The Discovery Process in Commercial Litigation

Most commercial litigation these days does not proceed to trial. The costs. The risks. The desire for peace and finality. Each of these has resulted in the vast majority of business litigation resolving short of trial – somewhere north of 95% of such cases. While it is vitally important to prepare each case as though it will proceed to finality at trial, commercial litigation is frequently won and lost in discovery.

DISCOVERY

First, what is discovery? Discovery is the process in which all sides of litigation can see what facts, documents, and information their opponents have related to the claims and defenses. The trial is no longer who can better ambush the other because discovery, generally speaking, is to be the process in which the parties lay their proverbial cards on the table prior to trial.

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Discovery is governed by the Rules of Civil Procedure and sets forth the guidelines for proper discovery and specific limitations on how and in what amount such discovery is conducted. The tools of discovery are set forth below but may be used in a different order than presented here, depending upon the specific case, facts, and parties.

DEPOSITIONS

In a civil lawsuit, any party to the lawsuit can require a prospective witness to submit to an out-of-court examination, under oath, before a court reporter. This examination is called a deposition. A deposition is virtually the same as giving testimony in court, except that no judge or jury is present.

At a deposition, lawyers question the witness concerning any matters which might lead to evidence that can be admitted at trial. All of the lawyers involved in the case have the opportunity to be present and question the witness.

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There are four principal uses for testimony given at a deposition:

Evidence at the Trial. An opposing party may use a deposition as evidence at the trial. Under certain conditions, a lawyer may read a part of the deposition to the jury, and the jury may consider the deposition in the same manner as if the witness gave live testimony.

Discovery. A deposition may be used to discover leads for evidence or to develop or discover facts that will help the case.

Impeachment of a Witness. Deposition testimony may be used to impeach a witness if the testimony at the trial varies from the deposition testimony. A lawyer is permitted to bring this variation to the jury’s attention to reduce the witness’ credibility.

Review of Witness. A deposition allows the participating lawyers the opportunity to evaluate a witness for candor, honesty, and responsiveness and to form opinions as to how the witness might appear to a jury.

The Deposition Transcript. A witness has the right to read and sign the deposition after it is completed to ensure that the court reporter transcribed the testimony accurately or that the facts are correct.

INTERROGATORIES

Another tool for obtaining information is called interrogatories. An interrogatory is a question that must be answered under oath by the other side. Interrogatories are limited by the Rules of Civil Procedure governing the matter – 50, for example, in Minnesota – and must be relevant to a claim or defense at issue. They should not be a fishing expedition. Interrogatories must be responded to within 30-days of service.

The party served with the interrogatory is permitted to assert certain objections if the interrogatory seeks privileged information or is not relevant to a claim or defense at issue. If the interrogatory is appropriate, it should be answered by the party.

Interrogatories are often helpful in finding facts or areas that can be deeper examined during a deposition.

DOCUMENT REQUESTS

Document requests are often served concurrently with interrogatories. Document requests, similar to interrogatories, must be related to the claims and defenses at issue in the litigation.

Unlike interrogatories, there is no black letter rule (in most states, including Minnesota) governing the number of document requests a party can serve on their opponent. This discovery tool is a request that asks the opponent to provide certain documents by category. For instance, ‘turn over all of the documents that support your claim for breach of fiduciary duty may be a request served in a shareholder dispute. Document requests must be responded to within 30-days of service.

Because so many civil cases today with email and text being so prevalent are won or lost based on the documents produced and/or available to the parties, document requests are often where a party finds their ‘smoking gun. The document establishes a claim. Or the document that negates liability. These are the nuggets of gold the litigator is mining for in serving document requests.

REQUESTS FOR ADMISSIONS

Last but not least, relating to discovery are requests for admissions. Here too, there is not a hard and fast rule on the number of requests for admissions that can be served in litigation.

Requests for admissions ask your party opponent to admit a certain fact so that the specific fact is deemed admitted for purposes of the litigation. “Admit that on December 8, 2021, you disbursed $100,000.00 from the Company’s checking account to yourself” may be a form of a request for admission in a case in which a shareholder was accused of swindling money from the Company.

The purpose of requests for admissions is to help narrow the issues for trial (or summary judgment). Suppose a party does not respond to a request for admission within 30-days the request is deemed admitted. If a party denies a request for admission, but the opponent later establishes the truth of such request, the party that served the request for admission may apply to the court for the fees in establishing said request. Thus, if you are going to deny a request for admission, it is important to have a basis for such denial.

Discovery is the forum for the vast majority of battles in commercial litigation. Crafting discovery requests to your opponent is vital to establishing your claim or negating their claim. Appropriately responding to requests in return ensures that the facts, documents, and testimony are on the table and available to your attorney to best advocate on your behalf.

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