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De-escalate the expert discovery wars: the federal rules permit maximum expert discovery, but it can be to your advantage to agree with your opponent to limit it. Here are tips for negotiating the best protection and drafting an ironclad discovery agreement.

The phrase "mutually assured destruction" might conjure up Cold War-era images of the United States and former Soviet Union stockpiling nuclear arms. For trial lawyers, though, the phrase often resonates as a description of the standoff between opposing parties over the breadth of expert discovery. The battle has been escalating since adoption of the 1993 amendments to Federal Rule of Civil Procedure 26, which permit discovery of "all data and information considered" by an expert.

History teaches us that a plan for mutually assured destruction eventually leads to compromise, when the opposing sides come to realize that the cost and burden of maintaining the balance of power is prohibitive. This result appears to be happening now with expert discovery.

In August 2006, the American Bar Association's House of Delegates adopted a recommendation for amendments to Rule 26 that, in essence, would preclude discovery of attorney-expert communications and draft expert reports. (1) If implemented, these amendments should greatly reduce the costs and burdens associated with expert discovery and greatly benefit consumers in litigation.

As this article went to press, it was unclear if the recommended rule changes will be implemented. At its November 2007 meeting, the Advisory Committee on Civil Rules considered reports from its subcommittee on Rule 26 regarding a preliminary proposal to amend Rule 26 on discovery of expert witnesses. The committee agreed to carry forward consideration of the proposals to its spring 2008 meeting. Accordingly, amendments to the rules to de-escalate expert discovery wars are still delayed. (2)

Fortunately, in the meantime, a viable alternative exists: You can negotiate with opposing counsel to limit expert discovery. What you forgo or allow is defined entirely by the agreement that you strike with your adversary.

Some attorneys, especially litigators at large corporate law firms, have been negotiating these agreements as a matter of course. Trial lawyers, however, are often reluctant to enter into such agreements, hoping instead to outsmart their opponent.

Perry Mason moments, with your opponent's expert admitting a fatal flaw in the report (which turned out to have been written by an overzealous defense attorney), may seem enticing, but in practice they are rare and typically illusory. If the expert stands by his or her opinions, the defense attorney's contribution to the report typically is of little significance.

Generally, it's to your benefit to seriously consider whether full expert discovery is worth the burden and expense of having to provide reciprocal expert discovery. And negotiating limits on expert discovery will enable you to work effectively with your own experts, free of the fear that every matter considered will potentially be available to your opponent.

Absent an agreement limiting expert discovery, what are you entitled to? Depending on whether you are in federal or state court, you need to examine the rules and research case law to understand the precise scope of discovery permitted.

Some state courts have adopted rules limiting expert discovery: New Jersey, for example, adopted rules in 2002 similar to those in the ABA resolution. As for federal courts, although the overwhelming majority follow the broad discovery rule, some courts have taken narrower views. (3)

Since Daubert v. Merrell Dow Pharmaceuticals, Inc., (4) and the 1993 amendments to Rule 26(a)(2) (as well as amendments to state rules that expressly track the federal rules), the trend in expert discovery has been toward full disclosure. The key phrase that courts rely on to justify broad expert discovery is the provision in Rule 26(a)(2)(B) that expert reports "shall contain ... the data or other information considered by the witness in forming the opinions."

Importantly, the draft rule contained the phrase "relied upon," but that was changed to the broader "considered" language because "relied upon" was felt to be too narrow. The advisory notes to the 1993 amendments further state that, based on this provision, "litigants should no longer be able to argue that materials furnished to their experts to be used in forming their opinions--whether or not ultimately relied upon by the expert--are privileged or otherwise protected from disclosure when such persons are testifying or being deposed."

