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REPORT

OF THE

FASTER-CHEAPER-SMARTER WORKING GROUP

OF THE

COMMERCIAL AND FEDERAL LITIGATION SECTION

OF THE

NEW YORK STATE BAR ASSOCIATION

JUNE 12, 2012

Opinions expressed are those of the Section preparingthis report and do not represent those of the New York State BarAssociation unless and until the report has been adopted by the

Association’s House of Delegates or Executive Committee.

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TABLE OF CONTENTS

Preface by David H. Tennant, Section Chair 2011-2012.................................................................1

Faster-Cheaper-Smarter (FCS) Working Group Final Report.........................................................3

I. Executive Summary.............................................................................................................3

II. Introduction..........................................................................................................................4

III. FCS Working Group Make-up.............................................................................................5

IV. FCS Working Group Process...............................................................................................6

V. Preliminary Considerations..................................................................................................8

A. Threshold Question: If You Build It . . . Will They Come? ...................................8

B. Background Observations About “Rocket Dockets”...............................................9

C. Lessons Learned From Good Court-based Models That Went Unused ................14

1. Delaware Superior Court Summary Proceedings ......................................14

2. District Court Oklahoma Fast Track..........................................................16

D. New SDNY Pilot Project Regarding Case Management Techniques

for Complex Civil Cases........................................................................................18

E. Private Litigation Agreements ...............................................................................18

1. Litigation “Pre-Nups” ................................................................................18

2. Pre-Trial Discovery and Trial Agreements................................................19

VI. Specific Recommendations................................................................................................20

Specific Recommendation No. 1

Establish An Aggressive Early Neutral Evaluation Pilot Project(Commercial Division and/or Federal Court) ..........................................20


Establish A Mediation Pilot Project in Commercial Division...................23

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Establish An Automatic Expedited Non-binding ArbitrationPilot Project in Commercial Division For Cases Under ASpecified Dollar Amoun ............................................................................25


Establish A Neutral “Search Facilitator” Pilot Project(Commercial Division and/or Federal Court ...........................................26


Amend The CPLR Provisions Re E-Discovery ........................................29

VII. Proposed Further Study......................................................................................................32

CONCLUSION..............................................................................................................................33

APPENDICES

Appendix A (FCS Working Group’s Statements of Support)

Appendix B (CPR Economical Litigation Agreement Model Form – available at CPR website

http://www.cpradr.org/Portals/0/Resources/ADR%20Tools/Tools/ELA%20Model%20Civil%20

Litigation%20Prenup.pdf)

Appendix C (Pretrial and Trial Agreements – available at trialbyagreement.com

(http://trialbyagreement.com/library/files/2011/06/Pretrial-Agreements-and-Their-

Explanation.pdf; http://trialbyagreement.com/library/files/2011/06/Pretrial-Agreements-

Agreement-with-Opposing-Counsel.pdf; http://trialbyagreement.com/library/files/2011/06/Trial-

Agreements-with-Exhibit-A.pdf))

Appendix D (2008 Report of the New York State Bar Association Commercial and Federal

Litigation Section Recommending Certain Amendments to the CPLR Concerning Electronic

Discovery)

PREFACE: NOT BUSINESS AS USUAL.

Businesses face stiff competition in today’s global economy, often operating on razor thin

margins. Our corporate clients are challenged to do more with less in a (post) Great Recession world

that contains substantially fewer resources. This includes having far less money to spend on

litigation. At a minimum, corporations are demanding that lawyers do more with smaller litigation

budgets. In this pressurized atmosphere the challenges for the bar are considerable. Lawyers must

be willing to shed their conventional lawyer-like viewpoint of “we know best” in favor of cultivating

a truly sympathetic understanding of their corporate clients’ needs. Lawyers must understand the

company’s current operating environment both from a broad industry perspective (what’s going on

in the industry?) and a client-specific focus (what’s going on within the company and the specific

business units that are the actual or potential consumers of legal services?).

We all know that corporate litigation departments are not viewed as profit centers for

companies, and litigation often produces a negative net effect on the company’s bottom line.

Business people typically view litigation as the last resort when all other methods of informal

resolution have failed. Corporations rarely are eager to litigate, knowing full well the costs (dollars,

time and person-hours) to reach a determination through the courts, including the costs associated

with discovery, especially e-discovery. When our corporate clients come to court they want

something faster, cheaper and smarter than what the legal profession currently is offering. They

want to liquidate the claim or liability – as expeditiously as possible – and move on.

Once we conscientiously put our feet in our corporate clients’ shoes, we can begin to

understand from our clients’ perspectives the extraordinary pressures they are under to resolve

disputes more efficiently. And we can take measure of client proposals to shrink costs (and time) to

resolution, and work collaboratively with our clients to explore other approaches that might satisfy

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their needs. But this client-centered focus must be client driven. Something is “faster, cheaper and

smarter” only if our clients view it that way. Ultimately, we must listen closely to our corporate

clients and work with them to drive dispute resolution to whatever point of efficiency they find

acceptable. If we do not, we risk becoming irrelevant to our business clients as they pragmatically

resolve commercial disputes without our assistance.

The Faster-Cheaper-Smarter Working Group was organized to explore ways of reducing time

and costs of traditional commercial litigation, intentionally employing a client-centered focus. I am

deeply indebted to the members of the Working Group. I would like to especially thank Chair

Mitchell F. Borger, Vice President and Associate General Counsel for Macy’s Inc., for thoughtfully

leading the Working Group, and also thank the Group’s two Vice Chairs, Justice John M. Curran,

New York State Supreme Court for the Eighth Judicial District (Erie County) and Jonathan K.

Cooperman, Kelly Drye & Warren LLP, for their fine contributions to this effort. (A complete roster

of the Working Group is set out in the Introduction to the Report.)

CFLS Section Chair, David H. Tennant (2011-2012)

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Faster-Cheaper-Smarter Working Group Final Report

I. EXECUTIVE SUMMARY

The Faster-Cheaper-Smarter (FCS) Working Group identified five concrete and specific

recommendations for increasing efficiency in the resolution of business disputes. Each

recommendation is presented as a single stand-alone proposal, although the recommendations might

be combined. Specifically, the FCS Working Group recommends the establishment of four pilot

projects to test:

• Aggressive Early Neutral Evaluation

• Greater Use of Mediation in the Commercial Division

• Automatic Expedited Non-binding Arbitration in the Commercial Divisionfor Cases Under a Specified Dollar Amount

• Use of a Neutral “Search Facilitator” to Help with E-discovery

The Working Group further recommends amending the CPLR to make current its provisions

regarding E-Discovery.

In addition to these five specific recommendations, the FCS Working Group also supports a

variety of other potential reforms to promote efficiency. These are collected under the label of

“statements of support” and are found in Appendix A to this Report. Specifically, the Working

Group seeks to promote and support:

• Contractual Commitments to Mediation

• Active Case Management Reinforcing Cooperation and Proportionality

• Technology-Assisted Review

• Efficiency in Privilege Designations

• Pre-Motion Conferences

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Finally, the FCS Working Group concluded that while rocket dockets hold a great deal of

promise in promoting early settlement, they also may inflict unwelcome costs and non-monetary

consequences. The Working Group would like to see the New York State Bar Association and New

York State Office of Court Administration undertake a comprehensive study to weigh the pros and

cons of rocket dockets before implementing such a program in the Commercial Division.

II. INTRODUCTION

“Faster, cheaper smarter” is more than a mantra: it is shorthand for super-efficient dispute

resolution that corporations are demanding of their lawyers, the courts and the legal profession as a

whole. These sophisticated consumers are focused on the corporation's bottom line. They want a

process by which legal claims and liabilities can be liquidated in less time and at less cost. The

traditional litigation model has bogged down under the weight of e-discovery and motion practice.

Arbitration of commercial cases suffers from its own inefficiencies. The Faster-Cheaper-Smarter

Working Group has considered what clients might choose to forgo in the way of process to achieve

faster and cheaper outcomes that also translate into smarter outcomes. Flipping a coin to resolve a

business dispute offers an incredibly fast and low-cost method of dispute resolution but does not

speak to a "smarter" outcome based on fair and informed decision-making. Central to the mission of

finding faster, cheaper and smarter ways to resolve business disputes is the selection of processes

and procedures that deliver sound results.

In-house counsel may have very different views from outside counsel as to what process will

produce an acceptably-sound determination on the merits, with outside counsel naturally focused on

what the client is giving up in the way of procedural rights and protections in the push to reduce time

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and legal fees, and potentially undermining the reliability of the merits determination.1 In the final

analysis, corporate clients are looking for economical solutions to their business disputes. In a world

of potential alternatives of litigation pre-nups, court-based rocket dockets, and other avenues to

achieve faster and cheaper resolutions, it is ultimately the client's determination as to what processes

and procedures provide the optimal balance of speed, cost and informed merits determinations. The

corporate adoption of “faster-cheaper-smarter” dispute resolution techniques is limited only by the

imagination of in-house counsel and their corporate clients – that is, what two mature consenting

corporations choose to do in the privacy of their boardrooms.

III. FCS WORKING GROUP MAKE-UP

In keeping with the client-centered focus, not only is the Group chaired by Mitchell F.

Borger, Vice President, Assistant General Counsel, Macy’s Inc., the Group’s members include four

other senior in-house counsel drawn from varying industries:

Karen L. Douglas, Division Counsel-Litigation Manager, Corning Incorporated

Vivian Naim, Practice Director and Counsel, H5

Carla Miller, Vice President, Universal Music Group

Jamie Stern, Managing Director, UBS

The Working Group's other members are drawn equally from the bench and outside counsel:

Judicial Members

Hon. John M. Curran, (Vice Chair), Justice, New York Supreme Court, Erie County

1 Experience shows that all the process in the world does not necessarily translate into sound meritsdeterminations. Additional discovery may only increase the number of issues and complicate resolution.We think many litigators accept the false premise that more process means more information whichnecessarily translates into a better merits determination. Not so. It only conclusively establishescorporations will expend more resources on litigation.

