CLIENT ALERT: Federal Rules of Civil Procedure Amendments to Take Effect December 1, 2015
On December 1, 2015, amendments to Rules 1, 4, 16, 26, 30, 31, 33, 34, 37, 55 and 84 of the Federal Rules of Civil Procedure will become effective. These amendments were originally approved by the Judicial Conference in September 2014 and subsequently approved by the Supreme Court in April 2015. The amendments are notable for their changes to the discovery process and the potential to dramatically change pleading requirements, particularly in patent cases. This client update addresses the substantive revisions to the Rules.
Cooperation and Early Case Management
In an effort to curb the rising cost and complexity of litigation, Rule 1 is amended to emphasize the obligation of parties to make litigation efficient, adding that the procedures “should be construed, administered, and employed by the court and the parties to secure the just, speedy and inexpensive determination of every action and proceeding.” Although encouraged, cooperation is not mandatory, and the Committee Note makes clear that “this amendment does not create a new or independent source of sanctions.”
The amendments to Rules 4(m) and 16 aim to reduce delay in the beginning of litigation and promote early case management. Rule 4(m) decreases the time to serve a defendant from 120 days to 90 days after filing the complaint. If service is not completed in time, the court may dismiss the action without prejudice. However, if the plaintiff is able to show good cause for the failure, the court must extend the time for service.
There are four significant changes to Rule 16. First, in Rule 16(b)(1)(B) the phrase “by telephone, mail or other means” is deleted to improve the effectiveness of scheduling conferences. Instead, prior to issuing a scheduling order, the court and parties are encouraged to engage in direct communications at an in-person scheduling conference, a teleconference, or by more sophisticated electronic means. Second, Rule 16(b)(2) is amended to reduce the time for issuance of the scheduling order from 120 days to 90 days after a defendant has been served, or from 90 days to 60 days after any defendant has appeared. Third, the list of topics that can be addressed in the scheduling order under Rule 16(b)(3)(B) is expanded to include: (iii) the preservation of ESI, and (iv) agreements reached under FRE 502. Finally, newly created Rule 16(b)(3)(B)(v) provides that a scheduling order may “direct that before moving for an order related to discovery, the moving must request a conference with the court.” The Committee Note indicates that such conferences are left to the discretion of the judge. In the District of Delaware, all judges already require parties to contact the court before filing a discovery motion.
There are several important revisions to Rule 26. Rule 26(b)(1) is amended to limit discovery based on proportionality. The amended rule requires that discovery be “proportional to the needs of the case” citing multiple factors to consider: (1) the importance of the issues at stake; (2) the amount in controversy; (3) the parties’ relative access to relevant information; (4) the parties’ resources; (5) the importance of discovery in resolving the dispute; and (6) the burden or expense compared to the benefit.
Five of the factors were previously part of Rule 26(b)(2)(C)(iii), which concerned court-ordered limitations on discovery. The new factor, “the parties’ relevant access to the relevant information,” is meant to reduce the costs of discovery when appropriate to a specific case, consistent with the other changes to Rule 26.
The Committee Note to amended Rule 26 makes clear that the burden is not on the party seeking discovery to show proportionality but rather instructs the parties to consider proportionality when making discovery requests and the court to consider the same when deciding discovery disputes.
Rule 26(b)(1) continues to instruct that information need not be admissible to be discoverable, however, it deletes the language concerning discoverability of information “reasonably calculated to lead to the discovery of admissible evidence.” The Committee Note states that there was a concern that the “reasonably calculated” language was being used to define the scope of discovery and swallowing other discovery limits.
Rule 26(d)(2) allows document requests to be served at any time more than 21 days after the summons and complaint are served. For the purpose of computing a response time, the request is considered to have been served on the date of the first Rule 26(f) conference. This rule was amended to “facilitate focused discussion during the Rule 26(f) conference.” To be consistent, amended Rule 34(b)(2) will now provide that responses to discovery served under Rule 26(d)(2) are due within 30 days after the parties’ first Rule 26(f) conference.
Rule 34 is amended to require that objections be stated with specificity. This change mirrors the existing language of Rule 33(b)(4), thereby resolving any doubt that there is a different standard for objections under Rule 34. Rule 34(b)(2)(C) further addresses objections and will now provide that an objection must state whether anything is being withheld on the basis of the objection. The Committee Note to this amendment states that “[t]he producing party does not need to provide a detailed description or log of all documents withheld, but does need to alert other parties to the fact that documents have been withheld and thereby facilitate an informed discussion of the objection.” The Committee Note further instructs that stating the limits of a search for responsive and relevant materials will meet the requirements of amended Rule 34(b)(2)(C).
Rule 34(b)(2)(B) also includes new language requiring the responding party to “state that it will produce copies of documents or of electronically stored information instead of permitting inspection” and that production must be completed at “the time for inspection specified in the request or another reasonable time that is specified in the response.”
Electronically Stored Information and Sanctions
Rule 37(e) substantially revises the requirements for preserving electronically stored information (“ESI”). It provides that if ESI that should have been preserved is lost because reasonable steps to preserve were not taken, and the ESI cannot be restored or replaced, the court, upon a finding of prejudice, “may order measures no greater than necessary to cure the prejudice.” If the court finds that the party acted with an intent to deprive the other party of the information, the court may presume that the lost information was unfavorable to the party, instruct the jury as to the same or dismiss the action or enter a default judgment.
The Rule was significantly amended because its previous version, adopted in 2006, did not adequately address “the serious problems resulting from the continued exponential growth in the volume of such information.” The amended rule provides uniformity across the courts and forecloses reliance on inherent authority or state law. The Committee Note provides substantial guidance on application of this “new” rule.
Another notable change is the elimination of Rule 84, which currently provides that the forms in the Appendix to the Rules “suffice under these Rules to illustrate the simplicity and brevity that these rules contemplate.” The Committee Note reflects that Rule 84 will be abrogated because a plethora of forms and samples are now available on Court websites, in law libraries and from other sources. Notably, the Committee Note also provides that “[t]he abrogation of Rule 84 does not alter existing pleading standards or otherwise change the requirements of Civil Rule 8.” Yet the elimination of forms is expected to have the greatest impact on pleadings. In particular, the elimination of Form 18 – long considered the benchmark for pleading direct patent infringement – is expected to have a pronounced effect in patent cases. New case law may also emerge from courts that have previously relied on Form 30 as exemplary of well-pled affirmative defenses.
In 2012, the Federal Circuit confirmed that Fed. R. Civ. P. Form 18 is the standard by which the sufficiency of patent infringement complaints is measured. Form 18 provides a basic outline of a direct infringement claim: plaintiffs must provide the patent number and identify an accused product. Because no further factual foundation is contemplated by the Form, courts have denied motions to dismiss direct infringement claims that would otherwise not pass muster under Iqbal/Twombly. In contrast, courts have consistently held that indirect infringement claims, which are not exemplified in Form 18, are subject to the Iqbal/Twombly standard. This asymmetry will be eliminated by the abrogation of Rule 84’s endorsement of Form 18. Practitioners can expect an uptick in motions to dismiss direct infringement claims while the courts settle upon a new standard for what factual allegations are sufficient to pass muster under Rule 8.
The abrogation of Rule 84 also has potential implications vis-á-vis the split amongst courts over whether the Iqbal/Twombly plausibility standard applies to affirmative defenses. The District of Delaware and the Third Circuit do not apply Iqbal/Twombly to affirmative defenses for reasons not having to do with Form 30, but the abrogation of Rule 84 may inspire litigants to revisit the issue with courts that have relied on Form 30.