Civil litigators often spend more time in discovery disputes than in trials. Few plaintiffs or defendants are keen on spending time in a deposition, collecting documents, or handing over to their opponent evidence that could be used against them later. Yet, as the Supreme Court said 70 years ago while interpreting the original Rules of Civil Procedure, “[m]utual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts he has in his possession.”[1]
In December 2015, the “proportionality” amendments to Rule 26 of the Federal Rules of Civil Procedure were amended. One clause was removed as not reflecting the law (the “reasonably calculated” clause), one clause was omitted as unnecessary (the clause about discovering the existence of documents and witnesses), a phrase was moved from one subsection to another (the phrase about proportionality), and a proportionality factor was added (about the parties’ “relative access to information”).
In the big picture, these changes were exceedingly modest. Nonetheless, as Judge Pitman of the Southern District of New York wrote just a few weeks after thereafter, “[g]iven the recent amendments to the Federal Rules of Civil Procedure that became effective December 1, 2015, proportionality “has become ‘the new black,’” in discovery litigation, with parties invoking the objection with increasing frequency.”[2] These days, defense lawyers for massive corporations talk about “proportionality” non-stop, objecting to every discovery request, no matter how inexpensive or important to the case, as “not proportionate.” Judge Pitman was unimpressed: “the 2015 Amendments constitute a reemphasis on the importance of proportionality in discovery but not a substantive change in the law.”[3]
There are thousands of blog posts written by defense lawyers about how the proportionality amendments changed everything, and I’ve grown tired of seeing these arguments pop up in Court. So, without further adieu, here’s a Plaintiff’s Guide To Rule 26’s Discovery Proportionality Standard.
This post has a lot of citations in it, and those citations have a lot of quotes, so I’ve switched over to footnote citing. Many of these citations are drawn from Duke Law Center for Judicial Studies’ “Revised Guidelines and Practices for Implementing the 2015 Discovery Amendments to Achieve Proportionality,” annotated version (June 15, 2017). Duke updates the annotations monthly, so check for the most recent version.
The Actual Changes To The Text Of Rule 26(b)
Fed.R.Civ.P. 26(b)(1) now says,
Unless otherwise limited by court order, the scope of discovery is 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.
The 2015 Amendments changed the text of Rule 26(b) in three ways:
- First, the language defining the scope of permissible discovery was changed to omit discovery “reasonably calculated to lead to the discovery of admissible evidence.”
- Second, the language describing relevant evidence was changed to omit discovery of “the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter,” but only because, as the Advisory Committee Note states, “discovery of such matters is so deeply entrenched in practice that it is no longer necessary to clutter the long text of Rule 26 with these examples.”
- Third, when it comes to “proportionality,” which was already part of Rule 26(b), “[t]he considerations that bear on proportionality are moved from present Rule 26(b)(2)(C)(iii), slightly rearranged and with one addition.” See Advisory Committee Notes. That “one addition” was the explicit instruction that courts consider “the parties’ relative access to relevant information.”
The Scope Of Relevance Under The 2015 Proportionality Amendments
The 2015 Amendments changed the language defining the scope of relevance,[4] but, substantively, the scope of relevance remains the same as it has for nearly forty years: “any matter that bears on, or that reasonably could lead to other matter that could bear on any party’s claim or defense.”[5] Judge Campbell, who chaired the Advisory Committee responsible for the 2015 Amendments, re-affirmed that, even after the Amendments, “[c]ourts generally recognize that relevancy for purposes of discovery is broader than relevancy for purposes of trial.”[6]
The Requesting Party Bears The Burden Of Establishing Relevance, The Objecting Party Bears The Burden Of Establishing The Discovery Is Not Proportionate To The Needs Of The Case
The burdens of persuasion were unchanged, with the requesting party bearing the burden of establishing relevance and the objecting party bearing the burden of establishing the discovery is improper. [7] The requesting party need only show relevance; the requesting party does not bear any burden to show proportionality.[8] Boilerplate claims that discovery is not proportionate are insufficient.[9] Instead, the objecting party needs to specifically show how the proposed discovery is not proportionate.[10]
Proportionate Discovery Is About Knowing When Discovery Has Reached “Diminishing Returns”
As Chief Justice Roberts wrote soon after the 2015 Amendments, “the pretrial process must provide parties with efficient access to what is needed to prove a claim or defense, but eliminate unnecessary or wasteful discovery.”[11] As several District Courts have held, proportionality is often a question of “whether discovery production has reached a point of diminishing returns,” and about the “marginal utility” of additional discovery once the core discovery in the case has been completed.[12] Stated another way, proportionality is a method to avoid going in circles or getting side-tracked, not an excuse for cutting corners.