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Hon. Andrew J. Peck, United States Magistrate Judge, Southern District of New York

Hon. Richard Sullivan, United States District Judge, Southern District of New York

Hon. Elizabeth Emerson, Justice, New York Supreme Court, Commercial Division, Suffolk

County

Hon. Shirley Kornreich, Justice, New York Supreme Court, Commercial Division, New York

County

Outside Counsel

Jonathan K. Cooperman (Vice Chair), Partner, Kelley Drye & Warren LLP

Gregory K. Arenson, Partner, Kaplan Fox & Kilsheimer LLP

James M. Bergin, Partner, Morrison & Foerster LLP

Harry P. Trueheart III, Partner, Nixon Peabody LLP

Heath J. Szymczak, Partner, Jaeckle Fleischmann & Mugel, LLP

Paul D. Sarkozi, Partner, Tannenbaum Helpern Syracuse & Hirschtritt LLP

David H. Tennant, Partner, Nixon Peabody LLP

IV. FCS WORKING GROUP PROCESS

The Group began its work in earnest in October 2011 starting with a brain-storming session

by email in which each member proposed three ideas (in any subject area). Those initial ideas led to

the formation of four topical categories: (1) Discovery (2) ADR (3) Litigation Process; and (4)

Legislation. The Working Group then split into four subcommittees which studied the initial ideas,

considered additional ideas, and prepared draft reports. Those draft reports were then shared with

the entire working group which met to discuss them. Based on that full working group review, an

interim report was circulated at the Section’s annual meeting in January 2012. The interim report

identified the ideas under consideration but did not present recommendations even of a preliminary

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type. The Working Group continued to narrow and refine possible recommendations for bringing

greater efficiency to dispute resolution whether in the form of litigation “pre-nups,” expansion of

ADR, enlisting third-party neutrals to help parties achieve proportionality and efficiency in their

commercial lawsuits, or amendments to the CPLR to make e-discovery in state court more efficient.

The vetting processed continued with another full working group meeting in April 2012 and further

refinement of the proposals until the Final Report was released May 31, 2012. The final report

reflects the consensus of the group as to what efficiency-inspiring measures should be considered for

implementation now.

The Working Group's final report is hardly the first or last word in finding more efficient

ways to resolve business disputes. Rather it suggests concrete and specific steps that might be taken

on a pilot basis to experiment with efficiency-focused models (Specific Recommendation Nos. 1

thru 4) together with specific proposed rules changes (Specific Recommendation No. 5), as well as

more general statements of support for behaviors and techniques that offer to promote efficiency in

the legal system (“Statements of Support”). Finally, the Working Group identified one efficiency-

inspiring measure – establishment of a rocket docket in the Commercial Division – that warrants

further study.

We note that Chief Judge Lippman's Task Force on Commercial Litigation in the 21st

Century seeks to promote faster, cheaper and smarter procedures in the Commercial Division of the

New York State Supreme Court to promote its attraction to corporate clients here and abroad.

Faster. Cheaper. Smarter. It is more than a mantra – but it is a fine mantra at that!

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V. PRELIMINARY CONSIDERATIONS

A. Threshold Question: If you build it . . . will they come?

It is often said that history is a great teacher – that the past is prologue. If so, we face

significant hurdles in creating any efficient alternative to traditional litigation that will be adopted in

practice by lawyers and litigants. The obstacles to adoption of faster-cheaper-smarter procedures

and techniques appear to include: habit, conservatism, distrust, unfamiliarity, fear, concerns about

departing from established procedural rules and predictable enforcement of them, related concerns

about malpractice, and pure economic self-interest. Forward-thinkers have tried and failed to create

more efficient means of resolving lawsuits, including judicial procedures specifically designed to

address business disputes. The Superior Court in Delaware created a “Summary Proceedings” track

for commercial cases that has largely gone unused. (See Section C(1), infra, at 15-17.) A creative

newly-minted federal district court judge in Oklahoma involved the local bar in constructing an

alternative fast-track for civil cases, which has attracted no litigants. (See Section C(2), infra, at 17-

18.) So what is going on? There appears to be a right brain / left brain split among lawyers who

intellectually understand many options exist for truncating the litigation process, shortening the time

to resolution, and reducing costs, but seem incapable of embracing any particular alternative – for

some or all of the reasons listed above.

While outside counsel may be reluctant to adopt FCS litigation techniques for a whole host

of reasons, as noted above, in-house counsel may have their own self-limiting attitude. Even though

corporate counsel should be natural proponents of court programs to reduce litigation timelines and

costs, they may distrust alternatives to traditional litigation because they are not widely in use and

fear stepping out in front of the pack, abandoning traditional process and procedures especially when

dealing with important matters that put substantial corporate dollars at risk – only to be second-

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guessed as an early adopter of a minority, alternative approach. Whatever constellation of factors

are at work – conservative culture, herd mentality, economic self-interest, or others – substantial

threshold obstacles exist and must be considered when formulating FCS alternatives to traditional

litigation.

B. Background Observations About “Rocket Dockets”

According to Black’s Law Dictionary, a “rocket docket” is (1) an accelerated dispute-

resolution process, (2) a court or judicial district known for its speedy disposition of cases, or (3) a

similar administrative process, in which disputes must be decided within a specified time (such as 60

days). After the 1983 amendments to the Federal Rules of Civil Procedure were passed, Rule 16

allowed courts to adopt local rules. Once judges were permitted to regulate their courtroom, certain

district courts were able to adopt rules that led to what we know as “rocket dockets” today.

The term “rocket docket” was purportedly first coined by an article in the Wall Street Journal

in 1987. See Paul M. Barrett, “Rocket Docket”: Federal Courts in Virginia Dispense Speedy

Justice, Wall St. J., Dec 3. 1987. Mr. Barrett described the program and methods used by United

States District Court for the Eastern District of Virginia. The Honorable Robert R. Merhige, Jr.,

United States District Judge, United States District Court for the Eastern District of Virginia,

described his program as follows:

If a party files a suit here today, and it is served on the opposing party ten days fromnow, the deputy clerk of the court . . . sends out a notice to both parties to appearbefore the judge within ten days. If it is filed and no answer or pleading is filedwithin twenty days, the notice goes out to the guy who filed it and to the defendant,whoever it is. And if he doesn't have a lawyer, that's too bad. You send it to him toappear before the judge and try to have him appear within seven days after theelapsed time. The goal is to have the case set for trial within thirty days of the filing.Now that’s not always possible because if the parties don’t get service, then we haveto wait twenty days before we can do anything. That waiting period is a right. Wecall it a pretrial conference which is a misnomer. It's really a docket call. . . . Wherethey misinterpret the rule is when they think the "rocket docket" means that we say,

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“Your case is going to be tried in 90 days whether you like it or not.” . . . . It doesn’thappen often, but that's the “rocket docket.” The whole theory, at least mine is, thatthe best way to get a case settled is to set it for trial. The earlier you set it, the earlierthe parties are going to get together and try to settle it.

“Interview: The Federal Courts: Observations From Thirty Years On The Bench”, 32 U. Rich. L.

Rev. 867, 874-876 (May, 1998).

Rocket dockets are thought to function efficiently and have become more attractive to

litigants because of “strict local procedural rules” which force “parties to engage in early discovery

and adhere to firm trial dates.” Alisha Kay Taylor, “What Does Forum Shopping in the Eastern

District of Texas Mean for Patent Reform?” 6 J. Marshall Rev. Intell. Prop. L. 570 (2007). Rocket

dockets have the beneficial effect of eliminating lengthy interruptions and keeping lawyers’ attention

focused on the case. In contrast, traditional case management often leads to cases hitting spells

where nothing is occurring with an attendant loss of focus by counsel. When case activity resumes,

lawyers have to re-focus and re-learn the case, perhaps multiple times.

Rocket dockets are most prevalent in the field of patent law, as well as in some criminal and

foreclosure contexts, and “took off” in the 1980s and 1990s. Rocket dockets “invite considerable

strategic behavior from patent owners, infringers, and litigators, and they are increasingly the subject

of analysis by legal scholars as well as legal practitioners.” Saurabh Vishnubhakat, “Reconceiving

the Patent Rocket Docket: An Empirical Study of Infringement Litigation 1985-2010,” 11 J.

Marshall Rev. Intell. Prop. L. 58, 60 (2011).

The most “famous” rocket dockets are: the Eastern District of Texas, the Eastern District of

Virginia, and the Western District of Wisconsin. These “rocket dockets” are known to encourage

forum shopping. Plaintiffs seem to prefer these venues because “of the forum’s knowledgeable

judges experienced in patent cases, special patent rules that compel quick and inexpensive discovery,

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and plaintiff-friendly juries.” Li Zhu, “Taking Off: Recent Changes to Venue Transfer of Patent

Litigation in the Rocket Docket,” 11 Minn. J.L. Sci. & Tech. 901, 902 (Spring 2010). Strategically,

plaintiffs have an advantage because the stricter pretrial timeline and schedule forces attorneys to

prepare their cases at a quicker pace. If the defendants are from out of town, then they will “have the

disadvantage of scrambling to devise a strong defense against plaintiffs who are familiar with the

grueling schedule and have already prepared for trial prior to filing.” Taylor, 6 J. Marshall Rev.

Intell. Prop. L. at 577. This type of gamesmanship, however, undermines the legal process and the

goals of fair and efficient adjudication.

Some have criticized the extreme time pressures imposed by rocket dockets as leading parties

to robotically undertake certain procedures because they do not have time to reflect upon their value,

afraid they will waive a substantial right. And while rocket dockets undoubtedly energize early

settlements in many cases, with the firm trial date and the stark realties of cost and risk which

follow,2 this is not true in all cases. The inordinate speed, and resulting anxiety, may stifle the

settlement process because the parties may become too heavily invested in fighting through to trial

2 Anecdotal evidence from two well-known rocket dockets (EDVA and EDTX) support the notion that thebest way to push settlement is a fast trial – with the judges pushing cases quickly through discovery andmotion practice. Discovery may be completed in four months. The compressed timeline force parties andtheir lawyers to face up to the risks and, as a result, to get serious about settlement. Judges will give aspeech early on about talking about settlement, and will offer to appoint a judge or magistrate judge toassist, but typically do not insist on ADR. One example of the court’s use of a hastily-imposed trial datecomes from the EDVA. The matter was scheduled for trial in 6 weeks but in the middle of hearing on anon-dispositive but important motion, the court said, “Let's try the case starting on Monday.” (This wasthe Thursday before). He then brought the parties into chambers for settlement talks and kept the partiesthere until 11:30 pm -- no food, limited breaks -- then ordered the parties back at 8 am the next day,where he continued to work with us toward resolution. The parties couldn't bridge their differences, andfinally the judge let them go telling them to be prepared for trial on Monday. Monday morning, literallyon the courthouse steps, one side blinked and the case settled. As one of the lawyers involvedcommented: “Trial is a wonderful way to focus the mind on settlement. Those courts know it, and trustthat the parties know it too. Courts that have badly clogged dockets offer little incentive to settle, becausethere is little credibility for adverse consequences (e.g., trial).”

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before they have a chance to let the dust settle. Some slack in the schedule is often needed to allow

passions to diminish and the rational assessment to take root. By contrast, a rocket docket is a

constant state of “the heat of battle,” which may serve to inflame “the heat of passion” of the parties.

