Hardly a week goes by without an insurance company, a big corporation, or one of their lobbying groups complaining about “the cost of litigation,” usually prefacing the word “cost” with hyperbolic adjectives like “soaring” or “exploding,” with the implication that, somehow, injured plaintiffs or their lawyers are to blame. Yet, whenever we see an actual example of a party engaging in absurd tactics to make litigation more costly and difficult, it always turns out that the defendant or their insurance company is to blame.  Although trial is typically the most expensive part of any case, the vast majority of cases settle, and so discovery is typically the most expensive part of most cases. (Earlier this week I turned in the updates for the Third Edition of our Pennsylvania Civil Discovery book, so discovery is on my mind.)


The railroad company Norfolk Southern, for example, spent over $250,000 last year funding non-railroad anti-consumer lobbying groups like the U.S. Chamber of Commerce, Business Roundtable, and National Association of Manufacturers, all of which have spent ample time decrying the costs of litigation and blaming trial lawyers for it.


Pannunzio v. Norfolk Southern, reported on by The Legal Intelligencer earlier this week, involves a train hitting a delivery van that was on the tracks. The driver sued the train company, alleging the train was going too fast, that the train didn’t sound a horn as it approached the crossing, and that the tracks were improperly designed, making it hard to see oncoming trains. The plaintiff’s claim as a whole is by no means simple –— they’re going to have to spend tens of thousands of dollars, maybe more, on experts testifying about how a railroad crossing should be designed — but the basic facts of the lawsuit are obviously quite simple, such as how fast the train was going and whether it sounded a horn or not.


Wouldn’t it be nice if there was, say, a camera on the train recording all that? 


Rather than sit down with the plaintiff and start talking about reasonable settlement — which would have spared them the bulk of the defense fees —  Norfolk Southern responded by trying to dismiss the case entirely. (We call that “preliminary objections” in Pennsylvania.) At the hearing on the preliminary objections, the railroad company’s lawyer popped open a laptop and started playing surveillance footage of the accident that was shot from the train, footage which showed the accident, the speed the train was traveling, and whether a horn was sounded.


That video sounds highly relevant to the case, don’t you think? The type of thing that should, as a matter of course, be turned over to the other side? It reminds me of a half-century-old trial court opinion from here in Philadelphia, explaining the purpose of discovery as a way to avoid “trial by surprise:”


Discovery, as all of us are aware, was unknown at common law. The early English concept of civil litigation envisioned a strictly adversary proceeding, a step above the ancient trial by battle, and substituting advocates fighting with their wits for champions fighting with their bodies. The “dog eat dog” philosophy then still prevalent led naturally to trial by surprise, trial by gamesmanship, the effort to catch an opponent napping, and to win by cleverness and cunning rather than by merit. Chancery intervened to a limited degree and entertained bills for discovery. But it was not until the middle of the last century that the New York Code of Procedure paved the way to the modern expanded and much more enlightened system of pretrial disclosure.

The Federal Rules of Civil Procedure, 90 years later, set up in rules 26 to 37 a comprehensive system of depositions and discovery. Rule 34, on which our own rule 4009 is based, is broader than our rule, and gives the court a large discretion to compel the production of documents without the specific limitations of our rule 4011, though with power in the court to impose restrictions, if it deems them proper.


Baukal v. Acme Markets, 38 Pa. D. & C. 2d 86 (Philadelphia Court of Common Pleas, 1966). These days by Pa.R.C.P. 4003.1, “a party may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action…” (The rules everywhere else are similar.)


Thus being informed of the existence of the video (by surprise at a hearing on a motion to dismiss the case, naturally), the plaintiff’s lawyer, Mark Goodheart at Cohen, Placitella & Roth here in Philadelphia asked for a copy, as he was plainly entitled to have a copy. That’s when the games started:


[A]ccording to court documents, when Goodheart expressed interest in obtaining a copy of the video, he was told by the defense that the video could only be played using special software called “RailView,” which he would have to purchase from a company called SAIC.


Goodheart looked into that, and was told it would cost $2,500, for him, his staff, and his experts to use it for just one year. He figured that was a bit steep, and so inquired further, and it turned out that SAIC didn’t even need to be asked at all:


According to court documents, Goodheart was told by the SAIC representative that Norfolk Southern actually owned the software and could waive the fees if it so desired. … In May 2012, according to court documents, Goodheart called Norfolk Southern’s counsel to inquire about obtaining the software free of charge during the litigation. Norfolk Southern’s attorney told Goodheart he’d get back to him on the issue but never did.


He filed a motion to compel, and Allegheny County Court of Common Pleas Judge R. Stanton Wettick Jr. granted it. Yet, the story doesn’t end there:


Norfolk Southern first filed a motion for reconsideration of the order, which Wettick denied, and then appealed the issue to the state Superior Court, according to court records.

In the meantime, 30 days passed and Norfolk Southern failed to comply with Wettick’s order, according to Goodheart.

Goodheart filed a motion for sanctions against Norfolk Southern on November 14, alleging that the railroad company was attempting to discourage plaintiffs’ access to discovery materials by charging exorbitant fees to view the surveillance footage.


He even dug up a Court of Appeals decision in Georgia last year in which Norfolk Southern played the exact same trick, refusing to turn over their own software for viewing the video of the train accident in question. Goodheart asked in the sanctions that Norfolk Southern be precluded from using the footage at trial, and that the jury be instructed the company concealed evidence.


So what was Norfolk Southern’s excuse?


Norfolk Southern, meanwhile, filed a brief in opposition, arguing that requiring it to provide the footage and software for free constituted unfair cost-shifting.


Did you catch that? The default rule is that a responding party has to pay for the cost of their own production of relevant materials, but it’s no minor feat, for example, to scan thousands of pages of documents, and so the discovery rule make allowances for these issues, allowing courts to “shift” costs where appropriate. Recent revisions to the Pennsylvania Rules clarified that, when it comes to discovery of electronically-stored information, “[a]s with all other discovery, electronically stored information is governed by a proportionality standard in order that discovery obligations are consistent with the just, speedy and inexpensive determination and resolution of litigation disputes.” Pa.R.C.P. 4009 (Explanatory Comment)(emphasis added). Further, “Parties and courts may consider tools such as electronic searching, sampling, cost sharing, and non-waiver agreements to fairly allocate discovery burdens and costs.” (Emphasis added.)


According to Norfolk Southern,not paying a ransom to hand over a video they can hand over for free is like ordering it to participate cost-shifting, as if it was being ordered to pay for the plaintiff’s discovery. In reality, Norfolk Southern wasn’t being asked to do much of anything other than to simply allow the plaintiff’s lawyer to install software off a CD or USB drive. It would have taken less effort — and certainly less money — for the railroad company to simply hand over the software and video than was for them to file their first objection, much less their motion for reconsideration and appeal.


The part that trial lawyers and insurance defense lawyers all know, but which isn’t repeated enough, is that this sort of chicanery by corporate defendants and insurance companies is commonplace in litigation; the bigger the case, the more obstruction/baloney you’ll get.