There are new Rules for the NC Business Court In effect, as of January 1, 2017. If you have a case in the Business Court, or are expecting to designate a case there, you should look them over. They are applicable to all actions currently pending in the Business Court.
If you are not willing to take the time to read the new Rules (which is not recommended), here are five things which affect discovery in the Business Court under the new Rules:
Be Courteous And Cooperative
New Rules 10.1 through 10.8 govern discovery. The new Rules dictate cooperation in discovery. Rule 10.1 (titled "general principles") says that:
The parties should cooperate to ensure that discovery is conducted efficiently. Courtesy and cooperation among counsel advances, rather than hinders, zealous representation.
If you think that this is a new and unfairly burdensome obligation, you are in the wrong profession. The North Carolina Revised Rules of Professional Conduct say that "[l]awyers are encouraged to treat opposing counsel with courtesy and to cooperate with opposing counsel when it will not prevent or unduly hinder the pursuit of the objective of the representation." Comment 1 to RRPC 1.2
The Rules make a specific reference to the concept of "proportionality," which was incorporated into the Federal Rules of Civil Procedure with the 2015 amendments to those Rules. New Rule 10.3(a) says that in the Case Management Conference:
Counsel should discuss the scope of discovery, taking into account the needs of the case,the amount in controversy, limitations on the parties’ resources, the burden and expense of the expected discovery compared with its likely benefit, the importance of the issues at stake in the litigation, and the importance of the discovery for the adjudication of the merits of the case.
If you find this to be a startling limitation on the scope of discovery, it isn't. NCRCP 26(b)(1a), effective in 2015 and captioned "limitations on frequency and extent," references much the same concepts. If you have an interest in mastering the challenge of proportionality, the drafters of the new Business Court Rules recommend studying A Practical Guide in Achieving Proportionality under New Federal Rule of Civil Procedure 26, 9 The Fed. Cts. L. Rev. 20 (2015).
Electronically Stored Information (ESI)
The new Rules speak more specifically to electronically stored information (ESI), more so than did Old Rule 17.1(t), which mentioned only "metadata.". New Rule 10.3(c) says that counsel for the parties should prepare an ESI protocol —an agreement between the parties for the identification, preservation, collection, and production of ESI." The Rule goes on to suggest the items that should be covered, like "the specific sources, location, and estimated volume of ESI" and how the search should be conducted. When should this happen? Per new Rule 9.1(d), at the Case Management Meeting. That meeting is required to happen no more than sixty days after the designation of the case to the Business Court. (new Rule 9.1(b)).
Interrogatories, Requests For Admission, And Depositions
Interrogatories and requests for admission are limited to no more than twenty-five (new Rule 10.4(b)). That's half the number permitted by the past set of Rules, which allowed for fifty of each (old Rule 18.2). The number of depositions allowed remains unchanged-- to no more than twelve by each party. (new Rule 10.4(c); old Rule 18.2), Though under the old Rules, Rule 18.2 excluded "testifying experts" from the limitation of twelve. The new Rules make no such exclusion, so this represents somewhat of a limitation.
All depositions are subject to a time limit of seven hours. New Rule 10.7(a). You might remember that when Rule 30 of the Federal Rules of Civil Procedure were amended in 2000 to provide for the same time limit, that there initially was debate about whether the time taken for breaks -- like coffee, lunch, or a trip to the bathroom -- was included in the time limit. It wasn't really much of a debate, since the federal advisory committee notes actually resolved that question. The notes say “[t]]his limitation contemplates that there will be reasonable breaks during the day for lunch and other reasons, and that the only time to be counted is the time occupied by the actual deposition.”
The new Business Court Rule 10.7(a) resolves that practical issue on its face, it says that the seven hours is measured by "on--the-record time."
The new Rule contains some clarification for 30(b)(6) depositions. A party providing a 30(b)(6) witness may often present multiple witnesses, each addressing a separate 30(b)(6) topic. Rule 10.4(c) says that "for depositions conducted pursuant to Rule 30(b)(6), each period of seven hours of testimony will count as a single deposition, regardless of the number of designees presented during that seven-hour period."
Streamlined Procedure For Resolving Discovery Disputes
In a new approach for resolving discovery disputes, new Rule 10.9(b)(1) requires the moving party to "initiate a telephone conference among counsel and the presiding Business Court judge about the dispute." in order to initiate this telephone conference, the moving party a party first must e-mail a summary of the dispute [of less than 700 words] "to the judicial assistant and law clerk for the presiding Business Court judge and to opposing counsel." The opposing party has seven calendar days to respond with an equally pithy (700 word) response. After receiving the response, the Judge can either require the filing of a formal motion and a brief, or rule based on the summaries.
It will be interesting to see how this approach works. Maybe the Business Court Judges will be innundated with telephone conferences. Or maybe, after the lawyers exchange the summaries, they will be infected with the spirit of courtesy and cooperation dictated by new Business Court Rule 10.1.
Credit Where Credit Is Due
I was guided in preparing this post by a document prepared by the principal drafters of the new Rules, including my partner Jennifer Van Zant, who seems to get mentioned on this blog more than any other Brooks Pierce lawyer. The document was prepared quite a while ago (in May 2016), so the Rule changes actually implemented may vary from what are described in it. It is titled Key Features of Proposed Changes to the North Carolina Business Court Rules.
I am working on adding the Revised Rules to the Sidebar of this blog. They have been hyperlinked by my assistant Nancy Preslan, who is undoubtedly the best legal assistant in the world. "Hyperlinked," in this case, means that you can clink on any Rule in the table of contents and hop to that Rule, and then click on the Rule itself to return to the Table of Contents. That saves a lot of paging back and forth. For now, they are here.