The Federal Rules of Civil Procedure: Important Amendments to be Aware of in 2016

Speaker Firms and Organization:
Ice Miller LLP
Mary Nold Larimore
Partner
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Presented By:
July 12, 2016
1
Partner Firms:
Schlam Stone & Dolan LLP
Jeffrey M. Eilender
Partner
Verrill Dana LLP
Frank J. Silvestri, Jr.
Partner

July 12, 2016
2
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Partner Firms:
July 12, 2016
7
Founded in 1910, Ice Miller LLP is an Am Law 200
Firm with a nationally recognized reputation in
many of its practice areas. Ice Miller offers a broad
array of capabilities in virtually all areas of legal
practice including: corporate, patents and
trademarks, bankruptcy, lobbying, labor and
employment, litigation, employee benefits,
environment, tax, trusts and estates, real estate,
municipal finance, public affairs and government
law. With offices in Chicago; Cleveland; Columbus;
DuPage County, Ill.; Indianapolis; New York; and
Washington, D.C., the Firm has more than 300
lawyers and 40 paraprofessionals.
Verrill Dana is a full service law firm with more than 130
attorneys and a growing number of service-based
practice groups. The firm has a regional presence in the
Northeast, with offices from Maine to Washington, D.C.,
allowing us to serve clients with interests across the
country and around the world. Through scalable staffing,
careful communication and skillful project management,
Verrill Dana helps individuals and businesses achieve
their goals in a manner that suits their unique legal
needs and preferred work methods.
Verrill Dana's enduring commitment to quality client
service is complemented by our commitment to
community service. Verrill Dana believes that its role as
a leading New England business carries a corresponding
obligation to give back to the communities in which we
live and work. This obligation is fulfilled through the
personal service of our lawyers and staff in numerous
community organizations, the firm's prominent charitable
giving program and the direct provision of pro bono legal
services.
Schlam Stone & Dolan is a preeminent litigation
boutique with the depth of experience, creativity,
and problem solving skills to deliver successful
outcomes for clients with surprising efficiency. Their
practice comprises all aspects of civil litigation,
government and internal corporate investigations,
and transactional and legal
counseling. Representing our clients in major
litigations is the bread and butter of our civil
litigation practice. These cases often involve hotly-
contested fights to control or dissolve companies,
protecting clients’ valuable intellectual property or
contractual rights, or disputes over valuable real
estate.

Brief Speaker Bios:
Frank Silvestri, a partner of Verrill Dana LLP in the firm’s Westport, Connecticut, office, represents parties to business disputes in state
and federal courts and arbitrations. He is Vice Chair of the Federal Civil Procedure Committee of the American College of Trial
Lawyers and a former co-chair of the Federal Practice Section of the Connecticut Bar Association. He is recommended in Band 1 for
general commercial litigation in Connecticut by Chambers and Partners and ranked by Benchmark Litigation, among others. A
graduate of Yale Law School and Georgetown University, he served as law clerk to United States Circuit Judge J. Joseph Smith of the
Court of Appeals for the Second Circuit.
July 12, 2016
8
Mary Nold Larimore
Mary Nold Larimore's primary practice concentration is in litigation, focusing on product liability litigation, the defense of
pharmaceutical and drug and device manufacturers, chemical companies, toxic tort litigation, commercial litigation, property damage
litigation, and general liability litigation. Mary was the first woman from the State of Indiana to be inducted as a Fellow in the American
College of Trial Lawyers and is a member of International Association of Defense Counsel, Defense Research Institute and Lawyers
for Civil Justice. She served as Chair of the Supreme Court Committee on Rules of Practice and Procedure, having completed her
second five-year term by appointment of the Chief Justice.
► For more information about the speakers, you can visit: https://theknowledgegroup.org/event-homepage/?event_id=1596
Jeffrey M. Eilender
Jeffrey M. Eilender joined the firm in 1995 and became a partner in 1999. Mr. Eilender has been a commercial litigator for over twenty
years. Although he has litigated virtually every kind of business conflict, his practice focuses on “business divorce”—intra-corporate
disputes over intellectual property, real estate and other assets, trade secrets, and disputes relating to business separations involving,
for example, operating, shareholder, non-compete and severance agreements. Mr. Eilender has also represented clients in criminal
and civil proceedings and investigations by government and regulatory agencies, including the Department of Justice, the Securities
and Exchange Commission, FINRA, and the New York State Attorney General’s Office.

