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

covery in federal courts, and much of that pretrial discovery, I am even more sad-
dened to say, is essentially a waste of time and money.

That is why I appreciate being given the opportunity to appear before this sub-
committee and offer my reasons as to why the proposed changes in Rule 26 relating
to automatic disclosure at the outset of a civil action should not be approved. I
might also add that virtually every general counsel of major industrial corporations
witn whom I have talked generally share my views as to the undesirability of this
mandatory automatic disclosure provision.

What the enactment of these proposed automatic, confessional types of disclosure
rules would, in my judgment, produce is a result diametrically opposite to the broad
objective of the Advisory Committee, namely, to contain the scope and costs of dis-
covery in complex litigation, both financial as well as in terms of the judicial and
professional laoor involved. These proposed rules would make simple cases complex
and convert complex cases into Kafkaesque nightmares.

The simple cases, and there are many in the federal courts, are either settled or
disposed oi with little or no discovery. TTiere is just no need for the complex launch-
ing apparatus that these proposed automatic disclosure rules present. Not all rock-
ets require a three-story gantry of the dimensions used at Cape Canaveral to be
launched.

The Administrative Office of the U.S. Courts has the raw empirical data relating
to the number of relatively simple cases. They far outnumber complex ones. The Ad-
visory Committee, as far as I am aware, has ofiered no explanation as to why these
cumbersome, intensely convoluted automatic discovery procedures, interwoven with
the sanctions, are necessary or beneficial for the handling of such disputes. Inherent
in these automatic disclosure rules is the potential for abuse presented to attorneys
who want to bludgeon an excessive settlement at the outset of the litigation. Such
an attorney can file a prolix, factually complicated pleading, thereby triggering the
"disputed facts alleged with particularity in the pleadings,' mechanism set forth in
Rule 26. Having done so, that attorney has thereby placed his adversary under an
immense draconian sword and predictably that adversary will respond in kind with
a massive pleading likewise bristling with particularized factual allegations.

The argument can and has been made that there are safeguards to prevent such
abuses, but that may or may not be sufficient with respect to the particular case.
The general disposition of trial judges and magistrates in the federal system, how-



152

ever, is to permit discovery as long as it is in some way arguably tangential to the
dispute. There is no reason to assume that this attitude will miraculously and spon-
taneously be changed with the advent of this automatic disclosure rule.

Even complex cases are often settled relatively quickly and without the need for
extensive discovery. With regard to those that cannot be settled, the imposition of
the automatic disclosure process in the proposed Rule 26 will add one more layer
onto the discovery process creating expansive and burdensome satellite litigation,
endless disputes about work product and attorney-client privilege as well as resur-
recting pleading motions reminiscent of the old days of case pleading bills in equity.

This revolutionary solution proposed by the Advisory Committee will aggravate
the problem which vexes everyone concerned either with defraying the exf)ense of
complex litigation or administering and managing it. That problem is discovery-run-
wild. In proposing yet another layer of discovery and making it mandatory, the
Committee has failed to appreciate the point that discovery is a variant of Parkin-
son's Law. Discovery in complex litigation almost invariably fills up the time al-
lowed for discovery and the capacity or will of the respective clients to pay for it.
As has been observed on many occasions by those observing the process, discovery
in complex cases has spawned a whole new breed of lawyers so-called "litigation
lawyers." For these lawyers there will always be one more round of def)ositions, one
more round of document production, one more round of interrogatories, either to ob-
ject to, move against or compel answers on.

Tlie Advisory Committee assumed, somewhat naively I submit, that this drive for
discovery of mammoth proportions, could be contained by getting as much informa-
tion as possible out on the table at the outset of the litigation. In theory, this ap-
proach sounds eminently reasonable. In practice, it will not work because it does
not get at the bottom of the problem.

what the litigation lawyers have done is to seize upon the objective that was built
into the Federal Rules of Civil Procedure with respect to discovery. That objective
was to get all the information relevant to the action out on the table by means of
discovery and thereby avoid surprise at a trial. What the litigation lawyers have
done is to take the fishing expedition license incorporated in Rule 26(bXl), that all
matters are discoverable if "tne information sought appears reasonably calculated
to lead to the discovery of admissible evidence" and use that license as the wedge
to enlarge the scope of discovery beyond all rational or economically sound propor-
tions. r^k)st of these litigation lawyers do so in good faith, namely, to protect them-
selves from the horrid spectre of "surprise" at trial.

