August 25, 2016 Top Story

Federal Court Clarifies Discovery Rights under Revised Rule 26

Rule does not require parties to produce all potentially relevant information, court says

Caitlin Haney

Redacting potentially relevant information is permissible, says the U.S. District Court Southern District of FloridaIn re Takata Airbag Prods. Liability LitigationThe district court applied the new proportionality standard to reach its decision but emphasized that the parties seeking similar results must provide a persuasive reason for withholding or redacting such information. ABA Section of Litigation leaders note that as one of the first forays into the proportionality analysis, this case sheds some light on how courts will apply the newly amended Rule 26.

Non-Production of Irrelevant Information

In Takata, the special master recommended that the producing party be allowed to redact information pertaining to seven distinct categories of documents deemed irrelevant and that the producing party be allowed to withhold irrelevant parent documents. The plaintiff disagreed with the special master's recommendation and appealed it to the district court assigned to the case.

The plaintiff objected to the redacting of information pertaining to the seven categories of information deemed irrelevant. The plaintiff argued that the report was flawed for four reasons: (1) it was based on an inaccurate premise, (2) it was inconsistent with the Federal Rules of Civil Procedure, because the redactions could potentially allow withholding of highly relevant information, (3) it would impair their discovery efforts, and (4) it could lead to further litigation over the redactions. The defendants argued that irrelevance redactions were necessary to avoid disclosing competitively sensitive information.

Court's Application of the Newly Revised Rule 26

In beginning its analysis, the court noted that Rule 26(b)(1) lists six factors to consider in determining whether or not parties may obtain discovery of nonprivileged matters: 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.

The court observed that recently amended Rule 26(b)(1) clarified that the common-sense concept of proportionality imposes reasonable limits on discovery. The court looked to Chief Justice John Roberts' comments on the recently amended rule and concluded that since a party is not entitled to all relevant information, it is logical that a party is not entitled to all irrelevant information if the producing party has a persuasive reason for withholding such information.

Ultimately, the defendant persuaded the court that the concern for disclosing competitively sensitive information was sufficient to allow the defendant's to redact irrelevant information. However, the court did find that the special master's seven categories of irrelevant information could only be redacted if none of the information concerned airbags, the product at issue in the case.

A New Roadmap

n light of the rule change, there is "now a consistent and agreed upon roadmap by which the court can base its proportionality decisions" notes Eric B. Levasseur, Cleveland, OH, cochair of the Motion Practice and Discovery Subcommittee of the Section's Pretrial Practice & Discovery Committee. "This was a good example of a court implementing the proportionality theme and in a big picture way what the change in the rule means," according to Robert J. Will, St. Louis, MO, cochair of the Section's Pretrial Practice & Discovery Committee.

The "court's willingness to engage in a six-factor balancing test demonstrates the increased emphasis on proportionality in discovery," suggests Levasseur. It does not appear that "any factor is any more important than another, so courts will have to look at all six factors depending on the facts of the case" predicts Levasseur.

Sensitivity to Proprietary Information

It is "interesting that the court clearly was sensitive to the potential disclosure of competitively sensitive information and it was willing to prevent the disclosure of such information," explains Levasseur. Will agrees, noting the court's "recognition of the significant amount of important proprietary information." "This decision shows that in certain circumstances, even if a protective order is in place, the parties may still have the ability or right to shield certain information from public disclosure" notes Levasseur. Further, "interestingly, there was no discussion of cost burden, because that is not where the battle was being fought," notes Will.

Finally, it is "noteworthy that the court honed in on Chief Justice Roberts' comments about the rule changes and basically said that a party is not entitled to receive every piece of relevant information," observes Will.

Proportionality versus Relevance Analysis

However, "this case was also about relevance" according to Ronald J. Hedges, Hackensack, NJ, cochair of the Motion Practice and Discovery Subcommittee of the Section's Pretrial Practice & Discovery Committee. This case "more likely than not stands for a confusion between relevance and proportionality" critiques Hedges.

Caitlin Haney is an associate editor Litigation News.

Keywords: Rule 26, Federal Rules of Civil Procedure, discovery dispute, proportionality

Related Resources

Copyright © 2017, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).