Unlike Federal Rules, The Recent Amendment To Rule 26 Of The Massachusetts Rules Of Civil Procedure Addresses Protective Orders Only
by Nathalie K. Salomon
The Supreme Judicial Court (“SJC”) approved amendments to Mass. R. Civ. P. 26, effective July 1, 2016, but unlike the recent and substantial amendments to Fed. R. Civ. P. 26, the SJC’s amendments are confined to section 26(c), concerning protective orders. Although the SJC’s Standing Advisory Committee on the Massachusetts Rules of Civil and Appellate Procedure (the “Committee”) considered proposals based on recent amendments to the Federal Rules, which focused on limiting the burdens of discovery (https://bostonbarjournal.com/2016/04/13/proportionality-emphasized-in-amendments-to-the-federal-rules-of-civil-procedure/). The Committee ultimately did not recommend them. Instead, the Committee adopted a “wait and see” approach, and as a compromise, the Committee recommended, and the SJC adopted, the new language in Rule 26(c) which instructs a court to consider factors relating to the proportionality of discovery when determining whether to issue a protective order under Rule 26.
The New Massachusetts Rule 26(c)
Before the July 1, 2016 amendment, Rule 26(c) was largely a copy of its federal counterpart. The SJC has now added a new paragraph, not present in the federal rule, at the end of the first paragraph of Rule 26(c), identifying three factors that may be considered in determining whether a protective order limiting discovery is warranted “due to undue burden or expenses.” These factors are:
(1) whether it is possible to obtain the information from some other source that is more convenient or less burdensome or expensive;
(2) whether discovery sought is unreasonable, cumulative or duplicative; and
(3) whether the likely burden or expense of the proposed discovery outweighs the likely benefit of its receipt, taking into account the parties’ relative access to the information, the amount in controversy, the resources of the parties, the importance of the issues, and the importance of the requested discovery in resolving the issues.
Rule 26(c) still states that the court has power to issue a protective order “to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense,” and the rule also still lists the kinds of orders that the court is authorized to issue (e.g., “that the discovery not be had,” or that it may occur “only on specified terms or conditions”) – but now the Rule sets forth substantive guidance to the courts and the parties concerning the appropriate circumstances for such orders.
The Reporter’s Note observed that the amendment “should not result in a significant change to Massachusetts practice because similar factors already exist to limit discovery of electronically stored information under Rule 26(f)(4)(E),” with the exception of one factor that is omitted from the amendment of 26(c), namely “whether the party seeking discovery has had ample opportunity by discovery in the proceeding to obtain the information sought.” The Reporter’s Notes conclude that the addition of these factors to Rule 26(c) merely “confirms the existing authority of a trial judge in determining whether to grant a protective order.”
The Committee Considered, but Did Not Recommend, Changes to Mass. R. Civ. P. 26 that Would More Closely Track Its Federal Equivalent.
The limited scope of the Massachusetts 2016 amendment to Rule 26 is the result of a “compromise” between the Committee’s recommendation not to change the Massachusetts discovery rules at this juncture and commentators advocating for the adoption of the extensive changes recently made to Rule 26 of the Federal Rules of Civil Procedure.
The Committee considered, but ultimately rejected, three proposed changes to discovery rules based on the 2000 and 2015 amendments to Rule 26 of the Federal Rules of Civil Procedure. Each of those revisions would have impacted Rule 26(b), which is titled “Scope of Discovery.” As observed by the Reporter’s Note on the amendment, the intent of these proposed changes was “to address the burdens of discovery that have been the subject of significant debate across the country over the past few years.”
The first proposed change, drawn from the 2000 federal amendments, would have refined the scope of discovery under Rule 26(b) by removing language that discovery must be “relevant to the subject matter” and replacing it with language that discovery must be “relevant to the party’s claim or defense.”
The second proposed change to Rule 26(b), taken from the 2015 federal amendments, would have adopted the principle of proportionality by listing factors to consider in deciding whether a discovery request is “proportional to the needs of the case,” such as “the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.”
The third proposed change, drawn from the 2015 federal amendments, would have deleted language in Rule 26(b)(1) that information must be “reasonably calculated to lead to discovery of admissible evidence,” a confusing phrase which, as the Committee Note to the Federal Amendment explains, “has been used by some, incorrectly, to define the scope of discovery.”
