How Proportionality in Discovery is Handled in Arbitration

How Proportionality in Discovery is Handled in Arbitration, as published by Law360 on October 23, 2017; posted with permission under license.

by Richard T. Seymour, Washington, D.C.

Photo of Richard Seymour

There has been a great deal of discussion of the effects of the increased prominence of proportionality in Federal-court litigation since the December 2015 changes to Civil Rule 26.  See, for example, “A Plaintiff’s Guide To Discovery Proportionality: Part 1” by Max Kennerly, and “Discovery Proportionality: A Defense View” by Alan Hoffman.  There has been relatively little discussion of how the issue of proportionality in discovery is handled in arbitration, and some comments might be useful.[i]

The Federal Courts Are Following in the Footsteps of Arbitrators, Part 1

The response of many arbitrators[2] to the Advisory Committee on the Civil Rules is, “What took you so long?”  It seems to us as arbitrators that the courts are simply belatedly following in our wake.

It has been true. for as long as I can determine from conversations with other arbitrators, that arbitrators have used the initial Case Management Conference as the occasion at which the parties are required to discuss broadly their discovery plans, and any objections to those plans.  We expect the parties to have planned, by the time of the conference, what discovery they need and how they intend to get it.  If the case seems simple to us and not needing much discovery, we will raise that and see if there is a good answer.  If not, we will limit discovery subject to easy reconsideration based on a later showing of good cause.  It is good that the Federal courts are now imitating arbitration by placing this subject front and center at a scheduling conference.

The Federal Courts Are Following in the Footsteps of Arbitrators, Part 2

Many Federal judges have also in the last decade adopted the common arbitral practice of allowing the parties to submit discovery disputes quickly and informally, without going through full motion briefing.  Many arbitrators, like me, take discovery disputes and responses by e-mail, schedule a quick telephone call if it would be helpful and counsel are available, rule during the call, and follow up with an order in the next couple of days.

Arbitration is very much like litigation, in that disputes over proportionality—and most other discovery questions—rarely arise when there are capable and experienced counsel on both sides, and parties who take a functional approach.  However, there will always be those exceptions for which we need the rules.[3]

Responding to Parties Who Blow Off Discovery Requests: Suggestions for Best Practices in Court and in Arbitration

Most of the discovery disputes arising in my own cases as arbitrator involve either privilege and claw-back questions,[4] or a party’s complete failure to respond to discovery.

Complete failures to respond occur both with represented parties and pro se parties, and occur on both sides of the dispute.  The remedy is seldom to issue the sanction of default or striking an Answer, because judicial standards for such case-ending or defense-ending sanctions are far less harsh and the failure to meet judicial expectations based on their own standards is likely to lead to vacatur.[5]

One practice I have found helpful is to schedule an in-person or telephonic hearing and require the parties on both sides to attend.  At the hearing, I explain to the non-responding party the need for the information, and the possible consequences of the failure to provide it on a very short turn-around.  If there is a problem with the request, we hash out changes then and there.  I may stagger the responses to keep the information flowing while taking into account the non-responding party’s other time commitments.  I may allow an immediate but short deposition of the non-responding party to get critical information quickly to the discovering party and cure some of its prejudice, without taking away from a subsequent full deposition at which everything can be re-visited.  I get the non-responding party’s verbal commitment to the schedule, and incorporate all that in an order.

My experience is that these conferences with the parties in attendance are often the first time the parties have an idea of the importance of their responses, of the fact that I take them seriously, and of the fact that I am likely the final judge of their credibility and bona fides.  The parties seem to come away from the experience with a newfound determination to comply.

It is not always the fault of the non-responding party that the discovery was not answered properly and on time.  It sometimes happens that counsel for that party for some reason has not forwarded the discovery requests to the non-responding party.  Opposing counsel cannot really enquire into that, but an arbitrator or judge can.

My understanding from talking with judges and practitioners alike is that complete failures to respond to discovery, and the difficulty of getting the non-responding party to understand the need to comply with discovery, are common in litigation as well.  Judges and practitioners may want to consider requiring the presence of at least the non-responding parties in telephonic or in-person hearings as a means of getting the word across and putting the litigation back on the rails.

Federal Courts Should Follow the Further Lead of Arbitrators as to Summary Judgments

The leading driver of litigation expense in courts is the routine use of summary judgment motions based on the adequacy of evidence, and the routine grant of such motions.

In Federal courts, the vast majority of cases are disposed of on summary judgment, and vanishingly few are tried.[6]  That requires the parties—usually the plaintiffs[7] but in some cases[8] also the defendants—to depose large numbers of potential witnesses, so that they can find out the knowledge of anyone who might later submit an affidavit or have information enabling them to contest a potential future affidavit about whose contents they can only speculate.  It also requires the parties to discover every possibly relevant piece of paper because they have no idea which documents will be used or how they could defend against them.

