Civil Disclosures (ABA Journal)

Civil Disclosures: Skepticism runs rampant as the federal courts’ experiment with discovery reform hits the two-year mark

Originally published in the ABA Journal, October, 1995
81 A.B.A.J. 76

By Ronald D. Coleman

When Justice Antonin Scalia opposed the adoption of a federal rule to force parties to disclose relevant documents at the onset of litigation, he had four reasons: It was cumbersome, premature in light of ongoing experimentation, lacking in popular support, and a threat to the adversarial system.

In hindsight, he might have added a fifth: Its selective implementation has created a balkanized federal system that raises the possibility of forum shopping.

One of the more clear-cut effects of mandatory disclosure, in the almost two years since revised Federal Rule of Civil Procedure 26(a)(1) became law after congressional efforts to block changes failed, is that neighboring courts are going separate ways on adopting it.

The Southern and Eastern districts of New York, the Northern and Southern districts of Illinois, and the Northern and Southern districts of Indiana are three examples cited in a report earlier this year by the Federal Judicial Center, the Washington, D.C.-based research and training unit for federal judges.

The report noted that 28 of 112 federal districts rejected mandatory disclosure outright, while 21 provide for it under a different basis than the federal rule.

Lawyers, judges and academics are just as divided as those courts on where and how fast the so-called “civil procedure revolution” is going, or whether someone called a revolution and no one came.

“It’s pointless, it’s expensive, and it raises unnecessary ethical issues,” says Gregory P. Joseph of Fried, Frank, Harris, Shriver & Jacobson in New York City, who is vice chair of the ABA’s Section of Litigation. “I don’t understand what value it is to have me speculating about what my opponent would think is relevant to an issue….”

Supporters of mandatory disclosure, however, maintain that lawyers can and must adjust to the change for the sake of their clients and the economics of law practice. They are confident the rule-making process will return to the uniformity it had for decades. And they consider the individual courts to be perfect laboratories.

“Our system is sufficiently well-ordered that it can tolerate … experimentation by home rule, at the grassroots level,” says Edwin Wesely of Winthrop, Stimson, Putnam & Roberts in New York City. Wesely chairs the Civil Justice Reform Act Advisory Group in the Southern District of New York and is an ex-officio member of that group’s Eastern District equivalent.

Until the Rules Enabling Act of 1934 was promulgated, federal courts followed procedural rules of the state in which they sat. Notwithstanding minor local variations in technical requirements, the act created a uniform system.

The cycle shifted with passage in 1990 of the Civil Justice Reform Act, 28 U.S.C. 7 471 et seq., which mandated grassroots experimentation in each district. According to a June 1992 report by the Judicial Conference, 21 of 112 districts had plans at that time requiring mandatory disclosure in some form, with 18 in operation.

Under the 1993 amendments, Rule 26(a)(1) requires parties to provide substantial discovery information without waiting for a request. But the rule limits its own applicability by deferring to local rules, allowing individual courts to opt out.

Among jurisdictions choosing mandatory disclosure, some common requirements emerge. According to a July 1994 report by a subcommittee of the Litigation Section, most mandatory disclosure systems require parties to voluntarily identify: “persons” with information about the litigation, all documents and things in a party’s possession or control “likely to bear significantly on any claim or defense,” insurance and indemnity contracts that could satisfy all or part of a judgment, and information regarding expert testimony.

Some courts require only barebones disclosure, while others demand great detail.

And some courts have invited attorneys to disclose voluntarily other discovery areas, including: itemization of all damages, medical records in a personal injury claim, subrogation interests, persons interviewed in connection with the litigation and the interviewer’s identity, and even an explanation of the legal theory on which a claim or a defense is based. These disclosures are to be made based on the parties’ own evaluation of the pleadings.

A Threat to Zealous Advocacy?

Criticism that mandatory disclosure is antithetical to the adversary system continues unabated. Kathleen L. Blaner of the Washington, D.C., office of Philadelphia’s Pepper, Hamilton & Scheetz, says it is a mistake to “put this consensual exchange process into the middle of a system that is at heart adversarial.”

