Amendments to the Federal rules of civil procedure : hearing before the Subcommittee on Intellectual Property and Judicial Administration of the Committee on the Judiciary, House of Representatives, One Hundred Third Congress, first session, June 16, 1993 online

Wasn't the purpose to try to set up laboratories with experimen-
tation? Isn't there some substance to what Ms. La Mothe suggests?

Mr. Frank. Of course there is, Mr. Chairman, but I feel that in
view of the fact that the present rule — the proposed rule, the 26
that is before you, expressly provides, except as local rules may
otherwise provide, that it will not overlay the experimentation, it
will not preclude the experimentation that exists. It will simply fill
in in other places. And I think it will become a useful guideline.

This is such modest disclosure here. First, you have to have
pleaded with particularity, that is a rule 9 limitation. You haven't
had five of those in your life, probably, in your own practice years.
Then you have to divulge simply your witnesses and answer obvi-
ous interrogatories which you had to know about in order to have
pleaded it in the first place, if you pleaded with particularity.

So I think it is sufficiently light a touch that it will prove useful
for other districts, and because of the exception for local rules, I
don't think it interferes at all with these. It just makes sure that
everybody is going to be doing some experimenting.

Is it going to work? I don't know. Do we need to try something?
Yes, we should. Do we want to review it in several years, 2, 3, 4,
whatever the number is? Yes, it will be imperative that you do so,
but you might as well review it for the whole country, and this en-
sures there will be going something going on somewhere.

Mr. Hughes. Thank you. I want to thank you for addressing me
as 'Tour Honor" three times. I don't get that back home, particu-
larly after I voted for the economic package 2 weeks ago.

Mr. Frank. Did I make you Your Honor? It couldn't have hap-
pened to a nicer fellow.

Mr. Hughes. You are very kind.

The gentleman from North Carolina.

Mr. Coble. Thank you, Mr. Chairman.

Good to have you all with us, this afternoon, as you say, Ms.
La Mothe.

Mr. Slate, I thank you for having elevated me from the 19th to
the 21st century. I am probably more comfortable in the 21st,
however.



82

Let me ask you a question, Mr. Slate, that has not been touched
upon, that I think is vital. If the proposed change to rule 30(b)
were to occur, what effect would it have on court reporters? I am
speaking professionally, means of livelihood.

Mr. Slate. Well, of course, that is highly speculative. The num-
bers are that there are some 40,000 to 50,000 court reporters in the
country; substantial numbers. And at their own expense they have
retooled themselves to become computer literate and to use com-
puter-aided transcription and to be a part of computer-aided
courtrooms.

And so I think the court reporters, contrary to some other profes-
sions, have prepared themselves for the future, and they are taking
the lead.

There is clearly room for the view, however, that if a rule which
we think is ill-advised catches fire, it could clearly impact on the
employment for these people.

I would really be rolling the dice to speculate to what degree it
might. On the one hand, I think it would be unfortunate for a
cadre of court professionals, whose core function is to provide an
accurate record and enhance the integrity of the process, to start
being out of work.

I would tell you parenthetically that this has happened in other
States, on occasion, where another technology came into the court,
and we are not talking about depositions. But in one instance
where that occurred and audio technology was encouraged, and
court reporters vanished, that system went to the dogs and is doing
everything it can today to return to the use of certified court
reporters.

So could it be an employment problem? Yes, it clearly has that
potential. But as quickly as I say that, I also note that court report-
ers are really leading court systems to the future in computer-aided
technology.

Mr. Coble. And I think you may have touched on this, Mr. Slate,
but as to reducing the cost of litigation, assuming this proposed
change is adopted.

Mr. Slate. Yes. Two points, and thank you for the opportunity
to address that very point. Our studies showed that regardless of
whether a transcript of a deposition was prepared and used, or, if
a transcript was not prepared, and even in the rare instance where
a tape was used, we found that the costs associated with employing
a court reporter were less than any other methodology.

Another truly important factor that hasn't been touched upon
here, however, is the realization that the use of an accurate tran-
scribed deposition is a fundamental basis upon which cases get set-
tled. And if that document is not available — and we have been told
by many people how much time is consumed in reviewing tapes —
then many frivolous cases will unnecessarily go to trial. I was told
by a State appellate judge that seeing a stack of tapes was an abso-
lute disincentive to review the trial record.