Arbitrations have a clear advantage over Federal courts in keeping discovery costs down, because vanishingly few arbitrators will decide cases on summary judgment based on the sufficiency of evidence.[9]  Unlike the Federal courts, arbitrators have not forgotten the importance of judging the credibility, tone and demeanor of witnesses testifying live.  They do not want their proceedings to degenerate into wars of affidavits, with its built-in advantages to the parties with greater access to information and greater resources.  They do not want to have to “fill in the gaps,” necessarily by speculation, when affidavits inevitably fall short of addressing a question that turns out to be important.

As a result, the parties know that they do not have to depose every witness who might conceivably file an affidavit, because they will have a chance to cross-examine that witness at the merits hearing.  Similarly, the parties know that they do not have to discover every possibly relevant scrap of paper, because any documents on which the other side relies will have to be presented by stipulation or through a witness they can cross-examine.

This is how I grew up learning to litigate from 1968 through the 1986 summary-judgment trilogy: we used interrogatories and requests for admissions extensively, we needed to discover some documents but only a fraction of what now needs to be discovered, and we took few depositions.  We simply took the witnesses on cross-examination at trial, and probed documents through the witnesses putting them on.  This is still how many administrative hearings are conducted.  We reached results that were more just, at a fraction of the expense of today’s litigation.

AAA and JAMS rules allow the parties to ask permission to file summary-judgment motions, and that right can only be abandoned by consent.  In the Case Management Conference arbitrators can inform the parties of the opportunity to hold down their transaction costs and limit their discovery if both sides stipulate not to take advantage of these arbitral summary-judgment rules.

This cost-saving opportunity is outside the frame of reference for many attorneys who have grown up as litigators after the Supreme Court turbo-charged Rule 56 in its summary-judgment trilogy,[10] but the need to hold down client costs should lead them to re-think the assumption that arbitration should mirror the faults of modern Federal-court litigation.

Clients who want to save costs may also want to think of insisting that older attorneys, who learned to try cases before 1986, be brought onto their legal teams.  This would be a counter-balance to age discrimination and serve many additional social purposes that need not be elaborated here.

 

Richard T. Seymour is an arbitrator, mediator, negotiator and litigator, at the Law Office of Richard T. Seymour, P.L.L.C., in Washington., D.C.   This is his ADR website (www.SeymourADR.com); his litigation website is www.RickSeymourLaw.com.

 

[1] In many of my commercial cases, the parties have equal access to the facts and there is no discovery.  The need for discovery is greatest where access to the facts is asymmetrical.  This article applies only when there is discovery.

[2] My sense of what arbitrators do is personal, gleaned from the continuing training we obtain from the American Arbitration Association, the American Bar Association Section of Dispute Resolution, conversations with fellow arbitrators, discussions on ADR list-serves, articles and treatises.  The practices of individual arbitrators may differ greatly from mine, so advocates should consider this in selecting arbitrators for their cases.

[3] E.g., Blake v. Batmasian, 2016 WL 4618931 (S.D. Fla. Sept. 2, 2016) (No. 15-CV-81222), aff’d in part and rev’d in part, 2017 WL 657767, at *3 (S.D. Fla. Feb. 15, 2017),  a one-count FLSA overtime case in which plaintiff attempted to enquire into defendants’ alleged fraud, their allegedly handing out “happy ending” massage vouchers and viewing of pornography, etc.

[4] It is useful to discuss Rule 502(d) and –(e), Fed.R.Evid., in the Case Management Hearing.  This allows a party to decide to forego pre-production review of materials for privilege, potentially saving substantial expense, and assert the privilege and the right to claw back the materials, only when the receiving party seeks to make use of the privileged material.

[5] In my experience, this does not in the least stop advocates from asking for sanctions that would, if granted, lead to vacatur.  In selecting arbitrators, advocates should look for persons that will deny their motions seeking relief that would give their clients momentary pleasure but “morning after” remorse.

[6]  The United States District Courts — National Judicial Caseload Profile for the twelve months preceding June 30, 2017 shows that nationwide, for each active judgeship there were 633 pending civil and criminal cases, there were 401 new civil cases filed and 101 new criminal cases filed, 582 matters terminated, but only 17 civil and criminal cases terminated by trial.  The data tables for the country and by judicial district can be downloaded from http://www.uscourts.gov/statistics-reports/caseload-statistics-data-tables, last visited October 7, 2017.

[7] Most but not all summary-judgment motions in court are filed on behalf of defendants.  In employment cases in particular, employers usually have access to far more information than plaintiffs.

[8] In sexual and racial harassment cases, employees may have access to more information than employers, particularly if they rely on the experiences of other employees.

[9] Motions to dismiss or for summary judgment based on other defenses, such as expiration of the period of limitations, failure to exhaust administrative remedies, etc., are by contrast welcomed because they are a cost-effective way to bring to an end cases that have no hope of success.

[10] Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986); and Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986).

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