grimm?

20 JUDGE GRIMM: A quick question. Tom, with 

21 the issue of whether we keep the factors or don't keep 

22 the factors --

23 MR. ALLMAN: Yeah.

24 JUDGE GRIMM: -- if the goal is uniformity 

25 to try to have a standard that is not going to change 
99

Heritage Reporting Corporation

(202) 628-4888

1 dramatically from one jurisdiction to another, and 

2 maybe the factors as listed are not the best factors, 

3 but --

4 JUDGE CAMPBELL: Could you turn on that 

5 mike? Folks can't hear you in the back.

6 JUDGE GRIMM: Sorry. But my question is 

7 that if the goal is to try to have a uniform standard 

8 that will be applied in the same fashion in all 

9 jurisdictions as much as possible, if the choice is 

10 having factors and having no factors, is there not a 

11 greater risk of having less uniformity if there's no 

12 guidance whatsoever as to how you might try to apply 

13 those factors to achieve the goals that you're 

14 advancing in the rule itself? And if we got the wrong 

15 factors, are there other factors that should be in 

16 there?

17 MR. ALLMAN: I would like to be able to say 

18 to you I know what the factors are and here is what 

19 they should be. I'm not in a position to say that. I 

20 think it's an extraordinarily difficult thing. I call 

21 it rulemaking by committee note really is what it's 

22 about. I just think the risk of not -- reasonability 

23 and proportionality clearly are related to and 

24 important to this process, but when you throw in those 

25 other factors -- I'm just not happy with your factors.
100

Heritage Reporting Corporation

(202) 628-4888

1 (Laughter.)

2 JUDGE GRIMM: We'll factor that in.

3 MR. ALLMAN: Okay.

4 (Laughter.)

5 JUDGE CAMPBELL: Judge Koeltl?

6 JUDGE KOELTL: If you dropped (b)(2) and 

7 added "absent extraordinary circumstances," wouldn't 

8 that be far more expansive than (b)(2) is now and lead 

9 to the problem that it's really undefined so that 

10 you're really back in the situation that sanctions 

11 could be imposed under the standards that some have 

12 said are too broad?

13 MR. ALLMAN: Yes, I agree it's a risk. I do 

14 think a really carefully written committee note --

15 here I am advocating a good committee note, but I 

16 think a carefully written committee note that explains 

17 and especially touches on the point I tried to make 

18 kind of subtly in my paper, that using the irreparable 

19 prejudice standard as an excuse to enter a default 

20 judgment and allowing a party to go immediately to the 

21 damages suffered is equivalent to creating a 

22 spoliation tort.

23 I think what you need to do is carefully 

24 define in the committee note that the purpose of the 

25 Silvestri exception is to permit parties who would be 
101

Heritage Reporting Corporation

(202) 628-4888

1 unfairly asked to defend a case to have that 

2 avoidance, and I think you could do that in a 

3 committee note. So it's a risk, but I think based on 

4 the fact we've had -- you know, since 2006, we've had 

5 a rule that says that, and I've never seen any case 

6 that has questioned or tried to use that as a hole 

7 through which to drive a truck. I just haven't seen 

8 it.

9 JUDGE CAMPBELL: All right. Thank you very 

10 much, Mr. Allman.

11 Mr. Hedlund?

12 MR. HEDLUND: Good morning, Mr. Chairman and 

13 members of the committee. First I wanted to thank you 

14 for all your efforts on this committee and all the 

15 hard work that you put forth, and thank you for giving 

16 me a chance to speak today about these important 

17 proposed changes.

18 My name is Dan Hedlund. I am a member of 

19 the law firm of Gustafson Gluek in Minneapolis where I 

20 practice antitrust and consumer protection law. I am 

21 also vice president of the Committee to Support the 

22 Antitrust Laws, or COSAL, of which I am here on behalf 

23 of today.

24 I realize the time is limited given the 

25 number of speakers that are appearing, so I refer the 
102

Heritage Reporting Corporation

(202) 628-4888

1 committee to our written comments submitted in March 

2 for a more complete recitation of our views on the 

3 proposed rules. Those comments contain the input of 

4 COSAL members from around the country, members with 

5 many years of prosecuting complex litigation cases on 

6 behalf of small businesses and consumers.

7 Today I am here to testify regarding the 

8 proposed changes to Rules 26(b)(1), 30, and 33. These 

9 changes are potentially unfair to parties bearing the 

10 burden of proof in complex civil litigation in 

11 particular and could result in increasing the costs, 

12 inefficiencies, and burden of litigation for all 

13 parties. These proposed changes raise serious 

14 concerns because they could substantially curtail the 

15 ability of litigants to gather evidence from 

16 defendants and third parties. This is a problem for 

17 the following reasons.

18 First, plaintiffs in antitrust cases are 

19 faced with substantial information asymmetry. 

20 Defendants and third parties have the bulk of relevant 

21 information regarding the market, the product, and the 

22 alleged conduct, while plaintiffs tend to be on the 

23 outside looking in at the outset of a case. Price24 fixing conspiracies by their very nature are secretive 

25 and hidden ventures, and oftentimes they can only be 
103

Heritage Reporting Corporation

(202) 628-4888

1 proved by stringing together numerous pieces of 

2 circumstantial evidence known as plus factors.

3 The evidence vital to plaintiffs' claims is 

4 regularly in the sole possession of the defendants or 

5 sometimes disbursed among a variety of far-flung third 

6 parties. To effectively enforce the antitrust laws 

7 and obtain recoveries for the businesses and consumers 

8 that have been harmed, private litigation is the only 

9 way to do that because although the Department of 

10 Justice issues a lot of fines, as everyone here is 

11 aware, that money does not go through to the people 

12 who have been harmed by the illegal behavior.

13 So, in order to effectively enforce the 

14 antitrust laws, the discovery rules must provide fair 

15 access to defendants' and third parties' information 

16 and documents.

17 Second, many recent court opinions have been 

18 increasing the evidentiary burdens on plaintiffs. For 

19 example, the requirements to prove class certification 

20 have been expanding pursuant to recent cases, 

21 including the Dukes case and Hydrogen Peroxide. This 

22 has led to a period where we are required to gather 

23 substantial amounts of data and to comprehend and 

24 understand a great deal of documentary and testimonial 

25 evidence.
104

Heritage Reporting Corporation

(202) 628-4888

1 Third, the Class Action Fairness Act has 

2 brought many state law class actions into federal 

3 courts. These cases typically assert the laws of 

4 multiple states, further adding to the complexity of 

5 the discovery process.

6 Specifically with regard to the rules, I'll 

7 start with the proposed changes to 26(b)(1). Decades 

8 of law students have learned the simple rule that 

9 discovery is limited to that which appears reasonably 

10 calculated to lead to the discovery of admissible 

11 evidence. The new rule proposes to eliminate this 

12 currently familiar language without replacing it with 

13 an equivalent.

14 This is troublesome for several reasons. 

15 First, we do believe that it is the case that the 

16 burden as it stands now is presently on the party 

17 withholding the information to establish that the 

18 withheld information is beyond the scope or too 

19 burdensome to produce.

20 In contrast, we believe that the proposed 

21 rule imposes a multifactor proportionality 

22 determination that will place a heavy burden on the 

23 party seeking information to satisfy the requisite 

24 proportionality. As we read it, the proposed 

25 proportionality inquiry is open to interpretation and 
105

Heritage Reporting Corporation

(202) 628-4888

1 will subject potentially every discovery request to 

2 scrutiny, and we believe that will lead to 

3 inefficiencies in the discovery process.

4 Third, the proportionality concept is 

5 unworkable at the outset of a complex case 

6 characterized by asymmetric information. Where one 

7 party has all the information, discovery will 

8 necessarily appear disproportional until the evidence 

9 is discovered and used to prove the claims.

10 As currently written, Rule 26(b)(1) 

11 generally treats litigants equally without regard to 

12 the amount of potentially relevant information they 

13 may have. In contrast, the proposed rule appears to 

14 offer protection to larger parties who have a monopoly 

15 on information by allowing them to use that 

16 disproportionate burden to avoid document production 

17 through the use of the proportionality argument.

18 With regard to Rule 30 and the two proposed 

19 changes, first to change the presumptive limit from 10 

20 depositions to five and to reduce the number of hours 

21 from seven to six. With regard to antitrust cases, 

22 which are oftentimes or almost always MDL cases, 

23 dozens of depositions are often required to gather 

24 evidence from far-flung witnesses and to preserve 

25 testimony of witnesses that will not be available at 
106

Heritage Reporting Corporation

(202) 628-4888

1 trial.

2 In addition, experts play a very large role 

3 in the cases that we work on. One side may even have 

4 more than five expert witnesses. Due to the unique 

5 nature, expert witnesses should be, it's our position, 

6 excluded from the proposed limit.

7 Third, reducing the presumptive limit to 

8 five depositions significantly alters the bargaining 

9 position of the parties. The net effect we believe 

10 will be to drag down the number of allotted 

11 depositions below a level necessary to prosecute a 

12 complex case, which can prevent parties from obtaining 

13 all the information that they need to litigate. Five 

14 instead of 10 becomes the new baseline for negotiating 

15 purposes.

16 With regard to the proposed six-hour limit, 

17 antitrust cases involve large amount of documents and 

18 data and a large amount of time during the depositions 

19 is spent going through those documents and 

20 authenticating them. Another issue that arises is 

21 that oftentimes seven hours needs to be split between 

22 multiple parties. We've been in cases where we've 

23 shared time on behalf of the class with the Department 

24 of Justice and with opt-out cases. We've also had 

25 cases where states attorneys general are involved, and 
107

Heritage Reporting Corporation

(202) 628-4888

1 so once the limit is cut to six there's fewer pieces 

2 of pie to go around between the various parties taking 

3 depositions.

4 At the very least, COSAL suggests that the 

5 proposed presumptive limit should be modified by 

6 committee comments to exempt expert and third-party 

7 depositions from the proposed limits. In addition, we 

8 suggest that the proposed rule could include a 

9 clarification that the presumptive limit on 

10 depositions is per party and not per side.

11 Finally, with regard to the interrogatories, 

12 we believe that the proposed shift from 25 to 15 is 

13 similarly problematic for the same reasons that I've 

14 stated with regard to depositions. And in our 

15 proposal, we actually put forth a suggestion with 

16 respect to contention interrogatories, proposing that 

17 they not be required to be answered until the close of 

18 discovery.

19 To conclude, as a lawyer who works on 

20 contingent cases, we at COSAL are familiar with the 

21 expenses of discovery because we bear it until the end 

22 of a case, and sometimes, if the case isn't 

23 successful, we bear it forever. We believe these 

24 proposals to restrict discovery are unnecessary and 

25 should not be adopted, but in the alternative, any new 
108

Heritage Reporting Corporation

(202) 628-4888

1 restrictions should include commentary and the 

2 Advisory Committee notes observing that courts should 

3 be expected to substantially vary the rules and 

4 especially the presumptive limits and caps in complex 

5 and large cases, consistent with the interests of 

6 justice.

7 JUDGE CAMPBELL: All right. Thank you, Mr. 

8 Hedlund. We've got about a minute of time. General?

9 GENERAL DELEREY: Thank you. Given that 

10 your subject is antitrust cases, I wanted to ask you 

11 about your experience. I'm not an antitrust 

12 practitioner, but I sort of assume that the arrival of 

13 an antitrust case would bring with it an assumption by 

14 everybody, including the court, that it's going to be 

15 complicated and will require more than whatever the 

16 defaults are. And so I was curious about your 

17 experience under the current rules in terms of getting 

18 the needed discovery given the complexities of the 

19 case.

20 You mentioned frequent cases with dozens of 

21 depositions. Do you see an issue now with getting the 

22 discovery that you need in these which almost by 

23 definition would be viewed as complicated?

24 MR. HEDLUND: Thank you. Yes. I mean, I 

25 think generally the experience has been that, you 
109

Heritage Reporting Corporation

(202) 628-4888

1 know, for example, we're not limited to 10 just due 

2 to, you know, the complexity of the case and in 

3 particular the number of parties that are involved. 

4 But our concern is that if the numbers shrink that, 

5 you know, when we start negotiating -- for example, 

6 we're negotiating with some defendants now, and their 

7 proposal is that, you know, we should have three 

8 depositions of each defendant family, which equals 

9 more than 10 for the case. But it seems to me that it 

10 becomes -- when the number is diminished, it becomes 

11 sort of a new guideline or a framework to work within, 

12 and the assumption of the courts will be, well, then, 

13 you know, for example, if they were going to give say 

14 60 depositions in a case, now they can say, well, 

15 that's six times the number of depositions that are 

16 allowed under the rules. But now if you did 60 

17 depositions in a case and it's five, then it's 12 

18 times. I think it's a harder argument for us to make.

19 Plus, I do think that with respect to cases 

20 that are not like the cases that I prosecute but with 

21 respect to smaller plaintiffs and cases, you know, 

22 we're used in our practice to going to the court and 

23 talking to the defendants about expanding the number 

24 of depositions. But I do think there's probably 

25 litigants out there who don't have that sort of level 
110

Heritage Reporting Corporation

(202) 628-4888

1 of knowledge with respect to going about that practice 

2 and I think they can be negatively impacted by this as 

3 well.

4 JUDGE CAMPBELL: All right. Thank you very 

5 much, Mr. Hedlund.

6 MR. HEDLUND: Thank you.

7 JUDGE CAMPBELL: Ms. Hoffman?

8 MS. HOFFMAN: Hello. My name is Anna 

9 Benvenutti Hoffman, and I'm a partner at Neufeld 

10 Scheck & Brustin, a small civil rights law firm --

11 JUDGE CAMPBELL: Ma'am, could you pull that 

12 mike down just a bit?

13 MS. HOFFMAN: Sorry.

14 JUDGE CAMPBELL: Thanks so much.

15 MS. HOFFMAN: A small civil rights law firm 

16 that handles serious police misconduct and other civil 

17 rights cases around the country. Obtaining enough 

18 discovery, particularly document and deposition 

19 discovery, is absolutely critical to the success of 

20 our civil rights suits, but we already have a strong 

21 incentive to keep the costs of discovery down as much 

22 as possible. As lawyers representing disadvantaged 

23 clients, we advance discovery costs out of pocket, 

24 carrying them for the multiyear life of the case 

25 against the risk that they will never be repaid if we 
111

Heritage Reporting Corporation

(202) 628-4888

1 lose.

2 Although we object to the proposed new 

3 limits on depositions, interrogatories, and requests 

4 to admit, I will focus today on the proposed limits to 

5 depositions and the new spoliation rules.

6 In our serious civil rights cases, we always 

7 need to take more than five depositions and routinely 

8 more than 10, including at least seven hours with lead 

9 deponent. It is one thing to give judges discretion 

10 to limit discovery, but by creating presumptive limits 

11 that we can never meet, our ability to prove civil 

12 rights violations is left to the essentially 

13 unreviewable mercy of the district judges to grant us 

14 an extension in every single case.

15 For example, we represented Eddie Joe Lloyd, 

16 who was exonerated by DNA testing after serving 17 

17 years in prison for a 1984 rape and murder he did not 

18 commit. While he was involuntarily committed to a 

19 psychiatric hospital, Mr. Lloyd was interrogated by 

20 Detroit police officers who deceived him into 

21 confessing by telling him he could help smoke out the 

22 real killer. The detectives then fed nonpublic facts 

23 about the crime to the innocent Mr. Lloyd to make this 

24 confession falsely appear reliable and then 

25 misrepresented that this nonpublic information had 
112

Heritage Reporting Corporation

(202) 628-4888

1 originated with Mr. Lloyd.

2 As with most of our cases, the defendants 

3 did not admit the misconduct. We had to prove our 

4 case through circumstantial evidence. This mostly 

5 comes from witnesses who generally will not talk to us 

6 outside of a deposition, defendants, other police 

7 employees, prosecutors, and witnesses who testified 

8 against our clients at their criminal trials.

9 As most of these witnesses are hostile to 

10 us, the depositions are slow-going, with even basic 

11 facts conceded only begrudgingly. In Mr. Lloyd's 

12 civil rights suit, we took 18 depositions spanning 24 

13 days. Discovery established that several details 

14 included in Mr. Lloyd's confession were things that 

15 the detectives believed to be true when they 

16 interrogated Mr. Lloyd but that were later proven 

17 false. The only possible source of these details was 

18 the detectives.

19 Discovery also revealed at least two other 

20 instances of coerced or fabricated confessions taken 

21 by the Detroit Police Department around the same time. 

22 At the end of discovery, Detroit not only agreed to 

23 provide substantial compensation for Mr. Lloyd but 

24 also to begin videotaping interrogations in homicide 

25 and other serious felony cases to prevent similar 
113

Heritage Reporting Corporation

(202) 628-4888

1 tragedies.

2 As another example, we represented Michael 

3 Greene, another DNA exoneree who spent 13 years 

4 wrongly imprisoned for rape. Mr. Greene's conviction 

5 was based on deeply flawed forensic evidence. Mr. 

6 Greene should have been excluded as a suspect at the 

7 time of his initial prosecution. Instead, a Cleveland 

8 criminalist falsely claimed that hair comparison and 

9 blood type evidence were highly incriminating.

10 To prove our civil rights case, however, we 

11 had to establish the criminalist knew these findings 

12 were false at the time he reported them. Only after 

13 we took 15 depositions over 17 days did Cleveland 

14 agree to a settlement. It would compensate Mr. Greene 

15 and perform an audit of its forensic laboratory. This 

16 audit in turn led to the exoneration of two more men. 

17 The criminalist, who had remained on the job after 

18 Mr. Greene's exoneration and the prosecution of the 

19 real perpetrator, was fired several months after the 

20 settlement.

21 Both of these cases show how critical 

22 adequate discovery is to the essential objective of

23 ' 1983, ensuring that victims of unconstitutional 

24 misconduct may recover damages or secure injunctive 

25 relief. We firmly believe that had we been limited to 
114

Heritage Reporting Corporation

(202) 628-4888

1 five depositions of six hours each we would not have 

2 succeeded in getting the agreement to videotape 

3 interrogations in Detroit or the audit in the 

4 Cleveland crime lab.

5 The proposed changes to Rule 37 are also of 

6 concern. We routinely face serious difficulties 

7 obtaining the underlying files from our client's 

8 criminal prosecutions even when according to policy 

9 and law they should have been preserved. These files, 

10 the contemporaneous records of the investigation, 

11 often contain critical evidence. The new rules 

12 encourage stonewalling and the destruction of this 

13 evidence.

14 An adverse inference is not a very powerful 

15 sanction. It merely permits the jury to find that 

16 evidence the defendant should have kept but cannot 

17 produce may have been helpful to plaintiff. But it 

18 does provide some incentive for defendants to look for 

19 and produce files. With the change, that would be 

20 gone as it would be essentially impossible to meet the 

21 threshold required for sanctions.

22 Even if files have been willfully destroyed, 

23 it may be difficult to prove that. Typically all 

24 anyone will say is the files have disappeared or 

25 cannot be located. On top of that, we would also have 
115

Heritage Reporting Corporation

(202) 628-4888

1 to prove the loss caused substantial prejudice, which 

2 is particularly difficult when you don't have the 

3 files.

4 We urge you to reject this change entirely. 

5 At the very least it should be limited to 

6 electronically stored evidence. The committee's aim 

7 to make civil litigation more accessible for average 

8 citizens is laudable, but limiting discovery in civil 

9 rights cases will have the opposite effect. It can 

10 effectively shut the courthouse doors to victims of 

11 serious police misconduct.

12 JUDGE CAMPBELL: All right. Thank you, Ms. 

13 Hoffman.

14 Questions? Judge Koeltl.

15 JUDGE KOELTL: Did you reach agreements with 

16 the defendants to take that number of depositions in 

17 the Lloyd and Greene cases, or did the judges give you 

18 the authority to do it?

19 MS. HOFFMAN: To be honest, I don't remember 

20 in those cases whether that was by agreement or --

21 JUDGE KOELTL: But plainly there would have 

22 had to have been either agreement or a decision by the 

23 court to go beyond the 10 deposition limit, and the 

24 rules say that the court must do that if the discovery 

25 is consistent with the rules. Why do you think that 
116

Heritage Reporting Corporation

(202) 628-4888

1 judges would be more reluctant to give you the same 

2 number of depositions when the presumptive limit is 

3 five rather than 10? The judge is still looking at 

4 the same case. The judge is still going to have to 

5 make the determination that this is the number of 

6 depositions that is the reasonable number in this 

7 case. The judge is going to have to say in fact I 

8 must do this if the amount of depositions is 

9 consistent with the purposes of the rules.

10 MS. HOFFMAN: Well, I think there are two 

11 issues. First is by changing the rule from 10 

12 depositions to five depositions, you'd be sending a 

13 strong signal that you think there's too much 

14 discovery. I mean, that's what you've been talking 

15 about. You think there's too much discovery in civil 

16 cases. So I think conscientious judges will take that 

17 signal and say, well, we've been allowing too many 

18 depositions. We should cut down. And I think that as 

19 the gentleman who spoke before me mentioned, when you 

20 have a lower limit of five and you're arguing for 

21 above that instead of arguing for, you know, slightly 

22 over the limit of 10, we're now arguing for triple the 

23 limit of five.

24 The other issue is, to be honest, I mean, 

25 we've faced some judges who are -- not most, but some 
117

Heritage Reporting Corporation

(202) 628-4888

1 judges who are very hostile to our clients, and I 

2 think that if we have to get either agreement from the 

3 defendants or permission from the court to take any 

4 more than five depositions, we run the risk of just 

5 simply not being able to prove our claims at all, and 

6 it would be a very difficult thing to get reversed or 

7 to get review of in any way.

8 JUDGE CAMPBELL: Other questions? Dean 

9 Klonoff?

10 DEAN KLONOFF: Do you see serious prejudice 

11 by the reduction from seven hours to six?

12 MS. HOFFMAN: I mean, I see prejudice. It's 

13 hard to say one hour is serious prejudice. I do think 

14 that with lead defendants in our cases we often have 

15 to take more than seven hours. And frankly, a lot of 

16 that is because of the obstruction by both the 

17 defendants and the defense lawyers. They say they 

18 don't remember anything, they won't admit anything. 

19 There's lots of speaking objections, all kinds of 

20 things which are not permitted by the rules but which 

21 everyone does and you don't want to run to the court 

22 every single time someone's violating the deposition 

23 rules.

24 And as long as you are permitted enough time 

25 in depositions to get what you need anyway, you don't 
118

Heritage Reporting Corporation

(202) 628-4888

1 have to bother anybody with it. You can just kind of 

2 ignore it and go ahead. But the shorter you make the 

3 depositions, the easier it is to just frustrate the 

4 ability to get the necessary discovery at all.

5 JUDGE CAMPBELL: Judge Diamond?

6 JUDGE DIAMOND: You kept saying your firm 

7 represents plaintiffs in serious civil rights cases. 

8 Do you have any sense of how many depositions are 

9 usually needed in less serious civil rights cases?

10 MS. HOFFMAN: I mean, I don't want to say 

11 any civil rights cases are not serious, but I --

12 JUDGE DIAMOND: Your word.

13 MS. HOFFMAN: I understand. Our cases are 

14 all cases with very high damages, often people who are 

15 in prison for many years, you know, death cases, that 

16 kind of thing. My understanding is from plaintiffs 

17 who are representing, you know, people who are held 

18 for 24 hours or something that routinely they don't 

19 take as much discovery because it's not in anyone's 

20 interest for them to take as much discovery. So I 

21 think it's a self-limiting --

22 JUDGE DIAMOND: It's the less exceptional 

23 cases that we see perhaps more frequently. A five24 deposition limit might be perfectly okay.

25 MS. HOFFMAN: But I think that they're 
119

Heritage Reporting Corporation

(202) 628-4888

1 already -- I don't think there's a problem now. I 

2 don't think they're routinely taking more.

3 JUDGE DIAMOND: But the five-deposition 

4 limit would be okay.

5 MS. HOFFMAN: For those cases, they might 

6 take less than five depositions, yes.

7 JUDGE CAMPBELL: All right. Thank you very 

8 much, Ms. Hoffman.

9 Mr. Strand?

10 MR. STRAND: Good morning. Thank you all 

11 very much for having me here today. Thank you all 

12 very much for the very hard work that you've done in 

13 working on the rules over the past several years. I'm 

14 here today on behalf of the Defense Research 

15 Institute. I am currently chair of the DRI 

16 Intellectual Property Litigation Committee, and I am 

17 immediate past chair of the DRI Commercial Litigation 

18 Committee.

19 When I'm not doing DRI work, I am a partner 

20 at Shook, Hardy & Bacon in their Washington, D.C. 

21 office. Over the past 30 years I have been trying 

22 commercial and intellectual property cases, generally 

23 very complex, and I have been living with and under 

24 the very federal rules we're here talking about today. 

25 So I do not come to you as a scholar. I come to you 
120

Heritage Reporting Corporation

(202) 628-4888

1 as someone who has worked with the rules and 

2 oftentimes with judges across the table.

3 I'm here today to urge the committee to 

4 adopt the rules in the form that they're advanced with 

5 the modifications suggested by the Lawyers for Civil 

6 Justice in their written submission. I won't go over 

7 all of that and don't have the time. There are two 

8 things I'd like to talk to, Rule 26(b)(1) and Rule 

9 37(e). We've also submitted written submissions from 

10 the chairman of our firm and you have those before 

11 you.

12 If I can only leave you with one word today, 

13 this is the word I'd leave you with: focus, focus. 

14 Rule 1 of the Federal Rules of Civil Procedure, and I 

15 believe it's Rule 1 for a purpose, talks about the 

16 just, speedy, and inexpensive resolution of claims. 

17 Just, speedy, and inexpensive. And just is first. 

18 Why? Because an inexpensive resolution without 

19 justice is no good. A speedy resolution without 

20 justice is no good. So it's about justice.

21 Now, when I started litigating, the purpose 

22 of litigating was the trial, and the purpose of anyone 

23 in our firm that had any clout was as a trial lawyer 

24 because you walked in to a judge, you walked in front 

25 of a jury, you declared ready and you tried the 
121

Heritage Reporting Corporation

(202) 628-4888

1 lawsuit. Today we have lost focus. Our system is a 

2 system of trial by litigation and trial by discovery, 

3 not trial by jury. We have lost focus.

4 The rules that you all have considered are 

5 attempting -- they're not the total solution. They're 

6 not a panacea. They're attempting to shift that focus 

7 back to the just, speedy, and inexpensive resolution 

8 of claims. Here's what I mean.

9 I do a lot of patent work. I try not to do 

10 a troll litigation. I hate troll litigation, because 

11 what happens? You get a troll that comes in. They 

12 file a lawsuit. They've never practiced. They're out 

13 buying foreign lawyers. Every document they have is 

14 privileged. They come in to your client. They say we 

15 want all documents for all time over everything you've 

16 ever done related to all of your products. It will 

17 cost $100 million to produce -- or it will cost $10 

18 million to produce 100 million documents. And the 

19 first thing your client says is how fast can we settle 

20 this.

21 That's not just, speedy, and inexpensive. 

22 That is litigation for litigation's sake. It is not 

23 litigation for the purpose of the Federal Rules. 

24 That's the most egregious example that's being 

25 considered by our friends across the way here with 
122

Heritage Reporting Corporation

(202) 628-4888

1 legislative changes. Your rules will assist in fixing 

2 that.

3 What do I mean? 26(b)(1). I've been a 

4 plaintiff, I've been a defendant. I have argued as a 

5 plaintiff that I am reasonably calculating to lead to 

6 the discovery of relevant information as I seek 

7 everything in the entire world. I'm not proud of 

8 that, but you do that when you zealously represent 

9 your client.

10 By eliminating that reasonably calculated 

11 language, you are focusing the issue on what is the 

12 claim about. First day of law school we all learn 

13 there are certain elements in the cause of action. 

14 Today we don't talk about elements. We talk about the 

15 litigation.

16 Last week I received a 30(b)(6) notice in a 

17 competitor-on-competitor case seeking right off the 

18 bat ESI discovery. We want a 30(b)(6) day-long 

19 deposition regarding your ESI processes. Now how does 

20 that have anything to do with a patent infringement 

21 case? Take your patent, take my product, look at it, 

22 and we either infringe or we don't. But no, we're 

23 going to spend $100,000 fighting about ESI discovery 

24 right off the bat.

25 Focus: speedy, just, and inexpensive 
123

Heritage Reporting Corporation

(202) 628-4888

1 resolution. 37(e), same type of thing. Let's focus 

2 there on when there is really something that has gone 

3 wrong. I would agree with LCJ that the willful and 

4 bad faith, not or, would make a huge difference there. 

5 Folks don't destroy documents. Many of you are 

6 judges. There is no way in the world if a client's 

7 destroyed documents that's a good thing. You know 

8 you're going to die sooner or later, so just get it 

9 over with. I don't think Rule 37(e)'s change -- I 

10 think it benefits. I don't think it hurts things.

11 I'm slightly over my time.

12 JUDGE CAMPBELL: All right. Thanks, Mr. 

13 Strand.

14 MR. STRAND: So if you have any questions.

15 JUDGE CAMPBELL: Questions?

16 (No response.)

17 MR. STRAND: Thank you all very much.

18 JUDGE CAMPBELL: All right. Thank you.

19 Mr. Troy?

20 MR. TROY: Thank you. I'm Dan Troy. I'm a 

21 senior vice president and the U.S.-based worldwide 

22 general counsel for GlaxoSmithKline, a London23 headquartered research-based global health 

24 organization of 100,000 people, 17,000 in the U.S. 

25 committed to helping people do more, feel better, and 
124

Heritage Reporting Corporation

(202) 628-4888

1 live longer. I'm keenly aware that I'm what stands 

2 between you and lunch. I'm always short. I'll try to 

3 be brief.

4 (Laughter.)

5 MR. TROY: In my position, I see firsthand 

6 almost every day how the U.S. legal system harms the 

7 U.S. competitiveness in the global marketplace. 

8 Within the last 10 years, as a percentage of GSK's 

9 global relative revenues, our annual U.S. external 

10 litigation case costs have been as much as 50 times 

11 higher than our non-U.S. costs. More than 45 percent, 

12 almost half, of GSK's U.S. employees are subject to at 

13 least one preservation notice. By contrast, in the 

14 rest of the world, it's just about one in eight.

15 Foreign-headquartered, worldwide, global 

16 multinationals like GSK, we have many choices about 

17 where to invest, where to expand, where to establish 

18 our new operations. As a 2008 U.S. Commerce 

19 Department report recommended, and I quote, "If high 

20 U.S. legal costs are not commensurate with high 

21 benefits, policymakers will need to find ways to 

22 reduce uncertainty and to bring U.S. legal costs more 

23 in line with those of other advanced economies."

24 I'm here to tell you the costs at least from 

25 where we sit are not commensurate with the said 
125

Heritage Reporting Corporation

(202) 628-4888

1 benefits. To take but two examples, I was in Germany 

2 two weeks ago, in the U.K. last week. We can get way 

3 more cost-effective justice in the United Kingdom and 

4 in Germany. And as a patriotic American, it pains me 

5 to say that, but it is true.

