The Discovery Process In Business Litigation

The discovery process is a critical aspect of any business litigation as it is the method by which you obtain information from the opposing party (as well as from non-parties) regarding facts pertaining to the dispute at issue.

If you are the plaintiff, you may want to obtain facts which form the basis of your claims. With respect to the certain claims, such as fraud, you may not have all the facts pertaining to the fraud allegedly committed by the defendant and discovery provides you with the opportunity to obtain these facts. For the plaintiff, it also provides the opportunity to obtain any purported facts relating to defenses that may have been raised by the defendant. By example, if the defendant asserts that it paid the amounts due under contract, discovery provides the opportunity to make the defendant provide proof that such payments were made. If no such proof is provided, this a strong indication that such defense is lacking in merit. Similarly, a defendant may not have knowledge of the facts pertaining to Plaintiff’s claims and/or to substantiate its defenses. Discovery provides the litigant with the opportunity to obtain such facts.

Even if you think you have all the facts pertaining to a claim and/or defenses to a claim, it is often a good idea to perform discovery so that you find out what the other side knows- or “see their hand” sort to speak- before going to trial. That way, you avoid or reduce the possibility of surprise at trial. In short, the conducting of discovery can be key to your success or failure in the case. Discovery also provides the opportunity for settlement as the parties are able to obtain facts which they may not have been aware of at the start of the litigation. These facts may help them better evaluate the strengths and weaknesses of their respective position.

In consultation with you attorney, you can decide whether and to what extent you should proceed with discovery.

In New York Supreme Court actions (other than actions in the Commercial Division) discovery is generally available after the defendant interposes its answer. If the defendant serves a pre-answer motion to dismiss, however, then discovery is generally stayed until that motion is decided. In the Commercial Division of the New York Supreme Court, however, discovery is generally not stayed by the service of a pre-answer motion to dismiss unless there is an express order from a judge staying such discovery. In federal court, while there are some exceptions, the service of a pre-answer motion to dismiss generally does not stay discovery unless a judge orders otherwise.

There are a multitude of discovery devices available in business litigation. With respect to obtaining discovery from a party in an action, three of the most common ones are document demands, interrogatories, and depositions. A document demand is where you request documents from a defendant in a case pertaining to claims or defenses asserted in the action. Interrogatories are written questions posed to a party which are responded to in writing. A deposition is where a party is asked question orally and answers questions orally. The questions and answers are transcribed by a court reporter who prepares a transcript of the deposition testimony.

In a commercial litigation, it may be necessary to also conduct discovery of non-parties. Generally, you are permitted to demand documents from a non-party (the device is known as a subpoena duces tecum) and you can also demand that the non-party appear for a deposition (known as a subpoena ad testificandum).

In federal court actions, certain mandatory disclosure is required regardless of whether or not any discovery demands are actually served.

In some cases, you may want to utilize all available discovery devices while in others utilizing only one device (such as a document demand) may be sufficient. Your attorney can advise you regarding what discovery devices are most appropriate in your case.

Yes. Objections can be asserted with respect to the information being requested. Your attorney can advise you when and if objections are appropriate. With respect to a document demand, for example, a common objection is that the demand is “unduly burdensome” to comply with or “overbroad”. Another common objection is that the request seeks information that is protected by some form of privilege (like attorney-client privilege).

Your attorney can help advise you as to whether, and to what extent, objections are appropriate.

If a party refuses to comply with discovery, they may be subject to sanctions. There are a wide variety of sanctions which can be imposed by a court. One example of the type of sanction is the striking of the non-compliant party’s pleading (in the case of the plaintiff, the complaint and in the case of the defendant, the answer), which is essentially tantamount to losing the case. Another example of a sanction which can be imposed is to preclude the non-compliant party from presenting evidence at trial relating the discovery which such party is refusing to provide.

When retained to represent you in a litigation, we advise as to how to best utilize the discovery process and defend against improper discovery demands. Please contact us today to address your matter.