Civil litigation, whether involving personal injury or contracts, has one set of rules of “discovery.” Discovery means that the other side is permitted to find and (discover) all information you have concerning the disputes in the lawsuit. Rule 26 of the Federal Rules of Civil Procedure seems straightforward: “Parties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party ... . Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.”
If you have ever been involved in a lawsuit, you know that discovery under Rule 26 can be disruptive, time-consuming, annoying, frustrating and expensive.
There are countless instances where a dispute, which will require but two days of trial, is preceded by months of requests to review documents, take depositions, deal with inadequate responses, and motions to the court to compel disclosure of information.
This article will survey the most common tactics and strategies used with discovery and will suggest ways in which you, as a party, can exercise some degree of control over this part of litigation.
Nature of claims and scope of discovery
Most construction jobs are rumor mills. It is part of the human condition to guess at other peoples’ motivations, particularly when you are hurt. In construction, contractors may suspect conspiracy between the owner and another contractor, or that the owner is involved in fraudulent practices of some sort, or that other mischief is afoot. As a result, when filing a lawsuit appears to be the only option, you want to allege not only breach of contract, but also other issues such as fraud, economic duress and tortious interference with contract.
Extending your claims beyond breach of contract, however, opens up areas of discovery for the other side to probe. A claim of “economic duress,” for example, permits the defendant to inquire deeply into your company’s financial position and corporate expenditures. Even an extended home office overhead claim, using the “Eichleay formula” (a ratio of overhead costs to project values over time), permits your opposition to investigate your profitability on unrelated projects.
The instructive point here is for you to determine at the outset, in consultation with your attorney, what claims you can legitimately raise, what it will take to prove them, what information will you need from the other side and what must you disclose.
If you are considering a lawsuit, or expect to be sued, get your documents in order. All of them. Sloppy document retention systems and inept record-keeping can cause an excessive loss of time in finding “missing” documents and answering motions to compel disclosure.
Two areas regularly create problems; the first being your project manager’s and field foremen’s diaries and personal job files. Gather these materials together and store them in an accessible place. These materials contain a wealth of data, good and bad, which you and your attorney need to know. Too often, foremen leave the job with their notes and diaries. If not discarded, those papers may be difficult to recover later.
The second problem is a product of the information age. Electronic records, including e-mail, are discoverable. In my practice, I treat e-mail like all other documentation and we print and file hard copies. Failure to adequately protect these kinds of records from erasure can lead to claims of “spoliation” (destruction with intent). Spoliation is the subject of a prior article.
A good way to avoid a scramble for documents during, or in anticipation of, litigation is to maintain a well-indexed file of all job records, however they were created.
Forms of discovery
Rules of court procedure permit an array of methods for obtaining information from the other side, and all of them are capable of being abused.
Document production is, in many ways, the most powerful discovery tool and most attorneys use it first. You can help by identifying records you know or suspect are kept by the other side and letting your counsel know.
Interrogatories tend to be interesting in concept, but limited in utility. Interrogatories are written questions that opponents must answer, under oath, in writing. In the past, it was not uncommon for interrogatories to number in the hundreds, and the answers would be vague or worse.
In an effort to control gamesmanship in interrogatories, many courts have placed a limit on the number of questions permitted. If there is no such rule in your jurisdiction, you can still ask the court for a protective order if you believe that discovery is abusive.
With depositions, my views may depart from many of my colleagues. Depositions are expensive and often do not fare well in a cost-benefit analysis. In one case in Florida, more than 40 depositions of subcontractors, suppliers and employees of the parties were taken over a two-month period.
None of the transcripts proved useful at trial except for those of the experts. Some courts have recognized this wastefulness and have set limits on the number of deponents and the total time to be allotted for all depositions.
Site inspection is under-used. No matter how graphic the testimony, photographs and videos of the project are almost always helpful in conveying information about job problems.
For this purpose, Federal Rule 34(a) permits “entry upon designated ... property ... for the purpose of inspection and measuring, surveying, photographing, testing, or sampling the property or any designated object or operation thereon ... .”
I have often inspected project sites with expert witnesses. An expert’s testimony and photographs highlight such factors as difficulty of site access, cramped working quarters, distances and times for moving crews, drawing coordination issues, and the like.
You should always ask “why” before objecting to discovery. Whether plaintiff or defendant, a range of objections is available, many frivolous in application that merely serve to make the exchange of information a tedious process and increase costs.
For example, in a lawsuit involving defective welds, an interrogatory stated:
“List, and describe the use of, all equipment used for welding.”
The objections, longer than the inquiry, were the following:
“Defendant objects to this Interrogatory on the grounds that it is not reasonably calculated to lead to the discovery of admissible evidence. Further, Defendant objects to this Interrogatory on the grounds it is compound.
“Further, Defendant objects to this Interrogatory on the grounds that providing a complete answer would be unduly burdensome.”
These objections are preposterous (in fact, only one arc welder was used). However, the objections cry out for a motion to compel discovery, which the other side must answer, and then a hearing will be scheduled for a court ruling. And what has been gained?
What you should realize, when involved in litigation, is that your records will be opened for the other side to review. You will need to discuss this matter with counsel and decide early on what fights you want to enter regarding disclosure.
Even privileged documents, such as investigations by or on behalf of your attorneys and your correspondence with your attorneys, will need to be scrutinized. In many courts now, raising a privilege is not, by itself, a sufficient objection.
You may also need to describe the documents you are keeping secret so the court, if necessary, can make a decision on the issue.
Enter King Pyrrhus
Pyrrhus was a Greek king who waged war on Rome. He won his battles, but at such an enormous cost in lives lost that he lost the war. His successful battles have since been called Pyrrhic victories.
There are parallels in pretrial discovery. Both sides can invest so much in the discovery process that they can be worn down financially. There are too many situations where the cost of getting the case to trial is larger than the possible recovery in a favorable verdict.
Discovery should be planned and decision made early as to how far afield you want to venture in pursuing legal theories. Ask yourself how much time and cost should be used up before you get your day in court. EC