How does the coronavirus pandemic impact the pace of commercial litigation? This article identifies factors for companies to consider in determining which commercial litigation activities can and should move forward and which ones may be amenable to extensions or stays.
The coronavirus pandemic has disrupted many routine commercial litigation activities, especially depositions, hearings and trials. Many litigants may be wondering whether to seek a blanket stay of discovery, motion practice or other activities. But courts are often reluctant to suspend cases entirely, and some have already indicated that they will not automatically reset every deadline that may apply. With so much uncertainty about how long the coronavirus-related disruptions will last, here are some factors to consider in determining which litigation activities can and should move forward and which ones may be amenable to extensions or stays.
1. Court Orders
The first stop for any commercial litigant is to determine whether their court system, individual court or individual judge has issued a general administrative order modifying deadlines, suspending court activities or otherwise restricting the types of litigation activities that can be conducted. Many courts, at all levels of government, have issued such general administrative orders, but there is widespread variation in the types of orders entered. New York’s state courts, for example, have suspended all filings in non-essential matters, and they have defined “essential“ narrowly. Other courts have allowed filings to continue but have restricted in-person courtroom access and/or reset existing litigation deadlines. The wide variation in orders underscores the importance of monitoring developments for the specific court and judge at issue.
Commercial litigants should also think carefully about which specific activities they need to perform for their case, and consider the challenges and implications of conducting those activities remotely. Even activities that can be performed from home may take much longer than normal because of technological challenges or other distractions. At the same time, litigants should not assume that all courts will automatically extend all deadlines. Litigants seeking additional time should be prepared to explain how specific coronavirus-related restrictions (such as the inability to travel, the inability to access an office or the need to provide child care because schools have closed) prevent compliance with an existing deadline.
Document Collections and Productions. Where stay-at-home orders are in place, it may be impossible for the foreseeable future to collect hard copy documents. But in many cases, it is still possible to collect, review and produce electronically stored information (ESI). That said, collecting and producing ESI often requires the involvement of in-house information technology personnel, many of whom also are working from home and may be fully occupied (and working extra hours) providing IT support services to their companies and colleagues. For this reason, as well as the logistical and technological challenges of reviewing materials remotely, even ESI-related discovery is likely to require more time than usual.
Depositions. Depositions are clearly easier to conduct in person. But they can be, and increasingly are, conducted remotely. Many court reporting services provide support for remote video depositions, including platforms that allow the sharing of exhibits by computer. Depositions can also be conducted by phone, without video. One challenge in conducting remote depositions, whether by phone or video, is that it is harder for the questioning lawyer to control the witness. It can also be harder for the defending lawyer to interject timely objections. Another challenge is how to handle exhibits. Often it will be advantageous, especially in cases with voluminous paper exhibits, to provide a full set of anticipated exhibits to the witness in advance, although doing so reduces the element of surprise. Video depositions may also present an additional and fundamental challenge—it is usually necessary for the witness to have a computer with video capabilities compatible with the court reporter’s software and technical equipment. That may not be realistic for every witness. In taking depositions, lawyers should also assume that the witness will not be available to testify in person at trial. That assumption will influence the way questions are asked, because the transcript and/or video may become less of an impeachment tool and more the principal mode of trial testimony.
Motion Practice. Many litigation filings can be drafted at home and filed electronically from home, but what about declarations and affidavits? Some states and courts require wet ink signatures for certain types of sworn statements. However, several states have suspended or altered those requirements in light of the now ubiquitous stay-at-home orders. New York, for example, has authorized remote notarization of documents, provided certain conditions are met. As with general administrative court orders, commercial litigants should monitor state-specific and court-specific developments in this area.
Hearings and Trials. Like depositions, evidentiary hearings and trials are best conducted in person but can, at least in some circumstances, be conducted by phone or video. Whether a particular case can be tried by video will depend on many factors, including, among others, whether a jury is involved, the number of witnesses and exhibits involved and courtroom technology. Ongoing stay-at-home orders may also change the type of evidence that is admissible at trial. Deposition videos and transcripts are the most obvious candidate. Normally, deposition testimony from a party’s own employee is not admissible in federal court unless the employee is unavailable to testify live at trial. Ongoing stay-at-home orders increase the likelihood of employees being deemed “unavailable“ under Federal Rule of Civil Procedure 32(a)(4). At the same time, however, Federal Rule 43(a) expressly contemplates that federal courts may allow live testimony at trial by “contemporaneous transmission from a different location.“ Thus, the mere fact that a witness cannot travel may not be enough to render the witness “unavailable“ within the meaning of the federal rules. Parties seeking to use deposition testimony at trial rather than presenting live testimony may need to point to something more than stay-at-home orders, such as the inability to connect a particular witness by video.
3. Obtaining and Opposing Stays
Given the logistical difficulties of litigating from home, litigants may be tempted to seek a blanket or open-ended stay of discovery, or of other proceedings. Some activities like jury trials may have to be stayed indefinitely. But litigants should not assume that all commercial litigation activities must, or will, be stayed. While several federal courts have cited coronavirus-related disruptions as a reason to stay discovery or extend deadlines, at least one federal court held that the coronavirus pandemic standing alone is not a sufficient reason to stay all discovery indefinitely. See Nekouee v. Privitera Realty Holdings, L.L.C., 2020 WL 1433481 (D. Kan. March 24, 2020). If any trend can be discerned from recent federal court decisions addressing this topic, it is that courts expect litigants to work together to address the logistical challenges created by the pandemic. Litigation may be inherently hostile, but this pandemic affects virtually all of society and can serve as a reminder that even hostile litigants can be well-served by cooperating on scheduling and logistical issues.
4. Alternative Dispute Resolution
Finally, litigants concerned about coronavirus-related delays in federal and state courts may wish to consider arbitration or mediation as an alternative. Generally speaking, the same coronavirus-related scheduling considerations that apply to litigation also apply to arbitration, except that arbitration is often less formal than litigation and may therefore provide greater flexibility in the way hearings are conducted and evidence is presented.
One reason not to pursue arbitration is that, depending on the forum, it can be harder to compel discovery, especially discovery from non-parties. Arbitration may also not be realistic for matters that are already being litigated. Mediation, in contrast, is an option available in many current commercial litigation matters and is particularly amenable to video proceedings because it is more about discussing settlement than presenting evidence. Indeed, mediation often does not involve the formal presentation of evidence at all. Litigants seeking rapid resolution of their disputes during this unsteady and uncertain time would be well-served to consider mediation as a parallel track to litigation, with the caveat that mediation is often most successful when both sides are invested in achieving a prompt resolution.