The use of a rocket docket in the commercial litigation context in New York does not appear

to have ever cleared the launch pad in any systematic manner. In 2006, the New York State Office

of Court Administration issued a report on the Commercial Division after conducting a series of

focus group interviews in five locations throughout the State. The study brought together current

and retired judges, prominent commercial litigators and in-house counsel of major corporations for a

meaningful dialogue about the Commercial Division. As part of this process, rocket dockets were

touched on as a possible way to speed up the adjudication of commercial cases.

Focus Group participants recognized that not every case in the New York state courts needs

this degree of judicial involvement, and not every court within the system has the resources to

provide it. But there was consensus that spending time at the beginning of a case, setting ground

rules, and demonstrating interest and energy in resolving a dispute could pay great dividends for the

parties and the court later in the case. There was also a strong consensus that certain aspects of the

Commercial Division’s flexible and adaptable approach ought to be emphasized, if this approach

were to be shared with other parts of the court system. First, participants noted that it is very

important to allow lawyers to work together and agree on realistic deadlines for discovery, motion

practice and other scheduling matters. If the court interferes with the lawyers’ agreed-to reasonable

timetables, hoping to move the case faster, the case can become overly compressed, making it even

more expensive and difficult to litigate efficiently. As one lawyer explained, contrasting the

Commercial Division with the 'rocket docket' in the Eastern District of Virginia: ‘I think the

[Commercial Division] does a great job. There are some cases in the federal court in Virginia and I

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think it is a waste of money. The schedules are so tight they don’t leave time for reflection or time

for consideration. They don’t leave time for settlement discussion. I think this court has it mixed

pretty right.’ Although the participants did not want their cases moved too quickly, they also did not

want them to languish. “Report of the Office of Court Administration to the Chief Judge on the

Commercial Division Focus Groups,” July 2006 at 14

(http://www.nycourts.gov/reports/ComDivFocusGroupReport.pdf).

As noted, the use of strict mandatory rocket dockets, although appealing on several levels,

can result in gamesmanship and forum shopping. Experience over the past two decades with such

rocket dockets – both good and bad – should be carefully considered in developing alternative

procedures to streamline litigation. Optional fast-track programs, with flexibility, may offer an

appropriate solution for many litigants, at least where the parties and their counsel are open to

creative alternatives.

As a general principle, courts and counsel should consider modified litigation structures in

every case, and right from the beginning. The focus should be on the efficient exchange of

information rather than on utilizing formal discovery devices. If there is interest, procedures and

protocols can be negotiated to fit the needs of any case. The tightness of a schedule, and how

aggressively to push a case, should be weighed against the risks of crimping or displacing settlement

discussions. It may be that no system can truly replace the experienced and skillful hand of an

engaged and artful jurist, but we believe a pilot project employing an aggressive form of Early

Neutral Evaluation (as explained below) is worth exploring as an alternative to traditional litigation,

promising to produce faster, cheaper and smarter litigation outcomes.

Before turning to the specifics of the proposed pilot program, we review two recent court-

based efforts to promote efficiency in civil litigation that have been ignored by the bar (Section III),

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the current pilot program in the Southern District of New York to establish efficient case

management procedures in complex civil litigation (Section IV) and the use of private agreements to

bring proportionality to litigation (Section V). These efforts help to inform the present proposal to

establish an aggressive form of Early Neutral Evaluation.

C. Lessons Learned From Good Court-based Models That Went Unused

1. Delaware Superior Court Summary Proceedings

The Delaware Chancery Court and Superior Court have been exploring various ways to make

court procedures more efficient for resolving complex commercial disputes. The Delaware Superior

Court in 1994 adopted the “Rules Governing Actions Subject to Summary Proceedings.” These

rules “establish an expedited procedure for non-jury trials for business disputes when the parties (at

least one of which must be a Delaware citizen or business entity) have consented, by written

agreement or stipulation.” The key features of the Delaware Summary Proceeding include:

There are deadlines for briefing of, and decisions on, motions todismiss.3

A plaintiff must file within 7 days of the filing of an answer, and thedefendant must file within 30 days thereof, copies of all documentsintended to be relied upon at trial and a list of intended trial witnesses.4

A party may serve only ten interrogatories, including sub-parts.5

A party may depose any person on the other party’s witness list, anydesignated affiant, if the parties elect to submit the case on briefs andaffidavits in lieu of live testimony, and only four other persons.Depositions must be completed within 120 days of the filing of the lastanswer.6

3 Rule 126

4 Rule 127(a)

5 Rule 127(b)

6 Rule 127(d).

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A party may serve only ten requests for admissions.7

At the option of the Court, discovery disputes may be addressed by aMaster at the expense of the parties, or by the Court.8

Unless otherwise ordered by the Court, all fact discovery must becompleted within 180 days after the filing of the last answer.9

Unless otherwise ordered by the Court, expert discovery must becompleted within 60 days after completion of fact discovery.10

There are no motions for summary judgment.11

Rule 129 provides that if the parties notify the Court within seven daysafter the close of discovery that they agree to forego witnesses at atrial, they may submit briefs and affidavits.

Rule 130 provides procedures for trials. Absent Court order, trials arelimited to five days. The Court’s decision is to be rendered 30 daysafter the filing of the final brief, if no oral argument occurs, or within30 days of oral argument.

Rule 131 provides that all of the SP Rules except Rules 129 and 130may be modified by agreement of all parties with approval of theCourt.

A 2009 report evaluating the status of Summary Proceedings in Delaware Superior Court

found that only six cases had gone through the process in its 15-year existence.12 The report made

the following observations as to the reasons:

It is difficult to explain why the Summary Proceedings Act has not been invokedmore often. Possible reasons include a lack of awareness of the Act itself and a

7 Rule 127(e).

8 Rule 127(g).

9 Rule 127(h).

10 Rule 127(i).

11 Rule 128. The elimination of summary judgment motion practice may be too high a cost for many litigants. The

objective should be to eliminate unnecessary motion practice.

12 See Report and Recommendations of the Special Committee On Superior Court Business/Complex

Litigation (June 2, 2009) (“Special Committee Report”) at 8-9, available at

http://www.google.com/search?q=Report+and+Recommendations+dated+June+2%2C+2009+of+the+Sp

ecial+Committee+on+Superior+Court+Business%2FComplex+Litigation+&ie=utf-8&oe=utf-

8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

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reluctance to include such provisions in a contract or stipulation at a time when thenature of future disputes may be unknown. Additional reasons may include aperception that the Superior Court docket is so heavy that the best intentions ofprompt trial dates and dispositions will necessarily be trumped by criminal speedytrial requirements and the pressure to schedule older civil cases for trial; and a fearthat, even if a case is specially assigned to a judge designated as a member of thePanel, that judge may not be able to allocate adequate time to the case during her orhis assignment to the criminal docket.

Special Committee Report at 8-9.

We think for a fast-track program to be successful (i.e., adopted in practice by lawyers and

litigants alike) it must be flexible. It cannot be a one-size fits all process but, rather, one that can be

adapted by the parties and modified by the court to match the needs of the case.

2. District Court Oklahoma Fast Track

One interesting model of a “modified” rocket docket can be found in the court of the

Honorable Timothy D. DeGiusti, United States District Court Judge for Western District of

Oklahoma. Judge DeGiusti created the program as an alternative for civil cases in response to

criticisms by lawyers of the delays and expense of litigating cases in that court. Judge DeGiusti

solicited input from the local bar and crafted a modified responsive “fast track” procedure. It is an

optional program described as follows: “With approval of the Court and agreement of all parties, civil

cases may be made subject to the ‘fast track’ procedure . . . The fast track procedure is made

available to the parties in order to provide alternatives which may reduce the costs and time involved

in federal civil litigation . . . Counsel and all parties are to agree to the selection of this procedure at

or prior to the first status/scheduling conference, or within 7 days thereafter. Selection of the

procedure will be documented as a matter of record in the case . . . Once such selection has been

approved by the Court, the case will be subject to the procedure . . . otherwise ordered by the Court.”

Key features of the “fast track” program include:

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Trial Date - within approximately 180 days or less as appropriatefrom program acceptance;

Discovery Period - 120 days or less allowed for discovery, only oneextension of the scheduling order deadlines will be permitted (not toexceed 7 days);

Depositions - No more than 5 depositions shall be taken by any party,and shall be limited to 5 hours each, except for expert witnessdepositions, which shall be limited to 6 hours;

Interrogatories and requests for admissions - limited to 20;

Requests for production - limited in number to 30 and documents areto be produced or inspection allowed within 7 days of the service ofresponses;

Motion to Dismiss - waived;

Summary Judgment and Daubert Motions - briefs, are limited to 20pages in length and only relevant portions of deposition transcripts areto be provided; reply briefs will not be allowed without leave of Court,and when allowed will be limited to 5 pages;

Motion to Compel - no more than one motion to compel related to alldiscovery matters is permitted and must be filed no later than 30 daysbefore the end of the discovery period;

Experts - only one per side permitted, without leave of court;

Time for Trial - no more than two trial days per side for thepresentation of the case, with 1/2 day per side reserved for rebuttal, asappropriate.

“Escape Clause” - a party may seek leave of Court to withdraw fromthe program but motions are discouraged and will be granted onlyupon a showing of good cause.

See http://www.okwd.uscourts.gov/files/fast_track_pro.pdf. Despite the streamlined procedures

requested by the local bar – with a user-friendly “escape clause” – not a single case has been slotted

into it. In other words, no combination of lawyers (and litigants) ever found the fast-track attractive,

assuming they even thought about it.

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D. New SDNY Pilot Project Regarding Case Management Techniques for Complex

Civil Cases

The Southern District of New York adopted a new pilot program, effective November 1,

2011, to enhance case management for complex civil cases and, in doing so, shorten the lifecycle of

cases and reduce costs. The features include an early comprehensive Rule 16 conference at which

parties will state their positions on a number of issues and will recommend limitations on fact and

expert discovery.13 The pilot will run for eighteen months.

