Why Is Discovery So Expensive?

Why Is Discovery So Expensive?

Changes to the Texas discovery rules go into effect January 1, 2021. I wrote about some of these proposed changes in Proposed Changes to Texas Discovery Rules Threaten Law Firm Revenue. The new Texas Rules will now have initial disclosures and other features more like the Federal Rules.

The changes are partly intended to address an obvious problem: the discovery process is too expensive.

If you’re a lawyer who litigates, or just a business person who has been involved in litigation, you know that civil litigation is very expensive. And most of that expense is for document discovery, depositions, and other pretrial discovery.

So why is this process so expensive?

One possible answer: emails. Today most discovery is about emails and other documents that exist in electronic form.

This is a change so big we sometimes don’t even notice it. When I started practicing law in Texas 23 years ago, most of the discovery was about old-fashioned paper. In the first big case I worked on, would you believe there were zero emails produced in discovery? Now, most of the documents produced in a lawsuit are emails and other documents found in electronic form. And this has made discovery more expensive.

On the other hand, you could make a case that e-discovery hasn’t fundamentally changed discovery. It was already expensive. The term “Rambo tactics” emerged from discovery battles in the 1980s, before e-discovery was even a thing. You could argue that email just exacerbated a problem that already existed.

So aside from email, why is discovery so expensive?

Results of my scientific survey

There’s no single answer, but in my experience, it comes down to three key things.

First, I hate to say it, but there are some bad lawyers out there, and all else being equal, bad lawyers tend to be more obstructive.

Second, even good lawyers often engage in obstructive tactics in discovery.

Third, judges don’t like to get their hands dirty dealing with discovery disputes.

Notice what I left out. I didn’t say discovery is too expensive because the Texas Rules of Civil Procedure need to be changed.

That’s why I don’t expect changes to those Rules to have much impact on the cost of discovery. It’s not like discovery is going to be too expensive if you get 25 interrogatories, but suddenly manageable if you only get 15. Limits on the number of depositions could have more of an impact, but even there, I think fights over written discovery are the bigger culprit, and I don’t see how limits on the amount of discovery will have much impact on that problem.

To understand better, let’s drill down on the three things that make discovery expensive, using my favorite hypothetical lawsuit, Paula Payne Windows v. Dawn Davis, to illustrate.

Suppose Paula Payne Windows sues Dawn Davis and her new employer, Real Cheap Windows, claiming that Dawn breached her non-compete and misappropriated trade secrets. Let’s say the lawyers on both sides are less than top notch.

If the lawyers are not so good, you are likely to get two things in discovery: discovery requests that are overbroad and poorly written, and discovery responses that simply repeat a bunch of formulaic objections. And even with good lawyers, you may still get some of this.

Let’s look at some examples.

Example 1: the overbroad request for production

Paula Payne Windows serves a request for production that seeks “all documents relating to sales of windows to customers of Paula Payne Windows.”

You see this kind of request a lot, in all kinds of litigation, and it is usually objectionable, for two reasons.

First, it is too indefinite. What the heck does “relating to” mean? I mean, I know what it means generally, but it’s such a broad and vague term. How do I decide whether a particular document “relates to” sales of windows? It’s just too fuzzy to provide meaningful guidance.

Second, the request is overbroad. In other words, it is not reasonably tailored to obtain relevant documents, while excluding irrelevant documents. It doesn’t even have a date range. And even if it was limited to a relevant time period, there are likely hundreds of documents, if not more, that “relate to” sales of windows to Real Cheap Windows, and most of those documents will have little or no relevance to the issues in dispute. That also means the request is probably “unduly burdensome,” another common objection.

Put it this way: If Paula Payne Windows gets the invoices identifying the sales, does it really need every single email with every customer about the sales?

Example 2: boilerplate objections to a reasonable request for production

Lest you think that obstructive tactics are limited to requesting too much discovery, let me assure you, there are plenty of obstructive responses as well.

