Judge Kozinski Vs. The Proposed Federal Civil Procedure Amendments
If you don’t think you can win fair and square, then change the rules. That’s been the modus operandi of the United States Chamber of Commerce (a private lobbying group with a misleading name) and the wealthy interests it represents, like the nation’s major insurance companies and product manufacturers. That’s why there’s been such a push for “tort reform” in the states over the past generation: because those same interests have realized that, in a fair court system, they will be held accountable for the full human and economic damage that they cause.
In the federal system, those wealthy interests have had such success in re-writing civil justice law in their favor — to those who doubt a slant in the Supreme Court, consider how the Chamber of Commerce wins every time, from Dukes to Behrend to Concepcion to Mensing to Barlett to Italian Colors — that they have moved on to re-writing federal civil procedure itself in their favor. This effort had its first big victory back with Twombly and Iqbal, which encouraged lower courts to start arbitrarily tossing out claims and cases on metaphysical grounds like whether an expert’s analysis was a “fact” or a “legal conclusion.”
Since then the effort to effectively grant civil immunity to a host of wealthy interests by way of supposedly neutral procedural changes has been gathering steam, culminating this year in proposed amendments to the Federal Rules of Civil Procedure by the Federal Judicial Conference’s Committee on Practice and Procedure. The two biggest issues relate to proposals (1) to preclude plaintiffs from obtaining evidence, including evidence held by defendants (back in June, I wrote about the “proportionality” changes) and (2) to give corporations a blank check to destroy evidence without any consequences.
I’d write more about the latter — in short, corporate defendants want to impose a criminal-like burden of proof on plaintiffs before a jury can even be told a defendant destroyed evidence — but District Court Judge Shira A. Scheindlin addressed the issue so exquisitely in a recent opinion that I see no reason to do more than quote her:
The risk that the evidence would have been detrimental rather than favorable to the spoliator should fall on the party responsible for its loss. To shift the burden to the innocent party to describe or produce what has been lost as a result of the opposing party’s willful or grossly negligent conduct is inappropriate because it incentivizes bad behavior on the part of would-be spoliators. That is, it would allow parties who have destroyed evidence to profit from that destruction.
Sekisui Am. Corp. v. Hart, No. 12-cv-03479, 2013 U.S. Dist. LEXIS 115533, at *35–36 (S.D.N.Y. Aug. 15, 2013)(quotations omitted)(PDF copy of opinion here). Notably, the American Health Information Management Association agrees with Judge Scheindlin, and so has raised concerns about the proposed rule changes (see page 3).
You can read the whole proposals (and leave a comment) here, or read a variety of summaries from the Center for Justice & Democracy (“These changes would benefit corporate wrongdoers trying to hide information in a case”), publications like Inside Counsel (“the amendments suggest that discovery will be conducted with laser-like precision instead of the sledgehammer approach of the current regime”), the Center for Constitutional Litigation (“These changes are inconsonant with the purposes of the civil justice system and predictably will result in practical problems in the courts and in denials of justice”), and, of course, the U.S. Chamber of Commerce (“We applaud the Committee for recognizing this problem and for its efforts to establish clear standards for the imposition of curative measures and sanctions when discoverable information is lost”).
Alas, like most attorneys who represent injured people and consumers in litigation, I’ve become accustomed to watching the U.S. Chamber of Commerce get whatever it wants and more, and so I’ve assumed that these rule changes will be passed, with at most minor changes.
Interestingly, though, last month, implicit opposition to the spirit of these rules came from an unlikely source: Judge Kozinski of the Ninth Circuit Court of Appeals (I have not read about his reaction to the rules specifically).
