Chapter 10 Corporate Discovery Strategy in Complex Products Liability Litigation in Federal Court
| Jurisdiction | New York |
John P. Marshall, Esq.*
I. INTRODUCTION
Most civil litigation in federal court settles either during pretrial discovery or right before trial—“on the courthouse steps.” Settlements at the pleading stage in products liability cases are relatively infrequent. Notoriously few civil cases in federal court are tried
Particularly because most cases settle, pretrial discovery is of critical importance. Such discovery is often used to determine the boundaries of settlement discussions. Frequently, the amount of the settlement reflects the parties’ success or lack of it during the discovery process. Pretrial discovery can also be the basis for motions for summary judgment. Federal courts, relying on U.S. Supreme Court directives, have been more willing to grant such motions in recent years. If the case is one of the few that are tried, the parties’ presentations likely will rely heavily on evidence developed during discovery
Pretrial discovery has become one of the most expensive parts of modern litigation practice in federal courts, particularly in complex cases such as multi-party products liability cases. The cost of discovery and how to manage it have become increasingly significant issues facing corporate in-house and outside counsel today 1948 Thus, an effective discovery strategy is often crucial to both the result and the expense of federal civil litigation.
This chapter reviews corporate discovery strategy in complex litigation such as products liability cases. Amendments to the Federal Rules of Civil Procedure relating to discovery, as well as the adoption of expense and delay reduction plans in the district courts, will have a profound impact on such strategy. Accordingly, this chapter first discusses the relevant amendments and then outlines particular corporate discovery strategies for such cases. This chapter also reviews strategies that corporations can implement to manage discovery in complex products liability litigation and to aid their counsel in obtaining the most favorable result. Particular attention is devoted to prelitigation considerations (such as establishment of an internal litigation team and development of a litigation plan and budget that include a separate discovery plan), informal discovery strategy and techniques, and other corporate discovery needs and considerations (such as corporate litigation awareness and document retention programs and discovery of foreign subsidiaries). Finally, because of the importance of computerized file systems to corporate discovery strategy in complex litigation, this chapter examines various technological innovations such as imaging and scanning devices and direct communications links between corporations and their outside law firms.
II. OVERVIEW OF STRATEGIC DISCOVERY ISSUES
Widely recognized problems with discovery were addressed by the 1993 and 2000 amendments to the Federal Rules of Civil Procedure (Federal Rules) and the various expense and delay reduction plans adopted by district courts pursuant to the Civil Justice Reform Act of 1990. Notwithstanding the traditional emphasis on broad pretrial disclosure (to avoid trial by surprise), a feeling that things had gotten out of hand developed among judges, lawyers and scholars. 1949 The amended Federal Rules and the expense and delay reduction plans seek to manage discovery more extensively and to reduce both the amount of discovery and the time it takes. This discovery philosophy requires that counsel for corporations in complex litigation be creative and resourceful. Discovery, particularly when limited by courts and costs, must be effective.
Complex products liability cases often include multiple parties and forums. Such cases may arise as class actions or as a multiplicity of individual actions stemming from the same events or course of conduct. Because complex products liability cases often involve numerous documents, it has almost become imperative for corporations to invest in computerized litigation support systems. The tedious, paper-intensive manual tasks in pretrial discovery can be accomplished faster by computerized searches. Case-related information and documents can be stored in a database, which replaces time-consuming and repetitive physical reviews of documents. Indeed, in 1980, a federal district court in National Union Electrical Corp. v. Matsushita Electrical Industrial Co. 1950 recognized that computerized files would soon be the norm in pretrial discovery, not the exception. The topic of e-discovery of electronically stored information (ESI) is beyond the scope of this chapter, but corporate litigants should keep themselves informed of the most recent developments in this area.
Complex products liability actions place enormous burdens on corporations, their counsel and the court system. In massive cases involving multiple parties that span many years, the sheer volume of correspondence, memoranda and other documents generated and received by a corporation demands a sophisticated and innovative approach to discovery. Corporate litigants have particular discovery problems and needs because many have numerous locations, large numbers of employees and a multitude of documents. Any of these corporate characteristics may be implicated by a discovery request, even though the characteristic may not in any way relate to the subject matter of the litigation.
The corporation should consider discovery strategy in light of (1) the district in which the case is pending, as well as the amended Federal Rules and expense and delay reduction plan in effect; (2) the judge to whom the case is assigned and that judge’s individual rules; and (3) any other local rules or standing orders concerning discovery in that district. In addition, the corporation should consider transferring the action to a more favorable jurisdiction if grounds to do so exist.
Generally, discovery will follow the four techniques allowed by the Federal Rules of Civil Procedure: depositions, 1951 interrogatories, 1952 document requests 1953 and requests for admissions. 1954 The order of these techniques may be determined by the expense and delay reduction plan adopted in the district, or other local rules or standing orders.
III. CHANGES IN THE FEDERAL RULES
On December 1, 1993, a number of amendments to the Federal Rules of Civil Procedure took effect 1955 Some of the more controversial amendments relate to mandatory disclosure (i.e., discovery without the need for a formal request) and limitations on the number of depositions and interrogatories that may be had in an action. These changes attempted to streamline the discovery process by making it less adversarial.
These amendments to the Federal Rules, which shifted the focus from discovery toward disclosure, have had significant implications for corporate discovery strategy in complex products liability litigation. The requirements, limitations and obligations imposed by these amendments are of particular importance in cases involving numerous witnesses and large volumes of documents.
On December 1, 2000, additional amendments to the Federal Rules took effect. Like the 1993 amendments, some of the 2000 amendments attempted to streamline the discovery process by reducing the scope of discovery and length of depositions. However, other 2000 amendments made drastic changes to discovery provisions by, for instance, standardizing the discovery process throughout all federal courts.
Rule 26(b)(1) provides that parties may obtain discovery regarding any matter “that is relevant to any party’s claim or defense,” 1956 rather than information that is “relevant to the subject matter involved in the action.” 1957 Litigants “would be able to secure information that is relevant to the subject matter only after parties file motions that show that they have good cause to request broader discovery.” 1958 The reason for this particular amendment was to “limit discovery and ‘fishing expeditions’ by restricting parties to discovery of material that implicates matters raised in the pleadings.” 1959
Many of the changes to discovery procedures reflected a desire to end discovery gamesmanship by imposing additional obligations and sanctions directly on counsel and parties. For example, pursuant to amended Federal Rule 26(g)(1) and (2), counsel must sign all discovery disclosures, requests, responses and objections. This signature represents counsel’s certification that on the basis of a “reasonable inquiry,” “the disclosure is complete and correct as of the time it is made.” Counsel’s signature also represents a certification that the requests, responses or objections are “warranted by existing law,” are “not interposed for any improper purpose” and are not “unreasonable or unduly burdensome or expensive, given the needs of the case, the discovery already had in the case, the amount in controversy, and the importance of the issues at stake in the litigation.”
To reduce the amount of motion practice over discovery disputes, Federal Rules 26(c) and 37(a)(2)(A) and (B) require that prior to filing a motion for a protective order or a motion to compel discovery, counsel must file a certificate that he or she has “conferred or attempted to confer with other affected parties in an effort to resolve the dispute without court action.” While local rules in many districts had previously required such attempts at resolution of discovery disputes, such conferences are uniformly required in all districts.
Amended Federal Rule 26(b)(5) requires that parties asserting claims of privilege or work product “make the claim expressly and . . . describe the nature of the documents, communications, or things not produced or disclosed in a manner that . . . will enable other parties to assess...
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