Highlights of the 2015 Amendments to Federal Rules of Civil Procedure
The most recent amendments to the Federal Rules of Civil Procedure became effective on December 1, 2015. The amendments are to Rules 1, 4, 16, 26, 30, 31, 34, 37, 55 and 84. The amendments are intended to help reduce the expense of litigation, expedite cases by shortening certain time periods, and provide more uniformity in the imposition of sanctions for failure to preserve electronically stored information (ESI). Below is a summary of the significant amendments.
Rule 1 was amended to provide that, in addition to the court, the parties have an obligation “to secure the just, speedy, and inexpensive determination of every action and proceeding.” Several amendments to the rules were intended to help the court and the litigants achieve that goal.
Some amendments shorten certain time periods at the beginning of litigation. Rule 4(m) reduces the time in which the complaint must be served after filing from 120 days to 90 days. Rule 16(b)(2) was amended to reduce the time that the court must issue a scheduling order to the earlier of (i) 90 days (rather than 120 days) after any defendant is served, or (ii) 60 days (rather than 90 days) from when any defendant has appeared.
A significant rule change that addresses the expense of litigation is the addition of a proportionality test to Rule 26 when considering the scope of permissible discovery. In addition to requiring that the information sought in discovery be relevant to a party’s claim or defense, amended Rule 26(b)(1) requires that the discovery be “proportional to the needs of the case.” Under the amended rule, the following six factors are to be considered by the court in making that determination: (i) the importance of the issues at stake, (ii) the amount in controversy, (iii) the parties’ relative access to relevant information, (iv) the parties’ resources, (v) the importance of the discovery in resolving the issues, and (vi) whether the burden or cost of the discovery outweighs its likely benefit. If discovery falls into this more limited scope, the discovery does not need to be admissible to be discoverable. Whether this will actually limit the volume of documents produced and make discovery less expensive remains to be seen. But as a consequence of the amendment, motions to compel should address these factors.
Amendments to Rule 34 will impact the manner in which litigants respond to a request for production of documents. Specifically, amended Rule 34(b)(2)(B) requires a responding party to state the grounds for objecting with specificity, including the reasons for the objection. Further, the response can no longer simply state that responsive documents will be produced without referencing a production date. Under the amended Rule the production must be completed no later than the time specified in the request or the response must specify another “reasonable time” for production. Also, under Rule 34(b)(2)(C) the responding party must state in the response whether documents are being withheld from production based upon the objection. This amendment removes the uncertainty of whether a party who produces documents notwithstanding an objection has withheld any documents based upon the objection.
Amendments were made to Rule 37(e) to bring clarity to the previous rule regarding the authority of the court to impose sanctions against a party for failing to produce ESI. Under the previous version of Rule 37(e), which was adopted in 2006, “’[a]bsent exceptional circumstances” a court could not impose sanctions on a party who failed to produce ESI if the information was lost as a result of the “routine, good-faith operation” of the party’s ESI system. This led to courts adopting different standards for imposing sanctions when ESI is lost and cannot be produced. Under the amendment to Rule 37(e), the following questions need to be considered before sanctions can be imposed:
- Is the ESI information that should have been preserved in the anticipation or conduct of litigation? The Rule does not apply when information is lost before the duty to preserve it arises, which leaves the courts with having to decide on a case by case basis when the duty arose.
- Was the ESI was lost due to the party’s failure to take “reasonable steps” to preserve the information? Sanctions cannot be imposed under the Rule if the party can show it took reasonable steps to preserve the information but it was still lost. According to the Advisory Committee’s comments, among other things, it is appropriate for the court to take into account the economic resources of the party to preserve ESI when considering the reasonableness of preservation efforts.
- Can the information that was lost be restored or obtained through other discovery? Even if a party failed to take reasonable steps to preserve the lost ESI, the party can still escape sanctions if the information can be obtained through other means.
Even if the court finds that the ESI should have been preserved, reasonable steps were not taken to preserve it, and that the information cannot be obtained through other means, that does not end the inquiry. Under Rule 37 (e)(1), before sanctions can be imposed the court must make a “finding of prejudice” to a party as a result of the lost ESI. According to the Advisory Committee’s comments, a consideration of prejudice necessarily includes a consideration of the importance of the information to the claims. Further, as noted in the comments, the amended Rule does not place the burden on a particular party to prove or disprove prejudice, leaving it to the court to decide how to assess prejudice.
While the court has discretion to determine what sanctions to impose upon a finding of prejudice, the court may only “order measures no greater than necessary to cure the prejudice.” Id. The amended Rule limits the discretion of the court to impose the most serious sanctions, such as a presumption that the lost ESI was unfavorable to the party, the dismissal of an action or a default judgment. Before any of those sanctions can be imposed, the court must find that a party “acted with the intent to deprive another party of the information’s use in the litigation.” Rule 37(e)(2). The Advisory Committee comments note that the determination of intent may be made by the judge when ruling on a pretrial motion or the judge may decide to have the determination made by the jury. In the comments, the Advisory Committee also notes that a finding of intent does not require the court to impose any of the foregoing sanctions and that the remedy should be tailored to fit the wrong.
The revisions to Rule 37(e) should help to resolve the split among circuits in how sanctions for failure to preserve ESI are imposed and make it easier for lawyers to advise their clients about the rules pertaining to the preservation and production of ESI. Whether these revisions and the other revisions will streamline litigation and reduce the overall expense of litigation remains to be seen.
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