Tailoring discovery: using nontranssubstantive rules to reduce waste and abuse.

• Author: Koppel, Joshua M.

INTRODUCTION I. A REVIEW OF THE CURRENT SYSTEM OF DISCOVERY AND CRITICISMS THEREOF A. The Importance of Discovery in American Litigation B. The Breadth of the American Discovery System C. Criticisms of the Current System of Discovery II. TRANSSUBSTANTIVITY AND ITS LIMITS A. A History of Transsubstantive Rules and Transsubstantive Discovery B. The Case for Transsubstantivity C. The Limits of Transsubstantive Rules III. JURISDICTIONS WITH NONTRANSSUBSTANTIVE DISCOVERY RULES IV. DISCOVERY REFORM ALTERNATIVES TO AND VARIATIONS ON NONTRANSSUBSTANTIVITY A. Active Judicial Case Management B. Value-of-Claim Tracks V. CREATING A SYSTEM OF NONTRANSSUBSTANTIVE RULES TO FIT MODERN DISCOVERY A. Nontranssubstantive Discovery Alternative B. Accounting for Falue-Based Judgments in the Creation of Nontranssubstantive Rules 1. Using Discovery to Promote Procedural Justice 2. Using Discovery to Promote Substantive Goals C. Discovery Reforms that Will Reduce Costs D. The Rulemaking Body CONCLUSION INTRODUCTION

The current system of discovery in the federal courts can produce enormous costs for both litigants and the court system. These costs stem from the overuse of both discovery in general and costly mandatory discovery procedures that are relevant in only a small subset of litigation. The alleged costs of discovery have spawned a number of articles and studies in recent years condemning the federal system of broad discovery. (1)

In a pair of recent cases, the Supreme Court responded to the criticism of rising discovery costs by instituting a heightened pleading standard meant to prevent meritless litigation from reaching the discovery stage. (2) Unfortunately, this crude attempt to rein in unnecessary discovery also threatens to kick much meritorious litigation out of the courts by preventing under-resourced plaintiffs from invoking the authority of the courts to gather basic information crucial to their cases. (3) Better solutions to the problem of discovery costs would address the system of discovery itself.

The primary problem with the current rules of discovery is that they sweep too broadly. Because the Federal Rules of Civil Procedure are transsubstantive--meaning that the same rules apply in every type of case--the discovery rules are not narrowly tailored to the requirements of any particular case. Transsubstantivity was one of the guiding tenets in the creation of the original Federal Rules of Civil Procedure, but the principle has come under attack more recently.

The creation of substance-specific (nontranssubstantive) rules, especially in the area of discovery, holds promise for reducing costs by replacing broad rules with rules that are narrowly tailored to particular types of litigation. Narrowly tailored rules will help reduce waste and abuse in the discovery process. A system of nontranssubstantive rules will also allow rulemakers to make deliberate choices about how discovery can be used as a tool to promote goals of substantive and procedural fairness, thereby allowing rulemakers to decide when costly discovery would or would not be appropriate.

The drafting of nontranssubstantive rules would also present rulemakers with many challenges. The extent of discovery permitted in litigation can have an enormous effect on the course and outcome of a case. Therefore, rulemakers would have to make value-based decisions about how much and what types of discovery to allow in any given substantive area. This process would undoubtedly be beleaguered by heightened interest group lobbying. (4) Rulemakers recognize at least two kinds of transsubstantivity. (5) "Casetype" transsubstantivity means that the same rules apply regardless of the subject matter of the litigation (e.g., securities fraud, employment discrimination, breach of contract). "Case-size" transsubstantivity implies that the same rules apply regardless of the amount in controversy or the complexity of the suit. (6) In this Comment, I seek to show that the federal system of discovery would benefit from nontranssubstantivity of both types, with a primary emphasis on case-type nontranssubstantivity. Ultimately, I argue that the discovery rules should be different for different types of litigation.

