LCJ and 55 Companies Call for Improvements to Draft FRCP Amendments on MDLs and Privilege Logs

LCJ calls for strengthening draft FRCP Rule 16.1 to address unexamined and often meritless claims in MDLs in its most recent Comment to the Committee of Rules of Practice and Procedure. The Comment includes a new compilation of data on insufficient and unexamined MDL claims. LCJ’s Comment also demonstrates the need to address the inefficiencies of document-by-document privilege logs. LCJ’s Comment was filed at the close of the Rules Committee’s public comment period.

Bolstering LCJ’s call for improvements to the rule proposals is a letter to the Rules Committee signed by fifty-five companies highlighting their “deep concerns” about the problems that arise from unexamined and unsupported claims in MDLs, and inefficiencies arising out of document-by-document privilege logging many cases.

LCJ’s press statement on the LCJ Comment and the company letter highlights the recommended FRCP revisions and the compelling data compilation on MDL dismissal rates. Public comments by LCJ and other related documents are available in the LCJ website document directory.

New Data on Insufficient Claims Demonstrates Need for Strengthened FRCP Rule 16.1

Empirical data demonstrating dramatic MDL claim dismissal rates, highlighted in LCJ’s recent Comment, demonstrate that mass-tort MDLs present a “rules problem” that needs to be addressed by revisions to proposed FRCP 16.1 (c)(4). Dismissals for factual shortcomings or the inability to establish a cognizable injury run in MDLs run as high as 75%, as demonstrated by public dismissal data. In one MDL, counsel noted that the “common denominator” among the dismissed claims was that they “should never have been filed in the first place.”

The dramatic numbers published by LCJ understate the unvetted claims issue. The undercount is due to multiple factors, including courts “not ordering information about claims, poor record keeping, multiple-plaintiff complaints, unfiled claims, and settlements of insufficient claims.”

Insufficient claims are a rules problem and an MDL management problem that is worth avoiding through FRCP amendments that would reduce their filing in the first place. This management problem gives rise to multiple cascading problems in MDLs which harm both defendants and plaintiffs. LCJ suggests revising section (c)(4) to prompt an order requiring early disclosures that would keep insufficient claims from overwhelming the court while maintaining the efficient operation of the MDL.

Comments by Washington Legal Foundation amplify concern about the “hydraulic pressure” on defendants caused by claim volume, with up to 50% of such claims unsupported.

LCJ’s comments on the proposed Rule 16.1 also address issues beyond the problems caused by insufficient and unvetted claims. LCJ urges the Civil Rules Committee to drop proposed rule provisions that do not address “rules problems” or for which a “rules solution” does not exist. Rather than improving the fairness and efficiency of MDLs, some currently proposed amendments could adversely impact MDL management.

Privilege Log Practices Present a Rules Problem that Calls for a Rules Solution

Many courts and parties now misconstrue Rule 26(b)(5)(A) to require document-by-document privilege logging, even for cases involving massive amounts of data and where there are categories of documents highly unlikely to contain discoverable information. Such practices have made privilege review and logging the single largest expense in civil litigation and are impacting cases both large and small. LCJ’s Comment argues that this is a rule problem requiring an amendment making clear that document-by-document logging is not the default standard.

Judge John Facciola and Jonathan Redgrave have proposed addressing document-by-document privilege logging head on. LCJ endorses the Facciola-Redgrave proposal as a necessary complement to the Rules Committee’s proposed amendments to Rule 16(b) and 26(f)(3)(D), together with the inclusion of the concept of proportionality in a FRCP 26(b)(5)(A) amendment. A new Facciola-Redgrave supplementary comment highlights the need for an amendment that will help the Rules Committee meet its objective to increase logging options beyond document-by-document.

LCJ’s endorsement of adding proportionality to FRCP 26(b)(5)(A) is bolstered by Google’s new public comment, which calls for inclusion of proportionality factors in the privilege logging process, consistent with how proportionality has been addressed by the FRCP.

LCJ comments on the privilege log proposal push back on assertions by the plaintiffs’ bar which equate the burdens of logging by defendants and plaintiffs. LCJ urges the Rules Committee to include in its rules note that the logging burden is asymmetric. LCJ also warns against the negative unintended consequences of “rolling” logs and instead recommends a focus on “tiered” or “phased” logging. Google’s public comment joined in calling for improved discussion of specific alternative log formats.

Broad Coalition of Companies Urges Improvements to Proposed Rules

Officials from 55 companies representing a cross-section of industries with varying litigation profiles joined a letter urging the Rules Committee to revise the preliminary draft of the FRCP amendments to address their deep concerns about problems arriving from unexamined and unsupported claims in MDLs, and the costs and inefficiencies of document-by-document privilege logging.

The letter calls the insufficient MDL claims problem “fundamentally unfair and contrary to the principles of civil justice,” noting that such unsupported claims force defendants to defend cases where the product was not used, there is no injury within the scope of the litigation, business was not conducted with the defendants, or a pertinent statute of limitations has run.

The letter also asserts that, as the costs and burdens of privilege logging increase dramatically due to exponential growth in data and communications volumes, it is imperative that there be a shift from document-by-document privilege logging to methods in line with the expansion of discoverable data.

Civil Rules Advisory Committee Begins Deliberations as Public Comment Closes

With the close of the public comment period on February 16, the Advisory Committee on Civil Rules will determine whether to amend its draft rules. The Advisory Committee will meet on April 9. The Advisory Committee is expected to publish any revisions to the proposals in the lead-up to that meeting.