6 When we make contracts with our peers these 

7 days, we opt out of the U.S. courts. That is not the 

8 way it was perhaps 30 or 40 years ago, but that is the 

9 way we as multinationals have to play things.

10 Indeed, a 2011 Harvard Business School 

11 survey of nearly 10,000 alumni identified cost and 

12 delay of the U.S. legal system as an important 

13 impediment to business investment in America. The 

14 U.K., for example, their current economic development 

15 efforts highlight their legal system and its emphasis 

16 on proportionality and cost containment. And I really 

17 think it behooves us to look to places like the U.K. 

18 and Germany to see how you can have an effective court 

19 system which does not function the way ours does.

20 So I'm going to talk about two rules 

21 quickly, and I very much endorse the previous comments 

22 and LCJ's comments. The current overly broad scope of 

23 discovery allowed under current Rule 26(b)(1) creates 

24 an overwhelming burden for corporate litigants and 

25 provides little evidentiary benefit to any party at 
126

Heritage Reporting Corporation

(202) 628-4888

1 trial.

2 Fortune 200 companies reported that in 2008

3 there were an average of 1,000 pages produced in 

4 discovery in major cases for every one page used at 

5 trial, 1/10th of 1 percent. Our experience is 

6 similar. I will submit these comments for the record. 

7 But in one federal multidistrict product litigation

8 that settled recently before trial in 2011, we 

9 produced 1.2 million documents, yet plaintiffs 

10 included only 646 GSK documents on their exhibits 

11 list, less than 5/100ths of 1 percent of the 

12 production.

13 So we strongly support the proposed changes 

14 to 26(b)(1), with the addition of a materiality 

15 requirement which we think is necessary to ensure that 

16 the proposal isn't undermined by historically broad 

17 views of discovery and relevance that have 

18 unfortunately made ineffective the previous scope of 

19 discovery reforms.

20 Turning briefly to Rule 37(e), preservation, 

21 like many corporate defendants, we are forced to take 

22 an extremely conservative approach to the 

23 preservation, collection, review, and production of 

24 documents. In one example, we have preserved 57.6 

25 percent of our company email. That's 203 terabytes of 
127

Heritage Reporting Corporation

(202) 628-4888

1 information. That's 20 times that of the printed 

2 collection of the Library of Congress.

3 Just to take another example, the amount of 

4 material collected to respond to specific requests in 

5 litigation has increased, this is from 2010, 2.86 

6 terabytes, to 2012, 9.03 terabytes. That's 316 

7 percent in two years.

8 So we believe that the proposed Rule 37(e) 

9 is an incredibly important step towards establishing a 

10 national preservation standard desperately needed to

11 allow corporate defendants to reduce costly 

12 overpreservation so we can spend the money on more 

13 socially valuable activities like R&D.

14 We do ask that the proposed rule be further 

15 reviewed to make clear that sanctions are available 

16 only if the actor had a culpable state of mind and 

17 acted with both willfulness and bad faith, though 

18 willfulness has been interpreted inconsistently.

19 To pick up and in conclusion, the favorite 

20 words you'll hear from me, what someone said before is 

21 not right. We don't want to be protected from 

22 liability where it is warranted. We do want to be 

23 protected from what some courts have accurately called 

24 legalized blackmail. We believe that taken together, 

25 the proposed changes, especially as we suggest with 
128

Heritage Reporting Corporation

(202) 628-4888

1 the amendments, would go a long way towards making the 

2 U.S. legal system more fair, efficient, cost3 effective, and, yes, competitive.

4 Thank you for the opportunity to testify. 

5 I'm happy to take any questions.

6 JUDGE CAMPBELL: All right. Thank you.

7 Judge Grimm?

8 JUDGE GRIMM: A question when we're trying 

9 to address some of the notions of the economic 

10 consequences of our system versus another system, and 

11 you expressed some confidence in the one in the U.K., 

12 and also you say that you don't want to avoid 

13 liability where liability is proper. In the U.K., 

14 they require disclosures, to include disclosures of 

15 information which is harmful to the party by their 

16 civil rules.

17 I've had some time and contact with the 

18 judges in the U.K. and how they do that, and that's 

19 ingrained in their system. It would certainly help 

20 reduce the amount of document production, discovery 

21 requests and other things that have to be -- that 

22 happen under our system if there was a requirement 

23 that both plaintiff and defendant produce as a 

24 mandatory disclosure information that was, in the case 

25 of a medical device that allegedly caused some sort of 
129

Heritage Reporting Corporation

(202) 628-4888

1 an injury, the information they had that shows that it 

2 was in fact harmful or that they had knowledge of it.

3 Should we be considering measures like this 

4 when we look at other countries like the U.K.?

5 MR. TROY: I'm not a U.K. lawyer. I'm not 

6 an expert in their system. I can't practice law in 

7 the U.K. That said, I think that if you take a look 

8 at the requirements or the proposals for the American 

9 College of Trial Lawyers, both plaintiffs and 

10 defendants, the best lawyers believe that they 

11 actually can get to the resolution of a litigation 

12 much quicker, much speedier, and by and large they 

13 believe that those kinds of -- I'm not endorsing one 

14 or the other specific thing -- focused information 

15 exchange can lead to better justice and better 

16 resolution. And that's why even plaintiffs' lawyers 

17 like Steve Sussman have endorsed a much more focused 

18 approach to discovery that's much more like the U.K. 

19 than you have here in the U.S. unfortunately.

20 JUDGE GRIMM: You can't get much more 

21 focused than giving up the stuff you know you have 

22 which is harmful to your case, right?

23 JUDGE CAMPBELL: Judge Matheson.

24 JUDGE MATHESON: We've heard now several 

25 times this morning the suggestion about adding 
130

Heritage Reporting Corporation

(202) 628-4888

1 materiality, and I'd be interested in what your 

2 definition of materiality would be and how it should 

3 be applied.

4 MR. TROY: That is a good question. I'm not 

5 sure I've given that enough thought. I'd like to 

6 respond to that in written comments. I mean, as 

7 lawyers, I want to say we know it when we see it. 

8 Materially means materiality does have a sense of 

9 there's something that's important as opposed to being 

10 trivial, whereas I think it's fair to say the 

11 interpretation and application of 26(b)(1) has been 

12 anything that could potentially be relevant as opposed 

13 to things that are again more focused and material.

14 JUDGE CAMPBELL: Elizabeth?

15 MS. CABRASER: Yes, thanks. I'm just 

16 curious if you know what percentage of the business 

17 records of Glaxo that it keeps in the normal course 

18 are now kept solely as ESI.

19 MR. TROY: Great question. I do not know 

20 that offhand.

21 MS. CABRASER: Okay. Thanks.

22 MR. TROY: A lot of it.

23 JUDGE CAMPBELL: We've got several other 

24 hands that have come up. I think the next one up was 

25 Judge Koeltl's.
131

Heritage Reporting Corporation

(202) 628-4888

1 JUDGE KOELTL: It's not clear to me how 

2 adding material to Rule 26(b)(1) would actually work 

3 since it's the standard for discovery, and you're 

4 going to be sending people out into the field or 

5 outsourcing it to contract people abroad to go over 

6 documents. You tell them that these are the documents 

7 which are relevant to a claim or defense, and then 

8 they're going to have to sift through the documents 

9 also to determine whether they're not only relevant to 

10 a claim or defense but also material. Wouldn't that 

11 just sort of increase all of the costs of review, 

12 discovery, sifting? How would it work?

13 MR. TROY: I'm not sure that it would. And 

14 we don't offshore our review, by the way. We tend to 

15 do it here in the U.S. And even if there's an initial 

16 cut made by contract lawyers, the people who are 

17 working on the litigation do take a second cut at 

18 things.

19 So I think it absolutely could work, and it 

20 would just again shrink down the massive amounts of 

21 information that each side is really sort of dumping 

22 on the other, which again, if you go back to the 

23 American College of Trial Lawyers, the plaintiffs' 

24 lawyers who at least participated in that, they don't 

25 want that much information dumped on them either. It 
132

Heritage Reporting Corporation

(202) 628-4888

1 gets to the needle in the haystack problem that was 

2 identified before.

3 JUDGE CAMPBELL: Judge Pratter.

4 JUDGE PRATTER: To understand rather than to 

5 presume the context in which your comments have been 

6 made, could you say just very briefly what it means to 

7 say you get better justice in the U.K. or Germany than 

8 here? I mean, what justice is this?

9 MR. TROY: What I mean is that if we have a 

10 contract dispute and we can choose a forum in which to 

11 litigate, we tend to put in an ADR clause. Why? 

12 Because we think that the courts are too expensive, 

13 the courts are too burdensome, the courts take too 

14 long. But if we can't agree to an ADR clause, we will 

15 often litigate in the U.K. because again the process 

16 is not as burdensome, it's not as costly, it's not as 

17 random.

18 I mean, I can't tell you that in this 

19 individual case versus that individual case, but in 

20 general, the U.S. litigation system does not have a 

21 very good reputation abroad. Go and talk to the 

22 Europeans even as they adopt things like modified 

23 class action kinds of measures. The first thing they 

24 say is, well, we don't want to be like America. We 

25 don't want to be like America. Well, why is that? 
133

Heritage Reporting Corporation

(202) 628-4888

1 It's because our system is the ridicule of the world.

2 JUDGE PRATTER: And excuse me for following 

3 up.

4 MR. TROY: Please.

5 JUDGE PRATTER: But I'm just saying maybe we 

6 could just listen in on what they're saying, but maybe 

7 I won't.

8 (Laughter.)

9 MR. TROY: That hasn't helped us either.

10 (Laughter.)

11 JUDGE PRATTER: But what I'm hearing is that 

12 you're talking more about cost and process, not 

13 result. Or is that how you quantify the result?

14 MR. TROY: Well, I guess two things. First 

15 of all, I'm much more willing and able to try cases in 

16 other places because it's not a process of extortion. 

17 I can actually get to a result much more easily, 

18 quickly, and less expensively, okay? And I think that 

19 this goes way beyond where this committee's 

20 discussions are, but often in certain kinds of complex 

21 cases, I'm a lot better off in front of a judge than I 

22 am in front of a judge and a jury.

23 JUDGE PRATTER: Okay. Thanks.

24 JUDGE CAMPBELL: All right. Thank you very 

25 much, Mr. Troy.
134

Heritage Reporting Corporation

(202) 628-4888

1 We appreciate everybody's comments this 

2 morning. We will take a one-hour break and resume at 

3 1:00.

4 (Whereupon, at 12:01 p.m., the hearing in 

5 the above-entitled matter was recessed, to reconvene 

6 at 1:00 p.m. this same day, Thursday, November 7, 

7 2013.)

8 //

9 //

10 //

11 //

12 //

13 //

14 //

15 //

16 //

17 //

18 //

19 //

20 //

21 //

22 //

23 //

24 //

25 //

26
135

Heritage Reporting Corporation

(202) 628-4888

1 A F T E R N O O N S E S S I O N

2 (1:00 p.m.)

3 JUDGE CAMPBELL: All right. We're ready to 

4 start with the afternoon session. Thank you all for 

5 being here, and I think our first speaker is Mr. 

6 LeBlanc.

7 MR. LeBLANC: Thank you. Good afternoon. 

8 Thank you for the opportunity to testify before this 

9 committee today. My name is Burton LeBlanc. I'm a 

10 shareholder with the law firm of Baron & Budd. And I 

11 appear before you today in my capacity as president of 

12 the American Association for Justice.

13 I'd like to say at the outset AAJ believes 

14 that we do have the greatest legal system in the 

15 world, and the fact that we're going through this 

16 process today serves as a shining example. AAJ, with 

17 members in the United States, Canada, and abroad, is 

18 the world's largest trial bar. Our members have 

19 practical experience with discovery tactics undertaken 

20 by defendants, who often have far greater resources 

21 than the plaintiffs AAJ members represent.

22 In other words, they can afford to battle 

23 over every dispute and spend excessively on document 

24 review while complaining about the expense. AAJ is 

25 extremely concerned with the impact the proposed rules 
136

Heritage Reporting Corporation

(202) 628-4888

1 will have on the administration of justice. The rules 

2 will increase the burden and expense for plaintiffs 

3 and give defendants more tools to avoid discovery --

4 more tools to producing relevant discovery that 

5 plaintiffs need to meet their burden of proof. 

6 Ultimately these proposed rules will make it far more 

7 difficult for consumers and small business owners to 

8 hold wrongdoers accountable.

9 Now AAJ has a number of concerns about the 

10 proposed rules. I'll be submitting extensive comments 

11 to this committee detailing all of those concerns. 

12 But today I want to focus on the harm the new 

13 proportionality standard of 26(b) will create.

14 The proposed changes to Rule 26(b) shifts 

15 the discovery process from a focus on relevancy to an 

16 economic calculation. In doing so, relevancy will 

17 give way to proportionality and defendants will 

18 benefit from step-by-step instructions on how to avoid 

19 producing critical, relevant information that 

20 plaintiffs need to prove their case. Each of the five 

21 factors would benefit defendants at the expense of 

22 plaintiffs, ultimately raising more questions than 

23 they will answer while creating collateral litigation 

24 in each and every case, in our view drastically 

25 increasing the workload of the federal judiciary.
137

Heritage Reporting Corporation

(202) 628-4888

1 The factor that will have the greatest 

2 impact on the fair administration of justice is the 

3 specific consideration of burden or expense. 

4 Discovery is more than a cost-benefit analysis. It is 

5 necessary in the search for the truth, and it is the 

6 method by which injured individuals are able to obtain 

7 information from alleged wrongdoers.

8 Defendants already argue in almost every 

9 case that discovery is simply too burdensome and 

10 expensive to produce, including that as one of the 

11 specific factors at the outset, but when we codify 

12 this practice, you give the argument credibility even 

13 when there is no basis for the claim. This factor 

14 upends incentives for defendants to preserve documents 

15 in an easily accessible format and encourages them to 

16 ensure that discovery will be too expensive or 

17 difficult to retrieve.

18 Justice would not be served in numerous 

19 cases litigated by our members if the burden or 

20 expense factor is codified. For example, in a 

21 complicated qui tam case that resulted in a very large 

22 verdict, plaintiffs alleged that a nursing home 

23 defrauded the federal government and the State of 

24 Illinois by billing Medicare and Medicaid for services 

25 that were so deficient as to be essentially worthless.
138

Heritage Reporting Corporation

(202) 628-4888

1 Discovery in the case involved 25 fact 

2 depositions, five expert depositions, and the review 

3 of approximately 350 patient files and company 

4 records, all of which were necessary because 

5 plaintiffs were required to prove that proper care was 

6 not documented or provided. Discovery also included 

7 the late production of 50 boxes of inappropriately 

8 withheld but relevant documents.

9 There is no doubt that defendants had a 

10 significant burden and expense to produce medical 

11 records for the residents in this case that lasted 

12 over six years. Plaintiffs would never have been able 

13 to prove their case if the defendants had been able to 

14 hide behind the burden of cost of producing relevant 

15 documents, and significant funds would not have been 

16 returned to the federal government and U.S. taxpayers.

17 I'd like to briefly address AAJ's objection 

18 to the proposed changes to the new limits on 

19 depositions, interrogatories, and requests for 

20 admissions. We believe these proposed limits will 

21 place limitations on important discovery tools that 

22 will make it far more difficult for parties to get the 

23 information that they need to support their case and 

24 will eviscerate tools the parties currently use to 

25 resolve simple issues of fact.
139

Heritage Reporting Corporation

(202) 628-4888

1 The problem that the new limits will create 

2 are enhanced by the fact that the proposed rules 

3 require that these exceptions now be granted only to 

4 the extent consistent with the new proportionality 

5 test.

6 While AAJ supports the proposed changes to 

7 Rule 34(b) relating to requests for production, the 

8 totality of the other proposed changes is 

9 overwhelmingly unbalanced against the interests of 

10 plaintiffs, and in our view, the changes are not 

11 necessary. Thank you for your time today.

12 JUDGE CAMPBELL: Thank you, Mr. LeBlanc. A 

13 question. You focused on the burden or expense factor 

14 that would be part of 26(b)(1), and as you know, 

15 that's in the rule now. It's in Rule 26(b)(2). It's 

16 also in Rule 26(g). So it can't be the presence of 

17 that language in the rule that's the problem. It's 

18 the relocating of it that it sounds like you're 

19 objecting to. Could you address what you think the 

20 relocating of it does given the fact that 26(b)(1) now 

21 says all discovery is subject to that factor which is 

22 in 26(b)(2)(C)?

23 MR. LeBLANC: We believe that the relocating 

24 will heighten the burden or expense factor. It will 

25 make it more complicated and challenging for the 
140

Heritage Reporting Corporation

(202) 628-4888

1 plaintiff to deal with that particular burden of proof 

2 early on in the litigation right up front.

3 JUDGE CAMPBELL: How will it do that? I 

4 mean, in every Rule 16 conference I hold, I ask myself 

5 the question and also the parties the question of 

6 proportionality, and we have that discussion right at 

7 the beginning of the case to ensure that the discovery 

8 is proportional to what is needed in the case. And in 

9 most cases, that's what they're proposing, but in some 

10 they're proposing out-of-proportion discovery.

11 MR. LeBLANC: Right.

12 JUDGE CAMPBELL: Is AAJ opposed to that 

13 discussion occurring at the Rule 16 conference, or do 

14 you see other problems arising from the presence of 

15 the language in 26(b)(1)?

16 MR. LeBLANC: We believe that it will 

17 emphasize the proportionality aspect as opposed to the 

18 relevancy aspect of seeking the information sought. 

19 So, yes, we have a problem with the location. Placing 

20 the proportionality test and codifying it up at the 

21 beginning as opposed to the end after determining what 

22 is relevant is a problem for us. We don't oppose 

23 discussing it in a rule conference, though.

24 JUDGE CAMPBELL: Other questions?

25 PROF. MARCUS: A similar kind of question. 
141

Heritage Reporting Corporation

(202) 628-4888

1 You didn't mention the proposed permission to serve 

2 Rule 34 requests earlier than presently allowed. Does 

3 AAJ have a view on that?

4 MR. LeBLANC: We don't oppose the changes to 

5 Rule 34, so we support the proposals as written. I 

6 was running short on time, so I focused on the 

7 proportionality and even had more to say on that but 

8 for time. But no, we do not have opposition to 

9 requests for production.

10 JUDGE CAMPBELL: If I can ask you one other 

11 question. I don't know your particular practice, but 

12 I know your firm is often engaged in large-scale 

13 litigation.

14 MR. LeBLANC: Yes.

15 JUDGE CAMPBELL: Do you find that you 

16 encounter difficulty getting more than 10 depositions 

17 in most cases? And if the answer to that is no, is 

18 there a reason you think you would encounter 

19 difficulty getting more than five?

20 MR. LeBLANC: Let me answer it this way. In 

21 my case, I handle toxic tort and environmental cases, 

22 and at the outset of the type of litigation that I 

23 handle, we did encounter problems getting the 

24 depositions that we needed to prove our case. As this 

25 area of the law has matured and developed, we now 
142

Heritage Reporting Corporation

(202) 628-4888

1 generally enter into consent arrangements with the 

2 defendants concerning depositions.

3 Our concern with limiting the depositions to 

4 five is the same that we heard earlier from the 

5 antitrust bar. It will become the new normal, and it 

6 will be much more difficult to get 15 or 25 

7 depositions, 25 being the norm in the type of cases we 

8 handle.

9 JUDGE CAMPBELL: We have another minute. 

10 Any other questions?

11 (No response.)

12 JUDGE CAMPBELL: All right. Thank you very 

13 much, Mr. LeBlanc.

14 MR. LeBLANC: Thank you for your time.

15 JUDGE CAMPBELL: Mr. Mason?

16 MR. MASON: Thank you, Mr. Chair. My name 

17 is Wayne Mason, and I hope to bring you maybe a little 

18 different perspective. I have a national trial 

19 practice where I travel around the country and try 

20 cases both in federal as well as state court, 

21 primarily on the defense side, although I do do some 

22 plaintiffs' work.

23 I want to talk with you about Rule 26, which 

24 seems to be a popular subject today, and give you my 

25 perspective perhaps of where the rubber meets the road 
143

Heritage Reporting Corporation

(202) 628-4888

1 out on the road so to speak. My experience is and my 

2 recommendation to you is if you did one thing and made 

3 one change through all of this, that it would be to 

4 remove the language as you have proposed with respect

5 to reasonably calculated to lead to admissible 

6 evidence.

7 I heard in the Dallas mini-conference, I 

8 believe it was the chair who mentioned the experience 

9 of having lawyers come in and believing that that 

10 phrase meant you could pretty much have anything you 

11 wanted. And I would tell you that when he said that 

12 that it resonated with me and my experience not only 

13 in the federal system but in the state system and in 

14 arbitrations.

15 And we can't ignore the fact that that is 

16 the reality of this. In arbitrations where they're 

17 going to apply the federal rules, we have the same 

18 reference to it. So I applaud the fact that you have 

19 included that in and recommend that that remain in.

20 This issue of discovery in Rule 26 has 

21 become an issue of leverage. We used to in the trial 

22 bar talk about resolving a case because the person on 

23 the other side was a great trial lawyer and you may 

24 get your bell rung. Now it's just about how much 

25 discovery that they can push the button on and how 
144

Heritage Reporting Corporation

(202) 628-4888

1 much media attention and destructive that the other 

2 side can be.

3 It's an unfortunate situation. So, when I 

4 talk about change and changing this, one might say, 

5 well, wait a minute, this has been in the rule 

6 forever. Why are you saying that this is such a 

7 powerful thing? E-discovery has changed the world, 

8 and it has highlighted and it has created an 

9 opportunity for parties, and not just defendants, 

10 plaintiffs, commercial plaintiffs in cases that know 

11 they can do it, to push the button and use the 

12 leverage there do it.

13 And the importance of focusing on narrowing 

14 that is really an important thing that I think that 

15 you have to consider. The practical realities then of 

16 all of this massive documents, which is not limited to 

17 just multinational corporations, but because everyone 

18 has an iPhone and everyone has a smartphone and an 

19 iPad, the amount of information available from smaller 

20 companies is now disproportionate to what it used to 

21 be, and it does matter in litigation in cases.

22 Here is how it matters too. It's not just 

23 about we'll send it to India and save money, and 

24 defense lawyers, you charge too much money. The 

25 reality is these documents have to be reviewed and 
145

Heritage Reporting Corporation

(202) 628-4888

1 they have to be reviewed typically for attorney-client 

2 privilege, work product, and things like that, and 

3 it's an enormous expense.

4 What I'm suggesting to you is that justice 

5 is not being denied. But my personal view of what I 

6 see is the fact that when I have to produce 2 million 

7 documents and the reality is two dozen of them wind up 

8 in trial of any significance, that there's so much 

9 waste in the system of stuff that is being requested 

10 under the auspices of reasonably calculated to lead to 

11 discovery that it's a real problem.

12 The proportionality, those five factors, I 

13 don't see how that increases the burden and expense to 

14 plaintiffs. I just don't see it. And I would say to 

15 you that in a civil rights context I think there is 

16 clearly protection. And if Ms. Hoffman were to 

17 suggest to anyone as she did in giving her anecdote 

18 today, I think she'd get more discovery. I'm not here 

19 to talk about limits because I'm not exercised about 

20 whatever you decide on that to be honest with you.

21 The pretrial process it's been said this 

22 week is littered with stop signs, and I would suggest 

23 to you that that's an improper metaphor to suggest 

24 that there is not justice in the implication of that. 

25 To just carry out the metaphor, a stop sign does not 
146

Heritage Reporting Corporation

(202) 628-4888

1 say do not enter. You cannot enter, which would 

2 preclude justice.

3 To the extent that a stop sign is in place 

4 in pretrial like we discussed here, it's a moment to 

5 pause, like if we were taking our car to a stop, and 

6 to reflect, which is a powerful and a good thing 

7 typically, and then move forward if appropriate.

8 That's not to say there aren't dispositive 

9 motions and things like that, but to suggest that it 

10 is improper is I think really wrong. Any lawyer who 

11 has the ability to pass the bar exam in any state in 

12 my opinion has the intellectual acumen to focus their 

13 requests and to ask good questions. In my experience, 

14 the best lawyers take the shortest depositions. They 

15 know the questions to ask. And so whatever the number 

16 is, the reality is here we're not precluding justice 

17 by what you're proposing in terms of relevant 

18 evidence.

19 They can still ask the questions without 

20 trouble to sit down, and we can do that, and I should 

21 do that, to be reflective, to ask the right questions. 

22 And that is not changing here, and it is not favoring 

23 one side or the other.

24 The last thing would be just again I 

25 mentioned it briefly, but the reach is really 
147

Heritage Reporting Corporation

(202) 628-4888

1 significant here in state courts dealing with this all 

2 the time and in arbitration. And we can't just say, 

3 well, we're here about the federal system, we can't 

4 talk about that. This matters to justice in the 

5 United States, and it's a pervasive problem, and I 

6 encourage you to stand firm in your recommendations 

7 and to act. Thank you.

8 JUDGE CAMPBELL: Thank you.

9 Questions? Judge Pratter?

10 JUDGE PRATTER: Mr. Mason, did you hear the 

11 comment this morning about predictive coding and 

12 whether or not that was useful or not? Have you any 

13 observations about whether in your practice you've 

14 seen any tendency to use predictive coding, or has it 

15 been a good idea that is just a good idea?

16 MR. MASON: Well, it's an evolving idea. So 

17 far it's just a good idea. We haven't bought all the 

18 software that the other gentleman spoke about, but the 

19 reality is we're always looking for ways. I mean, 

20 fees are too high. We're to blame. Defense lawyers 

21 have some responsibility in this. And the reality, 

22 though, is there is enormous pressure to keep costs 

23 down and the like.

24 And so I embrace that kind of technology and 

25 the like, but it is only one step and it is not the 
148

Heritage Reporting Corporation

(202) 628-4888

1 answer. My experience is the same as the speaker in 

2 terms of multiple cases and things like that. You 

3 can't get agreement on it. You can't afford to use 

4 it. And so, as a practical matter, it's used very 

5 little.

6 And as I said earlier, the other practical 

7 problem is you still have to review a ton of documents 

8 under the current system, millions of documents that 

9 are unnecessary. They're wasteful. There's no --

10 there is not -- and I want to emphasize -- a 

11 preclusion of an ability to find the smoking gun under 

12 your proposals. Or forget the smoking gun. And there 

13 is an ability for justice to be served for people to 

14 get what they need. They need to focus -- someone 

15 used the term focus, focus on the claims.

16 JUDGE CAMPBELL: Other questions? Let me 

17 ask one final one. You talked about producing 2 

18 million documents and 12 became relevant at trial. 

19 Why are you persuaded that if you only had to produce 

20 250,000 documents the plaintiff would still get those 

21 12 for trial?

22 MR. MASON: Because I know what the 

23 documents were, and I know what the claims were, and I 

24 know exactly that, you know, anybody that is capable 

25 of passing a bar examination can ask questions that 
149

Heritage Reporting Corporation

(202) 628-4888

1 would have gotten those documents and not just those. 

2 In fairness, there's an appropriate number in excess 

3 of that. But every one of those documents without 

4 question in my mind were discoverable, would have been 

5 had. It's the waste of the other over million and the 

6 storage costs that we had of every month having to 

7 store all these things and the holds and things that 

8 is the real-world problem.

9 JUDGE CAMPBELL: All right. Thank you very 

10 much, Mr. Mason.

11 Darpana Sheth?

12 MS. SHETH: Good afternoon. My name is 

13 Darpana Sheth, and I'm an attorney with the Institute 

14 for Justice, a nonprofit public interest law center 

15 dedicated to protecting constitutional rights. Thank 

16 you for the opportunity to testify on behalf of IJ at 

17 the first public hearing on the proposed amendments to 

18 the civil rules.

19 I applaud the Advisory Committee and the 

20 distinguished panel for its extensive work in 

21 proposing these reforms. Although IJ welcomes the 

22 amendments encouraging early and active judicial case 

23 management, we are tremendously concerned about the 

24 proposals to narrow discovery and limit the use of 

25 discovery devices. These measures will cause serious 
150

Heritage Reporting Corporation

(202) 628-4888

1 problems in constitutional litigation and contrary to 

2 their intent will in most cases profoundly increase 

3 discovery disputes and therefore litigation costs.

4 Since 1991, IJ has represented individuals 

5 and small businesses in federal courts across the 

6 country to challenge unconstitutional conduct by 

7 government officials at all levels. IJ litigates to 

8 protect free speech, property rights, economic 

9 liberty, and educational choice. Perhaps uniquely 

10 among the witnesses, IJ represents both plaintiffs and 

11 defendants to protect these constitutional rights.

12 For example, I represented the Monks of St. 

13 Joseph Abbey in a constitutional challenge to 

14 Louisiana law prohibiting anyone but a licensed 

15 funeral director from selling caskets. I also 

16 successfully defended a family-run motel against a 

17 civil forfeiture action brought by the U.S. Attorney 

18 in Massachusetts.

19 Most IJ cases are moderate in size. 

20 Typically they are resolved on summary judgment, but 

21 when required trials can last between one and five 

22 days. Routinely they require more than five 

23 depositions, although rarely more than 10. Invariably 

24 these depositions do not last the full seven hours, 

25 but more depositions are required because of the 
151

Heritage Reporting Corporation

(202) 628-4888

1 amount of witnesses.

2 Whether representing plaintiffs or 

3 defendants to protect constitutional rights, there is 

4 an asymmetry in access to information, with the 

5 government in sole possession of most of the facts 

6 needed to prove a constitutional violation. Based on 

7 this perspective of representing both kinds of 

8 litigants in moderate-sized litigation to address 

9 constitutional wrongs, I offer testimony opposing the 

10 proposals related to discovery.

11 First, the proposed proportionality 

12 requirement threatens the very ability of 

13 constitutional plaintiffs to obtain relevant 

14 information from the government. As an initial 

15 matter, through the use of the conjunctive "and," the 

16 amendment requires materials sought to both be 

17 relevant to a claim and defense and proportional to 

18 five subjective and very fact-dependent criteria.

19 Many witnesses today have even suggested 

20 adding a third requirement of materiality. Thus a 

21 government defendant can simply resist requests for 

22 information needed to prove a constitutional claim 

23 based on its own subjective belief that the request is 

24 not proportional to the action. Oftentimes these 

25 actions only seek injunctive or declaratory relief.
152

Heritage Reporting Corporation

(202) 628-4888

1 Moreover, to address Judge Campbell's 

2 earlier comment, relocating the proportionality 

3 factors shifts the burden under the existing rule from 

4 defendants to prove that discovery requests are 

5 disproportional to plaintiffs to prove that the 

6 discovery requests are in fact proportional. The 

7 proposed advisory note makes this burden shifting 

8 clear.

9 Consequently, contrary to its intent, this 

10 requirement will increase litigation costs given the 

11 uncertainty as to what proportionality means in a 

12 particular case and recalcitrant litigants. This 

13 shift will inevitably lead to a barrage of motions to 

14 compel and a concomitant need for judicial 

15 intervention.

16 Second, the amendments reducing the 

17 numerical limits on discovery devices are also 

18 counterproductive to the goals espoused by the 

19 committee. I will focus my comments on limiting the 

20 requests for admission.

