Controlling Your Client’s Discovery Costs with Proportionality

For defense counsel and their clients, discovery costs too frequently dominate throughout the life cycle of a case, changing the focus from the merits to the increasing costs to defend. Until recently, Fed. R. Civ. P. 26(b)(1) permitted discovery of “all non-privileged matter relevant to any party’s claim or defense,” including information that “appears reasonably calculated to lead to the discovery of admissible evidence.” Disputes over parties’ discovery obligations—and disputes over these disputes—exponentially increased litigation cost, frustrating parties and their clients.

Effective December 1, 2015, however, the standards changed. Under revised Fed. R. Civ. P. 26(b)(1), parties may now “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.”

This new language provides a valuable tool for counsel and clients looking to reduce discovery costs. As Chief Justice Roberts explained, the amendments to the rules “may not look like a big deal at first glance, but they are.” Amended Rule 26(b)(1) “crystalizes the concept of reasonable limits on discovery through increased reliance on the common-sense concept of proportionality,” which means, “as a fundamental principle, that lawyers must size and shape their discovery requests to the requisites of a case.”

This focus on proportionality is still being tested, with some courts noting that they remain “inclined to err in favor of discovery rather than against it,” Steel Erectors, Inc. v. AIM Steel Int'l, Inc., 312 F.R.D. 673, 676 (S.D. Ga. 2016) (citations omitted), and finding that the burden has not shifted—the party resisting discovery has the burden of showing undue burden or expense, even with the focus on proportionality. State Farm Mut. Auto. Ins. Co. v. Fayda, 2015 WL 7871037, at *2 (S.D.N.Y. Dec. 3, 2015) (citations omitted). But other courts have expressly stated that the amendment to Rule 26(b)(1) “‘dramatically changed’ what information is discoverable and further found that counsel’s citation and reliance on the prior rule was a “misrepresentation” deserving of sanctions! Fulton v. Livingston Fin. LLC, 2016 WL 3976558, at *7 (W.D. Wash. July 25, 2016).

At minimum, amended Rule 26(b)(1) now provides counsel with tools against the unlimited discovery under the prior system, and every practitioner should consider:

1. Is this information actually needed to advance or resolve this case?
2. How important are the issues presented?
3. How much is at stake in this litigation?
4. What burdens are there in accessing this material?
5. What resources do the parties have to spend on discovery?
6. Will this discovery go to resolve issues in this case?
7. Given all the above factors, does the cost in obtaining this discovery outweigh its likely benefit?

While each individual factor is not dispositive, courts are increasingly receptive to arguments against production on the grounds that the requests are not proportional to the issues, costs, and resources at play in the case.

Joshua Maggard is with Quarles & Brady, LLP in Milwaukee, Wisconsin.

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