Court rule amendments: It isn’t your traditional litigation plan anymore
By Richard L. Hurford
With the promulgation of the Michigan Supreme Court’s Order 2018-19, many significant and important amendments to the Michigan Court Rules will become effective January 1, 2020. See https://courts.michigan.gov/Courts/MichiganSupremeCourt/rules/court-rules-admin-matters/Adopted/2018-19_2019-06-19_FormattedOrder_AmendtOfDiscoveryRules.pdf. This article provides a brief overview of only a few of these amendments and identifies a number of potential suggested strategies that may give rise to a reconsideration of your current litigation practices.
A. Initial Disclosures
In the vast majority of cases filed in the circuit courts, counsel for the plaintiff must file initial disclosures within 14 days after a response to the complaint. MCR 2.302(A)(5)(b)(i). The defendant “must serve its initial disclosures within the later of 14 days after the opposing party’s disclosures are due or 28 days after the party files its answer.” MCR 2.302(A)(5)(ii). “In a case where initial disclosures are required, a party may seek discovery only after the party serves its initial disclosures...” MCR 2.301(A)(1). The cases exempted from the initial disclosures are quite limited. See MCR 2.301(A)(4).
The initial disclosures required by Rule 2.302(A) are more extensive than the disclosures called for in Fed. Rule Civ. Pro. 26(a)(1)(A). In addition to witness information, document descriptions, damage calculations, and applicable insurance agreements, the disclosures in the amended Michigan Court Rules call for: the factual basis of the party’s claims and defenses; documents and electronically stored information (ESI) in and not in the disclosing party’s possession; and, the anticipated subject area of expert testimony. MCR 2.302 (A)(1)(a-h). In No Fault and Personal Injury cases additional initial disclosures are required. See MCR 2.301(A)(2) and (3).
MCR (A)(6) identifies the parties’ initial disclosure obligations:
“A party must serve initial disclosures on the information reasonably available to the party. However, a party is not excused from making disclosure because the party has not fully investigated the case or because the party challenges the sufficiency of another party’s disclosures or because another party has not made its disclosures. “
The parties also have a duty to supplement their disclosures (as well as other discovery) in a timely manner. MCR 2.302(E).
It appears the new disclosure requirements are intended to accomplish at least two purposes: to jump start the litigation (particularly in no fault and personal injury cases) and to reduce the number of discovery disputes.
Practice Thoughts:
1. Any party engaging in gamesmanship or holding back trial “surprises” risks various sanctions if a trial court determines the initial disclosure or supplemental disclosure was incomplete or not timely made. MCR 2.313(A)(5-6). When there is the need to supplement it may be prudent for the supplementing party to document the file to establish that any initial disclosure or supplementation was, in fact, timely and reasonably made. It is not difficult to predict disputes will arise as to whether an initial disclosure was reasonable or supplementation was timely made.
2. The practice of serving discovery with the complaint or the answer to the complaint will need to change; a party may not request discovery until its initial disclosure has been made.
3. The amended rules may provide greater incentives to engage in pre-complaint mediation. The degree of diligence of the initial pre-complaint investigation will dictate the scope of that party’s initial disclosure. Prior to the filing of a complaint, and after evaluating the scope of the mandatory initial disclosures required, it may be deemed preferable to consider the wisdom of a pre-complaint mediation, which will offer greater control over the timing certain information is disclosed.
4. When the parties voluntarily choose to pursue a pre-complaint mediation, the parties can always stipulate to make the mutual initial disclosures required by MCR 2.302 (A)(1)(a-h), or otherwise voluntarily agree to exchange other information and documents as a condition precedent for the mediation. When necessary the parties can protect any disclosed information with a protective agreement that can later become a protective order entered by the court if the mediation is unsuccessful.
B. Proportionality, ESI and ADR
A major change in MCR 2.302(B) explicitly provides for “proportional” discovery:
“Parties may obtain discovery regarding any non-privileged matter that is relevant to any party’s claims or defenses and proportional to the needs of the case, taking into account all pertinent factors, including whether the burden or expense of the proposed discovery outweighs its likely benefit, the complexity of the case, the importance of the issues at stake, the amount in controversy, and the parties’ resources and access to relevant information.”