So if the process is diminished by the availability of a deposition,
then that will clearly have an impact on the cost of litigation in
terms of which cases go to trial when they shouldn't.

Mr. Coble. Thank you, sir.



83

Ms. La Mothe, correct me if I misinterpret what you said. As I
read your comments, you are neither endorsing nor rejecting the
proposed changes, but rather would wait for the respective districts
to respond in accordance with similar changes performed back in
1990, and then once all this information has been assembled, then
go from there; is that correct?

Ms. La Mothe. Absolutely. Absolutely.

Mr. Coble. Mr. Frank, I am going to plow this field again. I tried
this with the preceding panel, and was received warmly. Let me try
it on you.

Is there not a risk that an attorney may overly generously reveal
his strategy and his theories in a particular case if he is required
to fully and automatically disclose?

Mr. Frank. If it were really full disclosure, there would be con-
ceivably such a possibility. But what we are doing, as I read the
rule, is this. We now have rule 33 that provides for interrogatories.
That is going to be happily limited by the number of interrog-
atories, but it provides for them.

We have rule 34 providing for discovery of documents. We also
are required to enumerate witnesses, and we are also required to
provide the opinions of experts.

What rule 26 does, as I read it, is take those processes, all of
which are required in the course of the litigation anyway, and
move them up to the beginning so you know what you are looking
at, and only in a limited number of cases, and only insofar as it
is squarely relevant.

So this is not a matter of any added revelation. It is simply and
purely a matter of timing. Are we going to get on with this blasted
lawsuit and see what it is all about and encourage people to take
a look at it and then go on and settle it, or are we going to wait
3 or 4 months down the line and then get the very same
information?

So you are making a timing judgment when you pass on rule 26.
But you are not making a judgment as to what is to be disclosed,
because this is only a modest part of what will have to be disclosed.

Mr. Coble. The gentleman from California, Mr. Moorhead, pre-
viously referred to a survey of attorneys in Maricopa, and I believe
you stated you are not familiar with that?

Mr. Frank. Maricopa County is my home. I was chairman of the
State procedure committee for 30 years. I know what is going on
there. There has been no formal survey. We do have a much more
elaborate disclosure.

Had I been surveyed, I would have responded negatively about
it. It is sufficiently different from this. But you have got to be real
careful

Mr. Coble. You are referring to the survey that was referred to?

Mr. Frank. That is correct.

Mr. Coble. Mr. Frank in his statement, Ms. Pendell, indicated
the worst feature of rule 11 is that it is a fee-shifting device so that
the prevailing lawyer can get his fee out of the losing lawyer's side.
I am taking neither side on this, but I would be glad to hear you
respond to that.

Ms. Pendell. I can't quote the statistics, but if you look at the
Federal Judicial Center study, it will give you a great deal of infor-



84

mation about the size of the monetary sanctions. And you will see
that they are on balance quite modest, and that substantial mone-
tary sanctions have been rather infrequent.

That suggests to me that to the extent that there is a monetary
sanction, it is not fully compensating the other side. And, in fact,
the money may be paid to the lawyer but it is really the client who
would benefit from that, particularly if you are talking about a cli-
ent whose insurance company has not paid the lawyer, but who,
rather, has paid the lawyer out of pocket.

Mr. Coble. I thank the panel again.

I thank you, Mr. Chairman.

Mr. Hughes. The gentleman from California.

Mr. Edwards. Mr. Chairman, I am getting more of an education
than I had expected, and I am delighted. It is really very helpful.

I think I just have one question. Ms. La Mothe, is the ABA going
to make a recommendation on these rules?

Ms. La Mothe. Well, I would say, Mr. Edwards, that with re-
spect to rule 26(a)(1), there will be a proposal recommended to the
ABA board of governors, which will be meeting this coming week-
end. I understand you are going to be holding the record open.
Should they vote to support deferral, which is what will be pro-
posed to them, then obviously we would request also that they
make mention of that and add it into your record.

