Defense Counsel Journal

The Proportionality Principle after the 2015 Amendments

January 20, 2020

Rule 26(b)(1) was revised as part of the 2015 Amendments to the Federal Rules of Civil Procedure¹1 Thomas Y. Allman, The 2015 Civil Rules Package as Transmitted to Congress, 16 Sedona Conf. J. 1 (2015). to promote “proportional discovery”²2 David G. Campbell, New Rules, New Opportunities, 99 Judicature 19, 20 (2015) (“‘proportional' discovery [is] ‘discovery tailored to the reasonable needs of the case'”). by the incorporation of proportionality factors, then located in Rule 26(b)(2)(C), into the text of (b)(1), with the factors slightly re-adjusted and a new factor added.³3 The “amount in controversy” factor was moved to second place in the non-hierarchical list and a new factor evoking “the parties relative access to relevant information” was added. Rule 26(b)(2)(C)(iii) now requires a court to limit the frequency or extent of discovery when “[iii] the burden or expense of the proposed discovery is outside the scope permitted by Rule 26(b)(1).”⁴4 Subsections (i) and (ii) of Rule 26(b)(2)(C), unchanged by the 2015 Amendments, continue to limit discovery which is unreasonably cumulative or duplicative or which can be obtain from other less burdensome sources and should also be seen as proportionality limitations.

The revised scope permits discovery of non-privileged information only if it is both “relevant” to the claims or defenses of a party and is also “proportional to the needs” of the case. The renewed emphasis on proportionality, enforced through active case management, reflects a desire to achieve the goals of Rule 1. As Chief Justice Roberts put it in his 2015 Year-End Report, the amended rule “crystalizes the concept of reasonable limits on discovery through increased reliance on the common-sense concept of proportionality.”⁵5 See Year-End Report, quoted in Sprint v. Crow Creek Sioux Tribal Court, 2016 WL 782247 (D. S.D. February 26, 2016).

I. Cases Interpreting the New Rules

The flood of post-December 1 decisions on the scope and implementation of Rule 26(b)(1) and related changes is best summarized in the following categories, although the cases themselves need to be consulted as well.

A. Relevancy

The relevancy of discovery sought to the claims or defenses continues to be the primary issue determining the “scope” of discovery. If the information sought is not relevant, courts need not focus on proportionality. For example, in LightSquared v. Deere & Co. the court acknowledged the amended rule but denied the discovery based on a lack of relevance.⁶6 LightSquared v. Deere, 2015 WL 8675377 (S.D.N.Y. Dec. 10, 2015). Courts refuse to ask a party to “run down a rabbit hole chasing irrelevant information on collateral matters.”⁷7 O'Boyle v. Sweetapple, 2016 WL 492655, at *5 (S.D. Fla. Feb. 8, 2016) (quashing subpoena because it is not “what [FRCP] 1 and 26(b)(2) envision”).

The threshold for discovery relevancy under the amended rule remains relatively low,⁸8 Kelley v. Apria Healthcare, 2016 WL 737919, at *4 (E.D. Tenn. Feb. 23, 2016) (finding evidence sought is relevant for discovery purposes but not necessarily admissible at trial). in contrast to the enhanced showing of relevance required in some Circuits for purposes of securing an adverse inferences.⁹9 Fed. Nat'l Mortgage Assn. v. SFR Investments, 2016 WL 778368, at n. 16 (D. Nev. Feb. 25, 2016) (“[d]espite the recent amendments to Rule 26, discovery relevance remains a broad concept”). Some courts cite the terms of Federal Rules of Evidence 401, under which evidence is relevant if it has any tendency to make the existence of a fact of consequence more or less probable.¹⁰10 Sumpter v. Metropolitan Life Ins. Co., 2016 WL 772552 (S.D. Ind. Feb. 29, 2016) (discovery denied because unlikely to lead to relevant information and because it is not proportional to needs of the case). Moreover, as Judge Francis and others have held, relevance is still defined broadly by pre-December 1 case law, including the 1978 Supreme Court decision in Oppenheimer Fund v. Sanders,¹¹11 437 U.S. 340, 351 (1978) (“relevance to the subject matter involved in the pending action” has been construed broadly). which is often cited for that proposition.¹²12 Wit v. United Behavioral Health, 2016 WL 258604 at *10 (N.D. Cal. Jan. 21, 2016) (applying Oppenheimer despite the fact that it “constru[ses] language contained in Rule 26 prior to 2015 amendments”); see also In re ex Parte Application of Porsche Automobil Holding, 2016 WL 702327, at *9 (S.D.N.Y. Feb. 18, 2016) (collecting cases). See also Perez v. Department of Homeland Security, 2016 WL 705904, at *6 (S.D. Cal. Feb. 23, 2016) (relying on Oppenheimer in interpreting amended rule).

