United States International Trade Commission Amends Rules Concerning Discovery in Section 337 Investigations

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The United States International Trade Commission (ITC) on May 15, 2013, issued a notice amending Rule 210.27 of its Rules of Practice and Procedure in Section 337 investigations. The amendments go a long way in attempting to reduce expensive, inefficient, unjustified, or unnecessary discovery practices while preserving the opportunity for fair and efficient discovery. The final rule goes into effect 30 days from publication in the Federal Register, which is expected to occur very shortly.

The amendments follow a notice of proposed rulemaking from October 12, 2012, to make certain changes to Rule 210.27 on "General provisions governing discovery." The ITC refers to its efforts over the past year to consider proposals to improve procedures relating to discovery in Section 337 investigations, and specifically to improve e-discovery procedures. The ITC has considered proposals from the ITC Trial Lawyers Association and the ITC Committee of the American Bar Association IP Section, the e-discovery model order prepared by the Federal Circuit Advisory Council, e-discovery provisions promulgated by a number of U.S. district courts, the ground rules of the ITC's administrative law judges (ALJs), and analogous portions of the Federal Rules of Civil Procedure (FRCP). The ITC notes that some of the amendments could result in limitations on discovery, while others would implement standards provided in the Federal Rules of Civil Procedure or Federal Rules of Evidence. The ITC posits that Rule 210.27 currently contains no limitation on e-discovery and little guidance on when it is appropriate for an ALJ to limit discovery. The commission received comments on the proposed rules from multiple bar associations, law firms, companies, and one individual.

The amendments address three primary areas:

  1. electronically stored information from sources identified as not reasonably accessible;
  2. situations under which an ALJ must limit discovery by order; and
  3. claims of privilege or work product information.

The first major amendment adds new subsection (c) and deals with electronically stored information from sources identified as not reasonably accessible. Such discovery need not be provided upon a showing that information is not reasonably accessible because of undue burden or cost in response to a motion to compel or motion for protective order. In this regard, the proposed new subsection is similar to FRCP 26(b)(2)(B). The ITC contemplates that the case law developed under FRCP 26(b)(2)(B) would provide guidance for the application of proposed subsection (c). The ITC declined to adopt suggestions to limit the number of document custodians per party, to explicitly define what sources are "not reasonably accessible," and to prohibit discovery from personal computers and the like. In its commentary, the ITC clarified that the rule requires the person responding to discovery to identify what sources are not reasonably accessible and, per the Committee Notes on FRCP 26(b)(2), to provide enough detail to enable the requesting party to evaluate the burdens and costs of providing the discovery and the likelihood of finding responsive information. The ITC further clarified that the ALJ may, in appropriate circumstances, exercise his discretion to condition discovery upon payment by the requesting party of part or all of the reasonable costs of obtaining information from sources that are not reasonably accessible.

The second major amendment adds new subsection (d), which requires the ALJ to limit discovery in certain circumstances. Similar to FRCP 26(b)(2)(C), the proposed subsection requires limitations on discovery that is duplicative or can be obtained from a less burdensome source. The party seeking discovery also must have had ample opportunity to obtain the information, or the burden of the proposed discovery outweighs its likely benefit. Unlike FRCP 26(b)(2)(C), however, subsection (d) requires the ALJ to limit discovery when the person from whom discovery is sought has waived the legal position that justified the discovery or has stipulated to the facts to which the requested discovery pertains, and does not require an analysis of the importance of the issues at stake in the action. The rule, as amended from the original proposal, clarifies that the restriction on discovery would be limited only as to the "particular facts" that are the subject of the stipulation and that pertain to a disputed issue to which the discovery is directed. Discovery as to other facts pertaining to the disputed issue or relevant to a different issue would not be restricted.

Finally, proposed new subsection (e) adds new provisions concerning privileged information and attorney work product. The proposed rule provides a uniform set of procedures regarding privilege logs and outlines the consequences of a disclosure of privileged information. The rule goes beyond FRCP 26(b)(5) in the provision of a strict timeline that the ITC declined to adjust following the comment period. The ITC noted that it believes discovery will be most efficient when relevant privilege and work product issues are identified as soon as possible and that claims of privilege or work product be made with an appropriate amount of specificity in light of the circumstances at the time the claim is made. The ITC emphasizes the subsection on inadvertent disclosure is "not a categorical 'claw-back' rule and would not supplant any applicable waiver doctrine." Rather, the ALJs are to apply federal and common law in determining the consequences of any alleged inadvertent disclosure, including whether the holder of the privilege or protection took reasonable steps to prevent the disclosure of the information and other considerations found in Federal Rule of Evidence 502. In response to comments, the ITC decided to limit new paragraph (e)(2) regarding inadvertently produced privileged information to apply only to documents produced in response to a discovery request, as opposed to information generally. The commission further incorporated the American Intellectual Property Law Association's suggestion of allowing the inadvertently produced document to be submitted in camera for consideration by the ALJ in connection with a motion to compel. The commission further clarified that the ALJ may decline to entertain motions to compel where parties have agreed to relieve themselves of the duty of maintaining a privilege log. The new rule adds that parties may enter into a written agreement to set different periods of time for compliance with respect to the rules on privilege without approval of the ALJ unless the ALJ has ordered a different period of compliance. The commission further clarified that ALJs are in the best position to determine how cost shifting should be implemented, if at all, based on the specific facts of a particular discovery dispute.

Only time will tell the effects of these amendments in practice. To some extent, similar balancing and considerations already occur in discovery disputes before the ALJs, either by virtue of stipulations between the parties or ground rules or practices of the individual ALJs. The provision of uniform provisions and, in some instances, the potential application of case law developed under the Federal Rules of Civil Procedure, however, likely will lead to measureable limits on discovery during Section 337 proceedings.

For more information on practice before the ITC or related matters, please contact Larry Shatzer, Stefani Shanberg, James Yoon, or another member of Wilson Sonsini Goodrich & Rosati's intellectual property litigation and counseling practice.

Topics:  Attorney-Client Privilege, Discovery, Investigations, ITC, Section 337, Work Product Privilege

Published In: Antitrust & Trade Regulation Updates, Civil Procedure Updates, Electronic Discovery Updates, Intellectual Property Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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