E. Private Litigation Agreements

1. Litigation “pre-nups”

The so-called “Economical Litigation Agreement” promoted by the International Institute for

Conflict Prevention and Resolution is a complex contractual clause that seeks to specify what

litigation procedures the parties will employ if they wind up in a legal dispute.14 While the goal is

laudatory, and the ELA is comprehensive and well-intentioned, there appear to be significant

barriers to companies employing such “litigation pre-nups.” Perhaps the greatest impediment is the

need for transactional counsel to focus on the highly detailed provisions of the ELA, with a

concomitant investment of time and energy negotiating the agreement. Transactional lawyers may

not possess the expertise needed to intelligently weigh the costs and benefits of the various

provisions covered by the ELA. Indeed, litigators would be hard pressed to agree on what litigation

procedures to adopt for a dispute that has not arisen and may never arise. The ELA usefully

13The Pilot Program is detailed in a lengthy standing order that includes exhibits, checklists, and forms. In re Pilot

Project Regarding Case Mgmt. Techniques for Complex Civil Cases in the S.D.N.Y., No. 11-388, stndg. Order

(Nov. 1, 2011). A comprehensive overview of the Pilot Program can be found at

http://www.newyorklawjournal.com/PubArticleNY.jsp?id=1202536067541&slreturn=1.

14A copy of the model Economical Litigation Agreement (2010) is attached as an Appendix. It is available

http://www.cpradr.org/Resources/ADRTools/EconomicalLitigationAgreement.aspx

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employs principles of proportionality, keying the amount of process to the amount of money at stake

in the dispute, but it is not clear if transactional counsel and their client will be comfortable with

those default provisions or seek to vary them. Moreover, non-monetary interests may predominate in

a dispute and require much greater process than the dollar amount in controversy would justify.

Also, the robust criticism of arbitration as an uneconomical and slow alternative to traditional

litigation15 may apply to the arbitration procedures contemplated by the ELA.

2. Pre-trial Discovery and Trial Agreements

Even if the parties to a contract have not specified in that agreement what litigation process

will be employed in the event of future litigation (for example in the form of CPR’s ELA), the

parties are free to negotiate and agree to faster, cheaper and smarter alternatives after a lawsuit has

commenced. One source for such agreements is attorney Steven D. Susman, who seeks to employ

his own brand of cost-cutting procedures in his own cases and promotes the use of such agreements

generally for civil litigation. On his website, Susman offers various model agreements split between

pre-trial and trial phases.16 He reports some success in getting opposing counsel in his own cases to

adopt the agreements, but we are not aware of any track record regarding the use of these agreements

by other lawyers. We do not know of any statistics as to the number of lawsuits in which the parties

employed these or other cost-saving agreements, or how they impacted the timeline to resolution,

and if hard dollar savings were achieved. If opposing litigants and counsel enter such agreements in

good faith and responsibly perform their obligations, real time and cost savings would appear readily

15 See Strategies for controlling Discovery Costs in Arbitration (quoting CEO of AAA as saying “the single biggest

challenge facing arbitration today; out of control arbitration costs and delay.”)

http://www.jenner.com/system/assets/publications/1692/original/CBL_Sum11_DoornweerdMerrick.pdf?1319642310

16See http://trialbyagreement.com/pretrial-agreements/pretrial-agreements-made-easy. Sample model agreements are

attached as Appendix B.

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achievable. To the extent courts enforce such agreements, and endorse them by adopting and

promoting model agreements, more litigants may be convinced to try them. Indeed, the active

assistance of a skilled neutral may be necessary to overcome the typical negative reaction, “If the

other side wants it (whatever ‘it’ is), it must be bad.”

VI. SPECIFIC RECOMMENDATIONS


Establish An Aggressive Early Neutral Evaluation Pilot Project(Commercial Division and/or Federal Court)

We are mindful of the complex dynamics that lead to early settlements including the various

incentives and disincentives for parties to talk settlement in earnest. We are also mindful that we

need to fashion a program that is responsive to the practical and emotional needs of the parties

involved in litigation. At its core, any pilot project must overcome the intrinsic baseline reluctance

of the parties and their counsel to give up procedural rights, and in place of those conservative

expectations, offer an intelligent alternative that provides practical advantages to both sides – and in

a supportive environment that is conducive to securing the parties’ consent to engage in those

efficient alternative procedures. The program needs to be structured so that it builds the confidence

of the lawyers and litigants and provides a positive experience.

The FCS Pilot Project calls for an aggressive form of Early Neutral Evaluation (“ENE”) that

employs experienced neutrals (retired judges, mediators and/or savvy commercial litigators) who at

the outset of the litigation – before any judicial conference occurs – provide a “reality check” on the

claims and defenses, taking a measure of what is at stake in the dispute and the cost of traditional

litigation to resolve it, and actively explores with the parties various agreements to tailor the

procedures to efficiently reach a resolution, with proportionality a hallmark principle. Ideally, the

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neutrals would be commercially savvy retired judges, mediators, and prominent litigators who enjoy

wide respect and whose opinions carry a certain gravitas. It may be possible to recruit neutrals

through the membership of the Commercial and Federal Litigation Section (and other NYSBA

Sections) and from the existing rosters of court-approved mediators. Compensation might be

provided using the WDNY mediation model where a set number of hours of service are provided

without cost (or at a reduced fee) but convert to a normal hourly rate if the parties wish to continue

the discussion. The neutrals would receive some training but the goal is to have their considerable

experience in commercial cases drive the practical discussion with the lawyers – helping the parties

to recognize and adopt the means to achieve proportionality between the costs and what is at stake in

the litigation.

Specifically, the neutral would work with the parties to try to identify the essential claims,

the essential facts to support those claims, the defenses relevant to those claims, and tailor discovery

and trial procedures to match those core issues and what is at stake in the litigation. The areas for

potential agreement include all areas of pre-trial discovery and motion practice (staging discovery,

limiting document discovery, simplifying privilege review, restricting interrogatories and

depositions, forgoing motions (e.g., addressing pleading deficiencies without motion practice)) as

well as trial including limiting the length of the trial and exploring summary / expedited resolution

by mini-trial, summary jury trial, or other abbreviated method to shorten the lifecycle of the

lawsuit.17

17The range of efficient and streamlined procedures is limited only by the imagination of the parties and their counsel.

We have previously described this freedom in the following terms: “We are limited only by what two mature

consenting corporations might choose to do in the privacy of their boardrooms.” For example, as a prelude to taking

depositions, the parties could agree to conduct unsworn, informal interviews of certain groups of people to help

identify the people to be deposed. As proposed in one case, both corporations would produce their “team” for

informal interviews (telephonic, in-person, or video-conferenced) subject to time limitations and a prepared agenda,

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We think one way for neutrals to present FCS options is to use the existing model agreements

available on Attorney Susman’s “trial by agreement” website (and set forth in Appendix B) as a

starting point. These model agreements are “in the can” and their author a prominent contributor to

the new SDNY pilot project regarding complex civil case management. Corporate counsel

concerned that these agreements are untested, should be able to get the necessary comfort from the

fact that these agreements have been used in actual cases and logically appear capable of achieving

costs savings while preserving enough process to permit a fair adjudication of the dispute – faster,

cheaper and smarter. It will be the neutral’s task to present a range of reasonable FCS alternatives

and invite the parties to negotiate whatever provisions they think make sense given the contours of

the case. The goal is to have the parties “buy into” the process and knock out an agreement to

truncate discovery and trial procedures to match the needs of the case – bringing proportionality

between the cost of the litigation and what is sought to be accomplished in the lawsuit – that makes

economic sense for both parties. The neutral would be free to communicate with, and enlist support

from, the assigned judge.

Based on the information developed in these negotiations, the neutral may proactively

identify settlement opportunities. With the approval of the judge, the parties could be referred to the

court-annexed mediation program (or in federal court to a magistrate judge). The neutral might

recommend that the litigants and counsel meet early with the judge or magistrate judge.

Through such active hands-on ENE, and promotion of consensual limitations on discovery

and trial procedures, the Pilot Project would be expected to result in the adoption of streamlined

after which the two sides would identify up to five people to depose. In that same case, one side proposed a two-day

bench trial with direct examination by affidavit.

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procedures in a certain number of cases, bringing proportionality and efficiency to the litigation

process, while also identifying cases suitable for early mediation or judicial involvement.

We have struggled to identify the criteria by which certain commercial cases would be

selected for this Pilot Project. Some cases may be too small to warrant the investment, others may

be too complex or unwieldy. The prospects for effective early neutral evaluation appear to be

greatest where a business dispute involves two corporations or other business organizations and

equally sophisticated outside counsel. Perhaps the initial cast for suitable cases would be limited to

two-party cases involving breach of contract and other business disputes that are of a defined and

limited scope, do not include allegations of fraud, and are free of significant or novel legal issues.

The Pilot Program perhaps could start with an open invitation and see what commercial cases come

in the door. The judge could then make a determination as to the suitability of the case for

aggressive early neutral evaluation.


Establish A Mediation Pilot Project in Commercial Division

The Commercial Division should implement a pilot project requiring automatic

mediation early in the litigation process – preferably within the first 100 days after the

Request for Judicial Intervention. Early results from the pilot mandatory mediation program

implemented in the Southern District of New York, which applies to all employment

discrimination and Section 1983 cases, have been favorable, and in the Western District of

New York, where mediation is automatic, subject to enumerated exceptions, the reported

settlement rate is higher than 70% for cases reaching a mediator. Most business disputes

should be able to avail themselves of the settlement opportunity presented by mediation, and

to the extent that early settlement would be achieved in a large percentage of cases, court

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resources could be devoted to those cases that require greater judicial involvement. Given the

volume of cases in the Commercial Division, it would be advisable initially to implement a

mandatory mediation program as to only a percentage of cases to ensure there are sufficient

qualified and experience mediators available to handle the increased caseload on an expedited

basis. While parties should be able to avail themselves of the ADR panels that the

Commercial Division has created, parties should also be encouraged to select and agree upon

their own private mediators.

Mediation will often succeed despite the skepticism of counsel and parties. Still, there

should be some exceptions to the mandatory assignment of cases to mediation – either where

good cause is shown or where all parties oppose mediation.

The pilot mediation should provide for a limited exchange of key documents and, if

advisable, a limited number of depositions to allow parties to settle cases on an informed

basis. In addition, the mediation should provide for the parties to provide to the mediator

available information on jury verdicts on claims for unliquidated damages in cases similar to

theirs. For those claims or causes of action seeking liquidated damages, parties should

provide the mediator, without prejudice, with a reasonably reliable calculation of damages.

Finally, the parties should be required to certify that they have engaged in a calculation of

budgeted litigation costs and should be prepared to discuss generally with the mediator the

likely costs to be incurred.

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Establish An Automatic Expedited Non-binding Arbitration Pilot Project in CommercialDivision for Cases Under A Specified Dollar Amount

In addition to the opportunity for referral to mediation pursuant to guidelines presently

in effect in both federal district courts and in the NYS Commercial Division, an expedited

non-binding arbitration process should be established for all matters with liquidated damages

in an amount less than $250,000 or such other amount as each jurisdiction deems appropriate.