Sometimes, the best proportionality analysis is the most simple one: “the sheer number of attorneys who have made appearances in the case (24 by the Court’s count) is a persuasive demonstration of the importance of the issues at stake here, the value of the case, and that the parties have significant resources available to them.”[13] Nonetheless, let’s take a look at the case law on each proportionality factor mentioned by Rule 26(b).
The Importance Of Issues At Stake In The Action
The Advisory Committee Notes reiterated that “the monetary stakes are only one factor, to be balanced against other factors,” and reaffirmed the 1983 Amendments’ Note recognizing “the significance of the substantive issues, as measured in philosophic, social, or institutional terms.” Even a single severe injury from a common product can tip this factor in favor of a plaintiff.[14]
The Amount In Controversy
Few cases have interpreted this factor in depth. The cases that have done so have generally involved a single plaintiff, and the question was whether the cost of the proposed discovery would exceed the amount in controversy.[15] Moreover, courts have been quick to note that discovery in a low-damages case can still be proportionate if the litigation could vindicate other interests.[16]
The Parties’ Relative Access To Relevant Information
Access to information was one of the few explicit changes to the text of Rule 26(b). The Advisory Committee Notes address “information asymmetry,” where one “party may have vast amounts of information, including information that can be readily retrieved and information that is more difficult to retrieve. In practice these circumstances often mean that the burden of responding to discovery lies heavier on the party who has more information, and properly so.” Where relevant evidence is in the sole possession of the defendant, discovery is generally proportionate to the needs of the case,[17] particularly where the evidence is held by a multi-national corporation with sophisticated access to data that they do not permit outsiders to review.[18]
The Parties’ Resources
As the Advisory Committee Notes state, “consideration of the parties’ resources does not … justify unlimited discovery requests addressed to a wealthy party.” Nonetheless, the underlying purpose of this factor, must be remembered: “[t]he court must apply the standards in an even-handed manner that will prevent use of discovery to wage a war of attrition or as a device to coerce a party, whether financially weak or affluent.” Id., (emphasis added).
The Importance Of The Discovery In Resolving The Issues
To satisfy the “importance” factor, the discovery must only be “more than tangentially related to the issues that are actually at stake in the litigation.”[19] Even where the cost is considerable, the importance factor is satisfied where “the probative value of the sought after discovery is potentially substantial because it may be relevant to factual issues at the heart of [plaintiff’s claims].”[20]
Whether The Burden Or Expense Of The Proposed Discovery Outweighs Its Likely Benefit
Corporate defendants often refer to the “burden” of discovery as if it was the sole factor underlying proportionality, but “no single factor is designed to outweigh the other factors in determining whether the discovery sought is proportional.”[21] All discovery is inherently burdensome, and the question is whether that burden is undue in light of the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, and the importance of the discovery in resolving the issues.[22] For example, if a defendant has “far superior access to the information,” as in this litigation, such access “necessitates a stronger showing of burden and expense” before the discovery will be disallowed.[23] Further, even where there is a “considerable expense already incurred in defense of this case,” additional discovery can nonetheless be proportionate where a defendant has “chosen to rigorously defend th[e] action” and thereby place the plaintiff in the position of needing to do more to prevail in dispositive motion practice and at trial.[24]
Critically, claims of undue burden must be backed by evidence quantifying the difficulty or expense.[25] “Without offering evidence explaining the nature of the alleged burden it faces in producing the proposed discovery, [a party] has not met its burden of showing that the burden or expense … outweighs the likely benefit of such discovery.”[26] Further, a sophisticated party cannot rely on their own decisions that have made document production difficult or expensive.[27]
Finally, a party does not get credit for the “burden” of discovery productions made in other cases, and, in such a situation, the objecting party should come forward with “alternative methods of discovery enabling some lesser degree of production.”[28]
Citations:
[1] Hickman v. Taylor, 329 U.S. 495, 507, 67 S. Ct. 385, 392, 91 L. Ed. 451 (1947)
[2] Vaigasi v. Solow Mgmt. Corp., 2016 WL 616386, at *13 (S.D.N.Y. Feb. 16, 2016)(internal quotation omitted).