Suppose Paula Payne Windows serves this request for production instead: “Your invoices reflecting sales of windows to customers of Paula Payne Windows from the time you hired Dawn Davis to the present.”

Is this proper? Of course, it depends on the circumstances, and every case is different, but in a typical non-compete lawsuit, this would usually be a proper, reasonably tailored request. So let’s assume this is a well-drafted request.

Will the response be “please see attached invoices”? [Litigators laugh here.]

Not likely. First, you’re probably going to get a bunch of “general” objections that supposedly apply to every request for production. Sometimes these go on for pages. They may include objections like, “Defendants object to each request to the extent that it exceeds the permissible scope of discovery.” I joked about this sort of thing in Agree on These Litigation Rules to Level the Playing Field.

Usually, most of these general objections are, pardon my French, bullshit.

Now, don’t get me wrong, there are some “general” responses that I typically include in my responses, but I keep it to a minimum, and I try to include only general responses that really do apply to each request.

In contrast, most “general objections” I see don’t legitimately apply to every request, which makes them obstructive and unnecessary.

But that’s not all. In response to your specific request, you are likely to get something like this:

These are representative examples of “boilerplate” objections. By boilerplate, I mean the lawyer probably just did a cut and paste of a bunch of objections, rather than narrowly tailoring the objections to fit the requests.

This is usually the result of laziness, or sharp tactics, or both.

It’s lazy because it’s easier to just cut and paste the same objections over and over, rather than really thinking through what is objectionable about the request.

But it can also be a deliberate tactic. Even a good lawyer might choose to include a bunch of objections in every response. One rationale is that you don’t want to fall into the trap of waiving an objection that you might later need to argue to the judge. Another, more cynical rationale is that everybody does this, and you don’t want to make it too easy on the other side to get the documents they need. Why should you unilaterally disarm?

You see the same thing with another type of discovery request, the interrogatory.

Example 3: boilerplate objections to a reasonable interrogatory

An interrogatory is a written question that the responding party has to answer in writing, signed under oath by the responding party or its representative.

Here’s how I might draft an interrogatory if I represent Dawn Davis: “Please describe in reasonable detail the alleged trade secrets you contend Dawn Davis misappropriated.”

This is exactly the kind of question that interrogatories were designed for. So is the lawyer for Paula Payne Windows likely to respond with, “Dawn Davis misappropriated the following trade secrets . . .”?

That would be a pleasant surprise. No, the response is more likely to look like this:

It’s hard to see how these objections are warranted. The interrogatory expressly asked for reasonable detail. So the objection that the interrogatory improperly requires the responding party to “marshal evidence” just doesn’t apply here.

Rule 197 of the Texas Rules of Civil Procedure expressly provides that an interrogatory “may ask the responding party to state the legal theories and to describe in general the factual bases for the party’s claims or defenses.” In other words, the rule allows reasonable “contention” interrogatories.

In fairness, maybe the objections were made like that because the responding attorney is so accustomed to poorly drafted interrogatories. Let’s look at an example of that.

Example 4: the unduly burdensome interrogatory

Litigators have all seen this kind of interrogatory: “Please state all facts supporting your contention that Dawn Davis misappropriated trade secrets from Paula Payne Windows.”

Here, the problem is not so much that the request is irrelevant or overbroad. On the contrary, it is expressly limited to relevant facts supporting a specific claim made by one of the parties to the lawsuit.

The problem is that requiring the responding party to state all facts supporting the contention would just be too burdensome.

That’s why Texas Rule 197 specifically says “interrogatories may not be used to require the responding party to marshal all of its available proof.”

I’ll repeat: interrogatories are not for requiring the other side to marshal all its evidence. That’s what a “no evidence” motion for summary judgment is for. [rim shot]

But seriously, Rule 197 couldn’t be more clear about this. The comment to the rule says that “interrogatories that ask a party to state all legal and factual assertions are improper.” So an interrogatory that asks for “all facts” is almost always objectionable.