Federal District Court litigators need to be aware of some significant and important amendments to the
Rules of Civil Procedure. These changes, which became effective in December 2015, are designed to
change pre-trial and discovery practices in courts by speeding up and reducing the cost of district court
cases.
Rule 1 now highlights the duty of counsel to cooperate in resolving cases justly, speedily and
inexpensively. Further to those ends, Rules 26(b) and (c) emphasize that discovery should be proportional
to the needs and relevant to the case. Amended Rule 37(e) addresses the problem of excessive retention
of electronically stored information (ESI). The new amendments include modification of the rules requiring
parties to respond to in more detail regarding their requests for documents. Among others, Rule 55(c),
Rule 84, and Rule 4(d)(1) have been revised.
Federal District Court litigators and their associates will be wise to become aware of these changes to
remain in compliance with the rules. The changes are substantial and require earlier consultation with
clients and more detailed and thorough submissions and requests under the rules.
July 12, 2016
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In this two hour, LIVE Webcast, a seasoned panel of thought leaders and professionals assembled by The
Knowledge Group will discuss The Federal Rules of Civil Procedure and review the Important
Amendments to be Aware of in 2016. The speakers will review the potential consequences of the changes
and suggest best practices for compliance.
Key Topics Include:
• The Federal Rules of Civil Procedure Amendments
• Consequences of Amendments
• Increased Co-operation
• Speeding up Cases
• Reduction of Costs
• Problems of Electronically Stored Information
• Compliance and Litigation Risks
• Best Practices
July 12, 2016
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Featured Speakers:
July 12, 2016
11
SEGMENT 1:
Partner
Verrill Dana LLP
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP
SEGMENT 3:
Jeffrey M. Eilender
Partner

Introduction
Frank Silvestri, a partner of Verrill Dana LLP in the firm’s Westport, Connecticut, office, represents parties to business
disputes in state and federal courts and arbitrations. He is Vice Chair of the Federal Civil Procedure Committee of the
American College of Trial Lawyers and a former co-chair of the Federal Practice Section of the Connecticut Bar
Association. He is recommended in Band 1 for general commercial litigation in Connecticut by Chambers and Partners and
ranked by Benchmark Litigation, among others. A graduate of Yale Law School and Georgetown University, he served as
law clerk to United States Circuit Judge J. Joseph Smith of the Court of Appeals for the Second Circuit.
July 12, 2016
12
SEGMENT 1:
Partner
Verrill Dana LLP

Introduction
“The amendments may not look like a big deal at first glance,
but they are.”
Chief Justice Roberts, 2015 Year-End
Report on the Federal Judiciary, at p. 5
July 12, 2016
13
SEGMENT 1:
Partner
Verrill Dana LLP

