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The Preservation Debate Taken on by the House Judiciary Committee

December 13, 2011

On December 13, 2011, the U.S. House of Representatives Committee on the Judiciary's Subcommittee on the Constitution conducted a hearing on "The Costs and Burdens of Civil Discovery." Sutherland's Robert D. Owen, a litigation partner in the New York office and a prominent voice in the national discussion on civil rules reform, attended the hearing. 

Called by the majority Members to testify at Tuesday's hearing were Justice Rebecca Love Kourlis, Executive Director of the Institute for the Advancement of the American Legal System (IAALS); Professor William Hubbard of The University of Chicago Law School; and Thomas Hill, Associate General Counsel of the Environmental Group at General Electric Company. The minority Members called William Butterfield, a representative of the plaintiffs' bar and a partner at Hausfeld LLP. Each witness submitted written statements, gave five-minute oral presentations, and then answered questions. 

The majority's witnesses underscored the enormous costs and risks that attach to the current preservation regimen. Ms. Kourlis, whose IAALS organization works in support of litigation reform nationally and at the state level, stressed that the current system effectively shuts the nation's courthouse doors to the middle class and to many businesses smaller than the Fortune 500. 

Professor Hubbard briefed the Subcommittee on his research into the costs of litigation, which shows that while many cases can be litigated economically, the larger matters are consuming massive amounts of resources.  Professor Hubbard also noted that under the current "reasonable anticipation of litigation" standard, many companies are required to expend time and resources on preservation for matters that never ripen into actual litigation. Professor Hubbard supports Mr. Owen's suggestion that the preservation requirement kick in when a case begins, not before. As one example of the current system's misallocation of resources, Mr. Hill of GE stated his company has spent $5.4 million on a single case that has yet to be filed and may never be filed. He urged the Subcommittee to support the adoption of clearer preservation rules and a narrower scope of relevance. New rules would help to resolve cases on their merits and save money now wasted on unnecessary preservation efforts.

The Subcommittee is expected to report its findings to the U.S. Judicial Conference's Advisory Committee on Civil Rules, which is actively considering whether and how to amend the Federal Rules of Civil Procedure. The Subcommittee will likely state that the Advisory Committee should be allowed to complete its work and make whatever recommendations it deems appropriate. The minority members appeared to support allowing the Advisory Committee process to continue without interference from the Subcommittee, the Committee or the Congress. 

The hearing was held under the direction of the Subcommittee's Chairman, Rep. Trent Franks of Arizona. The Subcommittee has jurisdiction over subject matters including, but not limited to, constitutional amendments, constitutional rights, Federal civil rights, ethics in government and legal reform generally.  Video of the hearing as well as written statements submitted by the witnesses may be found here.

The hearing coincided with a crescendo of discussions about rules reform in which Mr. Owen has been a leading participant.  The national discussions began this fall in connection with the Advisory Committee's Mini-conference on Preservation and Sanctions, held on September 9, 2011, in Dallas, Texas.  Mr. Owen was one of a small number of invited speakers to that conference.  He proposed specific changes to the current preservation regimen, and in particular suggested abandoning the "reasonable anticipation of litigation" trigger for preservation.  Following the Mini-conference, Mr. Owen submitted his proposals in a 24-page letter to the Honorable David G. Campbell, Chairman of the Advisory Committee.  In the letter, Mr. Owen detailed the flaws of the current common law preservation system and proposed core principles to lower the costs of preservation while preventing substantial injustices.  Requiring that affirmative preservation efforts commence only when a complaint is filed would address many of the most egregious flaws in the current common law regimen.  His letter to the Advisory Committee is posted on the Committee's mini-conference website, along with eight submissions by other entities, including the U.S. Department of Justice, Microsoft Corporation, the New York Bar Association and Lawyers for Civil Justice. 

Mr. Owen's letter was republished in BNA's Digital Discovery & e-Evidence on November 9 and also in BNA's United States Law Week on November 29, under the title, "Restoring the Balance: An Expanded Proposal Concerning Preservation."  A summary of his proposals also ran in the December 1, 2011, print edition of Law Technology News and in its on-line edition, under the title, "Reset to Neutral: Today's Preservation Protocol Is Deeply Flawed.  It's Time to Rethink the 'Reasonable Anticipation of Litigation' Test."  A member of the plaintiffs' bar responded to that article to defend the current preservation regimen, and Mr. Owen published a rejoinder on December 9.

If you have any questions or comments regarding potential amendments to the Federal Rules of Civil Procedure that impact discovery, you may contact Bob at 212.389.5090 or robert.owen@sutherland.com. You may also contact the House Committee on the Judiciary, by visiting http://judiciary.house.gov/about/subcommittee.html.

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