Authored by Gary C. Ma, Erik R. Puknys, and E. Robert Yoches
One of the most dreaded aspects of litigation in the United States is discovery. Discovery is the process through which parties in litigation can request and obtain from opposing parties and third parties information, documents, and testimony relevant to the issues in a lawsuit. In the United States, parties can request documents, ask questions of the other side (called "interrogatories"), request the other side admit facts, or conduct depositions, procedures in which the opposing attorney asks questions of witnesses, who are under oath.
The United States allows parties access to more of the other parties' information than any other country in the world. For example, a plaintiff in U.S. patent litigation can inquire into details about the design, construction, operation, sales, and marketing of accused products, including documents and records about research and development, testing, marketing, and profit margins. A defendant can ask for similar documents about the development of the patent and competitive products. Discoverable materials include paper documents as well as electronic records, e-mails, and other records. Indeed, discovery of electronic materials, called "e-discovery," is now a major focus of discovery in U.S. litigation. It is not surprising, therefore, that discovery in U.S. litigation is burdensome, time consuming, and expensive.
Discovery can be especially difficult for foreign parties unfamiliar with U.S. law. Their documents and witnesses are thousands of miles from the U.S. courthouse, and there is usually a language barrier. Non-U.S. parties, however, must follow the same rules as U.S. parties, and failure to do so can result in severe penalties, including monetary fines, loss of rights, and sometimes, adverse rulings. Therefore, a foreign party should appreciate the rules of discovery and work closely with its U.S. litigation counsel to avoid making serious mistakes and to be prepared. Indeed, proper preparation will not only help reduce the burdens and cost of discovery, but it may provide tactical advantages later in the litigation.
One critical step a company must take is to have a proper document retention policy. In the United States, once a litigation starts, each party must make sure it retains all documents and records relevant to the litigation. Failure to do so will usually result in severe penalties.
The most important lesson a party must learn, however, is to gain control of the relevant information. There are four main reasons for this. First, your litigation counsel needs to know all the facts to prepare a case that emphasizes the strengths of your case and lessens the impact of facts against your position. If your counsel later learns important facts about your case, it may be too late to change strategies. Even if it is not too late, a changed strategy may be embarrassing if you have to contradict earlier positions.
Second, having control of documents and facts can reduce discovery costs. Producing documents in a timely and complete fashion will help avoid costly motions to compel discovery. Having access to witnesses and information will allow your counsel to respond completely to the other sides' requests and be aggressive in demanding information from the other side. This puts the other side on the defensive and helps your counsel to control the litigation.
Third, your counsel can best prepare witnesses for depositions if it has full control of information. Most depositions are now videotaped, so how a witness answers a question is sometimes as important as the substance of what he or she says. Proper preparation of a witness involves advising the witnesses of the questions they will likely face. Your counsel can best know this by knowing early on the important documents and other relevant records. If the counsel learns this information just before the deposition—or does not learn about the information because the opposing counsel has discovered the information from other sources—the deposition can go very badly.
Fourth, with control of the information, your counsel can make sure it provides all relevant information to permit filing "summary judgment motions." These motions can provide an early determination of all or some of the issues in a lawsuit. Opponents of such motions often complain they need additional discovery, which delays resolution of the motion.
A company naturally wants to protect its information. Moreover, many companies are reluctant to share everything with their counsel, either because of a general mistrust of attorneys or because the company is not familiar with its attorneys. When litigation occurs, however, it is important to find counsel that the company trusts so that together, the company and its counsel can gain control of the relevant information and prepare for discovery. This provides the best chance for success.
Copyright © Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. This article is for informational purposes and is not intended to constitute legal advice. This memorandum may be considered advertising under applicable state laws.