The arbitrator would be selected from the standard list of neutrals and would essentially serve

as a neutral evaluator. There would be no discovery. Rather, each party would be afforded a

brief period of time (not to exceed one day for the total process) to present a highlight of their

evidence to the arbitrator. The non-binding arbitration would be conducted off the record and

would be without prejudice. The arbitrator would render the non-binding decision within a

brief period of time such as two (2) weeks. Following the conclusion of this process, the

parties could stipulate to accept the decision of the arbitrator, negotiate their own settlement

terms or elect to return to the litigation path. This process would allow for a dual track to

permit continuation of litigation to the extent deemed essential for the protection of the

interest of the parties, while providing the parties with an early, neutral evaluation of the

merits.

The subcommittee's investigation revealed that a similar program in the Eastern

District of New York has proven to be successful for all civil cases valued at less than

$150,000. There, the parties are required to go to arbitration but are allowed ninety (90) days

for discovery. The entire process is supposed to be completed within six (6) months. The

parties may opt to accept the award or may seek a trial de novo. According to our

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subcommittee's research, in approximately 2/3 of the arbitrated cases, the parties accept the

award. With respect to the remaining 1/3, there is virtually never a trial de novo because the

parties ultimately settle the case following the arbitration.


Establish A Neutral “Search Facilitator” Pilot Project(Commercial Division and/or Federal Court)

Discovery in a world of electronically stored information (“ESI”) is different than discovery in a

world without photocopiers and personal, portable or linked computers or other electronic storage

devices. The volumes to be preserved, collected, produced, withheld as privileged or protected, and

reviewed have grown exponentially. Yet the goal of discovery in our litigation system has remained and

should remain the same: disclosure of all relevant facts so that the parties may realistically evaluate their

prospects in litigation and lead to a settlement, a decision based on facts about which there is no dispute,

or a trial without surprises and ambushes. The problem is one of proportionality: the costs in time,

money and people to discover every document and item of ESI may not be, and often in commercial

cases is not, justified by what is at stake in the case. The solution is twofold: (1) contrary to the out-of-

date paradigm of production of information only in response to a specific request, there must be

cooperation and agreement among the parties either before any litigation or during a lawsuit, and (2)

there should be early and continuing involvement of a third party – judge, magistrate judge, special

master, or neutral evaluator.

Absent cooperation and agreement, requesters must request information more broadly than

necessary, because requesters do not wish to miss information that would be relevant, but, in most

instances, will not have sufficient knowledge of the electronic systems and data of the producing party

to make more tailored requests. Absent cooperation and agreement, producers must over-preserve,

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collect much meaningless or at best tangential information, expend much unnecessary effort in

reviewing information for relevance, privilege and protection, and perhaps engage in expensive and

time-consuming motion practice to reduce the burden. More efficient litigation, that is, faster, cheaper

and smarter litigation, in the age of ESI requires cooperation and agreement.

However, if parties have reached a stage in their relationship that litigation becomes the rational

step to take, it will be hard for them to agree or cooperate because trust is highly likely to be lacking.

Therefore, agreement must be reached when the parties are still looking at a win-win situation at the

time of contracting or a third party must be involved once litigation has commenced to encourage, or, if

necessary, decree and enforce cooperation and agreement where it makes sense given the stakes in the

case.

To promote cooperation and cost-effective discovery, parties may include a provision in business

contracts to agree to use a search facilitator at the beginning of any dispute to serve as a liaison and

moderator or, if appropriate, decider of issues relating to the scope and efficacy of search terms or

protocols, or accuracy of the results of searches terms or protocols. The search facilitator could assist

parties to design more statistically valid and effective search protocols; evaluate the effectiveness of the

parties’ proposed search methodology to achieve the most efficient way to manage e-discovery under

the circumstances of the matter and minimize over- and under-capture of documents; and measure the

accuracy of the results of the parties’ productions of documents. The search facilitator’s expertise in

designing more cost-effective approaches to e-discovery and the search facilitator’s ability to provide

parties with objective data regarding their proposals or positions should serve to narrow areas of dispute

or provide the court with the necessary supporting evidence to decide on discovery disputes.

Additionally, the use of a search facilitator would make discovery far more cost and time effective so as

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to justify the additional up-front cost of retaining such an expert. The use of a search facilitator may

also enable the parties to take advantage of continually evolving resources to handle ESI.

The search facilitator’s qualifications are not those typical of a lawyer or IT or e-discovery

professional. The search facilitator should have the requisite expertise in computer technology, statistics

and linguistics,18 and experience in designing and implementing search protocols, sampling data, and

measuring the performance of searches using the metrics of recall and precision, according to the

principles of TREC.19 The search facilitator’s role could include evaluating the reliability and

implications of alternative approaches by quality control testing to ensure accuracy and the reduction of

“false positives,” and providing the metrics to test whether particular search terms would retrieve a

proportionate and appropriate amount of data in relation to the amount in controversy in the case.20 The

search facilitator also could assess the reasonableness and completeness of the parties’ productions,

based on the precision and recall achieved.

The parties should contractually define the role of the search facilitator. It could be as an

evaluator of search results or more akin to a mediator or to an arbitrator depending on the parties’

wishes. The search facilitator might become involved before any conference with the court to frame the

issues for discovery and the methods for review and production of ESI or the search facilitator may

18 U.S. v. O’Keefe, 537 F. Supp. 2d 14 (D.D.C. 2008) (Facciola, J.) (“[w]hether search terms or ‘keywords’ willyield the information sought is a complicated question involving the interplay, at least, of the sciences ofcomputer technology, statistics and linguistics”).

19The Text Retrieval Conference (TREC) Legal Track is a study sponsored by the National Institute ofStandards and Technology to study the effectiveness of search and retrieval approaches in the e-discoverycontext.

20 For example, the search facilitator can assess the effectiveness of proposed search terms (or “seed documents”in the case of predictive coding) by measuring the recall and precision of those search terms or “seeddocuments” on sample sets of documents coded as responsive as well as those coded as non-responsive toinform the parties of which terms are achieving high recall and high precision and which are not, and whetherthere are an unreasonable percentage of documents left behind.

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become involved after an initial court conference has framed the scope of discovery to aid the parties in

working through technical issues.


Amend The CPLR Provisions Re E-Discovery

The Working Group’s Legislative Process Subcommittee (LPS) initially put forth three broad

recommendations for potential legislative enactments in New York state designed to streamline and/or

shorten the civil litigation process: (1) amendments to Civil Practice Law and Rules (CPLR) Section

3216 to give justices greater discretion to dismiss civil actions for want of prosecution after a specified

period of dormancy; (2) amendments to the CPLR to bring the civil disclosure procedures set forth in

Article 31 in line with the 2006 Federal Rules of Civil Procedure amendments, and procedural rules in

other jurisdictions, governing e-discovery; and (3) in conjunction with a revised e-discovery proposal,

adopt a New York version of the provision in Rule 34 of the Federal Rules of Civil Procedure, requiring

the recipient of inadvertently disclosed privileged communications to return or destroy such materials

promptly upon request by the disclosing party.

The full Working Group believes the most viable recommendation is the proposed

amendments to the CPLR to govern e-discovery. The bases for this recommendation are two-fold:

(1) the six-year old amendments to the Federal Rules, and the successful adaptation of the bench and

bar to those amendments, provide substantial precedent for a similar New York solution; and (2) the

fact that this proposal already was developed thoroughly by the Section's Civil Practice Law and

Rules Committee, culminating, importantly, in an adoption of this same proposal in 2008 by the

New York State Bar Association's House of Delegates. To date, however, the Section's 2008

proposal has not been enacted into law. The FCS Working Group believes the time is ripe for

legislative action.

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As noted above, the bench and bar are well aware of the ubiquity of ESI in today's business

world and the enormous volume of electronic material that may meet the threshold requirements for

discoverability in the civil litigation context. In the wake of the Southern District of New York's

groundbreaking decisions in the Zubalake line of cases,21 as well as the significant, subsequent work

of The Sedona Conference®, the amendments to the Federal Rules brought about a sweeping change

in the handling of electronically stored information (ESI) in the federal courts. Indeed, the guiding

principle underlying the 2006 amendments to the Federal Rules is that relevant, non-privileged

electronic information is presumptively discoverable, provided that it is reasonably accessible. The

Federal Rules amendments are also designed to ensure that e-discovery issues are addressed by the

parties, and the district court, at the earliest stage of civil litigation.

Regrettably, in the six years following the Federal Rules amendments, New York has not

followed suit in the CPLR, which still lacks specific provisions addressing discovery of electronic

information. To be sure, state trial court and Appellate Division decisions have provided guidance to

New York practitioners on the permissible scope of e-discovery in the state courts. And the

Commercial Division has promulgated rules providing for the management of e-discovery via early

conferencing and inclusion of e-discovery planning in case management orders. But these scattered

efforts to address e-discovery clearly augur for a uniform approach across the state court system, one

that harmonizes the decisional rules employing the Federal Rules as a model.

Accordingly, the attached thorough report by the Commercial and Federal Litigation

Section's CPLR Committee, which, as noted, was already approved by NYSBA's House of

Delegates, proposes specific amendments to multiple provisions of Article 31 of the Civil Practice

21Zubulake v. USB Wormburg LLC, 217 F.R.D. 309 (S.D.N.Y. May 13, 2003); 216 F.R.C. 280 (S.D.N.Y.July 24, 2003); 220 F.R.D. 212 (S.D.N.Y. Oct. 22, 2003); 229 F.R.D. 422 (S.D.N.Y. July 20, 2004).

- - 31 -

Law and Rules to bring New York procedure in line with the majority of the 2006 Federal Rules

amendments.

Briefly summarized, the proposed amendments to Article 31 are:

CPLR 3120(1)(i) should be modified to explicitly recognize ESI as a category ofpotentially discoverable information along with "documents" or "things;"

CPLR 3120((2) should be amended to permit a party seeking discovery of ESI to requestproduction of such information in one or more specifically designated forms;

CPLR 3122(a) should be amended (i) to permit a party, when objecting to a request forESI, to specifically include any objection the party has to the requested form ofproduction; (ii) to require the objecting/responding party to designate the form or formsin which the party intends to produce ESI, in cases where the party has objected to therequested form or forms of production, or where no particular form of production wasspecified in the request; and (iii) to clarify that, absent a court order, a party need notprovide disclosure of ESI that is not reasonably accessible due to undue burden or cost,and to provide a procedure for handling disputes as to whether such information is, infact, reasonably accessible;

CPLR 3122 should be further amended to specify that, as a general practice (i)production of ESI shall be made either in the form in which such information isordinarily maintained, or in a form that is reasonably useable by the party requesting suchdiscovery, and (ii) a party need not produce ESI in more than one form;

CPLR 3122(b) should be amended to extend its provisions for identification of withheldmaterials to the production of ESI;

CPLR 3126 should be amended to include a limitation on sanctions in cases whereinformation is lost through the routine, good-faith operation of an electronic informationsystem; and

CPLR 3131 should be amended to include ESI among the types of materials that a partymay request as a supplement to interrogatories.

