July 2000

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A Parting of Ways? Amendments to the Civil Rules -- State and Federal By David F. Herr Whether the state and federal rules will ever again be on the same track is anybody’s guess.

In two fell swoops, the Minnesota 1 and Federal Rules of Civil Procedure 2 were amended this spring. Things may never be the same. The Minnesota amendments are perhaps the simpler to grasp -- they adopted parts of earlier federal rules amendments that have provoked little or no controversy and should work in state court litigation without causing any disruption. They include a substantial reworking of Rule 11 on sanctions and more modest changes to Rule 26 on discovery. They do not include the more controversial "initial disclosure" provisions that have been surrounded with controversy since first proposed for federal court. The federal rule changes include yet another formulation of initial disclosure, as well as a compromise modification of the scope of discovery -- discovery is narrowed to matters relating "to the claims and defenses," but the court can allow use of the broader, current standard that permits discovery of all information relating to "the subject matter of the litigation." This change seems sure to result in motion practice over the scope of discovery in most cases. Because the state and federal approaches are now so disparate, they will be discussed in turn. Whether the state and federal rules will ever again be on the same track is anybody’s guess.

David F. Herr is a partner with Maslon Edelman Borman & Brand, LLP, Minneapolis. He is coauthor of Minnesota Practice: Civil Rules Annotated and serves as Reporter to the Minnesota Supreme Court Advisory Committee on Rules of Civil Procedure.

"The rule [Minn. R. Civ. P. 26.05] requires supplementation of prior expert information, regardless of whether it was formally disclosed by interrogatory answer or in a deposition or if it was made by expert report."

