By now, most Indiana litigators should be aware of the recent revisions to the Federal Rules of Civil Procedure limiting discovery to nonprivileged matters that are “relevant to any party’s claim or defense” and are “proportional to the needs of the case.” See Fed. R. Civ. P. 26(b)(1). To date, the Indiana Trial Rules continue to adhere to the older standard, which expansively permits discovery of any matter that is reasonably calculated to lead to the discovery of admissible evidence. See Trial Rule 26(B)(1). Whether Indiana will follow the new federal standard remains to be seen. It also remains to be seen whether the federal changes will work; indeed, this hardly is the first attempt to rein in discovery.
I. How we got here
Discovery as we know it began with the adoption of the Federal Rules of Civil Procedure in 1938. The intent was to curb abusive tactics such as concealing critical facts until trial. What started as an attempt to give litigants a peek into their adversaries’ cases, however, has taken on a life of its own. Consequently, many of the significant revisions to the Federal Rules since the 1930s involve limitations on discovery (e.g., imposing caps on the number of depositions, interrogatories and admissions, and requiring parties to engage in case management discussions and exchange initial disclosures).
As lawyers, we know that our clients are concerned about the rising costs of litigation. Discovery – making discovery requests; collecting and reviewing materials responsive to discovery; objecting and responding to discovery requests; and fighting over objections and responses – is the primary driver of those rising costs. All too often, parties settle matters, not because they have any merit, but simply to eliminate the hassle of continued litigation. As a result, some companies understandably equate the current litigation process to “legalized extortion.”
While we can hope that the new federal policy restricting discovery will succeed, the last 80 years provide few reasons for optimism. So, if there is no easy fix, is there anything that lawyers and their clients can do to reduce discovery costs? Fortunately, the answer to that is “plenty.”
II. A universe of options
A. Survey the landscape
When it comes to discovery, it first is important to recognize than an employment case is not like a general litigation or personal injury case. Consider for a moment that in a typical personal injury case, the defendant company usually has little to no information about the injured plaintiff. The flow of discovery primarily will be from the company asking the plaintiff about the accident and his injuries. In such a case, the plaintiff is the one holding most of the cards. However, the opposite is true in a typical employment case: the employer holds the applicable personnel files, payroll records, electronic data (including emails), and likely employs the bulk of the witnesses. In short, in an employment case, it is the employer who typically holds most of the cards.
Sitting on the proverbial gold mine of discoverable information presents both a burden and an opportunity for employers. It is a burden in the sense that the employer will be on the receiving end of almost all of the discovery requests, and necessarily will be required to address those requests and any attendant motions to compel.
Nevertheless, having most of the key data in a case at its fingertips also provides a tremendous opportunity. Consider that the company does not have to go far to evaluate the nature of the claims against it and whether there is any real exposure: most of the material a company needs to defend the case resides in its own files. If reviewed and analyzed early enough in the life of a case (say when an EEOC charge or a complaint is filed), this can give the company’s counsel a real leg up on managing the litigation in the months and years to come because they will have a better idea of the potential end game before any discovery requests even are propounded. Done effectively, marshalling the information kept by the company can lead to an early (and favorable) settlement or a positive outcome on summary judgment or trial. Accordingly, as part of its initial investigation into a case (and without waiting for discovery), an employer should spend some time working with counsel to locate and review relevant and potentially discoverable information. This is an investment that will pay off by making discovery much easier to manage and will help put a case in the best possible position for a successful outcome.
B. Eliminate chaos
Imagine a situation where you depose a plaintiff in a poor-performance case based on information in the plaintiff’s personnel file, only to discover a few months later that the employee’s manager kept a separate file with performance information. This new evidence will have to be produced to the other side (who understandably will wonder if anything else has been held back), leading to distrust and a loss of credibility with opposing counsel and potentially the court. On top of this, by producing the material late, the employer lost its chance to question the plaintiff about the information kept in the supervisor’s file.
In order to avoid problems like this and facilitate the survey described above, employers should make a habit of keeping employment records in a central, easy-to-find location. This is simple enough with payroll records and employment policies, but documents concerning an employee’s performance may be more difficult to corral. Aside from HR, the most likely place performance documents would be kept would be with the employee’s supervisor. As a result, supervisors should be instructed to provide any employment-related performance documents to HR (or whoever acts as the custodian of personnel records). Supervisors can keep copies for themselves, but the company also should have the documents so they are not lost, misplaced or overlooked when needed.