Also, I am aware that the young lawyers division is presenting,
for the consideration of the ABA House of Delegates at the annual
meeting in New York in August, a recommendation that would op-
pose rule 26(a)(1), and allow the remainder of the rules to go into
effect.

Mr. Edwards. It is vour personal recommendation that insofar
as rule 26, that we don t at this time endorse — approve it?

Ms. La Mothe. Right, don't change it. That would be the position
of the litigation section. Defer the adoption of any changes to rule
26 until there has been an opportunity to see what happens in the
local district courts under the rule.

Mr. Edwards. Thank you very much.

Thank you, Mr. Chairman.

Mr. Hughes. The gentleman from New Mexico.

Mr. ScHiFF. Thank you, Mr. Chairman. I just have a couple of
questions.

Following up on that, Ms. La Mothe, I understand your proposal
of a deferral to — I think you said December 31, 1995 - to be in con-
junction with the date that the local plans are due from district
courts.

What I don't know is, what do you envision happens then? Is this
just a matter of equal timing, or do you foresee that perhaps based
on the local plans we won't need changes in rule 26(a)?

In other words, what is the point of the deferral?

Ms. La Mothe. Thank you, Mr. SchifF. I appreciate that ques-
tion. And I think that no doubt you detect that there is this timing
inconsistency, and I think that the concern of our council was sim-
ply that there not be a nationwide rule put into effect now, that
we allow that implementation to occur.

No doubt when those local plans come in and we actually across
the country begin to see what the results have been, we may very



85

well say, well, maybe 6 months more will be necessary to really
cogitate and come up with something.

I personally would not be at all surprised to see some sort of a
rule with respect to disclosure at that time. But it might look noth-
ing like the present rule, which I do believe has a very vague
standard, and which I think is not all that easy to implement. It
is going to promote collateral litigation, it is going to create a pro-
liferation of motion practice, and I think it far better to let those
local courts experiment, and then after we have had a chance to
cogitate, to go back in and make a nationwide rule.

Mr. SCHIFF. You would at least foresee the possibility, then, that
at that time the rule may be different than what is before us
today?

Ms. La Mothe. Absolutely.

Mr. ScHiFF. Mr. Frank, virtually all of my practice, when I was
practicing in courtrooms, was in the State court system in New
Mexico. Only on very rare occasions did I happen to practice in
Federal courts. So with that in mind, I wonder if you could go back
over rule 11.

You have resoundly criticized present rule 11. You have made
that very clear, but in what, to me, is somewhat conclusionary lan-
guage.

Could you perhaps with just a little more detail, with examples,
demonstrate exactly how current rule 11 creates the premises that
you have described?

Mr. Frank. Yes. I am grateful for the chance. I have laid this
out in several-page length in the formal statement you have, which
the 5-minute rule of necessity requires us to abridge.

But the problems which have arisen under rule 11, one of which
has technically concerned me, because I have spent all of my years
with this and related committees, just on judicial administration,
is the vast increase in the number of controversies that are pushed
into the courts. What was anticipated to be a rare thing has now
in all the literature gotten to be thousands of matters.

So that we have created a prodigious body of satellite litigation.
And the consequence is that the burdens on an overburdened court
system throughout the country and the Federal courts — as you
know full well, many of them can't take civil cases at all. Every-
thing you add you have to think about. Is it worth adding? And
this is proving very time consuming, very burdensome, as a simple
matter of administration.

Mr. SCHIFF. Pardon the interruption, but what specifically is in-
creasing? More motions to dismiss under rule 11?

Mr. Frank. No, I am sorrv, not that there are motions to dis-
miss. What is happening is that a case is filed, somebody — an an-
swer is filed, either side, there are — about 75 percent are against
plaintiffs, 25 percent are against defendants. If you don't abandon
this case, if you don't give up on this, I am going to go after you
for rule 11 sanction. That gets in at the correspondence stage. In
short, the lawyers try threatening each other.

Personally, they are not arguing the case any more. They are
saying, "You are a bad lawyer; you shouldn't have done this." At
that point they have to invoke, as one of you brought out, their
malpractice carrier. They have to inform them there is a possible



86

sanction there. So it has a general effect of forcing up insurance
premiums and insurance relations.

