Reforming the New Discovery Rules

Robert Cooter, UCB

Abstract

Reform of discovery rules should both internalize and equalize discovery costs. Internalizing discovery costs eliminates abuse and promotes efficiency. Equalizing discovery costs eliminates distortions in bargaining power between the parties and promotes fairness. We propose a cost-shifting rule that can achieve both objectives while reducing the administrative burden on judges. Our two-part rule derives from an economic definition of discovery abuse and an analysis of incentive effects of discovery rules. We show that our theory can be used to interpret as well as critique existing discovery rules and the recent reforms of those rules.