Under Rule 26(b)(1), parties are allowed to obtain discovery of all relevant, non-privileged information as long as it’s “proportional to the needs of the case.” The question then becomes, what does “proportional to the needs of the case” mean and where should this language be applied? This is where we must look to case law for a better understanding.

The main goal of the recent FRCP amendments is to support Rule 1’s demand for a just, speedy, and inexpensive resolution to the dispute at hand. Proportionality is at the core of that notion. In the following cases, you’ll see rulings that push parties to be more proactive in finding ways to reach that resolution while avoiding over-burdensome and expensive production requests.

After 6 Years, Court Says No to Additional Discovery

Armstrong Pump v. Hartman (W.D.N.Y December 13, 2016)

Why This Case is Important: Under Rule 26, proportionality can be used to stop parties from making excessive production requests that have “diminishing returns.”

Expert Analysis from George T. Tziahanas, Esq., Managing Director, Morae Legal

This case proves instructive in how courts may interpret discovery requests in context to updates in Rule 26 of the Federal Rules of Civil Procedure. Specifically, an amendment to Rule 26(b)(1) that requires discovery be “relevant to any party’s claim or defense, and proportional to the needs of the case.”

In this case, litigation had been ongoing for 6 years, with over a million pages of documents produced at the time Plaintiff filed a motion to compel production of a small set of documents, which had already been reviewed by its own expert. The Court denied the motion on several grounds. First, the court noted that “when adding a few more pages of documents requires five or six inches of motion papers, and would be added to over one million pages of total discovery…courts have to tell the parties that if they cannot yet prove their claims then they probably never will.” Second, the court noted that the plaintiffs had not articulated what information in these documents could be so probative to alter the outcome as compared to what was already produced. Finally, the Court found that discovery had reached a point of diminishing returns, and was no longer proportional to the needs of the case.

The case provided several lessons:

  • First, courts will apply a proportionality test at any point within a case. In fact, they may be more willing to apply proportionality the longer discovery continues
  • Second, proportionality cuts both ways and parties should be prepared to explain how discovery is not only relevant, but necessary to prove a claim or defense
  • Third, those parties hoping discovery turns up a “smoking gun” should instead focus on how overall discovery will advance the construction of their “story” instead


Relevancy, Proportionality, and Not Being Proactive Leads to Failed Sanctions Claim

F.T.C. v. DirecTV (N.D. Cal. December 21, 2016)

Why This Case is Important: Discovery requests pertaining to data that is not relevant or proportional will most likely be declined by the court. Additionally, failing to be “more proactive” in both parties’ preservation efforts can affect whether sanctions are warranted.

Expert Analysis from Bob Rohlf, Esq., E-Discovery Counsel, Exterro

This case is a poster child for the concept, that, if you live in a glass house, you should not throw stones. FTI complained to the court that DIRECTV had failed in its discovery obligations, but also failed to take proactive steps in its own discovery efforts. Judge James called out both parties on their lack of proactive measures, but the major impact fell on the FTC, whose motion for sanctions was, for the most part, denied.

The amended Federal Rules of Civil Procedure place a new emphasis on responsibilities of the parties in their conduct of discovery. In this case, both parties took a somewhat casual approach to discovery: DIRECTV in its preservation efforts; and the FTC in obtaining certain discovery, and in failing to take timely actions.

As the party seeking sanctions under Rule 37(e)(1), the FTC had burdens which it failed to carry. The FTC did not establish either that the information provided by DIRECTV was inadequate, or that their case was sufficiently prejudiced by the failure to preserve to warrant the requested sanction. The FTC asserted that the lost data may have included relevant information, but the judge dismissed this as speculation. Applying a standard 37(e)(1) analysis, Judge James found little prejudice to the FTC’s case, and, that curable with a 4-hour deposition of one of DIRECTV’s experts.

Parties looking to sanction their opponents for discovery failures should have their own house in order, or they may get on the wrong side of the presiding judge. In addition, they should be prepared to address all of the elements of a Rule 37(e)(1) analysis. This includes not only presenting the appropriate arguments to the judge, but also backing these up with facts. FTC’s failure to definitively address the “prejudice” or the “reasonable steps” elements of the analysis made this motion largely a waste of time and resource.