In Part I, I provide a brief review of the current federal discovery rules by discussing their importance to litigation and the breadth of the system of discovery. I also review some of the most important criticisms that scholars and practitioners have leveled at the discovery procedures. Part II of this Comment focuses on transsubstantivity by examining the history of transsubstantive rules in the federal system and discussing the advantages and problems associated with transsubstantive rules. In Part III, I give examples of state jurisdictions that use nontranssubstantive discovery rules and examine a number of possible models.

In order to place the nontranssubstantivity suggestion in a broader context, Part IV examines two alternative reforms to the discovery rules. Analysis will show that the judicial discretion over discovery through active case management results in a waste of resources and impairs the ability of the courts to manage cases fairly and consistently. Reforms that would impose nontranssubstantivity of the case-size variety--that is, by applying different rules depending on the amount in controversy--should be successful in lowering the cost of discovery and streamlining case management. The implementation of case-size nontranssubstantivity alone, however, would be insufficient to address the problems plaguing the current discovery system. Such a reform would do little to curb costs in the largest cases where broad discovery would still be available to litigants.

In Part V, I propose a system of nontranssubstantive discovery rules that takes advantage of the benefits offered by these two alternative reform strategies. A nontranssubstantive system of discovery rules will reduce the overall cost of discovery through narrowly tailored rules. It will also allow rulemakers to allocate the costs of discovery in order to promote the substantive goals underlying the litigation, particularly for causes of action that Congress has previously sought to encourage through devices such as fee-shifting. The Comment goes on to discuss the process that the creation of nontranssubstantive discovery rules would entail. I assert that the primary challenge that rulemakers will face will be in making decisions that will determine how discovery rules should affect substantive law and substantive rights. I suggest a number of practical reforms that could be implemented in a nontranssubstantive system to reduce costs.

Finally, this Comment proposes that the rulemaking committee that would be best equipped to craft a nontranssubstantive system of discovery rules would bring together experts and practitioners from all sides of the issue. Because of the substantive decisions that the committee would have to make and the political pressures from interest groups that it would have to confront, the rulemaking body would be best situated in the legislative branch. Although reform of the discovery system of the type recommended in this Comment would require a major overhaul of the federal discovery rules, nontranssubstantivity holds out the promise of narrowly drawn procedures that would reduce costs while still providing litigants with the tools necessary for the efficient development of their cases.

1. A REVIEW OF THE CURRENT SYSTEM OF DISCOVERY AND CRITICISMS THEREOF

   1. The Importance of Discovery in American Litigation

      Discovery plays an essential role in the modern system of American litigation. Modern American procedure assumes that "[m]utual knowledge of all the relevant facts gathered by both parties is essential to proper litigation." (7) Discovery is aimed at providing both the litigants and the factfinder with the information necessary to reach an accurate determination of the issues. In addition, ensuring that parties have access to all relevant facts to present to a neutral factfinder may further the important goal of procedural fairness. (8)

      Broad discovery is essential to a notice-pleading system in which a plaintiff is not required to know the facts necessary to succeed on his claim before initiating litigation. Broad discovery allows a plaintiff who knows merely that he has been wronged to leverage the power of the courts to gain access to the information that will allow him to prosecute a successful case. (9) Extensive discovery is thus essential to an effective system of notice pleading designed to provide advantages to under-resourced plaintiffs who cannot afford the private discovery required by a fact-pleading system.

      To the extent that the extensive system of federal discovery allows plaintiffs easier access to courts, discovery supports the political role that private litigation plays in the United States. (10) In this system, the powerful force of private litigation can be harnessed, through legislative choice, as a method of enforcement of statutory and administrative law. (11) Private litigation has indeed often been used as an alternative to a more bureaucratic state. (12) Dean Carrington has noted the privatization of enforcement, especially in the areas of antitrust, consumer protection, securities regulation, civil rights, and intellectual property law. (13) In particular, Carrington argues that private litigation is most effective in protecting civil liberties and the rights of those with fewer resources, because private litigants cannot be co-opted by powerful interest groups as easily as administrative agencies. (14) Discovery is a powerful tool in enabling private litigants to vindicate their rights because it gives them investigative abilities that their limited resources would otherwise render unavailable. (15)

   2. The Breadth of the American Discovery System

      To support a notice-pleading system and private enforcement of statutory law...