The attached detailed report outlines the specific language proposed for each suggested rule

amendment, and also discusses the provisions of the Federal Rules that are not recommended for

adoption by New York, due to fact that there may not be a New York analogue to a particular

provision (i.e., the lack of an analogous initial disclosure requirement to the one set forth in FRCP 26

does not require adoption of the FRCP's changes to such disclosures to address e-discovery).

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VI. PROPOSED FURTHER STUDY

The Office of Court Administration and, particularly the Commercial Division, should

begin studying whether to implement “rocket docket” practices similar to what is done in

other states and in certain federal district courts. It is acknowledged that this is the most

provocative of the recommendations and perhaps the one requiring the most effort with

respect to analyzing the possibility of implementation. Nevertheless, the Working Group

believes the concept should be considered and, if appropriate, purposefully rejected after such

consideration. In this way, the court system would further demonstrate that it is proactive in

considering all of the options for ADR/settlement models.

CONCLUSION

The FCS Working Group believes the foregoing recommendations should be

implemented, with the four court-based proposals undertaken on a pilot basis to explore their

respective efficacies. The CPLR’s provisions regarding e-discovery should be amended

without further delay.

APPENDIX A

FCS Working Group’s Statements of Support

Statement No. 1

Promote Contractual Commitments to Mediation

In contract negotiations, parties should strongly consider incorporating clauses

requiring pre-litigation mediation before initiating litigation or other proceedings. The

obligation to engage in mediation would arise upon the identification by one or more parties

to the contract of a dispute arising thereunder. Upon notice from any party to the contract of

such a dispute, the parties would promptly engage in mediation for a brief period of time.

The clause would provide that the mediation process would involve disclosure of documents

critical to the dispute and/or significantly supportive of a party’s position. The extent or

amount of disclosure required as part of the mediation process would be within the discretion

of the mediator, including the prospect for a limited number of depositions to be conducted

prior to the mediation.

Statement No. 2

Promote Active Case Management Reinforcing Cooperation and Proportionality

Others besides the Working Group have been studying and concluding that there is a need

for early and active case management and a requirement of cooperation among parties. In May

2010, a conference at Duke Law School (the “Duke Conference”) sponsored by the Civil Rules

Advisory Committee of the Standing Committee on Rules of Practice and Procedure of the Judicial

Conference of the United States (“Advisory Committee”) assembled a significant and useful group

of materials, including empirical data, on the causes of delays and expense in federal litigation.

- - 2 -

Thus, at the Advisory Committee’s November 7-8, 2011 meeting, the report of its Duke Conference

Subcommittee stated,

Among the main ideas presented at the conference, three prescriptions were offered manytimes, in many voices. What is needed can be described in two words and one phrase:Cooperation; Proportionality; and Sustained, active, hands-on case management.

Advisory Committee on Civil Rules, Washington, DC, November 7-8, 2011, Agenda Materials,

http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/Agenda%20Books/Civil/CV2011-11.pdf,

Tab VI, Duke Conference Subcommittee Report at 567.

For approximately ten years, The Sedona Conference® has been addressing the burgeoning

cost and length of complex litigation and the role of electronically stored information in that trend.

In March 2003, a working group of The Sedona Conference®22 first published The Sedona

Principles, which addressed electronic document retention and production. These principles were

republished in a second edition in 2007.23 In 2009, The Sedona Conference issued the Cooperation

Proclamation.24 In 2010, Working Group 1 published Principles of Proportionality,25 and, in

22 Working Group 1, the first of many Sedona working groups, developed and published for comment in 2003 principles and

best practice recommendations for ESI retention and disclosure in civil litigation.

23 The Sedona Principles, Second Edition: Best Practices Recommendations & Principles for Addressing

Electronic Document Production (2007). The second edition incorporated comments to the original principles

and also the 2006 revisions to the Federal Rules of Civil Procedure.

24 10 The Sedona Conference Journal® 331 (Fall 2009 Supp.). The Cooperation Proclamation declared: “The

costs associated with adversarial conduct in pre-trial discovery have become a serious burden to the American

judicial system. This burden rises significantly in discovery of electronically stored information (“ESI”). In

addition to rising monetary costs, courts have seen escalating motion practice, overreaching, obstruction, and

extensive, but unproductive discovery disputes – in some cases precluding adjudication on the merits

altogether – when parties treat the discovery process in an adversarial manner. Neither law nor logic compels

these outcomes. With this Proclamation, The Sedona Conference® launches a national drive to promote open

and forthright information sharing, dialogue (internal and external), training, and the development of practical

tools to facilitate cooperative, collaborative, transparent discovery. This Proclamation challenges the bar to

achieve these goals and refocus litigation toward the substantive resolution of legal disputes.”

- - 3 -

August 2011, The Sedona Conference® published a compendium for judges to assist them with case

management.26

Late last year, the Judicial Improvements Committee of the United States District Court for

the Southern District of New York announced a pilot project that will test techniques in complex

civil cases to streamline the judicial process in several areas, including, among others, initial pretrial

case management, discovery and motions.27

In addition, the New York State Bar Association has appointed a Special Committee on

Discovery and Case Management in Federal Litigation which will present to the House of Delegates

at the Association’s June 2012 meeting a report on preservation of documents and spoliation, initial

mandatory disclosure, early judicial case management, and preparation of privilege logs and waiver.

We endorse the broad recommendations for judicial case management in The Sedona

Conference® Cooperation Proclamation: Resources for the Judiciary (August 2011) at 9:

● Judges should adopt a “hands-on” approach to case management early in each action

● Judges should establish deadlines and keep parties to those guidelines (or make reasonable adjustments) with periodic status reports or conferences

● Judges should encourage the parties to meet before discovery commences to develop a realistic discovery plan

● Judges should encourage proportionality in preservation demands and expectations in discovery requests and responses

● Judges should exercise their discretion to limit or condition disproportionate discovery and shift disproportionate costs

25 The Sedona Conference® Commentary on Proportionality (2010).

26 The Sedona Conference® Cooperation Proclamation: Resources for the Judiciary (2011).

27 The Judicial Improvements Committee was comprised of judges from the Southern District of New York and

preeminent practitioners in the court. The Judicial Improvements Committee issued its report in early

October 2011, and the pilot project began in the Southern District of New York on October 31, 2011.

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● If necessary, judges should exercise their authority to issue sanctions under the relevant statutes, rules, or the exercise of inherent authority on counsel or partieswho create unnecessary costs or delay, or who otherwise frustrate the goals ofdiscovery by “gaming the system”

These recommendations include a suggestion that judges encourage the parties to meet before

discovery commences to develop a realistic discovery plan. We believe this requirement in the federal

rules (Federal Rule of Civil Procedure 26(f)) and the New York Uniform Rules of the Commercial

Division of the Supreme Court (Rule 8 of 22 NYCRR § 202.70(g)) should be strictly enforced. In

particular, to promote efficient discovery of ESI, courts should require parties where appropriate to

adopt the practices described in Exhibit B of the Southern District of New York pilot project Joint

Electronic Discovery Submission and Proposed Order (“SDNY Pilot Project”) and in the Supreme Court

of Nassau County Commercial Division Guidelines for Discovery of Electronically Stored Information

(“ESI”) (“Nassau Guidelines”).

Among other things, the SDNY Pilot Project requires counsel for the parties to discuss:

(1) preservation, (2) search and review, (3) sources of production, (4) forms of production, (5)

identification or logging of privileged material, (6) inadvertent production of privileged material, and (7)

cost allocation. Id. at 19.

For preservation, the SDNY Pilot Project lists the following topics to be discussed: (a) retention

of electronic data, (b) implementation of a data preservation plan, (c) identification of potentially

relevant data, (d) disclosure of the programs and manner in which the data is maintained, (e)

identification of computer systems used, and (f) identification of the individuals responsible for data

preservation. Id. at 20.

For search and review, the SDNY Pilot Project describes the following methodologies or

protocols that the parties may discuss: (A) the use and exchange of keyword search lists, “hit reports,”

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or responsiveness rates; (B) concept searching; (C) computer assisted review, including machine

learning, predictive coding or other advanced analytical tools;28 (D) limitations on the fields or file types

to be searched; (E) date restrictions; (F) limitations on whether back-up, archival, legacy, or deleted ESI

will be searched; (G) testing; and (H) sampling. Id. at 21.

The SDNY Pilot Project identifies potential sources of production of ESI as e-mails, word

processing documents, spreadsheets, presentations, databases, instant messages, web sites, blogs, social

media, and ephemeral data. Id. at 22. It then suggests that the parties discuss the following factors

bearing on the scope of production: (i) the number of custodians; (ii) the identity of custodians; (iii) date

ranges from which potentially relevant data will be drawn; (iv) locations of data; (v) timing of

productions, including whether there will be phased discovery or rolling production; and (vi) ESI in the

custody or control of non-parties.29 Id. at 23.

The New York Appellate Division, First Department, has endorsed the Nassau Guidelines. See

Tener v. Cremer, 89 A.D.3d 75, 81, 931 N.Y.S.2d 552, 556 (1st Dep’t 2011) (“[b]ased on the specific

facts of this case, we find that the Nassau Guidelines provide a practical approach” to ESI). Among

other things, the Nassau Guidelines require the parties to “prepare a written plan/stipulation for the

preservation, collection, review and production of ESI . . . reasonably anticipated to be subject to

28 See Moore v. Publicis Groupe, 11 Civ. 1279 (ALC) (AJP), 2012 WL 607412, at*12 (S.D.N.Y. Feb. 24, 2012)

(Peck, M.J.), aff’d, 2012 WL 1446534 (S.D.N.Y. Apr. 26, 2012) (Carter, J.) (first opinion in which a court has

approved the use of computer-assisted review). Studies have found that technology-assisted reviews can be

more effective with higher recall and higher precision than manual reviews of ESI. See, e.g., Andrew Peck,

“Search, Forward,” L. Tech. News (Oct. 1, 2011) at 25, available at

http://www.law.com/jsp/lawtechnologynews/PubArticleLTN.jsp?id=1202516530534&slreturn=1; Maura R.

