Using Discovery Effectively in Adversary Proceedings The Commercial Law and Bankruptcy Section of The Bar Association of San Francisco May 9, 2017 Speakers: Andrew S. Azarmi, Dentons US LLP Jeffrey L. Fillerup, Rincon Law LLP
INTRODUCTIONS • Andrew Azarmi, Dentons US LLP • Jeffrey Fillerup, Rincon Law LLP • We will end with Q&A • Contact information on last page 2
Objectives • Compare and contrast formal and informal discovery tools available. • Best practices for using discovery tools in adversary proceedings.
• Tips on how to efficiently use discovery to obtain evidence which makes a meaningful contribution to dispositive motions, evidentiary hearings and trial.
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Discovery Tools Outside Adversary Proceedings • Debtor's schedules • Meeting of Creditors - 11 USC §§ 341(a), 343; FRBP 2003(a), (b)(1) • Rule 2004 Examination - FRBP 2004 – Limitations (e.g., generally limited to debtor's conduct, property, and financial affairs under FRBP 2004(b)) • Internet (Google, LinkedIn, PACER, Professional/Licensure registries, DRE, Secretary of State, FINRA, etc.) 4
Adversary Proceeding ("AP") • Virtually all discovery mechanisms available in federal district court litigation are available in bankruptcy adversary proceedings. See FRBP 7026-7037 (incorporating FRCP 26-37 verbatim).
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Discovery Tools in APs • • • • •
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Mandatory initial and supplemental disclosures (FRBP 7026); Interrogatories (FRBP 7033); Requests for Production of Documents (FRBP 7034); Depositions (FRBP 7027, 7028, 7030, 7031, 7032); Requests for admission (FRBP 7036, 9016) (see In re Pacific Thomas Corp. (BC ND CA 2015) 543 B.R. 7, 10—matter admitted under FRCP 36 is conclusively established unless court permits admission to be withdrawn); Physical or mental examination of a party (FRBP 7035); Expert discovery (FRBP 7026 (incorporating FRCP 26(b)(4))); Discovery re existence and limits of insurance coverage (FRBP 7026 (incorporating FRCP 26(a)(1)(D))); Protective orders (FRBP 7026 (incorporating FRCP 26(c))). 6
Documents • From parties – Initial Disclosures (FRBP 7026) – Requests for Production (FRBP 7034); – Deposition Notice w/ Document Requests (FRBP 7027, 7028, 7030, 7031, 7032). – ESI (emails, texts, IMs, social media)
• From non-parties: – Subpoena (business records only OR w/ deposition) (FRBP 9016/FRCP45) 7
Witnesses • • • • • •
Initial disclosures Interrogatories Interviews Witness statements Deposition notice (parties) Deposition subpoena (non-parties)
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Damages • • • •
Initial disclosures Interrogatories Requests for admissions Expert and percipient depositions
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Requests for Admissions • In re Pacific Thomas Corp., 543 B.R. 7, 10 (Bankr. N.D. Cal. 2015) (matter admitted under FRCP 36 is conclusively established unless court permits admission to be withdrawn). • Use to: – – – – –
Establish genuineness of documents Narrow down issues Establish/refute elements of claim/defense Lock parties in to positions Legal opinion/conclusion (application of fact to law)
• Tip: be narrow and specific; building-block approach 10
Depositions • • • • • • • •
Authenticate docs to use as evidence Obtain admissions for MSJ/Trial Impeachment material Close doors Fact-find and identify witnesses/docs Test case Convey strength of case Evaluate witness for trial/test witness 11
Depositions • One day per witness (7 hours max) • 10-depo limit • Timing of notice - "reasonable notice" – Without documents: 10 days probably enough – With documents: 30 days required (FRCP 30(b)(2); FRCP 34(b)(2)(A))
• Corporate deposition (30(b)(6) - PMQ) • Videotape deposition? 12
Tip #1 Fashion Discovery to the Case: – What do you want to accomplish? MSJ? Trial? – Which discovery tools will best achieve your objective?
– Cost/benefit analysis? 13
Tip #2 Focus on Selected Discovery Tools – Tailor the discovery – Follow through to ensure compliance – Plan meet and confer to focus in on the things you really want/need 14
Tip #3 Take Advantage of Under-Utilized Procedures – Requests for Admission – Inspection of Facilities
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Tip #4 Be Careful With ESI – Be careful what you wish for: volume can be staggering if you request too broadly – Can create extremely costly collection, review and compliance burdens – Try to tailor ESI requests - avoid costly battles and focus in on what you actually want 16
Tip #5 Think About Documents – Designate "Top 10 Documents" list – Constantly update Top 10 – Create wish list of documents to guide discovery 17
Tip #6 Think About Admissibility of Evidence Early – Source? – Authentication? – Hearsay or documentation issues with information received? 18
Tip #7 Depositions – Ask key leading questions
– Maximize usefulness of depositions with testimony that can be used at trial – Funnel approach to questioning
– Test witness by asking tough questions 19
Tip #8 Consider Discovery Sanctions – Be prepared to prosecute and defend – Initial Disclosures and sanctions – ESI-related sanctions – Failure to respond/produce sanctions – Failure to preserve evidence sanctions
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Tip #9 Use Discovery to Facilitate Settlement – Prepare for facts/evidence to be highlighted in settlement/mediation brief – Focus on key documents and other side's bad facts – Ask leading questions in depositions – Establish and gather facts re damages 21
Tip #10 Preserving Evidence From Third-Party (TP) – Establish admissibility of TP documents – Talk to TP witnesses about preserving testimony via deposition or video deposition – Secure favorable TP testimony w/o deposition – Dealing with TP resisting involvement
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Q&A • Questions?
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THANK YOU •Dentons US LLP Andrew S. Azarmi
•Rincon Law LLP Jeffrey L. Fillerup
• Andrew S. Azarmi • Dentons US LLP • Spear Tower, One Market Plaza 24th Floor • San Francisco, CA 94105 • Tel: 415.356.4631 • Email:
[email protected]
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• LinkedIn: http://www.linkedin.com/in/andrewazarmi
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Jeffrey L. Fillerup Rincon Law LLP 90 New Montgomery St Suite 1400 San Francisco, CA 94105 Tel: (415) 996-8199 Email:
[email protected] LinkedIn: http://www.linkedin.com/in/jeffreyfillerup
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