Then comes the stage finally — we will jump to the end. The case
is over. Motion is granted or it is not. The case is disposed of. Then
the controversy arises, was this a rule 11 case, should I get sanc-
tioned, should I pay my attorney's fees for having to be in this
case? That is the area which is running into a very large volume,
quite literally thousands, as the figures show. And this becomes in
itself mountainous.

There is a further independent deleterious value factor, and I
will mention one other and be done, because you are short for time.
The business which is vital to your practice and mine — and I have
a lot of State work, of course, too — the lawyers have got to get
along. They have got to remove themselves from their cases. They
can't be after each other. And the lawyer who is after the other
lawyer is usually something of a menace to the practice and to offi-
cials and to the good operation of the bar.

What the rule is doing is compelling lawyers to go after each
other. If you are entitled to that claim for counsel fees, then you
have got to say to the other guy, "Now, you are so wrong that you
have got to pay the counsel fees here." So we get the phenomenon
I described. First you try the case and then you try the lawyer.

This contributes materially to a serious deterioration of relations
at the bar, which in turn creates friction and makes it harder to
settle cases and generally operate. That is quite apart from the
abuse problems. Those are just the routine rule 11 problems.

Mr. SCHIFF. So the increase in litigation you are talking about
is an increased number of claims for sanctions against attorneys?

Mr. Frank. That is right.

Mr. ScHiFF. I will ask you to respond in just a second since you
were testifying on the opposite end, Ms. La Mothe. But staying
with you for just a moment, Mr. Frank, have there been so many
of these sanctions granted that there is an encouragement to go file
them? If most of them are lost, it seems to me that would dissuade
lawyers.

Mr. Frank. In a world in which people sue the doctors if they
don't get well fast enough and so on, we have — I don't know about
your State, but probably there, too — we are getting an immense in-
crease in the number of legal malpractice claims. And if the lawyer
does not claim against the other lawyer to get some money to apply
to the fees, then he may be guilty of malpractice to his own client.

Mr. SCHIFF. For not having claimed?

Mr. Frank. To not have made the claim. So we have built in a
system which creates a much greater incentive to add to that kind
of friction.

Mr. ScHlFF. Could you briefly explain how the proposed change
in rule 11 will solve that problem as you see it?

Mr. Frank. We sponsored for much of the bar and many judges
more radical changes. These are very modest.

What this does. Justice O'Connor, in her opinion in the Cooter
case, which I believe the chairman discussed expressly earlier in
one of his questions, stressed that the object of the rule is deter-
rence; it is not compensation. It is a fact that the courts are being



87

abused when somebody files a worthless case and the court's time
is being taken.

So the rule, as amended, provides that there can be sanctions but
the sanctions shall be paid into the court as a penalty as an equiv-
alent to a contempt so that it will deter the conduct, but not put
a premium on quarreling as between attorneys. That is change
number one.

Change number two, is that there is a system so that people can
withdraw from what proves to be an improvident position if they
wish to do so in very rapid order.

And the third change, which was particularly sponsored by the
American College of Trial Lawyers, which are overwhelmingly de-
fendants, is the change from "shall" to "may," so that judges will
have more discretion in this field and can make value judgments
more easily and decide, "Well, does this really warrant it or doesn't
it?"

So the three critical changes made in the rule are: (a) the grant-
ing of additional discretion to the judges; (b) the deterrence feature
of Justice O'Connor's opinion by emphasizing that in most but not
all cases the payment should be into the public Treasury for abus-
ing the public service of litigation; and (c) that there should be an
opportunity to retreat from error in very short order, before the
blow falls.

Mr. SCHIFF. Ms. Pendell, it is my understanding earlier you testi-
fied in favor of rule 11 in its current form. You have heard my
questions to Mr. Frank. I would like to give you the opportunity
to respond in any way you wish to.

Ms. Pendell. I will go back to the Federal Judicial Center sur-
vey and say that 60 percent of the judges said that few or none of
the requests for rule 11 sanctions have themselves been ground-
less. So if there is a spate of rule 11 motions, it perhaps reflects
on another problem in the courts.