The amended Court Rules make clear proportionality also applies to ESI discovery. MCR 2.302(B)(5). When faced with an objection the requested ESI will impose an undue burden or expense “the court may specify conditions for the discovery, including allocation of the expense and may limit the frequency or extent of discovery of ESI (whether or not the ESI is from a source that is reasonably accessible).” MCR 2.302.5. Because of the proliferation of ESI discovery disputes, the new Court Rules also provide for an optional initial ESI conference to address those ESI issues that will likely occur during the case and provides a mechanism for the development of a detailed written ESI plan and order. MCR 2.314(J). The parties and the courts should seriously consider convening such a conference where appropriate and the parties will be well served to agreeing to a written ESI plan prior to such a conference. A model ESI plan, utilized by the district courts of the Eastern District of Michigan, has been endorsed by the Oakland County business court for your consideration. See https://www.mied.uscourts.gov/pdffiles/ParkerEsiOrderChecklist.pdf.
MCR 2.411(H) provides for the mediation of discovery disputes and “in cases involving complex issues of ESI, the court may appoint an expert under MRE 706. By stipulation of the parties, the court may also designate the expert as a discovery mediator of ESI issues...” MCR 2.411(H)(4).
In recognition of a whole panoply of ADR processes other than just mediation and case evaluation, MCR 2.401(C)(1)(h) continues to urge the Court consider:
“whether mediation, case evaluation, or some other form of alternative dispute resolution would be appropriate for the case, and what mechanisms are available to provide such services...”
In 2015 the Supreme Court Administrative Office provided a bench book to all trial courts that outlined 14 different ADR processes and the indications and contraindications for the use of these processes. See Michigan Judges Guide to ADR Practice and Procedure, https://courts.michigan.gov/Administration/SCAO/OfficesPrograms/ODR/Documents/ADR%20Guide%2004092015.pdf. When exploring an appropriate ADR process with the trial court, litigators should always seriously consider which of any of these processes could be beneficially incorporated into their litigation plan.
Practice Thoughts
1. Federal case law dealing with “proportionality” might be utilized by the parties in the briefing of proportionality disputes. Fed. Rule of Civ. Pro 26 was amended in 2015 to include a proportionality requirement and there is a well-developed body of federal law dealing with the concept.
2. As the Oakland County business court’s standard case management protocol has long called for proportionality in business case discovery (https://www.oakgov.com/courts/businesscourt/Documents/ocbc-pro-case-management.pdf), the Oakland County Business Court judges have published a number of written opinions on proportionality. In the not too distant future, there will likely be a proliferation of published Michigan business court cases dealing with the topic. Under the Business Court Statute all decisions and opinions of the Michigan business courts, including discovery disputes, must be published on line. See https://courts.michigan.gov/opinions_orders/businesscourtssearch/pages/default.aspx. These business court opinions will undoubtedly provide significant guidance to other Michigan circuit courts and the parties in resolving proportionality disputes.
3. Parties should consider mutually agreeing on a discovery mediator at the outset of a case. Trial courts are typically loath to entertain discovery disputes and the parties may find it quicker and less expensive to agree to a mediator who can assist in the resolution of discovery disputes either in whole or significant part. Typically the briefing will be minimal and can be dealt with expeditiously during a conference call with the discovery mediator and counsel. Remember, the discovery mediator (if acting as a mediator and not an expert under MRE 706) does not order a resolution or otherwise make recommendations to the trial court. If the parties cannot mutually agree to a resolution in whole or in part during the mediation, the parties may file a Motion and proceed to Court on the unresolved issues. Under these circumstances there will be absolutely no issue on whether or not concurrence was sought. When parties attempt, but are unable to resolve discovery disputes through mediation, the imposition of sanctions will likely be minimized.
4. If the parties anticipate significant ESI discovery and having difficulties developing a mutually acceptable ESI plan, a mediator who is experienced with ESI issues can assist the parties in developing an ESI discovery plan for presentation to the Court. This mediator will be very familiar with the ESI discovery plan and can be called upon to mediate ESI disputes if needed.
5. If there is an ESI discovery dispute, and the parties decide to mediate the dispute, it is highly recommended the mediator have ESI subject matter expertise.
6. The discovery mediator selected by the parties may, but need not be, the same mediator who will meet with the parties to explore a global resolution of the dispute. When selecting a mediator to assist in the resolution of discovery disputes, consider whether this same mediator will be appropriate to ultimately mediate a global settlement.