[3] Vaigasi v. Solow Mgmt. Corp., 2016 WL 616386, at *13 (S.D.N.Y. Feb. 16, 2016).
[4] The phrase “reasonably calculated to lead to the discovery of admissible evidence” was deleted.
[5] Henry v. Morgan’s Hotel Grp., Inc., 2016 WL 303114, at *3 (S.D.N.Y. Jan. 25, 2016)(citing State Farm Mut. Auto. Ins. Co. v. Fayda, 2015 WL 7871037, at *2 (S.D.N.Y. Dec. 3, 2015)(quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978))).
[6] In re Bard, 317 F.R.D. at 566. Accord In re: Am. Med. Sys., Inc., MDL No. 2325, 2016 WL 3077904, at *4 (S.D.W. Va. May 31, 2016)(“it remains true that relevancy in discovery is broader than relevancy for purposes of admissibility at trial,” and, “notwithstanding Rule 26(b)(1)’s recent amendment placing an emphasis on the proportionality of discovery, the discovery rules, including Rule 26, are still to be accorded broad and liberal construction.”)
[7] Cont’l W. Insur. Co. v. Opechee Constr. Corp., 2016 WL 865232, at *1 (D.N.H. Mar. 2, 2016) (“Once a showing of relevance has been made, the objecting party bears the burden of showing that discovery request is improper.”); Carter v. H2R Rest. Holdings, LLC, 2017 WL 2439439, at *4 (N.D. Tex. June 6, 2017) (amendments “do not alter the basic allocation of the burden on the party resisting discovery”); William Powell Co. v. Nat. Indemnity Co., 2017 WL 1326504, at *5 (S.D. Ohio Apr. 11, 2017)(“the amended rule did not shift the burden of proving proportionality to the party seeking discovery”); United States ex rel. Shamesh v. CA., Inc., 2016 WL 74394, at *8 (D.D.C. Jan. 6, 2016) (“Once the relevancy of the materials being sought has been established, the objecting party then bears the burden of ‘showing why discovery should not be permitted.’”).
[8] In re: Bard IVC Filters Prod. Liab. Litig., 2016 WL 4943393, at *2 (D. Ariz. Sept. 16, 2016) (“[A]mendment does not place the burden of proving proportionality on the party seeking discovery.”); State Farm Mut. Auto. Ins. v. Fayda, 2015 WL 7871037, at *2 (S.D.N.Y. Dec. 3, 2015)(“The burden of demonstrating relevance remains on the party seeking discovery, but the newly-revised rule does not place on that party the burden of addressing all proportionality considerations.” Quotation omitted). Accord Nerium Skincare, Inc. v. Olson, No. 3:16-CV-1217-B, 2017 WL 277634, at *3 (N.D. Tex. Jan. 20, 2017)(“a party seeking to resist discovery on these grounds still bears the burden of making a specific objection and showing that the discovery fails the proportionality calculation mandated by [Rule 26] by coming forward with specific information to address [the proportionality factors]…”
[9] Ramos v. Town of E. Hartford, 2016 WL 7340282, at *2 (D. Conn. Dec. 19, 2016) (“[t]he 2015 revision of the Federal Rules precludes the use of the type of boilerplate objections on which Defendants rely.”); Leibovitz v. The City of New York, 2017 WL 462515, at *2 (S.D.N.Y. Feb. 3, 2017) (Court overruled defendant’s “general, boilerplate objections to each of plaintiff’s requests for production” because “such objections violate Fed.R.Civ.P. 34(b)(2)(B).”).
