Discovery is the most poorly understood, widely abused and terribly governed aspect of commercial litigation. One could write a treatise on all the problems with the modern day discovery process. Instead, I’ll take it one at a time. Today’s topic: Lawyers wasting tons of client money on overly-broad, useless discovery. I already anticipate that some big firm will file this exact blog post as an exhibit to a court filing and complain about how I’m a big meanie to big law firms. So let the fun begin!
Defining the Problem: World War III Discovery Tactics
The problem: Many lawyers – and particularly lawyers at big firms – believe in discovery that resembles World War III. I will explain. Discovery is an important part of the litigation process. As we all know, discovery allows litigants to gather relevant information that supports their claims and defenses. Up until 2015, the operative standard (in the Federal Rules) was anything reasonably calculated to lead to the discovery of admissible evidence. We saw how well that worked out (hint: terribly).
In December 2015, new amendments to the Federal Rules of Civil Procedure replaced that standard with a new “proportionality standard.” The new standard allows for discovery relevant to claims or defenses but also proportional to the needs of the case (and listing several proportionality considerations). This change is fantastic and it recognizes what good lawyers, good judges and good litigants already know: Lots of lawyers are engaging in abusive discovery crusades. Their efforts are not intended to uncover relevant information. Instead, their goals are (1) to use discovery to exert pressure on the other side and raise their adversary’s litigation costs (2) to make a bunch of money off their clients.
I have been involved in numerous cases where lawyers on the other side (again, mainly BIGLAW types) take the following position: Give us every single email in the defendant’s possession, custody or control. And the defendant is a company with numerous employees. In fact, I have litigated against lawyers who have gone further than that: Give us every single email in the company’s possession. And this third-party who had communication with you, give us all of their emails as well. You can’t make this up. If anyone thinks I’m joking, just email me and I’ll give you the case number. This is a 1,000+ lawyer firm and supposedly “elite” lawyers.
The Usual Tactics: Give Us Everything
This is standard fare. Lawyers request all communications between A and B (regardless of the subject matter). There are 7 custodians who legitimately may have relevant information. Lawyers demand 30 custodians because, well, you never know. One side proposes a reasonable list of search terms. The other side demands 100 more search terms, including generic terms like “contract” and “agreement.” There are 3 or 4 people who really should be deposed. Lawyers want 15 deposition. In all but the most complex cases, most depositions should never last more than two or three hours. But there are a whole bunch of lawyers out there who live for the 7 hour deposition. I have defended so many 6 or 7 hour depositions where I walked out the door and thought to myself, “Dear God, they got absolutely nothing out of that depo. All they did was waste everyone’s freaking time.”
Legitimate Claims/Defenses Generally Require Less Discovery
Let’s address the issue of necessity: If you have a legitimate claim or defense, then you already have some sense of what the claim or defense entails. Hypothetical time: You own Widget Co. and employee Joe Smith just left the company, downloaded a corporate database and stole a prototype. You want to sue him for theft of trade secrets. You have a pretty good handle on what your claim entails. You know what he stole. You can use targeted discovery to figure out what he did with the stolen trade secrets; how he used them; who he shared them with. Do you need every single email in the history of the known world? Do you need to depose 17 people? Probably not. This is because you have a legitimate claim. You know who wants unlimited, World War III style discovery?
Litigants and lawyers who pursue bogus claims. Although perhaps overused, the term fishing expedition is appropriate. Litigants and lawyers who pursue bogus claims or defenses always want the fishing expedition. Why? Because they go into litigation knowing their position is weak and hoping they’ll find some smoking gun to prop up their case. Interestingly,when we initiate litigation or arbitration, we usually have a pretty good handle on our claims/defenses and the supporting facts/evidence. A frequent topic of conversation in our office: We can win X case with the evidence we already have (even without any discovery!). Sure, some cases are different. Sure, we usually have a couple pieces of evidence we need to ferret out. But this framework is completely different. This framework: Advance legitimate claims or defenses for which you have a decent amount of factual or evidentiary support. The opposite framework: Advance weak claims or defenses and pursue WWIII discovery in hopes of finding some good evidence.