B. Proportionality

A limit on the scope of discovery, designed to guard against “redundant or disproportionate discovery,” has been part of the Federal Rules of Civil Procedure since 1983.¹³13 Committee Note, Rule 26 Subdivision (b), 97 F.R.D. 165, 217 (1983). The Committee Note described the new provision as intended to limit “disproportionate” discovery of matters which were “otherwise proper subjects of inquiry.” After the 2010 Duke Litigation Conference, the Rules Committee acted on its conviction that “discovery in civil litigation would more often achieve the goals of Rule 1 through an increased emphasis on proportionality,” enforced through active case management.¹⁴14 June 2014 Rules Report, II(A)(2)(a). Although the initial Draft Committee Note described this as a “change” designed to “limit the scope of discovery,”¹⁵15 Committee Note, 16, Initial Proposal, at 296 of 354. The 2013 Initial Proposal is available at http://www.ediscoverylaw.com/files/2013/11/Published-Rules-Package-Civil-Rules-Only.pdf. (last accessed May 15, 2016). the final version of the Committee Note more accurately states that it merely “restores the proportionality factors to their original place in defining the scope of discovery.”¹⁶16 Committee Note, 19. The original rule is found at 97 F.R.D. 165, 215 (1983)(Rule 26(b)(1)).

A number of cases have explicitly denied discovery of otherwise relevant information based on proportionality grounds, involving a variety of contexts. In Henry v. Morgan's Hotel Group, the court refused to enforce subpoenas against former employers as not proportional to the needs of the case where it was not even “remotely apparent” what relevance the information would have to the allegations in the case.¹⁷17 2016 WL 303114, at *3 (S.D.N.Y. Jan. 25, 2016). In another, discovery requests were denied because they was “precisely the kind of disproportionate discovery that Rule 26 – old or new – was intended to preclude.”¹⁸18 Gilead Services v. Merck, 2016 WL 146574, at *2 (N.D. Cal. Jan. 13, 2016) (“a party seeking discovery . . . must show, before anything else, that the discovery sought is proportional to the needs of the case”).

In Wilmington Trust v. AEP Generating,¹⁹19 2016 WL 860693 (S.D. Ohio March 7, 2016). the court concluded that the “rule of proportionality” would be violated if it ordered an additional search which might produce 200K documents that would have to be searched manually.

C. Burden of Proof

There is also little evidence that the changes in Rule 26(b)(1) have affected the practical burdens of proof involved, as both parties must play a role in addressing proportionality, depending on the circumstances.

The Committee Note makes it clear that the relocation of the proportionality factors does not “place on the party seeking discovery the burden of addressing all proportionality concerns.”²⁰20 Committee Note, 19. Moreover, a party may not “refuse discovery simply by making a boilerplate objection that it is not proportional.”²¹21 Committee Note, 19. In Carr v. State Farm Mutual, the court held that a party seeking to resist discovery must come forward with “specific information.”²²22 2015 WL 8010920, at *9 (N.D. Tex. Dec. 7, 2015)

The party seeking discovery also may need to “make its own showing of many or all of the proportionality factors” to justify the request.²³23 Id. at *17. Thus, in Augustyniak v. Lowe's, a party seeking to justify further discovery was required to list what discovery would be sought, why the information was not already available and how the information would demonstrate the point sought to be established.²⁴24 Augustyniak v. Lowe's Home Center, 2016 WL 462346, at *5 (W.D.N.Y. Feb. 8, 2016). In Wilmington Trust v. AEP Generating, the court noted that the party had not presented “anything – either evidence or persuasive argument” showing it would materially add to the existing production.²⁵25 2016 WL 860693 (S.D. Ohio March 7, 2016) (a “responding party still must meet its burden of explaining how costly or time-consuming responding to a set of discovery requests will be”).

Each party is expected to provide information uniquely in their possession to the court, which then is expected to reach a “case-specific determination of the appropriate scope of discovery.”²⁶26 Committee Note, 20 (the party requesting discovery “may have little information about the burden or expense of responding” but the producing party may have little information about the importance of the discovery “as understood” by the requesting parties). Amended Rule 37(e) is said to require a similar approach when the proportionality of preservation demands are at issue.²⁷27 Committee Note, Rule 37(e), 42 (“a party urging that preservation requests are disproportionate may need to provide specifics”).