Upon review of public comments, however, and to the dismay of some practitioners as shown in the Massachusetts Lawyers Weekly’s June 20, 2016 story titled “Unfortunate delay in amending state discovery rules,” the Standing Advisory Committee ultimately recommended not to adopt the three proposed changes to Rule 26(b). Some comments took the position that the changes are not needed. As suggested in the Reporter’s Note, the Committee was particularly receptive to the concern that the consequences of imposing the federal changes to Massachusetts courts are unknown (“The principal objection to the amendments by the Standing Advisory Committee was based on the perception by many Committee members of drawbacks and unintended consequences of imposing the federal changes on the Massachusetts trial courts, as well as the newness of the federal changes”). Consequently, the Committee favored a “wait and see” approach, advising the SJC not to revise the discovery rules at this time. As a “compromise,” the Standing Advisory Committee prepared draft language for the SJC’s consideration alluding to the principle of proportionality but limited to the narrow issue of granting protective orders in discovery disputes under Rule 26(c). The SJC approved the draft amending Rule 26(c) as described above and left untouched the remaining portions of the discovery rules.
For a further discussion of the amendment to Rule 26(c), readers are directed to the Reporter’s Note (http://www.mass.gov/courts/docs/sjc/rule-changes/rule-change-rule-26-mass-rules-civil-procedure-reporters-notes-may-2016.pdf).
Nathalie K. Salomon is a litigation associate at Fitch Law Partners LLP, where she focuses her practice on general commercial litigation, with particular emphasis on the defense of banks and other financial institutions in tort and contract matters, business litigation and real estate litigation.
The amendments to the Federal Rules of Civil Procedure, effective December 1, 2015, include significant changes to Rule 37(e) concerning spoliation of electronic evidence. See Fed. R. Civ. P. 37(e). With electronically stored information (“ESI”) becoming increasingly prevalent, the amendments are designed to clarify and streamline litigants’ preservation obligations, imposing a high bar on parties who seek to have sanctions imposed on their opponents. Litigants can now expect uniform standards for curative measures where the circuits had previously been split and sanctions inconsistently applied. For example, the amended Rule 37(e) represents a departure from the negligence standard which precipitated sanctions in a variety of circuits under the former Rule, and “forecloses reliance on inherent authority or state law to determine when” sanctions and remedial measures should be used. Fed. R. Civ. P. 37(e) advisory committee’s note to 2015 amendment, available at https://www.law.cornell.edu/rules/frcp/rule_37. (“Advisory Committee Notes”). Instead, under the current Rule 37(e), courts are instructed not to impose an adverse inference, or other harsh sanctions, absent a party’s intent to deprive the other party of the at-issue evidence, resulting in prejudice. Moreover, under the amended Rule, such corrective measures can only be imposed where electronic information that should have been preserved in anticipation of litigation is lost. The amended Rule offers some additional protection to litigants by permitting additional discovery to repair or replace such presumed “missing” evidence. And, even if the court eventually finds that sanctions are appropriate, they are limited to “measures no greater than necessary to cure the prejudice.” Fed. R. Civ. P. 37(e)(1). Thus, the result may be that, as litigants find additional protections under the amended Rule, and higher hurdles to imposing sanctions on their opponents, we may see a decrease in litigation concerning failure to preserve.
Fed. R. Civ. P. 37(e), as amended.
The text of the amended Rule, marked to show changes from the prior version, follows:
(e) Failure to Provide[Preserve] Electronically Stored Information. Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good faith operation of an electronic information system.[If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:
(1) upon finding prejudice to another party from loss of information, may order measures no greater than necessary to cure the prejudice; or
(2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:
(A) presume that the lost information was unfavorable to the party;
(B) instruct the jury that it may or must presume the information was unfavorable to the party; or
(C) dismiss the action or enter a default judgment.
Evidentiary Sanctions Under the Amended Rule.
Failure to take reasonable measures to preserve. Rule 37(e) does not create a new duty to preserve, and as such, does not apply if the ESI is lost before the duty to preserve arises. See Advisory Committee Notes. Indeed, a party’s preservation obligations remain triggered when litigation is pending or reasonably foreseeable, or where the party has independent preservation obligations, e.g., under a specific statute or internal company policy.
