Legal computer judge concept, cyber gavel,3D illustration

 

The 2015 amendments to the Federal Rules of Civil Procedure (FRCP) have been heralded for their innovation and effectiveness in addressing discovery disputes. While far from perfect, the Rules changes—when applied—have generally helped counsel, clients, and the courts advance the tripartite mandate from FRCP 1 "to secure the just, speedy, and inexpensive determination" of litigation.

Despite their overall effectiveness, there remains the difficulty of getting courts to properly apply the amended Rules. In some instances, courts have not looked to the FRCP amendments for direction in governing the discovery process or otherwise resolving discovery disputes. Instead, courts have relied on abrogated provisions from the FRCP, outdated or inapposite case authority, or even gut calls to manage discovery issues. As U.S. District Judge David Campbell observed in In re Bard IVC Filters Prods. Liab. Litig. regarding this unfortunate trend: "Old habits die hard.

Nowhere is this phenomenon more apparent than in a multidistrict litigation involving price fixing in the pharmaceutical industry. In re Generic Pharms. Pricing Antitrust Litig. from the Eastern District of Pennsylvania represents a troubling failure by the federal judiciary to follow the current FRCP regime.

The Case Management Order

In Generic Pharmaceuticals, the court issued a case management order (CMO) designed "to move the litigation forward." In an apparent effort to do so, the CMO delineates provisions that are strikingly overbroad and violate fundamental aspects of federal discovery procedure.

The first problematic provision from the CMO is a preservation mandate for "any and all communications in any potentially relevant custodial file." This expansive "any and all" requirement, coupled with an increase in the scope of discovery to "potentially relevant" materials," will likely necessitate the retention of any number of irrelevant communications including emails, chats, text messages, and the like. Such a provision runs counter to FRCP 37(e), which was designed to reduce such overly broad preservation burdens.

The CMO also requires the parties' search terms to include, at a minimum, "all drugs named in any complaint and all Defendants." By mandating that the responding parties identify every document which references the drugs at issue in the litigation, this provision essentially guarantees a sweeping scope of information—much of it likely irrelevant—subject to inclusion in the discovery process. This runs contrary to search term best practices, which generally frown on the use of generic terms, along with other words or phrases that will typically result in over-inclusive search results (such as in 2008's Victor Stanley, Inc. v. Creative Pipe, Inc. in the District of Maryland.)

The most offensive provision in the CMO is the court's directive to defendants to produce all documents identified through the use of search terms without any "relevance or responsiveness" review. Taken together with the overly broad search term requirement, such a provision could result in the production of millions of irrelevant documents. Even worse, many of those documents would undoubtedly reflect proprietary and confidential information and would be disclosed to industry competitors (all of which have been or are being joined as defendants in this lawsuit).

In an effort to ameliorate the impact of these provisions, the CMO provides that documents may only be viewed by outside counsel for the first 120 days after their production, during which time the responding party may clawback irrelevant or nonresponsive documents.

Defendants' Request for Mandamus

After the court overruled their objections to the CMO, the defendants filed a request for a writ of mandamus with the Third Circuit. In seeking mandamus, the defendants spotlighted the onerous nature of the CMO's production without "relevance or responsiveness" review requirement and argued that it overtly flaunted FRCP 26(b)(1)'s restriction on discovery of information relevant to claims and defenses.

The Third Circuit, however, denied the request in a 2-1 split decision. In its order, the majority emphasized that the FRCP "permit a district court to compel the production of documents within broad parameters" and held that the CMO was a proper exercise of the district court's "wide latitude in controlling discovery." Tacitly acknowledging the overbreadth of the CMO, the majority opined that the CMO's clawback provision would cure any harm associated with the coerced production of irrelevant "trade secrets, unrelated business information, and unrelated personal or embarrassing information."

In contrast to the majority, the dissenting judge concluded the CMO "constitutes a serious and exceptional error" given its inexplicable deviation from ordained discovery procedure under FRCP 26(b)(1) and 34(b)(2)(C). The dissent also rejected the notion that the CMO's clawback procedure could have an elixir-like effect on the production of irrelevant information. As the judge explained, "a court does not spontaneously gain authority to compel production of non-responsive, irrelevant documents simply by establishing a period of time afterwards for the review and potential return of the documents produced."

Following the dissent's critique of the majority order, the defendants filed with the Third Circuit a petition for en banc review of their request for mandamus. Defendants were joined in their efforts by multiple amicus briefs, including one filed by renowned e-discovery firm Redgrave LLP on behalf of the advocacy group Lawyers for Civil Justice (LCJ). Gareth Evans, who authored LCJ's amicus briefs in support of the mandamus petition and the petition for rehearing en banc, explained why Redgrave LLP supported LCJ's efforts to obtain mandamus relief: "The district court's discovery order is an example of the epidemic of excessive discovery in civil litigation. One of the hallmarks of our judicial system is that discovery is limited to relevant material. The district court and the Third Circuit panel majority ignored that."

The Third Circuit, however, declined defendants' petition for rehearing on January 6, 2020. With "a majority of the judges of the circuit in regular service not having voted for rehearing," the court decided it would not act on the request for en banc review.

Lessons from Generic Pharmaceuticals

For now, the Generic Pharmaceuticals CMO represents a disappointing failure by federal judges to abide by the FRCP. A CMO that ostensibly requires the production of every document—regardless of relevance—that a company has generated or received regarding one of its products is the essence of judicial overreach. It also flies in the face of U.S. Chief Justice John G. Robert's vision of cooperative and proportional procedure in civil discovery that he shared in his "2015 Year-End Report on the Federal Judiciary." The scenario the Chief Justice envisioned—providing requesting parties with "efficient access to what is needed to prove a claim or defense" while reducing "unnecessary or wasteful discovery"—has been disregarded in Generic Pharmaceuticals for the sake of expediency.

While the breakdown in Generic Pharmaceuticals is anything but universal—the author's experience is that most judges do follow the FRCP, not every U.S. district judge or magistrate judge is aware of the FRCP amendments or necessarily feels constrained to follow their strictures. Lawyers representing plaintiffs or defendants should be aware of this fact and work to educate the judiciary—either formally in litigation or informally through education programs—wherever possible in order to better ensure they obtain results for their clients that are more consistent with the FRCP objectives articulated by the Chief Justice.

 

Philip Favro is a consultant for Driven, Inc. where he advises organizations and their counsel on issues relating to the discovery process and information governance. He also serves as a member of The Sedona Conference WG1 Steering Committee.