Arizona s New Civil Rules What Every Lawyer Needs To Know BY DON BIVENS DON BIVENS is a partner in the Phoenix office of Snell & Wilmer LLP. He chaired the 25-person Civil Justice Reform Committee, which Chief Justice Scott Bales established in 2015 to recommend reforms to the Arizona Supreme Court to reduce the time and expense of civil litigation. Mr. Bivens is a former President of the State Bar of Arizona, and a former Chair of the Section of Litigation of the American Bar Association. Photo by Rudion Kutsaev on Unsplash 12 A R I Z O N A AT T O R N E Y D E C E M B E R 2 0 1 7 w w w. a z b a r. o r g / A Z A t t o r n e y
Let s sneak a peek, or rather a listen, into the future. First, open the time travel app on your mobile device. Set the desired future date to July 1, 2018, which happens to be the effective date for reforms to Arizona s Rules of Civil Procedure. Now, set the desired future location to your own law office. Finally, click the eavesdrop icon to overhear future dialogues between you and your favorite client taking place on that summer day. Your client has past litigation experience with Arizona s civil courts and comes to you with questions the answers to which require your studied knowledge of Arizona s new civil rules. Because you are totally versed in the new rules (relax, this takes place in the future!), you field your client s questions deftly, and you provide an overview of the new rules and their impact on civil justice in Arizona. You say your app is not working? No worries. Here is a transcript of your future conversation. Listen to yourself! You are a diligent lawyer who is up to date on the new civil rules. w w w. a z b a r. o r g / A Z A t t o r n e y D E C E M B E R 2 0 1 7 A R I Z O N A AT T O R N E Y 13
Tiered Discovery Limits You as Lawyer: It s always nice to hear from my favorite client. How are you? Your Client: I am between a rock and a hard place. I need your advice. You: How can I help? Arizona s New Civil Rules Client: I have three employees who just announced their departure to a national competitor. These employees do not have covenants not to compete with me, but they do have covenants not to solicit my customers. But, of course, that is exactly what they are doing, soliciting the customers for whom they have worked as my employees. I am losing money from customers that are supposed to be mine! You: How much money? Client: At least $80,000, from what I know so far. Maybe $100,000. I d like to file suit, but I know from past experience that discovery costs alone can eat me alive. The national competitor can certainly afford to outspend me. I cannot afford to sue, and I cannot afford to lose my customers. Like I said, I m between a rock and hard place. You: You know what? Your options may be better than you think. Effective today, July 1, 2018, new civil reforms went into place in Arizona aimed at reducing discovery costs and delay in civil cases. The main idea is to keep the costs of civil litigation proportional to what is really at stake in each case. Client: Talk to me. You: New Rule 26.2 divides all cases into three tiers, depending on what is at stake in each case. Each tier has presumptive limits on the amount of discovery that the parties can take. For example, in a case with damages over $50,000 but under $300,000, each side is presumptively limited to 10 interrogatories, 10 document requests, and 15 hours of fact witness deposition time. So a wealthier litigant cannot simply run up the discovery costs and make the case economically infeasible for the other side to continue. Parties can stipulate to additional discovery beyond the presumptive limits, but the judge can disallow it. No matter what, any additional discovery must remain necessary and proportional to the issues at stake. Client: That sounds promising. You: Not only that, but the amount in controversy is not the only criteria for tier assignment. A small monetary dispute of utmost public importance might merit a higher tier assignment. For cases under $50,000, presumptive discovery limits are lower: 5 interrogatories, 5 document requests, 5 hours of depositions. For cases over $300,000, the limits are higher: 20 interrogatories, 10 document requests, and 30 hours of depositions. The new Rule 26.2 also specifies time limits for parties to complete discovery (120, 180 and 240 days for tiers 1, 2, and 3). Client: I m beginning to get the picture: new rules to keep cases moving and keep discovery costs proportional. I get it. But what happens if I disagree with the opposing party 14 ARIZONA ATTORNEY DECEMBER 2017 www.azbar.org/azattorney
about the right tier assignment for my case? You: The parties are required to discuss and, if possible, agree on a tier assignment. But the judge can disallow the stipulation. If the parties cannot stipulate to a tier assignment, the judge will decide. You can always ask the judge for a different tier assignment, but you will need to explain why a different discovery tier is necessary and proportional to your case. Expedited Resolution of Disclosure and Discovery Disputes Client: These new civil rules sound promising to me. But what about discovery disputes? I remember spending lots of money, time and patience, waiting for the judge to decide motions to compel and motions for protective orders. From my perspective as a client, everything in our last court case suddenly ground to a halt for no reason apparent to me, just because someone filed a discovery motion. Do the new rules address this issue? You: You will like this. New Rule 26(d) requires an expedited process for resolving New Rule 26(d) requires an expedited process for resolving discovery disputes. No party can file a motion to compel or motion for protective order without first obtaining permission from the judge. discovery disputes. Parties can still contact the court by phone during a deposition to resolve a dispute by phone. But no party can file a motion to compel or motion for protective order without first obtaining permission from the judge. Instead, the parties