Amendments to the Minnesota Rules Sanctions. Perhaps the most sweeping change to the Minnesota Rules is the nearly complete replacement of Rule 11. In practice, however, this change is likely to be nowhere near as significant as would appear. The changes follow verbatim the 1993 amendments to Fed. R. Civ. P. 11. Those amendments initially were viewed by the Minnesota advisory committee as unnecessary, given the widespread recognition that sanctions had not become the problem in state-court litigation that they were in federal court, particularly in federal courts in more populous urban areas. In 1990, the Minnesota Supreme Court handed down its decision in Uselman v. Uselman, 3 and established standards for the imposition of standards that anticipated and avoided many of the vexing problems sanctions were to become elsewhere. Because our Rule 11 worked well, and was well-understood by the courts and most litigants, changing the rule seemed unwise. The law of sanctions in Minnesota has always had a statutory foundation in addition to its primary basis in the inherent power of the courts and thence in court rules. In Minnesota, Minn. Stat. 549.21, until its replacement in 1997, was viewed as creating sanctions standards largely duplicative of Minn. R. Civ. P. 11. In 1998, however, the Legislature replaced this tried-and-true statute with 549.211, which was drawn significantly from federal Rule 11 as it had been amended in 1993. Although the amended statute and old state Rule 11 created different procedures, they were in fact interpreted and implemented as consistent or overlapping statements of the sanction power. That conclusion will be inevitable now that the amended statute and amended rule are identical. How do they work? The changes are summarized as follows: The rule applies to "advocating" in addition to mere "signing" Certification extends to legal sufficiency and factual support Motion is now served but not filed, and responding party has 21 days to cure the defect or withdraw the unsupported position Court is authorized to enter order to show cause on its own motion Sanctions may be ordered against an attorney or a law firm (or against the party) Non-monetary sanctions and fines are expressly authorized The biggest change in sanctions practice is the establishment of a "safe harbor" procedure. A party seeking sanctions can no longer just file a motion for sanctions. Rule 11.03(a)(1) provides that a motion for sanctions must be 1) brought in a separate motion and 2) served in the normal manner but not filed. The motion cannot be filed for 21 days and then only if "the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected." This provision is intended to limit the extent and frequency of motion practice over sanctions and also to permit a party to consider and amend the conduct giving rise to the motion. The requirement of a separate motion is intended to curtail the practice of adding a sanctions charge as a "knee-jerk" allegation in response to another party’s pleading. This unsavory practice is not prevalent in Minnesota, and should be less likely ever to become established. Rule 11.02 explicitly expands the scope of Rule 11 to cover not only "signing" of pleadings but the full range of litigation conduct: "signing, filing, submitting, or later advocating" a pleading or other paper. The specific formulation of the representations deemed made has been modified, though the general structure remains. The signing or advocating constitutes certification that, after "an inquiry reasonable under the circumstances": 1.it is not presented for any improper purpose; 2.the claims, defenses or other contentions are warranted either by a) existing law or b) a "nonfrivolous argument" for extension or modification of existing law; 3.the allegations or other factual contentions "have evidentiary support" (or, if so identified, will have evidentiary support after a reasonable opportunity for further investigation or discovery); and 4.denials of contentions are warranted by the evidence or, if so identified, "are reasonably based on a lack of information or belief." The requirement of Rule 11.02(b) for a "nonfrivolous argument" for extension or modification (including reversal) of existing law changes the current standard that the argument be a "good faith" argument. This new standard is intended to remove any question of whether an "empty head/pure heart" pleading would avoid sanctions -- it will not in the future (and would not have in the past either, but now the rule says so). The requirement that the inquiry be "reasonable under the circumstances" should encourage courts to make an appropriate assessment of the offending conduct. This provision, for example, would justify a more limited investigation of the facts before commencing an action where the statute of limitations is about to run when the client approaches the lawyer. Of course, the exigency of that situation would not carry forward to establish a lower standard for correcting any mistake during the 21-day safe harbor period if a Rule 11 motion is made. The sanctions available are now more expressly provided for under the rule. The rule allows the court to order other than monetary sanctions. The court may now order a fine be paid into court. The current rule contemplates only sanction payments made to the other side. Because the measure of sanctions is expressly stated as "what is sufficient to deter repetition" of the offending conduct, the amount needed to deter could under the rule exceed the amount of harm actually caused to the opposing litigant; in this circumstance a fine, or a mixed payment to court and the adversary might allow the correct level of deterrence without creating a windfall to the party. The rule expressly provides that a sanction can be awarded against a law firm rather than the individual lawyers. These provisions generally track what courts already deemed to be within their power under the former rules, so the impact of the rule change is likely to be greater clarity, not a substantial change in available sanctions. Of course, the provision allowing sanctions against law firms instead of against only individual lawyers may curtail the practice of sending new associates to argue the untenable motions. In sum, new Rule 11 will change the procedure for seeking and obtaining sanctions, but should not result in significant change in sanctions practice. Sanctions have been the exception rather than the rule in Minnesota litigation, and that should continue. Discovery Changes. Three simple changes were made to Rule 26. These follow amendments that were made to the federal rules in 1993, but do not include any of the controversial "automatic disclosure" provisions. More on that later. Limitations on Discovery. Rule 26.02(a) is amended to modify the specific formulation of the power of the court to limit the amount of discovery. The changes are intended to make it clearer how the courts may implement discovery limitations, but do not change the extent of the power or the encouragement of the rules that these limitations be imposed. Privilege Logs. Rule 26.02(e) is an entirely new rule that requires a party asserting a claim of privilege in response to a discovery request to set forth the basis for the privilege claim in a separate privilege log. Although the rule is new, the use of privilege logs has long been a part of practice, particularly in complex cases.4 They will undoubtedly become more commonplace under this rule, but practice will not change considerably since the information required in a log is already routinely required. A privilege log should set out an identification of the document and the specific privilege claimed. The rule requires that information that "will enable other parties to assess the applicability of the privilege or protection" be provided. Most often, a log will be produced in tabular form with columns for the following information: Document No. Description Date Author Addressee(s) Any Other Recipients Privilge Claimed This form is not a rigid specification; it may be necessary to provide additional information to allow the other parties to assess the applicability of the claimed privilege. Although the requirement for a log appears absolute, in fact it may not be necessary to list each document being withheld from production. The rule specifically excludes any requirement that a production of the log itself reveal privileged information. The advisory committee also notes that "the requirement of the log should not, however, be an invitation to require detailed identification of every privileged document within an obviously privileged category. Courts should not require a log in all circumstances, especially where a request seeks broad categories of non-discoverable information."5 Thus, a request for "All attorney-client correspondence" or "All attorney notes" would not required a detailed response, where the requests are patently objectionable without regard to detailed information. Supplementation. Rule 26.05 is revamped to conform it to the federal rule. The new rule makes subtle changes to the rule, but they are important in that they strengthen and clarify the duty to supplement. The amended rule states the duty as an affirmative duty to disclose, replacing the phrasing of the current rule: "A party is under no duty to disclose [unless]. . .." Under the new rule, the duty to supplement arises if, 1) after a discovery response has been made, 2) the disclosing party learns that it is "in some material respect incomplete or incorrect." The rule is not limited to responses that are "incorrect when made" or that were initially correct but further information makes not amending them "in substance a knowing concealment." The rule requires supplementation if the responses, regardless of their accuracy when made, are materially wrong based on what is later known. The amended rule will clarify what is an area of uncertainty under the current rule: the duty to supplement expert discovery information. The rule requires supplementation of prior expert information, regardless of whether it was formally disclosed by interrogatory answer or in a deposition or if it was made by expert report. This rule recognizes the importance of expert disclosures and the reality that parties often exchange expert information by reports rather than formal depositions. There is one circumstance under the amended rule where subsequent information does not trigger a duty to supplement: where the information is made known to the other party. This exception applies only when the disclosure is made either 1) during the discovery process or 2) in writing. Thus, if a witness clarifies interrogatory answers at a deposition, the answers are deemed supplemented by the deposition testimony. It is possible, of course, that this is not sufficient supplementation, i.e., the duty may have existed before the deposition, and doing so at the deposition may be untimely. It does not need to be done by a separate supplemental interrogatory answer after the deposition, however. Similarly, if a deponent identifies additional fact witnesses, it is not necessary for any party to supplement requests to identify witnesses because the information has been made known during the discovery process. This limitation on supplementation is carefully constructed to apply to formally disclosed information and information disclosed in writing. It is not satisfied by arguing at a hearing that "We will call Prof. Corey" or "Dr. Casey will be our expert," nor is it satisfied by later suggestions that discussions between counsel constitute supplementation. They don’t suffice under the current rule, and certainly would not under the proposed amended rule.

