In April of this year, the Colorado Supreme Court adopted a revised version of Colorado’s simplified civil procedure rule, C.R.C.P. 16.1. The revised version applies to cases filed on or after September 1, 2018 and includes changes that will affect how common claims are litigated. From a defense perspective, these changes may have a significant impact on the investigation, evaluation, and preparation of civil cases for potential settlement and trial.
First, Rule 16.1 will continue to apply presumptively to most common civil actions unless the filing party’s attorney certifies that the value of the party’s claims is reasonably believed to exceed $100,000. However, under the revised version of Rule 16.1, this certification will be subject to C.R.C.P. 11. Under the current rule, a plaintiff who wishes to be excluded from simplified civil procedure needs only complete a perfunctory opt-out process, which is not currently subject to Rule 11. Second, Rule 16.1 cases will no longer be subject to a $100,000 damages cap. Third, a defending party that does not wish to proceed under simplified civil procedure must now file a motion establishing good cause to exclude the case from simplified procedure. Last, the revised version of Rule 16.1 includes many changes to the disclosure and discovery process.
These changes, and the expected effect on litigated claims, are discussed in more detail below.
Summary of Changes
1. Presumptive Application and Rule 11 Certification
Rule 16.1 will continue to apply presumptively to the most common civil actions unless the filing party’s attorney certifies, through a civil case cover sheet, that the value of the party’s claims is reasonably believed to exceed $100,000. Under the revised version of Rule 16.1, this certification will be subject to Rule 11, meaning that it must be well grounded in fact, warranted by existing law (or a good faith argument for the modification of existing law), and not made for any improper purpose. The significance of Rule 11 is the threat of sanctions, including an award of attorney fees and costs against the certifying attorney for violating the rule. Under the current version of Rule 16.1, the civil case cover sheet, which includes a similar attestation that the case is valued at more than $100,000, is not subject to Rule 11.
2. Removal of $100,000 Damages Cap
Rule 16.1 cases will no longer be subject to a $100,000 damages cap, as they are now. Under the revised version of Rule 16.1, a party will be able to recover more than $100,000 in damages even if the case proceeds under simplified civil procedure.
3. Changes to the Opt-Out Process
Under the current version of Rule 16.1, a defendant that does not wish to proceed under simplified civil procedure can simply file a notice electing exclusion from the rule no later than 35 days after the case becomes at issue. Exclusion from Rule 16.1 is still possible under the revised version.
However, a defendant seeking to be excluded will need to file a motion establishing good cause to exclude the case from simplified civil procedure. This standard may be satisfied by counsel’s certification (again, subject to Rule 11) that the reasonable value of the moving party’s claims against one of the other parties is reasonably believed to exceed $100,000.[1] Also, the trial court may, in its discretion, determine whether other good cause for exclusion exists by considering the following factors: (1) the complexity of the case; (2) the importance of the issues at stake; (3) the parties’ relative access to relevant information; (4) the parties’ resources; (5) the importance of discovery in resolving the issues; and, (6) whether the burden or expense of proposed discovery outweighs its likely benefit.
A motion for exclusion from Rule 16.1 must be filed no later than 42 days after the case becomes at issue and be signed by both the party and its counsel.
4. Changes to the Disclosure and Discovery Process
The revised version of Rule 16.1 includes a number of changes to the disclosure and discovery process. Limited deposition discovery (six hours total) will be permitted and parties will be able to serve up to five requests for production. While discovery options are expanded under the revised version of Rule 16.1, expert options are restricted. Under the current version of Rule 16.1, there is no limit on retained experts. For Rule 16.1 cases filed on or after September 1, 2018, the parties will be limited to one retained expert per side unless the trial court authorizes more on a showing of good cause.
A table summarizing the differing approaches to disclosure and discovery-related issues between the current and revised versions of Rule 16.1 is available here.
Expected Effects on Litigated Claims
Assuming more cases fall under Rule 16.1, i.e., if fewer plaintiffs opt out and trial courts limit defendants from opting out, the changes are likely to affect litigated claims, both positively and negatively.