[10] Fischer v. Forrest, 2017 WL 773694 (S.D.N.Y. Feb. 27, 2017)(“It is time, once again, to issue a discovery wake-up call to the Bar in this District” to state grounds for objecting to discovery request with specificity under Rule 34); Raab v. Smith & Nephew, Inc., 2016 WL 2587188, at *4 (S.D. W. Va. May 4, 2016) (defendant failed to provide specific objection to discovery requests); Allen-Pieroni v. Sw. Corr., LLC, 2016 WL 1750325, at *4 (N.D. Tex. May 2, 2016) (“Party seeking to resist discovery on these grounds still bears the burden of making a specific objection and showing that the discovery fail[ed] the proportionality calculation mandated by Rule 26(b) by coming forward with specific information to address.”).
[11] 2015 Year-End Report on the Federal Judiciary, p. 7 (emphases added).
[12] Abbott v. Wyoming Cty. Sheriff’s Office, No. 15-CV-531W, 2017 WL 2115381, at *2 (W.D.N.Y. May 16, 2017)( Considerations of proportionality can include reviewing whether discovery production has reached a point of diminishing returns. See Alaska Elec. Pension Fund v. Bank of Am. Corp., No. 14-CV-7126 (JMF), 2016 WL 6779901, at *3 (S.D.N.Y. Nov. 16, 2016) (“Rule 26(b)(1)’s proportionality requirement means [that a document’s] ‘marginal utility’ must also be considered.”) (citations omitted); Updike v. Clackamas County, No. 3:15-CV-00723-SI, 2016 WL 111424, at *1 (D. Or. Jan. 11, 2016) (“There is a tension, however, among the objectives of Rule 1. As more discovery is obtained, more is learned. But at some point, discovery yields only diminishing returns and increasing expenses. In addition, as more discovery is taken, the greater the delay in resolving the dispute. Finding a just and appropriate balance is the goal, and it is one of the key responsibilities of the court in managing a case before trial to assist the parties in achieving that balance.”)
[13] Wal-Mart Stores, Inc. v. Texas Alcoholic Beverage Comm’n, No. A-15-CV-134-RP, 2016 WL 5922315, at *2 (W.D. Tex. Oct. 11, 2016).
[14] Fassett v. Sears Holdings Corp., 319 F.R.D. 143, 150 (M.D. Pa. 2017)(“Although this is not a case involving, for instance, constitutional rights or matters of national significance, to these particular litigants, it is a matter of grave import. Further, its outcome may impact the marketability of a widely sold piece of home machinery or some of its components.”)
[15] Bell v. Reading Hosp., No. CV 13-5927, 2016 WL 162991, at *3 (E.D. Pa. Jan. 14, 2016)(“It appears that the discovery conducted to date, as well as the discovery requests currently at issue, would certainly not exceed the amount of controversy in this matter.”).
[16] Schultz v. Sentinel Ins. Co., Ltd, 2016 WL 3149686, at *7 (D.S.D. June 3, 2016)(“The court applies the proportionality requirement built into Rule 26, but rejects Sentinel’s characterization of the value of Ms. Schultz’s case as a $17,000 case that benefits her alone. … If punitive damages are awarded, Ms. Schultz has the potential to affect Sentinel’s alleged business practices and to remedy the situation for many insureds, not just herself.”)
[17] Albritton v. CVS Caremark Corp., 2016 WL 3580790, at *4 (W.D. Ky. June 28, 2016)(“Here, proportionality favors the Plaintiff. … It is highly unlikely that Plaintiff could discover similar information from another source or in another manner. Defendants are in the best position to produce these documents.”); Schultz v. Sentinel Ins. Co., Ltd, 2016 WL 3149686, at *6 (D.S.D. June 3, 2016)(“The amended rule also specifies one additional factor to be considered in determining proportionality: the parties’ access to relevant information. This factor definitely favors Sentinel, who ‘holds all the cards’ on the discovery sought by Ms. Schultz.”)