Yet people still draft interrogatories that way. Why? Especially when you know the responding party is just going to object.

Again, I think laziness is the main reason. And maybe also a cynical view that says it doesn’t matter that much how you draft it, because the other side is just going to object anyway. Plus, even if you have to file a motion to compel, it’s unlikely the judge will get down into the weeds of how the interrogatory was worded.

Ah, judges. The other piece of the puzzle.

How judges typically respond to obstructive discovery tactics

How do judges usually respond to requests that are too broad, or objections that are too obstructive?

I can tell you exactly how most judges respond. Picture a summer vacation in the family station wagon, let’s say in the 1970s. You’re one of three kids, sitting in the middle, bare legs sticking to the vinyl seat. Cigarette burning in the ash tray up front. Your brother in his shorts and tube socks keeps invading your space. “Mommy, Johnny keeps touching me!” “That’s a lie, I did not!” “Yes, you did!”

What would Mommy or Daddy say? “If you kids don’t shut up and behave, I swear to God, I’m going to pull this car over right now and give you both a spanking!” (I mean back in the day, of course.)

Did Mommy and Daddy care who started it? Did they care who was right and who was wrong? No, they just didn’t want to be bothered.

And that, my friends, is why discovery is so expensive.

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Zach Wolfe (zwolfe@fleckman.com) is a Texas trial lawyer who handles non-compete and trade secret litigation. Thomson Reuters named him a 2020 Texas Super Lawyer® for Business Litigation.

These are his opinions, not the opinions of his firm or clients, so don’t cite part of this post against him in an actual case. Every case is different, so don’t rely on this post as legal advice for your case.

I Can’t Drive 25 (Requests for Production)

I Can’t Drive 25 (Requests for Production)

Senior Texas lawyers despair, the last vestiges of the “trial by ambush” era are being swept away like the Imperial Senate.

It looks like changes to the discovery rules are coming to Texas in 2019. Some of the changes will be significant improvements, while others will be less consequential tweaks. But there is one proposed change that is just a bad idea: limiting each side to only 25 requests for production of documents. More about that later.

The Discovery Subcommittee of the Texas Supreme Court Advisory Committee has been working on changes to the discovery rules for a few years now. I wrote about this two years ago in Proposed Changes to Texas Discovery Rules Threaten Law Firm Revenue. As I wrote then, the two biggest changes are requiring Federal-style initial disclosures and making communications with testifying experts undiscoverable.

These changes struck me as basically a good idea, with the potential to reduce gamesmanship and litigation expense. I say “reduce” because you’re never going to eliminate gamesmanship from discovery. This is litigation, after all. Plus, one man’s “gamesmanship” is another man’s proper use of the rules to protect his client’s interests.

In any case, the changes I wrote about—and others—may be coming soon. On February 11, 2019, the Discovery Subcommittee transmitted its recommended rewrite of the Texas discovery rules to the Supreme Court Advisory Committee.

I’ve only got five minutes, so I won’t try to cover all the changes, but here are some highlights:

  • Rule 190.4 would require a Federal-style initial conference followed by a discovery control plan and docket control order. I often find the initial conference a waste of time—it’s too early to address all those issues—but it’s relatively harmless.
  • Rule 192.4(b) would change “the burden or expense of the proposed discovery outweighs its likely benefit” to “the discovery sought is not proportional to the needs of the case.” In other words, the proposal writes proportionality into the rule, although proportionality is already implicit.
  • Rule 193.2(a) targets “prophylactic” objections: “An objection must state whether any responsive materials are being withheld on the basis of the objection.” This sounds like a good rule, but expect it to be routinely ignored.
  • Rule 194 would now require Federal-style initial disclosures. Unless otherwise agreed or ordered, both sides would have to serve them within 30 days after the defendant’s answer. For Texas practice, this completes the decades-long shift in philosophy from “trial by ambush” to putting your cards on the table from the start. Also, like the federal rule, the new rule would allow “a description by category and location” in lieu of actually producing the documents—I’ve never understood the point of this.
  • Rule 195.5(a)(4) would expand the scope of expert disclosures to be closer to Federal Rule 26.
  • Rule 195.5(c) would generally exempt communications with testifying experts from discovery (like the Federal rules–notice a pattern?). Overall, this is a good change for reasons I explained in my “Proposed Changes” post.
  • Rule 199.1(b) would add total hour limits for depositions (50 hours for a typical case).
  • Proposals for addressing ESI and spoliation are still being discussed.
  • Rule 196.1(c) would provide: “Unless otherwise stipulated or ordered by the court, a party may serve on any other party no more than 15 requests for production or for inspection in a Level 1 case or 25 requests for production or for inspection in Level 2 or Level 3 cases, including discrete subparts.” [record scratch]

Wait, what?! You’re telling me in a typical case I only get to serve 25 requests for production?

If you’re not a lawyer, or if you’re a lawyer who doesn’t litigate, that probably doesn’t sound unreasonable. But trust me, 25 requests for production is not a lot.

I’ve been practicing business litigation in Texas for over 20 years. That’s not as long as most of the people on the Supreme Court Advisory Committee, but it’s still a pretty good run. I don’t think I’ve ever had a case of even the slightest complexity where each side served fewer than 25 requests for production.

My fellow litigators understand that you don’t know what you’re going to get when you serve that first broad set of requests for production. And you usually don’t know what the real factual disputes are until you get some substantive documents from the other side and take one or two depositions.

That’s not all. It’s hard enough to get the documents to prove your claim or defense when the other guy is cooperating. When opposing counsel is actively trying to obstruct your efforts to get the documents you need, it’s even harder. For example, I had a fairly simple non-compete case where I had to serve about a dozen sets of requests for production because the opposing party was so slippery.

Surely I’m not alone. I’m a little surprised that the highly experienced litigators on the Supreme Court Advisory Committee would endorse a 25-request limit. I’d be curious to know how many of them have ever had a business lawsuit where 25 requests for production were adequate.

IMG_7223
Take my license, all that jive

Maybe they’ve seen too many cases with an excessive number of requests for production. But there is already an inherent reasonableness limit. Let’s say a party has already served 75 requests for production in three separate sets and then serves a fourth set of 25 more requests. If those requests are unreasonable or duplicative of prior requests, then the responding party can file a motion for protective order asking the judge to limit the number of requests. I don’t think anyone doubts the trial court judge’s discretion to grant a motion like that.

If, on the other hand, those new requests are relevant to issues in the case, reasonably tailored, and not duplicative of prior requests, I say they should be allowed.

But we must reduce the cost of discovery, right?

I’m all for trying to contain the cost of discovery. But it’s not the number of requests for production that is driving up the cost of discovery. In my experience, it’s really two things: (1) emails, and (2) fighting over discovery.

The impact of emails on the cost of litigation is well known. That ship has sailed.

The other factor that makes discovery so expensive is when the lawyers can’t get along. It’s really the discovery battles that drive up the cost. These skirmishes are usually the result of requesting lawyers serving unreasonably broad requests and/or responding lawyers making a litany of unreasonable objections. The problem is then compounded when trial court judges don’t want to get their hands dirty.

These are the main factors that make discovery expensive, not the number of requests for production.

I don’t know how to fix these problems. But I do know that limiting parties to 25 requests for production isn’t going to make lawyers more cooperative, and it isn’t going to change the fact that reviewing and producing thousands of emails is expensive.

If anything, this new speed limit is likely to increase gamesmanship and battles over discovery. If you only get 25 requests, your incentive is to make them broad. That’s going to lead to more objections and more discovery motions. And don’t get me started on arguing about “discrete subparts”; we already know from interrogatories how much time lawyers can waste on that.