In determining whether a party has taken reasonable steps to preserve, the Rule allows courts to consider “routine, good-faith operation of an electronic information system,” as well as the “proportionality” of the efforts to the case and to a party’s resources. Id. The Advisory Committee directs that courts be “sensitive to the party’s sophistication with regard to litigation in evaluating preservation efforts…” Id. And, a party’s efforts need not be perfect. Id.
No sanctions or other remedial measures unless information is lost. Critical to whether remedial measures are permitted under the amended Rule is that the information at issue be lost; if it can be “restored or replaced through additional discovery,” Rule 37(e) does not permit remedial action. Fed. R. Civ. P. 37(e). The Advisory Committee reasons that “[b]ecause electronically stored information often exists in multiple locations, loss from one source may often be harmless when substitute information can be found elsewhere.” Advisory Committee Notes. Moreover, “efforts to restore or replace lost information through discovery should be proportional to the apparent importance of the lost information…. [S]ubstantial measures should not be employed to restore or replace information that is marginally relevant or duplicative.” Id.
Measures “no greater than necessary” on finding of prejudice. Assuming the above prerequisites are met, a court may order certain proportional remedial measures under subsection (e)(1) of the amended Rule only “upon finding prejudice to another party from loss of information.” Fed. R. Civ. P. 37(e)(1). The measures must also be “no greater than necessary to cure the prejudice.” Id. How to assess prejudice is left to the discretion of the courts; the Rule does not address which party has the burden. Advisory Committee Notes.
Upon finding prejudice, courts may impose remedial measures that are proportional to the prejudice. Id. The Advisory Committee identifies these less severe, but serious measures, as “forbidding the party that failed to preserve information from putting on certain evidence, permitting the parties to present evidence and argument to the jury regarding the loss of information, or giving the jury instructions to assist in its evaluation of such evidence or argument, other than instructions to which subdivision (e)(2) applies.” Id.
Specified and severe measures only upon finding “intent to deprive.” Under the amended Rule, the most severe sanctions, such as adverse inference jury instructions, dismissal of claims, and entry of a default judgment, are now reserved for a “finding that the party acted with the intent to deprive another party of the information’s use in the litigation.” Fed. R. Civ. P. 37(e)(2). The Advisory Committee counsels the importance of a finding an “intent to deprive” in order to address and deter such failures. Advisory Committee Notes. Mere negligence — or even gross negligence — is no longer sufficient.
While the Rule sets forth four severe sanctions that may be imposed under the Rule upon a finding of intent, proportionality again directs the analysis. Likewise, the Advisory Committee cautions that “[t]he remedy should fit the wrong, and the severe measures authorized … should not be used when the information lost was relatively unimportant or lesser measures such as those specified in subdivision (e)(1) would be sufficient to redress the loss.” Id.
Elizabeth Bresnahan is a litigation associate in the Boston office of Morgan, Lewis & Bockius LLP.
Significant amendments to the Federal Rules of Civil Procedure became effective on December 1, 2015. The amendments modify Rules 1, 4, 16, 26, 30, 31, 33, 34, 37, 55, and 84. The amendments seek to increase the efficiency and speediness of litigation while slowing the rising costs of discovery. Toward the latter goal, certain of the revisions establish an express guiding principle to limit the scope of discovery: proportionality.
The application of the proportionality requirement likely will have an immediate and lasting influence on how parties conduct discovery in federal courts and how the courts referee discovery disputes. Specifically, amended Rule 26(b)(1), which governs the scope of discovery, permits discovery into relevant, non-privileged information “proportional to the needs of the case.” (Emphasis added.) Old Rule 26(b)(1) permitted discovery into relevant, non-privileged information “reasonably calculated to lead to the discovery of admissible evidence,” a phrase that was often misconstrued and which is now removed. Old Rule 26(b)(1) also permitted such discovery into sources of additional discovery, “including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter.” Thus, the new rule: (i) establishes “proportionality” as a limiting principle (ii) potentially limits “discovery about discovery” and, consequently, (iii) will, it is hoped, add a needed control to the rising costs of discovery.
Proportionality Is The New Standard
The amended rule removes “reasonably calculated” – an ambiguous phrase that sometimes allowed for expansive discovery – and focuses on “proportional.” And the amended rule specifies the considerations for determining whether discovery is proportional, including “the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Parties now must consider these factors when making or responding to discovery requests.