Applicability
“[T]he foregoing amendments to the Federal Rules of Civil Procedure shall take effect on December 1,
2015, and shall govern in all proceedings in civil cases thereafter commenced and, insofar as just and
practicable, all proceedings then pending.”
United States Supreme Court Order
April 29, 2015
July 12, 2016
14
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 1
“These rules govern the procedure in all civil actions and proceedings in the United States district courts,
except as stated in Rule 81. They should be construed[,] and administered[, and employed by the court
and the parties] to secure the just, speedy, and inexpensive determination of every action and
proceeding.”
July 12, 2016
15
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 1
The eight words added to Rule 1 “are words that judges and
practitioners must take to heart. . . . [T]hey make express the
obligation of judges and lawyers to work cooperatively in
controlling the expense and time demands of litigation. . . .
[L]awyers have an affirmative duty to work together, and with the
court, to achieve prompt and efficient resolutions of disputes.”
July 12, 2016
16
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 1
“In light of the fact that counsel are unable to proceed to bring pretrial discovery to an end, this Court, in
fulfillment of its Rule 1 obligations, enters the following order governing discovery. All paper and written
discovery is deemed closed, and the parties shall move forward to depositions.” The court went on
unilaterally to set deadlines for the completion of fact depositions and expert discovery. Sibley v. Choice
Hotels Int’l, No. CV-14-634 (JS)(AYS), 2015 WL 9413101at *8 (E.D.N.Y. Dec. 22, 2015)
July 12, 2016
17
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 1
Amended Rule 1 invoked to deny leave to amend when sought late in the proceedings with no good
reason for delay:
• Cruz v. T.D. Bank, N.A., No. 10-Civ.-8026 (PKC), 2016 WL 927228 at *3 (S.D.N.Y. March 10, 2016)
• United National Ins. Co. v. Indian Harbor Ins. Co., Civ. No. 14-6425, 2015 WL 8316433 at *2 (E.D. Pa.
Dec. 9, 2015)
July 12, 2016
18
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 1
“This amendment [to Rule 1] does not create a new or independent source of sanctions. Neither does it
abridge the scope of any other of these rules.”
Advisory Committee Note to Amendment of Rule 1
July 12, 2016
19
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 4
The time within which a defendant must be served is reduced from 120 days to 90 days. Rule 4(m).
“Shortening the time to serve under Rule 4(m) means that the time of the notice required by Rule
15(c)(1)(C) for relation back is also shortened.”
July 12, 2016
20
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 16(b)
“(1) Scheduling Order. Except in categories of actions exempted by local rule, the district judge—or a
magistrate judge when authorized by local rule—must issue a scheduling order:
(A) after receiving the parties’ report under Rule 26(f); or
(B) after consulting with the parties’ attorneys and any unrepresented parties at a scheduling
conference by telephone, mail or other means.
(2) Time to Issue. The judge must issue the scheduling order as soon as practicable, but in any event
[unless the judge finds good cause for delay, the judge must issue it] within the earlier of 120 90
days after any defendant has been served with the complaint or 90 60 days after any defendant has
appeared.”
July 12, 2016
21
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 16(b)
“The provision for consulting at a scheduling conference by ‘telephone, mail or other means’ is deleted. A
scheduling conference is more effective if the court and parties engage in direct simultaneous
communication. The conference may be held in person, by telephone, or by more sophisticated electronic
means.”
July 12, 2016
22
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 16(b)
“(3) Contents of the Order.
(B) Permitted Contents. The scheduling order may:
(iii) provide for disclosure[,] discovery[, or preservation] of electronically stored information;
(iv) include any agreements the parties reach for asserting claims of privilege or of protection as trial-
preparation material after information is produced, [including agreements reached under Federal
Rule of Evidence 502;
(v) direct that before moving for an order relating to discovery, the movant must request a
conference with the court;]”
July 12, 2016
23
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 16(b)
“The amendments also identify techniques to expedite resolution
of pretrial discovery disputes, including conferences with the
judge before filing formal motions in aid of discovery. Such
conferences can often obviate the need for a formal motion – a
well-timed scowl from a trial judge can go a long way in moving
things along crisply.”
July 12, 2016
24
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 16(b)
Summary: four new provisions in Rule 16(b) are “aimed at encouraging more active case management:”
1. “[C]ase management conferences during which judges and lawyers actually speak with each other.”
2. Advancing the time for the scheduling conference is intended “to encourage earlier intervention by
judges.”
3. Inclusion of preservation of ESI and Fed. R. Evid. 502 agreements in items to be addressed in case
management order.
4. Prefiling conferences for discovery motions.
David G. Campbell, “New Rules, New Opportunities”
99 JUDICATURE No. 3, Winter 2015, 19, 23-24
July 12, 2016
25
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 26(d)
“[(2) Early Rule 34 Requests.
(A) Time to Deliver. More than 21 days after the summons and complaint are served on a party, a
request under Rule 34 may be delivered:
(i) to that party by any other party, and
(ii) by that party to any plaintiff or to any other party that has been served.
(B) When Considered Served. The request is considered to have been served at the first Rule
26(f) conference.]”
Rule 26(d)(3) now allows the parties to stipulate to case-specific sequences of discovery.
July 12, 2016
26
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 26(d)(2)
Rule 26(d)(2)’s “relaxation of the discovery moratorium is designed to facilitate focused discussion during
the Rule 26(f) conference. Discussion at the conference may produce changes in the requests. The
opportunity for advance scrutiny of the requests delivered before the Rule 26(f) conference should not
affect a decision whether to allow additional time to respond.”
July 12, 2016
27
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 34(b)(2)
(2) Responses and Objections.
(A) Time to Respond. The party to whom the request is directed must respond in writing within 30 days
after being served [or – if the request was delivered under Rule 26(d)(2) – within 30 days after the
parties’ first Rule 26(f) conference]. A shorter or longer time may be stipulated to under Rule 29 or be
ordered by the court.
July 12, 2016
28
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 34(b)(2)
(B) Responding to Each Item. For each item or category, the response must either state that inspection
and related activities will be permitted as requested or state an objection [with specificity the grounds
for objecting] to the request, including the reasons. [The responding party may state that it will
produce copies of documents or of electronically stored information instead of permitting
inspection. The production must then be completed no later than the time for inspection specified
in the request or another reasonable time specified in the response].
(C) Objections. [An objection must state whether any responsive materials are being withheld on
the basis of that objection.] An objection to part of a request must specify the part and permit inspection
of the rest.
July 12, 2016
29
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 34(b)(2)
“These amendments should eliminate three relatively frequent problems: the use of broad, boilerplate
objections that provide little information about the true reason a party is objecting to a document request;
responses stating that responsive documents will be produced in due course, without indicating when
production will occur and which often are followed by long delays; and responses that state various
objections, produce some documents, and yet do not say whether any other documents have been
withheld on the basis of the objections. All three practices thwart Rule 1’s goals of speedy and
inexpensive litigation.”
David G. Campbell, “New Rules, New Opportunities”
99 JUDICATURE No. 3, Winter 2015, 19, 22-23
July 12, 2016
30
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 34(b)(2)
“An objection may state that a request is overbroad, but if the objection recognizes that some part of the
request is appropriate the objection should state the scope that is not overbroad. Examples would be a
statement that the responding party will limit the search to documents or electronically stored information
created within a given period of time prior to the events in suit, or to specified sources.”
“The 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.”
July 12, 2016
31
SEGMENT 1:
Partner
Verrill Dana LLP

Rule 34(b)(2)
Schultz v. Sentinel Ins. Co., No. 4:14-CV-04160-LLP, 2016 WL 3149686 (D.S.D. June 3, 2016)
• Defendant insurer’s three pages of “general objections” including objections based on confidentiality,
attorney-client privilege and work product overruled in their entirety; they “fail to preserve any valid
objection at all because they are not specific to a particular discovery request and they fail to identify a
specific privilege or to describe the information withheld pursuant to a privilege.” *7.
• In action for bad faith denial of insurance claim, undue burden objection to request for personnel files
of employees up chain of command from claims handler to head of claims department overruled for
failure to provide information as to the number of such employees; court unable to assess burden.
*10.
July 12, 2016
32
SEGMENT 1:
Partner
Verrill Dana LLP