Blaner, chair of the Litigation Section mandatory rules subcommittee, says, “You’re mixing apples and oranges, trying to put this ‘I’m OK, you’re OK’ [approach] into a very adversarial system.”

“Mandatory disclosure is an accident waiting to happen,” says Melinda Thaler, an AT&T in-house lawyer in Basking Ridge, N.J., who chaired the Litigation Section subcommittee that authored the 1994 report on mandatory disclosure. The report found little had changed in practice, mainly due to low compliance because of local restrictions of the rules’ application or lawyer ignorance.

“Mandatory disclosure,” the report concluded, “has not yet worked its way into the fabric of federal civil litigation.”

Mandatory disclosure, Thaler argues, amounts to codification of the kind of thoughtless discovery practices that are the bane of civil litigation: overly broad document requests, form interrogatories, and stonewalling interrogatroy responses. When a lawyer uses cookie-cutter document requests, she says, no one bothers to ask if a request is appropriate to the case.

The chief beneficiaries of mandatory disclosure are lazy lawyers, she says. “You’re giving up chips that would never have been put on the table. There’s no substitute for good lawyering, and this helps bad lawyers who don’t have the discipline or competence to draft appropriate requests.”

Judge Marvin E. Aspen of the Northern District of Illinois at Chicago, which has not adopted mandatory disclosure, admitted his discomfort with the new disclosure obligation at a recent conference on civil procedure. “It scares the living daylights out of me to carry the burden of deciding what’s relevant to [an] adversary’s case.”

Others are less concerned. “I don’t think that it’s going to put attorneys to severe ethical tests or place them in tension or conflict place them in tension or conflict with their ethical duties,” says Linda Mullenix, a law professor at the University of Texas at Austin. “The drafters of the new rules repeatedly said–and it’s in the legislative history–the new rules were not going to basically change lawyers’ privileges and immunities [regarding discovery].”

However, she adds a caveat: If courts would reinterpret rules to require disclosure of privileged or immunized material, it would create ethical dilemmas.

Costs vs. Benefits

Another question is whether benefits of mandatory disclosure are what they were intended to be. “In a simple case it serves many of the same functions as the first-wave interrogatories, which may or may not make a lot of sense,” says Irwin Warren, who defends classaction securities cases for New York’s Weil, Gotshal & Manges.

But Warren doubts the system is of much use in complex cases. “Try to imagine what would be involved in complying with an initial disclosure obligation in a case where a class action plaintiff claims that a bank and its officers made false public statements about its … lending and operations,” he says.

“How would you ever respond to that? Identify every file in the bank? Or every loan the bank made, and didn’t make? Every loan underwritten or renewed? The rules make absolutely no sense in an entire class of cases, which is why you have various courts opting out of the rule,” he says.

New York lawyer Wesely agrees that the system works much better for simple negligence cases than complex cases. “The general view among magistrates and judges,” he says, “is that complex cases need hands-on, individualized treatment.”

It is also debatable whether some lawyers are attempting to implement the rules in good faith. According to Dianne Nast, of Kohn, Nast & Graf in Lancaster, Pa., who represents plaintiffs in class actions, some lawyers simply cannot adopt a spirit of cooperation. “I think that parties who want to withhold things [still] use relevancy as a way to withhold them,” she says.

Nast cites her experience in breast implant litigation, where the defense contended that it only had to produce material relating to use of silicone in breast implants. “But silicone is the [physiological] problem, not just in breast implants,” she says. To secure needed discovery, “You’re still requiring judicial intervention, and plaintiffs still have to worry about what they’re going to get,” says Nast.

Lawyers also complain that while mandatory disclosure may level the playing field, it is the “big guy” who gains yardage.

John Shyer, a partner in the New York City office of Latham & Watkins, says the new system is a boon for defendants in employment cases, whom he represents. “We normally would cooperate with discovery requests in any event,” says Shyer, “but it does bring out the plaintiff’s documents earlier.”

That is exactly the problem, says Nancy Erika Smith of Smith Mullin in West Orange, N.J., who represents plaintiffs in employment cases.