To be sure, proportionality is not a wholly new concept in federal practice. For example, before the 2015 amendments, proportionality was implied by Rule 26(b)(2)(C)(iii), which required courts to limit discovery where “the burden or expense of the proposed discovery” would “outweigh its likely benefit,” and Rule 26(g) required a party seeking discovery to certify that the discovery was “not . . . unduly burdensome or expensive,” in light of the circumstances of the litigation. But while parties seeking protective orders pursuant to Rule 26(c) would frequently call the court’s attention to these proportionality considerations, opposing parties would often invoke “reasonably calculated,” which the Advisory Committee Notes on the new rule state “were used by some, incorrectly, to define the scope of discovery.” The amendments change that. The Committee Notes also state that “[t]he present amendment restores the proportionality factors to their original place in defining the scope of discovery,” empowering courts to enforce tighter limits on disproportionate discovery.
Proportionality May Restrict Discovery About Discovery
The amendment to Rule 26 deletes language that permitted discovery into information about “the existence, description, nature, custody, condition, and location of any documents . . . and location of persons who know of any discoverable matter.” However, the Committee Notes suggest that this change is more style than substance. It states that the long list of examples is so “deeply entrenched” that to include it would only maintain unnecessary “clutter” in an already lengthy rule, and that “[t]he discovery identified in these examples should still be permitted under the revised rule when relevant and proportional to the needs of the case.”
Still, the revision suggests limitations to the scope of this discovery to the extent that it would be at cross purposes with proportionality. For example, in a recent case, a magistrate judge ruling on a motion for a protective order applied Rule 26(b)(1) and limited a proposed Rule 30(b)(6) deposition topic, noting that “[w]hile Plaintiffs have articulated credible reasons for seeking this information nationwide, its production is not proportional to the needs of the case.” Cooper v. Charter Commc’ns, Inc., No. 3:12-cv-10530-MGM, 2016 WL 128099, at *2 (D. Mass. Jan. 12, 2016). One of the credible reasons that Plaintiffs had advanced was that they were entitled to test Defendant’s assertion that they lacked certain relevant records for Massachusetts by inquiring about “how [Defendant] is able to track service losses in other states.” Pl.’s Opp’n To Charter’s Mot. at 7, Cooper, ECF No. 187. Thus, although the discovery request might have been permitted under the old rule, it was deemed not proportional under the new rule, and therefore exceeded the scope of discovery now permitted.
Proportionality Considerations Will Likely Contain The Costs Of Discovery
Proportionality figures to slow the ballooning costs of litigation caused by technological advances. Specifically, widespread use and adoption of electronically stored information (ESI), often over many platforms, has made once-mundane discovery requests exponentially more burdensome. In the past, responding to a discovery request might have meant collecting the data from a few computers from a few custodians, and each of those computers might have stored only a few gigabytes of data. Now, discovery sometimes requires searching and reviewing terabytes of data harvested from local computers, from networks, and from the cloud – all of which must be reviewed for relevance and privilege. This discovery can be similarly onerous for discovery recipients who must review and analyze large productions to determine how the information fits into or modifies their theory of the case or how the information might necessitate additional discovery.
The Committee Notes express the hope that parties and the courts will continue to embrace sophisticated ways to reduce the costs of producing ESI. For example, to the extent that a discovery request could call for a click-by-click review through thousands or millions of documents, courts should permit parties to use reasonably-tailored search terms to narrow the scope of review. Proportionality may now require it. Limiting the scope of e-discovery would certainly make discovery less expensive. Moreover, as discussed above, if courts become more reluctant to permit discovery into potential sources of additional discovery, that would further contain costs.
At the very least, the amended Rule 26(b)(1) will require parties and federal courts to weigh the proportionality factors and determine, for example, whether the importance of certain discovery in resolving an issue is proportional to the burden or expense of providing that discovery. The Committee Notes suggest that parties should use Rule 26(f) and other scheduling and pretrial conferences to gain a “full appreciation of the factors that bear on proportionality” to inform their discovery requests and responses. In discovery motion practice, parties will no longer prevail by arguing that a discovery request is reasonably calculated to lead to admissible evidence; now they must demonstrate that the request is proportional.
Immanuel R. Foster is a litigation associate at Skadden, Arps, Slate, Meagher and Flom LLP, and a member of the Boston Bar Association.