Correspondingly, employers should designate one person who will be responsible for collecting and gathering materials responsive to discovery, and who also will act as the point of contact between the company and outside counsel. This will help ensure that efforts in responding to discovery are not duplicated and that they do not fall on deaf ears.
C. Avoid data dumps
The employer knows much more about its documents and record-keeping practices than does outside counsel. Having the company spend a little time previewing items that will be sent to outside counsel will (1) familiarize the point person (see above) with the documents and (2) give it an opportunity to address obvious issues such as duplications and missing or incomplete documents — say, multiple copies of the same performance review in a file, or a performance review that is incomplete or is missing for a particular year. This will eliminate time spent by outside counsel reviewing the same document over and over and having to make calls to locate complete copies of documents or the whereabouts of missing documents.
D. Don’t destroy discoverable evidence
The destruction or spoliation of evidence can make even the most boring claim suddenly exciting. To avoid this excitement, employers should have document retention policies and procedures in place so items are preserved in the event of litigation. Once an employer knows about a potential claim, additional care should be taken to ensure that the procedures have been followed and that custodians of potentially relevant documents are admonished (through a litigation hold notice) to destroy nothing. As early as possible, outside counsel should double-check to make sure that these basic steps have been followed.
E. Properly manage electronic discovery
Electronic discovery is the bane of modern civil litigation. The ubiquity of email and other forms of electronic data and communications has dramatically increased the volume of potentially discoverable materials that an employer may possess concerning an employee. It is imperative that employers work with counsel early in a case to develop a plan regarding the extraction, management, review and production of electronic information. Ideally, this should occur before discovery commences.
The process should start by identifying what types of electronic data the company may have concerning employees, where that material is kept and for how long. Fortunately, Federal Rule 37(e) and Trial Rule 37(E) will protect an employer from sanctions if it deletes electronic data as part of the good-faith operation of its electronic data system. However, it should be noted that such routine deletions may also deprive the employer of potentially case-winning materials. Thus, an employer need not wait until an employee files a claim; if it suspects one, it may be better to delay deletions for that employee, as well as critical witnesses, decision-makers, and HR until the matter is concluded.
After establishing the types of data the employer keeps, outside counsel then should work with the employer’s IT personnel and managers to identify specific records custodians that could have electronic data and to develop keywords (including abbreviations, slang, etc.) to look for. This will provide a solid background for counsel to discuss electronic discovery – including search terms – with the other side.
A few other things can help an employer defray discovery costs. One is to establish a cutoff date for discovery with the other side (i.e., the termination date or case filing date). This may help narrow the scope of discovery and eliminate the possibility of producing privileged communications about the lawsuit. Second – if feasible – have the company take an active role in the review process: outside vendors and counsel inherently will cost the company more than if it internalizes these tasks.
Another thing to consider is staging electronic production. See if the other side will agree to a sample relating to specific people, time periods, or search terms before moving on to a broader (and potentially more expensive) production.
F. Pick your battles
Discovery squabbles tend to make lawyers and their clients look petty and unreasonable. On top of that, most judges hate discovery disputes. Yet, time and again, we all have seen (and may have participated in) discussions over discovery that degenerate into shouting matches. While much of this may be attributable to attorneys’ egos, employers have been known to egg things on. None of this, however, reduces discovery costs and actually tends to make things worse.
While we all would like to live in a professional nirvana, we also have to know that hostility and distrust is inevitable in litigation. If an employer is keen on reducing discovery costs in this environment, there still are some things it can do. First and foremost, counsel and the employer always should act professionally. If there are disputes, they should not say or do anything that would aggravate the judge.
Second, absent a strategic goal that would be fostered by fighting over everything (and it is hard to envision such a case), employers would be better served picking their battles and fighting over only those things that truly are worth fighting for (attorney-client privileged communications, trade secrets, requests that truly are harassing, overbroad or unduly burdensome). In short, object as needed, but be willing to compromise on less important items to focus on what matters. Last but not least, employers should not be afraid to have the judge take an active role in the discovery process. Getting the judge involved early and often will help to educate the judge about the case and also should help keep tempers and egos in check.
The above ideas are just a sample of things that employers can do to take control over discovery. Obviously, every employer and case is unique, but the possibilities for finding ways to reduce costs are limitless. The key is for counsel to work with their clients as early as possible to streamline the process of identifying, reviewing, and producing discoverable information.•
Mr. Murphy is a partner in Barnes & Thornburg in its Indianapolis office and chairs the DTCI Employment Law Section. The opinions expressed in this article are those of the author.