Smith says that credibility of defense witnesses often is critical to a case, and that early discovery “just allows them to get their lies straight. Having to show my hand when I have such a high burden of proof is not a level playing field.”

Clyde Szuch of Pitney, Hardin, Kipp & Szuch in Morristown, N.J., agrees that mandatory disclosure could work hardships on smaller firms and smaller clients.

Previously, Szuch says, small plaintiffs could file a complaint and see what developed as the litigation unfolded. Now, he says, a party has to look harder at all its documents before filing a complaint and finding out what the other side has.

It is true, says one federal magistrate, that disclosure requires plaintiffs to file well-founded complaints. “Mandatory disclosure can run into problems where pleadings are not particularly well-drafted–where they are vague and conclusory,” notes U.S. Magistrate Judge Stanley Chesler of the District of New Jersey at Newark.

“But the rules provide that the scope of disclosures is bounded by the specificity of the pleadings,” he says. “I think that when those rules are interpreted by lawyers using good faith and judges using their God-given common sense, the fears of practitioners regarding these rules are largely imaginary.”

Chesler contends that with close supervision, the system can work for many kinds of cases. “I think that attorneys on both sides are viewing the requirement realistically,” he says. “They’re talking about it. They’re asking each other over the phone or in letters, ‘Do you really think that you want or need [that] in connection with these disclosures?’ and they’re getting realistic disclosures.”

A Balkanized System?

An outspoken critic of the balkanization of federal practice is law professor Edward Cavanagh of St. John’s University in Jamaica, N.Y. He says he sees the value in experimentation, but through his work on a Litigation Section subcommittee, he’s “seeing a lot of lawyers very unhappy with this fragmentation of practice.”

Wesely contends that experiments have changed the once uniform federal practice to a district-by-district free-for-all.

Asks AT&T’s Thaler, “Why should I be entitled to certain information about a defendant’s insurance in Los Angeles but not in Kansas City? My sense of it is that this seems to be a very haphazard way of doing the experiment.”

Balkanization may be the result of bad timing, says Blaner, who notes that revised Rule 26(a)(1) was promulgated when pilot projects were just getting under way pursuant to the reform act. She says that her ABA subcommittee’s surveys suggest that district-by-district distinctions are causing a lot of confusion. “It makes things more contentious when people don’t know the ground rules,” she says.

Lawrence Rolnick, a partner at Lowenstein, Sandler, Kohl, Fisher & Boylan in Roseland, N.J., points out that even in the District of New Jersey, “The rules apply in some cases and not others.

“I have a case that is in full-swing discovery and was filed before the rules passed, so even though there had been no discovery, we don’t have mandatory disclosure,” says Rolnick. “But in other cases before the same magistrate, we do have it. It’s troublesome.”

The worst aspect of balkanization is forum shopping.

Wesely says a plaintiff with a choice could well consider discovery policies when choosing where to file. He says that if he represented a defendant sued in the “wrong” district for his client’s posture in a case, “I’d seek all sorts of ways, such as forum non conveniens, to get out.” There could even be situations where he might try to remove a case to federal court for disclosure.

Many lawyers, however, deny that adjusting to use or nonuse of the rule is difficult.

“The ‘not-a-problem’ crowd,” counters Blaner, is made up of “hardened litigators who don’t like to complain.” She says that a survey of 30,000 lawyers the Litigation Section plans to release later this year suggests that what lawyers feel about conforming to the respective districts’ systems is different from what they do. “Things are taking longer, it’s not reducing time, and it’s just an extra layer lawyers have to go through,” she says.

“Lawyers do their best to adjust to whatever procedural system they have to work with,” she adds, but because of the confusion, “people don’t know what they’re doing.”

Wesely argues that balkanization is necessary for a short time, to compare experiences.

Says Cavanagh, “The difficult thing about this whole process is the sea change in the whole culture. It’s hard for lawyers to voluntarily hand over documents that are prejudicial to their own case. Then we’re going to go back and change the rules again? The rules were once the Rosetta stone, and now it seems there aren’t any rules anymore.”

© ABA, ABA Journal, October, 1995
Copyright © American Bar Association, 1995.

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