Thus far, the judiciary, both trial judges and magistrates, have blindly accepted
the soundness of that objective. The blind acceptance of this objective, however, has
an inevitable side affect: there are no realistic bounds really put on discovery. Dis-
covery is not a finite road with a discreet recognizable end point. Rather, it is a cir-
cle which, driven by litigation lawyers, gets increasingly expanded until arbitrarily
cut ofi", either by time restraints or restraints on costs.

With this license, aggressive lawyers can make even simple cases immensely bur-
densome. For instance, we recently had a simple trade dress case with a competitor
in which the attorneys' fees for each side exceeded a million dollars. In discovery,
the parties turned over tens of thousands of pages of documents, provided many
pages of proposed ad copy and surveys of consumer perceptions, exchanged numer-
ous package design mock-ups and pill prototypes, and produced twenty years worth
of analgesic labelling. Documents were also subpoenaed from numerous third par-
ties. The parties propounded, answered and objected to multiple sets of interrog-
atories. The parties took over fifteen depositions, several of which took two to three
days and most of which went well beyond the normal work day. The attorney time
required to engage in this discovery was enormous, but when all was said and done,
the briefs in the appeals court revealed the issues to be simple and straightforward.

What needs to be done to contain discovery-run-rampant in complex fitigation in
the federal system is a recognition that the objective of discovering all information
"reasonably calculated to lead to the discovery of admissible evidence" is not an un-
questionably and unarguably valid objective to be achieved regardless of rational
cost and time constraints. On the contrary, the excessive discovery abuses, although
admittedly done in good faith in order to avoid surprise, basically show that even
attempting to attain this objective is inherently wasteful and unsound and is, in the
final analysis, the root cause of the problem.

In other areas, the Advisory Committee's proposed amendments appear to recog-
nize this. Its proposal limiting the number of interrogatories, including subdivisions
has worked very well in many district courts, and I believe is inherently sound. So
is their imposition of limits on the number of fact depositions.

In this connection, it is worth noting that, the 1983 amendment to Rule 11 whose
purpose was to "put teeth" in the Rule and thereby break or restrain excessive zeal



153

in discovery and restrain taking unfounded or unwarranted positions in litigation,
proved counterproductive and spawned satellite litigation. There is every reason to
believe the present proposed Rule 26 amendments will likewise spawn satellite liti-
gation. Strict limits on discovery, as I have stated above, should help to lighten the
massive burden of pretrial discovery that afflicts complex cases, but is at best only
a mild palliative. The best terminator of discovery-run-rampant is a firm trial date.
That tactic we know works. It usually produces a settlement and, if not, facilitates
a quick disposition of the case.

On the other hand, the assumption that the proposed mandatory automatic disclo-
sure will result in curtailing discovery is based on pure speculation. There have
been no experiments in any of the district courts with mandatory formal automatic
disclosure. For the reasons set forth above, I believe the assumption is unsound, but
in any event, such a revolutionary, potentially devastating change should not be
made without testing to see if it does work.

Mr. Hughes. Since the advent of the Civil Justice Reform Act,
Mr. Frazza, 23 of 41 programs have incorporated some form of
mandatory disclosure. Isn't that evidence that disclosure up front
is a way we will proceed?

Mr. Frazza. Well, some form of mandatory disclosure, the words
"some form" is mandatory disclosure in some courts throughout the
system; but normally, it is not, not normally. I know of no instance
where it is a blanket, open-ended obligation that you should look
into your opponent's mind, look at his complaint, and try to divine
what his cause of action is and what the gist of his complaint is
and find every document or categorize every document relevant to
that.

I have not been personally exposed to any of those situations
where we have been involved in mandatory disclosure so I cannot
talk to that. Maybe some of the other people on the panel can.