21 Empirically there has been no problem with 

22 burdensome or abusive requests for admission. Indeed, 

23 to the extent there is a problem, it is that litigants 

24 underused this very useful tool that can reduce costs 

25 both for parties and the judicial system. Rule 36 
153

Heritage Reporting Corporation

(202) 628-4888

1 requests serve additional vital purposes beyond laying 

2 foundation to admit documents into evidence.

3 First, admissions narrow the issues in the 

4 litigation. Second, they facilitate proof with 

5 respect to the remaining issues. Both of these 

6 purposes expedite litigation by reducing other more 

7 burdensome discovery or making a suit amenable to 

8 summary judgment or even reducing trial time.

9 This is particularly true in constitutional 

10 cases subject to the rational basis standard of 

11 review. For example, in the litigation challenging 

12 the casket monopoly in Louisiana, IJ effectively used 

13 Rule 36 to obtain admissions to prove material facts 

14 about the lack of any health or safety justification 

15 for the licensing requirement. As a result, the trial 

16 was shortened to three hours rather than the 

17 anticipated three days.

18 IJ is sympathetic to the problems raised by 

19 many of the witnesses regarding cost-prohibitive 

20 discovery and extortion at settlements, but changing 

21 the default rules for all civil litigation to address 

22 a problem that occurs in only 30 percent of the cases 

23 is not the solution. This blunt and heavy-handed 

24 approach threatens to close the doors of justice to 

25 meritorious cases, and for nonprofits like IJ with 
154

Heritage Reporting Corporation

(202) 628-4888

1 limited budgets, they threaten to severely curtail the 

2 vindication of constitutional rights.

3 Thank you for your time, and I'm available 

4 for questions.

5 JUDGE CAMPBELL: All right. Thank you.

6 Judge Grimm?

7 JUDGE GRIMM: Can I just sort of as a 

8 practical way of understanding, because the notion of 

9 the shift in the location of the existing requirements 

10 regarding proportionality, I understood you to say 

11 that it shifts the burden to the plaintiff at an 

12 earlier point to be able to justify it instead of at 

13 some later point when the person who is resisting 

14 discovery wants to assert it.

15 But how in practical terms are you able to 

16 meet the requirements that you have under Rule 26(g) 

17 that says that your signature on a discovery request 

18 certifies, and the third element of that is that it 

19 has the same analysis that's required under Rule 

20 26(b)(2)(C), which is it's neither unduly burdensome 

21 or expensive given the needs of the case and the 

22 importance of the evidence?

23 So you've got to make that proportionality 

24 assessment before you can comply with your obligations 

25 under the rule when you initiate it. How if you 
155

Heritage Reporting Corporation

(202) 628-4888

1 already have to do that does moving the language of 

2 proportionality into the scope significantly change 

3 what you already have to do? I don't understand in a 

4 practical matter how does it do that.

5 MS. SHETH: I think there are two points. 

6 One, under current rules, you have the party7 controlled discovery where it's relevant to a claim or 

8 defense, and then you have court-controlled discovery 

9 where it's relevant to the subject matter. And so the 

10 current rules contemplate I think more disputes over 

11 that larger sphere of information that's simply just 

12 relevant to the subject matter. And there I think 

13 that's where 26(g) comes into effect where the signing 

14 the discovery requests indicates that you are aware of 

15 all these factors and you're considering them.

16 With the proposed revisions, you're inviting 

17 more disputes over not just whether it's relevant to 

18 the claim or defense but whether it is in fact 

19 proportional. And at those disputes, it's going to 

20 require judicial intervention, and in that motion to 

21 compel, it's going to be plaintiff's burden rather 

22 than the defendant's burden to show disproportionality 

23 or proportionality.

24 JUDGE CAMPBELL: Rick?

25 PROF. MARCUS: Following up I think on what 
156

Heritage Reporting Corporation

(202) 628-4888

1 you just said, and earlier I think you said the 

2 committee note shows or says that there's a burden 

3 shift. That's what you just said. Can you tell me 

4 where it says that?

5 MS. SHETH: I don't have it in front of me, 

6 but I recall that at least the proposed committee note 

7 that was in the draft --

8 PROF. MARCUS: That's what I'm talking 

9 about.

10 MS. SHETH: Right, right. My understanding 

11 was that that was the implication of the note. If 

12 that's not the case, then, you know, I'm very 

13 relieved, but I think a lot of people --

14 PROF. MARCUS: So, if the committee note 

15 didn't say that, you'd be very relieved.

16 MS. SHETH: I'd be very relieved if there is 

17 not in fact a burden shifting. That's correct.

18 JUDGE CAMPBELL: Any other questions? Go 

19 ahead.

20 JUDGE SUTTON: Yes, just one question. You 

21 know, there's a current safeguard in the rules, which 

22 is that if your opponent is behaving unreasonably with 

23 discovery or the district court judge is being 

24 unreasonable, if a Rule 56 summary judgment motion is 

25 filed against you, and that's usually the big event in 
157

Heritage Reporting Corporation

(202) 628-4888

1 a 1983 case, you can say under 56(d), you know, I 

2 can't respond to this because I haven't gotten enough 

3 discovery. There were three decisionmakers, there 

4 were four other witnesses. I've only had discovery of 

5 five people. I need all seven to be able to respond 

6 to the summary judgment motion.

7 So I'm curious in constitutional litigation 

8 is that a waste -- is that really not a safeguard? Or 

9 maybe you just haven't come across it.

10 MS. SHETH: I haven't actually come across 

11 it because right now the rules adequately protect 

12 rights to discovery, but by severely curtailing that, 

13 I don't know how that would.

14 JUDGE SUTTON: Because what I'm wondering 

15 with the current proposals, it's hard to figure 

16 exactly where things should be. But you've got 

17 safeguard of the person on the other side being 

18 reasonable. If that doesn't work, you're hopeful the 

19 district court judge is being reasonable. But a 

20 concern of an earlier person testifying or commenting 

21 was, well, what if you have an unreasonable district 

22 court judge. It's very unusual to get review of a 

23 limit on depositions or interrogatories, which I think 

24 is true.

25 But I think if you lose a summary judgment 
158

Heritage Reporting Corporation

(202) 628-4888

1 motion having said I can't respond to this, that would 

2 strike me as a pretty serious exception, and I do 

3 think courts of appeals would step in and say how can 

4 they possibly respond to this summary judgment motion 

5 if they're not getting the evidence or a deposition of 

6 a decision-maker or a witness.

7 MS. SHETH: Well, in our practice usually, I 

8 mean, although you can make a summary judgment motion 

9 before the close of discovery, it usually happens 

10 after discovery is closed when all the evidence is in. 

11 So I'm not sure how the rule would take -- the 56 

12 provision would be implemented after with the proposed 

13 rules, but it doesn't seem like it would be an 

14 adequate safeguard. Or it would come into play a lot 

15 more often, whereas right now the current rules 

16 adequately safeguard against it, provide for enough 

17 discovery.

18 JUDGE CAMPBELL: All right. Thank you very 

19 much, Ms. Sheth.

20 Mr. Levy?

21 MR. LEVY: Good afternoon. My name is 

22 Robert Levy, and I am counsel for Civil Justice Reform 

23 and Law Technology at Exxon Mobil Corporation, and I 

24 also serve as chair of the Federal Rules Committee of 

25 Lawyers for Civil Justice. Thank you for the 
159

Heritage Reporting Corporation

(202) 628-4888

1 opportunity to come and speak to you and give a 

2 perspective on the proposed amendments. And my goal 

3 today is to give you some empirical facts that 

4 hopefully will reinforce the reasons why the 

5 amendments to these rules are so important and really 

6 essential to resolving some of the fundamental 

7 challenges that we have in our current litigation 

8 system in federal courts.

9 One initial issue, I know there's been a lot 

10 of discussion, and at the Tuesday hearing there was 

11 discussion as well, about the FJC study. And while 

12 that brought -- the closed case study. That brought 

13 some important information to the process. One of the 

14 areas that was not addressed in that study were costs 

15 and impact of discovery on the parties themselves, 

16 which I think is a very important factor, and 

17 therefore I'm not sure that we can draw the conclusion 

18 from the FJC study that discovery is not a broad issue 

19 and it's solely limited to what's been called a narrow 

20 band of cases. I think that the issue is much broader 

21 and much more severe.

22 A significant driver for why Exxon Mobil 

23 currently has over 5200 individuals on litigation hold 

24 for U.S. matters is the lack of standards for 

25 preservation obligation. Each time we put someone on 
160

Heritage Reporting Corporation

(202) 628-4888

1 hold it impacts up to 10 different parts of our 

2 technology organization, not to mention the impact 

3 that it has on the individual involved.

4 A significant percentage of these holds are 

5 put in place long before the litigation actually is 

6 formally begun, a lawsuit filed, we file one or the 

7 other side files one, and certainly long before we 

8 know who the court is or the opposing party. Plus, we 

9 have to entertain and address and evaluate 

10 preservation issues in all of our e-discovery 

11 platforms, of which you can imagine are quite 

12 significant in number. And so we are making decisions 

13 about what our preservation approach is when we're 

14 looking at implementing new technology or updating 

15 technology. Even as simple as switching out computers 

16 involves preservation issues.

17 So we are very, very focused on these 

18 changes. These holds also impact each individual 

19 employee who is on hold. We estimate that it involves 

20 at least 10 minutes a day for the individual on hold 

21 to address the issues related to the hold and the 

22 obligations in the notification, which include some 

23 pretty direct and important language to each 

24 individual. And they take that very seriously, and so 

25 they have to change the way they do their business.
161

Heritage Reporting Corporation

(202) 628-4888

1 So, if you look at it for the 5200 

2 individuals on hold, and some of those are former 

3 employees, but the vast number are current employees, 

4 it translates into about 867 hours per day in the 

5 company, which on a yearly basis is over 327,000 hours 

6 that are impacted just by the fact of people having to 

7 address litigation holds.

8 And this in terms of productivity even for a 

9 company of my size is talking about real dollars, in 

10 tens of millions of dollars that are impacted simply 

11 by dealing with preservation issues. And, you know, 

12 it is a significant issue.

13 So the next issue or question is why do we 

14 have this vast overpreservation of information. And 

15 as I pointed out before, without the clear standards 

16 and consistent standards throughout all of the 

17 Circuits, we're forced to overpreserve because we're 

18 faced with the risk that in hindsight, looking at the 

19 facts of a particular case, we will be held to what is 

20 referenced as Monday morning quarterbacking about what 

21 we could have done and therefore what we should have 

22 done in that context.

23 Preservation, as I noted, is a big element 

24 in our design and approach to our technology systems, 

25 and I've described it as throwing sand in the process 
162

Heritage Reporting Corporation

(202) 628-4888

1 of efficiency. These systems are designed to make our 

2 people do their jobs more effectively, more 

3 efficiently, to give them more information, and yet 

4 when we have to deal with all of these issues and 

5 hamstring the technology, it slows down the process. 

6 We end up sometimes making significant changes in our 

7 technology and other times not approaching technology 

8 solutions because of these concerns.

9 We also know that very rarely in actual 

10 discovery is this information ever used. In 2012, we 

11 collected data on about 3.8 percent of all the 

12 custodians that we have on hold in the U.S. So just 

13 3.8 percent, so that's about four out of 100 people. 

14 And then we know that even when we collect the 

15 information, so we collect it to preserve it or 

16 sometimes because we needed it, it's very rarely used 

17 in litigation.

18 So of these individuals, the four out of 

19 100, we processed only 16, a little over 16 percent of 

20 that data in terms of matters. So what it's saying is 

21 that 16 percent of the 4 percent is for each 100 

22 people, less than one of those individuals ever has 

23 their information put into the discovery cycle. And 

24 as you know, once it goes into the discovery cycle, 

25 the chances of particular information being needed is 
163

Heritage Reporting Corporation

(202) 628-4888

1 also pretty, pretty limited, a relatively small 

2 percentage.

3 These costs are very significant obviously. 

4 We spend over 40,000 hours in internal costs just in 

5 terms of discovery activities. That's the internal 

6 time of our personnel. That's not including the 

7 outside review time, the outside counsel costs or the 

8 outside costs for our review vendors.

9 So these are significant costs. Obviously 

10 the impact to a smaller company could be devastating, 

11 and it's a big impact for us as well. And I don't 

12 want to belabor this issue, but we know that the 

13 question about costs and the ability to seek and 

14 obtain efficient justice can be a gatekeeper for 

15 whether people can get relief.

16 People don't bring lawsuits because they 

17 know the costs are going to be so high. And I know 

18 that there was a question before about the 

19 nonsignificant civil rights cases. I posit that 

20 there's probably a number of civil rights cases that 

21 are not being brought today because the lawyers can't 

22 make an economic case to bring them because of the 

23 costs of discovery.

24 This is an issue that impacts plaintiffs and 

25 defendants, and these changes will make a meaningful 
164

Heritage Reporting Corporation

(202) 628-4888

1 difference in our civil litigation system. I want to 

2 point out that we endorse obviously the LCJ comments, 

3 and I do agree with John Rabiej's comments on the 

4 issue of curative measures. I think that's a very 

5 important change that should be considered. And I'm 

6 happy to answer any other questions.

7 JUDGE CAMPBELL: Questions? Judge Oliver?

8 JUDGE OLIVER: I think we would all agree 

9 that the plaintiffs didn't cause all these problems 

10 with e-discovery and neither did the defendants, but 

11 technology, as a result of advances in technology, 

12 some of which actually do benefit businesses, that 

13 means that we've got a lot more documents, a lot more 

14 things to control, and there may actually be a lot 

15 more relevant information because people do more 

16 recordkeeping.

17 It's legitimate obviously to think about how 

18 can you lay down a rule where you have some certainty 

19 or relative certainty and that you don't have to 

20 overpreserve. But it's got to be somewhat imprecise 

21 necessarily because of the number of documents and 

22 things you have to anticipate. Wouldn't it be 

23 reasonable to build in some business costs as a result 

24 of decisions that are made that may have you getting 

25 rid of documents that may be pertinent?
165

Heritage Reporting Corporation

(202) 628-4888

1 MR. LEVY: Well, when we look at our 

2 information systems, we, I think like any company, 

3 have to try to figure out the most effective way to 

4 manage information, to govern that information, to 

5 make our company work more effectively. We do have a 

6 tremendous amount of information, and we struggle with 

7 how to get rid of what we don't need in terms of the 

8 business decision-making and have access to the things 

9 that we do need.

10 We also know that when we try to be the most 

11 efficient and effective in making that decision, the 

12 exception is the preservation obligation and what 

13 happens if we get rid of a lot of things that we know 

14 we'll never need, it won't advance our business, but 

15 we're going to be questioned later about why we didn't 

16 save it because it might be related to some future 

17 lawsuit or even an existing lawsuit, and that's a 

18 tough standard.

19 But, yes, business decisions are a factor. 

20 We know we benefit from this information, but we need 

21 to be able to use it in the most effective way 

22 possible. I hope I answered your question on that.

23 JUDGE CAMPBELL: Parker?

24 MR. FOLSE: Given that the rule --

25 JUDGE CAMPBELL: Could you push the button 
166

Heritage Reporting Corporation

(202) 628-4888

1 on that, please?

2 MR. FOLSE: Okay. Given that the rule 

3 doesn't change the obligation to preserve information, 

4 how specifically would the proposed amendments in the 

5 case of your company reduce the number of individuals 

6 who would be on hold or reduce the cost and money 

7 incurred internally devoted to preservation? It 

8 sounds as if there's been a very conscious, well 

9 thought out effort at Exxon Mobil to try to preserve 

10 information. Do you as a result of these rule 

11 amendments do something less, and if so, what language 

12 of the rule allows you to do that?

13 MR. LEVY: I think the difference is that 

14 the decisions that are made, some of them are 

15 decisions that are put to me -- my ability to make 

16 what I think is the reasoned and appropriate and 

17 efficient result that won't cause any loss of 

18 information that relates to a lawsuit will be -- I'm 

19 not going to say no, let's just keep everything, which 

20 sometimes we do now. We have 600 terabytes of data 

21 that's only on hold simply for the potential it might 

22 be needed in a lawsuit.

23 I can guarantee you that of that 600 

24 terabytes, maybe 50 gigabytes would ever be used. But 

25 I can't feel comfortable getting rid of that knowing 
167

Heritage Reporting Corporation

(202) 628-4888

1 that I don't know what the standard against which I 

2 will be judged in that decision, whether it's 

3 reasonableness, whether it's negligence, whatever it 

4 is. So I have to keep it all.

5 And that cost, we're spending a significant 

6 amount of money right now just dealing with the 

7 preservation of that information. It's not free just 

8 to sit that stuff down. There are a lot of costs 

9 associated with that. Those are the types of examples 

10 where we will save money and not lose any information 

11 that will be needed in ongoing lawsuits.

12 MR. FOLSE: Because the standard by which 

13 sanctions would be imposed changes?

14 MR. LEVY: I don't what sanctions -- I don't 

15 know what standard against which my decision will be 

16 made. So, if it's negligence, I'm not sure what --

17 you know, how can I decide whether I will meet that in 

18 deciding I don't think it's reasonably likely that 

19 it's going to be needed, and so I keep it. But if 

20 it's a standard based upon what the committee has 

21 proposed, I think that I'm justified in making the 

22 decision that we don't need to spend the money to keep 

23 it because I know it's probably never going to be 

24 used. But the probably is the part that I think the 

25 difference between some Circuits and other Circuits 
168

Heritage Reporting Corporation

(202) 628-4888

1 could be determinative.

2 JUDGE CAMPBELL: All right. Thank you very 

3 much, Mr. Levy.

4 Ms. Schwartz?

5 MS. SCHWARTZ: Judge Campbell, members of 

6 the committee, thank you for the opportunity to 

7 testify today about proposed amendments to the federal 

8 rules. My name is Michelle Schwartz, and I'm the 

9 director of justice programs at Alliance for Justice, 

10 a national association of more than 100 organizations 

11 dedicated to the creation of an equitable, just, and 

12 free society. AFJ has submitted comments, as have 

13 several of our members.

14 I speak today to urge you to consider these 

15 amendments in the broader context of numerous factors 

16 already affecting everyday Americans' access to the 

17 courts and to reject those proposals that would 

18 further diminish that access.

19 I want to push back on the suggestion that 

20 was made earlier that our justice system is somehow a 

21 black mark on our nation's reputation. Quite to the 

22 contrary, thanks in no small to the efforts of those 

23 on the committee and others in this room, our justice 

24 system is the envy of the world. Disputes that in 

25 other places might be decided on the streets here are 
169

Heritage Reporting Corporation

(202) 628-4888

1 decided in the courtroom.

2 The system works because people know that 

3 when they enter an American courtroom, they do so on a 

4 level playing field. Whatever inequities of status, 

5 class, or money exist on the outside do not matter 

6 before an impartial judge and jury. This ideal is 

7 inscribed on the U.S. Supreme Court: equal justice 

8 under law.

9 The system only works as long as the 

10 American people believe they can in fact have their 

11 day in court if they are wronged, but that belief is 

12 being eroded by a number of factors. First, with one 

13 in 10 federal judgeships vacant and courts suffering 

14 under the weight of draconian budget cuts, more and 

15 more Americans are being forced to wait for justice 

16 despite the efforts of federal judges.

17 Second, consumers, employees, and even small 

18 businesses are being blocked from the courthouse 

19 because of forced arbitration agreements in the fine 

20 print of contracts.

21 Third, the class action device is facing 

22 increasing limitations. That device often is the only 

23 path to relief for individuals who have been harmed 

24 but whose injuries alone are not worth the cost of 

25 litigation. It is also an incredibly important 
170

Heritage Reporting Corporation

(202) 628-4888

1 mechanism for addressing societal wrongs.

2 And fourth, pleading standards have been 

3 increased in recent years such that victims who make 

4 it through the courthouse doors frequently cannot make 

5 it past the initial pleading stage.

6 Together these recent developments mean that 

7 it's harder for victims to find a lawyer who will take 

8 their case, and victims are questioning whether they 

9 can really have their fair day in court. As a result, 

10 more and more wrongdoing will be pushed underground. 

11 That has dire consequences for the victims themselves, 

12 but it also harms our society when wrongdoing 

13 continues unpunished and the public doesn't learn of 

14 threats to their health, safety, and well-being.

15 Unfortunately, a number of the proposed 

16 amendments to the federal rules will only magnify the 

17 barriers that already exist for those seeking justice.

18 In particular, we are concerned about the changes to 

19 Rules 26(b), 30, 31, 33, and 36. By limiting 

20 discovery, these changes would further serve to 

21 discourage victims from going to court, discourage 

22 lawyers from taking victims' cases, and privilege 

23 parties with money and power.

24 I've heard it suggested that these proposed 

25 amendments are minor and would have little effect. 
171

Heritage Reporting Corporation

(202) 628-4888

1 That may be true in cases where the parties have equal 

2 power and resources, but where a victim with few 

3 resources is coming up against a powerful corporation, 

4 the impact will be anything but small.

5 I began by speaking about an inscription on 

6 the U.S. Supreme Court. I would like to end my 

7 remarks with an inscription on the Frank R. Lautenberg 

8 Federal Courthouse in Newark, New Jersey. I had the 

9 great honor of working for Senator Lautenberg, my home 

10 state senator, for six years. Although he was not a 

11 lawyer himself, Senator Lautenberg had a deep and 

12 abiding respect for our justice system, a respect no 

13 doubt shaped by his experience fighting in Europe 

14 during World War II.

15 And so, when it came time for Senator 

16 Lautenberg to choose an inscription for the courthouse 

17 that bears his name, he wrote, "The true measure of 

18 democracy is its dispensation of justice." At a time 

19 when public confidence in two of our three branches of 

20 government is disturbingly low, it has never been more 

21 important for Americans to believe in the fair 

22 dispensation of justice. Therefore, AFJ urges the 

23 committee to reject changes to the federal rules that 

24 would undermine those beliefs. Thank you.

25 JUDGE CAMPBELL: All right. Thank you. 
172

Heritage Reporting Corporation

(202) 628-4888

1 Comments or questions for Ms. Schwartz?

2 (No response.)

3 JUDGE CAMPBELL: All right. Thank you very 

4 much for your comments.

5 MR. BARKETT: I have one.

6 JUDGE CAMPBELL: Yes, please, Justice 

7 Nahmias (sic). Could you pull a mike over toward you?

8 MR. BARKETT: Oh, sorry. No. I have one.

9 JUDGE CAMPBELL: Oh, it's John. Okay.

10 MR. BARKETT: Did you have a specific 

11 reaction to the scope of discovery in 26(b)(1)? You 

12 rolled a number of numbers together, but did you have 

13 a particular reaction to the scope changes?

14 MS. SCHWARTZ: The concern about Rule 26(b) 

15 is by moving the proportionality requirement up, by 

16 taking out the longstanding language that has existed 

17 in that rule, we're very concerned that that will 

18 increase litigation around those questions and further 

19 burden already overburdened courts, therefore making 

20 it even more difficult for people to get justice, 

21 delaying trials and so on.

22 MR. BARKETT: Even though you've heard 

23 already the (b)(2)(C) factors have been part of (b)(1) 

24 for a long time, reasonably calculated has been 

25 subject since 2000 to a good cause standard, and the 
173

Heritage Reporting Corporation

(202) 628-4888

1 26(g) certification language that all lawyers now sign 

2 essentially say the same thing.

3 MS. SCHWARTZ: Well, I think the concern is 

4 twofold. One is taking out the reasonably calculated 

5 language altogether and --

6 MR. BARKETT: Well, it's not removed 

7 altogether. It's just adjusted to reflect its 

8 original intent.

9 MS. SCHWARTZ: I would submit that the 

10 change is going to lead to corollary litigation around 

11 that question, and also the concern of moving it up in 

12 the rules and making it so that that burden is placed 

13 on the proponent of the discovery at the outset as 

14 opposed to being a question that may be determined 

15 later on.

16 JUDGE CAMPBELL: Okay. Any other questions?

17 (No response.)

18 JUDGE CAMPBELL: All right. Thank you very 

19 much for your comments.

20 Ms. Vaughn?

21 MS. VAUGHN: Good afternoon, members of the 

22 committee. My name is Andrea Vaughn. I'm a staff 

23 attorney with the Public Justice Center. We are a 

24 nonprofit social justice law firm in Baltimore, 

25 Maryland that works to expand and enforce the rights 
174

Heritage Reporting Corporation

(202) 628-4888

1 of those who have suffered due to poverty or 

2 discrimination, and we do this through litigation, 

3 legislative advocacy, and community education.

4 I very much appreciate the opportunity to 

5 come here today to provide input on how these proposed 

6 changes to the rules will impact our clients' ability 

7 to enforce their basic rights under the law. I'll be 

8 brief because we've also submitted written comments, 

9 and I'll just focus on our three main concerns.

10 First, the presumptive limit on deposition 

11 hours and the reduction of depositions from 10 to five 

12 would significantly burden our clients in employment 

13 cases. Our workplace justice project litigates many 

14 cases on behalf of low-wage workers for nonpayment of 

15 wages, and these cases often involve complicated 

16 employment relationships.

17 For example, we litigate a lot of cases 

18 around labor broker arrangements or rental worker 

19 schemes. These all have multiple employers, which 

20 often require several 30(b)(6) depositions of the 

21 corporate employers as well as additional depositions 

22 of foremen, managers, supervisors, et cetera.

23 All of these depositions are necessary to 

24 take out the facts around control that is required to 

25 show joint employment under federal employment laws. 
175

Heritage Reporting Corporation

(202) 628-4888

1 These depositions also take a significant amount of 

2 time in order to uncover the necessary and relevant 

3 evidence to establish these relationships.

4 In addition, I'm sure not only in our 

5 litigation but in much more litigation than was 

6 previously true, many depositions require the use of 

7 an interpreter. Using an interpreter in depositions, 

8 as you can imagine, often can take more than double 

9 the time that is normally needed for a deposition. 

10 While in theory a judge could permit a party more time 

11 to depose a non-English speaker, the need to argue 

12 exceptions each time, which in our cases would be for 

13 most depositions that we defend and even some that we 

14 conduct, could deter reliance on such witnesses at 

15 all.

16 Reducing the presumptive limits both in 

17 number and hours would therefore particularly burden 

18 our clients' access to key evidence and would require 

19 us to routinely demonstrate why the presumption would 

20 not apply. In short, altering limits we don't see as 

21 necessary, and we think that it would increase the 

22 costs of litigation and impede access to justice for 

23 low-wage workers.

24 Second, in employment and civil rights case, 

25 defendants typically are in possession of the facts 
176

Heritage Reporting Corporation

(202) 628-4888

1 that plaintiffs need to support their claims, and the 

2 proposed rules we believe would further this imbalance 

3 by adding additional limits to plaintiffs' access to 

4 information.

5 For example, in employment discrimination 

6 claims, plaintiffs need records of hiring decisions, 

7 pay scales, names of coworkers who may have heard 

8 improper remarks, names of comparators. All of this 

9 evidence is in the hands of the employer, and 

10 plaintiffs' only tool to get this evidence is through 

11 discovery, especially interrogatories and depositions.

12 Therefore, decreasing the number of 

13 interrogatories and depositions will usually be 

14 inadequate to generate the evidence that a plaintiff 

15 needs to prevail, and this is especially true in cases 

16 where we are arguing a joint employer relationship, as 

17 I alluded to earlier.

18 And finally, as you've heard a lot about 

19 already today, we are definitely concerned about the 

20 new limitations on discovery based on proportionality. 

21 Defining the scope of discovery to include, in our 

22 cases, consideration on the amount of controversy at 

23 the outset puts low-wage litigants at a distinct 

24 disadvantage.

25 For many low-wage worker plaintiffs, 
177

Heritage Reporting Corporation

(202) 628-4888

1 including our clients, the amount in controversy may 

2 be relatively small, especially in comparison to the 

3 costs of litigating a case in federal court. Clearly 

4 low-wage workers will be at a disadvantage in 

5 litigating their wage claims if the scope of 

6 permissible discovery shrinks in proportion to the 

7 monetary value of their claims.

8 We also believe that this proposed rule is 

9 in direct conflict with the remedial purposes of 

10 important employment laws like the Fair Labor 

11 Standards Act, which drafters intended to facilitate 

12 the enforcement of important rights, especially in the 

13 case of low-wage workers.

14 So not only does this rule adversely impact 

15 low-wage workers in employment claims, it will cause 

16 more delays and more increased costs while the parties 

17 litigate more discovery disputes.

18 In conclusion, typical civil rights and 

19 employment plaintiffs can prevail only through the 

20 liberal use of discovery. These proposed rule 

21 changes, especially the ones that I've just discussed, 

22 will subject litigants, especially low-income 

23 litigants, to an unfair and often insurmountable 

24 disadvantage.

25 Thank you. I'm happy to take any questions.
178

Heritage Reporting Corporation

(202) 628-4888

1 JUDGE CAMPBELL: All right. Thank you.

2 Questions?

3 MR. FOLSE: To what extent in the work that 

4 you described have you been facing proportionality5 related objections based on undue cost or expense 

6 already under the existing rules?

7 MS. VAUGHN: That's a great question. 

8 Defendants now often bring up, for example, the amount 

9 in controversy. This is a case about a small amount 

10 of money. The discovery you are seeking is too much. 

11 But typically we are still able to get the information 

12 we seek, and if not, then -- or the defendants have to 

13 move for a protective order. Our concern is that with 

14 this rule, it puts the presumptive responsibility --

15 or the parties have the ability to resist discovery 

16 based on something like amount in controversy, whereas 

17 now it would be a question for the court.

18 JUDGE CAMPBELL: Judge Pratter.

19 JUDGE PRATTER: Have you run into any 

20 circumstances or cases where a judge who's been 

21 requested to give you more time on depositions because 

22 of a translator or an interpreter has refused that 

23 kind of a request?

24 MS. VAUGHN: We have not had that come up 

25 ourselves yet. I think my main concern with the 
179

Heritage Reporting Corporation

(202) 628-4888

1 shortening of the deposition hours, and I heard 

2 someone earlier say one hour may not seem like a lot, 

3 but the idea is that by just shortening it, you know, 

4 going from seven to eight hours may not be seen as a 

5 big deal. Maybe going from six to eight or six to 

6 nine is seen as a larger jump. So I think the issue 

7 is more why are we lowering the bar.

8 JUDGE PRATTER: Well, if your alternative 

9 was to speak to your opponent and say you understand 

10 that the plaintiff or the witnesses are not English 

11 speakers, we're going to have to bring a translator, 

12 do you really think that you're going to run into 

13 problems with opposing counsel, who is going to say, 

14 you know, five hours are five hours? I mean, really?

15 MS. VAUGHN: I certainly hope not, of 

16 course, because we all understand -- I think it's 

17 pretty intuitive that an interpreter is going to take 

18 longer. They want to get the information, or we want 

19 to get the information. It's in the interests of 

20 everybody that the interpreter be allowed to interpret 

21 for as long as it takes. And I would say that 

22 typically we are able to come to an agreement with 

23 defendants on the number of hours when an interpreter 

24 is involved.

