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Litigation Discovery in "the Normal Course of Business"


There is no question that technological changes have revolutionized discovery in civil litigation, particularly in cases where the parties seek large volumes of documents from their opponents. Medical device and pharmaceutical litigation come to mind. How to manage so-called “e-discovery” is on the minds and lips of many lawyers. In theory, e-discovery techniques should provide a discovering party with powerful weapons to ferret out litigants who cheat the system by hiding the ball. Unfortunately, this is not necessarily the case. Technological sophistication in the discovery process does not, by itself, guarantee integrity in the content of a party’s discovery responses. In fact, recent experience teaches that technology can be used improperly to increase the obstacle’s that a party faces in discovering the truth. For example, document or file formatting can reduce a discovering party’s ability to efficiently search documents for critical information.

I was recently reminded, however, that it is important to return to the rules of procedure occasionally as a source of protection against unprincipled discovery practices by well-heeled litigants and resourceful lawyers. In a recent case handled by our firm, the defendant produced more than two million pages of documents relating to the development and sale of a medical device. Although the production was in an electronic format, it was marked by a high degree of disorganization. It was very difficult to manage and highly trained personnel on our staff suspected that the coding and formatting of the documents had been designed to impair their usefulness. The modern-day equivalent of shuffling a pile of papers.

Courts have the power to deal with problems that arise in the brave new world of discovery problems. Many courts, however, lack the sophistication, experience or resources to handle important e-discovery disputes and problems. That’s where the rules of procedure can come in handy. Rule 34 of the Federal Rules of Civil Procedure (and most of the analogous state rules), for example, gives a producing party a choice. One choice is to identify its documents to correspond with the discrete requests served in a request for production. The other is to produce documents as kept in the “usual course of business.” In cases where there is a large volume of records, the party making a document request has a potentially significant advantage if the producing party’s responses identify how its production corresponds to the requests.

The historical reasons that the rulemakers created this choice are clear. One reason was to prevent discovery abuses via document production in “volume or disarray.” Another was to ensure production of documents “in the order in which the documents are actually kept in the usual course of business so that there is an internal logic reflecting business use.” “Second Report of the Special Committee for the Study of Discovery Abuse,” American Bar Ass’n Section of Litigation, 92 F.R.D. 137, 177-78 (1980).

Recent experience, however, teaches that some manufacturers use the “usual course of business” option to do exactly what the rule seeks to avoid, make document production in “volume or disarray.” In the case which I mention, the defendant took the position that its document production was made in the “usual course of business.” In fact, every page of the documents produced was examined, vetted and analyzed before the production took place. The defendant represented in court that a team of thirty to forty full-time outside lawyers was working on the production on a full-time basis. Free-ranging redactions, many with obviously material content, filled the production. Hundreds of thousands of pages were withheld on grounds of privilege. While the defendant was a large, sophisticated corporation with thousands of employees, there was absolutely no “internal logic” to its production.

As our frustration in working with the defendant’s production grew, I began to reexamine the purposes of the Rule 34 option and the decisions interpreting the rule. Despite the obvious importance of this issue, there is not a great deal of authority as to what constitutes production of records as maintained in the “usual course of business.” But some things are relatively clear. When a party makes this election, that party has the burden of proving that it has in fact produced its documents in as maintained “in the usual course of business.” Cardenas v. Dorel Juvenile Group, 230 F.R.D. 611, 618-19 (D. Kan. 2005).

One of the problems we were having was that the defendant had obtained internal records from different people it called “custodians” and purported to produce those records on a custodian by custodian basis. When the records were combined and produced to us, however, there was no apparent principle relating to their organization. At least one federal judge has found that this process is not authorized by Rule 34. In Scripps Clinic & Research Foundation v. Baxter Travelol Laboratories, Inc., CIV. A. No. 87-140-CMW, 1988 Westlaw 70013 (D. Del. June 21, 1998), the court explained, “Baxter . . . failed to produce the documents as they were kept in the ordinary course of business. The documents were gathered from many people and transferred to Scripps in an unintelligible manner. This is insufficient under Rule 34(b).”

Even once these failures are identified, it is very difficult to persuade a judge to do anything about it. In the case to which I refer, however, we were able to persuade the trial court that the remedy is to require the producing party go back and redo its production, by identifying those documents (and their Bates numbers) which correspond to the discrete discovery requests. The decision in Cardenas supported the trial court’s conclusion. Our defendant complained bitterly about the trial court’s ruling, particularly about the expense and effort associated with having to redo its responses to our substantial discovery requests. The interlocutory appeal that followed was dismissed.

I learned a few things from this experience. I was reminded of the importance of narrowly tailoring discovery responses. The more specific we are in our document requests, the more likely we will be able to help get the courts to pin down our opponents in providing responsive information. I also learned that we should never accept without corroboration the representations of our adversaries that their document production is based on the “usual course of business.” We should be careful about testing those representations when the need arises, and challenging them when they unduly and improperly complicate our efforts to find the truth.

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