1. Positive Effects of the Changes
Reduced Expert Expenses
The revised version of Rule 16.1 is likely to reduce litigation costs. For example, each party will be presumptively limited to a single retained expert. Under the current rule, there is no limitation.
Improved Predictability of Litigation Expenses
The predictability of litigation expenses will likely improve, reducing the need for supplemental budgets from counsel and revisions to the reserve amount (for claims defended under a liability insurance policy). Under the revised version of Rule 16.1, deposition and written discovery, while permitted, will be much more limited than what is typically permitted under C.R.C.P. 16. Accordingly, the fees and costs associated with these activities, which vary significantly from case to case, should become more predictable.
Streamlined Removability to Federal Court
The revised version of Rule 16.1 may be helpful to defendants who wish to remove a case to federal court under diversity jurisdiction, which requires a removing party to show that the amount in controversy exceeds $75,000, the jurisdictional limit. Under Rule 16.1, an attorney whose client is opting out of the rule based on the amount of the damages sought, i.e., in excess of $100,000, must file a civil case cover sheet noting that the plaintiff is seeking a monetary judgment in excess of $100,000. Currently, the civil case cover sheet is not subject to Rule 11.
A majority of Colorado’s federal court judges have rejected civil case cover sheets as evidence of the amount in controversy because the civil cover sheet is not subject to Rule 11. For cases filed on or after September 1, 2018, the civil case cover sheet will be a Rule 11 filing and can presumably be used as evidence of the amount in controversy for diversity jurisdiction cases.
2. Negative Effects of the Changes
Removal of the $100,000 Damages Cap and Limiting Opt-Outs
In the revised version of Rule 16.1, the Colorado Supreme Court removed an important defense-friendly feature, the $100,000 damages cap. Under the current rule, a defendant has the option of weighing the competing interests in deciding whether to opt out from simplified civil procedure. That is, a defendant can decide that foregoing written discovery is a worthwhile trade for the protection of a damages cap, a protection that may be particularly important if the defendant has lower liability insurance limits. That choice will no longer be available for cases filed on or after September 1, 2018.
Reduced Information for Evaluating Settlement Value
Once a claim is in litigation and proceeding under the revised version of Rule 16.1, the opportunities to observe the plaintiff and assess him or her for the purpose of evaluating the settlement value of a claim is limited. Discovery depositions will be subject to a cumulative 6-hour limit and, accordingly, counsel will have to make some choices in how deposition time is allocated. One likely outcome is that the plaintiff’s deposition will be shorter, limiting the time available to assess whether the plaintiff will make a good witness on his or her behalf. It will also limit the time available to challenge a plaintiff with adverse evidence, an approach that often helps to manage settlement expectations.
Impairment of a Defendant’s Ability to Challenge Claims
The revised version of Rule 16.1 reduces the adversarial nature of litigation by limiting a defendant’s ability to test the plaintiff’s claims. This, in turn, may encourage unscrupulous attorneys to engage in hide-the-ball litigation tactics, knowing that the chance of discovery (and any related consequences) is diminished.
The revised version of Rule 16.1 also expands the opportunities for procedural gamesmanship. Consider the following scenarios that may arise when the revised version of Rule 16.1 goes into effect:
- Cases Involving Two or More Plaintiffs: A motor vehicle accident involving two or more claimants can result in a lawsuit where the two claimants, now plaintiffs, seek damages against a single defendant. The defendant’s attorneys will now have to depose two plaintiffs and, potentially, two or more treaters, all within the 6-hour cumulative time limit. Similarly, the defendant will have to use the already limited written discovery against two plaintiffs, while each plaintiff could separately use its full allotment against the defendant. Under the revised version of Rule 16.1, the defendant in this scenario would be presumptively limited to a single retained expert, though the trial court would likely find good cause to expand the number of retained experts to two to separately address each plaintiff’s claimed medical issues.
