Commercial Litigation and Arbitration

Rulemaking Activity – 2004

Gregory P. Joseph*

There are several important rulemaking initiatives percolating through the Advisory Committees of the U.S. Judicial Conference. The Standing Committee on Rules of Practice and Procedure will be considering several of them next month. This article summarizes a number of the most important contemplated rule amendments.

Redacting All Court Filings. Section 205(c)(3) of the E-Government Act of 2002 directed the adoption of rules, through the Advisory Committee process, to protect the privacy of litigants, witnesses and others in this era of electronic filing. The legislation contemplates that these rules will ‛provide for the redaction of certain categories of information in order to protect privacy and security concerns“ (§ 205(c)(3)(A)(iii)).

Pursuant to this Congressional directive, the Rules Committees are drafting provisions that will require that personal identifying information be edited out of all court filings, other than filings under seal. As currently envisaged, these amendments dictate disclosure of only the last four digits of a social security or financial account number, only the initials of a minor’s name, only year of birth (rather than birthday), and only the city and state of a home address. These rules may be in effect by December of 2006.

Unpublished Opinions. The ban against citing unpublished appellate opinions, which still exists in the Second, Seventh, Ninth and Federal Circuits, would be abolished by Federal Rule of Appellate Procedure 32.1(a). This proposed rule recognizes that, in this age of electronic research, unpublished opinions pop onto the screen together with those labeled ‛published,“ and that it is incongruous to prevent citation to them —merely for their persuasive value — when virtually everything else, from The Iliad to The National Enquirer, is citable. Assuming all interim approvals, the effective date for this amendment will likely be December 2005. In the mean time, you remain free to cite, e.g., unpublished Tenth Circuit opinions in the Second Circuit, but not unpublished Second Circuit opinions.

Electronic Discovery. At its April 2004 meeting, the Advisory Committee on the Federal Rule of Civil Procedure approved in concept circulating several electronic discovery proposals for public comment. These include amendments to Rules 16(b) and 26(f), which deal, respectively, with the initial pretrial conference and the parties’ initial discovery conference. The amendments would identify as issues to be discussed (i) electronic discovery, (ii) evidence preservation, and (iii) inadvertent waiver. This is relatively innocuous and parallels the American Bar Association’s pending amendments to the ABA Civil Discovery Standards.

Far more unsettling are a series of as-yet unfinalized proposals. One would create a new defined term, ‛electronically stored information,“ which would be carved out of the meaning of ‛document“ for purposes of, e.g., Rule 34 document requests (an odd limitation that would require every document request to be rewritten and would create havoc for the first few years following adoption, until the amendment penetrates the consciousness of bench and bar).

Another proposal would create a ‛safe harbor“ for sanctions for destruction of electronic information if done as part of routine retention and destruction programs. If adopted, corporate retention and destruction programs could be modified to call for earlier and more thorough destruction of data, risk free.

A third electronic discovery proposal would adopt a ‛two tier“ approach, permitting a party to avoid production by objecting that the data sought are not ‛reasonably accessible.“ The burden would then be shifted to the party seeking discovery to establish that the data are ‛reasonably accessible.“ Absent discovery into that question, the party resisting discovery would appear to have a monopoly on that information.

A fourth proposal would specify a procedure for addressing claims of inadvertent waiver of privileged or otherwise protected materials. This proposal is likely to be purely procedural because Congress enacted legislation barring any rule from ‛abridge[ing], enlarge[ing] or modify[ing] any substantive right“ (28 U.S.C. § 2072(b)), and specifically providing that any ‛rule creating, abolishing, or modifying an evidentiary privilege shall have no force or effect unless approved by Act of Congress“ (28 U.S.C. § 2074(b)).

It is possible that some or all of these proposals will be circulated for public comment as early as August 2004.

Evidence Rule Amendments. The Advisory Committee on the Federal Rules of Evidence has focused on a handful of rules that are the subject of Circuit splits, in order to settle the divisive issues. Both civil and criminal practice would be affected by these proposals, which may be circulated for comment later this summer.

Rule 404(a) (Character Evidence Generally). Courts are divided as to whether character evidence — which cannot generally be offered to prove predisposition — may be admitted in a civil case under Rule 404(a). Subdivision (a) is an exception that is drafted in terms of an ‛accused“ and was intended to be limited to criminal cases, but has leached over into civil actions with criminal overtones (e.g., assault and battery). The proposed amendment would close this door and explicitly limit Rule 404(a)(1) and (2) to criminal cases.

Rule 408 (Settlement Offers). The proposed amendment to Rule 408 would resolve three separate Circuit splits. First, it would permit the use of statements of fault in subsequent criminal cases to prove guilt. Second, the amendment would prohibit the use of statements made during settlement negotiations for impeachment purposes (i.e., contradiction or prior inconsistent statement). Third, it would prohibit a proffer by the party who made the settlement offer, a practice permitted in some courts.

Rule 606(b) ( Inquiry into Validity of Verdict or Indictment). The limitations of Rule 606(b) are designed to preserve the sanctity of jury deliberations by prohibiting inquiry into the thought processes of jurors. This has proved occasionally problematic when the verdict written down by the jury clearly does not reflect their intent (as they, from time to time, have pointed out to the court afterwards). The Advisory Committee considered an exception that would have permitted inquiry into the verdict in this limited circumstance, but was concerned that, however narrowly drafted, any such amendment might invite broader attacks on verdicts. It settled on a limited exception that would permit inquiry to determine whether the verdict reported is the result of a ‛clerical mistake.“

Rule 609(a)(2) (Impeachment by Evidence of Conviction). Rule 609(a)(2) dictates that evidence of a crime of dishonesty or false statement must be admitted on the issue of credibility. The lingering issue has been whether the court is limited to looking at the formal elements of the offense or may look at other available information. The classic example is obstruction of justice, which does not contain dishonesty as an element but by its nature manifests dishonesty.

The proposed amendment would address this issue by placing within Rule 609(a)(2) any crime ‛that readily can be determined to have been a crime of dishonesty or false statement“ — i.e., abandoning the elements test but permitting the court to look at, for example, the indictment.

Rewriting the Federal Rules of Civil Procedure. The Civil Rules Advisory Committee is well along in a project to entirely rewrite (‛restylize“) the Federal Rules of Civil Procedure. The first 63 rules are already finished.

The goal is purely to improve the drafting, not to rectify problems. Even cosmetic surgery has risks and complications, however, not to mention cost. It will be at least a year before these rewritten rules are released for public comment and analysis.

There is little doubt that the rewritten rules will read better. Smart people are devoting substantial time to ensuring this.

There is, however, a serious question whether the product will be worth the enormous cost that this re-writing exercise will impose — including all new treatises on civil procedure (the publishers of Moore’s and Wright & Miller must be salivating); more expensive research for clients as subdivisions of rules that are changed must be researched in multiple ways; and a stream of litigation over whether any of the changes in fact has substantive impact, regardless of intent. It may be that the first generation of litigation will find no impact. Down the road, however, different words may lead to different results.

All of this rulemaking activity is enough to make one think fondly of H. L. Mencken’s witticism: ‛Say what you will about the Ten Commandments, you must always come back to the pleasant fact that there are only ten of them.“

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