Proponents of the limit will point out that you won’t need as many requests for production because the other party has to produce their evidence as part of the new initial disclosures. That’s a fair point, but it doesn’t help me with getting the documents I need to prove my case.

In fairness to the proposal, I also have to point out the preamble: “Unless otherwise stipulated or ordered by the court . . .”

That’s a good safety valve. It leaves the parties free to agree on a greater number of requests for production, and I expect a lot of litigants—especially in complex cases—will avail themselves of that option. And even if the parties don’t agree, the judge can order a greater number of requests if a party offers a good reason.

So the proponents of this revision would say, listen dude (that’s what they call me), you’re overreacting.

But I still don’t think we should start with the presumption that 25 is a reasonable number of requests for production. When the parties can’t agree, some judges are likely to fall back on the number in the rules. So if we’re going to have a number, it should be a good number. Even better, let’s have no presumptive limit and just rely on an inherent limitation of reasonableness.

That was the decision the Texas Supreme Court effectively made when it adopted the “new” discovery rules back in 1999, when I was a new lawyer and Gary Cherone was singing for Van Halen. Those rules limited the number of interrogatories a party could serve but left the number of requests for production open-ended.

The Supreme Court Advisory Committee should do the same thing now. Most of the proposed changes look good. Just take out that 25-request limit.

And May the Force be With You.

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IMG_4571Zach Wolfe (zwolfe@fleckman.com) is a Texas trial lawyer who handles non-compete and trade secret litigation at his firm Fleckman & McGlynn, PLLC. He likes both David Lee Roth and Sammy Hagar. 

These are his opinions, not the opinions of his firm or clients, so don’t cite part of this post against him in an actual case. Every case is different, so don’t rely on this post as legal advice for your case.

Proposed Changes to Texas Discovery Rules Threaten Law Firm Revenue

Proposed Changes to Texas Discovery Rules Threaten Law Firm Revenue

We earn our hourly fees the old-fashioned way

Anyone who has been involved in a business lawsuit knows that a lot of time and money is spent fighting over what documents each side must produce.

You send a request for production that includes variations on the theme of “please produce documents supporting your claim that my client did X.” Your adversaries object. You object to their objections. You “confer” with opposing counsel.

You file a motion to compel. They file a response. You go to a hearing where the judge says “I don’t have time for discovery disputes” and tells you to go out in the hall and work it out. Eventually, the judge rules.

After the hearing, you argue with opposing counsel with the wording of the order. You go back to court for the judge to resolve that dispute. The judge finally signs an order. A few weeks later the other side produces documents, but they don’t include all the documents you asked for. You file another motion.

While all this is happening, the other side requests documents from you. You object. Opposing counsel calls you and . . . well, you get the idea.

Does it have to be this hard?

When you serve a request for production of documents, you’re essentially looking for two kinds of documents: good documents and bad documents. Good documents—for the opposing side—are the documents they are going to use to prove their case. Bad documents are the ones you’re going to use against them to prove your case.

Clients spend a lot of time and money essentially getting the other side to produce its good documents and its bad documents. And the proliferation of emails has made it worse.  The only ones left smiling are the law firm partners reviewing the billable hours for the month.

Couldn’t we simplify and just have a rule that says “each party must produce its good documents and its bad documents in 30 days upon request”?

Yes and no. A rule requiring a party to produce its bad documents—the documents that hurt its case—would just not be workable. But a rule requiring production of the documents a party plans to use to prove its case? That sounds sensible.

Federalization of the Texas Rules of Civil Procedure?

Texas may soon have just such a rule.  The Texas Supreme Court Advisory Committee is considering significant changes to the discovery rules in the Texas Rules of Civil Procedure.  One of those changes would require routine disclosure of the following:

initial-disclosures-rule
Sound familiar, litigators?  This is of course what the Federal Rules of Civil Procedure already require in a party’s “initial disclosures.”