I have no problem with mandatory disclosure if it is applied in
a particular case where it is tailored to that case. In fact, many of
the cases in the Federal courts are relatively simple cases and go
on and are settled without the judge ever intervening or with very
little discovery to take place. Putting this layer on there makes
that simple case into a complicated one often.

So I have no problem with mandatory disclosure applied in par-
ticular cases by a judge who is in control of that process.

Mr. Hughes. How much of your concern is that perhaps it will
spark a fishing expedition; that it will, in fact, evolve into a cause
of action that they may not have known they had?

Mr. Frazza. To be very frank, with notice pleading, you can go
on a fishing expedition, too. You can use section 26.

Mr. Hughes. That was my second question.

Mr. Frazza. You can use rule 26 now to go on a fishing expedi-
tion. The courts often allow you to do that.

The difference is that you have to, at least, detail what docu-
ments you are looking for; and as a defendant — as a plaintiff, I
have to detail. You as a defendant have to decide, (a) whether
those documents are responsive, whether you have documents re-
sponsive to do; and (b) whether they should be produced if not for
work product, kept out of work product or something. You are not
up there in the clouds somewhere. Anything that bears on this
complaint, give me. It is Kafkaland.

Mr. Hughes. Isn't it true, Mr. Cortese, Mr. Higgins, that that oc-
curs anyway?



154

Mr. Higgins, you indicate the concern about proprietary informa-
tion. You are also concerned about all kinds of privileged informa-
tion. That is a problem under the present procedures, is it not?

Mr. Higgins. Yes, it is but it is not compounded by a mandatory
disclosure requirement.

Mr. Hughes. The difficulty that I think that we have to wrestle
with is the fact that much of the information that you would rather
not give initially, you ultimately have to give. If they ask the right
question and make a specific enough request, they get the
information.

That often comes after a year of discovery, after interrogatories
have been propounded, and numerous depositions. That is precisely
what I believe the purpose of mandatory disclosure is, to try to get
information you are going to have to disclose anyway and eliminate
the costly, time-consuming aspect of it. This combined with the
face-to-face meetings early on among counsel and a session with
the judge who becomes familiar with the case up front.

What is so wrong with that?

Mr. Higgins. Well, I think that all of the relevant information
coming out under the present system, at least as far as the way
I handle litigation, I mean there is just no future for me to draw
out litigation and incur substantial expense about items I know
sooner or later I am going to have to produce.

Mr. Hughes. Mr. Higgins, as counsel for Hughes Aircraft, I
would bet that you respond to the questions you are asked; but if
your adversary is not smart enough to ask the right questions, you
won't supply him with the additional answers, would you help him
get smart in the process?

Mr. Higgins. A fair question demands a fair answer in the law.

Mr. Hughes. Understandably. If you do not adopt that practice
at the present time, then you might find yourself with another job
or if you were a practicing attorney, at the end of an ethics com-
plaint. That is precisely what we are trying to get at. I think there
are some legitimate concerns; but, you know, the suggestion that
you might disclose proprietary information, that is a problem with
the present rules. You need protective orders. That is the subject,
I am sure, of endless motions under present procedures.

Mr. Higgins. We are not faced with a mandatory requirement up
front. If a suit is broad and it involved proprietary information, you
know you are going to have to produce it. Inevitably you can work
out with your adversary a stipulated protective order that the
judge will sign that didn't involve judicial intervention. Here you
are adding a layer of judicial intervention and motion practice that
currently doesn't exist.

Mr. Hughes. Your argument is, it is not going to result in less
costs because it is going to generate more motion practice; I pre-
sume that is the bottom line?

Mr. Toll, in your statement you refer to a hypothetical situation
where a client reveals information to his attorney during a break
while taking a deposition. In your hypothetical, the attorney is re-
quired under the disclosure statute to reveal that to the adversary.
Doesn't rule 26(b)(5) provide adequate protection for privileged
information?



155

Mr. Toll. Well, I think in the hypothetical, Mr. Chairman, it re-
fers to a situation regarding similar claims or accidents or the like,
in a situation where the question wasn't even asked for in a
deposition.