How We Got Here: Risk Aversion and Lawyer Greed
We got here for a couple reasons: First, risk aversion. Lawyers are classically risk averse. And perhaps rightfully so. I mean, at this very moment, there are BIGLAW lawyers filing my blog posts as exhibits and saying, “Your honor, Jonathan Pollard is a bad, bad man! He says mean things about some big law firms. He talks about beating up on Proskauer Rose in litigation. He is critical of big firms! He has no decency!” You can’t make this stuff up. The point being that any lawyer who does anything different; any lawyer that doesn’t go along with the herd; any lawyer that doesn’t follow every normal convention is automatically at risk. Most lawyers have little to no risk tolerance.
So what do they do: We must scour the earth to collect every potentially relevant email in God’s creation! We must collect every single imaginable potential custodian! We must take 7 hour depositions of 87 witnesses! This serves several purposes. First, it satisfies the lawyers’ need to avoid any risk at any and all costs. Real talk: Most lawyers are terrible at objectively assessing risk. They’ll insist on spending $250k+ on discovery costs when $100k would have sufficed. This protects them against the risk boogeyman. But second (and perversely): It makes them a bunch of money. Preparing absurd discovery requests. Filing motions to compel. Reviewing 20,000 documents produced by the other side. It’s a cash cow. Of course they want World War III discovery. Not to benefit their clients, but instead, as a profit center! Third, it allows lawyers to advance weak claims or defenses that never should have been plead!
Where We Are: The Perfect (Discovery) Storm
It’s like the perfect storm: BIGLAW FIRM tells client: “X is a viable claim. It’s solid. We can win this thing. Let’s do it.” They initiate litigation. They tell the client, “We know the defendant has this evidence. They’re scumbags so they’ve hidden it really well. We just have to find it. We have to be really aggressive in our discovery. Otherwise, you know, we might miss something.” The case moves forward. The claim or defense is still weak and relatively undeveloped. The lawyers have yet to find any real evidence to support their position. And now they’re scrambling. They have to scour the earth! They have to find SOMETHING to support their position. God forbid they’d have to go back to their clients and say something like, “You know, we probably shouldn’t have pursued this matter. The claim/defense is not strong enough. We need to be reasonable, come to the table and settle this thing.” Because if that happened, the client might fire the firm, the partner might not make his numbers and then all hell will break loose.
The Solution: Better Lawyers, Proportionality & Informed Clients
The solution is pretty simple: First, lawyers need to change. Lawyers need to recommend against advancing weak claims or defenses that will only survive if an absolute fishing expedition yields a smoking gun. If it’s a weak claim or defense, do the right thing. Don’t advance bogus causes. If the claim is weak, recommend against pursuing it no matter how much money it would make you. If the defense is stupid, tell the client to settle, pay some money and make it go away. Don’t be greedy. Learn actual, objective risk assessment. No; you do not need every single document in the history of the universe and 27 depositions. Second, judges need to step it up. Good judges realize that not every discovery dispute is tit for tat with bad conduct on both sides. Some discovery disputes involve one side engaging in tactics that are simply unacceptable. Judges need to whack litigants and lawyers who abuse the discovery process. Judges need to police the issue of proportionality. They need to read the 2015 amendment to FRCP 26, really take that to heart and start applying the rule. It’s a big freaking deal. Finally, clients need to be more informed. The bigger the case, the more sophisticated the client, the better informed the client should be. It’s 2017. You can figure out whether or not your lawyer is blowing smoke. You can push back. You can say, “Hey, I don’t think we need to spend $300k in discovery. Let’s narrow this.” The bottom line: The old model of WWIII discovery is completely broken. The 2015 amendment to FRCP 26 should help make things better, but only if lawyers, judges and clients do their part.
Jonathan Pollard is a competition lawyer based in Fort Lauderdale, Florida. He focuses his practice on complex non-compete, trade secret and unfair competition claims and has numerous significant decisions in this space. He has recently appeared in the Wall Street Journal, Bloomberg, FundFire and on PBS News Hour. His office can be reached at 954-332-2380.