must present the judge with a short joint written statement of their discovery dispute. Each party gets 1.5 pages, no more. A party may, but need not, request a hearing. If a party requests a hearing, the hearing will be set at the judge s earliest convenient time. If possible, the judge will resolve the discovery dispute based on the parties expedited submissions, without further briefing or expense. If so, the judge enters a minute order that describes the discovery dispute and the court s resolution, so there is a record on appeal. Client: That actually sounds sensible for most cases. But what if the discovery dispute is more complicated? Am I still limited to 1.5 pages? You: You re right. Not every discovery or disclosure dispute can be reduced to three pages for both sides. But many can. For disputes with more depth and nuance, the judge can order the parties to file written motions to resolve the dispute in keeping with the old rules. But the judge will still strive for a resolution that keeps discovery costs proportional to what s at stake. Safe Harbor for ESI Preservation You: [later in the day] My favorite client, again! What now? Client: I just got a letter threatening to sue my company for employment discrimination in our tech sales division. I can assure you, www.azbar.org/azattorney DECEMBER 2017 ARIZONA ATTORNEY 15
Arizona s New Civil Rules this company does not tolerate discrimination of any kind. But this letter demands that we put a freeze on all company documents and electronically stored information dating back to January 2015 for all company communications, in all offices. The letter also demands that we preserve all text messages on our employees cell phones. That strikes me as ridiculous and, frankly, harassing. I want to do the right thing. But I also do not want to get second-guessed a year from now about what I should have preserved. I sure don t want a claim for spoliation of evidence. You: As your lawyer, I don t want a spoliation claim either, believe me. But we are both in luck. New Arizona Civil Rule 45.2 allows you, right now, to go to court and have the judge decide the scope of information that you need to preserve in anticipation of litigation. As long as you preserve the information the judge says to preserve, you have a safe harbor going forward against any future claim of spoliation. Client: Wow. A safe harbor for preservation of evidence? I never heard of such a thing. You: I think Arizona s new rule is a national first. Client: Wait a minute. Is there a catch? What happens if I decide not to spend the time and money to seek an advance safe harbor preservation order? Have I just put myself at greater risk by not seeking an advance court order? You: No. A party s election not to seek an advance preservation order does not waive any rights or arguments. There is no prejudice. The relevant question will simply remain whether you took reasonable steps to preserve evidence in anticipation of litigation. Protections for Non-Parties Served With A Subpoena You: [still later in the day]. My favorite client, yet again! Client: Five of my company s largest vendors are in a lawsuit with each other. I just got hit with a third-party subpoena demanding that my company produce all electronically stored communications between my company and each of these five vendors over the last five years. The subpoena covers thousands of communications involving dozens of employees. This is not my fight. I cannot just drop everything and devote my resources to a massive search for thousands of emails, voicemails, and texts. What s more, shouldn t each of these five vendors already have all the communications they re demanding I now produce? Why me? You: It is a lucky thing that you keep calling me today, July 1, 2018. Starting today new Rule 45 offers protections to persons subject to a burdensome subpoena. You can now go directly to the judge and seek relief. The new rules protect you from having to produce information to which the requesting party already has access. Furthermore, the judge is empowered to condition your compliance with the subpoena on the requesting party bearing some, perhaps all, of the costs associated with producing the materials the subpoena requests. You have a duty, like every citizen, to cooperate and facilitate the civil justice process, but the new rules are designed to protect against disproportional discovery costs and to protect third parties, like you, from excessive costs of compliance with a subpoena. The judge has enhanced power to shift costs to keep costs proportional to your situation. Oh, and one more thing. Remember how expensive it can be to produce a privilege log in some of our past cases? Well, the new rules permit you to object to producing an unduly burdensome or expensive privilege log. If you make a timely objection, then the party requesting the privilege log must pay your reasonable expenses in preparing it. If they want a burdensome and expensive privilege log, they can pay for it. Client: The more I hear, the more I like these new rules. They seem likely to help me save money, time and sleep particularly with respect to electronically stored information. New Factors to Deal With ESI You: There is more for you to like with respect to electronically stored information, The new rules permit you to object to producing an unduly burdensome or expensive privilege log. If the other party wants a burdensome and expensive privilege log, they can pay for it. ESI for short. As you know, today almost every case can involve ESI from emails, to photos, voicemails, data storage and social media posts. The new rules recognize this reality and specifically require the parties in a lawsuit to deal upfront with preservation, disclosure and discovery of ESI. The new rules require an early meeting for the parties to discuss all case management issues, including issues of disclosure or discovery of ESI. New Rule 26(e) lists factors for determining what might be good cause requiring disclosure or production of ESI. Examples include the