Virtually all federal courts have construed "other information considered" to include facts and data provided by attorneys to their experts, as well as all draft expert reports and all attorney communications with the experts, even if those communications contain attorney work product. (5) The only safe assumption in most jurisdictions, therefore, is that your trial strategy, mental impressions, and other traditional work product are discoverable if provided to a testifying expert. As the ABA noted in the report accompanying its recommendation, "anything the expert looks at or hears, including an attorney's input, is deemed to have been 'considered by the expert' and has become fair game for discovery by the other side. (6)

In addition to your disclosure obligations, in many courts you have an obligation to instruct your experts to preserve their drafts, and some commentators have suggested that it is good practice to include this direction in the expert retention agreement. (7) Some courts have standing orders directing experts to retain and produce all drafts of their reports as a matter of general practice. Regardless of the standard practice in any court, however, ordering experts to destroy drafts and notes is generally sanctionable. (8)

Ultimately, if you decide to forgo an agreement with opposing counsel (or they decline to enter into one with you), most trial lawyers agree that the best practice is to instruct your expert to maintain a single electronic document that is revised and updated over time and ultimately is developed into the final report. Of course, opposing counsel may seek a copy of your expert's hard-drive so that the metadata can be swept for the change history to the report.

Even if you avoid communicating with your expert in writing and avoid discoverable drafts of his or her report, it's likely you still will be unable to freely share your litigation thoughts and strategies without

risking their discovery. Ultimately, the expert will be deposed and will have to answer questions regarding what you told or asked him or her. The expert will surely recall, for example, whether you asked questions like: "What's the strongest aspect of my case?" Or worse: "What is the weakest aspect of my case?"

While all of the above efforts may keep the hard evidence of drafts, mental impressions, and so forth from being seen by the other side, your adversary is nonetheless entitled to probe, at the deposition of your expert or at trial, into your consultations with the expert and the degree of your involvement in revising and finalizing the report. That's discoverable.

If the significance of a case warrants the cost, and you or your client can afford it, you should employ two experts on the same issue--one expert to testify and one to consult. You would use the testifying expert to provide a report and testify at trial. You would use the consulting expert, whose identity, opinions, and communications with you are protected from disclosure except in very limited instances, to work with you in analyzing data, testing theories of the case, and helping you prepare for cross-examination of the opposing expert.

Free from discovery obligations, you could speak openly with the consulting expert about the strengths and weaknesses of your case (first ensuring, of course, that your testifying expert is walled off from your consulting expert). You would also be able to ask your consulting expert the hard questions that most trial lawyers only dream of asking their testifying experts (or ask through a number of artificial constructs such as, "What points is the defense likely to bring out?").

Again, however, this scenario assumes that you and your client can afford to pay for the services of dual experts (and assumes that two experts are available, which is a problem in some arcane or rare subject areas). Needless to say, injured consumers and their counsel are typically at a disadvantage when fighting against well-financed companies, which are more likely to have the resources to retain dual experts.

Agreeing with your adversary to mutually forgo certain expert discovery will invariably avoid significant costs, burden, and artificial constructs. It will also likely help you prepare a better case for your client.

Negotiating stand-downs

Once you decide that your case warrants a mutual de-escalating of expert discovery, you want to make sure that you negotiate the right protections. There is only one known reported case interpreting agreements to forgo expert discovery, In re Parmalat Securities Litigation. (9) In that case, the Southern District of New York rejected the plaintiff's contention that his agreement with the defendants regarding expert discovery precluded discovery of his retention agreements with his experts, because he failed to expressly provide that in the agreement.

More often than not, attorneys grab a model agreement from a colleague without giving it much thought. Pressed for time, the parties might end up adopting that form agreement with little or no discussion. Such casualness can be a recipe for disaster.

The form, timing, and scope of the agreement are important terms that you should carefully consider and negotiate. The issue of scope includes how you want to handle drafts and whether you want to ask (and allow the other side to ask) report-preparation questions. Finally, you need to concern yourself with the clarity of the language in the agreement. Let there be no doubt what kind of expert discovery you intend to preclude and what you intend to allow.

In view of the increasing use of these agreements, we can expect to see an increase in case law concerning their interpretation. You do not want your agreement to make a case of first impression.