I’ve never understood the point of the alternative to provide a “description” of the documents.  I’m always tempted to respond “Plaintiff is in possession of white paper documents with black printing located in its computers and file cabinets.” Even a more reasonable description, such as “emails between the parties regarding the dispute at issue, located on Plaintiff’s email server,” is practically worthless.  If you see some value to this alternative, please tell me why.

But we must not carp too much. Overall, this change to the Texas Rules would cut the time lawyers spend arguing over requests for production that amount to saying “just give me the documents you’re going to use to prove your case.”

Some lawyers won’t like this. Those of a certain vintage will say, “Back in my day, the partners would hand you a file on Friday and say go try this case on Monday. It was trial by ambush. We never knew what documents the other side had, and we liked it!”

Does that sound old fashioned? Well, if you’re one of the lawyers saying “we used to have to serve dozens of requests for production and file a motion to compel, just to get the documents the other side planned to use,” you may sound the same way to the generation of lawyers coming up now.

Expert Texpert

Another proposed change to the Texas discovery rules could also save money, and also has a Federal flavor.

Currently, Texas lawyers have to be careful any time they communicate in writing with a hired expert witness, because those communications are discoverable. But this proposed rule would change that:

expert-communications-rule

Sound familiar again? This would match a change made to the Federal Rules in 2010.

Some of you won’t like this. You smell a rat every time you see an expert designation. You want to see the emails where the lawyer tells the expert what to say. You fight for the first draft of the expert’s report so you can show he changed opinions under pressure from the client.

“What happened to transparency?” you say. If this rule change happens, the lawyer could practically write the report for the expert, and no one would ever know. The early drafts of the expert report will be like Donald Trump’s tax returns.

There is some merit to this critique, but I think it largely misses the mark. For one thing, telling the expert what to say probably doesn’t happen as often as people think.

It’s an old saw that hired experts will say whatever the hiring lawyer tells them to say. As a litigator who sometimes has to deal with difficult experts, my response is “I wish.” Try persuading a Ph.D. who charges $500/hour that he needs to tweak his methodology. Truth is, most experts who are good enough to be hired have too much pride to let a mere J.D. tell them what to say.

But there is a simpler problem with the critique of exempting attorney-expert communications from discovery. The reality is that under the current Texas rules you hardly ever get any good dirt on the expert anyway.

Litigators know their communications with testifying experts are discoverable, and they act accordingly. They’re not going to email the expert saying “I need you to change part of your report.” Lawyers often twist themselves in knots to make sure there are no documents showing the evolution of the expert’s opinions and report. They scold the expert if he even thinks of jotting down a few notes on a legal pad.

And therein lies the problem. Jumping through hoops to avoid leaving a paper trail of attorney-expert communications costs time and money. Do we really want a rule that incentivizes a lawyer to sit and look over the expert’s shoulder while he types revisions to his report? Better to save that time and let lawyers and experts email each other all they want, without fear of a it’s going to look.

This was basically the thinking when the corresponding Federal rule was changed. And on balance, that thinking was right.

Partners at big law firms may wonder how they are going to make up the billable hours lost because of these changes. But don’t worry. They’ll find a way.

*Update: On February 11, 2019, the Discovery Subcommittee transmitted its recommended rewrite of the discovery rules to the Supreme Court Advisory Committee. See the Subcommittee’s cover letter

*2nd Update: On August 21, 2020, the Texas Supreme Court approved some of the proposed changes, including initial disclosures. But it looks like SCOTX did not approve the proposed exemption for testifying expert communications. Stay tuned for analysis.

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Zach Wolfe (zwolfe@fleckman.com) is a Texas trial lawyer who handles non-compete and trade secret litigation at his firm Fleckman & McGlynn, PLLC. Follow @zachwolfelaw on Instagram to keep up with his latest shenanigans.

These are his opinions, not the opinions of his firm or clients, so don’t cite part of this post against him in an actual case. Every case is different, so don’t rely on this post as legal advice for your case.