Grossman and Gordon V. Cormack, “Technology-Assisted Review in E-Discovery Can Be More Effective

and More Efficient than Exhaustive Manual Review,” 17 Rich. J. L. & Tech. 11 (Spring 2011), available at

http://jolt.richmond.edu/v17i3/article11.pdf (“Grossman & Cormack”).

29 With such an exchange of information, the parties should also discuss whether there is any need for initial

disclosures under Rule 26(a)(1), Fed. R. Civ. P.

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discovery.” Id. § II.A.3. The Nassau Guidelines advise counsel to confer regarding the implementation

of litigation holds; each party’s document or record retention policies; “their respective clients’ current

and relevant past ESI and policies regarding ESI;” their clients’ network design, types of databases, ESI

retention policies, and inaccessible ESI; and organizational charts for information systems personnel.

Id. § II.B.1.-3., II.D. The Nassau Guidelines further require counsel to be prepared to discuss at the

preliminary conference:

1. all matters concerning ESI as to which there is disagreement . . .;

2. the anticipated scope of requests for, and objections to, production of ESI;

3. the form of production of ESI and, specifically, but without limitation, whether allESI will be produced in a single format, or multiple formats, and whether thoseformats will be Native File, Static Image, and/or other searchable or non-searchable formats;

4. identification, in reasonable detail, of ESI that is or is not reasonably accessiblewithout undue burden or cost, the methods of storing and retrieving ESI that is notreasonably accessible, and the anticipated costs and efforts involved in retrievingsuch ESI;

5. methods of identifying pages or segments of ESI produced in discovery (i.e.Bates-stamping);

6. the method and manner of redacting information from ESI if only part of the ESIis discoverable, and the exchange of redaction logs;

7. relevant ESI custodians, including such person(s)’ name, title and jobresponsibilities;

8. cost-sharing or cost-shifting, if applicable, for the preservation, retrieval, reviewand/or production of ESI, including any litigation support database . . .;

9. search methodologies or protocols for retrieving or reviewing ESI. For example,some counsel currently use: key word searches, concept searches, “fuzzy searchmodels”, probabilistic search models and clustering searches; agreement(s) onsearch terms; limitations on the fields or document types to be searched;limitations regarding whether back up, archival, legacy or deleted ESI is to besearched; and sampling to develop an objective basis on which to evaluate thelikelihood and cost of obtaining responsive ESI;30

30 Sampling refers to a process by which subsets of ESI are identified and searched for the purpose of

developing a factual basis on which to estimate the cost of collecting, reviewing and producing ESI. Examples

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10. preliminary depositions of information systems personnel, and limits on the scopeof such depositions;

11. the need for two-tier or staged discovery of ESI (e.g., an initial search of a keycustodian’s documents, or a key time-period, only; followed by a broader ordifferent search if necessary). The two-tiered approach is intended to be usedwhen ESI can initially be produced in a manner that is more cost-effective, whilereserving the right to request or to oppose additional more comprehensiveproduction in a later stage or stages;

12. the need for any protective orders or confidentiality orders;

13. the need for certified forensic specialists and/or experts to assist with the searchfor and production of ESI;31

14. the protocols to be observed when preparing logs of documents withheld fromproduction, in whole or in part, based on an assertion of (1) attorney clientprivilege, (2) work product doctrine and/or (3) any other basis for withholding anotherwise responsive document from production; and

15. whether the parties must make reasonable efforts to maintain the data as NativeFiles in a manner that preserves the integrity of the files, including but not limitedto, the contents of the file and the Metadata related to the file, including the file’screation date and time.

Id. II.C.1.-15. (first footnote in original; second footnote added).

We do not recommend that each of the topics encompassed within the SDNY Pilot Project and

the Nassau Guidelines be covered by counsel in every case. What is appropriate should be tailored to

the circumstances of the case. Proportionality should be a touchstone, and cooperation is a necessity.

Nonetheless, parties must confer about the scope of discovery, especially ESI. The parties should

attempt to reach agreement, but, where they cannot, the courts must be involved.

Promptly following the meet-and-confer among the parties, there should be a conference with the

court to set forth, among other things, a discovery or case management plan. The Pilot Project requires

of ESI samples include, but are not limited to, identified subsets of (1) “key” custodians, (2) sources of ESI

and (3) time periods.

31 Consideration might also be given to the use of a neutral evaluator to facilitate agreements on production of

ESI or even to conduct the searches at the direction of the parties. See Marian Riedy, Suman Beros, and Kim

Sperduto, “Mediated Investigative E-Discovery,” 4 Fed. Cts. L. Rev. 77 (2010).

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courts to make best efforts to conduct an in-person initial pre-trial conference within 45 days of service

on any defendant of a complaint, except, if the government is a defendant, it is 60 days. See Pilot

Project I.B. at 1. In cases in the Commercial Division of the New York Supreme Court, current Rule 7

requires a preliminary conference within 30 days following a decision on a dispositive motion (if not

moot) if such a motion is filed with a Request for Judicial Intervention (RJI). Rule 7 of the New York

Uniform Rules of the Commercial Division of the Supreme Court (22 NYCRR § 202.70(g)). Rule 7

should be modified to require the plaintiff to file an RJI for a preliminary conference within 30 days

after an answer is served and to require that conference to be held within 30, not 45, days of the

assignment of the case.

The parties should be required to prepare a draft discovery plan in anticipation of the court

conference with a description of any areas of disagreement in accordance with the Pilot Project and

Nassau Guidelines. If no plan is drafted in the Commercial Division, then the case should not be

permitted to continue in the Commercial Division.

The case management conference in federal courts or the preliminary conference in state courts

provides a deadline by which the parties must exchange views on the appropriate scope of discovery and

a focus for the parties to encourage cooperation and planning. As suggested in the Nassau Guidelines,

each party may wish to identify a person familiar with the client’s electronic systems who should be

invited to attend the preliminary or case management conference. See Nassau Guidelines II.B.3. The

courts must be involved in planning discovery to see that plans appropriate to the case are made in order

to reduce the cost, burden and length of discovery in this electronic age.

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Statement No. 3

Embrace Technology-Assisted Review

In the interest of promoting efficient compliance with discovery obligations, accuracy and cost-

effectiveness, parties should consider technology-assisted review (including predictive coding, non-

probabilistic coding, and other advanced search methods). Technology-assisted review recently has

been judicially approved an acceptable way to search for relevant ESI in appropriate cases.32

The objective of review in e[-]discovery is to identify as many relevantdocuments as possible, while reviewing as few non-relevant documents aspossible. Recall is the fraction of relevant documents identified during areview; precision is the fraction of identified documents that are relevant.Thus, recall is a measure of completeness, which precision is a measure ofaccuracy or correctness. The goal is for the review method to result inhigher recall and higher precision than another review method, at a costproportionate to the “value” of the case.33

Traditional linear manual review for identifying responsive documents has come under challenge

in terms of efficiency and accuracy.34 When collections of data requiring review reaches terabyte or

petabyte levels, linear manual review becomes incapable of carrying out the task in a timely or cost-

efficient manner. Fully-automated assessment, on the other hand, has not proven to be a viable

32 Moore v. Publicis Groupe, 11 Civ. 1279 (ALC) (AJP), 2012 WL 607412, at *1 (S.D.N.Y. Feb. 24, 2012) (Peck, M.J.) ,

aff’d, 2012 WL 1446534 (S.D.N.Y. Apr. 26, 2012) (Carter, J.) (“[t]his judicial opinion now recognizes that computer-

assisted review is an acceptable way to search for relevant ESI in appropriate cases”).

33 Id. at *9 referencing Grossman & Cormack at 8-9.

34 Grossman & Cormack; Maura R. Grossman and Gordon V. Cormack, “Inconsistent Assessment of

Responsiveness in E-Discovery: Difference of Opinion or Human Error?” Proceedings of DESI IV: The

ICAIL 2011 Workshop on Setting Standards for Searching Electronically Stored Information in Discovery

(2011); Webber, W., D.W. Oard, F. Scholer and B. Hedin, “Assessor error in stratified evaluation,” in

Proceedings of the 19th ACM International Conference on Information and Knowledge Management (CIKM)

(2010); Cormack, G.V., M.R. Grossman, B. Hedin and D.W. Oard, “Overview of the TREC 2010 Legal

Track,” The Nineteenth Text Retrieval Conference (TREC 2010) (2012); H.L. Roitblat, A. Kershaw and P.

Oot, “Document categorization in legal electronic discovery: computer classification vs. manual review,” J.

Am. Soc.for Info. Sc. & Tech. (2010) 61(1):70-80.

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alternative as it tends to entail a steep trade-off between recall (capturing all the responsive documents)

and precision (avoiding the capture of non-responsive documents).35

Technology-assisted approaches, which combine both human and machine inputs, have been

found to be both efficient and accurate, if implemented in accordance with sound methodological

principles.36 However, “[a]s with keywords or any other technology solution to e[-]discovery, counsel

must design an appropriate process, including use of available technology, with appropriate quality

control testing, to review and produce relevant ESI while adhering to Rule 1 and Rule 26(b)(C)

proportionality.”37 “[N]ot all technology-assisted reviews . . . are created equal.”38 The same studies

that demonstrate the accuracy of such approaches (if implemented properly) also demonstrate the

inaccuracy of such approaches (if implemented improperly).39 Technology-assisted review must be

properly implemented to provide more accurate and complete results. For this reason, parties should

cooperate and agree, in advance, to a protocol for measuring the recall and precision of technology-

assisted approaches.40 In sum, “computer-assisted review is an available tool [that] should be seriously

35 See, e.g., the results of the TREC-2008 Legal Track Ad Hoc Task Force (Oard, D.W., B. Hedin, S. Tomlinson

and J.R. Baron, “Overview of the TREC 2008 Legal Track,” The Seventeenth Text Retrieval Conference

(TREC 2008) (2009)).

36 See B. Hedin, S. Tomlinson, H.R. Baron, and D.W. Oard, “Overview of the TREC Legal Track,” The

Eighteenth Text Retrieval Conference (TREC 2009) (2010); Oard, et al., TREC 2008; Cormack, et al., TREC

2010.

37 Moore, 2012 WL 607412, at *12.

38 Grossman & Cormack, at 2, 48 (analyzing data collected from the TREC 2009 Legal Track Interactive Task and showing

that, at TREC 2009, technology-assisted review processes enabled two of eleven participating teams to achieve results

superior to those that could have been achieved through a manual review of the entire document collection).

39 See Hedin et al., TREC 2009; Hedin, et al., TREC 2008; Cormack, et al., TREC 2010.

40 These protocols should adhere to the general principles that inform large-scale studies of the effectiveness of

retrieval systems (for a review of such studies for e-discovery, see D.W. Oard, J.R. Baron, B. Hedin, D.D.