Judge Kozinski, it seems, owns a Nissan LEAF, an electric car at the heart of a class action alleging that Nissan failed to disclose various defects with the car’s battery. The class action was filed and a hefty settlement was negotiated before the onset of discovery, prompting a vehement objection to the settlement from Judge Kozinski, whose brief opened with a complaint about the absence of real discovery into the materials held by the defendant:
[D]efendants always deny liability when faced with a meritorious lawsuit. Merck didn’t roll over and play dead when it was first sued over the people it killed while raking in billions selling Vioxx. Merck was brought to heel only when counsel obtained—through discovery—internal documents making it clear that Merck continued hawking a drug that it knew induced heart attacks in unsuspecting patients. See generally In re Vioxx Prods. Liab. Litig., 802 F. Supp. 2d 740 (E.D. La. 2011) (discussing “extensive discovery” undertaken by various law firms).
There are countless other cases where companies have played possum until they were confronted with internal documents proving them liable. See, e.g., National Association of Attorneys General, Master Settlement Agreement (1998) (multi-state tobacco litigation); Matthew T. Lee, The Ford Pinto Case and the Development of Auto Safety Regulations, 1893–1978, 22 Bus. & Econ. Hist. 390, 399–400 (1998) (Ford Pinto exploding gas tank); Erin Brockovich (Universal Studios 2000) (polluted groundwater in Hinkley, California). The simple fact is, no one knows better the problems with a vehicle or any other product than the company that makes it. It’s their job to know, and it’s the job of the lawyers suing them to find out everything the company knows and hopes to conceal.
Bolding mine. What makes Kozsinki’s argument so astonishing isn’t the dog-bites-man conclusion that civil justice is premised on plaintiffs’ ability to dig deep into the defendants’ files — what kind of a naive fool really believes that companies don’t try to conceal incriminating evidence? — but the fact that it is being made by a highly-regarded federal appellate judge.
Throughout the debate over the amendments to the Federal Rules of Civil Procedure, one assumption has been implicit and unassailable: that corporate defendants and their lawyers will honestly and fairly approach the litigation with an eye towards preserving all pertinent evidence and then gladly turning it over to the other side in the interest of justice.
Nonsense. Major corporations lie. They establish policies long in advance with an eye towards eliminating every trace of responsibility, then pay their lawyers millions to do everything possible to thwart plaintiffs from getting to the truth. Civil discovery rules premised on parties’ unverifiable assertions of good faith efforts at preservation and production are no more likely to succeed than criminal laws premised on restraint and self-reporting.
But nobody listens to plaintiffs’ lawyers when they say that. Maybe they’ll listen to a disgruntled consumer named Alex Kozinski.
[Update: As revealed by a Motion for Sanctions filed this week in the transvaginal mesh multi-district litigation, it turns out that Johnson & Johnson, whose website boasts they have "the most comprehensive base of health care businesses in the world," has "lost, destroyed, or disposed of tens of thousands, if not hundreds of thousands, of documents and other evidence containing information vital to this litigation." Despite a litigation hold order, Ethicon, the J&J subsidiary responsible for surgical products, lost the hard drive of its worldwide president from 2005-2010 and has produced a less than 100 documents combined from the electronic files of its chief medical officer from 2007-2010, its global medical director (for Gynecare products) from 2003-2005, and its senior project manager in regulatory affairs from 2001-2005. They also purged all electronic records of the marketing VP who developed the TVT implant and destroyed 600 pounds of documents from the TVT's original manufacturer — despite their own emails concluding it should be held unless there was a litigation hold (which there was), a problem apparently caused by Ethicon not having any actual document retention policies at all.
J&J is one of the largest corporations in the world, and yet they expect us to believe that they're a Mom & Pop shop that doesn't know how to preserve documents in litigation; they thus told Bloomberg News, “We have never intentionally destroyed, withheld or failed to produce relevant documents.” When a multi-billion-dollar corporation purges executives' emails and hard drives in the middle of litigation involving thousands of plaintiffs with permanent organ damage, they should be held responsible — yet advocates for the Rules Amendments believe J&J should be able to get away with it if they merely claim, like a young child, that it wasn't "intentional." We don't excuse young children who do something obviously wrong and then claim "I didn't mean it," so why should we excuse for-profit businesses for the same?]