Amendments to the Federal Rules If the Minnesota amendments are simple to understand, the federal amendments are enigmatic and somewhat arcane. Some of the provisions are essentially new; some have been debated in some form for years, if not decades. One thing is clear: their adoption to accomplish certainty and uniformity is unlikely to accomplish those goals. They are more certain to foster increased discovery disputes in federal court, at least for the next few years. Automatic Disclosure. The 2000 amendments to federal Rule 26 were intended to lay to rest the significant controversy surrounding the "automatic disclosure" provisions. After the federal rules were amended in 1993 to provide for automatic disclosure, but also to permit courts to "opt out" of following the rules, under the state rules, Minnesota took a "wait and see" approach to the most controversial of these amendments. In the federal courts, the automatic disclosure concept was widely debated, and approximately one-half of the districts declined to follow the 1993 rules in some major way, most by "opting out" of the initial disclosures under Fed. R. Civ. P. 26(a)(1). This resulted in the aptly- described "Balkanization" of discovery and disclosure in the federal courts. Now, the federal courts have moved back toward uniformity, as the 2000 amendments delete the opt-out provisions added in 1993. The amendments make initial disclosure part of practice in all federal districts, but the initial disclosure requirement itself is changed significantly. (The rules do expressly exempt eight categories of cases from the initial disclosure provisions: administrative appeals, habeas corpus cases, pro se prisoner proceedings, requests to quash an administrative summons or subpoena, an action by the U.S. to collect a student loan, proceedings ancillary to proceedings in another court, and motions to enforce an arbitration award.) Rather than requiring disclosure of all relevant documents, the new rule requires production only of information the "party may use to support claims or defenses."6 This change is very significant, for it does not require the initial disclosure of adverse information --the "smoking gun" will not have to be handed over without a request. The result of this modification is to make it inevitable that initial disclosures will no longer reduce the amount of discovery; anything disclosed initially will be followed by discovery requests to obtain the non-self-serving information that need not be disclosed automatically. Rule 37(c)(1) was amended to require preclusion of evidence that should have been disclosed, but was not. Scope of Discovery. The other blockbuster change in the federal rules is the narrowing of the scope of discovery. Although the scope of discovery has been the subject of "reform" proposals for decades, modifying the scope of discovery was always viewed as a very blunt instrument of change. In the climate of 2000, however, the federal advisory committee recommended to the Supreme Court a new two-tier scope rule, and the Court has adopted it. Currently, discovery in both state and federal court is allowed as to information that is "relevant to the subject matter involved in the pending action." This unquestionably allows broad discovery. The 2000 federal amendment limits discovery as a matter of right to that which is "relevant to the claim or defense of any party." This is unquestionably a narrower scope of discovery, although litigation will have to define the limits of the new standard. That litigation is likely to be extensive. Although new Rule 26(b)(1) constricts the scope of discovery without any court order, it also expressly permits the court to enter an order to return the scope of discovery to the "relevant to the subject matter" test, but provides only that such an order should be entered "for good cause." It is not clear what would constitute "good cause" in this context, but it is easy to foresee that many litigants will seek the more traditional scope. Again, it seems inevitable that we will have hundreds of new federal court discovery decisions to review in the coming years. Limits On Depositions. Rule 30(d)(2) is amended to create a presumptive limit on the length of a deposition. Under the rule, a deposition of one day comprises seven hours of testimony. This limit can be changed by court order or stipulation of the parties. Since many full-day depositions do not accomplish seven hours of actual testimony, it seems probable that the rule will result in many 1¼ day depositions in federal court, and motions for expanded depositions are fairly likely. The rule does not impose any specific limit on the number of depositions that may be taken. Discovery Documents Not Filed. One aspect of the federal amendments is significant in that it reflects the federal courts adopting a rule provision that has been in place and working well in Minnesota for years. Fed. R. Civ. P. 5(d) is amended to provide that discovery requests and responses are no longer to be filed in federal court. This change mirrors the amendment of Minn. R. Civ. P. 5.04 in 1985 to accomplish the same result. The change in the federal rule serves to keep private information that would be made public only by the requirement for filing. In addition, there is generally no need for all discovery requests and responses to be filed, and the necessary discovery information can be brought before the court by means of affidavit or by order permitting some documents to be filed. 7 Other Changes. The other changes to the federal rules are not earthshaking. A number of changes relate only to admiralty law procedures. Rules 4 and 12 are amended to provide for service and allow 60 days to respond for individuals sued for acts as public officials. This amendment thus allows such an individual the same expanded time that the Government would have.

