Electronic Communication in Modern Litigation

It goes without saying that use of electronically stored information constitutes a fundamental component of any modern, successful company, but state and federal courts have only recently adjusted their rules of discovery to reflect that. For example, the federal courts recently revised their Rule 37, which concerns sanctions for failing to preserve or produce documents relevant to a claim or defense. Previously, Federal Rule 37(e) permitted sanctions for a party’s failure to preserve electronic information only in “exceptional circumstances.” Now, Rule 37(e) places an affirmative duty on parties to take “reasonable steps to preserve” electronic information, and that duty begins the moment litigation is anticipated, not merely commenced. State courts often follow the federal judiciary’s example—whether by expressly revising their rules in accordance or simply as an example to guide decisions when their rules are silent on an issue (as Colorado’s rule is)—so these changes are significant regardless of forum.

For businesses and individuals, the added focus on electronic information both increases a party’s discovery obligations but also protects against destruction of evidence, thereby ensuring that litigation proceeds fairly and reaches a just result in light of all the facts. Gone are the days where “routine” or “automatic” system maintenance could destroy large swatches of evidence adverse to a party. In practice, a party could easily defend against its opposition’s requests for electronic information by hiding behind a wall of technological jargon designed to excuse (or confuse) the issue entirely. The old rule placed the burden on the requesting party to prove “exceptional circumstances”—an almost impossible standard to meet without smoking-gun evidence, especially in light of judges’ reluctance to wade into the “new world” of technology.

The revised rule, however, essentially flips the burden to rest on the party unable to produce electronic evidence. Now, it must explain what “reasonable steps” it put in place to preserve this information from the moment litigation was anticipated. Given the amorphous meaning of “anticipated,” companies now must be very careful not only to begin preserving electronic information once a dispute is foreseen, but they must also disable automatic system maintenance and inform employees about routine procedures that could delete or affect such information. In light of these rule changes, electronic discovery now takes a much larger role in any case, but it is a role commensurate with the already widespread use of technology in the modern, successful company

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Are Draft Expert Reports “Discoverable” in Water Court Proceedings?

     Pretrial discovery (where a party to a legal proceeding can see the evidence the other side will use) has been undergoing big changes in Colorado. One of the most significant recent changes to the Colorado rules of civil procedure is that draft expert reports and communications between experts and attorneys are now protected from discovery under C.R.C.P. 26 as trial preparation materials. For background see http://www.wsmtlaw.com/blog/changes-in-colorado-s-rules-of-civil-procedure-aimed-at-frontloading-litigation-to-decrease-costs.html.

     The question addressed at the annual Water Division One Bench-Bar Meeting, held on August 17, 2015, was whether this change in civil discovery would apply to Water Court proceedings. From the discussions, it appears that there is some uncertainty about whether the new C.R.C.P. 26(b)(4)(D) will protect draft water expert reports in a water court proceeding. For example, some take the position that this rule does not apply in water court proceedings because the official comment to Rule 26 expressly excludes water law from its scope. Others counter that Rule 26 generally applies in water court proceedings because the Uniform Local Rules for All State Water Court Divisions incorporates Rule 26, except as expressly modified by Local Rule 11. Arguably, the new rule protecting draft expert reports from discovery is not in direct conflict with a specific water court rule or the modifications expressed in Local Rule 11 and should therefore apply in water court proceedings.

     The water court has not had the opportunity to express its opinion on this issue yet. At the meeting, it was noted that where the general rules of civil procedure are discretionary in water court proceedings, the court would apply them unless it is convinced by the facts of a particular case that the general rule should not apply. This approach is consistent with either interpretation of the applicability of Rule 26. The comment to Rule 26 regarding its scope, which provides that a water court may use those rules, suggests that the rules are discretionary. Local Rule 12, which provides that a water court may modify the local rules on a case-by-case basis “to avoid substantial injustice or great hardship,” suggests that the local rules and those general rules, incorporated through the local rules and not independently applicable, are subject to modification on a case-by-case basis by the court. Thus, even if applicable, the new rule is subject to modification by the court.

     At the meeting, the question was asked whether the attorneys present were for or against applying this rule in water court proceedings. A number of attorneys expressed their support for the rule protecting draft expert reports from discovery, and no one expressed opposition to the rule. Thus, there may not be many challenges to the position that draft expert reports will be protected from discovery in water court proceedings, but there is room for a contrary interpretation.

     Experts and attorneys should be aware of this possibility for disclosure in water court proceedings and take some steps to ensure their draft reports and communications are protected. Given the strong support expressed by water lawyers at the Division One Bench-Bar Meeting for this protection from discovery, it may be possible for experts and attorneys to protect themselves against this uncertainty by getting all parties to stipulate that Rule 26(b)(4)(D) will apply to their case.

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Changes in Colorado’s Rules of Civil Procedure Aimed at Frontloading Litigation to Decrease Costs

After testing new rules in a select number of Colorado districts over the past few years, on July 1, 2015, the Colorado Supreme Court adopted new rules intended to significantly change civil litigation, especially the discovery process. This initial stage of a lawsuit – depositions, document requests and production, and interrogatories – is costly in client time and legal fees. Responding to complaints about those escalating costs, the new rules focus on setting discovery parameters early in a case to proportionally reflect the monetary claim and controversy at issue. Above all, the rules seek to restrict discovery of documents or issues merely tangential to the real source of the dispute or, more cynically, to move past “scorched earth” litigation tactics. The Court hopes to do so by rewriting the case management process, abandoning default or presumptive orders in favor of open communication between counsel and the court to reach an order tailored to the specific needs of each individual case. Judges will also play a stronger role in managing the discovery process.

The new discovery rule (CRCP 16(b)) now requires parties to meet in person or by telephone to reach a proposed case management order that details the claims, defenses, description of the case, settlement efforts, amount in controversy, proportional discovery limits, discovery timing, expert witness considerations, treatment of electronic information, and all deadlines in advance of a firm trial date. Where agreement cannot be achieved, both parties must present their respective positions in advance of the mandatory court conference, which must occur 49 days after the case is at issue. The rule—like other similar rule new changes beyond the scope of this post—requires the court to “actively oversee” the process.

Of course, adverse parties will continue to have different views of what their case requires, and it is facile to expect agreement on case parameters before an in-depth investigation into the dispute has commenced. To this end, the success of the new rules will hinge on whether or not judges actively oversee and are willing to involve themselves in the discovery phase of cases on their dockets. Often, this is not a question of the bench’s desire to administer justice, but rather the practical requirements of managing caseloads that may leave little time for a judge to decide discovery disputes. Only time will tell if the rule’s new demands on the bench to routinely oversee discovery can and will be implemented.

To this end, the new rules afford counsel the opportunity to further clients’ goals by always endeavoring to keep good, open lines of communication with opposing counsel. Indeed, under the prior rules where the bench rarely involved itself in discovery unless absolutely necessary, conceding a small point rarely returned any benefit to the conciliatory party, removing any incentive to self-regulate the process and resulting in relatively unrestrained discovery where both sides “wanted it all.” Now, because the rules require the court to “actively oversee” the discovery process, if the opposition is unwilling to reciprocate and concede anything, the court will likely recognize which party is causing the friction and respond accordingly. Thus, under the new regime, it should be easier to establish trust and candor with the court, which could yield substantive benefits for a party in addition to saving money. Though discovery will always be contentious as each side will have a different view of the case and its requirements, Colorado’s new rules present a real opportunity to reach the merits more quickly and inexpensively.

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