25 JUDGE PRATTER: Because obviously with what 
180

Heritage Reporting Corporation

(202) 628-4888

1 we are all -- the underpinning of much of this is that 

2 it may be not as simple-minded as can't we all get 

3 along, but it really does shock me to think that on

4 basic kinds of propositions do we really have to have 

5 rules about them. Maybe that's a rhetorical question.

6 JUDGE CAMPBELL: Judge Matheson, did you 

7 have a question?

8 JUDGE MATHESON: I had the same question.

9 JUDGE CAMPBELL: Judge Koeltl?

10 JUDGE KOELTL: I'm really not sure how your 

11 issue with respect to proportionality would work out 

12 in practice. You say it's now going to be the 

13 responsibility of the plaintiff's lawyer to assure 

14 that the requests that the plaintiff's lawyer makes is 

15 consistent with the scope of discovery, which includes 

16 such things as consideration of burden and expense.

17 Under 26(g), that's already a responsibility 

18 of the plaintiff's lawyer. But the specifics of how a 

19 request might be too burdensome, not proportional to 

20 the needs of the case is really going to require some 

21 input from the defendant, who comes forward and says, 

22 look, if we were to comply with this request as you've 

23 worded it, we would have to search the files of 500 

24 people.

25 And so that would usually be something that 
181

Heritage Reporting Corporation

(202) 628-4888

1 would be discussed in the context of attempting to 

2 work out what the requests are, what the reasonable 

3 proportional responses to the requests would be, and 

4 only if the parties disagreed with that would it ever 

5 come to the court. It just seems -- and you can 

6 respond from your own practice -- that it's 

7 unreasonable to think that the change in the rule 

8 would somehow require the plaintiffs to be omniscient 

9 with respect to what the effect of the request would 

10 be on the defendant's recordkeeping and the documents 

11 and the custodians. It plainly requires some input 

12 from the other side. It requires a discussion as to 

13 what a reasonable request is in terms of this case. 

14 And you would also expect that in the context of a 

15 civil rights case that the interests involved, which 

16 are part of the factors to be considered, would be 

17 taken into account by the parties and certainly by the 

18 judge who if you ever had to bring it before the judge 

19 would make that determination.

20 So I don't understand why putting the 

21 factors into the scope of discovery would change the 

22 actual practice other than to remind people that all 

23 of this is still there, which some people don't 

24 appreciate when it's not in the first sentence of the 

25 rule.
182

Heritage Reporting Corporation

(202) 628-4888

1 MS. VAUGHN: Sure. And I can speak again 

2 from our own experience. I think largely in most -- I 

3 think litigators would agree that discovery is a 

4 collaborative process. There's lots of discussion 

5 that happens before anything is brought to the judge. 

6 In the District of Maryland, for example, it's 

7 required that there be very extensive discussion 

8 between counsel before --

9 JUDGE KOELTL: We require a pre -- in the 

10 Southern District of New York, we also require a 

11 conference. We also require the lawyers to first of 

12 all discuss and then to have a conference with the 

13 judge before you ever make a discovery motion.

14 MS. VAUGHN: Right. And in the District of 

15 Maryland, you're even required to exchange briefing 

16 before it goes before the court. So I don't mean to 

17 imply that in every single case it's this contentious 

18 battle between the two sides and we're unable to come 

19 to an agreement. Our concern about the language, the 

20 changes in the language of the rule, is that it puts 

21 the -- that it allows defendants to resist discovery 

22 from the onset based on the factors instead of 

23 requiring them to bring it before the court.

24 JUDGE KOELTL: But can't they do that now? 

25 They file an objection to a request for discovery and 
183

Heritage Reporting Corporation

(202) 628-4888

1 they say burdensome, not proportional, not consistent 

2 with 26(b)(2)(C)(iii)?

3 MS. VAUGHN: Right. And I think what the 

4 difference is is that here -- well, in our current 

5 practice typically there are objections and 

6 occasionally some withholding of information. But for 

7 the most part, the rules require that you move for a 

8 protective order or that before you can resist the 

9 discovery to that level -- and our concern is that by 

10 moving the language up, it makes it easier for parties 

11 to resist discovery and also potentially increases the 

12 risk of abuse, discovery abuse.

13 JUDGE CAMPBELL: All right. Thank you very 

14 much, Ms. Vaughn.

15 Mr. Dyller?

16 MR. DYLLER: Thank you. My name is Barry 

17 Dyller. I'm a civil rights attorney in a small civil 

18 rights litigation law firm. Thank you for hearing 

19 from me.

20 I'm an attorney in the trenches of the 

21 federal courts. I represent citizens whose civil 

22 rights, their constitutional rights, were violated by 

23 government entities or government employees or actors. 

24 Most of my clients have little or no money. So I 

25 make the decision up front what cases are valid, what 
184

Heritage Reporting Corporation

(202) 628-4888

1 cases are provable, what cases have significant 

2 societal issues or personal issues, and I mention this 

3 because so much of these proposed rules changes have 

4 to do with costs, but I think that it is generally 

5 plaintiffs' lawyers who weed out frivolous cases 

6 because we're paying for the costs, we're paying for 

7 the excessive discovery.

8 If I take a deposition that's not needed, it 

9 costs me hundreds of dollars, so I don't do it. I 

10 believe these rules will thwart the goals of reducing 

11 costs. I know the proposed rules will prevent valid 

12 claims from being brought and prevent valid claims 

13 from being proved. And this will permit or encourage 

14 bad conduct by government actors, which violates 

15 citizens' constitutional rights.

16 I'd like to talk about two of the proposed 

17 amendments, not proportionality because I know that's 

18 been discussed extensively. I have not heard anyone 

19 speak about Rule 4, service. And the proposed change 

20 to Rule 4(m) would reduce the time for service from 

21 120 to 60 days. I think this is unnecessary, first of 

22 all, because it's always in plaintiff's interest to 

23 get the summons and complaints served as soon as 

24 possible.

25 I also think that the proposed rule change 
185

Heritage Reporting Corporation

(202) 628-4888

1 is a de facto repeal of Rule 4(d), which permits 

2 waiver of service by mail, the cheapest, most 

3 inexpensive, and easiest mode of service, and the 

4 reason it does that is because Rule 4(d), if I file my 

5 complaint today and put it in the mail today, the 

6 other side has 30 days to not respond. By the time I 

7 learn they haven't responded, maybe I have 25 days, 

8 and I have to really hustle, and it's not always 

9 possible. So I think it doesn't do anything except 

10 make it more difficult and expensive.

11 I would also like to discuss the proposed 

12 rules change to the number of depositions. I think a 

13 limit of five depositions is a disaster. When one 

14 considers the need to depose parties, eyewitnesses, 

15 supervisors, people involved in making governmental 

16 policy, document custodians, medical providers, 

17 countless other types of witnesses, five depositions 

18 is nothing or in many cases is nothing.

19 Not only do we need to be able to survive 

20 summary judgment, we need to be able to make a 

21 convincing case to a jury. So even if I can survive a 

22 summary judgment motion, I need people's testimony and 

23 if I can't get it, I can't protect my client's rights.

24 And that applies equally to defendants 

25 because I want defendants to take as many depositions 
186

Heritage Reporting Corporation

(202) 628-4888

1 as they want because if they can't assess my case, 

2 they can't assess whether to go to trial or to try to 

3 resolve the case. I want all information on the 

4 table. And this limit I think is just a disaster.

5 Now there are abuses, but federal judges are 

6 more than capable of stemming those abuses. I think 

7 the severe limits in the proposed rules presume that 

8 attorneys and judges cannot exercise good judgment, 

9 and I just don't think that's so. The proposed rule 

10 change reminds me of something that Judge Max Rosen of 

11 blessed memory from the Third Circuit wrote in an 

12 opinion in a different context, and he wrote that 

13 formalism is often the last refuge of scoundrels. 

14 History teaches us that the most tyrannical regimes 

15 from Pinochet's Chile to Stalin's Soviet Union are 

16 theoretically those with the most developed legal 

17 procedures. And that's from Beck v. City of 

18 Pittsburgh.

19 The more restrictive our rules, the more we 

20 rely on their formalism, the less accountable our 

21 government, our government actors, and our corporate 

22 and individual citizens need be. The more restrictive 

23 our rules, the more at risk the most vulnerable 

24 citizens are. The more restrictive our rules, the 

25 fewer tools at our disposal to prevent corruption or 
187

Heritage Reporting Corporation

(202) 628-4888

1 other law violations and to pursue remedies where bad 

2 acts have already occurred. Thank you.

3 JUDGE CAMPBELL: Mr. Dyller, it seems to me 

4 that a limit of five depositions is a disaster only if 

5 you can't get more when you need more, and to say that 

6 a presumptive limit is a disaster necessarily implies 

7 that judges won't exceed it in cases where it should 

8 be exceeded. At the same time, you said that judges 

9 are more than capable of preventing abuses. One seems 

10 to be a vote against the competency of judges to make 

11 the right decision on the number of depositions and 

12 the other seems to be a vote in favor of judges being 

13 able to control abuses. Could you address that 

14 dichotomy?

15 MR. DYLLER: Sure. When I bring a case, I 

16 always think I'm right, and from time to time, the 

17 judge tells me I'm not. So, when I say I need more 

18 depositions, in my experience, I've never had a 

19 problem, but that doesn't mean I won't have a problem. 

20 And I also think that if there's a change from 10 to 

21 five in the rules, that is a message to judges. You 

22 know, we want you to limit this. It's also a message 

23 to opposing counsel. Here is a weapon at your 

24 disposal to limit proof.

25 So while judges certainly have the 
188

Heritage Reporting Corporation

(202) 628-4888

1 discretion to give me everything I want, it doesn't 

2 mean they will, and I think it's a message not to.

3 JUDGE CAMPBELL: Dean Klonoff.

4 DEAN KLONOFF: Two questions from your 

5 written submission. The first one, you say most cases 

6 require more than five depositions, and I'm wondering 

7 if you have any empirical support for that. And then 

8 secondly, you talk at some length about how bad it 

9 would be to have a four-hour deposition. I wonder if 

10 you're as vigorously opposed to a six-hour.

11 MR. DYLLER: I don't have studies about how 

12 many depositions. It's really my own personal 

13 experience that generally more than five are needed, 

14 and I can certainly give examples. I have a case, a 

15 wonderful case where there were 27 depositions taken, 

16 every one needed by both sides. It was about half and 

17 half, by the way.

18 DEAN KLONOFF: Well, that's a very different 

19 statement to say most of your cases than to say most 

20 cases.

21 MR. DYLLER: Well, that's true, that's true. 

22 And I am talking from my own experience. In terms of 

23 four hours versus six hours, most of my depositions 

24 aren't more than four hours, but it doesn't mean that 

25 many are -- you know, many are more than that. A 
189

Heritage Reporting Corporation

(202) 628-4888

1 minority, but many.

2 I also think that it invites abuse. For 

3 example, I did have a deposition of a corporate 

4 president who after every question paused 25 or 30 

5 seconds. A question like what is your name, and we 

6 would wait and we would wait and we would wait. And 

7 that was every question, and I waited, and I took the 

8 deposition over two days.

9 You know, I don't really want to have to go 

10 to a judge and while I think I would get what I want, 

11 I think it's a waste of the judge's time for me to go 

12 and say, you know, Mr. Smith, you know, paused a lot, 

13 please, judge, make him come back.

14 JUDGE CAMPBELL: Judge Harris, did you have 

15 a question?

16 JUDGE HARRIS: Thank you. With 4(m), have 

17 you ever had any trouble getting an extension of time 

18 to perfect service from a judge where you've had 

19 trouble?

20 MR. DYLLER: I never have had a problem. 

21 But I do think that it will make me think twice about 

22 trying to serve by mail. It is generally how I do 

23 serve because it is the most efficient. And it will 

24 make me think twice, but, you know, in the handful of 

25 times when I just couldn't find somebody or needed 
190

Heritage Reporting Corporation

(202) 628-4888

1 more time, I have not had a problem.

2 JUDGE CAMPBELL: We've got about one more 

3 minute. Judge Pratter?

4 JUDGE PRATTER: Just very quickly. Thank 

5 you for the written submission because it's very 

6 helpful to put into context some of the things that 

7 you've mentioned. One of them that caught my 

8 attention was your suggestion that by reducing the 

9 number of interrogatories, the unintended consequence 

10 might be that lawyers being reduced in the number they 

11 can write will write the ones -- will draft them more 

12 broadly and therefore defeat what we're trying to 

13 accomplish. I thought that was a fairly interesting 

14 comment. Is that how you approach discovery?

15 MR. DYLLER: Well, actually, if I'm correct, 

16 that comment that I made was to the prior proposed 

17 rule about limiting document requests.

18 JUDGE PRATTER: I thought it was about 

19 interrogatories.

20 MR. DYLLER: The only reason I say that is I 

21 rarely use interrogatories, so I don't care how many 

22 there are personally. I personally think they're 

23 useless.

24 JUDGE CAMPBELL: All right. Thank you very 

25 much, Mr. Dyller.
191

Heritage Reporting Corporation

(202) 628-4888

1 MR. DYLLER: Thank you.

2 JUDGE CAMPBELL: Mr. Dahl?

3 MR. DAHL: Good afternoon. My name is Alex 

4 Dahl, and I'm counsel for Lawyers for Civil Justice. 

5 Thank you very much for this opportunity to 

6 participate in the public comment process, and we 

7 appreciate your recognition that there is a serious 

8 problem. As you know, there's widespread agreement in 

9 the bar that discovery is too expensive, that costs 

10 are driving the outcomes of cases, and that discovery 

11 is being abused.

12 The overbroad scope of discovery is in a big 

13 picture the reason for these problems. We have filed 

14 a lengthy comment, so I just want to touch on three 

15 points briefly here. I'd like to start with Rule 

16 37(e) because I believe that this is one area in which 

17 the public comment process has already achieved 

18 clarity on one issue, and that issue is what it means 

19 to say willful or in bad faith.

20 On the first day of the public comment 

21 process, the Sekisui case defined willful and made 

22 clear that willful means knowing but not necessarily 

23 with any culpability. In other words, that phrase has 

24 now been defined. Willful or in bad faith means 

25 willful.
192

Heritage Reporting Corporation

(202) 628-4888

1 It's been defined as such to one of the 

2 audiences that matters most, the people who make 

3 preservation decisions, because their job is to make 

4 sure that their organizations don't get sanctioned. 

5 And so, to those people, it doesn't matter whether 

6 that's the majority rule or most jurisdictions or 

7 almost all jurisdictions because if their jurisdiction 

8 is where that's the standard, that is the standard 

9 that they are going to use to make preservation 

10 decisions. So those people, they don't know whether a 

11 case is going to be brought or where it's going to be 

12 brought, but they know there's a chance that it's 

13 going to be brought in a jurisdiction where willful 

14 simply means knowing without any culpable intent, and 

15 they will make preservation decisions to preserve 

16 everything to avoid sanctions in that event.

17 So, if the committee is going to adhere to 

18 its goal, as the note says, to ensure that potential 

19 litigants who make reasonable efforts to satisfy their 

20 preservation obligations have the confidence that 

21 they're not subjected to serious sanctions, then the 

22 committee should change the "or" to the "and" or 

23 define willful in a way that makes that clear that 

24 there is a culpability requirement for that rule.

25 Now I'd like to address (b)(2). The 
193

Heritage Reporting Corporation

(202) 628-4888

1 provision in (b)(2), the exception to the rule, is an 

2 example of rule writing for a very rare exception, but 

3 putting that into the rule, that will run a very high 

4 risk of being used more than the committee expects it 

5 to be.

6 As we laid out in our comment, we also 

7 believe that the exception is unnecessary. The cases 

8 that gave rise to the concern have some showing of 

9 culpability in the facts of those cases. They also 

10 could have been dealt with by what is incorporated in 

11 the current draft as curative measures. So the risk 

12 of a rule written for a very rare exception being 

13 overused does not outweigh the cost -- sorry -- the 

14 cost of -- the potential cost of that rule does not 

15 overweigh the usefulness of it, and we urge that the 

16 (b)(2) exception be removed.

17 Finally, I'd like to comment on the change 

18 proposed to 26(b)(1), and we addressed this in the 

19 comment as well, but I'd like to make the observation 

20 that it seems to me that the opponents of this change 

21 really aren't afraid of proportionality. They're 

22 afraid of not having proportionality.

23 What we've heard today is arguments why 

24 proportionality means different things to different 

25 cases, which is exactly the point of the 
194

Heritage Reporting Corporation

(202) 628-4888

1 proportionality analysis to begin with, and 

2 demonstrates that thoughtfulness given to cases in 

3 advance is an appropriate way to gauge discovery 

4 because again there's widespread belief that the 

5 discovery is overbroad.

6 So putting that language into 26(b)(1) we 

7 think would be a substantial improvement for the 

8 reason that it will make people think about their case 

9 and their claims and have discovery that is related to 

10 the claims and defenses in the cases.

11 JUDGE CAMPBELL: Mr. Dahl, let me ask you a 

12 question on that last point. As I understand some of 

13 the comments on proportionality, the concern is this. 

14 Where it currently resides in the rule in (b)(2), it 

15 is a consideration a court can take in limiting 

16 discovery, and in order to invoke it, somebody needs 

17 to ask the court to limit discovery, and that's 

18 usually going to be the party who's received the 

19 discovery, and they then have to go to the court and 

20 say this isn't proportional, please limit it.

21 I think one of the points that has been made 

22 is that if we put that right into the definition of 

23 the scope of discovery, we now empower lawyers who 

24 receive discovery to say, I object, I won't produce it 

25 because even though it's relevant, it's not 
195

Heritage Reporting Corporation

(202) 628-4888

1 proportional. And that then in effect creates a new 

2 obstacle that those lawyers who don't want to turn 

3 over information can invoke that isn't in the present 

4 version of the rule. Could you address that?

5 MR. DAHL: Sure. And I confess that that's 

6 a new idea, even though I've read the draft a number 

7 of times, a new idea to me because that's not what I 

8 understood the change to mean. And I frankly don't 

9 understand why that would be a change of burden 

10 because it seems to me that in discovery disputes as a 

11 pragmatic thing that they're going to arise in the 

12 same way today that they would in the future under the 

13 rule, which is that there's a request and a response, 

14 and one party or the other is going to move either to 

15 compel or for a protective order, and I don't 

16 understand how as a practical matter moving the 

17 language is going to change which party does that or 

18 what the burden is.

19 So that's off the top of my head. I admit 

20 that that's a new concept because that is not how I 

21 understood the change to mean.

22 JUDGE CAMPBELL: Professor?

23 PROF. MARCUS: I note you refer to the 

24 Sekisui case and in particular in relation to the use 

25 in our rule of willful. I'm right, am I not, that the 
196

Heritage Reporting Corporation

(202) 628-4888

1 Sekisui case contains some fairly strong disagreement 

2 with our rule. Is it really the measure of our rule? 

3 I'm a little surprised at that idea.

4 MR. DAHL: The Sekisui case says that 

5 willfulness is sufficient for a sanction without 

6 culpability standard --

7 PROF. MARCUS: In the Second Circuit, citing 

8 Residential Funding.

9 MR. DAHL: Correct. And then it says or 

10 negligence. And in the footnote that you refer to, it 

11 says that the rule if adopted would abrogate 

12 Residential Funding with respect to negligence. And I 

13 can't give you the Law Review answer off the top of my 

14 head, but I can tell you that those two phrases

15 together is enough to cause serious concern. And 

16 again, my point is to keep in mind the audience --

17 isn't most judges or most jurisdictions, it is the 

18 preservers, the people who are making decisions whose 

19 job is to avoid sanctions and whether that creates 

20 risk.

21 But the text of that case, of the Sekisui

22 language says that knowledge without any degree of 

23 culpability is sufficient for sanctions or negligence. 

24 And I think that for the people making preservation 

25 decisions that's it. That's all they need to know, 
197

Heritage Reporting Corporation

(202) 628-4888

1 that there are jurisdictions where they can get 

2 sanctioned under that standard, and therefore their 

3 option is only to preserve everything and to continue 

4 what's happening today, which is a really extravagant 

5 amount of overpreservation needlessly.

6 JUDGE CAMPBELL: Judge Grimm, last question.

7 JUDGE GRIMM: Mr. Dahl, help me out if you 

8 would. If the decision is made to have willful or bad 

9 faith, disjunctive instead of conjunctive, is there a 

10 definition of willful? Knowing that the definition in 

11 the footnote that you've been referring to is very 

12 broad, is there language that you believe you would 

13 think that we should be well-served to consider to 

14 define willful either in the rule itself or in the 

15 advisory note that you think gets at the conduct that

16 would cause those decision-makers who may have to act 

17 before there's even a lawsuit to have some comfort as 

18 to where they can go safely without being fearful of 

19 sanctions?

20 MR. DAHL: Yes. I think the important 

21 concept to put in the definition is a level of 

22 culpability, bad faith or -- I can't dictate the exact 

23 words, of course, but to put that concept in so that 

24 it's not simply knowing without any kind of culpable 

25 conduct.
198

Heritage Reporting Corporation

(202) 628-4888

1 JUDGE GRIMM: Some notion of awareness of 

2 the consequence in terms of making the information 

3 unavailable as opposed to I'm not sleepwalking when I 

4 didn't do this.

5 MR. DAHL: Correct, something that is 

6 related to an intention to get rid of that data or 

7 information for the purpose of not allowing it to be 

8 considered in a future lawsuit.

9 JUDGE CAMPBELL: All right. Thank you very 

10 much, Mr. Dahl.

11 Ms. Claffee?

12 MS. CLAFFEE: Good afternoon. Thank you so 

13 much for the chance to testify this afternoon. My 

14 name is Lily Fu Claffee. I am the general counsel of 

15 the U.S. Chamber of Commerce, which is the world's 

16 biggest business federation, as well as the general 

17 counsel of the U.S. Chamber's Institute for Legal 

18 Reform. I'm also the head of the Chamber's Litigation 

19 Center, which is a public policy law firm that 

20 litigates on behalf of the Chamber in state and 

21 federal courts all over the country.

22 Before I joined the Chamber, I was a 

23 litigation partner at Mayer Brown and the Jones Day 

24 law firms. I was a government lawyer for four years 

25 serving at three agencies, including the Justice 
199

Heritage Reporting Corporation

(202) 628-4888

1 Department. And I've thought about the federal rules 

2 as a practitioner, as a government GC, as a corporate 

3 GC, and as a public interest litigator who tries to 

4 shape litigation policy. But today I'm speaking as a 

5 voice on behalf of the Chamber's tens of thousands of 

6 members who are affected by the federal rules every 

7 day.

8 I'm not going to rehash the Chamber's 

9 technical comments to the proposed amendments, but 

10 instead I just want to make one overarching point, and 

11 that is the proposed amendments to the federal rules 

12 overall in the Chamber's view is a cautious and well13 reasoned, carefully balanced effort to address among 

14 other things two of the most important aspects of 

15 civil litigation that affects the business community 

16 today: one, the scope of discovery, and two, document 

17 preservation.

18 In the Chamber's view, the proposed changes 

19 represent moderate but positive steps toward 

20 clarifying the rules and making them work as they were 

21 intended. The committee correctly focused on scope 

22 and preservation. These are two areas that are major 

23 drivers of litigation costs. And I know that this 

24 committee is lousy with data at this point, but allow 

25 me to throw a few more points on the pile.
200

Heritage Reporting Corporation

(202) 628-4888

1 Studies show that discovery costs alone 

2 account for anywhere between 25 to 90 percent of 

3 litigation costs. Scope helps determine whether we're 

4 closer to the 25 percent side or to the 90 percent 

5 side. Preservation costs are a little bit more 

6 difficult for us to quantify on a broad basis, but 

7 preliminary reports suggest that those costs are 

8 pronounced as well, and testimony such as Mr. Levy's 

9 earlier would confirm that point.

10 The reason for this is the amount of 

11 material, as we've discussed -- other witnesses have 

12 discussed is so great today with electronic discovery, 

13 and overpreservation for safety's sake is so 

14 prevalent.

15 In my position, I can confirm that 

16 preservation exacts a heavy psychic toll on in-house 

17 lawyers and outside lawyers who are worried about it 

18 not just in the context of sanctions. Discovery costs 

19 are also not just an inconvenience or a drag on 

20 profits for the business community. Litigation costs 

21 have real-world implications for everyone, and I just 

22 want to raise three specific harms.

23 The first is a harm to our global 

24 competitiveness. In a June 2013 analysis by Nera 

25 Economic Consulting comparing liability costs across 
201

Heritage Reporting Corporation

(202) 628-4888

1 Europe, Canada, and the United States, the analysis 

2 found that the United States has the highest liability 

3 costs of all the countries surveyed, comprising a full 

4 1.66 percent of U.S. GDP. That figure is 2.6 times 

5 higher than the average level of Eurozone economies.

6 The oversized costs of litigation for 

7 companies doing business in the United States 

8 undermines our efforts to attract innovators and 

9 entrepreneurs to American shores. It puts companies 

10 doing business in the United States at a competitive 

11 disadvantage at least in this respect to companies 

12 that do not, and it does not matter if the company is 

13 a U.S. company, although U.S. competitiveness does 

14 disproportionately impact U.S. businesses, but it 

15 certainly affects the U.S. employee and the U.S. 

16 customer.

17 Whether analyzed in terms of foreign direct 

18 investment in the United States or the impact on U.S. 

19 businesses, litigation costs have negative real-world 

20 impacts on every person that's dependent on or has an 

21 interest in the health of U.S. markets.

22 The second harm I would like to raise falls 

23 squarely on the shoulders of small businesses, defined 

24 roughly as companies with 100 or fewer employees or in 

25 some other contexts companies with less than $10 
202

Heritage Reporting Corporation

(202) 628-4888

1 million of revenue a year. Some circles are 

2 accustomed to talking about discovery costs in terms 

3 of terabytes and petabytes, but in my opinion, a much 

4 larger-scale problem exists with respect to discovery 

5 costs, is the effect that discovery costs have on 

6 small businesses. They make up the majority of the 

7 Chamber's membership, and as the Small Business 

8 Administration has reported, small businesses create 

9 most of the nation's new jobs, employ half of the 

10 nation's private sector workforce, and provide half of 

11 the nation's non-farm private real-growth domestic 

12 product, as well as a significant share of innovation.

13 It's estimated that litigation costs small 

14 businesses well over $1 billion a year. In one study, 

15 one in three small businesses reported that they had 

16 either been threatened or sued, threatened with a 

17 lawsuit or sued. If sued, more than two-thirds of 

18 them said that they would have to pass legal costs on 

19 to customers, reduce employee benefits, or delay 

20 hiring new employees.

21 A majority who were sued said their 

22 businesses suffered because litigation was very time23 consuming, and almost a majority said that litigation 

24 caused them to "change business practices in ways that 

25 do not benefit customers". That is worse in my 
203

Heritage Reporting Corporation

(202) 628-4888

1 opinion than any petabyte.

2 The third harm is more fundamental. The 

3 fact that it can be economically rational for a 

4 defendant to settle unmeritorious claims rather than 

5 pay the inevitable high cost of having to defend 

6 against them raises serious fairness concerns. It's 

7 disappointing that the very rules governing federal 

8 litigation can be manipulated to make the process 

9 itself more costly than a bad outcome on the merits or 

10 to make the process costly regardless of the merits.

11 So I just want to conclude by commending the 

12 committee for focusing on these important areas in a 

13 positive although a modest way. We don't expect that 

14 these proposed amendments will revolutionize 

15 litigation behavior, in part because the amendments 

16 are largely clarifying tweaks with court intervention 

17 mechanisms built in throughout as pressure valves.

18 Dire arguments suggesting that the changes 

19 will lead to cataclysmic problems are simply not 

20 credible. This committee's own memorandum proves its 

21 evident caution by laying out a series of more 

22 aggressive approaches it could have taken but that it 

23 then rejected. The committee obviously deliberated 

24 carefully before choosing not to pursue these more 

25 aggressive reforms at this time, and it's the 
204

Heritage Reporting Corporation

(202) 628-4888

1 Chamber's view that the committee should not let its 

2 measured approach be watered down further by 

3 naysayers.

4 That concludes my remarks, and I'm glad to 

5 take any questions.

6 JUDGE CAMPBELL: All right. Thank you.

7 Questions? Judge Diamond?

8 JUDGE DIAMOND: Wouldn't the great majority 

9 of your small business members be covered by insurance 

10 of various kinds? Do you have data on that?

11 MS. CLAFFEE: I don't off the top of my head 

12 now, but regardless of that, they are affected by 

13 litigation regardless of whether there's ultimate 

14 insurance coverage. As you know, a lot of deductibles 

15 are quite high, and it's also the time and energy and 

16 the psychic pain it causes small businesses --

17 JUDGE DIAMOND: Many of those decisions, 

18 though, that you talk about are going to be made by 

19 the insurer. I mean, wouldn't it be more complete, 

20 wouldn't your analysis be more complete, if you 

21 figured what role the insurer and insurance companies 

22 play in all this?

23 MS. CLAFFEE: The rule amendments focus 

24 largely on scope of discovery and preservation, and 

25 those two areas impact small businesses in a way that 
205

Heritage Reporting Corporation

(202) 628-4888

1 insurance companies can't really ameliorate.

2 JUDGE DIAMOND: Even if they're paying the 

3 legal fees?

4 MS. CLAFFEE: In terms of disruption and 

5 concern, yes.

6 MS. CABRASER: Thank you. Exxon Mobil's 

7 counsel gave us a snapshot a few minutes ago of 

8 employees at Exxon Mobil engaged in litigation hold. 

9 I believe he said 5100, and that they spent 10 minutes 

10 a day. Do you have any comparative data on the 

11 percentage of employee time or the percentage of 

12 employees that were engaged in record preservation 

13 activities back in the day of paper discovery?

14 MS. CLAFFEE: I did a lot of research on 

15 that before I came to the hearing today. I didn't 

16 find anything that I felt concrete enough to present 

17 to this committee, which is why I said it was harder 

18 to measure. There are some preliminary reports. I'm 

19 aware of one in particular, but that report calls on 

20 further study. I thinK the most compelling evidence 

21 on that is testimony like Mr. Levy's where he can say 

22 at my company this is what happens.

23 JUDGE CAMPBELL: Judge Matheson.

24 JUDGE MATHESON: It seemed to me towards the 

25 end of your remarks that you thought the committee 
206

Heritage Reporting Corporation

(202) 628-4888

1 should go much further. Do you have any specific 

2 recommendations that the committee should continue to 

3 consider as we work through this public hearing 

4 process?

5 MS. CLAFFEE: Yes. The answer is yes. I'd 

6 love to submit a personal wish list, but in our 

7 written comments, we did suggest a number of ways in 

8 which although we are supportive of the proposed 

9 amendments as they currently read, we suggested a 

10 number of ways they could have gone even further.

11 JUDGE MATHESON: Well, I know we have 

12 limited time, but why don't you just give us your top 

13 suggestion.

14 MS. CLAFFEE: Top suggestion, okay. Well, 

15 as a GC myself, my worry with respect to preservation 

16 is trigger, scope, and duration. That's what I worry 

17 about. I worry about when I've got to do a hold how 

18 broad that hold has got to be and how long I've got to 

19 leave it in place. These amendments don't go there. 