Form. The best practice, especially in jurisdictions where a judge may have a standing order that requires production of draft reports, is to reduce your agreement and understandings with counsel to a stipulation and proposed order to submit to the court. The parties should include language clearly stating that the stipulation and order supersede other rules, case law, and orders that may provide something to the contrary. Appropriate language might include: "The parties state that to the extent that the specific stipulations agreed to herein waive disclosure requirements under Fed. R. Civ. P. 26(a)(2)(B) or (C), previous orders of this court, or applicable case law, the parties agree to such waiver."

Timing. In most jurisdictions, absent a stipulation to the contrary, you begin to generate discoverable expert information with your very first communication with the expert. Therefore, you should negotiate the agreement early in the litigation, perhaps as early as the Rule 26 conference. Whether in a class action or an individual case, typically you will submit expert reports first. Thus, your opponent potentially gains a tactical advantage by delaying an agreement to forgo expert discovery, because his or her report is likely due after yours.

Until counsel and the court have signed the stipulation and order, limit your consulting-type communications with your experts and direct them to generate a single electronic document that will eventually be the final report. Also, if time is truly of the essence and you want to avoid the delays litigators often face while waiting for a judge to sign an order, simply include the following language: "The parties agree to comply with and be bound by the terms of this stipulation and order pending its approval by the court."

Scope. The ABA resolution, read literally, suggests stipulating only to nondiscovery of communications regarding an expert's reports. The typical stipulation (and I believe the better practice), however, is to preclude discovery of "all facts and data considered" by the testifying expert, including communications with the attorney, unless the facts and data are relied on.

Even beyond the ABA proposal, you should further consider the scope of communications you want to protect from discovery. Do you want to preclude discovery of general communications with your expert (such as conversations about draft reports or meetings for depositions) ? Or do you want to preclude discovery of all communications, including documents that you provide to your expert that he or she considers but does not rely on?

If you choose the latter, you will have much greater flexibility. For example, if you provide your expert with documents to consider but he or she decides ultimately that the documents are unhelpful and might even damage your case, the documents would not be discoverable. The difference in language addressing communications can be subtle and often overlooked; work to make sure your agreement is clear.

Another important consideration is whether you want to protect only communications between you and your expert, or protect communications among a broader group, such as between experts and their staff or among experts (again, to the extent the communications are not relied on for the expert's opinions in the final report). In Lanham Act litigation, for example, where direct-to-consumer marketing studies are performed, the testifying expert who designs the survey typically employs an agency, often run by a consulting expert, to conduct the actual study.

If you negotiate to preclude discovery of communications among experts, then to the extent the testifying expert relies on the study done by the consulting expert, those materials are still discoverable. However, to the extent the testifying expert simply receives input on the proposed design and implementation of the study from the consulting expert, the communications would be protected from discovery.

Ultimately, the testifying expert is in a position of having to support his or her design and implementation strategy. Securing an agreement to exclude communications between the testifying expert and the consulting expert will avoid needless duplication of deposition testimony.

You will also want to protect draft reports and perhaps any draft working papers or studies. In more complex cases, the expert not only prepares a report, but also may prepare event studies or sample models. Producing drafts of these items in discovery is costly, time consuming, and potentially damaging to your case. Accordingly, in your agreement you may want to make clear that drafts of such studies, working papers, or other preliminary items--which are not part of the final report--are not discoverable.

Note that if you use an expert in more than one case, you may find that opposing counsel seeks drafts of reports from earlier cases in which you used that expert, even if you had an agreement precluding discovery of drafts in the earlier cases. If you have a signed order in an earlier case protecting drafts from discovery, you may be able to protect them from discovery on that basis.

If you've worked with an expert in a case where you have negotiated an agreement to protect the expert's drafts and think you might want to use that expert again in another case, you should ensure that he or she does not retain drafts (since any preservation requirement is presumably negated by the agreement that the drafts are not discoverable).

Caveat: In jurisdictions (for example, New Jersey) where draft reports are protected from discovery under the rules, there are exceptions that permit their discovery in extraordinary circumstances. In those jurisdictions, you may have an ongoing obligation not to direct your expert to destroy drafts. Likewise, be careful not to direct an expert to destroy draft reports from an earlier case after a request for those drafts has been made.

