Scenario

A former employee of a Fortune 500 client has sued over the noncompete provision in the company’s employment contracts. The company has already produced tens of thousands of pages of documents, but the plaintiff insists the defendant has not produced documents relating to the drafting and implementation of the provision, which according to the plaintiff, the company “should” have. The outside counsel’s discovery efforts to date have been reasonable, diligent and proportional to the needs of the case. All the same, the plaintiff serves a 30(b)(6) deposition notice seeking a designee to testify on, among other things, the company’s issuing and implementation of a legal hold, the company’s document retention policies and practices, the company’s disaster recovery backup policies and practices, and the company’s investigation of certain systems in responding to discovery requests. The outside counsel believes the notice constitutes “discovery on discovery,” or “meta discovery.” Can the plaintiff depose a designee on these topics? Is such discovery permissible?

What Is Discovery on Discovery?

Most discovery seeks documents and other information related to the allegations and defenses in the litigation. By contrast, “discovery on discovery” (also known as “meta-discovery” or “discovery about discovery”) seeks information on the steps a party took to preserve, identify, collect, process review and produce documents in response to discovery requests. Discovery on discovery requests are often designed to expose some deficiency in an opposing party’s efforts to meet their discovery obligations or to identify the cause of a known deficiency.

Examples of discovery on discovery include discovery requests seeking information about legal hold notices, document retention policies, disaster recovery backup practices, and the means and methods used to identify, review and produce responsive discovery materials. Discovery on discovery requests typically take the form of interrogatories and 30(b)(6) notices, though they can take any form—both formal and informal—including requests for the production of documents, requests to admit and document preservation demand letters.

Is It Permissible?

The Rules of Civil Procedure (and more and more local rules, standing orders and pilot programs) favor mandatory early disclosures, joint discovery plans and similar mechanisms to get parties talking about ESI preservation and discovery early in a case. These are all designed, at least in part, to avoid discovery-on-discovery-type disputes. But despite best efforts, certain disputes inevitably will require a court’s intervention. And while courts have not adopted a uniform test when deciding discovery on discovery disputes, courts, unsurprisingly, often look to Federal Rules of Civil Procedure 26 and 37 for guidance on whether such discovery is appropriate under the circumstances.

Federal Rule of Civil Procedure 26(b)(1) describes the scope of discovery as follows:

Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.

As a result, courts often look at whether the discovery sought is “relevant to any party's claim or defense and proportional to the needs of the case[,]” a case-specific and fact-intensive analysis.

Generally, however, courts permit discovery on discovery only once there is some evidence of an inadequate discovery process or spoliation—and even then, courts are sensitive to the costs and possible privilege issues related to discovery on discovery. Courts are most hesitant to allow discovery on discovery early in litigation, and many courts are unlikely to allow discovery on discovery until at least some substantive discovery has occurred. In fact, many courts will only allow discovery on discovery if the requesting party can show an adequate factual basis for claiming that the producing party’s production is deficient.

What’s more, perhaps because discovery on discovery can be a prelude to a bid for sanctions, some courts require not just a showing that the producing party’s production is deficient but also that the deficiency resulted from bad faith—much like Rule 37(e)(2), which reserves the most severe sanctions for instances in which the producing party “acted with the intent to deprive another party of the information’s use in the litigation[.]”

Also, similar to sanctions context, courts may impose intermediate measures such as additional discovery and restoration from alternative sources as alternatives to discovery on discovery.

Key Takeaways

Given the ever-increasing role of discovery (and electronic discovery, in particular) in litigation, we are likely to see more and more attempts to take discovery on discovery. And whether you are the party seeking the discovery or the one trying to avoid it, you should consider the following:

  • Courts are increasingly requiring parties to make early and meaningful disclosures to minimize the likelihood that disputes into discovery into discovery will arise.
  • Courts will expect the parties to have met and conferred (often by phone and not just in writing) before entertaining a motion to compel discovery on discovery.
  • In deciding discovery on discovery disputes, courts are likely to consider proportionality, relevance, attorney-client privilege and work product protection concerns and whether the requesting party has established an adequate factual basis for an assertion that the producing party’s production is deficient.
  • Courts may impose intermediate measures such as additional discovery and restoration from alternative sources as alternatives to discovery on discovery.