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considered for use in large-data-volume cases where it may save the producing party (or both parties)

significant amounts of legal fees in document review.”41

Statement No. 4

Promote Efficiency in Privilege Designations

One of the most vexing, time-consuming and expensive areas of ESI discovery, because of the

tremendous volume of ESI, is the review of information for privileged or protected materials, the

creation of privilege logs, and challenges to designations of privilege or protection. The difficulties are

exacerbated by the detail usually provided in a document-by-document list including:

(i) the type of document (e.g., letter, e-mail, or memorandum);

(ii) the general subject matter of the document;

(iii) the date of the document;

(iv) the author of the document;

(v) the addressee of the document;

(vi) any other recipients of the document; and

(vii) where not apparent, the relationship of the author, addressees and recipients.

See, e.g., Local Rule of the United States District Courts for the Southern and Eastern Districts of New

York 26.2(a)(2)(A). Moreover, the advent of e-mail chains leads to the possibility of having to log each

link in the chain and to log individual links several times to account for each chain in which the link

appears. Further, due to the volume of ESI, there is great concern that a privileged or protected

Lewis and S. Tomlinson, “Evaluation of Information Retrieval for E-Discovery,” 18 Artificial Intelligence &

Law (2010) 347-386), but the protocols can be made more efficient by scaling down to the needs of a specific

matter.

41 Moore, 2012 WL 607412, at *12.

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document will be missed in a review and produced leading to a waiver of the privilege or protection

regarding all documents covering that subject matter. See Fed. R. Evid. 502(a), 502(b).

First, we recommend that parties take advantage, and federal courts encourage the use, of

relatively new Federal Rules of Evidence 502(d) and (e). Rule 502(e) provides that an agreement on the

effect of disclosure in a federal proceeding binds only the parties to the agreement, unless it is

incorporated into an order. Rule 502(d) provides that a court order that a privilege or protection is not

waived by disclosure in the litigation is not a waiver in any other federal or state proceeding. Together,

they suggest that the parties should discuss and enter into agreements concerning lack of a waiver of

privilege or work-product protection for inadvertent disclosure of privileged or protected ESI or even for

disclosure subject to a claw-back agreement and then have the agreement entered as an order.

Second, we urge consideration of the suggestions articulated by Magistrate Judge John C.

Facciola and Jonathan M. Redgrave, former chair of The Sedona Conference® Working Group 1, in their

leading article “Asserting and Challenging Privilege Claims in Modern Litigation: The Facciola-

Redgrave Framework,” 4 Fed. Cts. L. Rev. 19 (2010) (“Facciola-Redgrave Framework”). They

emphasize that the parties should discuss the anticipated volume of privilege claims, the type of

privilege claims, the process by which claims will be identified and adjudicated, the non-waiver of

privilege for disclosure during the privilege assertion/logging process, and the process to address

inadvertent production. Id. at 44.

They encourage agreement on exclusion of certain documents and ESI from the process. Id.

The Pilot Project lists four categories of documents that presumptively need not be included in a

privilege log: (1) communications exclusively between a party and its trial counsel; (2) work product

created by trial counsel or its agents (other than a party) after commencement of the action; (3) internal

communications within a law firm or legal department of a company or government entity; and (4) in a

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patent infringement action, documents authored by trial counsel for an alleged infringer. See Pilot

Project II.D.

Facciola and Redgrave suggest categorization of the withheld documents, rather than document-

by-document listing in the first place. See Facciola-Redgrave Framework at 45. They describe the

categories as ones “arranged in order to understand (a) the basis for withholding the document, and (b)

the general subject matter of the documents in the category . . . to create a set of natural differentiations

among the documents.” Id. Indeed, Local Rule of the United States District Courts for the Southern and

Eastern Districts of New York 26.2(c) makes a categorical listing presumptively proper, unless the

listing is not comprehensible.

Facciola and Redgrave also propose what they call objective indexing of ESI from metadata –

such as presumptive authors, recipients, dates, assigned bates or production number and file size – as

source of information for the parties to agree on how to handle claims of privilege or protection. See

Facciola-Redgrave Framework at 46. We suggest one possible use of the objective indexing might be to

use an agreed-upon sampling technique to choose a small number of documents for in camera review by

the court, which, if found to be privileged, would foreclose further privilege review for the documents

indexed or, if found not to be privileged, might result in the preparation of a complete privilege log.

Because an e-mail chain can involve a conversation among two or more persons that formerly

would have taken place over the telephone or at a meeting, it may be appropriate for parties to agree to

truncate the information about the e-mail chain by providing in a log only: (1) the first-in-time e-mail,

(2) the last-in-time e-mail, (3) a list of all persons involved in the chain, and (4) the reason for asserting

the privilege. A similar approach has been embraced by the Pilot Project, which requires “only one

entry on the log to identify withheld e-mails that constitute an uninterrupted dialogue between or among

individuals,” provided that the party discloses that the e-mails are part of an uninterrupted dialogue and

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the beginning and ending dates and times, and the names of all recipients of the communications, as well

as other requisite privilege log disclosures. See Pilot Project II.E; cf. Facciola-Redgrave Framework at

49.

In sum, the burden of privilege logs should be reduced by agreements among the parties,

protocols for avoiding the listing of every document if feasible, and court encouragement and

involvement.

Statement No. 5

Promote Pre-Motion Conferences

As already required in the Commercial Division of the Supreme Court and in many federal

courts, pre-motion conferences should be required before parties are permitted to make a discovery

motion.42 See Rule 24 of the New York Uniform Rules of the Commercial Division of the Supreme

Court (22 NYCRR § 202.70(g)); Local Rule 37.3(c) of the United States District Court for the Eastern

District of New York; Local Rule 7.1(b)(2) of the United States District Court for the Northern District

of New York ; Local Rule 37.2 of the United States District Court for the Southern District of New

York; Pilot Project III.A.1. Such disputes rarely justify full briefing and its concomitant delay.

Efficiency for both parties and the court dictates that the court intervene early and resolve the dispute on

the telephone or at most by truncated written presentations (no more than two or three singled-spaced

pages). It should be the rare situation where full-fledged motion practice occurs.

42 The Advisory Committee at its March 22-23, 2012 meeting considered amending Federal Rules of Civil

Procedure 7(b)(3), 26(h) or 16(b)(3)(B)(v) to require a pre-motion conference before any discovery motion.

See Advisory Committee on Civil Rules, Washington, DC, March 22-23, 2011, Agenda Materials,

http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/AgendaBooks/Civil/CV2012-13.pdf, Tab 9B, Duke

Conference Subcommittee Rules Sketches at 380-81.

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Statement No. 6

Explore Litigation “Pre-Nups”

As national boundaries disappear in the context of the business deal, commerce and litigation

have become international. In contracting, business entities often select venues for litigation which will

give them the comfort of transparency and a mature, stable and fair legal system. As a result, the federal

and state courts of New York are frequently selected as the preferred venue. Discovery of ESI, its cost

and the time-consuming nature of its implementation, however, may change that preference. The

breadth of discovery provided in our legal system, which far surpasses that of other preferred venues,

i.e., London or arbitration, may impact the choice of venue for litigation in the future.

This concern, as well as all companies’ concerns regarding cost, lengthy litigation and lost

opportunity, has impelled litigators like Daniel B. Winslow, also a former judge, to support a “civil

litigation prenup.” The International Institute of Conflict Prevention & Resolution together with Mr.

Winslow have developed an Economical Litigation Agreement which can be integrated into commercial

contracts to afford businesses control of the cost and length of future litigation. See

http://www.cpradr.org/Resources/ADRTools/EconomicalLitigation-Agreement.aspx. Thus, just as

sophisticated parties may contract for venue or waiver of jury trials, they also could contract to

circumscribe discovery.

The Agreement provides for a mix of mediation, arbitration and litigation. Portions or all of the

Agreement may be adopted for use in a commercial contract. Of particular interest are the sections of

the Agreement addressing discovery (Sections 10-14). We recognize that parties have different views

about the benefits of arbitration and may prefer to have discovery issues heard by the judge ultimately

responsible for the case. Companies may also have routine types of business agreements where the

costs of discovery may not warrant additional arbitration costs and fees.

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Commercial contracts, thus, may limit discovery, as described below, without providing for

arbitration. For example, contracting parties can agree to limit the scope of e-discovery and document

productions, as well as the number of depositions and interrogatories, based either upon the amount in

dispute or the subject matter of a contract.

We suggest that companies develop their own form clauses that fit their own particular business

requirements. Such clauses may be particularly useful in those situations where routine or recurring

types of business contracts are negotiated and prepared by non-lawyers. The Economical Litigation

Agreement provides some guidance.

Section 10.1 of the Agreement sets forth the disclosure that each party will voluntarily turn over

before discovery begins. Thus, relevant facts will first be disclosed, to be followed by disclosure of all

non-electronic documents that support the party’s claims and defenses and the names of all personnel

with relevant personal knowledge. See id. Moreover, all non-electronic discovery requests must be

answered within 30 days, and discovery is limited by the amount of the claim. See id. § 10.3. So, for

example, in a dispute of up to $400,000, each party is limited to five interrogatories, and in a dispute of

up to $1,000,000 is limited to 10 interrogatories. See id. §§ 10.3.1.1, 10.3.1.2. Similarly, requests for

production of documents in a dispute of up to $400,000 are limited to seven, and in a dispute of up to

$1,000,000 are limited to 14. See id. §§ 10.3.2.1, 10.3.2.2.

Depositions may be conducted by audio visual means but may not exceed four hours for any

party or counsel. See id. § 11.1. Again, the number of permitted depositions is proportional to the

amount in controversy. See id. § 11.2.

In the Agreement, the parties agree to conduct relevant and material e-discovery, to provide the

requested discovery within 30 days, and to use particular search tools, document retrieval and format.

See id. §§ 12.1.1, 12.1.2, 12.1.3, 12.1.5. Interestingly, it is presumed that metadata or slack space need

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14002368.4

not be searched or produced, except the entries showing by whom it was created and the date. See id. §

12.2.1. Electronic repositories that are not reasonably accessible and information on personal digital

devices need not be produced. See id. §§ 12.2.2, 12.2.3. Additionally, voice mail systems do not have

to be searched or produced, and foreign privacy laws are followed. See id. §§ 12.2.4, 12.2.5.

Preservation is addressed in Section 12.4, and proportionality applies as to the number of requests for

key word searches. See id. § 12.5.2.2. Two tables are presented at the close of the Agreement setting

forth the limits on paper discovery (interrogatories, document requests, etc.) and e-discovery (key word

custodians, key word time periods, etc.). See id. Tables 1 and 2.

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