November 30, 2017

How to Achieve the Mandate of Proportionality Through Phased Discovery

Robert E. Sumner IV and Charles R. Scarminach – November 30, 2017

In the modern age of electronic discovery, it is easy to miss the forest for the trees. Whether it be through interrogatories, production of documents, or depositions, even the simplest of matters can quickly become discovery nightmares if the parties lose sight of the end goal: the discovery of relevant facts. In 2015, in an effort to refocus the litigation process, the U.S. Supreme Court amended the scope of discovery to clarify that information is discoverable if it “is relevant to any party’s claim or defense and proportional to the needs of the case. . . .” Fed. R. Civ. P. 26(b)(1). The 2015 advisory committee note further declared that “[t]he parties and the court have a collective responsibility to consider the proportionality of all discovery and consider it in resolving discovery disputes.” An effective tool that litigators can use to comply with the committee’s mandate is phased discovery.

Traditionally, phased discovery is a process in which the parties agree, or the court mandates, that discovery will initially be limited to “clearly relevant information located in the most accessible and [least] expensive sources.” Tamburo v. Dworkin, No. 04 C 3317, 2010 U.S. Dist. LEXIS 121510, at *9 (N.D. Ill. Nov. 17, 2010). This allows “the parties to develop the facts of the case sufficiently to determine whether, at a later date, further potentially more burdensome and expensive discovery is necessary or warranted.” Id. For example, in Tamburo, the district court required that “[d]uring the initial phase, the parties shall serve only written discovery on the named parties. Nonparty discovery shall be postponed until phase two, after the parties have exhausted seeking the requested information from one another.” Id. As stated in Tamburo, the purpose of phased discovery is “to ensure that discovery is proportional to the specific circumstances of [the] case, and to secure the just, speedy, and inexpensive determination of [the] action. . . .” Id. at *8.

Rule 26 of the Federal Rules of Civil Procedure was amended in 1993 to require the parties to meet and develop a proposed discovery plan at the outset of the litigation. Fed. R. Civ. P. 26(f) (1993). The amendment further required that the proposed discovery plan include the parties’ views and proposals on “whether discovery should be conducted in phases. . . .” Id. This same language remained in the rules for the next 25 years and is still present today. Fed. R. Civ. P. 26(f)(3)(B). Judge Paul W. Grimm of the U.S. District Court for the District of Maryland recently stated that “phased discovery” can function “as a means to keep discovery proportional.” Hon. Paul W. Grimm, “Are We Insane? The Quest for Proportionality in the Discovery Rules of the Federal Rules of Civil Procedure,” 36 Rev. Litig. 117, 153 (2017). Judge Grimm further opined that judges can “keep costs and burdens in check by ordering that discovery occur in stages, with the initial phases focusing on the information most likely to be relevant to resolving the central claims and defenses, and additional phases allowed based on the result of the initial phase.” Id. at 152–53; see also Siriano v. Goodman Mfg. Co., L.P., No. 2:14-cv-1131, 2015 U.S. Dist. LEXIS 165040, at *19–20 (S.D. Ohio Dec. 9, 2015) (suggesting phased discovery as a method the parties could use to come to an agreement regarding proportional discovery).

Phased discovery does have detractors, however. Some district courts have viewed phased discovery requests under Rule 26(f)(3)(B) with skepticism. Philip N. Yannella, Pennsylvania eDiscovery 4–7 (2d ed. 2015). As identified by Yannella, one case that is illustrative of this skepticism is United States v. Education Management LLC, No. 07-cv-461-TFM (W.D. Pa. Nov. 8, 2012). In Education Management, the defendant sought to initially produce only a limited set of documents that it argued would be dispositive of the case. The plaintiffs opposed the request and instead sought to conduct conventional discovery. The court denied the defendant’s request and reasoned that phased discovery “would not promote the just, speedy and inexpensive resolution of the case” because the plaintiffs’ theory of the case was that the information in the limited set of documents was “a pretext or cover-up.” Education Management LLC, No. 07-cv-461-TFM, slip op. at 2. As seen here, courts are wary of parties attempting to use phased discovery for a tactical advantage and not for the intended purpose of reaching an expedited resolution.

Regardless of the skepticism from some courts, the adoption of the 2015 amendments to the Federal Rules of Civil Procedure and the committee’s renewed focus on proportionality should lead to an increased acceptance of phased discovery. An example of post-amendment phased discovery occurred in Provau v. YRC, Inc., No. 4:16-cv-00422-RBH, 2016 U.S. Dist. LEXIS 113645 (D.S.C. Aug. 25, 2016). In Provau, the plaintiff was an employee of a vendor hired to perform repairs on a tractor-trailer owned by the defendant. Id. at *2. The plaintiff was injured while performing repairs and filed a complaint for negligence, gross negligence, and willful and wanton behavior. The defendant owner and its codefendant filed a motion to dismiss asserting the statutory employer defense and alleging that the plaintiff’s exclusive remedy was under the South Carolina Workers’ Compensation Act. The court denied the motion to dismiss but, in doing so, granted the parties 60 days “to engage in limited jurisdictional discovery solely on the issue of whether [the plaintiff was] a statutory employee.” Id. at *7. The court further stated that, “[p]ending the outcome of the limited time for discovery, [the defendants] will have the opportunity to re-file their motion to dismiss at the conclusion of the sixty day period.” Id. The court recognized that the defendants had asserted a defense that was potentially dispositive of the entire case and, therefore, ordered phased discovery to address that issue first. At the conclusion of the additional 60 days, the defendants refiled their motion to dismiss and the court dismissed the case for lack of subject matter jurisdiction. Provau v. YRC, Inc., No. 4:16-cv-00422-RBH, 2016 U.S. Dist. LEXIS 113645 (D.S.C. Apr. 28, 2017).

There are a number of factors that will increase the likelihood of success when requesting phased discovery from the court. First, as demonstrated in Provau, it is important to identify any potentially dispositive issues that could be more efficiently addressed through phased discovery. The attorney advocating for phased discovery should emphasize the likelihood of an early resolution to the case after the initial phase of discovery and filing of motions. Second, it is beneficial to articulate specific details and deadlines when developing a phased-discovery plan. Courts can be wary of a vague phased-discovery plan that could lead to disputes down the road. Third, the advocating attorney should be prepared to demonstrate how and why phased discovery will not be redundant or lead to an unnecessary duplication of efforts. Anyone considering the use of phased discovery should be sure to articulate a legitimate basis for the request and be prepared to defend against accusations of misuse. Finally, the request for phased discovery should promote the interests of judicial economy and savings for the client.

Ultimately, the considerations that bear on proportionality have long been a part of the Federal Rules of Civil Procedure. According to the 2015 advisory committee note, the 2015 amendments simply “reinforce[] the Rule 26(g) obligation of the parties to consider [proportionality] factors in making discovery requests, responses, or objections.” As demonstrated above, trial lawyers, and their clients, can benefit immensely from including phased discovery in their litigation planning.

Robert E. Sumner IV and Charles R. Scarminach – November 30, 2017