7. When developing a dispute resolution plan, consider discussing with the agreed upon neutral the staging and timing of potentially beneficial ADR processes other than mediation or case evaluation.
8. Parties should seriously question the wisdom of scheduling an MCR 2.403 case evaluation prior to a mediation. Courts are increasingly receptive to allowing the parties to opt out of MCR 2.403 case evaluation, which has proven to be far less successful than mediation in the resolution of disputes and, in fact, studies show case evaluation actually increases case age and the life of the dispute. Case Evaluation and Mediation in Michigan Circuit Courts: A Follow-up Study, https://courts.michigan.gov/Administration/SCAO/OfficesPrograms/ODR/Documents/2018%20Mediation%20and%20Case%20Evaluation%20Study.pdf
C. Staging Discovery
Although not specifically addressed in the amended Michigan Court Rules, a party and the court should always consider the benefits of “staging” discovery in the development of a litigation plan. Proportional and staged discovery are two independent concepts. Proportional discovery has been discussed as a reasoned methodology for limiting certain burdensome or certain wasteful discovery. Staged discovery merely involves delaying more costly and burdensome discovery until after the initially staged discovery focuses on, for example, the issue of liability or other threshold legal and factual issues. Greater use of staged litigation— for example, litigating and resolving some potentially case-dispositive issues before discovery on other more discovery-intensive issues—is a potent and effective practice for the trial courts and counsel to consider and recommended as a best practice by the Supreme Court Administrative Office. See Caseflow Management Guide, SCAO (2013), https://courts.michigan.gov/Administration/SCAO/Resources/Documents/Publications/Manuals/cfmg.pdf. The Caseflow Management Guide identifies another beneficial context for the use of staged discovery:
“The court should limit the nature and scope of discovery according to the management needs of the case. Each of the following approaches is aimed at minimizing the time and expense devoted to discovery while promoting non-trial dispositions at the earliest point in the process.... Developing a process where initial discovery focuses on the information needed for settlement with discovery for trial provided only in cases that are likely to be tried.” Id. at p. 22
In light of the amendment to MCR 1.105, the Michigan Trial Courts will continue to be receptive to appropriate discovery staging practices:
“These rules are to be construed, administered, and employed by the parties and the court to secure the just, speedy, and economical determination of every action....”
Practice Thoughts:
1. Staging discovery in appropriate cases is a tool for counsel in reducing a client’s case costs.
2. If unresolved or disputed legal or factual issues will pose a significant impediment to a successful mediation, consider the use of staged discovery to address those issues before engaging in the mediation. If the mediation is unsuccessful, the parties can always pursue the additional discovery necessary to prepare for a trial. A premature mediation will all too often be a fruitless exercise and a waste of your client’s time and money.
3. If you believe you have been ordered to mediation prematurely, this should be raised with the mediator before scheduling the mediation. The mediator can effectively work with the parties and the court to ensure the parties are adequately prepared to engage in a meaningful mediation.
4. Always discuss with the your mutually selected neutral the design of any mediation process and whether other ADR techniques might be beneficially staged, modified or incorporated into the mediation process.
D. Conclusion
This article does not address all of the significant changes to the Michigan Court Rules that have the potential to profoundly impact your litigation practices. Suffice it to state this article only focuses on a few of the amendment likely to impact the interplay between your litigation and ADR practices. To the extent all participants in the litigation process are charged with the responsibility “to secure the just, speedy, and economical determination of every action” all of the amended Michigan Court Rules are an indispensable tool to achieve those laudable objectives.
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Richard Hurford is the president of Richard Hurford Dispute Resolution Services PC and a principal in Strongbridge Negotiation Strategists PC. Recently inducted into the Michigan Lawyer’s Hall of Fame, he is the past chair of the ADR Section of the State Bar of Michigan, the Macomb and Oakland County ADR Committees, and the ADR Section of the Federal Bar Association. He is the co-author of the nationally recognized “A Taxonomy of ADR” and a contributor to the Supreme Court Administrative Office’s publication the “Michigan Judges Guide to ADR Practice and Procedure.” He is a professional with Professional Resolution Experts of Michigan (PREMi, http://premiadr.com), a Distinguished Fellow in the International Academy of Mediators (by invitation only), a member of the National Association of Distinguished Neutrals (by invitation only), and a member of AAJ, DRI and MDTC.