The way I see the 26(a)(1) disclosure requirement, is it consistent
with that attorney-client privilege? I am not necessarily confident
I could rely on attorney-client where I have the overriding consider-
ation of disclosure with things that are relevant.

In that hypothetical, in a deposition situation, where you are
dealing with, I think, an accident, to use what Mr. Bruno was re-
ferring to, similar accidents or claims or the like would clearly be
relevant and something that may ultimately be discoverable. But
the rub is it is not asked for.

It wasn't asked for in the hypothetical by the questioner and
probably wasn't asked for in the interrogatories prior to the deposi-
tion. I have a real problem with that mandatory disclosure where
I have to give that information up right away in the absence of a
request for it.

Mr. Hughes. So you would have concerns with proposed rule
26(a) anyway even if we could satisfy your concern about what in
essence is pleadings with particularity?

Mr. Toll. I have a legitimate concern with having to make a dis-
closure at the outset of litigation without a request for that infor-
mation. It is not the way as a lawyer I was trained. It was based
on an adversary system which I think ultimately is a good system.
I just have a philosophical problem; and I think, if enacted, a real
problem with coming to grips with that disclosure requirement.

Mr. Hughes. Mr. Dunlap, I presume some of the data you sup-
plied relative to the Arizona experience, is created because of the
additional motion practice generated by that?

Mr. Dunlap. I didn't submit that.

Mr. Hughes. OK That was the last panel. I am sorry. You were
in Texas and California. They go further in Texas, don't they? They
substitute disclosure for document requests. You are not supposed
to need document requests.

Mr. Dunlap. They require more information to be disclosed up
front than 26(a)(1) does.

Mr. Hughes. I see.

Mr. CoRTESE. If I may comment on that, Mr. Dunlap put his fin-
ger on a real problem with this version of disclosure in the new
amendments, because the original Brazil-Schwarzer concept of dis-
closure was that it replace discovery, not that it be added as an ad-
ditional layer on discovery. That is where we have a real problem
with it, because it just gives another layer you have to go through
and deal with; and obviously it causes the problems that Mr. Toll
spoke to.

Mr. Hughes. Is the present criteria used for 26(a) better or
worse today? At one time the criteria was "likely to bear signifi-
cantly on any disputed claim or defense."

Mr. Cortese. It is still the same, Mr. Chairman. The general
standard as to the scope of discovery has remained the same. It has
been interpreted perhaps more broadly, so that basically anything
must be turned over originally.

Mr. Hughes. I see.



81-258 0-94-6



156

Thank you. The gentleman from New Mexico.

Mr. ScHlFF. Thank you, Mr. Chairman. I would like to stay on
the subject, Mr. Chairman. I think we are at the crux of the pro-
posed change in rule 26(a).

As I understood our first panel of judges, who were the pro-
ponents of this change, they suggested the information that we be
provided by this disclosure at the beginning of the case is in es-
sence information that has to be provided anyway and would be
provided anyway; so let's just eliminate useless steps in the discov-
ery process and get right to it.

Mr. Toll has raised the point in the adversarial system, I think
I should be asked for the document. I think that that is the heart
of the matter. Aren't the plaintiffs attorneys adept enough at their
trade that they are able under present rule 26(a) to frame a re-
quest in the context of they are going to get everything anyway?

If the answer to that is yes, then I think the proponents of the
change have a point. If the answer to that is no, then I think the
objections have a point in that you might be disclosing things that
the adversaries never thought of asking for.

I will open that up.

Mr. Toll. If I may, Mr. Schiff, based upon my experience, the
answer to that question is it depends upon the lawyer. I represent,
for example, the casino industry. In many instances there is docu-
mentation that I have which arguably would be protected under
some privilege, but which may be relevant and perhaps discover-
able depending upon the nature of the particular document and the
like.

My experience is that the plaintiffs attorneys that I come in con-
tact with, a lot of them do not do their homework; and the situa-
tion arises in many instances where I am not called upon to give
out that type of information.