[18] Labrier v. State Farm Fire & Cas. Co., 314 F.R.D. 637, 643 (W.D. Mo. 2016)(“LaBrier does not have access to the information she seeks, other than through the discovery, as it is in State Farm’s own database and the database of its vendor, Xactware. In terms of resources, LaBrier is an individual, while State Farm is a corporation with a national presence, with sophisticated access to data. As discussed in the preceding section, the burden or expense of the discovery outweighs its likely benefit, particularly in light of State Farm’s refusal to permit an outsider to access its computer system or even provide complete lists of its data fields.”)
[19] Flynn v. Square One Distribution, Inc., No. 6:16-MC-25-ORL-37TBS, 2016 WL 2997673, at *4 (M.D. Fla. May 25, 2016)
[20] In re Suboxone (Buprenorphine Hydrochloride & Naloxone) Antitrust Litig., No. 13-MD-2445, 2016 WL 3519618, at *7 (E.D. Pa. June 28, 2016)(emphases added).
[21] Capetillo v. Primecare Med., Inc., 2016 WL 3551625, at *2 (E.D. Pa. June 29, 2016).
[22] Black v. Buffalo Meat Serv., Inc., No. 2016 WL 4363506, at *6 (W.D.N.Y. Aug. 16, 2016)(“In effect, the concept of undue burden that has been in Rule 26 for the last thirty plus years has been replaced by proportionality, with the burden as one factor to determine whether the discovery demand is proportionate to the case.”)
[23] Doe v. Trustees of Boston Coll., 2015 WL 9048225 (D. Mass. Dec. 16, 2015).
[24] Vay v. Huston, 2016 WL 1408116, at *6 (W.D. Pa. Apr. 11, 2016).
[25] Zoobuh, Inc. v. Better Broadcasting, LLC, 2017 WL 1476135, at *4–*5 (D. Utah Apr. 24, 2017) (defendant failed to provide “some quantification . . . of the material in its possession that [was] responsive” and thus failed to establish undue burden); Fish v. Kobach, 2016 WL 893787, at *1 (D. Kan. Mar. 8, 2016) (“Objections based on undue burden must be clearly supported by an affidavit or other evidentiary proof of the time or expense involved in responding to the discovery request.”); Scott Hutchison Enter., Inc. v. Cranberry Pipeline Corp., 2016 WL 5219633, at *3 (S.D. W. Va. Sept. 20, 2016) (collection of cases that require specific proof); McKinney/Pearl Rest. Partners, L.P. v. Metro. Life Ins. Co., 2016 WL 98603, at *3 (N.D. Tex. Jan. 8, 2016) (party resisting discovery must show that “requested discovery was overbroad, burdensome, or oppressive by submitting affidavits or offering evidence revealing the nature of the burden.”).
[26] William Powell Co. v. Nat’l Indem. Co., 2017 WL 1326504, at *12 (S.D. Ohio Apr. 11, 2017)
[27] Wagoner v. Lewis Gale Med. Ctr., LLC, 2016 WL 3893135, at *3 (W.D. Va. July 14, 2016)(rejecting claim of undue burden where defendant “did not preserve e-mails in an readily searchable format, making it costly to produce relevant e-mails when faced with a lawsuit.”)
[28] Siriano v. Goodman Mfg. Co., L.P., 2015 WL 8259548, at *6 (S.D. Ohio Dec. 9, 2015)(“[T]o date, Defendants have expended relatively little in complying with discovery in this matter. Defendants’ production thus far consists of the electronic disclosure of documents previously collected and reviewed pursuant to discovery in other, related cases. … Defendants have not proposed alternative methods of discovery enabling some lesser degree of production, such as limiting the search to certain offices or files.”)
