The world of e-discovery changed significantly in the past year. On Dec. 1, 2015, amendments to the Federal Rules of Civil Procedure (FRCP) affecting discovery took hold. At the heart of the amendments was a renewed effort to provide judges and lawyers with tools to help move the discovery process along and keep litigation costs in control.
Perhaps the most prominent change is the refined scope of discovery under new Rule 26(b)(1). For many years, parties could obtain information "reasonably calculated to lead to the discovery of admissible evidence." Over time, courts became concerned that this language was too broad in scope, leading to "fishing expeditions" in discovery.
The issue became particularly glaring with the explosion of electronically stored information (ESI) in the workplace. The result: volumes of documents that outside counsel must sift through, adding significant discovery costs to a matter.
Today's Rule 26 departs from the "reasonably calculated" standard, and replaces it with new language focusing on two key concepts—relevance and proportionality. This change limits the scope of discovery to only that which directly addresses the needs of the case.
The rule also provides a list of factors, requiring parties to take into account the importance of the issues at stake in the action, the amount in controversy, the parties' access to relevant information, the parties' resources, the importance of discovery in resolving the issues, and whether the cost of discovery outweighs the benefit.
What does this mean for in-house counsel, and why does it matter? At its core, proportionality is about balance, ensuring that parties receive the information they need to plead their claims and argue their defenses, while curtailing expensive and time-consuming waste. While the concept seems simple enough, the proportionality component received a great deal of attention last year, for good reason: It can be complicated to apply.
Here are five common mistakes that in-house counsel should look for that frequently appeared in e-discovery case law in 2016.
1. Failing to realize that the standard for discovery has changed.
In 2016, many attorneys continued to apply the old standard and relied on courts to resolve their discovery disputes. Courts, while initially patient, are no longer likely to tolerate this conduct in 2017. When it comes to discovery, in-house counsel serve as a backstop, guarding that outside counsel does not invoke the ire of the court, such as in in Fulton v. Livingston Fin. In that case, an attorney was sanctioned for citing to the old amendments and ignoring proportionality.
As judicial officers become more comfortable with the language of the FRCP amendments, an increasing number of courts are remanding discovery requests back to parties, and courts are imposing sanctions for noncompliance with the new requirements. Adapt discovery strategies accordingly.
2. Considering only the cost of discovery and ignoring the other factors.
Cost is an important consideration in handling discovery and determining whether a discovery request is proportional. Even though courts are sympathetic to parties' financial concerns (especially considering the current volumes of electronic documents), they remain as committed as ever to ensuring that parties have needed information. For example, in First Niagara Risk Mgmt. v. Folino, the court held that the broad scope of the plaintiff's discovery requests were necessary to "uncover the scope of [the defendant's] alleged misdeeds."
Cost is only one component of the proportionality equation. Counsel must take into account that other factors are involved and build well-rounded arguments involving all of the proportionality factors.
3. Telling the court what won't work and not telling the court what will.
As the 2015 amendments stated in Rule 1, "These rules … should be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding" (emphasis added). Rule 1 appears frequently in 2016 cases involving proportionality, such as Wai Feng Trading Co. v. Quick Fitting. For courts, the aims of Rule 1 and proportionality the same: Every litigant is responsible for making discovery proportional. Courts are expecting more than a blatant denial that discovery is disproportional; what they want to see is an option for discovery that is.
4. Not taking the meet and confer requirement seriously.
When the amendments were newly issued, many courts were patient with parties and issued lengthy opinions that dissected the parties' discovery arguments until they were proportional. As 2016 drew to a close, courts increasingly refrained from crafting discovery, and instead more commonly sent cases back to the parties to settle the issue themselves.
For instance, in Pyle v. Selective Ins. Co. of Am, the court reiterated that discovery should be party driven, and not micro-managed by the court. When determining scope of discovery, expect early meet and confer conferences to play a significant function in setting the tone for the rest of discovery.
5. Thinking of proportionality as a constraint, not a tool.
As the recent case Ciuffitelli v. Deloitte & Touche stated, "For Rule 26(b)(1)'s proportionality mandate to be meaningful, it must apply from the onset of a case." While it seems that proportionality limits discovery, it actually can be a useful mechanism. Proportionality can restrain costs, and ensure that inside and law firm counsel focus their efforts only on the documents that are worth the resources.
Amy Rotering, KrolLDiscovery law clerk, assisted with this article.