likelihood of finding relevant information that cannot be obtained from other sources, or the extent to which the discovery has been narrowly tailored. Similarly, Rule 26(e) lists factors that might constitute an undue burden or expense. Examples include the dollar costs involved in producing the requested ESI, and the anticipated disruption to the producing party s normal operations. The new rule allows the judge to impose conditions on disclosure or discovery of ESI, including requiring the party seeking discovery to pay some or all of the reasonable expense, including business disruption to the extent such costs are quantifiable. None of the factors on these various lists for ESI are actually new to the case law dealing with ESI. But Arizona s new rules collect most of the relevant factors from case law into one place, so the parties and judges have immediate access to important factors to be weighed in determining how best to handle ESI. No More The Document Speaks For Itself Client: You know one thing that has driven me crazy over the years is the way that some parties evade a direct answer to an allegation in a pleading, or to a request for admission. 16 ARIZONA ATTORNEY DECEMBER 2017 www.azbar.org/azattorney
Arizona s New Civil Rules More Details and Background About the New Civil Rules In August 2017, the Arizona Supreme Court approved procedural reforms aimed at reducing the time and expense it takes to resolve civil cases in Arizona s superior courts. The reforms arise from recommendations of the Civil Justice Reform Committee, which Chief Justice Scott Bales established at the end of 2015. The new rules build on the Supreme Court s previous restyling amendments, which established proportionality as a guiding concern in civil discovery. Don Bivens, an Arizona attorney and the former president of the State Bar of Arizona and former chair of the American Bar Association s Section of Litigation, chaired the 25-member committee, which also included Justice Robert Brutinel, other judges and court The committee sought input from Arizona judges, lawyers and litigants and also considered reforms adopted by courts outside Arizona and recommendations from the Conference of Chief Justices Civil Justice Improvements Committee. personnel from throughout Arizona, attorneys from various practice areas, including in house counsel, and public members. As part of its extensive report titled A Call to Reform (www.azcourts.gov/cscommittees/ Committee-on-Civil-Justice-Reform), the committee sought input from Arizona judges, lawyers and litigants and also considered reforms adopted by courts outside Arizona and recommendations from the Conference of Chief Justices Civil Justice Improvements Committee (www.ncsc.org/newsroom/news-releases/2016/ccj-endorses-civil-justice-report. aspx) and the Institute for the Advancement of the American Legal System (IAALS) (http:// iaals.du.edu/) at the University of Denver. The rule changes will become effective on July 1, 2018, and can be found at www.azcourts.gov/portals/20/2017%20 Rules/17-0010.pdf. Some highlights among the changes include: Differentiated case-management providing for case tiering and lower discovery limits for less complicated cases Expedited procedures for resolving discovery and disclosure disputes Revised rules regarding preservation, disclosure, and discovery of electronically stored information (ESI) Changes to better protect non-parties from unduly burdensome requests for information via civil subpoenas New procedures to resolve disputes about the duties of parties or non-parties to preserve ESI The committee s report also recommended establishing a pilot project in Pima County offering short jury trials as an alternative to compulsory arbitration, and improving judicial training and public information for civil cases. Those recommendations were not part of the rule changes, but will be implemented separately. The State Bar and other bar associations will be holding CLE programs in the coming months about the new civil rules. The Education Services Division of the Arizona Courts will do the same for judges. Remember when we sent that simple request for admission? Admit that your payment obligations are governed by paragraph 16 of the contract. You would think a person could answer such a direct question. But do you remember the other side s response? Something like, The document speaks for itself. That was a useless non-response. You: I agree with you, and so do Arizona s new civil rules. New Rule 8(c) does not permit: (1) an answer to an allegation that states the document speaks for itself, (2) an answer that denies any allegations inconsistent with the document, or (3) an answer to a factual allegation, or an allegation that applies law to fact, by claiming the allegation states a legal conclusion. Client: That seems like a good thing. No more hiding behind linguistic smokescreens. But what about denying an allegation on information and belief? That also seems evasive to me. You: New Rule 8(c) does not permit a party to deny an allegation on information and belief. An answering party must either admit, deny, or state that it lacks sufficient information to form a belief about the truth of an allegation. Those are the options. Client: And requests for admission? Are you evading my actual question? You: The same principles I just described apply equally to requests for admission in a revised Rule 36. No more the document speaks for itself. Closing Comments Client: Frankly, I am impressed. I knew there was a reason I keep you as my lawyer. I m glad you are so up to date on Arizona s new civil rules. You: Not a problem. I would like to say I do it only for you, and I do of course. But I actually have a professional responsibility to stay current on rules changes. Good lawyers stay current. You: [quietly to yourself] Wow. I am sure glad I read the December issue of Arizona Attorney back in 2017! That was actually my first inkling that new civil rules were on the way! 18 ARIZONA ATTORNEY DECEMBER 2017 www.azbar.org/azattorney