Some discovery agreements I have seen provide that the agreement does not preclude discovery regarding the "preparation of the final report." The rationale behind this provision is that the parties want to keep each other honest.

The provision allows each lawyer to ask the opposing expert questions to ensure that the opposing attorney did not draft the report and then simply ask the expert to sign it. There is a fine line between asking questions about how the report was prepared versus asking about the editing and finalization of a final report.

If you are facing an aggressive adversary, this provision has the potential to negate the parties' intentions to limit discovery of communications and draft reports. In any event, if your adversary insists on the provision, you should keep your antennae up during the questioning of your expert at his or her deposition and vigorously defend the expert from questions about the substance of conversations he or she had with you or your cocounsel about the final report.

Clarity. Finally, you should ensure that the language in your agreement is clear as to what/s and what/s not protected. One way to do this is to clearly delineate the items that are left untouched under the rules.

In In re Parmalat, Judge Lewis Kaplan, based on the "entirety" of the stipulation at issue, concluded that the parties did not intend to limit discovery only to "facts and data considered by the testifying expert and communications relating thereto or, perhaps, to the expert's opinion." (10) Therefore, the court held that the agreement did not protect from disclosure the retention agreement between the plaintiff and PricewaterhouseCoopers. The lesson from this case is that you should make certain that your agreement with opposing counsel specifies what is and is not protected.

The cost and burden of conducting full-scale expert discovery can be overwhelming. While the ABA-proposed expert discovery amendments may provide some relief, counsel are currently left to negotiate stand-downs in their individual cases.

As early as the initial Rule 26 conference (or its equivalent in state court), you should consider negotiating with your adversary to forgo discovery of communications and draft reports. The earlier you enter an agreement with your adversary, the more flexibility you will have in both retaining experts and communicating with them about their role in the case without artificial constructs.

When reducing your agreement to writing, make sure the terms are clearly stated so that there are no disputes later as to its meaning. Once you are securely protected by the agreement, enjoy using your expert cost-effectively and make sure you protect the communications when producing discovery and in depositions.

Notes

(1.) ABA Recommendation (adopted by the House of Delegates Aug. 7-8, 2006), www.abanet. org/crimjust/policy/am06120a.pdf.

(2.) See www.uscourts.gov/rules/index2.html.

(3.) See e.g. Emerson Enters., LLC v. Kenneth Crosby-New York, Inc., 2008 WL 141638 at *2 (W.D.N.Y. Jan. 14, 2008) (recognizing that in the Second Circuit "the majority of cases require the disclosure of all materials provided to the expert, including those which fall under the category of 'core attorney work product'").

(4.) 509 U.S. 579 (1993).

(5.) See e.g. Emerson Enters., LLC, 2008 WL 141638 at *2.

(6.) ABA Report 3 (2006), www.abanet.org/ crimjust/policy/am06120a.pdf.

(7.) See Gregory P. Joseph, Engaging Experts, Natl. L.J. 12 (Apr. 18, 2005).

(8.) Draft expert reports are discoverable (see B.C.F. Oil Refining, Inc. v. Consol. Edison Co. of N.Y., 171 F.R.D. 57 (S.D.N.Y. 1997)), so parties are obligated when litigation is pending to preserve potentially relevant and discoverable documents (see Bayoil, S.A. v. Polembros Ship. Ltd., 196 F.R.D. 479 (S.D. Tex. 2000)). This obligation extends to draft reports. (See W.R. Grace & Co.-Conn. v. Zotos Intl. Inc., 2000 WL1843258 at **10-11 (W.D.N.Y. Nov. 2, 2000).)

(9.) 2007 WL 1815461 at *1 (S.D.N.Y. June 25, 2007).

(10.) Id. at *2.

ERIC W. CHAFFIN practices law in New York City at Bernstein Liebhard & Lifshitz. He can be reached by e-mail at chaffin@bernlieb.com.
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