Over the past three decades, changes in technology have precipitated changes in the legal profession. Written correspondence progressed to emails; phone calls reduced to text messages. With this evolution, the potential of information discoverable in lawsuits has grown exponentially. The growth of electronically stored information (ESI), in turn, brought with it a slew of unique issues. The vast majority of ESI in most cases is irrelevant and producing it is costly and burdensome. Adapting to the needs of the profession, the Rules Committee addressed this very issue in 2015 by amending Federal Rule of Civil Procedure 26 (Rule 26).
In short, the committee amended Rule 26(b)(1) to limit the scope of discovery to relevant, non-privileged information that is proportional to the needs of the case. Lawyers rejoiced. Spending countless hours producing and reviewing tens of thousands of documents in low-worth cases ostensibly became a thing of the past. But there are two sides to this story: what the rule says, and how judges interpret and apply it.
It has now been a little over two months since the 2015 amendments to the Federal Rules took effect, and magistrate-judge opinions regarding the Rule 26 are beginning to surface. Although it is still far too early to predict the practical impact of the amendments, one thing is clear—better data-retention policies make for better proportionality arguments. Indeed, the committee notes provide that parties should consider reliable technology as a means to reduce costs in cases involving large volumes of ESI.
Among the factors a judge considers in determining the proportionality of discovery, only one can be directly manipulated by the parties: the burden imposed on litigants versus the likely benefit to the resolution of the dispute. (The other factors judges consider in determining proportionality of discovery include: the importance of the issues at stake; the amount in controversy; access to relevant information; the resources of the parties; and the importance of discovery in resolving the conflict. See Fed. R. Civ. P. 26(b)(1). ) Magistrate judges’ early interpretations of this rule indicate that self-imposed burdens are unpersuasive. During the 2016 ALM LegalTech conference in New York, U.S. Magistrate Judge James C. Francis made this very point. “If you have been cavalier about your information governance and you have hordes of information that have not been properly vetted . . . I’m going to be much less sympathetic because the burden you created is more or less self-imposed.”
Accordingly, a well-crafted data-retention policy is critical to saving costs in discovery; magistrates are unmoved by the costs created by deficient (or nonexistent) policies. A well-written policy will likely make for a stronger argument in limiting proportional discovery. At the very least, it will create a stronger negotiating position when crafting the scope of discovery with opposing counsel. It is important to remember, though, that a policy is only as effective as it is implemented.
—Michael Paretti, Snell & Wilmer, Las Vegas, NV