By Hayes Hunt and Arthur Fritzinger
In Security National Bank of Sioux City, Iowa v. Abbott Laboratories, Civ. No. 11-4017, Doc. No. 205 (N.D. Iowa Jul. 28, 2014), U.S. District Judge Mark W. Bennett of the Northern District of Iowa sanctioned defense counsel sua sponte for his actions during several depositions and ordered counsel to write and produce a “training video” explaining appropriate attorney conduct. Bennett took note of what he considered obstructionist conduct when reviewing deposition testimony to rule on objections for trial. In a 33-page opinion, Bennett criticized counsel for making unnecessary and excessive objections to form, coaching the witness by making speaking objections and seeking independent clarification of pending questions, and frequently interrupting opposing counsel. Counsel never became abusive or used profanity. Indeed, the attorney conducting the deposition never sought relief from the court or requested that any sanctions be imposed. Nonetheless, Bennett concluded that counsel had violated the Federal Rules of Civil Procedure and had substantially frustrated the discovery process. In his view, sanctions were justified and necessary to change counsel’s “obstructive deposition practices” and deter “others who might be inclined to comport themselves similarly.”
One noteworthy aspect of Bennett’s opinion is that, although clearly inappropriate, the conduct
With trials becoming less common, discovery has become the focus of litigation. Controlling the discovery process is a necessary and important aspect of effective litigation. Only about 2 percent of federal civil cases go to trial, according to a 2010 article from The National Law Journal titled “Two Federal Judges Offer Differing Takes on Declining Trial Numbers,” and cases are often won or lost during discovery, where facts are developed for dispositive motions and settlement. Attorneys often seek to control or limit discovery by being obstructive during depositions, objecting to legitimate discovery requests and inappropriately delaying the production of relevant evidence.
Attorneys may also increase the burden and cost of discovery by requesting or producing an excessive number of irrelevant documents, expanding the scope of litigation far beyond the evidence relevant to the claims being litigated. A 2010 study titled “Litigation Cost Survey of Major Companies” estimated that 1,000 pages of documents are produced for every single page entered as an exhibit at trial or during summary judgment. Among the largest companies in America, major cases involved the production of more than 4.9 million pages of documents.
It is unclear that obstructive tactics ever prevent opposing counsel from obtaining discoverable information, but they undoubtedly increase the cost and burden of discovery. Despite the fact that the number of trials has decreased over the last decade, litigation costs have risen an average of 9 percent per year, according to the litigation-cost survey. Between 2000 and 2008, litigation costs among Fortune 200 companies nearly doubled from $66 million to $115 million, despite the fact that attorneys’ hourly rates barely changed during the same time period. Indeed, some studies have estimated that, for most companies, litigation costs match the costs paid to plaintiffs in settlement and judgments.
These excessive costs are ultimately borne by clients, and corporate attorneys must be aware of the discovery tactics being used by outside counsel. Focusing discovery on the issues necessary for settlement or trial can bring cases to an efficient resolution, while encouraging overly aggressive tactics only to settle on the eve of trial is likely not a long-term cost-effective litigation strategy.
General counsel must also consider the effect that obstructive conduct may have on a determination of the case’s merits. Bennett’s opinion is a paramount example of how courts view efforts by counsel to frustrate or abuse discovery. Deposition transcripts are often filed with the court in connection with motions or in anticipation of trial. The court’s review of those
As discovery has become a principal factor in the success and efficiency of litigation, it is increasingly important for general counsel to set standards for the company’s litigation attorneys. Companies should remain informed as to how their outside counsel are responding to discovery and should work with counsel to develop a clear discovery strategy for each case. Together, the company and its litigation counsel must consider discovery tactics that will reduce the cost of discovery while providing a strategic advantage for dispositive motions and settlement.
Originally published in The Legal Intelligencer on August 20, 2014.