D.  Individual Factors

There is no hierarchy implicit in the order of individual factors listed in Rule 26(b)(1); indeed, the “amount in controversy” was moved to behind “importance of the issues” to avoid any such inference.²⁸28 The Chair of the Duke Subcommittee explained that “placing the amount in controversy first in the list may cause courts to impose inappropriate limits on discovery.” April 2014 Minutes, at lns. 224-226. The Duke Guidelines state that “[n]o one factor is intrinsically more important or entitled to greater weight than any other. ” Guidelines, 99 Judicature 47, 54 (2015). This contrasts with the approach adopted by the court in Zubulake I²⁹29 Zubulake v. UBS Warburg, 217 F.R.D. 309 (S.D.N.Y. May 13, 2003) (“Zubulake I”). in redesigning a list of factors to discourage shifting the costs of production.³⁰30 Id. at 320, 323 (criticizing giving “equal weight” given to the factors as ‘uniformly favor[ing] cost shifting” and ordering “weighing the factors in descending order of importance” to conform to presumption against cost-shifting sought by court). The 2015 Amendments addressed that issue by simply adding a neutral reference to the authority to “allocate costs” to Rule 26(c)(1)(B).³¹31 As amended, Rule 26(c)(1)(B) now provides that a court may specify terms, “including time and place or the allocation of expenses, for the disclosure or discovery.”

The factors listed in Rule 26(b)(1) differ slightly from those listed in Rule 26(g), as well as those included in the 2006 Committee Note relating to production of ESI from inaccessible source under Rule 26(b)(2)(B).³²32 Committee Note, Rule 26(b)(2)(B)(2006), 234 F.R.D. 219, 339 (2006). That list is, in turn, largely ignored since even if production of accessible ESI is ordered for “good cause,” it is not required if not proportional to the needs of the case.³³33 See Panel Discussion, Managing Electronic Discovery: Views from the Judges, 76 Fordham L. Rev. 1, 23- 24 (2007) (because “the factor at the top of the hierarchy will almost always wash out the other factors” and, in any event, its “really a proportionality issue.”); see also Thomas Y. Allman, The Two-Tiered Approach to E-Discovery, Has Rule 26(b)(2)(B) Fulfilled its Promise? 14 Rich. J. L & Tech. 7, *63 – 64 (2008) (“undue burden or cost in discovery could have been addressed by the existing limitations on discovery found in Rule 26(b)”). No court has placed significance in the differences.

The new factor dealing with asymmetric access to information has received some limited attention in the cases.³⁴34 Committee Note, 21 (“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”). In Doe v. Trustees of Boston College, the court interpreted the factor to mean that a party with superior access needed a “stronger showing of burden and expense” to avoid production.³⁵35 Doe v. Trustees of Boston College, 2015 WL 9048225 (D. Mass. Dec. 16, 2015). Similarly, the importance of disparity in resources has been downplayed. In Salazar v. McDonald's,³⁶36 2016 WL 736213 (N.D. Cal. Feb. 25, 2016). the court emphasized that the financial resources available to handle discovery costs are essentially irrelevant, citing the Committee Notes.³⁷37 Id. (“consideration of the parties' resources does not foreclose discovery requests addressed to an impecunious party, nor justify unlimited discovery requests addressed to a wealthy party”).

E. Preservation

Neither the Committee Notes to Rule 26(b) nor to Rule 37(e) deal with the issue on of the impact of the renewed emphasis on proportionality as a limitation on the scope of discovery under Rule 26(b)(1). Presumably the Committee still believes, as it once stated, that “the outer limit of the duty to preserve” is set by the Rule 26(b)(1) scope of discovery.³⁸38 Thomas Y. Allman, The 2015 Civil Rules Package, 16 Sedona Conf. J. at 33 (“the impact of the amended scope of discovery Rule 26(b)(1) is ignored [in] contrast [to] the analogous Committee Note prepared for the (then) proposed Rule 37(f) in 2004”). One pre-amendment court conceded that proportionality would be relevant to a retroactive assessment of parties involved in a failure to preserve, but would not, especially in the pre-litigation context, be a very reliable basis for unilateral decision making, given that hindsight may apply.