Introduction
Mary Nold Larimore's primary practice concentration is in litigation, focusing on product liability litigation, the defense of
pharmaceutical and drug and device manufacturers, chemical companies, toxic tort litigation, commercial litigation, property
damage litigation, and general liability litigation. Mary was the first woman from the State of Indiana to be inducted as a
Fellow in the American College of Trial Lawyers and is a member of International Association of Defense Counsel, Defense
Research Institute and Lawyers for Civil Justice. She served as Chair of the Supreme Court Committee on Rules of
Practice and Procedure, having completed her second five-year term by appointment of the Chief Justice.
Mary has been active in publishing and speaking on issues concerning product liability, legal issues affecting the liability of
pharmaceutical and drug and device manufacturers, privacy, electronic discovery, medical malpractice and the Federal
Rules of Evidence.
July 12, 2016
33
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP

Amendments to the Federal Rules of Civil Procedure
Rule 26(b)(1)
July 12, 2016
34
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP

Amendments to Rule 26(b)(1)
Changes to the scope of discovery
Relevant to claim or defense, not subject matter (amended 2010)
Proportionality criteria were amended and moved to Rule 26(b)(1) (2015)
Are the Amendments having the hoped for impact?
A major problem is that courts continue to cite old cases under previous Rule 26(b)(1)
July 12, 2016
35
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP

The Oppenheimer Problem
Oppenheimer is an almost 40-year old Supreme Court decision decided under prior Rule 26(b)(1)
The scope of discovery under the Oppenheimer decision:
“Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject
matter involved in the pending action….
* * *
It is not ground for objection that the information sought will be inadmissible at the trial if the
information sought appears reasonably calculated to lead to the discovery of admissible
evidence.”
Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340 (1978)
July 12, 2016
36
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP

Scope of discovery under new Rule 26(b)(1):
“Scope in General. Unless otherwise limited by court order, the scope of discovery is as follows:
Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s
claim or defense and proportional to the needs of the case, considering the importance of the
issues at state in the action, the amount of controversy, the parties’ relative access to relevant
information, the parties’ resources, the importance of the discovery in resolving the issues, and
whether the burden or expense of the proposed discovery outweighs its likely benefit. Information
within this scope of discovery need not be admissible in evidence to be discoverable.”
July 12, 2016
37
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP

Omission of “reasonably calculated to lead to discovery of admissible evidence” in new Rule
26(b)(1) described as an improvement to clear up the misinterpretation of the scope of discovery.
Sibley v. Choice Hotels, 2015 WL 9413101 (E.D. N.Y., Dec. 22, 2015).
Courts and parties still cite Oppenheimer. Be proactive and head off this argument in your briefing.
July 12, 2016
38
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP

Arcelormittal Indiana Harbor LLC v. Amex Nooter, LLC,
2016 WL 614144
The recent amendment to Rule 26(b)(1), effective December 1, 2015, and applicable to this dispute,
removed the familiar language that relevant information does not have to be admissible at the trial to
be discoverable if it “appears reasonably calculated to lead to the discovery of admissible evidence.”
See Fed. R. Civ. P. 26(b)(1) (2010) (amended Dec. 1, 2015). The advisory committee's note
explains that the language had been “used by some, incorrectly, to define the scope of
discovery” as more broad than the scope set forth in Rule 26(b)(1). Fed. R. Civ. P. 26(b)(1)
advisory committee's note to 2015 amendment.
“Discovery of nonprivileged information not admissible in evidence remains available so long as it is
otherwise within the scope of discovery.” Id. Neither party acknowledged this amendment nor
discussed its impact on the instant dispute.
July 12, 2016
39
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP

Arcelormittal Indiana Harbor LLC v. Amex Nooter, LLC
The reliance in Vardon, Clark, and Steele (and Pfizer's reliance on Vardon and Clark) on the pre-
amendment language of Rule 26(b)(1) to limit the discovery of settlement negotiations is no longer
persuasive. Rule 26(b)(1) expressly provides that evidence need not be admissible to be
discoverable. The only question then is whether the discovery sought meets the standard set out in
Rule 26(b)(1) for relevance and proportionality.
Proportionality, which was added to the definition of the scope of discovery with the December 1,
2015 amendment to Rule 26(b)(1), has not been briefed as neither party cited the amended rule.
See Fed. R. Civ. P. 26(b)(1) advisory committee's note to 2015 amendment (“[I]f the parties continue
to disagree [about proportionality], the discovery dispute could be brought before the court and the
parties' responsibilities would remain as they have been since 1983.... The court's responsibility,
using all the information provided by the parties, is to consider these and all the other factors in
reaching a case-specific determination of the appropriate scope of discovery.”).
July 12, 2016
40
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP

Noble Roman's, Inc. v. Hattenhauer Distributing Company,
2016 WL 1162553 (S.D. IN)
The limits and breadth of discovery under Rule 26 apply to Rule 45 subpoenas to non-parties.
The limits and breadth of discovery expressed in Rule 26 are applicable to non-party discovery.
“… [E]ffective December 1, 2015, Rule 26(b) underwent its most recent structural and linguistic
alteration. And, once again, the changes were designed to protect against over-discovery and
to emphasize judicial management of the discovery process, especially for those cases in which
the parties do not themselves effectively manage discovery.”
July 12, 2016
41
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP

Noble Roman's, Inc. v. Hattenhauer Distributing Company
The Committee Notes emphasize that the parties and the court “have a collective responsibility to
consider the proportionality of all discovery and consider it in resolving discovery disputes.”
Nonparty subpoenas were not proportional to the needs of this case.
“The court finds that Hattenhauer's documents and deposition subpoenas to Privet Fund constitute
discovery run amok.”
“… discovery too far afield from the contested issues in this case.”
July 12, 2016
42
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP

PolyOne Corporation v. Lu, 2015 WL 9489915 (N.D. IL)
PolyOne brought a trade secret misappropriation claim
LEGAL STANDARD
“When this case was filed, Rule 26(b)(1) described the scope of discovery as ‘any nonprivileged
matter that is relevant to any party's claim or defense.’ Under that version of Rule 26, the court
could, for good cause, expand the scope to ‘any matter relevant to the subject matter involved in the
action.’ Fed. R. Civ. P. 26(b)(1). Effective December 1, 2015, Rule 26(b)(1) was amended to
eliminate the court's discretion to expand discovery to the subject matter of the action and to
add a requirement that discovery be ‘proportional’ to various factors. The new version is applicable
to pending actions to the extent just and practicable. 28 U.S. C. § 2074(a); Sup. Ct. Order April 29,
2015.”
July 12, 2016
43
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP

PolyOne Corporation v. Lu
“…Rule 26(b)(1) does not permit the court to compel discovery about the subject of the lawsuit.
Discovery is limited to claims and defenses in the lawsuit. Under Rule 26(b)(1), the court cannot
authorize a wholesale examination of a competitor's business – even limited to nine
customers and six product lines – on the basis of speculation that something improper might
have occurred.”
“Polymax asks that its production of formulas and customer information be delayed until PolyOne
discloses a prima facie case of misappropriation. (Def.'s Mot. for Protective Order at 5.) That
request is denied. Although the court agrees that many of PolyOne's discovery requests are
overly broad, the proper course is not to make discovery one-sided, but to narrow the scope
of discovery to what is properly relevant to the claims and defenses and proportional to the
factors set out in Rule 26(b)(1).”
July 12, 2016
44
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP

Robertson v. People Magazine, 2015 WL 9077111 (S.D. N.Y.)
“Plaintiff alleges that she was subjected to a discriminatory work environment and ultimately
terminated due to her race.”
“On December 1, 2015, Rule 26(b)(1) was amended to require that discovery be ‘proportional to the
needs of the case.’” The Court refused to characterize the amended rule as creating a new
standard.
“As such, the 2015 amendment does not create a new standard; rather it serves to exhort
judges to exercise their preexisting control over discovery more exactingly. See Advisory
Comm. to 2015 Amendment (explaining that the “present amendment restores the
proportionality factors to their original place in defining the scope of discovery” (emphasis
added) and stressing the “need for continuing and close judicial involvement” in ensuring
proportionality).”
July 12, 2016
45
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP

Robertson v. People Magazine
“The Court has no trouble concluding that Plaintiff's discovery requests are burdensome and
disproportionate.”
“Plaintiff here seeks nearly unlimited access to People's editorial files, including all documents
covering the mental process of People staff concerning what would or would not be published in the
magazine.”
July 12, 2016
46
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP

Goes International, AB v. Dodur Ltd., 2016 WL 427369 (N.D. CA)
Proportionality Factors: The Party’s Resources
“The court is aware that the defendant is located in China and (as it describes matters) is a small
concern with limited resources. The production requests here, though, should not be an excessive
burden. Furthermore, although it is a concern, the defendant's financial wherewithal is not decisive.
The advisory committee's notes to Rule 26 state: “[C]onsideration of the parties' resources does
not foreclose discovery requests addressed to an impecunious party, nor justify unlimited
discovery requests addressed to a wealthy party.” Fed. R. Civ. P. 26(b) advisory comm. notes
(2015 amends.) Both parties should tailor their efforts to the needs of this case.”
“Finally, the court thinks it relevant that the parties are moving toward settlement
discussions. The requested discovery may “likely benefit” both parties in that endeavor by
helping to accurately fill out the picture of this developing lawsuit. See id. (proportionality
weighs both “expense” and “likely benefit” of discovery).”
July 12, 2016
47
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP

Introduction
Jeffrey M. Eilender joined the firm in 1995 and became a partner in 1999. Mr. Eilender has been a commercial litigator for
over twenty years. Although he has litigated virtually every kind of business conflict, his practice focuses on “business
divorce”—intra-corporate disputes over intellectual property, real estate and other assets, trade secrets, and disputes
relating to business separations involving, for example, operating, shareholder, non-compete and severance agreements.
Mr. Eilender has also represented clients in criminal and civil proceedings and investigations by government and regulatory
agencies, including the Department of Justice, the Securities and Exchange Commission, FINRA, and the New York State
Attorney General’s Office. He has been lead counsel in successful trials and hearings in the Commercial Divisions of New
York’s state courts, a variety of arbitral forums, and in other federal and state courts around the country.
Mr. Eilender has been designated a Super Lawyer for the New York Metro Area from 2010-2014 in the area of commercial
litigation. He is a member of the Association of the Bar of the City of New York, the American Bar Association (and the
Business Divorce and Private Company sub-committee of its Business Law Section). Mr. Eilender is also a member of the
Commercial and Federal Litigation Section of the New York State Bar Association and Co-chair of its New York State
Judiciary Committee.
July 12, 2016
48
SEGMENT 3:
Jeffrey M. Eilender
Partner

ESI = Electronically stored Information
July 12, 2016
49
SEGMENT 3:
Jeffrey M. Eilender
Partner
Databases
E-mail
Word Processing Documents
Spreadsheets
Instant Messaging
Social Media
SMS Texting
DON’T FORGET METADATA!!!!!!!

IMPORTANCE OF ESI
July 12, 2016
50
SEGMENT 3:
Jeffrey M. Eilender
Partner
ESI may contain the “smoking gun”
ESI IS NEVER REALLY DELETED!
Failure to preserve may result in severe consequences for the client …
AND THE ATTORNEY

Old Rule 37(e)
• “Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for
failing to provide electronically stored information lost as a result of the routine, good-faith operation of
an electronic information system."
July 12, 2016
51
SEGMENT 3:
Jeffrey M. Eilender
Partner

Old Rule 37(e): Severe Sanctions For Failure to Preserve ESI
July 12, 2016
52
SEGMENT 3:
Jeffrey M. Eilender
Partner
• Allied Concrete Co. v. Lester, 736 S.E.2d 699 (Va. 2013)(deletion of Facebook account yielded
$772,000 sanction, $542,000 of which to be paid by ATTORNEY; court also granted right to adverse
jury instruction)
• Lawyer sanctioned in Allied Concrete subsequently suspended from practice for 5 yrs.
• In re Pradaxa Prods. Liab. Litig., MDL No. 2385, 2013 WL 6486921 (S.D. Ill. Dec. 9,
2013)(Imposition of $1 million in sanctions)
• Grange Mut. Cas. Co. v Mack, 270 Fed App’x 372 (6th Cir 2008)(answers stricken leading to $8
million in default judgments)
• Gatto v. United Air Lines, Inc., No. 10-CV-1090-ES-SCM, 2013 WL 1285285 (D.N.J. March 25,
2013)(adverse inference instruction authorized even though Plaintiff’s “destruction of evidence does
not appear to be motivated by fraudulent purposes or diversionary tactics, and the loss of evidence
will not cause unnecessary delay.”)

Issue with Old Rule 37(e)
July 12, 2016
53
SEGMENT 3:
Jeffrey M. Eilender
Partner
• Advisory Committee Notes on Rules – 2015 Amendments
• Old rule “has not adequately addressed the serious problems resulting from the continued
exponential growth in the volume of such information.”
• “Federal circuits have established significantly different standards for imposing sanctions or
curative measures on parties who fail to preserve electronically stored information. These
developments have caused litigants to expend excessive effort and money on preservation in
order to avoid the risk of severe sanctions if a court finds they did not do enough.”

Federal Circuit Split Interpreting Old Rule 37(e)
• See Rimkus Consulting Grp., Inc. v. Cammarata, 688 F. Supp. 2d 598, 614–15 (S.D. Tex. 2010)
(discussing cases).
• The Seventh, Eight, Tenth, Eleventh and D.C. Circuit required bad faith for an adverse
inference
• See, e.g., Penalty Kick Mgmt. Ltd. v. Coca Cola Co., 318 F.3d 1284, 1294 (11th
Cir.2003) ("[A]n adverse inference is drawn from a party's failure to preserve evidence
only when the absence of that evidence is predicated on bad faith.“).
• However, the First, Second, Fourth and Ninth Circuits held that bad faith was not required,
especially where there was severe prejudice.
• See, e.g., Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99, 108 (2d
Cir.2002), (“The sanction of an adverse inference may be appropriate in some cases
involving the negligent destruction of evidence because each party should bear the risk of
its own negligence.“).
July 12, 2016
54
SEGMENT 3:
Jeffrey M. Eilender
Partner

Amendments to Rule 37(e)
• Per Advisory Committee Notes, amendment intended to prevent trend of litigants “expending
excessive effort and money on preservation”
• Resolves circuit split, in favor of cases requiring intent and provides a uniform rule for the imposition
of spoliation sanctions
• Advisory Committee Notes:
• “New Rule 37(e) replaces the 2006 rule. It authorizes and specifies measures a court may
employ if information that should have been preserved is lost, and specifies the findings
necessary to justify these measures. It therefore forecloses reliance on inherent authority
or state law to determine when certain measures should be used.” (emphasis added).
July 12, 2016
55
SEGMENT 3:
Jeffrey M. Eilender
Partner

