• Revisiting Proportionality
  • July 29, 2016 | Author: Jason E. Ohana
  • Law Firm: Willcox & Savage, P.C. - Norfolk Office
  • In a previous edition of this Newsletter, I wrote about using the concept of proportionality to limit discovery costs. With the recent amendments to the Federal Rules of Civil Procedure that took effect December 1, 2015, this topic has continued to garner considerable attention. Indeed, U.S. Supreme Court Chief Justice John Roberts dedicated the bulk of his 2015 Year-End Report on the Federal Judiciary to proportionality.

    The amended Rules emphasize a proportionality standard that limits the scope of discovery requests to the needs of the case. It has now been five months since the amended Rules took effect. This Article will take a look at how the new emphasis on proportionality has played out in the trenches. Before turning to the recent cases, however, I pause briefly to remind the reader what exactly changed on December 1, 2015.

    The New Emphasis on Proportionality

    To help combat the problem of “over-discovery,” the Judicial Conference Advisory Committee on Civil Rules (the “Committee”) made a number of revisions to Rule 26, which is the Rule dealing with the scope of discovery. One of the changes made was to move the proportionality requirement into the definition of what is discoverable. Prior to this change, the requirement existed, but it was set out in a separate subsection, as a ground on which a discovery request could be objected to. Rule 26(b)(1) now provides as follows:

    Parties may 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.

    Fed. R. Civ. P. 26(b)(1) (emphasis added). In placing proportionality factors into Rule 26(b)(1), the Committee noted that the individual factors (e.g., the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, etc.) should not be used in isolation to undermine the purpose of proportionality.

    The other major change to this Rule was to eliminate, from the provision permitting discovery of inadmissible information, the qualifier, “reasonably calculated to lead to the discovery of admissible evidence.” The Committee found that this phrase had been misused to define (and thus enlarge) the scope of discovery. Chief Justice Roberts had this to say of Rule 26(b)(1)’s new formulation: “Rule 26(b)(1) crystalizes the concept of reasonable limits on discovery through increased reliance on the common-sense concept of proportionality.”

    In addition to Rule 26(b)(1), several other Rules have also been revised to greater emphasize the centrality of proportionality in discovery. For example, Rule 1 was amended to clarify that the courts and the parties have a duty “to secure the just, speedy, and inexpensive determination of every action and proceeding,” and Rule 37(e), which governs preservation of electronically stored information (“ESI”), was revised to require only that a party take “reasonable steps” to avoid the loss of ESI. As the Committee points out in the Advisory Committee Notes, an important “factor in evaluating the reasonableness of preservation efforts is proportionality.”

    How are Courts Interpreting the Revised Rule 26(b)(1)?

    Five months in, the question is whether the renewed focus on proportionality has changed the way courts rule on discovery disputes. A number of courts have already begun applying the amended Rule 26(b)(1), and though not all agree that the revisions reflect a substantive change in the law, most are carefully considering proportionality challenges. A summary of several recent cases follows.

    Cases Striking Discovery Requests Under the Doctrine of Proportionality
    • Vaigasi v. Solow Mgmt. Corp., No. 11 Civ. 5088 (RMB)(HBP), 2016 WL 616386 (S.D.N.Y Feb. 16, 2016).
    Vaigasi is one of the more remarkable cases citing the revised Rule 26(b)(1). In it, the court found that the plaintiff’s requests for documents and ESI were “far out of proportion to his claims,” and that they were “the product of a conscious effort to draft the most burdensome document requests possible.” Upon making these findings, the Court not only denied the plaintiff’s motion to compel, but also sanctioned the plaintiff, by, among other things, ordering the plaintiff to pay the defendant’s reasonable attorneys’ fees incurred in addressing the discovery motions. The court anticipated that such fees would “exceed $50,000.”
    • Pertile v. Gen. Motors, LLC, No. 1:15-cv-00518-WJM-NYW, 2016 WL 1059450 (D. Colo. Mar. 17, 2016).
    In Pertile, the plaintiffs sued General Motors for injuries sustained in a rollover accident. They sought to compel production of Finite Element Analysis (“FEA”) Models GM engineers had generated in the process of designing the truck model at issue in the case. The court, while acknowledging that the models “could yield information relevant to this action,” balanced that fact against the harm GM would face in producing sensitive trade secret analysis.

    The court ultimately denied the plaintiff’s motion to compel, holding that the request for FEA Models was not proportional to the needs of the case. In reaching this determination, the court considered the fact that GM had already produced electronic CAD drawings of the final design of the truck as well as engineering reports capturing what GM “knew or should have known from the FEA Models.”
    • Gilead Sciences, Inc. v. Merck & Co., Inc., No. 5:13-cv-04057-BLF, 2016 WL 146574 (N.D. Cal. Jan. 13, 2016).
    In Gilead, the court opened its opinion with this analysis of amended Rule 26(b)(1):

    What will change—hopefully—is mindset. No longer is it good enough to hope that the information sought might lead to the discovery of admissible evidence. In fact, the old language to that effect is gone. Instead, a party seeking discovery of relevant, non-privileged information must show, before anything else, that the discovery sought is proportional to the needs of the case. The present dispute offers a good example of the wisdom of the Advisory Committee on Civil Rules in elevating proportionality in defining the scope of permissible discovery.