The Committee deleted any hint that proportionality plays a role in preservation planning. The Initial Draft of the Committee Note made the point that “prospective litigants who call for preservation efforts by others should keep the proportionality principles [in Rule 26(b)(1)] in mind.”³⁹39 Draft Committee Note, Rule 37(e) Initial Proposal (at 327 of 354). The original 2013 Rules Package may be found at http://www.ediscoverylaw.com/files/2013/11/Published-Rules-Package-Civil-Rules-Only.pdf. (last accessed May 15, 2016). That was dropped from the final version, which does, however, caution that a party objecting to a demand for preservation on proportionality grounds may need to provide specifics in order to enable meaningful discussions of possible preservation orders.

Not all courts have yet caught the subtle distinction. One prominent commentator flatly states that “[d]emonstrating the ‘relevance' of missing ESI [that should be preserved] will necessarily implicate proportionality factors.”⁴⁰40 Hon. Craig B. Shaffer, The “Burdens” of Applying Proportionality, 16 Sedona Conf. J. 55, 102 (2015); accord Hon. Joy Flowers Conti and Richard N. Lettieri, E-Discovery Ethics: Emerging Standards of Technological Competence, 62-Nov. Fed. Law. 28, 31 (2015) (“[p]roportionality is a guiding principle [under the amendments] in determining the breadth and extent of the preservation required”). However, it is highly unlikely that the author intended to convey that a party, acting in good faith, who ignores the need to preserve relevant evidence on proportionality grounds is thereby exempted from being questioned, with hindsight, about the accuracy and viability of that decision.

F. Case Management

As noted, a related aspect of the renewed emphasis on proportionality is to encourage courts to practice active case management. As the court noted in Siriano v. Goodman Manufacturing,⁴¹41 2015 WL 8259548, at *7 (S.D. Ohio Dec. 9, 2015). the amendments “contemplate active judicial case management.” In that case, the court scheduled a discovery conference to consider phased discovery, while also ordering that the parties engage in “further cooperative dialogue in an effort to come to an agreement regarding proportional discovery.”

There is an emerging consensus that courts should place “greater emphasis on the need to achieve proportionality” in their approaches to discovery.⁴²42 Eramo v. Rolling Stone LLC, 2016 WL 304319 (W.D Va. Jan. 25, 2016). This is consistent with Chief Justice Roberts's emphasis in his Year-End Report that courts needed to be actively involved in guiding decisions respecting the scope of discovery.”⁴³43 See Year-End Report, supra n. 2.

In Robertson v. People Magazine, the court stated that the rule “serves to exhort judges to exercise their preexisting control over discovery more exactingly.”⁴⁴44 2015 WL 9077111, at *2 (S.D.N.Y. Dec. 16, 2015). In Sender v. Franklin Resources, the court held that while the scope of discovery is broad under the amended rule, the issue “does not require the duplication of testimony by deposing five people and written discovery on the subject.”⁴⁵45 2016 WL 814627, at *2 (N.D. Cal. March 2, 2016).

Increased judicial case management has also been the theme of third-party comments. The Duke Center for Judicial Studies convened interested observers to compile a list of Guidelines and Principles “aimed at provid[ing] greater guidance on what the amendments are intended to mean and how to apply them effectively.”⁴⁶46 Guidelines and Practices, Duke Center for Judicial Studies, available at 99 Judicature 47 (2015). Early, ongoing and meaningful discovery planning and the use of judicial pre-packaged lists of topics for Rule 26(f) conferences are recommended. Other suggestions involve staging discovery so that sources “most clearly proportional” to the needs of the case should be utilized.

This is analogous to the “two-tier” system of discovery of ESI originally given as justification for the 2006 Amendment to Rule 26 presumptively limiting discovery of ESI from inaccessible sources.

Two sitting Magistrate Judges have also contributed thoughtful articles with specific suggestions for improved case management in support of proportionality and adherence to Rule 1.⁴⁷47 Shaffer, supra n. 40, 16 Sedona Conf. J. 55 (2015); Hon. Elizabeth Laporte and Jonathan Redgrave, A Practical Guide to Achieving Proportionality Under the New Federal Rule of Civil Procedure 26, 9 Fed. Cts. Law 19 (2015).