New Rule 37(e)
• FAILURE TO PRESERVE ELECTRONICALLY STORED INFORMATION. If electronically stored information that
should have been preserved in the anticipation or conduct of litigation is lost because a party failed
to take reasonable steps to preserve it, and it cannot be restored or replaced through additional
discovery, the court:
• (1) upon finding prejudice to another party from loss of the information, may order measures no
greater than necessary to cure the prejudice; or
• (2) only upon finding that the party acted with the intent to deprive another party of the information’s
use in the litigation may:
• (A) presume that the lost information was unfavorable to the party;
• (B) instruct the jury that it may or must presume the information was unfavorable to the party; or
• (C) dismiss the action or enter a default judgment.
July 12, 2016
56
SEGMENT 3:
Jeffrey M. Eilender
Partner

New Rule 37(e)
Three conditions that must be satisfied before Rule 37(e) can be applied
1. ESI that should have been preserved in the anticipation or conduct of litigation is lost;
2. A party failed to take reasonable steps to preserve the information; and
3. The information cannot be restored or replaced through additional discovery.
July 12, 2016
57
SEGMENT 3:
Jeffrey M. Eilender
Partner

New Rule 37(e)
• Advisory Committee Notes explicitly state that the rule depends on the common-law duty to
preserve ESI; it does not create a new duty to preserve.
• Thus, the existing case law on when a duty to preserve arises and the when evidence is
relevant continues to be applicable.
July 12, 2016
58
SEGMENT 3:
Jeffrey M. Eilender
Partner

Reasonable Steps to Preserve
• “The rule applies only if the information was lost because the party failed to take reasonable steps to
preserve the information. Due to the ever-increasing volume of electronically stored information and
the multitude of devices that generate such information, perfection in preserving all relevant
electronically stored information is often impossible. As under the current rule, the routine, good-faith
operation of an electronic information system would be a relevant factor for the court to consider in
evaluating whether a party failed to take reasonable steps to preserve lost information, although the
prospect of litigation may call for reasonable steps to preserve information by intervening in that
routine operation. This rule recognizes that “reasonable steps” to preserve suffice; it does not call for
perfection. The court should be sensitive to the party’s sophistication with regard to litigation in
evaluating preservation efforts; some litigants, particularly individual litigants, may be less familiar
with preservation obligations than others who have considerable experience in litigation.”
• “Because the rule calls only for reasonable steps to preserve, it is inapplicable when the loss of
information occurs despite the party’s reasonable steps to preserve. For example, the information
may not be in the party’s control. Or information the party has preserved may be destroyed by events
outside the party’s control — the computer room may be flooded, a “cloud” service may fail, a malign
software attack may disrupt a storage system, and so on. Courts may, however, need to assess the
extent to which a party knew of and protected against such risks.”
July 12, 2016
59
SEGMENT 3:
Jeffrey M. Eilender
Partner

Breaking Down New Rule 37(e)
• Subsection 1:
• “Upon finding prejudice to another party from loss of the information, may order measures no
greater than necessary to cure the prejudice”
• Applies only where there is no intent
• Advisory Committee Notes: Allows for a range of measures to cure the prejudice; but
cannot be an adverse inference or any other measure set forth in the second subsection
• “Care must be taken, however, to ensure that curative measures under subdivision
(e)(1) do not have the effect of measures that are permitted under subdivision
(e)(2) only on a finding of intent to deprive another party of the lost information’s
use in the litigation.”
July 12, 2016
60
SEGMENT 3:
Jeffrey M. Eilender
Partner

• Subsection 2:
• “Only upon finding that the party acted with the intent to deprive another party of the
information’s use in the litigation may:”
• (A) presume that the lost information was unfavorable to the party;
• (B) instruct the jury that it may or must presume the information was unfavorable to the
party; or
• (C) dismiss the action or enter a default judgment.
• Per Advisory Committee Notes, Explicitly rejects cases finding that an adverse inference
may be applied even where the spoliation was not intentional.
• “It is designed to provide a uniform standard in federal court for use of these serious
measures when addressing failure to preserve electronically stored information. It rejects
cases such as Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99 (2d
Cir. 2002), that authorize the giving of adverse-inference instructions on a finding of
negligence or gross negligence.”
July 12, 2016
61
SEGMENT 3:
Jeffrey M. Eilender
Partner

• Subsection 2:
• Advisory Committee Notes explained why it rejected adverse inference in cases of spoliation
without intent
• “Adverse-inference instructions were developed on the premise that a party’s intentional
loss or destruction of evidence to prevent its use in litigation gives rise to a reasonable
inference that the evidence was unfavorable to the party responsible for loss or
destruction of the evidence. Negligent or even grossly negligent behavior does not
logically support that inference. Information lost through negligence may have been
favorable to either party, including the party that lost it, and inferring that it was
unfavorable to that party may tip the balance at trial in ways the lost information never
would have. The better rule for the negligent or grossly negligent loss of electronically
stored information is to preserve a broad range of measures to cure prejudice caused by
its loss, but to limit the most severe measures to instances of intentional loss or
destruction.”
July 12, 2016
62
SEGMENT 3:
Jeffrey M. Eilender
Partner