20 I understand why not. I know that the committee 

21 considered it and decided not to go there.

22 Sanctions is the least of my problems, 

23 frankly. I'm not going to take actions for other 

24 reasons. My ethical duties, what's going to happen to 

25 me in court if I spoliate evidence, that stuff is 
207

Heritage Reporting Corporation

(202) 628-4888

1 going to keep me from doing the stuff that I do now to 

2 preserve documents, and back-end sanctions are not 

3 what's going to drive me. So, as a result of the 

4 committee's suggested amendments, I'm not going to 

5 change how I preserve. I am a chronic overpreserver, 

6 and I'm going to continue to do that. So that's one 

7 thing.

8 On scope, I think that those changes are --

9 they're good. You can see this committee has pointed 

10 out a number of ways in which they're actually not 

11 that different from the way the rule currently reads. 

12 The big change is moving away from being able to ask 

13 a judge for evidence that's relevant just to subject 

14 matter rather than relevant to a claim or defense.

15 Frankly, I think you could narrow down 

16 relevance because I can drive a truck through 

17 relevance. My opponents in litigation certainly have 

18 before. I've never sat down and argued with somebody 

19 about whether or not something is discoverable because 

20 it's related to subject matter. They always argue 

21 that it's relevant, and relevance is a very, very 

22 broad concept.

23 I think that there could be an amendment to 

24 the rule that says that it should be material and 

25 relevant, and that gets us closer to a place where we 
208

Heritage Reporting Corporation

(202) 628-4888

1 discover discovery is better matched to the small 

2 amount of documents that actually get used at trial or 

3 that get used in dispositive motions rather than the 

4 gigantic amount of paper and electronic paper that 

5 ends up getting discovered.

6 So I think there's not any number of ways to 

7 skin that cat, but there's a substantial distance that 

8 these rules could go to bring litigation costs under 

9 control.

10 JUDGE CAMPBELL: All right. Thank you very 

11 much, Ms. Claffee.

12 We're going to take Mr. Karl, and then we'll 

13 take a break.

14 MR. KARL: Mr. Chairman and members of the 

15 committee, I thank you for the opportunity to speak 

16 before you. My name is John Karl and I've been in 

17 private practice since 1979. I'm an adjunct professor 

18 at American University Law School, but I'm here 

19 speaking on behalf of my experiences, and I'm a member 

20 of the National Employment Lawyers Association and its 

21 local affiliate, the Metropolitan Washington 

22 Employment Lawyers Association.

23 And over the years, I've done practically 

24 every kind of litigation, from airplane crashes to 

25 medical malpractice to securities litigation. Much of 
209

Heritage Reporting Corporation

(202) 628-4888

1 my current practice is employment discrimination, 

2 whistleblower cases, and the challenge of doing those 

3 kinds of cases is that you have to show intent. Those 

4 cases are different. It's not a question of merely 

5 satisfying a negligence standard.

6 I'm here to speak on behalf or in opposition 

7 to the proposals to severely limit the written 

8 discovery and the number of depositions that parties 

9 can take. As an attorney, I owe a professional 

10 obligation and a duty to my clients to prepare for the 

11 inevitable opposition to the motion for summary 

12 judgment or in other cases to prepare for trial.

13 And I'd suggest that it's simply impossible 

14 to do that in a professionally responsible way under 

15 the proposed changes. It has never happened to me in

16 any of the employment cases that I've done where I 

17 could prepare the case for summary judgment or for 

18 trial doing -- or living under a five-deposition 

19 limit, to living under a 15-interrogatory limit. I 

20 just don't think it's possible to do it properly. I

21 don't think it will work for employment cases.

22 I recognize that some cases require only a 

23 couple depositions, but in those cases that's all 

24 that's going to be taken in any event. And I had a 

25 recent wrongful termination case, and one of the 
210

Heritage Reporting Corporation

(202) 628-4888

1 issues was -- and this just underscores perhaps some 

2 of the complexity and some of the issues that come up. 

3 There was a dispute over who was the decision-maker, 

4 who made the decision to terminate, and under Staub v. 

5 Proctor Hospital, this required additional 

6 depositions.

7 Obviously I had to take the depositions of 

8 the people who I thought were the decision-makers, but 

9 I certainly had to take the depositions of the people 

10 whom the defendants claimed were actually the 

11 decision-makers. And ultimately that judge ruled that 

12 that was a matter to be decided by the jury, and the 

13 jury rejected the defendant's claim as to who actually 

14 made the decision.

15 You've got all sorts of internal dynamics in 

16 a case like this because the defense really was the 

17 persons who made the decision to know about the 

18 protected activity. The jury didn't believe that 

19 explanation. And so, in addition to having to deal 

20 with the question of two possible sets of decision21 makers, I had to depose the HR people. The defendant 

22 in the middle of the litigation started changing its 

23 rationale for the decision. That required an 

24 additional deposition. And then you've got the whole 

25 issue about what was said at a particular meeting and 
211

Heritage Reporting Corporation

(202) 628-4888

1 how you go about proving pretext.

2 You've got a need certainly as an 

3 attorney, you have a need for defining corroborating 

4 witnesses. You need to find or want to find 

5 conflicting testimony. And it's just impossible to do 

6 that without taking a sufficient number of 

7 depositions. And so the attorney is faced with a 

8 situation where they're not properly preparing or 

9 incurring the additional cost of going to the court 

10 and asking for additional depositions.

11 I think in most cases, certainly in most 

12 employment cases, the lawyer's requirement of diligent 

13 representation -- I mean that the parties are going to 

14 have to certainly in employment cases seek permission 

15 of the court. It's one more delay, and it's one more 

16 thing for the judges to do, and I think the judges 

17 certainly have enough on their plates without having 

18 to get involved in the process or progress of 

19 discovery for cases that are filed before them.

20 And what this does is it unfairly increases 

21 the cost to the parties and increases an additional 

22 burden, particularly on the plaintiffs who are 

23 bringing the claims, and in a wrongful termination 

24 case, you've got a plaintiff who can't afford to pay 

25 these additional costs. And I can tell you that no 
212

Heritage Reporting Corporation

(202) 628-4888

1 one on the plaintiff's side wants to incur additional 

2 deposition costs, and I can really be sure that I 

3 really don't want to pay any deposition costs that I 

4 don't believe that I absolutely have to pay.

5 I think it's going to have the impact of 

6 reducing the number of depositions and have the impact 

7 of discouraging pro bono attorneys, and it could very 

8 easily lead to having more people come in as pro se 

9 plaintiffs. I think with respect to the question of 

10 the time of the deposition, as a practitioner, I can 

11 say I don't know in advance how long a deposition is 

12 going to take. And if you're subject to a really 

13 severe time limit -- and I think certainly the seven14 hour limit is something that we've learned to live 

15 with.

16 You've got a -- there's an incentive for 

17 opposing counsel and the witnesses as well to run out 

18 the clock. You've got to go through in many cases, 

19 certainly in employment cases that are document20 intensive, you've got to go over the documents with 

21 the witnesses. You've got to ask specific and precise 

22 questions about it. And sometimes there's just 

23 obstreperous conduct on the other side.

24 I had one case, a whistleblower case, where 

25 the attorney objected to practically every single 
213

Heritage Reporting Corporation

(202) 628-4888

1 question that I proposed. There was an average of 3.2 

2 objections per transcript page. And when you think in 

3 terms of the impact that this has, what the attorney 

4 was doing was taking advantage of this opportunity to 

5 delay the deposition, to take up additional time, and 

6 ideally dissuade me from following up on some of the 

7 questions.

8 And I think shortening the time available or 

9 allowed for depositions runs the risk of encouraging 

10 this sort of conduct in other cases. I would ask that 

11 you take into consideration the impact that reducing 

12 the number of interrogatories, reducing the number of 

13 depositions and reducing the time allowed for these 

14 depositions, that you reject the proposed changes. 

15 Thank you.

16 JUDGE CAMPBELL: Thank you, Mr. Karl. 

17 Questions?

18 JUSTICE NAHMIAS: It sounds like many of 

19 your cases involved more than 10 depositions, much 

20 less five. Have you had any difficulties working with 

21 counsel to get the number of depositions that you 

22 think you need?

23 MR. KARL: Frankly, it depends who the 

24 counsel is. If the counsel is experienced, then I 

25 don't have trouble. But some of the local 
214

Heritage Reporting Corporation

(202) 628-4888

1 institutional defendants often staff their cases with 

2 younger attorneys who while they are very competent 

3 just don't have the authority to agree to additional 

4 depositions.

5 JUSTICE NAHMIAS: And what about a judge and 

6 judicial involvement at that point in the cases that 

7 you have now when you're working with those talented 

8 lawyers but the ones that don't have authority? What 

9 happens then?

10 MR. KARL: I hate to bother the judges. I 

11 do it no more than once a year.

12 JUSTICE NAHMIAS: So, if you need more than 

13 10 and the lawyer doesn't agree, you just take less 

14 than 10?

15 MR. KARL: No, because I've been able to 

16 reach agreement, and where I've needed a couple more 

17 than 10, we agreed to 12 or 13, and there's been no 

18 problem reaching an agreement with the other side.

19 JUSTICE NAHMIAS: Then why would you think 

20 that if five was a presumptive limit you'd have any 

21 less or any more difficulty in reaching agreement?

22 MR. KARL: Because I've dealt with a number 

23 of obstreperous attorneys who have given me a hard 

24 time on behalf of the institution that they represent.

25 JUDGE CAMPBELL: Judge Diamond?
215

Heritage Reporting Corporation

(202) 628-4888

1 JUDGE DIAMOND: I'm curious that you say 

2 that employment cases are document-intensive. Do you 

3 really think they are?

4 MR. KARL: Certainly with the production of 

5 emails. I have a Rehabilitation Act case that 

6 involved about a foot and a half worth of printouts 

7 and emails and I had to go through them.

8 JUDGE DIAMOND: Well, I don't doubt that you 

9 have an occasional case, but aren't the great majority 

10 of workplace discrimination cases rather 

11 straightforward? I was fired because of my age, I was 

12 fired because of my race, very few documents.

13 MR. KARL: I've had cases where the 

14 particular defendant had a policy of not backing up 

15 any part of its email system, and so there were 

16 perhaps no more than 15 or 20 documents at issue in 

17 that case. That's certainly correct that it varies 

18 from case to case depending upon what's at issue, 

19 depending on how many decision-makers were involved in 

20 the process. And the problem is that there's no 

21 precise rule of thumb to say that there's never just a 

22 few documents or that -- you know, part of the thrust

23 of my concern is that if you look at it from the point 

24 of view of how many people do you have to depose, I 

25 think you've got to -- it's always in my experience 
216

Heritage Reporting Corporation

(202) 628-4888

1 been more than five, and requiring the litigants to go 

2 to the court if they can't work it out just imposes 

3 additional burdens on both sides, but it's on the 

4 judicial system as well because then the judge has got 

5 to read the papers, he's got to decide whether or not 

6 the additional depositions are warranted, and so 

7 creating the presumptive limit just creates more work 

8 for anybody, and it's procedural work rather than work 

9 that's related or directed to the merits.

10 JUDGE CAMPBELL: All right. Thank you very 

11 much, Mr. Karl.

12 MR. KARL: Thank you.

13 JUDGE CAMPBELL: We will break and resume at 

14 3:00.

15 (Whereupon, a brief recess was taken.)

16 JUDGE CAMPBELL: All right, folks. Could 

17 you please take your seats? We're ready to get 

18 started.

19 (Pause.)

20 JUDGE CAMPBELL: Mr. Chertkof.

21 MR. CHERTKOF: Good afternoon. I'm Stephen 

22 Chertkof. I'm a lawyer in Washington, D.C. I'm 

23 speaking on behalf of the Metropolitan Washington 

24 Employment Lawyers Association, about 300 people who 

25 bring claims on behalf of individuals in employment 
217

Heritage Reporting Corporation

(202) 628-4888

1 discrimination cases primarily and other civil rights 

2 cases.

3 The refrain we hear from the defense bar is 

4 essentially litigation takes too long and it's too 

5 expensive. And yet plaintiffs, the plaintiffs' bar, 

6 have no greater interest than getting inside a 

7 courtroom and in front of a jury as quickly and as 

8 inexpensively and efficiently as possible. Running up 

9 the clock and running up the bill are classic defense 

10 tactics, not the plaintiffs' bar.

11 I'm here to focus on two particular issues, 

12 although we'll submit written comments on others: the 

13 restriction of depositions and proportionality. 

14 Professor Miller, Arthur Miller, wrote an article 

15 earlier this year called "Simplified Pleading and 

16 Meaningful Days in Court" in which I thought he 

17 summarized eloquently and at great length the problem 

18 of asymmetrical cases, that is, where nearly all of 

19 the information is in the control of one side.

20 In such cases, deal-making and horse trading 

21 is virtually nonexistent. In your typical employment 

22 case, the employer has access to nearly all the 

23 documents and controls in one manner or another all or 

24 nearly all of the witnesses. You add on top of that 

25 that employers try to expand their reach by broad 
218

Heritage Reporting Corporation

(202) 628-4888

1 claims, sometimes unreasonably broad claims, under 

2 Rule 4.2 of the rules of ethics to say every employee 

3 or virtually every employee is represented and you 

4 can't talk to them even if they're willing to talk to 

5 you.

6 Then settlement agreements and severance 

7 agreements are more and more often having gag orders 

8 that says in exchange for some money you can't 

9 voluntarily cooperate with anybody who's bringing a 

10 claim against the company. Only under subpoena can 

11 you talk to them. Sometimes these nondisclosure 

12 provisions end up earlier where as part of routine 

13 paperwork employees agree to nondisclosure and that 

14 everything they learn at the company is confidential. 

15 We've had such agreements applied to the personnel 

16 policies, to internal evaluation forms, saying what's 

17 company confidential.

18 You've heard in other contexts about doctors 

19 practicing defensive medicine. Well, I think that's 

20 true in employment cases and many probably civil cases 

21 in general where there's asymmetrical information. A 

22 lot of the depositions and other discovery devices we 

23 use aren't necessary for trial. That was one of the 

24 points made in the committee's report is that judges 

25 say, oh, in criminal cases, people cross-examine 
219

Heritage Reporting Corporation

(202) 628-4888

1 witnesses they never deposed. That's true. I've done 

2 that. But you don't get to trial unless you overcome 

3 the summary judgment motion, which is virtually 

4 inevitable in every such case. It's virtually 

5 inevitable. Some defense lawyers have joked it would 

6 be malpractice not to file one.

7 And so we practice defensive lawyering. We 

8 take a lot of depositions and other discovery because 

9 we have to prove our case on paper before we ever get 

10 to trial. And defense tactics are good at hiding the 

11 ball. How do you do that? You can do that by not 

12 identifying a single decision-maker, by having 

13 decision-makers' decisions made by committees. Oh, 

14 this one recommended, but that one approved, but this 

15 one signed off.

16 We just had a recent case where the decision 

17 was made in a room with 12 people. Whether minutes 

18 were kept or not is in dispute, but they certainly 

19 weren't produced, and nobody could remember what was 

20 said. After deposing nine of them, we got bits that 

21 leaked out about what was said as the reason for the 

22 firing. And that was before we deposed anybody for 

23 comparative evidence or for me-too evidence, other 

24 people had brought claims, or to get things like how 

25 are the emails kept and destroyed and things like 
220

Heritage Reporting Corporation

(202) 628-4888

1 that.

2 In a case where one side has all the 

3 information, they have no interest in offering to let 

4 the other side have any more discovery than the rules 

5 entitle them to. My experience -- I heard Mr. Karl 

6 testify -- my experience and other people I've talked 

7 to even during the break is you never get agreement to 

8 exceed the number of depositions in the rules from 

9 opposing counsel.

10 The nice ones laugh and say, yeah, I'd love 

11 to if I could, but, you know, my client would fire me 

12 if I agreed to give you an extra three or four 

13 depositions. And I've never in my experience seen 

14 somebody sanctioned for arguing that the limit in the 

15 rules is reasonable. Even when we win those motions, 

16 there is never a downside to the defendant. In fact, 

17 there's an up side because delay happens.

18 Every time we go to court, every time we 

19 file a motion to compel or a motion to exceed 

20 depositions, it's months and months of delays, 

21 sometimes years, which doesn't suit plaintiffs. It 

22 runs up the costs. It doesn't make things more 

23 efficient.

24 Under the current rules, active judges who 

25 want to be involved in discovery early on, who want to 
221

Heritage Reporting Corporation

(202) 628-4888

1 be very involved and have reports and manage 

2 discovery, can already do so. But for many other 

3 judges where discovery motions are the unloved 

4 stepchildren who aren't gotten to very quickly, it is 

5 just a delay. Every time you go to the courthouse it 

6 adds time and money.

7 Here is what the rule on depositions looks 

8 like to me. The empirical data in the report was that 

9 around 80 percent of cases already, civil cases in the 

10 federal court, are done with five or fewer depositions 

11 per side.

12 So this is what it looks like to me. 

13 Suppose our state insurance commissioner said, we did 

14 a study and concluded that 80 percent of people only 

15 have five or fewer doctor visits per year, so we're 

16 going to pass a rule that says insurance companies 

17 only have to reimburse for five doctor visits a year. 

18 Now, of course, if you need more, you can ask for 

19 more, but it's up to their discretion.

20 And there's no analysis of whether the other 

21 20 percent of cases and discovery are more complex, 

22 require more depositions, properly require more, none 

23 at all. All we get is anecdotes. So back to the 

24 example, that the insurance company says, well, I can 

25 tell you an anecdote about a claimant or two or three 
222

Heritage Reporting Corporation

(202) 628-4888

1 that abused the system and was a hypochondriac, saw 

2 too many doctors. Great. I'm sure in any system 

3 there is abuse. But that's not the rule. There's no 

4 empirical data whatsoever here that says that the 

5 deposition rule needs to be changed. In fact, if 80 

6 percent are already coming in at five or fewer per 

7 side, it's working.

8 If I can have one minute on proportionality. 

9 One of the problems we have in civil rights cases is 

10 that there's a tendency to view the value or the 

11 burden of discovery in monetary terms only. And that 

12 means in practical effect is that an employee who's 

13 earning minimum wage or slightly above and is getting 

14 paid 20- or $25,000 a year and has lost their job for 

15 discriminatory reasons, their claim is worth less in 

16 monetary terms maybe than somebody who's earning 

17 $100,000 or $200,000 a year.

18 While the rule, the proposed rule, suggests 

19 that other values come into play, I fear that it will 

20 be simply dollars and cents. Why should we spend 

21 $10,000 producing emails if the guy was only earning 

22 $20,000? And what will happen is people at the lower 

23 end of the pay scale whose entitlement to injury is 

24 just as valid and just as important under these 

25 private attorney general statutes, their claims get 
223

Heritage Reporting Corporation

(202) 628-4888

1 much less discovery, which will translate into a much 

2 higher rate of dismissal on summary judgment.

3 I think I'm over my time, but I would 

4 welcome questions.

5 JUDGE CAMPBELL: Thank you.

6 Judge Koeltl?

7 JUDGE KOELTL: Thank you. You know, NELA 

8 has been very helpful to the committee both in terms 

9 of input into the proposals as well as in developing 

10 the employment protocols for early discovery in 

11 employment discrimination cases. So we really 

12 appreciate and respect NELA's views.

13 The one thing that you said I'm not sure is 

14 accurate, that there's no empirical information that 

15 suggests there's a problem in cases where you have 

16 five or more depositions on a side. In the report 

17 that accompanied the rules, proposed rules and 

18 Advisory Committee notes, we noted that in the FJC 

19 study when both plaintiffs and defendants take more 

20 than five depositions, about 43 percent of plaintiff's 

21 lawyers and 45 percent of defendant's lawyers report 

22 that they consider the discovery costs to be too high 

23 relative to their client's stake in the litigation.

24 Now we can't draw a causal relationship 

25 between that because there are other forms of 
224

Heritage Reporting Corporation

(202) 628-4888

1 discovery that are still going on. On the other hand, 

2 it certainly is a source of concern when depositions 

3 get to be more than five and almost 50 percent of the 

4 lawyers say that the costs in the litigation are 

5 disproportionate to the stakes involved.

6 You know, similarly, when the NELA lawyers 

7 were surveyed with the assistance of the FJC, the NELA 

8 lawyers thought that there was a problem with 

9 disproportionate litigation. Eighty percent of the 

10 NELA lawyers thought that in small cases the amount of 

11 the discovery was disproportionate to the stakes in 

12 the case. And in larger cases, it was about 50 

13 percent of the lawyers thought that the costs were 

14 disproportionate.

15 So I'm not sure that it's correct to say 

16 that there's no empirical data. My question really is 

17 don't you think that the Advisory Committee note to 

18 the five depositions makes it sufficiently clear that 

19 the judge ought to look carefully and that there will 

20 be many cases where just as the presumptive limit of 

21 10 was insufficient, there will be more cases where 

22 the presumptive limit of five is insufficient.

23 So the judges must increase the number, must 

24 grant the request for an increased number. In even 

25 more cases, they've been doing it before, under the 10 
225

Heritage Reporting Corporation

(202) 628-4888

1 limit, when they're faced with a five limit. But they 

2 should look at it.

3 MR. CHERTKOF: I fail to see how it's more 

4 efficient to have ever more motions going back to the 

5 judge to get depositions in fewer than 20 percent of 

6 the cases. On the committee's report on page 267, it 

7 expressly said there was no proof that depositions 

8 caused dissatisfaction or were even the major cost of 

9 discovery battles. So there is no empirical evidence 

10 that that's what we're relying on in this.

11 But let me go back because I again say that 

12 the problem with the expensive litigation and delay 

13 happens in two places primarily: the early motion to 

14 dismiss, which is fast becoming routine, and that can 

15 be fixed by -- it all can be changed by just changing 

16 Rule 8 -- this committee can do that -- and the 

17 summary judgment.

18 And one of the ways with summary judgment is 

19 the hide-the-ball shell game. If we're going to be 

20 living in a world where the presumptive limit is five 

21 and we have to file a motion and wait potentially for 

22 months to get a ruling, and we're afraid to use up our 

23 five, not knowing if we're going to get seven or eight 

24 or 12, how about if the defendant had to produce early 

25 on in discovery all the affidavits it plans to use for 
226

Heritage Reporting Corporation

(202) 628-4888

1 its summary judgment motion? So now we know what the 

2 universe is we have to aim for, which people whose 

3 opinions matter, which people we're going to have to 

4 cross-examine on paper because we don't get to them at 

5 trial if we don't get past summary judgment. Pipe 

6 that up early, or make Rule 56(d), which is the rule 

7 that allows you to get additional discovery after 

8 seeing the summary judgment motion, not something that 

9 is very, very rarely granted and hard to get anything 

10 out of but the routine, that when the defendant has 

11 held you to five depositions because they haven't 

12 agreed to more, then you should almost presumptively 

13 get more discovery once you see what they put in their 

14 summary judgment motion, the people you haven't talked 

15 to, people haven't examined yet.

16 But what's happening here is we've got all 

17 the information and we've talked to our witnesses. 

18 We're not going to let you talk to them informally. 

19 We're not going to let you talk to them off the 

20 record. We're not going to let you see any documents 

21 unless you fight for them. And by the way, we're 

22 going to put in summary judgment stuff that you 

23 haven't seen and people you haven't talked to.

24 JUDGE CAMPBELL: We have a number of folks 

25 who want to ask questions, but we are about 13 minutes 
227

Heritage Reporting Corporation

(202) 628-4888

1 into your discussion, and I fear if we go much longer 

2 we're going to shortchange those at the end of the 

3 schedule. So thank you very much for your comments, 

4 Mr. Chertkof.

5 And let's hear from Ms. Klar.

6 MS. KLAR: Thank you. Mr. Chairman and 

7 members of the committee, my name is Jennifer Klar. 

8 I'm a partner at the civil rights firm of Relman, Dane 

9 & Colfax here in Washington, and I'm the secretary of 

10 the Metropolitan Washington Employment Lawyers 

11 Association. And I thank you for hearing my testimony 

12 today.

13 My testimony will focus on proposed Rule 

14 37(e), which would establish a new standard to govern 

15 remedial measures and sanctions as a result of 

16 spoliation. I have four principal concerns about the 

17 proposed rule. First and primarily, it will impede 

18 the search for truth. Second, it changes the 

19 substantive law of multiple Circuits. Third, it will 

20 disproportionately hurt civil rights plaintiffs. And 

21 fourth, at a minimum, it should not apply outside of 

22 the context of ESI, which is provided as the 

23 justification for the change.

24 First, the proposed rule focuses on the mens 

25 rea of the spoliating party instead of the search for 
228

Heritage Reporting Corporation

(202) 628-4888

1 truth. The point of civil rights cases is the search 

2 for truth. Did the defendant violate our civil rights 

3 laws? Instead of focusing on the mens rea of the 

4 spoliating party, the question should be whether a 

5 remedial measure or a sanction is necessary to 

6 counterbalance the damage to the search for truth that 

7 was caused by the spoliation.

8 This is not just my point as a civil rights 

9 attorney. The D.C. Circuit has repeatedly held this, 

10 as have other Circuits, including the Second, Fourth, 

11 and Sixth. As the D.C. Circuit explained earlier this 

12 year, and this is a quote, "Where the evidence is 

13 relevant to a material issue, the need arises for an 

14 inference to remedy the damage spoliation has 

15 inflicted on a party's capacity to pursue a claim 

16 whether or not the spoliator acted in bad faith."

17 Negligence or gross negligence would be a 

18 more appropriate standard. The committee's comments 

19 say that the intent of this proposal is to protect 

20 parties who act reasonably in preservation. This goal 

21 is achieved by a negligence or a gross negligence 

22 standard because if a party has acted reasonably, they 

23 haven't acted negligent or grossly negligent.

24 Because the proposed willfulness or bad 

25 faith standard is so difficult to prove, the 
229

Heritage Reporting Corporation

(202) 628-4888

1 destruction of evidence will go unchecked and it 

2 creates a perverse incentive to destroy bad evidence. 

3 Moreover, disallowing specifically an adverse 

4 inference instruction, which is in the comments, 

5 without willfulness or bad faith is specifically 

6 incorrect because an adverse inference is a remedial 

7 measure, not a sanction, as suggested by the comments 

8 to the proposed change.

9 Again, the D.C. Circuit has held that issue 

10 related sanctions like an adverse inference 

11 instruction are "fundamentally remedial" rather than 

12 punitive and are properly imposed when the destruction 

13 of evidence has "tainted the evidentiary resolution of 

14 an issue." Thus the focus should be on the effect of 

15 the spoliation on the search for truth and not the 

16 intent of the spoliating party.

17 Second, this rule represents a substantive 

18 change in the law of several Circuits, not a 

19 procedural change. The comments recognize there is a 

20 Circuit split on the substantive law and then they 

21 resolve it. And this should not be the role of the 

22 Federal Rules of Civil Procedure. It impedes the role 

23 of the federal judiciary also and individual federal 

24 judges and Circuits.

25 The comments foreclose reliance on inherent 
230

Heritage Reporting Corporation

(202) 628-4888

1 authority and state law, also changing substantive 

2 law, and disregard established EEOC regulations 

3 requiring the preservation of personnel records.

4 Third, the proposed rule raises grave 

5 fairness concerns, especially for civil rights 

6 plaintiffs. In civil rights cases, documents that can 

7 substantiate discrimination where it occurred are 

8 largely in control of the defendant and not the 

9 plaintiff. For example, hiring and personnel 

10 documents and documents about comparators in an 

11 employment case are controlled by the employer.

12 If the employer destroys that evidence, the 

13 plaintiff, the court, and the public are all unable to 

14 determine the truth of what happened. In the words of 

15 Judge Lamberth, former Chief Judge of the DDC, 

16 "Plaintiffs alleging discrimination should not be 

17 forced to prove their cases based on defendant's 

18 choice of files and records due to spoliation."

19 The proposed rule sets out a standard that 

20 will be hard for civil rights plaintiffs or any

21 requesting party to meet because the rule places the 

22 burden on the requesting party to show both 

23 substantial prejudice and the mens rea of the 

24 spoliating party.

25 Obviously it's hard to demonstrate 
231

Heritage Reporting Corporation

(202) 628-4888

1 substantial prejudice when you don't know what was in 

2 the documents. You can't prove there was a smoking 

3 gun if you don't know what the document said because 

4 it was destroyed. That gives a perverse incentive to 

5 fail to preserve or destroy. It's hard to prove 

6 willfulness of bad faith of someone else because the 

7 knowledge of what was done and wasn't done is in the 

8 hands of the spoliating party. So the burden should 

9 be on the party that destroyed the evidence that we 

10 recognize it was obligated to preserve.

11 Finally, while I oppose changing the rule 

12 altogether, I would strongly suggest that if adopted 

13 it should only apply to ESI and not paper documents. 

14 The concerns expressed by the committee relate only to 

15 the cost of ESI preservation. The comments say 

16 electronic documents would likely be duplicative where 

17 alternatives exist. And while I disagree with that 

18 with respect to ESI, it's certainly not true with 

19 respect to paper documents that are frequently 

20 irreplaceable and important to prove discrimination: 

21 handwritten interview notes, application forms, 

22 comments on application forms that can be crucial to 

23 showing discriminatory intent.

24 Allowing more discovery or shifting 

25 attorney's fees is not a solution. If documents are 
232

Heritage Reporting Corporation

(202) 628-4888

1 destroyed, many times additional discovery will not 

2 replace them, especially for paper documents, and 

3 shifting fees can't undo the harm to the search for 

4 truth and the requesting parties' ability to prove its 

5 case.

6 In sum, I urge you to reject this rule, 

7 leave the spoliation law as it now stands. If some 

8 version of the amendment is adopted, it should reflect 

9 a negligence standard or gross negligence standard 

10 rather than bad faith or willfulness. And 

11 additionally, the rules should be restricted to ESI.

12 I'm finished with my presentation on 

13 spoliation, but I'd like if I may have 30 seconds to 

14 provide an example with respect to the deposition rule 

15 that was discussed.

16 JUDGE CAMPBELL: Sure.

17 MS. KLAR: I recently had a case, an 

18 employment case where there were many witnesses 

19 disclosed by the other side on their initial 

20 disclosures, and I asked for additional depositions 

21 because they had identified these witnesses. That was 

22 very, very hard fought and litigated and opposed, 

23 briefed, et cetera, argued. And what I was allowed to 

24 get was two hour depositions where I had to pay for my 

25 transcript and the transcript for the other side 
233

Heritage Reporting Corporation

(202) 628-4888

1 because they said that the depositions were 

2 unnecessary. But then they put those witnesses on 

3 their trial witness list and called them. So 

4 obviously they opposed and then intended to call the 

5 witness, which is a gotcha that will happen more and 

6 more often if the number is reduced.

7 The judge, who I think in the end was fair, 

8 pushed very hard on why is your case so different from 

9 the standard case, so special that you need extra 

10 depositions when you don't need them in another case. 