II. Conclusions

The primary impact of the amended rule is the heightened visibility of the proportionality factors.⁴⁸48 In addition to the cases cited below in the text, other decisions include: Sarma v. Wells Fargo, 2016 WL 41003 (M.D. N.C. Feb. 2, 2016); Wilson, 2016 WL 526225; Vaigasi v. Solow Management Corp., 2016 WL 616386 (S.D.N.Y. Feb. 16, 2016); Curtis v. MetLife, 2016 WL 687164 (N.D. Tex. Feb. 19, 2016); Bentley v. Highlands Hospital, 2016 WL 762686 (E.D. Ky. Feb. 23, 2016); Sumpter, 2016 WL 772552; Merlin v. Crawford, 2016 WL 814580 (D. Colo. March 2, 2016); Sender, 2016 WL 814627. As Judge Pittman put it in Vaigasi v. Solow Management, proportionality “has become the new black.”⁴⁹49 Vaigasi, 2016 WL 616386, at *2 (holding the large volume of document requests to be “far out of proportion to [the party's] claims”). In Duvall v. BopCo, the court decisively rejected on proportionality grounds a testing protocol whose risks and burdens were not justified by the amount in controversy.⁵⁰50 Duvall v. Bopco, 2016 WL 1268343 (E.D. La. April 1, 2016).

However, courts are not reluctant to resist claims of disproportionality. In one such case, the court described the argument based on disproportionality as mere “hyperbole” despite the recent amendments.

In contrast, relevance is “still” to be construed “broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on” any party's claim or defense.⁵¹51 State Farm v. Fayda, 2015 WL 7871037 at *2 (S.D.N.Y Dec. 3, 2015). This conclusion exists despite the deletion of reference to the discoverability of information as “reasonably calculated to lead to admissible evidence” ⁵²52 Committee Note, 24. The Chair of the Duke Subcommittee explained that “[m]any lawyers and courts continue to treat this provision as expanding, and indeed defining, the scope of discovery.” April 2014 Minutes, lns. 298-300. which has led some courts to conclude that “no longer is it good enough to hope that the information sought might lead to the discovery of admissible evidence.”⁵³53 Gilead Sciences, 2016 WL 146574, at *1. Not all courts are aware of the deletion. See, e. g., Vailes v. Rapides Parish School Board, 2016 WL 744559, at *3 (W.D. La. Feb. 22, 2016) (“relevancy of a discovery request depends upon whether it is ‘reasonably calculated' to lead to admissible evidence”).

The reason is subtle but fairly obvious. Proportionality trumps relevance, it does not modify or replace it. In Pertile v. GM, for example, a court in a roll-over case refused to require GM to produce complex modeling software which, although relevant, was not proportional to the needs of the case given the failure to demonstrate that other discovery was not adequate.⁵⁴54 Pertile v. GM, 2016 WL 1059450, at *4 (D. Colo. March 17, 2016) (placing burden on party seeking discovery to establish relevance and necessity for production of proprietary trade secret information); accord Turner v. Chrysler, 2016 WL 323748 (M.D. Tenn. Jan. 27, 2016) (lane departure software used in Europe not sufficiently relevant to justify burdens).

It is difficult, based solely on the cited reasoning in the opinions to date, to identify any difference in result which can be directly correlated to the relocation of the proportionality factors into Rule 26(b)(1).⁵⁵55 Committee Note, 19 (“[t]he present amendment restores the proportionality factors to their original place in defining the scope of discovery”). The amended rule does not actually place a greater burden on the parties or the courts to consider proportionality.⁵⁶56 See, e.g., Dao v. Liberty Life Assurance Corp., 2016 WL 796095 (N.D. Cal. Feb. 23, 2016) (Laporte, M.J.). As one commentator put it, “[w]e could not locate a single case where we could say with any confidence that the amendment to Rule 26(b)(1) caused a court to rule that the discovery in question was unauthorized.”⁵⁷57 David Herr and Steven Baicker-McKee, Discovery, 31 No. 2 Fed. Litigator NL 10 (2016).

Nonetheless, many believe that the proportionality relocation has had, at the margins, an appreciable and very real impact on parties and the courts in close cases. The Author shares this view although, in the main, the results are more often no different than might be expected under the previous rule. In Garner v. St. Clair College, for example, the Magistrate Judge stated that it made no difference as to whether old or new rules applied,⁵⁸58 Garner v. St. Clair College, 2016 WL 146691, at n. 1 (S.D. Ill. Jan. 13, 2016), affirmed 2016 WL 1059238 (S.D. Ill. March 17, 2016). a conclusion in which the District Judge joined after review on appeal.⁵⁹59 Id. at n. 3.

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