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March 30, 2017 Practice Points

Statistical Sampling May Meet the Proportionality Requirement under FRCP 26

A magistrate judge’s recent decision struck a balance between parties’ right to discoverable information on one hand, and limiting costs and labor on the other.

By Jason M. Wiley

With the rise of discovery disputes centering on large requests of documents stored electronically, courts are attempting to strike a balance between parties’ right to discoverable information on one hand, and limiting costs and labor on the other. A magistrate judge’s recent decision struck such a balance.

In Solo v. United Parcel Service Co., 2:14 cv-12719-DPH-RSW (Jan. 10, 2017), the U.S. District Court for the Eastern District of Michigan provided guidance on how courts should examine the burden vs. benefit analysis set forth in Fed. R. Civ. P. 26 in instances where a party is seeking vast quantities of electronically stored data and offered a solution that limits the time and expense associated with compiling discoverable information while preserving a propounding party’s objective.

In Solo, the plaintiff sought information from United Parcel Service (UPS) regarding the shipping company’s billing practices on a package-by-package basis. Because the matter was a nationwide class action and the statute of limitations varied from state to state, the plaintiff’s request identified five distinct time periods each ending on December 29, 2013. UPS objected to the request and, in so doing, submitted a declaration from an executive providing that the cost and burden associated with fully answering the request from archived data would take in excess of six months and would cost $120,000. UPS further asserted that limiting the request to the six-month period from June 30, 2013 to December 29, 2013 would be proper because one of the defenses that UPS raised was that all claims arising from conduct prior to the June 30 date were barred based upon certain terms and conditions that require UPS be put on notice of billing disputes within 180 days, or the issue was waived.

Fed. R. Civ. P. 26(b)(1) provides, in pertinent part, that discovery should be “proportional to the needs of the case . . . and whether the burden or expense of the proposed discovery outweighs the benefit.” In determining the proportionality, the magistrate judge determined that UPS satisfied its burden of showing that production of package-specific information would be extraordinarily burdensome—especially in light of the uncertainty of whether UPS’s waiver defense was meritorious.

In so ruling, the magistrate judge did not discredit the plaintiff’s request. Instead, the magistrate judge held that statistical sampling strikes the appropriate balance between the plaintiff’s need for information and the burden imposed on the responding party. In support of this position, the magistrate cited previous holdings—most notably Smith v. Lowe’s Home Centers, Inc., 236 F.R.D. 354, 357–58 (S.D. Ohio 2006)—which provided “[l]imiting discovery to a statistically significant representative sampling . . . will both reasonably minimize the otherwise extraordinary burden imposed on the plaintiffs and their counsel and yet afford the defendant a reasonable opportunity to explore discovery and establish an evidentiary basis for its defenses.” Thus, the magistrate judge ordered UPS to provide responsive documents for the six-month period in question along with a calculation methodology to assist the plaintiffs.

Based upon the decision in Solo, along with its progeny, practitioners now have effective methods to ascertain information without having to unduly burden their adversaries. One such method—statistical sampling—allows for limited production of documents while still allowing a plaintiff to calculate damages.

Jason M. Wiley is of counsel with Armstrong Teasdale, LLP in Las Vegas, Nevada.

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