Ninth Circuit "Strikes" a Blow for Proper Motion Procedure

Phillies' slugger Ryan Howard was ejected from a game this week in extra innings, leaving his team (which had no more position players) to insert ace pitcher Roy Oswalt into the outfield and to use him at the plate. First time the Phils used a pitcher in the field in decades. Howard argued a mistakenly called third strike on a check swing.

Today's post relates to a different kind of mistaken strike. The Ninth Circuit has explained that trial courts cannot strike a claim for damages on the ground that the damages are precluded as a matter of law.  Whittlestone Inc. v. Handi-Craft Co., No. 09-16353 (9th Cir. Aug. 17, 2010).  Specifically, Rule 12(f) of the Federal Rules of Civil Procedure does not authorize the court to strike the claim for damages on the basis that such damages are legally not recoverable.

Here, the defendant field a Rule 12 motion to strike the paragraphs of the complaint that sought the recovery of lost profits and consequential damages, in alleged violation of the plain language of the parties' contract.  The trial court granted the motion, and plaintiff appealed.

Rule 12(f) states that a district court “may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” The function of a 12(f) motion
to strike is to avoid the expenditure of time and money that would arise from litigating spurious issues by dispensing with those issues prior to trial.  While the motion here seemed to fit the purpose of the rule, it didn't fit the language. The court found that the damages allegations met none of those listed categories. 

Handi-Craft argued that Whittlestone’s claim for lost profits and consequential damages should be stricken from the complaint, because such damages were precluded as a matter of law.  But that meant that Handi-Craft’s 12(f) motion was really an attempt to have certain portions of  Whittlestone’s complaint dismissed or to obtain summary judgment against Whittlestone as to those portions of the suit, which attempt was better suited for a Rule 12(b)(6) motion or a Rule 56
motion, not a Rule 12(f) motion. 

And this was not harmless error, said the 9th, because the standard for review of the different motions is not the same, and there was some question whether a 12(b)(6) motion would be granted, had it been filed.

The court concluded that Rule 12(f) of the Federal Rules of Civil Procedure does not authorize a district court to dismiss a claim for damages on the basis it is precluded as a matter of
law.


 

Toyota MDL Judge Issues Discovery Order

The judge overseeing the Toyota unintended acceleration MDL has issued an order permitting expanded discovery. In Re: Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices, and Products Liability Litigation, Case No. 8:10ML2151 JVS (Order No. 5: Phase I Discovery Plan, July 20, 2010).

Judge Selna (C.D. Calif.) noted that the Phase I Discovery Plan being promulgated was intended solely to educate the parties about foundational issues involved in the litigation, including the identification of the proper parties to this litigation, the identity of relevant third-parties, organizational structure, the identify of relevant witnesses, and identity, nature, and location of relevant documents. The court expects that discovery on foundational issues during Phase I will enable the parties to develop a more narrowly tailored discovery plan for subsequent phases of the litigation and to be more focused, economical and efficient in subsequent phases of discovery. In addition to the foundational information to be provided to plaintiffs by Toyota, Phase I will also provide Toyota the opportunity to obtain foundational, threshold information from plaintiffs, the class representatives, and relevant third-parties.

Phase I Discovery will last for 100 days, and the parties agreed the Phase I discovery plan needs to be coordinated to the extent feasible with related cases pending in state courts.

Under the order, the Toyota Defendants are to produce witnesses pursuant to Rule 30(b)(6) to testify concerning the twenty-one issues, including:

• organizational structure,
• the roles and responsibilities of each of the various Toyota companies with respect to the design, manufacture and sale of Toyota vehicles,
• the identity, nature, location and retention of documents related to the design, evaluation, manufacture, and testing of the ETCS system and any modifications or adaptations of the ETCS system for Toyota vehicles,
• the identity of the persons and departments involved in the design, evaluation, testing and manufacture of the ETCS and its components,
• the identity, nature, location and retention of documents related to information Toyotas has received about speed control, surge, and SUA events in Toyota and Lexus vehicles, including specifically warranty records, customer complaints, claims and lawsuits,
• procedures employed for investigating and responding to complaints of unintended acceleration by owners or operations of any Toyota vehicles, and
• the internal decision-making process by the Toyota Defendants about what and when to inform Toyota customers, governmental agencies and the public about SUA events and the identities of the persons and departments involved in that decision-making process and the identity of the persons and departments involved in that process.

