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Expert: Proposed change to discovery rules a potential ‘game-changer’

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Proposed changes to the pre-trial phase of a lawsuit could make it easier for litigants to withhold evidence, says Suja A. Thomas, a University of Illinois law professor and expert in civil procedure.

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3/3/2014 | Phil Ciciora, Business & Law Editor | 217-333-2177; pciciora@illinois.edu

CHAMPAIGN, Ill. — A seemingly innocuous proposal that would allow litigants to withhold evidence during the pre-trial phase of a lawsuit could make it easier for large corporations to conceal information in lawsuits, according to a University of Illinois expert in civil procedure.

The changes proposed by the Advisory Committee of the Civil Rules – the body that considers changes to the Federal Rules of Civil Procedure, which affects the daily operations of the federal courts – would allow parties to withhold evidence during discovery on the basis of a lack of proportionality to the needs of the case.

If that were to happen, that could be a “game-changer” in the civil litigation process, says law professor Suja A. Thomas.

“The rules that have been proposed are rules that deal with cost, because there’s a perception in the legal world that discovery costs in civil litigation are out of control,” she said. “But the proposed changes could have the unintended consequence of creating a lot of trouble for typical, everyday cases.”

According to Thomas, corporations see excessive discovery costs as worrisome because it leads them to settle cases brought by plaintiffs that the corporations see as otherwise winnable.

“Corporations have been complaining that electronically stored information” – all information stored in computers and storage devices; known as ESI in legal circles – “is and continues to be a very costly expense for them during the discovery process,” she said. “Searching ESI can incur significant costs, including because information can exist in so many different places.”

Which is why some corporations contend that plaintiffs intentionally try to run up discovery costs by asking for unnecessary information in an attempt to extract a settlement, Thomas said.

“Big businesses see discovery costs as prohibitively high, and maintain that plaintiffs are forcing their hand and actually making them settle cases that they otherwise wouldn’t,” she said. “Thus, their motivation to change the rules and curb the cost of discovery.”

But according to Thomas, data compiled by the Federal Judicial Center casts doubt on the solution to this problem.

“They conclude that discovery is disproportional to the stakes of the case in only 6 to 15 percent of civil cases,” she said.

The data show that the median cost of discovery for plaintiffs and defendants is $15,000 to $20,000, respectively. Even at the 95th percentile – that is, equal to or higher than the costs in 95 percent of the cases studied – the costs are $280,000 and $300,000.

“Those figures come from information from both plaintiffs’ and defendants’ lawyers, using actual cases as the underlying data,” Thomas said. “The atypical cases – the 6 to 15 percent – are motivating the proposed change in the rule.”

So the question is, should atypical cases force a rule change that would, in turn, affect all cases, including typical ones?

In a recently published paper, Thomas argues that when the Supreme Court has made changes motivated by atypical cases, the resultant change, which must also apply to typical cases, has negatively affected those typical cases.

“The old saying in legal circles is that hard cases make bad law,” she said. “Well, I would say that atypical cases also make bad law.”

In the article, Thomas argues for a new doctrine of judicial restraint – what she calls the “atypical doctrine.”

“That means that the Supreme Court should not make legal change in cases where legal change is motivated by oddball or atypical facts, and when the change would also affect typical cases,” she said. “Now, I’m not saying that changes should never be made. But when you make changes, you have to make them carefully, so that the change is narrowly tailored and that it’s motivated by the right facts.”

According to Thomas, if you apply the concept in the paper to the rule changes proposed by the committee – where atypical cases motivate the rule change, and the rule change would affect typical cases – the new rule could have a negative effect on typical cases.

In other words, if discovery is working in the vast majority of cases, a rule change specifically created for outliers is likely to create even more problems.

“If a change is made to accommodate those 6 to 15 percent of cases, then the change affects all cases, including the typical cases that are already proportional,” she said.

And if the new rules went into effect, they could make it easier for corporations to withhold information from plaintiffs in typical cases by using “disproportionality” as a shield, Thomas said.

“If that happens, we will see lawyers not producing discovery that they ordinarily would’ve produced in the past in the same case, because now they have an additional way to exclude information,” she said. “That change is going to motivate lawyers to ask themselves, ‘What’s disproportionate to the needs of the case?’ They will then exclude that information. But the opposing lawyer will have a different view of proportionality.”

It’s a judgment call, which means there will be more disputes and more judicial involvement, Thomas said.

“And these disputes over proportionality will add cost,” she said.

Thomas advocates for moving away from the legal concept of “transubstantivity,” which dictates that one set of rules must apply equally and across-the-board in all substantive areas of the law.

“There are problematic cases, and there always will be problematic cases, so maybe we need a special rule for those cases,” she said.

Unfortunately, the proposed changes are dividing the plaintiffs’ and defendants’ bars, as indicated by the extensive written and oral testimony that has been generated by the proposed changes.

While Thomas argues that the changes should not go forward as formulated, if they do, she has a simple, unique remedy: Require a “proportionality log.”

“In this log, the party withholding discovery on the basis of lack of proportionality would give information about what ESI they are not searching,” she said. “The other side can then assess whether or not they think the discovery is proportional to the needs of the case.”

Essentially, the proportionality log gives some information so the parties can have a dialogue with each other, Thomas said.

“And if they can’t work it out, it gives the requesting party more information to go to the court to assess the claim,” she said.

Editor's note: To contact Suja A. Thomas, call 217-244-7614; email sathomas@illinois.edu.

The paper, “How Atypical, Hard Cases Make Bad Law,” is available online.

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