11 And that's just going to be more and more difficult 

12 with the normative effect of a rule where you have to 

13 prove your case is really more complicated, more 

14 difficult, bigger in order to get the depositions you 

15 need to depose people that will be put on at trial.

16 JUDGE CAMPBELL: Thank you, Ms. Klar.

17 Questions?

18 PROF. MARCUS: Regarding Rule 37(e)?

19 MS. KLAR: Yes.

20 PROF. MARCUS: As you've heard today and 

21 we've heard also, there are a number of reports that 

22 currently preservation is a very large and expensive 

23 burden for a significant number of enterprises. And 

24 I'm wondering, do you think those reports are 

25 inaccurate, or is the notion that that's the way 
234

Heritage Reporting Corporation

(202) 628-4888

1 things should be?

2 MS. KLAR: Well, let me respond to that in 

3 two ways. First of all, the rule is and has always 

4 been under the current 37(e) that documents can be 

5 destroyed in the normal course. So there's no reason 

6 to just preserve everything. Under a normal 

7 destruction policy, they can be destroyed.

8 So the rule only attaches when there's a 

9 reasonable belief that there would be litigation, 

10 which should not be everything. And the proposed rule 

11 changes don't change that because while there was a 

12 discussion in the comments about possibly clarifying 

13 what has to be preserved, in fact, that's not the 

14 change that's being made here.

15 So I don't think the rule as it's written 

16 really goes to that problem, and instead we get a type 

17 one, type two error situation where in excusing 

18 negligent and grossly negligent conduct in order to 

19 make sure that defendants who -- or companies who 

20 behave reasonably aren't punished, when of course 

21 negligence, gross negligence, isn't reasonable, the 

22 search for truth is impeded.

23 So even if there is overpreservation right 

24 now, I don't think that this rule changes that without 

25 a clarification of what has to be preserved and also 
235

Heritage Reporting Corporation

(202) 628-4888

1 creates a harm in the search for truth.

2 JUDGE CAMPBELL: All right. Thank you very 

3 much, Ms. Klar.

4 Mr. Woodfield?

5 MR. WOODFIELD: Good afternoon. My name is 

6 Nicholas Woodfield. I'm a principal at the Employment 

7 Law Group, a Washington, D.C.-based employment law 

8 firm. I'm also president of the Virginia Employment 

9 Lawyers Association, which is the NELA affiliate of --

10 or the Virginia affiliate of NELA.

11 JUDGE CAMPBELL: Could you pull the mike up 

12 just a little higher, please? Thanks.

13 MR. WOODFIELD: Yes, sir. I'm here today to 

14 speak about Federal Rule of Civil Procedure 4(m) and 

15 the proposal to shorten the time for service from 120 

16 days to 60 days. There are a couple of concise points 

17 I'd like to raise.

18 First, it's problematic for employment law 

19 cases. Employment law cases have additional factors 

20 that are unlike other cases wherein you have 

21 frequently people coming to you at the last minute 

22 because they got a right-to-sue letter. Then they 

23 show up and say, I have to file this in the next day 

24 or two. In those situations, you're very often 

25 dealing with someone where you're trying to protect 
236

Heritage Reporting Corporation

(202) 628-4888

1 their statute of limitations, but you cannot 

2 necessarily do the type of due diligence that you'd 

3 like to do. In those situations, you can prepare pro 

4 se complaints over your own name or you can file it. 

5 And while you have an admittedly lower standard, 

6 you've got to perform your due diligence. And to 

7 perform that due diligence, you have to go out in a 

8 situation where again, as Mr. Chertkof said, the 

9 evidence very often is asymmetrical, and who controls 

10 it?

11 In that situation, that 120 days can be used 

12 very quickly. You can also run into that situation of 

13 trying to get FOIA information waiting for results 

14 from other agencies and trying to get witness

15 statements. In the False Claims Act area in which my 

16 firm also practices, you run into an interesting 

17 situation wherein when you file the government is 

18 immediately involved. The U.S. attorneys immediately 

19 are involved. At that point, to protect your client's 

20 interests and to stop the case from going out from 

21 underneath the seal order, to avoid violating the 

22 seals, the plaintiff's attorneys at that point are 

23 relegated to the back seat.

24 We can be in the back seat for six months to 

25 years depending on how long DOJ or the U.S. Attorney's 
237

Heritage Reporting Corporation

(202) 628-4888

1 Offices may take. And at the end, they may simply 

2 say, we're not going to take a position on this or 

3 we're not going to intervene or we're going to 

4 intervene. Intervention occurs in roughly 18 percent 

5 of the filings.

6 On those other cases, we can be finding out 

7 18 months down the road that they've spoken to any 

8 number of witnesses and got any number of documents, 

9 and at that point we have 120 days to FOIA documents 

10 potentially to find out who we may be able to speak to 

11 at that point. To shorten that in half is to put us 

12 in a difficult situation where you've halved our time 

13 to try and get the information necessary to come 

14 forward with very good cases.

15 Now not all cases are spectacular, but we 

16 try and put forward the very best that we can. 

17 Importantly, though, when we look at our cases, we 

18 have to make a decision at the beginning based on the 

19 evidence. And if we have finite evidence in front of 

20 us, we have to make less guided choices.

21 Many of these cases, the False Claims Act 

22 cases, are turned down by the government not because 

23 of the merits of them but because of internal politics 

24 at the agency or because of some issue or concern with 

25 the AUSA that doesn't stop the case from proceeding if 
238

Heritage Reporting Corporation

(202) 628-4888

1 it goes forward as represented by individual counsel, 

2 but it puts the individual counsel at an incredible 

3 disadvantage in that they really can only prepare 

4 their clients and prepare their cases very, very 

5 briefly.

6 My suspicion, and this is my suspicion as 

7 Nicholas Woodfield, attorney who practices in 

8 Washington, D.C., that part of the impetus for this 

9 reduction is to shorten the time that these cases go 

10 from filing date to terminal date. And I would say to 

11 a degree that this is pointing at the wrong creature 

12 that's causing these problems. There are many reasons 

13 for the delays in these cases. There are many reasons 

14 for the length of federal dockets. One of them is the 

15 Iqbal and Twombly standard that becomes the de rigueur 

16 standard for -- or the de rigueur motion to dismiss 

17 motion that comes up in every case in the summary 

18 judgment.

19 In the last couple of years, in the last two 

20 years, in this particular jurisdiction, I have waited 

21 18 months for a motion to dismiss ruling, and I have 

22 waited three years for a summary judgment decision 

23 where we had to mandamus the D.C. Circuit to get a 

24 decision on the summary judgment.

25 To say that we need to reduce 120 days to 60 
239

Heritage Reporting Corporation

(202) 628-4888

1 days to speed these things up is pointing at the wrong 

2 creature. The reason that we are having this 

3 expedited or this shortening is I presume to expedite 

4 the process. I don't think that's it. Moreover, I 

5 think on a simple cost benefit analysis, there are 

6 times where when we have to file a case after we've 

7 been able to do a little more due diligence, we 

8 determine that this may not be the case to do and you 

9 voluntarily withdraw.

10 If you had to serve within 10 days, we would 

11 serve. There would be no voluntary withdrawal, and it 

12 would be proceeding forward. This gives us a chance 

13 to finalize when there is a short limitation or there 

14 is some other pressure on the case for us to pull 

15 back. That 120 days is of great value. And there is 

16 no cost to defending or not being served and the case 

17 being dismissed out.

18 If, however, the time is shortened, what we 

19 end up doing is having to go in those cases is trying 

20 without guarantee that we're going to get additional 

21 time filing motions, which creates more load on the 

22 dockets and potentially causes more issues with the 

23 courts. So I think we essentially on this rule have 

24 something that isn't broken and I don't think needs 

25 fixing. Unless there's any issue, I would yield my 
240

Heritage Reporting Corporation

(202) 628-4888

1 roughly remaining one minute to Mr. Chertkof because I 

2 thought what he had to say was very astute.

3 JUDGE CAMPBELL: Well, thank you for that 

4 generous offer. Let's see if there's any questions.

5 (No response.)

6 JUDGE CAMPBELL: Okay. Thank you very much 

7 for your comments, Mr. Woodfield.

8 We'll come back to Mr. Chertkof at the end 

9 if that one minute remains.

10 (Laughter.)

11 JUDGE CAMPBELL: All right. Mr. Seldon?

12 MR. SELDON: My name is Bob Seldon. I have 

13 been practicing law for 37 years as a member of the 

14 District of Columbia Bar. And the primary place that 

15 I practiced have been in the federal courts here in 

16 the United States District Court and in the D.C. 

17 Circuit.

18 Several of my colleagues asked me to speak 

19 about the issue of the number of depositions and where 

20 the default rule would go to five and speak about it 

21 to the committee, and I think they did it because my 

22 background I think gives me some sort of unique 

23 experience.

24 I began as a plaintiff's lawyer for the 

25 federal government doing antitrust work. I became a 
241

Heritage Reporting Corporation

(202) 628-4888

1 defendant's lawyer for the federal government as an 

2 Assistant United States Attorney here in the District 

3 working for former Chief Judge Lamberth and then a 

4 colleague of mine when he became the chief of the 

5 Civil Division, Judge John Bates. And we were 

6 entrusted with defending the federal government, 

7 largely during the Reagan Administration, from all 

8 sorts of attacks and in all sorts of trials.

9 It gave me broad experience, enough so that 

10 at one point I went next to head the litigation 

11 department of a corporate law firm, where I defended 

12 -- represented I should say for the most part 

13 financial institutions. Some of them are large enough 

14 to be on Main Street, and some of them are small 

15 enough -- I'm sorry, large enough to be on Wall 

16 Street. You can tell I messed that up. And some were 

17 small enough to be on Main Street. And then I went to 

18 open my own plaintiffs' law firm where I now work.

19 I think in my observation the great thing 

20 about the United States judiciary is that you can walk 

21 into court with anybody and you can say, I don't know 

22 what's going to happen with your case. But here, here 

23 as opposed to any other place on earth, you're going 

24 to get a fair shake, I can promise you that. And I've 

25 seen that for my many years of experience. I've seen 
242

Heritage Reporting Corporation

(202) 628-4888

1 that as the rules have evolved. I've seen the concept 

2 of disclosures, and whoever came up with that idea for 

3 my money deserves to get the Nobel Peace Prize. Not 

4 the peace prize, but the prize.

5 I'm going to give you an example or two 

6 about how the five deposition limit rule would work if 

7 in my view this awful rule were put in place. I 

8 represented in one case a fellow who blew the whistle 

9 on the internal affairs division in the D.C. 

10 Department of Corrections and they paid him back by 

11 phonying up a report that he beat up a first degree 

12 murderer.

13 Before we could get to the people, before we 

14 could get to the defendants, before we could get to 

15 the investigators, we had to do the witnesses. We 

16 started with the two who said they saw him do it. And 

17 those depositions showed they really didn't say that 

18 until they were put under investigation.

19 There were nine more people who said, you 

20 know, they didn't see anything. And we sort of sorted 

21 our way through, saw from some of the reports that the 

22 first eight didn't see anything because they couldn't 

23 see anything. And we get to the ninth guy and I said, 

24 did you see anything, and he said no. And I said, 

25 could you. He said, sure. I said, what happened. He 
243

Heritage Reporting Corporation

(202) 628-4888

1 said, that man did not beat up the prisoner.

2 That's before we could start with the real 

3 depositions. I have another case where a fellow was 

4 intentionally exposed to asbestos at the workplace by 

5 the Department of Commerce. There were many, many 

6 witnesses, and there was a report that went to the 

7 President of the United States that confirmed this. 

8 We had to prove that case with many, many witnesses or 

9 would have had to had we not had in the third witness 

10 of what was going to be 10 or more, when asked about 

11 this, said everybody knew he wasn't given medical 

12 monitoring equipment. Everybody saw him coughing up 

13 blood at the workplace. And I said, do you know that 

14 the supervisor knew that and wouldn't help him out. 

15 She said, sure. We were both watching him coughing up 

16 blood one day, and I said, why don't you transfer him 

17 to my staff, I've got an opening. And she said no.

18 Now this first fellow is a Gulf War vet and 

19 a Marine, and he's driving a FedEx truck today. And 

20 if I didn't start his case five years ago and I 

21 started it next year, I'd have to say, Emmett, you 

22 know, there's a lot here and I don't think you did it. 

23 But there's a new presumptive rule, and if I can't 

24 talk a federal judge into giving us more than five 

25 depositions, I don't think you're going to get that 
244

Heritage Reporting Corporation

(202) 628-4888

1 fair shake.

2 And if I say to the next guy, Dion, I know 

3 you're a Gulf War vet and I know your lung tissue is 

4 so brittle you are never going to see your young 

5 children grow up, but I'm here to tell you there is a 

6 new presumptive rule, your case is not proportionally 

7 big enough, and I may not be able to tell a federal 

8 judge and convince them to let me take more than five 

9 depositions.

10 Now I am here to tell you that that rule is 

11 beneath the dignity of the United States Courts to put 

12 in place. And I am just here as one practitioner to 

13 ask you don't ever make me go to court and have to say 

14 to a client I don't think these courts are going to 

15 give you a fair shake. I just don't think you should 

16 do it. Thank you.

17 JUDGE CAMPBELL: All right. Thank you.

18 Questions for Mr. Seldon?

19 (No response.)

20 JUDGE CAMPBELL: All right. Thanks so much.

21 Mr. Williams?

22 MR. WILLIAMS: Thank you, Mr. Chairman. My 

23 name is Marc Williams. I'm president of Lawyers for 

24 Civil Justice, and I'm a practicing lawyer in 

25 Huntington, West Virginia, with the firm of Nelson 
245

Heritage Reporting Corporation

(202) 628-4888

1 Mullins Riley & Scarborough.

2 You've had the benefit of LCJ's written 

3 comments, and Mr. Dahl and Mr. Levy have expanded on 

4 those. I'd like to if I could give a little bit of a 

5 different perspective for those LCJ members who are 

6 practitioners in the federal courts, essentially 

7 talking about my experience over 28 years having a 

8 practice that was primarily in the federal courts and 

9 various districts. And I would like to direct my 

10 comments to the proportionality component of Rule 26, 

11 which is in the proposed amendments, and the 

12 presumptive limits on discovery. And if I could, I'll 

13 deal with the proportionality change first.

14 A lot of the discussion, and I've been here 

15 since this morning, has been pointing out the fact 

16 that proportionality as it exists in the current rule 

17 and being moved would allow the courts to have the 

18 benefit and the lawyers and practitioners to have the 

19 benefit to focus on that issue early in the case when 

20 we are preparing our discovery plans.

21 The most recent case that I litigated the 

22 current iteration of proportionality unfortunately --

23 and I might add is the only time that we had to go to 

24 a magistrate judge on that issue -- unfortunately got 

25 bogged down in the whole question of whether or not 
246

Heritage Reporting Corporation

(202) 628-4888

1 the discovery that was being requested was reasonably 

2 calculated to lead to the discovery of admissible 

3 evidence.

4 Even though it's clear from the language of 

5 the rule that that's not what it was intended to 

6 define as scope, by eliminating that language and 

7 pushing proportionality into the scope of discovery, 

8 it will allow us then to focus on proportionality as 

9 it relates to the discovery that is necessary for the 

10 type of case that is being prepared.

11 Ultimately, if you go back to the '93 

12 amendments and go forward, the efforts that these 

13 committees have made in trying to amend these rules 

14 has been to try to force lawyers and judges to not 

15 make the same mistake generals have made of trying the 

16 last case -- or discovering the last case or fighting 

17 the last war, but to focus on the facts that are in 

18 dispute, the issues that have been raised by the 

19 pleadings, and craft a discovery that is necessary for 

20 that.

21 This amendment would allow that to happen 

22 and would give us the tools to make a decision. And 

23 frankly, to the extent that there are objections about 

24 proportionality and the prospect that it could end up 

25 eliminating meritorious claims, I think that the way 
247

Heritage Reporting Corporation

(202) 628-4888

1 this committee has drafted the proposed rule has 

2 provided an excellent balance to guarantee access to 

3 justice, to deal with what most lawyers from 

4 plaintiffs and defense would acknowledge, and that is 

5 discovery is too expensive and oftentimes too 

6 extensive. It provides a good balance for that so

7 that at the beginning of the case we can sit down 

8 lawyer to lawyer and perhaps with the judge if that's 

9 the way that they do that in that district and craft a 

10 discovery plan that would incorporate and consider 

11 proportionality in relation to the case.

12 So, to that extent, we would avoid what I 

13 see unfortunately often, and that is cases that are 

14 resolving because of the costs of discovery or, as 

15 described by Mr. Mason in his comments, discovery that 

16 is used as leverage not to find the facts of the case 

17 but to exercise leverage points to try to force a 

18 resolution.

19 Good lawyers, very smart lawyers, have 

20 recognized that most of the work that takes place in a 

21 case is in the discovery process, and they use 

22 discovery, especially with the explosion of 

23 electronically stored information, to demand 

24 information as a result of which parties are then 

25 forced to make judgments as to whether or not they are 
248

Heritage Reporting Corporation

(202) 628-4888

1 willing to go forward to test the merits of the claims 

2 or whether they have to make an economic decision in 

3 that resolution. This amendment would put us back in 

4 the position of actually using discovery for the 

5 purpose of searching for truth, which I think is the 

6 intent.

7 In the last minute, I'd like to talk about 

8 presumptive limits. In the 20 years that I've been 

9 practicing since presumptive limits were put in place, 

10 I can tell you that the '93 amendments on 

11 interrogatories, for instance, eliminated many of the 

12 abuses that I had grown up learning about in terms of 

13 written discovery. And frankly, over 20 years, 

14 whenever there was a question about the number of 

15 interrogatories, the number of depositions, the length 

16 of a deposition, I can only think of one case in 20 

17 years in handling hundreds and hundreds of cases in 

18 the federal courts where we were not able to work out 

19 an agreement, whether it was horse trading with 

20 opposing counsel in terms of, well, you want this, I 

21 need this, why don't we agree on that, or just saying, 

22 okay, you need more than 10 depositions. Why don't

23 we -- tell me how many you need and who you need to 

24 depose, and then we can make a judgment on that.

25 It's almost invariably resolved by 
249

Heritage Reporting Corporation

(202) 628-4888

1 agreement. And on one occasion, when we had to go to 

2 the judge, the judge was able to work out an agreement 

3 once again by asking the parties to define exactly the 

4 type of deposition schedule that they needed.

5 The vast majority of cases in my experience 

6 -- and I've handled a lot of big cases and small cases 

7 in federal court. The vast majority of cases are 

8 going to fall within the presumptive limits that are 

9 set out in these amendments. But I trust the judges 

10 to know that if I make a request and can justify my 

11 request for something that falls outside of those 

12 limits that I'll get that.

13 That's the comments I wanted to make, and 

14 I'll be happy to answer any questions.

15 JUDGE CAMPBELL: Judge Oliver.

16 JUDGE OLIVER: It sounds like you haven't 

17 had any problem with the 10-deposition limit.

18 MR. WILLIAMS: None.

19 JUDGE OLIVER: And so you haven't had to 

20 fight over someone getting too many or what have you.

21 MR. WILLIAMS: Only one time in 20 years, 

22 Your Honor. And I can't say that most of the cases 

23 that I've handled -- because as I get longer in the 

24 tooth, the cases get more complex. That's what we all 

25 hope as we advance as experienced lawyers. But I can 
250

Heritage Reporting Corporation

(202) 628-4888

1 tell you that most of the cases I see across the 

2 platform in our firm fall within that, and to the 

3 extent that they fall outside of it, it usually is 

4 resolved by agreement.

5 JUDGE OLIVER: So you're not here to argue 

6 for a five-deposition limit based on your experience.

7 MR. WILLIAMS: I think a five-deposition 

8 limit is appropriate because I think that falls within 

9 what most cases that are in the federal courts are 

10 actually using. For instance, the note that came with 

11 the proposed amendment indicates that the way that 

12 that five-deposition limit was identified was because 

13 that should handle the majority of the cases that fall 

14 in the federal courts.

15 JUDGE OLIVER: But it's not based on the 

16 fact that you've had a problem with the prior limit.

17 MR. WILLIAMS: I believe that five is a good 

18 default from which we can start, and I can tell you 

19 that the 10-deposition limit that we currently have 

20 has not been a problem in cases where it's justified 

21 to ask for more than that.

22 I can tell you this, though. I've never had 

23 a case at the end of the resolution that I thought, 

24 gosh, I wish I'd had more time for discovery. Lawyers 

25 will expand the discovery to the outside limits. It's 
251

Heritage Reporting Corporation

(202) 628-4888

1 like air in a bottle. And at the beginning of a case, 

2 if I know that the presumptive limit is five, what I'm 

3 going to be forced to do is sit down and think about 

4 who do I need to depose in this case, what are the 

5 sorts of witnesses I'm going to need to identify so 

6 that I can then have a plan in place as opposed to 

7 prior to the '93 amendments when it was open season 

8 and we could just hopefully within the time limited 

9 for discovery take as many depositions as possible.

10 Five makes sense as a starting point. Ten 

11 has not been a problem for what we currently have. 

12 And I trust the judges that in appropriate cases that 

13 they will allow the parties to take more than five if 

14 necessary.

15 JUDGE CAMPBELL: Parker?

16 MR. FOLSE: I'd like to get your reaction to 

17 some themes that have come through in some of the 

18 comments we've heard today. There's been an argument 

19 made that by taking the proportionality factors and 

20 moving them explicitly into the scope definition in 

21 Rule 26 that what that will do in practice is to 

22 provide a new range of tools that can be used as 

23 objections by people who want to resist discovery, 

24 which will in turn lead to a lot of satellite 

25 litigation in front of federal judges who are already 
252

Heritage Reporting Corporation

(202) 628-4888

1 overworked and already underfunded, which will in turn 

2 lead to delays in the resolution of cases on the 

3 merits. And as someone who has been in the trenches

4 of litigation and has seen the way people use 

5 objections, I'd like to get your reaction to that.

6 MR. WILLIAMS: Well, if I make a 

7 proportionality objection, which we're entitled to do 

8 now, and on occasion we do based upon looking at the 

9 nature of the claims, the scope of the questions that 

10 are being asked, particularly let's say in a 30(b)(6) 

11 deposition notice where oftentimes the net is cast 

12 very broadly and I'm trying to narrow it down to the 

13 actual issues in dispute.

14 To the extent that I make a proportionality 

15 argument, it seems to me that I have the 

16 responsibility to make that showing as to why it's not 

17 in proportion. I understand that the offering or the 

18 demanding party has certified that under 26(g), under 

19 those circumstances, they believe that it is 

20 proportional to the needs of the case. If I'm going 

21 to make an objection on burdensome or privilege or 

22 proportionality, then that falls to be my 

23 responsibility. And I suspect that the magistrate 

24 judges or the judges that hear that are going to 

25 demand me to make that showing.
253

Heritage Reporting Corporation

(202) 628-4888

1 So I'm going to have to think about that as 

2 to how I can justify limiting that within the 

3 parameters of how proportionality is defined in the 

4 proposed amendment, which gives pretty good guidance 

5 to me as a practitioner on the showing that I'm going 

6 to have to make in order to prevail on that issue.

7 Ultimately I suspect proportionality 

8 objections are going to result in a narrowing or a 

9 focus of the discovery, with an understanding that 

10 once that is completed, we would give them the right 

11 to revisit that issue, much in the same way we do, for 

12 instance, when we're negotiating 30(b)(6) notices of 

13 saying let's narrow it down to these topics, let's 

14 have witnesses testify to those, and then after you've 

15 heard those, if you need additional -- if you want to 

16 broaden it from that point, let's come back and 

17 revisit that issue.

18 JUDGE CAMPBELL: All right. Thank you very 

19 much, Mr. Williams.

20 MR. WILLIAMS: Thank you.

21 JUDGE CAMPBELL: Mr. Relman?

22 MR. RELMAN: Good afternoon, Mr. Chairman 

23 and members of the committee. Thank you for the 

24 opportunity to testify today. My name is John Relman. 

25 I'm the managing partner of Relman Dane & Colfax. 
254

Heritage Reporting Corporation

(202) 628-4888

1 And our firm specializes in litigating civil rights 

2 cases. Our focus is on discrimination cases in the 

3 areas of fair housing, fair lending, unemployment, and 

4 disability discrimination, and my comments are based 

5 on more than 25 years of experience litigating 

6 literally scores of civil rights cases both at the 

7 firm and before that at the Lawyers Committee for 

8 Civil Rights, where I worked before founding the firm.

9 I want to focus my remarks in the couple of 

10 minutes that I have on concerns that I have about two 

11 of the changes, and the first is the proposed 

12 reduction in the number of depositions, and the second 

13 is the proposed amendment to Rule 26(b) regarding the 

14 scope and burden of discovery.

15 First, with respect to depositions, lowering 

16 the cap, the presumptive cap, on the number of 

17 depositions is a change that I believe in my judgment 

18 in the context of individual civil rights claims will 

19 dramatically tip the balance in favor of large 

20 companies and against individual plaintiffs. The 

21 restriction is going to make it much more difficult 

22 for plaintiffs to prove the case, and it's not going 

23 to have the same effect on defendants. And I want to 

24 take a minute and explain why, and I'll focus my 

25 comments specifically on the civil rights 
255

Heritage Reporting Corporation

(202) 628-4888

1 discrimination context.

2 Discrimination cases today are rarely proven 

3 by a smoking gun, but rather they depend upon 

4 inferences that are drawn from circumstantial 

5 evidence. The key to any individual case is proving 

6 pretext, that is, that the asserted reason or defense 

7 is not true, it's a lie. And the way that you test 

8 that to determine if it's pretext is that you've got 

9 to test the reasons that are given and explore the 

10 treatment of similarly situated individuals to the 

11 plaintiff so that you can show that individuals not in 

12 the protected group, people who are not African 

13 American, someone who is not a woman or someone who is 

14 not Hispanic, for example, is not treated the same 

15 way, that the excuse doesn't apply.

16 Establishing the evidence of how similarly 

17 situated folks are treated requires multiple 

18 depositions, and the reason for that is very simple. 

19 Ethically, plaintiffs' attorneys are often barred from 

20 informally speaking with employees of companies. 

21 We've got to rely on formal depositions to explore 

22 their knowledge and testimony.

23 If multiple reasons are given by a defendant 

24 for why an adverse decision is made, for instance, why 

25 he didn't get the housing, why he didn't get the job, 
256

Heritage Reporting Corporation

(202) 628-4888

1 the only way we can test the truthfulness of that 

2 statement, the only way we can do it is to identify 

3 potential similarly situated folks, and we've got to 

4 depose them. We've got to test out and ask them 

5 questions. That frequently requires well more than 

6 five depositions, and in fact, it may take a 

7 deposition or two just to determine who the actual 

8 decision-maker was in the process, who was the person 

9 who actually sets the rules and made the decision.

10 So for this reason, this restriction in this 

11 critical discovery tool of depositions is going to 

12 weaken the ability to prove meritorious discrimination 

13 cases, and it's ultimately in my view going to 

14 undermine the enforcement of civil rights laws.

15 In contrast, this change for depositions 

16 doesn't hurt the defendant because they have access to 

17 all of their own employees. They can conduct their 

18 own informal discovery without restriction. They 

19 don't need depositions to test that out or to check 

20 for whether there are actually similarly situated 

21 folks. They only need to depose the plaintiff. 

22 That's one deposition, and that's it. And because the 

23 plaintiffs bear the burden of proof, the defendants 

24 have more to gain by blocking discovery. So they're 

25 going to have an incentive to try and limit the 
257

Heritage Reporting Corporation

(202) 628-4888

1 depositions to the bare minimum that are there. So 

2 defendants have little to lose by lowering that limit. 

3 Plaintiffs have a lot to lose.

4 Second, there is no risk of an abuse or 

5 overuse of depositions under the current system by 

6 plaintiffs because most of the plaintiffs are indigent 

7 and can't recover the costs of litigation. And so 

8 attorneys are working on a contingency or a fee9 shifting basis. They front the costs of litigation, 

10 and they have no incentive to take unnecessary 

11 depositions. And, of course, depositions are costly.

12 If there is to be a change, I think the more 

13 palatable change -- I don't think there should be a 

14 change, but if there is to be a change, the change 

15 should be one where there is a limit on the number of 

16 hours, total number of hours, and that would preserve 

17 the plaintiffs' access to the witnesses they need to 

18 depose while ensuring that the overall time spent in 

19 deposition is reasonable. It preserves the 

20 flexibility for the plaintiff to be able to address 

21 the evidentiary needs of each case on a case-by-case 

22 basis, and it's going to reduce discovery disputes by 

23 decreasing the likelihood that a plaintiff will file a 

24 motion for leave to take more depositions.

25 If I could have leave just to say just a few 
258

Heritage Reporting Corporation

(202) 628-4888

1 words about the proportionality test, would that be 

2 permissible?

3 JUDGE CAMPBELL: Yes.

4 MR. RELMAN: With respect to 

5 proportionality, here is the problem with the change 

6 that moves the language up into 26(b)(1). The problem 

7 is that the factors in the proposed rule weigh the 

8 amount in controversy against essentially the cost and 

9 burden of discovery on the defendant. In a typical 

10 individual case, the amount in controversy may be 50-, 

11 $60,000. But in almost every case, that is going to 

12 be outweighed by the cost to a large defendant of 

13 searching for emails or producing loan files, for 

14 example, if it's a lending discrimination case or even 

15 in a housing discrimination case. It's almost always 

16 going to be overweighed, and the defendant will almost 

17 always say that it is too burdensome and more costly 

18 to produce those files to check that email than the 

19 amount in controversy.

20 But for the reasons I've said, that 

21 discovery is essential. You can't prove the pretext 

22 without seeing the emails, without getting into the 

23 files.

24 I'll give you one example as I wrap up my 

25 comments. I represented an individual who was here in 
259

Heritage Reporting Corporation

(202) 628-4888

1 D.C. years ago who was HIV positive and gay and was 

2 applying for housing. He had a rental application for 

3 a townhouse that was rejected. The property 

4 management company first told him that he didn't 

5 qualify because he had a blemished credit record. He 

6 said, I'll find a cosignor, and the management company 

7 said, we don't take cosignors, sorry, rejected.

8 He then offered to pay a second month's rent 

9 as security. They said, we don't do that. We don't 

10 accept that. And finally he said, I will prepay the 

11 entire year's rent, $11,000, just to show you that you 

12 don't have a risk here. They said, we don't do that. 

13 We can't take that. That's not our policy. We've 

14 never done that.

15 I didn't believe that was true. That defied 

16 logic. It didn't make any sense why you wouldn't 

17 accept that. So we said we want to see the files. 

18 We're certain it was a large management company that 

19 ran it. We said, we're certain we're going to find 

20 similarly situated individuals for whom you've either 

21 taken cosignors, accepted extra rent, or even taken a 

22 whole year's of rent.

23 They resisted, saying, of course, it would 

24 be burdensome, costly, it shouldn't be done. The 

25 judge ultimately, Judge Kessler in the case, ruled 
260

Heritage Reporting Corporation

(202) 628-4888

1 that we were entitled to that discovery because she 

2 said this is essential to proving pretext. The result 

3 was we got into the files, we found out what they said 

4 was pretext. They did take cosignors, they did allow 

5 for prepay, and their reasons were not true.