- Cases Involving Liability and Damages Defenses: Where a defendant has both liability and damages defenses available, the revised version of Rule 16.1 will only allow a single retained expert. Accordingly, a defendant in a motor vehicle accident case may be forced to choose between, for example, an expert in accident reconstruction and a medical expert. A plaintiff in a motor vehicle accident case typically designates treating physicians as non-retained experts and, accordingly, a plaintiff who wished to present an accident reconstruction expert along with a non-retained medical expert could require a defendant to seek the trial court’s permission to designate another expert under the good cause standard. A more likely scenario is the plaintiff who designates only treaters as non-retained experts, then opposes any attempt to expand the number of allowable experts. Given that one of Rule 16.1’s objectives is to reduce the cost of litigation, trial courts are likely to restrain any attempts by defendants to expand the number of allowable experts. The potential prejudice that arises from the retained expert limitation is not limited to cases arising from motor vehicle accidents. It could also affect other common types of litigation, e.g., slip-and-fall cases, where a defendant could retain a medical expert or a standard of care expert, but not both without first receiving permission from the trial court.
- Late Disclosure of Damages Exceeding $100,000: Suppose a plaintiff in a motor vehicle accident case has disclosed past medical expenses in the $50,000-75,000 range, allowing his or her counsel to avoid, in good faith, certification that the value of the case exceeds $100,000. At the plaintiff’s expert disclosure deadline, 13 weeks before the trial, this plaintiff then discloses a treater who opines that the plaintiff’s future treatment needs include surgery, the projected cost of which would exceed $100,000. While the affected defendant could move to terminate the application of Rule 16.1, citing the changed circumstances, the defendant would then have to address those circumstances and conduct any related discovery with a trial date looming.[2] Trial courts are often reluctant to continue cases. Accordingly, a faultless defendant could be forced to address the changed circumstances within a short pretrial window. The same scenario could arise in construction defect lawsuits when a plaintiff timely discloses a cost of repair expert who opines that the repair costs will exceed $100,000.
Conclusion
Rule 16.1 was originally implemented to enhance the just, speedy, and inexpensive determination of cases, consistent with the objectives of C.R.C.P. 1. The coming changes to Rule 16.1 were motivated, in part, by the Colorado Supreme Court’s desire to increase the number of cases proceeding under simplified civil procedure. If that goal is realized, there are likely to be both positive and negative effects on litigated claims, as discussed above.
From a defense perspective, the revisions to Rule 16.1 are an imperfect approach to real issues, the increasingly high cost of litigation and access to court. Under the current case management rules, trial courts already have the discretion to tailor discovery and the scope of permitted experts proportionate to the needs of the case. While the Rule 16.1 revisions are likely to provide a real benefit in terms of cost certainty, this benefit comes at the expense of a defendant’s ability to challenge claims. These revisions are likely to frustrate the truth-seeking function of litigation while removing an important protection for a defendant, the damages cap.
As with any rule change, the actual effects, including any unintended consequences, will be more apparent with implementation. In the meantime, we anticipate that the changes to Rule 16.1 will bring more predictability to certain aspects of the litigation process, for example, expenses and budgeting, and less certainty to others, such as the evaluation of settlement potential and the assessment of damages.
If you have questions regarding the changes to Colorado’s Rule 16.1, or if you would like to discuss any issue related to civil litigation in Colorado, don’t hesitate to contact me or any of the other attorneys at Proctor Brant.
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[1] This approach presumably applies when a defendant asserts a counterclaim with a value in excess of $100,000.
[2] The revised version of Rule 16.1 addresses this scenario, i.e., the late disclosure of damages in excess of $100,000. When this occurs, a defendant is permitted to move to have the case removed from simplified civil procedure, even if the changed circumstances arise more than 42 days after the case is at issue. However, this remedy does not ameliorate the complications that would arise when a case with an existing trial date (and the related time constraints) is moved from simplified civil procedure.