The real problem that I have is how do I go back to my client
under the proposed change and say the protections that were af-
forded to you under the previous system may no longer be afforded
to you? We may have to disclose documents that we may not have
had to disclose in the absence of a request for it.

So the real concern that I have is the erosion of what is from the
defense point of view, a critical, critical shield, that is attorney-cli-
ent and attorney work product.

Mr. Schiff. Under the proposed rule, if I may follow up on that,
would you have a right to go in and seek a protective order on the
gn'ounds of I have something that may be relevant but it is privi-
leged under some rule?

Mr. Toll. I would suspect I would have that opportunity. Again,
if my adversary isn't adept enough at knowing what he snould be
asking, what I am doing is I am having my client pay for me to
educate my adversary; and in the context of that dispute in litiga-
tion; and, after all, I think we have to be mindful of the fact that
once the litigation starts, it is an adversarial process. You are there
to win. You are there to — if you are on the fence, either win out-
right or minimize your exposure.

By introducing this type of disclosure requirement, you are, in
essence, eviscerating what is a very, very critical weapon that the
defense has.



157

Mr. Frazza. May I add under the present practice, you have no-
tice pleading. When the discovery process gets underway, it is the
plaintiffs obligation to determine what are the disputed facts and
what evidence does he need to prove his case.

Under this particular situation, we have to decide from a very
prolix pleading perhaps what are the disputed facts.

Mr. ScHiFF. You have to determine from the complaint what the
complainant wants?

Mr. Frazza. That is right. Mr. Chairman, you are right. A lot of
these controversies do arise in the context of rule 34 motions and
rule 26 motions. The difference is you have a mooring. You have
a specific request where someone says all documents that relate or
refer to this particular Patent Office proceeding, et cetera.

We then come in and say that is much too broad. There are 13
carloads of documents, try to hammer it out. We hammer it out
with either the magistrate, the judge, or ourselves generally.

That is where issue is joined. Issue will still be joined on this,
under the same types of arguments you will have; and the answer
to it is limitation on the time; in other words, limitation on the
amount of depositions, limitation on the time; and somebody saying
you are going to finish this by June 1.

Now, if you guys cannot work it out, I will work it out for you,
but June 1, discovery shuts down. You have 6 months, 3 months,
or 2 months in this case to do it. That is the way you move the
process forward. Not by drafting another potential technical argu-
ment over — I said categories. We are supposed to say, provide them
with the categories of documents. What is the definition of
category?

I would say it is verv, very broad. All our NDA's; in other words,
if somebody says you have made a pattern of not divulging to the
FDA certain side effects of your drugs in the last 5 years and puts
that in the complaint, and I say I am supposed to give him some-
thing that — what do I do? I say all right, every FDA-NDA new
drug application we ever filed, that is about 70 carloads of
documents.

It might be the disputed facts are in there. Take a look at them.
He will say are you kidding, I want something more particular.
What do you want more particular? You want cardiac drugs? We
are back in the same thing again.

I say it is his obligation to say this is what I want. Give it to
rne. And I say no or yes. And then the judge or the magistrate de-
cides. We get on witn it within a time constraint. That is the an-
swer to this problem.

Mr. SCHIFF. If I may, under the proposed rule, you can even be
giving the plaintiffs attorney a theory he didn't even think of?

Mr. Frazza. Perhaps. But I will not give it to him easily, obvi-
ously. The point about being an advocate, the chairman's comments
about I wouldn't have a job. I am not going to say — ^you might look
in 1937, there was an article filed that said side effect wasn't — it
is on page 16; I think I remember, isn't it back there somewhere?
I will not have somebody say go back and look at it. I will say, this
is hypothetical, of course, it has never arisen, I am going to say to
the NDA's. And the judge is going to say wait a minute, that is not
enough. Well, what is enough, Your Honor?



158

Mr. DuNLAP. I would answer that question

Mr. SCHIFF. I yield back.

Mr. Hughes. Doesn't the question of whether or not it was plead-
ed with particularity come into play? If it has not been pleaded
with particularity, then you have no guidance.

Mr. Frazza. That is correct. That is correct.

Mr. Hughes. You don't have to respond?

Mr. Frazza. That is correct.