The court ruled that during this litigation the parties must endeavor to avoid duplicative depositions or repetitive questions and to avoid deposing any witness more than once on the same subject matter. But it held off on ruling on Toyota’s position that no Toyota witness deposed during Phase I
would be deposed again in subsequent phases of this litigation on the same subject matter, except by agreement of the parties. Plaintiffs did not agree with Toyota’s position.

Plaintiffs are to provide completed Plaintiff Fact Sheets and Class Representative Fact Sheets, including the production of any documents responsive to the fact sheets. Fact Sheet Responses to information requests are deemed interrogatory responses pursuant to FRCP 33 and may be treated as such at time of trial, under the order. Responses have to set forth all information known or reasonably ascertainable to the party and/or their counsel. The parties are obligated to make a reasonable search and diligent inquiry for information or documents responsive to the request.
Fact Sheet Responses to document requests and the production of documents are deemed responses and production under FRCP 34. 

Additionally, the Toyota Defendants shall be permitted to conduct inspections of the subject vehicles.  Plaintiffs and class representatives have to identify whether the subject vehicle exists, and if so, its current location, general condition, and vehicle identification number, if known.  The parties agreed that vehicle inspections would be permitted commencing in Phase I. The protocol for vehicle inspections will apparently be determined on a case-by-case basis. 

 

Update on Proposed Amendment to Federal Rules on Expert Discovery

Experts play a vital role in mass tort defense.  Selection, preparation, and discovery of experts are crucial pre-trial tasks of the defense attorney.  Thus, the rules of civil procedure governing those tasks really matter.

The end of the time period for public comment on proposed changes to Federal Rule of Civil Procedure 26 is rapidly approaching. The formal process to amend the rule governing expert discovery began in early 2008 when the Advisory Committee on civil rules met to consider rule changes recommended by the American Bar Association. After drafting a proposed rule, the committee published the changes for public comment. Written comments are due by February 17, 2009.  There will be a final public Judicial Conference hearing in San Francisco, California, on February 2, 2009.  Guidelines for submitting comments can be found here.


After the comment period ends in February, the advisory committee is expected to consider comments and, if needed, redraft the rule.  Under the Rules Enabling Act, the rule will then be forwarded to the Standing Committee on Rules of Practice and Procedure, which must consider the changes. The standing committee would review the rule at a meeting planned for June, and submit it to the Judicial Conference for consideration at its September session. The proposed changes could go to the U.S. Supreme Court in time for the October session. Assuming this timeline holds up, the Supreme Court must act on the changes by May, 2010. The final step will require consideration by Congress, which will have seven months to act on the proposal. By statute, non-action would allow the rule changes to take effect early as December, 2010.

But the first deadline is the looming end to the public comment period.

What would the rule do?

The key changes extend work-product protection to drafts of Rule 26(a)(2)(B) expert reports and 26(a)(2)(C) party disclosures, and also to certain attorney-expert communications. The proposed amendments are designed to reflect what the Standing Committee calls the “lessons of experience” as opposed to theory, and to provide useful discovery while reducing practices that now impede the best use of expert trial witnesses.

Under the proposal, Rule 26(b)(4) would be amended to extend work-product protection to drafts of expert reports, drafts of party disclosures, and communications between expert witnesses and counsel. Exceptions are carved out for discovery of compensation, identification of facts or data the attorney provided to the expert and that the expert considered in forming the opinions to be expressed; and any assumptions that the attorney provided to the expert and that the expert relied upon in forming opinions.

Some courts have interpreted the Advisory Committee note on existing Rule 26(a)(2)(B) to allow parties to inquire into all communications between experts and counsel, multiplying expenses with little benefit to the parties, and impeding the way cases are actually prepared for trial. This approach has also contributed to the practice of retaining two experts, one to testify and the other to consult. Many lawyers will stipulate out of discovery of draft reports and attorney-expert communication because the costs of such discovery seem higher than the infrequent, small benefits that may be gained. The changes thus are needed to create efficiencies and to reduce litigation costs.

Some academics and the plaintiffs’ bar argue, however, that any restriction on inquiry into the expert's relationship with retaining counsel is a bad idea. Some have even started a letter-writing campaign opposing the proposed amendments. Comments from DRI, on the other hand, suggest that the protections should extend to communications between attorneys and the expert's staff as well.