6 The point is that were this a 

7 proportionality test, and where that was the case 

8 because there wasn't a lot of damages involved in this 

9 case, we would never have gotten into those files and 

10 the rights of a deserving plaintiff would have gone 

11 unvindicated.

12 And finally, the last thing I want to say, 

13 and then I'll stop, is that the problem here in moving 

14 the rule is that it takes the proportionality test out 

15 of an issue that is squarely in front of a judge when 

16 there is a contested motion for protective order and 

17 puts it, the plaintiff, at the mercy of the defendant 

18 because the plaintiff, who has the burden, is asking 

19 the defendant for that discovery, for those emails, in 

20 a bank case for those loan files. There is no bank, 

21 there is no large company that will not tell me that 

22 it's way too burdensome in light of how much is at 

23 stake to produce those emails, to produce those loan 

24 files, and if that's the test, I'll never get what I 

25 need.
261

Heritage Reporting Corporation

(202) 628-4888

1 That means every single time there is going 

2 to be a disputed discovery motion I will have to go to 

3 the judge every single time to fight this battle and 

4 I'll have the burden to show it. Sometimes I may win 

5 if the judge is favorable, other times I may lose. 

6 But the point is the presumption is being set against 

7 an individual civil rights plaintiff who may have a 

8 very meritorious case. I think this sets civil rights 

9 back. I would ask that these changes not be put into 

10 effect.

11 JUDGE CAMPBELL: All right. Thank you very 

12 much, Mr. Relman.

13 Malini Moorthy.

14 MS. MOORTHY: Good afternoon, Mr. Chairman 

15 and members of the committee. My name is Malini 

16 Moorthy, and I'm a vice president and assistant 

17 general counsel at Pfizer, Inc. Specifically, I head 

18 the company's civil litigation group, which includes 

19 oversight of our e-discovery team.

20 Pfizer is frequently a defendant in a wide 

21 variety of civil litigation matters, including product 

22 liability, securities, and antitrust litigation. But 

23 Pfizer is also occasionally a plaintiff in litigation, 

24 and it is from these dual perspectives that I'm 

25 speaking here today.
262

Heritage Reporting Corporation

(202) 628-4888

1 Rather than reviewing point by point the 

2 proposed amendments, I'd like to give you a concrete 

3 narrative of our experience. This narrative 

4 complements our written comments, which were submitted 

5 earlier today, and illustrates how the current rules 

6 have forced Pfizer to preserve, collect, and produce 

7 staggering amounts of information at even more 

8 staggering costs, and much of the information has no 

9 bearing on the litigation we face.

10 In the hormone therapy litigation, Wyeth, 

11 which was subsequently acquired by Pfizer, it was 

12 subject to a discovery preservation order Rule 26 that 

13 required us to preserve 1.2 million backup tapes over 

14 the course of six years.

15 Backup tapes are intended for disaster 

16 recovery to enable companies to restore data on our 

17 systems in the face of a catastrophic event. Like 

18 most companies, Pfizer's policy is to recycle its 

19 backup tapes at regular intervals as the data on the 

20 tapes becomes duplicative and it is expensive to 

21 purchase new tapes and store huge volumes of old ones.

22 In connection with the hormone therapy 

23 preservation order, we estimate that Wyeth and Pfizer 

24 spent nearly $40 million to buy and store the 1.2 

25 million backup tapes that were preserved. Each one of 
263

Heritage Reporting Corporation

(202) 628-4888

1 the tapes holds roughly 100 gigabytes of data, so in 

2 total they hold approximately 100 petabytes of data.

3 I was largely unfamiliar with the term 

4 petabyte until recently, and the number meant very 

5 little to me. But I've since learned that 50 

6 petabytes is roughly equivalent to the entire written 

7 literary works of all mankind in all languages since 

8 the beginning of recorded time, and we preserved twice 

9 that much.

10 The most remarkable fact is that despite 

11 preserving 100 petabytes of information, we never went 

12 back to those backup tapes to retrieve a single 

13 document, not once, as the information on those tapes 

14 was completely redundant. There was no need to go to 

15 the backup tapes because in the same litigation Pfizer 

16 collected millions and millions of documents from its 

17 live data environment, which included retrieving data 

18 from more than 170 custodians and more than 75 

19 centralized information systems.

20 From those collection efforts, Pfizer 

21 produced approximately 2.5 million documents, 

22 representing more than 25 million pages. Of those 2.5 

23 million documents, we estimate that only about 400 

24 company documents were marked as exhibits in the 23 

25 trials that have taken place in the litigation to 
264

Heritage Reporting Corporation

(202) 628-4888

1 date.

2 Over the course of those trials, plaintiffs 

3 consistently used the same 400-odd documents, most of 

4 which were produced early on in the litigation, 

5 notwithstanding our continued production of documents. 

6 This means that for every one document used at trial, 

7 about 625,000 additional documents were produced.

8 Another point to consider is that 

9 fortunately or unfortunately depending on your 

10 perspective, Pfizer was able to comply with the 

11 overbroad preservation order and plaintiffs' discovery 

12 demands notwithstanding the significant expense and 

13 burden.

14 The hormone therapy litigation is only one 

15 example. Pfizer dedicates substantial time and 

16 resources to complying with overbroad discovery 

17 obligations on a daily basis. In order to support 

18 these efforts, Pfizer employs 10 full-time colleagues

19 and three full-time contractors to manage our legal 

20 discovery exclusively.

21 In addition, we have a team of dedicated 

22 vendors, including 13 people devoted exclusively to 

23 document collection, eight people responsible for the 

24 technology side of electronic discovery, and on 

25 average 215 people reviewing documents at any given 
265

Heritage Reporting Corporation

(202) 628-4888

1 time.

2 Surely the great majority of defendants 

3 cannot bear this expense. The impact of burdensome 

4 preservation and discovery obligations on small and 

5 midsized companies must be immense. And even though 

6 many companies will not have the volume of data that 

7 Pfizer generates, preserving even one backup tape has 

8 the potential to directly impact the bottom line of a 

9 company.

10 Yet under the current rules, companies like 

11 Pfizer preserve, collect, and produce documents that, 

12 as the hormone therapy example illustrates, bear 

13 little, if any, relationship to the real claims and 

14 defenses raised by the litigation it faces and serve 

15 no business purpose whatsoever.

16 I thank the committee for the opportunity to 

17 testify, and I also thank you for your efforts to 

18 address the much needed amendments in the rules.

19 JUDGE CAMPBELL: Thank you.

20 Questions? Justice Nahmias.

21 JUSTICE NAHMIAS: You give us an example 

22 that has some astounding numbers, but the proposed 

23 amendments, what effect do you think they would 

24 actually have on that type of case?

25 MS. MOORTHY: I think they'll have a fairly 
266

Heritage Reporting Corporation

(202) 628-4888

1 significant impact, particularly the amendments to 

2 Rule 37(e). I would like to see them go further, but 

3 at least it eliminates the risk of sanctions in the 

4 event of pure negligence. I do think, as I think 

5 others have suggested, that it should not be just be 

6 limited to -- that willfulness alone is insufficient 

7 and that sanctions should only be afforded in 

8 instances where a party has intentionally deprived a 

9 litigant of information or data that should have 

10 otherwise been produced.

11 Just to add to that one point is that at 

12 this point we've just taken the most conservative road 

13 because of the risk and threat of sanctions. And I 

14 think what this gives us the opportunity to do is with 

15 the amendments to the rules just continue to focus on 

16 being responsible and take the most defensible 

17 position but also one that is responsive to the 

18 discovery obligations that we face.

19 JUDGE CAMPBELL: Parker, did you have a 

20 question?

21 MR. FOLSE: I'd just like to follow up on 

22 the last question that was asked because I'm still 

23 having trouble understanding how that example you gave 

24 relates to amendments under the rules that we're 

25 considering. It sounded to me like that was a court 
267

Heritage Reporting Corporation

(202) 628-4888

1 order entered in that litigation that defined and 

2 prescribed what you had to preserve, which obviously 

3 sounds like it was a $40 million escapade. But what 

4 part of the rules that we are considering now does 

5 that story help us decide?

6 MS. MOORTHY: Absolutely. I think there's 

7 two things. One is I actually think this one reflects 

8 the proportionality requirement and the amendments to 

9 Rule 26(b)(1) because I think what has happened is and 

10 what our experience is is that it's quite disparate in 

11 terms of how courts have interpreted that rule and in 

12 terms of what constitutes relevance and the extent of 

13 our discovery obligations.

14 So it is because of the lack of uniformity 

15 in the approach and also I think the lack of 

16 consideration of proportionality within the concept of 

17 scope, which is what resulted to the extensive 

18 preservation order there.

19 Now I should say that after six years we 

20 were able to convince the court to lift that order, 

21 but it was after significant spend and demonstration 

22 that it was overburdensome and demonstrating that the 

23 parties had never gone to the backup tapes a single 

24 time.

25 JUDGE CAMPBELL: All right. Thank you very 
268

Heritage Reporting Corporation

(202) 628-4888

1 much, Ms. Moorthy.

2 Mr. Smith?

3 MR. SMITH: Good afternoon, Mr. Chairman and 

4 members of the committee. I am a lawyer with the 

5 NAACP Legal Defense and Educational Fund. LDF was 

6 founded in 1940 by Thurgood Marshall. It is the 

7 nation's oldest civil rights legal organization, and 

8 we are here today because we are deeply concerned 

9 about a number of the proposed changes to the 

10 discovery process currently under consideration by the 

11 committee and the impact it will have on the ability 

12 of civil rights plaintiffs to obtain relief through 

13 the federal courts.

14 We are deeply concerned about these changes. 

15 And in fact, earlier this week our president and 

16 director counsel, Sherrilyn Ifill, testified before a 

17 Senate Judiciary subcommittee about this very 

18 important issue.

19 It is our view that the most troubling 

20 change currently under consideration relates to Rule 

21 26(b)(1). Throughout the history of the Federal 

22 Rules, the scope of discovery has been defined through 

23 a lens of relevance. Adding a proportionality 

24 requirement to Rule 26(b)(1) represents a sea change 

25 in the discovery process and will lead to a dramatic 
269

Heritage Reporting Corporation

(202) 628-4888

1 reduction in the scope of discovery.

2 This change will be particularly harmful to 

3 civil rights plaintiffs, who are often dependent on 

4 discovery to substantiate their claims. Very often 

5 victims of discrimination are not in possession of 

6 information they need to support their claims. That 

7 information is in the exclusive province often of a 

8 defendant and can only be obtained through the 

9 discovery process.

10 Moreover, as Mr. Relman just explained, as 

11 discrimination has become more subtle and 

12 sophisticated, civil rights plaintiffs face an even 

13 higher burden as they are often required to establish 

14 discrimination through circumstantial evidence. Thus, 

15 civil rights plaintiffs use the discovery process to 

16 ferret out and expose discriminatory policies, 

17 practices, and actions.

18 The addition of this proportionality 

19 requirement to Rule 26(b)(1) will only exacerbate the 

20 information asymmetry between plaintiffs and 

21 defendants in civil rights cases and will give 

22 defendants a multitude of opportunities to squirrel 

23 out of their obligation to produce relevant and 

24 necessary discovery.

25 For example, we are particularly concerned 
270

Heritage Reporting Corporation

(202) 628-4888

1 about allowing defendants to rely on the amount in 

2 controversy as a factor determining the scope of 

3 discovery, and they will use it as an opportunity to 

4 minimize the significance of civil rights cases which 

5 often don't involve large sums of money or primarily 

6 seek injunctive relief.

7 To be clear, we do not deny that 

8 proportionality has a role to play in the discovery 

9 process, but the current formulation of the rule, 

10 which places that review squarely in the hands of the 

11 court, strikes a far better balance. It has been our 

12 institutional experience that federal judges and the 

13 magistrates who assist them in the discovery process 

14 are more than capable of making assessments about the 

15 extent to which discovery should be allowed in a 

16 particular case and then overseeing the discovery 

17 process.

18 I would also like to address the argument 

19 that dramatic changes to the discovery rules are 

20 necessary to curtail abuses on the discovery process 

21 and control litigation costs. As an initial matter, 

22 we are aware of no empirical data or research showing 

23 that civil rights cases are categorically prone to 

24 have exorbitant discovery costs. And that certainly 

25 has not been our experience for the last seven decades 
271

Heritage Reporting Corporation

(202) 628-4888

1 litigating civil rights cases across the country.

2 At most, there may be a small handful of 

3 cases where discovery costs have grown exponentially. 

4 However, the appropriate solution is not to narrow 

5 the scope of discovery in all civil litigation. Such 

6 a heavy-handed approach will only have a devastating 

7 result on civil rights actions.

8 Moreover, this proposed amendment will 

9 likely have the unintended consequence of making 

10 discovery processes longer and more costly. The 

11 addition of a proportionality requirement will likely 

12 lead to greater motion practice, which itself is 

13 costly, takes time, and consumes judicial resources 

14 that can be spent in other ways.

15 We do, however, believe there is a cost 

16 consideration that this committee should pay careful 

17 attention to as the costs that these proposed 

18 amendments if adopted would have in preventing civil 

19 rights plaintiffs from obtaining the relief they 

20 deserve.

21 Our system of civil rights enforcement is by 

22 design dependent on individual plaintiffs serving as 

23 private attorney generals who use civil litigation to 

24 vindicate important congressional policies and 

25 fundamental constitutional rights. Procedural changes 
272

Heritage Reporting Corporation

(202) 628-4888

1 such as the ones currently before this committee will 

2 only have the unintended consequence of undermining 

3 this vital component of our justice system.

4 There are a number of other proposals that 

5 we also have a concern about that are detailed in 

6 greater length in our written comments. I did want to 

7 note, though, that the lowering or imposition of 

8 presumptive limits for depositions, interrogatories, 

9 and requests for admission will also have the net 

10 result of making it harder for civil rights plaintiffs 

11 to get access to the discovery they need.

12 Also, interrogatories and requests for 

13 admission are some of the least expensive forms of 

14 discovery. If the committee is concerned about cost, 

15 it should consider proposals that increase and do not 

16 decrease the use of these very important and useful 

17 discovery tools.

18 In closing, the proposed amendments are at 

19 odds with the longstanding and fundamental premise 

20 that the federal courts should be open and available 

21 to those who seek redress for civil rights violations.

22 Thank you again for this opportunity. I'm 

23 happy to answer any questions.

24 JUDGE CAMPBELL: Thank you, Mr. Smith.

25 Questions?
273

Heritage Reporting Corporation

(202) 628-4888

1 (No response.)

2 JUDGE CAMPBELL: All right. Thank you very 

3 much.

4 Ms. Fleishman?

5 MS. FLEISHMAN: Good afternoon. Thank you 

6 very much for permitting me to testify today. My name

7 is Wendy Fleishman, and I'm here on behalf of the New 

8 York State Trial Lawyers as well as the AAJ and 

9 specifically the members of AAJ that are involved with 

10 environmental toxic tort and product liability 

11 litigation.

12 I want to address two specific changes of 

13 the rules, and then I will submit papers in addition. 

14 Rule 26(b)(2)(C) already encourages judicial 

15 involvement in the discovery process and empowers 

16 judges themselves to limit duplicative or 

17 disproportionately burdensome or expensive discovery, 

18 and sanctions are already available in the case of 

19 truly egregious abuses.

20 There is no evidence that suggests that 

21 these mechanisms are insufficient or ineffective. In 

22 many instances, we already have in place the Rule 16 

23 conference, at which time we can then address and deal 

24 with any issues that will arise that will perhaps 

25 raise the specter of an abuse of discovery, and it's 
274

Heritage Reporting Corporation

(202) 628-4888

1 through that mechanism that is already in place that 

2 we can address the specific and very important issues.

3 Countless costly and time-consuming disputes 

4 would arise from the proposed changes in the scope of 

5 discovery in Rule 26(b)(1), from changing the 

6 relevance standard to a proportionality standard. 

7 This will give rise like the Daubert change to a 

8 plethora of new motions and lots of discovery 

9 disputes, which will just encourage defendants, 

10 frankly, to bring more and more objections and be more 

11 and more obstreperous to the form of discovery 

12 possible for plaintiffs in environmental torts, in 

13 toxic torts, in individual cases involving medical 

14 devices and pharmaceutical devices.

15 In each of those cases, the individuals, the 

16 small businesses are faced with defendants that are 

17 huge multinational corporations with enormous amounts 

18 of money, rooms full of lawyers, who will then come in 

19 and file motion after motion, and now by changing the 

20 rule, we are just setting up a new device for them to 

21 utilize.

22 We cannot know the value of a piece of 

23 information until we get the information. The most 

24 classic example of that, of course, is the Vioxx case. 

25 In that case, the defendant, Merck, had failed to 
275

Heritage Reporting Corporation

(202) 628-4888

1 disclose to the New England Journal of Medicine and 

2 failed to adequately disclose to the FDA that its 

3 painkilling medicine actually increased the risk of 

4 cardiovascular episodes. And it wasn't until thorough 

5 discovery was able to unearth the fact that Merck and 

6 the authors that it supported had failed to disclose 

7 that to the New England Journal of Medicine when the 

8 drug was first put on the market, and the New England 

9 Journal of Medicine then endorsed the drug.

10 It was that fraudulent concealment, that 

11 secret that would have been otherwise impossible to 

12 unearth without the ability to do adequate discovery. 

13 And that discovery was brought on because Judge 

14 Fallon was able to oversee the discovery and because 

15 he in his wisdom used Rule 26(b)(2)(C) to control that 

16 discovery.

17 Rule 30 now calls for a presumptive limit of 

18 10 depositions. And you've heard over and over today 

19 people talk about and testify before the committee 

20 about how difficult it will be for plaintiffs to 

21 appear and limit their discovery to only five 

22 depositions. It will be impossible to know what five 

23 depositions are critical. It will be impossible to 

24 develop their case in that way, especially in the case 

25 of a toxic tort, in the case of an environmental tort, 
276

Heritage Reporting Corporation

(202) 628-4888

1 in the case of a simple product liability case.

2 In each of those cases, it is necessary to 

3 do more than five depositions. And by utilizing a 

4 presumptive limit of five, the plaintiffs will be 

5 forced to come before the court time and time again to 

6 ask for more depositions and to involve the court and 

7 further overburden the court and further increase 

8 their costs. Thank you.

9 JUDGE CAMPBELL: Thank you.

10 Questions? Judge Koeltl.

11 JUDGE KOELTL: How would the Vioxx case have 

12 been any different under the proposed rules? You must 

13 have taken far more than 10 depositions in the case. 

14 The judge controlled the case by using the standards 

15 in 26(b)(2)(C), which now under the proposal would be 

16 part of the first sentence in the scope of discovery. 

17 The judge would still have to do the same thing.

18 MS. FLEISHMAN: The way it would be 

19 different would be that the plaintiffs would have to 

20 show that the information was available, that the 

21 information existed. And without doing the discovery, 

22 they couldn't show that because what typically 

23 happens, Your Honor, is that the plaintiff comes up 

24 with a list of depositions that they think are 

25 necessary. The defendants then say, oh, no, those are 
277

Heritage Reporting Corporation

(202) 628-4888

1 too many depositions, it's completely unnecessary, and 

2 it's going to cost us gazillions of dollars to produce 

3 those megabytes of data.

4 And then they'll say there is no 

5 proportionality. You can't prove in that instance 

6 that a drug caused cardiovascular events and that we 

7 failed to disclose that, that was a fraud. So they 

8 will argue that the proportionality will not justify 

9 or warrant that intense investigation and discovery.

10 JUDGE CAMPBELL: Professor Marcus?

11 PROF. MARCUS: One of the things we've heard 

12 from a number of witnesses today has been that they 

13 represent low-wage workers where the monetary value of 

14 the claims may be relatively limited. Isn't Vioxx a 

15 case where the monetary value of the claims is 

16 astonishingly high? Wouldn't proportionality in such 

17 a case actually operate to support very broad and 

18 aggressive discovery, indeed perhaps more than would 

19 otherwise be legitimate?

20 MS. FLEISHMAN: In that case, as Your Honor 

21 remembers or rather the professor remembers, there 

22 were many instances where the claims were very 

23 minimal, where the claims, the individual claims were 

24 simple claims where there was a cardiovascular event, 

25 but it was difficult to prove that the event was 
278

Heritage Reporting Corporation

(202) 628-4888

1 caused by the increased risk of the Vioxx in addition 

2 to the circumstances. And so, as a result, there were 

3 defense verdicts when these cases went to trial.

4 It's only when the cases are aggregated

5 under an MDL that the position of power changes. But 

6 if the rules are changed by the rule changes, the rule 

7 will adversely impact the individuals who go to trial 

8 and the individuals who bring these cases even when 

9 the cases are not abrogated as part of an MDL.

10 So, for example, the painkiller case. In 

11 those cases, the JPML denied the request for the 

12 motion to transfer and centralized those cases. So 

13 those individuals all have to prove their cases by 

14 individual discovery. In that instance, they don't 

15 have the power of the number of cases abrogated 

16 together.

17 JUDGE CAMPBELL: Thank you very much, Ms. 

18 Fleishman.

19 Mr. Regan?

20 MR. REGAN: Good afternoon, and thank you 

21 for the opportunity to testify before this committee. 

22 I am Patrick Regan, and I'm a lawyer practicing here 

23 in Washington with the law firm of Regan Zambri Long & 

24 Bertram. I'm a trial lawyer, and I represent 

25 plaintiffs in civil actions in state and federal 
279

Heritage Reporting Corporation

(202) 628-4888

1 courts throughout the D.C. area. I'm a fellow of the 

2 American College of Trial Lawyers and a longtime board 

3 member of the American Association for Justice.

4 I regularly practice in four courts, four 

5 federal courts, and I tell you that so that you can 

6 take my comments in context. The federal courts are 

7 in D.C., Baltimore, Greenbelt, and Alexandria. During 

8 the course of my career, I've litigated somewhere 

9 between 300 and 400 cases in federal court and tried 

10 more than 50 civil jury trials.

11 The proposed rule changes in my judgment 

12 will make it much more difficult for my clients, 

13 ordinary citizens, small businesses, to achieve a fair 

14 trial in federal court. They will be denied the 

15 ability to meet their burden of proof and thus denied 

16 access to the courts and in the end be denied justice.

17 I will be submitting extensive written 

18 comments to this committee detailing my concerns with 

19 all of the rules, and today I'll address just two of 

20 the proposed changes: the harm caused by the 

21 proportionality, which you've heard a lot about during 

22 the course of today, and two, the presumptive limits 

23 in Rules 30, 31, 33, and 36.

24 Rather than repeat what's been said 

25 throughout the morning and afternoon about the 
280

Heritage Reporting Corporation

(202) 628-4888

1 proportionality, let me cite to you and take a minute 

2 if you'll allow me to talk about a case that was 

3 pending just down the street here before former Chief 

4 Judge Thomas Hogan in the D.C. Federal Court.

5 This case I submit to you illustrates the 

6 problem with the proposed proportionality issues. 

7 This particular case involved the death of a 22-year8 old construction laborer who was accidentally shot in 

9 the head by a nail gun on a construction site. This 

10 young man had just graduated from community college, 

11 was not married, and had no dependents.

12 Under the D.C. statute, his case, the value 

13 of his claim, was capped at roughly $750,000. Why do 

14 I tell you that? Because it relates to one of the 

15 factors, which is the amount in controversy. The nail 

16 gun in question was a high-velocity nail gun, and it 

17 was capable of firing a nail at a speed slightly 

18 faster than an M16 rifle. We took deposition after 

19 deposition of the employees of the manufacturer and 

20 the distributor of the product, probably 12 or 14 

21 witnesses, all of whom said that it was perfectly safe 

22 for use and that it was suitable for use in the 

23 construction industry.

24 Well, the 13th or 14th witness had a 

25 different view and testified that five years earlier, 
281

Heritage Reporting Corporation

(202) 628-4888

1 before my client was killed, the manufacturer had 

2 recommended that it only be used in shipyards where 

3 you're attaching two-inch thick steel plates to each 

4 other and not be used in the construction industry.

5 Well, that was a sea change, as you can 

6 imagine, in my case, resulting in a resolution of the 

7 case. But it had a much greater societal impact, and 

8 that is as a result of this case, those guns were 

9 taken off of construction sites throughout the 

10 country. I would have failed on the proportionality 

11 factors on several of the cases.

12 Judge Hogan, who I'm sure is well known to 

13 most of you, is one of the fairest jurists that I've 

14 ever appeared before. He would have been confronted 

15 at the outset after my fifth deposition with a motion, 

16 and as fair as he is, he probably would have said, 

17 Regan, you can have two more depositions. So I would 

18 have gotten to seven. And the defense argument would 

19 have been, look, it's too burdensome, it's too 

20 expensive, and they're all saying the same thing.

21 Well, they were all saying the same thing 

22 until the 13th or 14th witnesses, which resolved it. 

23 They would have said it was a waste of time, and so 

24 with all of this, that's a perfect example. I mean, 

25 the folks that I represent are ordinary people. 
282

Heritage Reporting Corporation

(202) 628-4888

1 They're teachers and firefighters and lawyers and 

2 judges and civil servants and so forth. I don't do 

3 class action work or anything else. These are 

4 ordinary folks.

5 And the other thing I want to talk about in 

6 the remaining time, which is only 40 seconds at this 

7 point, is the presumptive limit on five depositions. 

8 I think that Mr. Williams, who was up here just a few 

9 witnesses ago, said it about as succinctly as it can 

10 be said, and I would echo his comments. There is no 

11 problem with the current limit of 10. He has never 

12 had a problem. I've never had a problem with it. 

13 Five would result in a -- in virtually every case I 

14 have, the judge is going to have to be involved.

15 Another witness before Mr. Williams said 

16 it's silly to think that there will be an agreement on 

17 that issue because there won't be. The defense 

18 counsel would indeed be in trouble with their client 

19 if they agreed to more depositions without getting a 

20 ruling from the court. So that presumptive rule -- I 

21 know I'm out of time. That presumptive rule would 

22 simply increase the burden on the federal judiciary. 

23 Every single case would now involve motions.

24 One final point, and I'll take your 

25 questions. The limit on requests for admissions I 
283

Heritage Reporting Corporation

(202) 628-4888

1 would submit is a solution in search of a problem. 

2 The purpose of requests for admissions is to narrow 

3 the issues. Why should I file a motion with a judge 

4 asking to increase the number of requests for 

5 admissions, which will only serve to limit the issues 

6 that that judge has to decide?

7 I have never in those 3- and 400 cases that 

8 I've talked about, plus all the cases that I've 

9 litigated in state court, ever, ever had a problem 

10 with the excessive number of requests for admissions.

11 I apologize for exceeding my time. Thank 

12 you for listening to me.

13 JUDGE CAMPBELL: Thank you.

14 Questions?

15 JUSTICE NAHMIAS: We've heard today a number 

16 of cases where there was an extensive amount of 

17 discovery that proved justified because the case 

18 ultimately turned out to be meritorious. Have you 

19 ever had a case where you ended up taking 15 or 20 

20 depositions and then lost them and required the 

21 defendant obviously to bear the additional cost of 

22 that discovery and then lost on the merits?

23 MR. REGAN: Well, Judge, you know, if there 

24 is a lawyer who stands before you and says that they 

25 haven't lost a trial, they're not trying cases. So, 
284

Heritage Reporting Corporation

(202) 628-4888

1 yes, of course I've lost trials.

2 JUSTICE NAHMIAS: But I think that's the 

3 real issue. I mean, obviously, if every case in which 

4 there was enormous discovery and preservation produced 

5 a result for the plaintiff, then obviously that would 

6 be justified. The question is the cases where all of 

7 that extra discovery and all of the enormous costs 

8 that may be involved don't do anything to advance 

9 justice and how to balance it. And that's why I'm a 

10 little concerned when we only hear kind of the 

11 positive stories of we did all this extra discovery, 

12 the defendant beared the cost, but that turned out to 

13 be entirely justified. What is on the other side of 

14 that? What cases is all of that discovery paid for by 

15 the party that prevails?

16 MR. REGAN: Well, I think -- I was tempted 

17 to make a joke about trial lawyers never talking about 

18 their losses, but it's a serious question that 

19 deserves a serious response. And the answer is that 

20 it's not as if -- the fact that one party loses at 

21 trial doesn't mean that their prosecution or defense 

22 was nonmeritorious. In every case that I win, that 

23 doesn't mean that it was a nonmeritorious defense from 

24 the outset and that I should be awarded costs for that 

25 defense. And the flip side is true.
285

Heritage Reporting Corporation

(202) 628-4888

1 And to the extent that there are 

2 nonmeritorious cases, I think you have more than 

3 enough tools at your disposal right now under the 

4 current rules to deal with abusive tactics. I don't 

5 have a lot of discovery disputes, and maybe it's 

6 because I'm getting long in the tooth, as one of the 

7 other witnesses commented earlier, but I don't have a 

8 lot of discovery disputes. But I have found that when 

9 I do, the judge is perfectly competent and comfortable 

10 in calling it a ball or a strike and making a 

11 resolution on it. And I don't see where any of the 

12 presumptive limits or the proportionality issues will 

13 advance the goal of every single person in this room, 

14 which is, you know, trying to make sure justice is 

15 done.

16 I recognize it has to be done. I have to 

17 advance the costs. My clients can't afford the 

18 litigation costs, very few of them. You know, maybe 

19 the doctors, lawyers, and judges could, but the others 

20 can't. So I'm not wasting my time or money when I do 

21 it. I try to think about it. I try to be 

22 appropriate. So, you know, it's a long-winded answer 

23 to a simple question. I apologize.

24 JUDGE CAMPBELL: Judge Sutton?

25 JUDGE SUTTON: Just a quick question. You 
286

Heritage Reporting Corporation

(202) 628-4888

1 know, several witnesses have been concerned about 

2 limiting depositions from 10 to five or changing the 

3 presumption, and I think the suggestion is that the 

4 change is designed to encourage district court judges 

5 to allow fewer depositions. So I've heard that from a 

6 lot of people.

7 I'm not sure that's what the committee has 

8 in mind. I mean, the idea of a presumption is to 

9 reflect the norm, so as I understand the number five, 

10 it's that there is a study that showed that in 75 

11 percent of cases there are fewer than five depositions 

12 taken. And I'm just wondering from your perspective, 

13 given the anxiety of, oh, we're not going to get these 

14 depositions in the future, if it would help to have 

15 the committee note explain that, in other words, 

16 explain this is not designed to prevent depositions. 

17 It's designed to explain to the world what the norm 

18 is. And all you have to do in one of your cases is 

19 say, well, I'm just not in that 75 percent category, 

20 here is why.

21 MR. REGAN: Well, that sounds reasonable, 

22 and if every jurist --

23 JUDGE SUTTON: Well, it is.

24 MR. REGAN: -- was as reasonable as you, it 

25 wouldn't be a problem. But the point is I am now at 
287

Heritage Reporting Corporation

(202) 628-4888

1 the discretion of someone when I don't think that this 

2 needs to be. I would say that in my cases -- you 

3 know, obviously surveys are surveys, and you don't 

4 really know the quality of the respondents in terms 

5 of, you know, how big a sample it is.