Relevancy and Proportionality Go Hand in Hand

In re Bard IVC Filters Products Liability Litigation (D. Ariz. September 16, 2016)

Why This Case is Important: Relevancy alone is no longer sufficient – discovery must also be proportional to the needs of the case.

Expert Analysis from David Yerich, Esq., Director of E-Discovery, UnitedHealth Group

Judge David G. Campbell’s order denying the plaintiff’s request for additional substantial discovery with only a marginal likelihood of impacting the case resolution is an excellent teaching guide on the need for the legal community to utilize the new rules and further provides good example in applying proportionality. Keen observers will take note of the holistic nature of the analysis.

Judge Campbell sets the stage with an overview of the changes and the purpose behind the changes. He further points out that this is the rule in effect today, and as such it abrogates both old and new cases that are continuing to analyze under the previous “reasonably calculated” language. The message is clear that it is past time to get going with the new rules.

The specifics of the “relevancy” analysis may limit the order’s applicability to other cases. Plaintiffs are seeking discovery in an MDL from 18 of the defendant’s foreign subsidiaries regarding regulatory communications. However, none of the MDL members allege harm by these foreign entities. Plaintiff’s claim of relevance rests on the possibility that some of these communications might contradict the Defendant’s U.S. regulatory communications. The court concluded that “the discovery appears to be only potentially relevant - more hope than likelihood.”

In the proportionality analysis, the Defendant persuaded the court that a significant burden was required to collect 13 years of communications from 18 foreign subsidiaries. Defendant’s also explained why the vast majority of these communications were already going to be captured through their U.S. ESI searches.

Given the limited relevance of the small amount of unique information that might be gained through such an effort, the court concluded that the discovery request of these foreign entities is not proportional to the needs of the case.


Court’s Obligation to Limit Discovery if Disproportional

Rowan v. Sunflower Elec. Power Corp (D. Kan. June 2, 2016)

Why this Case is Important: New court opinion states that the court has an obligation to limit e-discovery if the parameters are disproportionate.

Expert Analysis from Josh Gilliand, Esq., Blogger, Bowtie Law and The Legal Geeks

Magistrate Judge Tesesa J. James has been busy with the multiple court orders issued in Rowan v. Sunflower Elec. Power Corp. This has allowed the judge to elegantly explain the application of proportionality and relevance under the 2015 Amendments to the Federal Rules of Civil Procedure. This should not be new to anyone, but it is always good to keep the eye on the purpose of the Rules.

Judge James reminded litigators that: A) the party requesting discovery does NOT have the burden of addressing proportionality factors; and B) the party resisting discovery production has the “the burden to establish the lack of relevancy by demonstrating that the requested discovery (1) does not come within the scope of relevancy as defined under Fed. R. Civ. P. 26(b)(1), or (2) is of such marginal relevancy that the potential harm occasioned by discovery would outweigh the ordinary presumption in favor of broad disclosure.” Rowan v. Sunflower Elec. Power Corp. (D.Kan. June 2, 2016, No. 15-cv-9227-JWL-TJJ) 2016 U.S.Dist.LEXIS 72254, at *8-9.

The parties in Rowan did not address proportionality in their discovery motions. Courts have an obligation to limit discovery if they determine: (i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in this action; or (iii) the proposed discovery is outside the scope permitted by the rule. Rowan, *9-10 (June 2, 2016 opinion).

Judges taking ownership of cases to apply proportionality analysis is a good thing. However, these factors can be easier decided if the parties actually make the arguments to the court. How much data is there in a case? How long will it take to review discovery? Was there any responsive discovery withheld?

Discovery should be orderly, with checklists, and a plan. Many attorneys will better serve their clients if they can answer whether ESI sough in discovery is duplicative, cost for retrieving it, or if the discovery is outside of the scope of the case. That means parties should always be thinking about proportionality, instead of waiting for the court to ask about it.