"Rule 11(b) explicitly expands the scope of Rule 11 to cover not only "signing" of pleadings but the full range of litigation conduct: ‘signing, filing, submitting, or later advocating’ a pleading or other paper."

Where Are We Going From Here? The Minnesota Supreme Court Advisory Committee on Rules of Civil Procedure has not yet taken up the newest federal amendments, coming as they did partly out of deep left field. If it follows its traditional course, however, the committee will advise the Court to wait until the rules actually go into effect in federal court (it is possible Congress will act to kill them before December 1, 2000), then see how they prove to work in federal court cases, and then attempt to determine if they make sense for the Minnesota courts. For the time being, they are relevant only to federal court practice. If the federal court committee continues on the path it has been on, it may well be that further modification will be made to the federal rules. Because these are untested changes, it is likely further changes will be appropriate. As to other issues, the advisory committee intends to meet, at least annually, to review issues and suggestions from the bench and bar. No dramatic changes are in the immediate offing, it appears. As always, comments and suggestions from the bench and bar are most welcome.

Notes 1 The Minnesota amendments were reprinted in the May/June 2000 issue of Bench & Bar of Minn., at 52-56, and are available on the Supreme Court’s Web site. 2 The federal changes were adopted by Supreme Court Order dated Apr. 17, 2000. In accordance with 28 U.S.C. ¤ 2072, they become effective on December 1, 2000, unless Congress intervenes before that to modify or rescind the adoption. 3 464 N.W.2d 130 (Minn. 1990). 4 See Minn. R. Civ. P. 26.02(c), Advisory Comm. Comment -- 2000 Amends., citing, for example, Allendale Mutual Ins. Co. v. Bull Data Sys., Inc., 145 F.R.D. 84 (N.D. Ill. 1992) (ordering privilege log and specifying requirements). 5 Minn. R. Civ. P. 26.02(c), Advisory Comm. Comment -- 2000 Amends., citing Durkin v. Shields (In re Imperial Corp. of Am.), 174 F.R.D. 475 (S.D. Cal. 1997)(recognizing document-by-document log would be unduly burdensome). 6 Fed. R. Civ. P. 26(a)(1), as amended effective Dec. 1, 2000. 7 Practice under the Minnesota rule is outlined in 1 David F. Herr & Roger S. Haydock: Civil Rules Annotated ¤ 5.6 (3rd ed. 1998). Federal court practice will likely now conform in large part to existing Minnesota practice.