6 But I would say this. I can tell you in my 

7 personal cases very few of my cases have involved more 

8 than 10 depositions, and I cannot think of one that 

9 has involved five or less. So I sort of fall into the 

10 category of Mr. Williams, who stood here before me and 

11 while he was a proponent of the changes admitted that 

12 10 was fine. And when it needs to be exceeded, you 

13 work around it. So I don't think it needs to be 

14 changed. Anyway, I don't think it needs to be 

15 changed.

16 JUDGE CAMPBELL: All right. Thank you very 

17 much, Mr. Regan.

18 MR. REGAN: Thank you, Your Honor. Thank 

19 you.

20 JUDGE CAMPBELL: Mr. Rakower.

21 MR. RAKOWER: Good afternoon, Mr. Chairman 

22 and members of the committee. Thank you for hosting 

23 today's event. My name is Michael Rakower. I'm a 

24 principal of a commercial litigation law firm in New 

25 York City called Rakower Lupkin. I'm also on the 
288

Heritage Reporting Corporation

(202) 628-4888

1 executive committee of the New York State Bar 

2 Association of the --

3 JUDGE CAMPBELL: Could you just pull that 

4 mike up a little higher, please?

5 MR. RAKOWER: Sure.

6 JUDGE CAMPBELL: Thanks. That's better, 

7 thanks.

8 MR. RAKOWER: You're welcome. I'm also on 

9 the executive committee of the commercial and federal 

10 litigation section of the New York State Bar 

11 Association and the co-chair of the federal procedure 

12 committee of that section, and I stand here before you 

13 today as a representative of that section. We have 

14 submitted a fairly detailed report to your committee 

15 identifying our thoughts and responses, and today I 

16 just wanted to cherrypick a few significant or fine17 tuning points that we raise in our report. And I 

18 thought I would follow the style that the committee 

19 followed in its memo. Instead of going in seriatim 

20 from one rule to the other, I would go thematically.

21 Your memo begins with case management 

22 proposals. I would note that we support the proposal 

23 for Rule 4(m). But we do recommend that an Advisory 

24 Committee note be included to provide examples of when 

25 good cause could be found because we think that the 
289

Heritage Reporting Corporation

(202) 628-4888

1 good cause component, the good cause exception, is an 

2 important exception to this acceleration of the 

3 service rules, and it would help practitioners and the 

4 court I think for you to show the situations in which 

5 good cause can be employed so that parties don't think 

6 that good cause should be a limited form of remedy.

7 Similarly, with Rule 16(b)(2), we also 

8 support the rule, and we again think that the good 

9 cause exception should be underscored. We support 

10 adding the preservation in Rule 502(d) orders to the 

11 list of issues which may be included in discovery 

12 plan, as we think that would very much help the 

13 parties when they commence discovery discussions.

14 We think that early Rule 34 requests would 

15 substantially assist litigation so that when the 

16 parties come to court and discuss the discovery plan, 

17 they would have a set of discovery requests in hand, 

18 and they would have actual real-life issues to face 

19 rather than theoretical ones with respect to the scope 

20 of discovery.

21 Rule 26(b)(1), proportionality, here is 

22 where we begin to -- we continue to support the 

23 proposal, but we do so with caution. I think there 

24 was a question earlier today about whether 

25 proportionality would increase the amount of 
290

Heritage Reporting Corporation

(202) 628-4888

1 litigation that would occur. We think it probably 

2 would in the early stages while parties and courts 

3 become comfortable with the notion and the boundaries 

4 and how to assess proportionality, but because we 

5 think it's a good move, we think that that collateral 

6 litigation will even itself out over time and 

7 proportionality will prove to be a very good thing.

8 We do want to point out that with respect to 

9 proposal 26 -- the proposed amendment to 26(c), the 

10 allocation of costs, internally as we read that 

11 proposal, there was some discussion as to whether or 

12 not that was intended to change the American rule, and 

13 we don't think it should. We don't think the Advisory 

14 Committee meant to do so, but because there was some 

15 doubt and question, we thought perhaps it might be 

16 advisable to include an advisory note with that 

17 proposed rule so that there's no confusion on that 

18 front.

19 With respect to the presumptive numerical 

20 limits, here is where we diverge. We weren't 

21 comfortable with those presumed limitations. We 

22 didn't feel as if the data supported a reduction in 

23 the number of depositions. I did read the report 

24 fairly carefully and I did hear the questions today. 

25 And I think the primary question was, well, what --
291

Heritage Reporting Corporation

(202) 628-4888

1 it's not so much that there's discovery abuse on one 

2 side, but as a whole, if parties each take their fair 

3 share of depositions collectively, that increases the 

4 costs of litigation to a degree that becomes 

5 unsupportable for the dollar figure at stake.

6 We didn't feel as if in our experience --

7 and we come from a cross-section of lawyers, through 

8 all the big firms and the small firms, working on a 

9 variety of types of commercial litigation. We didn't 

10 see an extensive amount of abuse that would warrant a 

11 reduction in the number of depositions. We thought 

12 that the data supported leaving things as they are. 

13 And to the extent that there's a concern that 

14 collectively the use of depositions increases the cost 

15 of litigation, we thought there must be a better way 

16 to solve it than these presumptive limits.

17 This time the clock is going up. Does that 

18 mean I've actually run through my five minutes 

19 already?

20 JUDGE CAMPBELL: It does, it does. But if 

21 you have concluding thoughts, we want to hear them.

22 MR. RAKOWER: I do, and I apologize.

23 JUDGE CAMPBELL: That's all right.

24 MR. RAKOWER: I will skip to the end, which 

25 is Rule 37. I think that's probably the most 
292

Heritage Reporting Corporation

(202) 628-4888

1 significant area where we have concerns other than 

2 with respect to the limitations on the number of 

3 depositions and so forth. We support the formulation 

4 of sanctionable conduct. We do recommend that 

5 willfulness be defined. We think willfulness should 

6 be defined in terms of either intentional conduct or 

7 conduct that's sufficiently reckless to enable someone 

8 to foresee the high likelihood of harm. And I think 

9 our report formulates a definition better than I just 

10 did off the cuff, but I tried to paraphrase as best as 

11 I could.

12 We do also think that action should be 

13 defined as actions or omissions, and we assume that 

14 the Advisory Committee intended that, but we think it 

15 should be laid out clearly. We think that the 

16 prefatory language in Rule 37 should explicitly direct 

17 courts to impose the least curative measure or 

18 sanction necessary to repair prejudice. We think that 

19 that's consistent with the methodology of the courts, 

20 but we also think it would be helpful to set that 

21 forth.

22 I realize my time is up, so unless the 

23 committee has questions.

24 JUDGE CAMPBELL: All right. Are there 

25 questions?
293

Heritage Reporting Corporation

(202) 628-4888

1 (No response.)

2 JUDGE CAMPBELL: All right. Thank you very 

3 much, Mr. Rakower.

4 MR. RAKOWER: Thank you.

5 JUDGE CAMPBELL: Mr. Henderson?

6 MR. HENDERSON: To the members of the 

7 Advisory Committee, good afternoon. I'm Wade 

8 Henderson, president and CEO of the Leadership

9 Conference on Civil and Human Rights. Thank you for 

10 the opportunity to testify at today's hearing.

11 The Leadership Conference is a coalition 

12 charged by its diverse membership of more than 200 

13 national organizations to promote and protect the 

14 civil and human rights of all persons of the United 

15 States. The Leadership Conference is committed to 

16 building an America that is as good as its ideals, an 

17 America that affords everyone access to quality 

18 education, housing, healthcare, fairness in the 

19 workplace, economic opportunity, and financial 

20 security.

21 We understand the vitally important role 

22 federal protections play in ensuring equality of 

23 opportunity and fair treatment under the law. It is 

24 with that understanding and history that we express 

25 our concerns about the proposed changes to the federal 
294

Heritage Reporting Corporation

(202) 628-4888

1 rules, which we believe would place unequal burdens on 

2 plaintiffs seeking to have their rights redressed in 

3 federal courts.

4 The cumulative impact of the proposed 

5 changes to the discovery rules, specifically the 

6 proposed changes to Rule 26(b), 30, 31, 33, 36, and 

7 37(e), will have serious adverse impacts on civil 

8 rights litigants. The burden that these changes would 

9 impose is heavy. Simply put, the upending of reliable 

10 and settled rules will create a continually moving 

11 goalpost, resulting in additional burdens and barriers 

12 for civil rights plaintiffs and their attorneys, often 

13 keeping plaintiffs from having their rights protected 

14 and enforced.

15 For decades, the federal judiciary has 

16 served as the place where individuals facing unfair 

17 and illegal treatment have turned for the enforcement 

18 of their rights. Private parties bring more than 90 

19 percent of actions under civil rights and other 

20 statutory enforcement actions that implicate the 

21 public interest. In 2005, out of 36,096 civil rights 

22 cases brought, the U.S. was the plaintiff in only 534 

23 cases or 1.5 percent of all civil rights cases brought 

24 that year. The rest were brought by private 

25 plaintiffs.
295

Heritage Reporting Corporation

(202) 628-4888

1 Now virtually all modern civil rights 

2 statutes rely heavily on these private attorneys 

3 general whose importance has been recognized by 

4 courts, academics, and Congress. If these private 

5 litigants are restricted in their ability to bring 

6 cases, the system breaks down. Recent Supreme Court 

7 rulings have limited access to the courts for 

8 vulnerable Americans, narrowing both procedural and 

9 substantive rights for civil rights litigants.

10 In this context where the courthouse door 

11 has now been shut on so many, a move by this body to 

12 further restrict access to justice is ill-advised and 

13 antithetical to the pursuit of justice. Although the 

14 goals of the proposed changes to the federal rules, 

15 such as improving efficiency and increasing costs, in 

16 an overburdened system are laudatory, many of the 

17 proposed changes will fail to accomplish those 

18 objectives and will in fact have unintended 

19 consequences that are far more damaging than the 

20 potential good contemplated by the proposals.

21 Civil rights litigants will be the ones most 

22 burdened by these changes. Specifically, the rules 

23 limiting discovery and particularly creating the 

24 proportionality standard under Rule 26(b) will impact 

25 plaintiffs such as the victims of employment 
296

Heritage Reporting Corporation

(202) 628-4888

1 discrimination, who already bear the burden of proving 

2 their claims in the face of severe imbalances and 

3 access to relevant information.

4 Such information asymmetry requires 

5 discovery rules that rectify these imbalances, not 

6 exacerbate them, limiting discovery and creating a 

7 proportionality standard that will only function to 

8 wide the gap between those who control the information 

9 and those who need to access to it to vindicate their 

10 rights.

11 I refer you to an article written in 2004 in 

12 the Journal of Empirical Studies entitled "How 

13 Employment Discrimination Plaintiffs Fare in Federal 

14 Court." It's by Kevin Clermont and Stewart Schwab. 

15 And one of the findings is that in employment 

16 discrimination cases plaintiffs won 4.23 percent of 

17 pretrial adjudications in those cases compared with 

18 22.23 percent in other types of cases.

19 That imbalance that already exists under 

20 present rules will be exacerbated to an even greater 

21 degree under the proposed changes that you have 

22 submitted. Now, placing additional procedural 

23 barriers in the path of those trying to protect, 

24 vindicate, and enforce their rights, and the rights of 

25 the public is not only bad policy. It is bad 
297

Heritage Reporting Corporation

(202) 628-4888

1 precedent and bad for efficiency.

2 Now one additional point needs to be 

3 underscored. The federal judiciary is in crisis. I 

4 don't have to tell you that. We know that judicial 

5 resources are limited and that judges have limited 

6 time. Yet the problem should be dealt with through 

7 the confirmation of pending judicial nominees, not by 

8 changes in the discovery rules that will place 

9 additional barriers in the way of the most vulnerable 

10 plaintiffs.

11 Although I'm confident that it was not the 

12 intent of this body, the result of many of these 

13 proposed changes would be to impose the greatest cost 

14 on those least able to bear that burden. Those most 

15 vulnerable with fewest resources and least access to 

16 information should be protected rather than harmed.

17 Thank you for giving me the opportunity to 

18 share these views.

19 JUDGE CAMPBELL: Thank you.

20 Questions?

21 (No response.)

22 JUDGE CAMPBELL: All right. Thank you very 

23 much, Mr. Henderson.

24 Ms. Dolkart?

25 MS. DOLKART: Good afternoon, and to the 
298

Heritage Reporting Corporation

(202) 628-4888

1 chair and the members of the committee, my name is 

2 Jane Dolkart. I'm a senior counsel at the Lawyers 

3 Committee for Civil Rights Under Law, and I was for 17 

4 years a law professor teaching in the area of civil 

5 procedure. The Lawyers Committee is presently 

6 celebrating its 50th anniversary this year of fighting 

7 in federal courts to secure equal justice under law. 

8 It certainly has had much experience using the Federal 

9 Rules of Civil Procedure.

10 We oppose the proposed amendments to Rule 

11 26(b)(1), 30, 31, 33, 36, and 37. And I'd like to 

12 make four points. First, the federal courts have 

13 traditionally been the last bastion of the 

14 disenfranchised. Civil rights legislation has 

15 provided plaintiffs with a private right of action in 

16 federal courts to protect them from the prejudices and 

17 passions of state courts.

18 Attorneys bringing civil rights cases have 

19 been seen as private attorney generals going forth to 

20 protect the rights of the less powerful. The federal 

21 courts have been unique tribunals for preserving the 

22 civil rights of people. There should be a compelling 

23 reason to roll back the protection of the federal 

24 courts through rule changes, and there is no such 

25 compelling reason.
299

Heritage Reporting Corporation

(202) 628-4888

1 First, these rule changes have, as many have 

2 suggested, a vastly disproportionate effect of 

3 plaintiffs in civil rights cases. As has been noted, 

4 in 80 percent of the cases, there are fewer than five 

5 depositions taken, which means that these rule changes 

6 have absolutely no effect on those cases. There is 

7 also at the other end of the spectrum a significant 

8 number of what would be called large and complex 

9 cases. Some of them are class action, some of them 

10 may be large commercial litigation.

11 In all of those cases, it not only is likely 

12 to be but almost always will be more than 10 

13 depositions taken by either side. And indeed, there's 

14 some greater equality because defense counsel also 

15 have an interest in taking a number of depositions.

16 I did an informal poll at the Lawyers 

17 Committee to see if there was anyone who had litigated 

18 a case in recent years that went through most of the 

19 discovery process and had used fewer than 10 

20 depositions, and the answer was that there weren't 

21 any.

22 Now most of these were class actions, 

23 although not all of them. So we are talking about a 

24 small group of cases involving individuals or a few 

25 individuals who bring suit in federal courts. A large 
300

Heritage Reporting Corporation

(202) 628-4888

1 percentage of federal court dockets that fit this 

2 category are civil rights cases, and thus these rules 

3 will have a significant effect, particularly on civil 

4 rights cases.

5 For over 40 years there has been a debate 

6 over the cost and efficiency of discovery, with 

7 corporate defendants urging more restrictions and 

8 plaintiffs urging broader discovery. This debate 

9 appears intractable. The discovery rules have been 

10 amended many times with major amendments meant to 

11 respond to costs and delay. None of these amendments 

12 have lowered the volume of criticism from corporate 

13 defendants, and in particular the 1993 amendments, 

14 like the present proposed rules, had a particularly 

15 significant impact on civil rights cases.

16 The fact that there is a debate does not in 

17 any way answer several fundamental questions. Are 

18 discovery costs and delays excessive and 

19 disproportionate, and are the present proposed 

20 amendments likely to remedy such perceived excesses?

21 The Federal Judicial Center's 2009 study of 

22 discovery finds no empirical evidence in support of 

23 excessive and disproportionate discovery. That does 

24 not mean that there aren't costs that can't be 

25 perceived as excessive, but it did not find the actual 
301

Heritage Reporting Corporation

(202) 628-4888

1 amount of discovery was excessive, nor have any other 

2 empirical studies. The study found that the primary 

3 factors in driving up litigation are complexity of the 

4 case, high monetary stakes, and discovery disputes. 

5 And I suggest that contentious litigation is in fact a 

6 good part of the reason that there are unnecessary 

7 costs in discovery, and that perhaps that is what we 

8 should be focusing on.

9 And in particular, I'd like to suggest that 

10 there is apparently already some consensus that we 

11 should look at early and active case management. 

12 There are presently several pilot projects that have 

13 established protocols in areas where there are 

14 significant amounts of discovery, and I think it would 

15 be useful to wait and see what we learn from those 

16 protocols in terms of whether more aggressive and 

17 different case management helps.

18 The second thing is that we could reduce the 

19 time and delay of contentious litigation. And I would 

20 suggest that judges in some instances are already 

21 trying to do that. They are using letter motions 

22 instead of full-blown motions. They're holding 

23 hearings by phone. They're attempting to resolve 

24 discovery disputes more efficiently and more quickly. 

25 And I think and the Lawyers Committee thinks that 
302

Heritage Reporting Corporation

(202) 628-4888

1 these are areas that promise benefit in terms of cost 

2 and efficiency that will not impact negatively on one 

3 or the other side of litigation. Thank you.

4 JUDGE CAMPBELL: All right. Thank you.

5 Questions?

6 (No response.)

7 JUDGE CAMPBELL: Okay. Thank you very much, 

8 Ms. Dolkart.

9 Mr. Steeves?

10 MR. STEEVES: Good afternoon. My name is 

11 Frank Steeves, and I am the general counsel and 

12 secretary of Emerson Electric Co., which is 

13 headquartered in St. Louis, Missouri.

14 Emerson is an American corporation, as 

15 opposed to the Korean Emerson Radio Corp. Some people 

16 get us mixed up a little bit. Makes clock radios. We 

17 don't do that. Made up of five business platforms 

18 that produce products and provides services in areas 

19 from process management, network power control 

20 systems, to climate and industrial automation systems, 

21 renewable energy products, and all the way to products 

22 for the home. In 2013, Emerson was named as one of 

23 Fortune's world's most admired companies, and also in 

24 2013, it was placed on Thomson Reuters' list of the 

25 top 100 global innovators.
303

Heritage Reporting Corporation

(202) 628-4888

1 I'm speaking today from a background that is 

2 perhaps unique among general counsels of global 

3 companies. I began in the early 1980s with the 

4 Wisconsin State Public Defender's Office defending 

5 impoverished juvenile defendants, and I spent after 

6 that more than two decades trying commercial and tort 

7 cases in state and federal courts in the upper 

8 Midwest. During that time I tried many, many juries. 

9 I tried many, many court trials and argued countless 

10 discovery motions in state and federal court. And I 

11 also held many appeals.

12 My direct involvement ended six and a half 

13 years ago when I joined Emerson and I took my present 

14 position, and I now see civil justice in a broader 

15 light, particularly with respect to the types of cases 

16 and with respect to how justice systems function on a 

17 global scale just as in other countries that we also 

18 work within.

19 Emerson is a company, I want to make it very 

20 clear, that believes deeply, deeply in the American 

21 system of justice and in particular in the jury 

22 system. As a matter of philosophy and as a matter of 

23 policy, whether we are a plaintiff or a defendant, we 

24 will always preserve our right for a trial by jury, 

25 always. We will never waive that right, even when the 
304

Heritage Reporting Corporation

(202) 628-4888

1 plaintiff and our co-defendants are begging for us to 

2 enter a stipulation to waive the trial.

3 The reason is that we, contrary to much 

4 popular belief, have found that juries with a very 

5 high level of consistency find justice with a clear6 eyed, bottom-line, common sense view.

7 Last night I reviewed Sherrilyn Iffil's 

8 comments, the president and director counselor of the 

9 NCAA Legal Defense and Education Fund, and I couldn't 

10 agree with her more that it is the procedures in civil 

11 litigation, the procedures when applied evenly that 

12 protect all of us. Tragically, though, the well13 meaning protections enshrined in our statutes do not 

14 function the way they are intended. They do not.

15 Long ago and throughout my courtroom years, 

16 they, together with a reluctance of judges to manage 

17 their cases, have allowed civil justice in the United 

18 States to become reduced to a series of guides where 

19 cases can be just as much about finding and exploiting 

20 the other side's errors during pretrial phases as it 

21 is about finding what truthfully happened and 

22 therefore finding justice.

23 This unhappy fact may be denied by many, but 

24 I'm telling you as a practitioner that it is the truth 

25 of our otherwise great justice system. It is the 
305

Heritage Reporting Corporation

(202) 628-4888

1 truth whether acknowledged or not that is crystal2 clear to those who actually practice in the system on 

3 either side of the courtroom. And as a consequence, 

4 both plaintiffs and defendants both suffer. And it 

5 goes even further.

6 It's tragic that the United States justice 

7 system, which has contributed so much to making this 

8 the greatest nation on the planet, is cited as a 

9 reason not to come here to do business. In this job I 

10 work constantly with the chief legal officers of 

11 companies across the globe, and the U.S. justice 

12 system often comes up for discussion. Sadly, I find 

13 myself in the role of first an explainer and 

14 occasionally an apologist.

15 I cannot recall a single conversation where 

16 what our system has become is not cited by many of my 

17 peers as a reason to stay away from the United States. 

18 People and their businesses should be coming here 

19 because of the great justice system. They should be 

20 here because of it, not citing it as a reason to stay 

21 away.

22 The changes proposed in my opinion will go 

23 far to knocking down opportunity for abuse. They will 

24 move the process in the right direction for all 

25 parties in litigation. They will do exactly what is 
306

Heritage Reporting Corporation

(202) 628-4888

1 needed for a long time by encouraging critical 

2 behavioral changes.

3 First, shortened discovery will force 

4 lawyers and parties to better focus at the outset of 

5 the suit. Very important. Secondly, involvement of 

6 judges will enhance their early understanding of the 

7 focus of a suit, which is also critical. And third, 

8 the rule changes will reduce in my view the got-ya 

9 mentality that clogs the courts and impedes the 

10 ability of litigants on both sides who seek justice 

11 from finding justice.

12 Each of these reforms is needed now to get 

13 our system working in the way it was intended. The 

14 proposed rules do not do everything, but they're a 

15 very good start. And I want to thank you for allowing 

16 these remarks, and I also want to thank each of you 

17 for taking time out of your lives to sit in these long 

18 days that it takes to review these rules. It's an 

19 important part of the process, and I want you to know 

20 that we at Emerson are grateful to you for that.

21 JUDGE CAMPBELL: Thank you, Mr. Steeves.

22 Questions?

23 (No response.)

24 JUDGE CAMPBELL: All right. Thank you for 

25 your comments.
307

Heritage Reporting Corporation

(202) 628-4888

1 Mr. Sellers?

2 MR. SELLERS: Mr. Chairman, members of the 

3 committee, thank you for hearing from me today. I am 

4 a partner in the Washington, D.C. law firm of Cohen 

5 Milstein Sellers and Toll and have been practicing law 

6 for more than 30 years, primarily civil rights law.

7 I come today to tell you that while I share 

8 the committee's concerns about the costs of litigation 

9 and the protracted nature of litigation, I believe the 

10 changes for the most part that the committee is 

11 recommending will not achieve the goals that it seeks 

12 to achieve.

13 You've heard a good deal today, and I won't 

14 repeat it, about the concerns from the civil rights 

15 community, about the numerical limits on discovery, 

16 about the proportionality rule, and about some of the 

17 cost shifting that is proposed. I share those 

18 concerns. I believe that there are a good deal of 

19 self-imposed limits that parties who bring these cases 

20 have on the discovery that they pursue. Many of us 

21 handle cases on a contingent basis, as I do, and I can 

22 assure you we are very careful about the discovery we 

23 undertake, and I believe that the FJC's studies 

24 confirm that most often parties self-police the 

25 discovery that they undertake.
308

Heritage Reporting Corporation

(202) 628-4888

1 I find it somewhat curious that the 

2 committee feels compelled to raise these proposed 

3 changes now when there are some excellent pilot 

4 studies that exist which might generate some of the 

5 evidence with which further thought can be given to 

6 particular limitations if the committee wishes to 

7 proceed in that direction.

8 I am concerned, however, and I raise this 

9 reluctantly at the end of a long day, but I think 

10 there is a third way. There is a debate going on 

11 whether discovery is too much or too little, and I 

12 think that the issues that we confront about discovery 

13 today are largely a product of a system that provides 

14 a one-size-fits-all set of discovery limits and a use15 it-or-lose-it approach to discovery where those who 

16 bring the case and those who defend the cases feel 

17 very concerned about passing up any discovery for fear 

18 that they may later believe it's necessary to prove 

19 the case or to sustain their defenses.

20 The third way that I want to propose is a 

21 modification of Rule 16. I believe that a much 

22 earlier and more active involvement by the courts in 

23 the management of discovery would help greatly. I 

24 recognize the courts are empowered to do this. I cite 

25 in my written comments, which I just submitted this 
309

Heritage Reporting Corporation

(202) 628-4888

1 morning, some examples of courts that have adopted 

2 rules of this sort, but there is no largescale 

3 approach to this.

4 I think there is some value in having courts 

5 be directed to hear from the parties early in the case 

6 about what particular issues are pivotal to assessing 

7 the value of the claims and the defenses and focus 

8 discovery initially on what appears to be the pivotal 

9 issues. And I give some examples in my written 

10 remarks. I'll give you one or two here. There may be 

11 a Daubert issue that's lurking there. There may be a 

12 question about the viability of an economic model or 

13 whether there are statistically significant 

14 disparities that ultimately are evident from a body of 

15 data.

16 Those go to the heart of the valuation of 

17 these cases, and often you don't get to those issues 

18 until months or years into litigation. Courts are 

19 empowered -- and I suggest that a rule change might 

20 actually direct them initially to stage discovery, 

21 focusing on those matters that they believe after 

22 hearing from the parties are especially central to one 

23 side or the other or both of their particular 

24 interests, and they are undoubtedly not the same in 

25 terms of what discovery will be relevant to evaluating 
310

Heritage Reporting Corporation

(202) 628-4888

1 the claims, and putting off the balance of discovery 

2 until there is an opportunity to explore some initial 

3 discovery that may be central, and then allowing the 

4 parties to explore the possibility of a resolution of 

5 the matter.

6 I think the other thing this does is it 

7 permits courts to tailor the discovery limits if there 

8 are limits of one sort or another to the particular 

9 needs of a case. And I submit the one-size-fits-all 

10 approach is either going to lead to, as there have 

11 been debates for a decade or more, a couple of 

12 decades, about there's too much discovery, there's too 

13 little discovery. I've been sitting here for a couple 

14 of hours. It seems to me that in large part that view 

15 is determined by which side of the V you're on and 

16 probably will be forever that divide.

17 But I suggest that the courts are empowered 

18 and should be directed to be much more focused on the 

19 particular needs of discovery in a particular case. 

20 And I'll pause there.

21 JUDGE CAMPBELL: All right. Thank you.

22 Questions for Mr. Sellers?

23 MR. FOLSE: Do you not think that Rule 16 

24 requires what you just described in its current form?

25 MR. SELLERS: Well, I don't think it 
311

Heritage Reporting Corporation

(202) 628-4888

1 requires it, and in my 30 years-plus of legal 

2 practice, I virtually have never seen it used that 

3 way. And more often than not, courts advise the 

4 parties to produce a Rule 16 plan, and the plan allows 

5 the parties to go forward with discovery. And because 

6 there are differences in tactics that parties use to 

7 decide what sequence and the like of discovery, you 

8 may never get to the issues on my side that really are 

9 important for quite a while.

10 MR. FOLSE: If we directed, as you 

11 described, judges to do what you say and judges don't 

12 do what the rule might provide, as you suggested, what 

13 would the remedy be?

14 MR. SELLERS: Well, I'm not sure I have a --

15 I think we'd have to convene another meeting to talk 

16 about what to do with judges who don't follow the 

17 rules. But I submit, by the way, that there are 

18 countervailing advantages for the court's incentives 

19 to do this, lest judges think you're just imposing 

20 more work on us when we are already heavily burdened 

21 with busy dockets. This could lead to fewer trials, 

22 shorter cases for shorter litigation, less motion 

23 practice. I think they will free up time on the other 

24 end of the litigation. And so I would hope the 

25 courts, besides feeling obliged to follow the rule, 
312

Heritage Reporting Corporation

(202) 628-4888

1 would regard it as advantageous to do so.

2 JUDGE CAMPBELL: Judge Pratter.

3 JUDGE PRATTER: One observation and one 

4 question. Having been part of this process, I assure 

5 everybody I don't think I recall hearing that any of 

6 these rules came up because the judges were feeling 

7 burdened and that we had too much to do. So I don't 

8 think the rules come from that concern.

9 My question is which of the pilot programs 

10 do you recommend we focus on?

11 MR. SELLERS: I think there are two that are 

12 particularly interesting. The complex litigation 

13 program in the Southern District of New York, as I 

14 read the protocol, actually has some components in it 

15 that are similar to my recommendations, and I'd be 

16 very interested in hearing after you've seen the 

17 results. I believe it's due to conclude at the end of 

18 2014.

19 There may be some very interesting 

20 information collected about early intervention by 

21 courts in managing discovery because I believe that 

22 the protocol permits that in complex cases. I also 

23 think that the protocols that are adopted, to the 

24 extent they are, with respect to handling employment 

25 cases and the early interchange of evidence would 
313

Heritage Reporting Corporation

(202) 628-4888

1 likewise be very informative in assessing the extent 

2 to which that adequately informs the parties so that 

3 they have an early opportunity to assess the strengths 

4 and weaknesses of their respective positions and 

5 perhaps resolve the case earlier.

6 JUDGE CAMPBELL: Any other questions?

7 (No response.)

8 JUDGE CAMPBELL: All right. Thank you very 

9 much, Mr. Sellers.

10 And thank you, everybody, for your comments. 

11 I think I speak on behalf of everybody on the 

12 committee that this has been a very valuable, very 

13 informative day. We recognize that there are earnest 

14 and honest beliefs shared on all sides of this issue. 

15 I wish I could say everything is clear after today, 

16 but obviously these are hard issues, and the things 

17 we've learned today from you have been very valuable.

18 We will hold another hearing on January 9 in 

19 Phoenix and one on February 7 in Dallas, and we 

20 continue to look forward to written comments as well. 

21 Thank you very much. We are adjourned.

22 (Whereupon, at 5:05 p.m., the Judicial 

23 Conference Committee in the above-entitled matter was 

24 adjourned.)

25 //
314

Heritage Reporting Corporation

(202) 628-4888

1 //
315

Heritage Reporting Corporation

(202) 628-4888

REPORTER'S CERTIFICATE

CASE TITLE: Proposed Amendments to the Federal

 Rules of Civil Procedure, Judicial

 Conference Advisory Committee on

 Civil Rules

HEARING DATE: November 7, 2013

LOCATION: Washington, D.C.

I hereby certify that the proceedings and 

evidence are contained fully and accurately on the 

tapes and notes reported by me at the hearing in the 

above case before the Administrative Office of the 

U.S. Courts.

Date: November 7, 2013

 

Diane Humke

Heritage Reporting Corporation

Suite 600

1220 L Street, N.W.

Washington, D.C. 20005-4018