    The court went on to deny Merck’s motion to compel production of two test tubes shown in a photograph that Merck suspected might contain the same compound that the underlying patent dispute was about. The court held that with no indication that the compound was the same, Merck’s request was akin to “requiring GM to produce discovery on Buicks and Chevys in a patent case about Cadillacs simply because all three happen to be cars,” and concluded that “given the cost and potential delay introduced by the requested production, Merck's request is precisely the kind of disproportionate discovery that Rule 26—old or new—was intended to preclude.”

    Cases Upholding Discovery Requests Over Proportionality Objections
    • Rui He v. Rom, No. 1:15-CV-1869, 2016 WL 909405 (N.D. Ohio Mar. 10, 2016).
    In Rui He, the corporate defendants argued that a number of the plaintiffs’ discovery requests were “not proportional to the needs of the case, and that Plaintiffs ha[d] not narrowed their requests to the new Rule 26 standard adopted in 2015.” These requests sought production of “financial documents, tax returns, accountings, and information on assets.” The court conceded that the requests were extensive but nevertheless granted the motion to compel because the plaintiffs’ “allegations of fraud and illegal activity [were] similarly extensive and troubling.” The court assigned great weight to the allegations that the defendants had “improperly moved around client funds, and made intra-company sales to generate profit, hide assets and to commit fraud on members of the putative class.”
    • Morgan Hill Concerned Parents Assoc. v. Cal. Dep’t of Educ., No. 2:11-cv-3471 KJM AC, 2016 WL 304564 (E.D. Cal. Jan. 26, 2016).
    In Morgan Hill, the defendant made proportionality objections as to two broad categories of document requests. The case involved a challenge to the State of California’s compliance with certain federal statutes governing the education of children with disabilities. The defendant interposed a general proportionality objection to requests that sought “state-wide” documents and to requests that sought documents related to students who were deemed not disabled. Regarding the first class of documents, the defendant argued that the plaintiffs were only 17 children in 7 school districts, so to the extent requests sought documents related to 1,022 districts and over six million children, they were disproportionate to the needs of the case. The court rejected this argument, holding that discovery of statewide documents was proportionate because the suit alleged systemic statewide noncompliance with the federal statutes. The court also rejected the argument that discovery should be limited to documents regarding disabled students because such a limitation would prevent plaintiff from challenging non-disability determinations the defendant had made.

    Cases Finding a Middle Ground

    Sometimes neither party totally prevails on its proportionality argument. In these cases, courts are left to find a middle ground between granting and denying the discovery motion.
    • Siriano v. Goodman Mfg. Co., No. 2:14-cv-1131, 2015 WL 8259548 (S.D. Ohio Dec. 9, 2015).
    In Siriano, the court was faced with a motion to compel responses to numerous requests for production. The court found that the requests were for relevant documents but also that the “Defendants’ discovery costs could be significant.” The court looked, for guidance, to both Rule 26(b)(1) and Rule 1 of the Federal Rules of Civil Procedure. The court remarked, “Restoring proportionality is the touchstone of revised Rule 26(b)(1)’s scope of discovery provisions,” and it cited Rule 1’s injunction that “the civil rules ‘should be construed and administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.” (emphasis in original). With these principles in mind, the court ordered a discovery conference to discuss whether conducting discovery in phases would be beneficial and instructed the parties to “engage in further cooperative dialogue in an effort to come to an agreement regarding proportional discovery.”
    • Oracle Am. Inc. v. Google, Inc., No. 10-cv-03561-WHA (DMR), 2015 WL 7775243 (N.D. Cal. Dec. 3, 2012).
    Oracle sought to add 22 individuals to the list of custodians from whom it sought electronically stored information (“ESI”). The court found that, with respect to this request, “Neither party submitted a proper analysis of the Rule 26 proportionality factors.” Specifically, the court found that while Oracle provided some information regarding the relevance of each custodian, it did not “address any of the proportionality factors, including the importance of the requested discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” By the same token, the court found that Google failed to assert that the discovery sought was irrelevant or too expensive to produce. Faced with this “failure to fully address the legal standard,” the court was left to “make its best judgment based on the limited information before it.” The court settled on a compromise, granting Oracle access to ESI from 10 additional custodians of its choice (out of the 22 it had requested).


    While the concept of proportionality is nothing new, courts are clearly taking notice of the new emphasis in the 2015 amended Rules on what is necessary for the case in light of the related burden or expense of the discovery request. This is a welcome development that may lead to substantial cost savings. Moving forward, it is important for parties to be familiar with the application of the proportionality limitation. Several practical pointers can be drawn from how courts have already applied the amended Rules on proportionality: (1) Parties need to be cognizant of how asserting claims or defenses may expand the scope of discovery; (2) Parties need to object on proportionality grounds when the discovery request does not satisfy the proportionality limitations in the amended Rules; (3) Parties need to be ready to provide specific details on the burdens and expenses related to the discovery request; (4) Parties need to consider cost-shifting some or all of the expense to the requesting party; (5) Parties need to point out alternative means to obtain the information from another source; (6) Parties should cooperate with each other on negotiating the scope and limits of discovery requests, including considering use of technology-assisted review tools, to reduce the cost; (7) Parties should be careful when dealing with case law on proportionality decided before the amended Rules went into effect; and (8) Parties need to carefully consider whether their own discovery requests are proportionate to the needs of the case. Lastly, while the amended Rules generally do not apply to pre-litigation conduct, similar proportionality assessments are made with respect to the reasonableness of evidence preservation decisions when litigation is or should be reasonably anticipated.