I think no rule is without its problems. And every rule has to go
to the greater good. There may be examples, anecdotes, that could
be presented to this committee, which would cause the committee
to feel that in that particular instance a rule 11 motion wasn't jus-
tified or was inappropriate or had an unfortunate consequence. But
it is our belief that it does go to the greater good.

I think that the American Judicature Society survey and the
Federal Judicial Center survey show that that is the case.

Mr. SCHIFF. Mr. Chairman, thank you. I jdeld back.

I thank the witnesses.

Mr. Hughes. I thank you.

The rule for disclosure, 26, refers to matters pleaded with par-
ticularity. The standard has been criticized as vague and open to
dispute. I questioned the judge's panel about what is core informa-
tion? What kind of guidance do you see the courts providing to en-
sure that, frankly, lawyers are not penalized for not up front dis-
closing information that should have been disclosed. In effect, some
judge may decide that there was core information which was not
disclosed which a lawyer has read as not core information?

Mr. Frank. Is that question directed to Ms. La Mothe, to me

Mr. Hughes. Anyone that wants to address it.



88

Ms. La Mothe. I will take a crack at it, Mr. Chairman. Thank
you.

It is the position of the litigation section that the standard is un-
duly vague. It is one of the things that bothers us about it. At the
time that we were asked for our comments to the advisory commit-
tee, and we made them back in February 1992, there was some-
what different language in the proposed change to rule 26(a)(1),
which was "information likely to bear significantly on any claim or
defense."

Now, after the public hearings have occurred, the present version
of the proposed change is "discoverable information relevant to dis-
puted facts alleged with particularity in the pleadings" — particu-
larly troublesome, since we have notice pleading. One wonders ex-
actly what it is that is core information, exactly as your question
points out.

And also, again, of course, different from the present rule, and
the standard for discovery, which is "information relevant to the
subject matter or likely to lead to the discovery of admissible
evidence."

So we detect a lot of problem here, and again, I think that there
will be a need for motion practice with respect to what that means.

Mr. Hughes. Mr. Frank, what would you say about that?

Mr. Frank. Your Honor, briefly, this illustrates the fact that the
system worked. The original draft was way too broad. There was
criticism, very good criticism, from the litigation section. The draft
they have reflects what we have in Maricopa County, and it is —
you will pardon the expression — ^hell to live with.

What they did, then, for this experimental purpose, was cut it
down to the particularity which is taken from rule 9 and which de-
scribes how you plead fraud, which must be pleaded with
particularity.

Mr. Hughes. But that is a factual issue?

Mr. Frank. Take care actual issues. It is highly traditional,
clearly understood. It is a narrow area. I think that the number of
cases in which anybody will plead with particularity, because we
use notice pleading, is so small that I think this really gets to be
pretty close to the sound and fury over nothing.

Mr. Hughes. Well

Mr. Frank. Could I make one other comment, please?

Mr. Hughes. What is pleaded with particularity to one may not
be pleaded with particularity to another. That language would be
the genesis, it seems to me, of a large motion practice, unless there
are some additional guidelines. If there were to be additional guide-
lines, what would you see as additional guidelines for practitioners
that do not want to run afoul of the law?

I mean, most of the lawyers, I think, try to comply with the
rules.

But lawyers that want to comply with the rules are asking, I
think, a very good question. What does it mean? How do I stay
within the confines of the rule? I grant you that part of it is the
uncertainty of this change. Everybody likes the status quo.

Frankly, I can see why it is very important for us to move that
process, the discovery process, if we can identify what is core, up
at the beginning instead of waiting to see if a practitioner asks the



89

right question. A litigant can give him the information he is enti-
tled to earlier in the process, because sometimes it takes us 2 years
to get to the nub of a case that should have been resolved a year
and a half ago. If the lawyer and the judge had focused in on it
in the early stages of the trial instead of in the last stages of the
trial, it probably would make the litigation simpler.

I understand the rationale for it, but I think that there is some
legitimate concern over what we mean when we say "core informa-
tion," and what we mean by "pleaded with particularity."

Ms. La Mothe. I think the comment is very well taken, and I
think part of the difficulty perhaps lies in the dissimilarity of the
various kinds of litigation brought in the Federal courts.

It might be very simple to say in connection with a certain type