• Subsection 2:
• Does not require courts to apply one of the three remedies set forth in the subdivisions.
• “Courts should exercise caution, however, in using the measures specified in (e)(2).
Finding an intent to deprive another party of the lost information’s use in the litigation
does not require a court to adopt any of the measures listed in subdivision (e)(2). The
remedy should fit the wrong, and the severe measures authorized by this subdivision
should not be used when the information lost was relatively unimportant or lesser
measures such as those specified in subdivision (e)(1) would be sufficient to redress the
loss.”
July 12, 2016
63
SEGMENT 3:
Jeffrey M. Eilender
Partner

Application of New Rule 37(e)
• CAT3, LLC v. Black Lineage, Inc., No. 14 Civ. 5511 (AT) (JCF), 2016 WL 154116 (S.D.N.Y. Jan. 12, 2016)
• “In light of the findings here, dismissal of the action or imposition of an adverse inference are
available sanctions under either Rule 37(e) or the court's inherent authority. See Fed. R. Civ. P.
37(e)(2); West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir.1999) (Under inherent
authority, “[d]ismissal is appropriate if there is a showing of willfulness, bad faith, or fault on the part
of the sanctioned party.”). However, such drastic sanctions are not mandatory.”
• “Here, these considerations dictate a two-fold remedy. First, the plaintiffs shall be precluded from
relying upon their version of the emails at issue to demonstrate notice to the defendants of use of the
SLAMXHYPE mark. . . . Second, the plaintiffs shall bear the costs, including reasonable attorneys'
fees, incurred by the defendants in establishing the plaintiffs' misconduct and in securing relief.”
• “The relief outlined here satisfies the dictates of Rule 37(e)(2) and of principles of inherent authority
not to impose unnecessarily drastic sanctions. Furthermore, it is also consistent with Rule 37(e)(1),
as it is no more severe than is necessary to cure the prejudice to the defendants.”
• Court found that, despite language in new Rule 37(e) foreclosing inherent authority of courts, courts
retain inherent authority to remedy spoliation. Court found that Rule 37(e) merely provides that
“ court could not rely on one of those other sources of authority to dismiss a case as a sanction for
merely negligent destruction of evidence, as would have been the case under Residential Funding,
306 F.3d at 108.”
July 12, 2016
64
SEGMENT 3:
Jeffrey M. Eilender
Partner

Application of New Rule 37(e)
• Nuvasive, Inc. v. Madsen Med., Inc., No. 13CV2077 BTM(RBB), 2016 WL 305096, at *1 (S.D. Cal. Jan.
26, 2016)
• Prior to Amendment of Rule 37(e), court had granted motion for adverse inference, despite lack of
intent.
• Court found that new rule applied where the court had granted a motion for an adverse inference
jury instruction, but the trial had not yet occurred.
• “It is clear from the language of (e)(2) as well as the Committee Notes that the adverse inference
instruction that the Court was going to give falls within the measures that are not permissible
absent a finding of intent. The Committee Notes explain: “Subdivision (e)(2) applies to jury
instructions that permit or require the jury to presume or infer that lost information was
unfavorable to the party that lost it. Thus, it covers any instruction that directs or permits the jury
to infer from the loss of information that it was in fact unfavorable to the party that lost it.’”
• “In its prior orders, the Court did not make any finding that NuVasive intentionally failed to
preserve the text messages so that Defendants could not use them in this litigation. Instead, the
Court found that NuVasive was at fault for not enforcing compliance with the litigation hold. The
record does not support a finding of intentional spoliation by NuVasive. Therefore, under Rule
37(e), as amended, it would not be proper for the Court to give the adverse inference instruction.”
July 12, 2016
65
SEGMENT 3:
Jeffrey M. Eilender
Partner

Impact of the Rule Change
• Clients and attorneys still must take reasonable efforts to preserve ESI
• However, rule may give them an opportunity to explain how or why they were unable to preserve
all ESI
• Courts may still impose sanctions where ESI is not preserved, even without intent
• However, these sanctions cannot include an adverse inference or the other more serious
sanctions set forth in (e)(2)
• Intentional spoliation of ESI may still continue to result in severe sanctions, although courts are
instructed to exercise caution
• While amendments were intended to prevent parties from extending excessive money and time on
preserving ESI, remains to be seen what impact this will actually have
July 12, 2016
66
SEGMENT 3:
Jeffrey M. Eilender
Partner

July 12, 2016
67
Contact Info:
Mary Nold Larimore
Partner
Ice Miller LLP
E: larimore@icemiller.com
T: (317) 236-2407
Jeffrey M. Eilender
Partner
E: jeilender@schlamstone.com
T: (212) 344-5400
Partner
Verrill Dana LLP
E: fsilvestri@verrilldana.com
T: (203) 222-3108

► You may ask a question at anytime throughout the presentation today. Simply click on the question mark icon located on the floating tool bar on the bottom right side of your screen. Type
your question in the box that appears and click send.
► Questions will be answered in the order they are received.
Q&A:
July 12, 2016
68
SEGMENT 1:
Partner
Verrill Dana LLP
SEGMENT 2:
Mary Nold Larimore
Partner
Ice Miller LLP
SEGMENT 3:
Jeffrey M. Eilender
Partner

July 12, 2016
69
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