Can’t We All Get Along? – Proportionality under the FRCP

As most of us know by now, several changes to the Federal Rules of Civil Procedure impacting the discovery process took effect in December 2015. While much has been written elsewhere about these amendments, the 2006 changes received much wider coverage. I believe this is largely due to the nature of the 2015 changes as understated, with some amendments simply aimed at bringing the FRCP into line with common practice.

The Rules Committee undertook, in the revisions to Rules 26 and 37, to clarify the murky area of proportionality in discovery. Proportionality in this context is very often misunderstood, even by seasoned practitioners. Worse still, since it necessarily relies on an evaluation of reasonableness, often involving technical considerations and their associated costs, an understanding of the legal concept of proportionality under the FRCP isn’t enough. The Committee makes note that the amendments do not substantively change the proportionality analysis, but the revisions highlight the current focus on collaboration. The changes also attempt to clarify how and when proportionality should be considered in the context of both preservation and discovery.

Rule 26 – There have always broadly been two aspects to proportionality in discovery. I used to refer to these as “vertical” and “horizontal” proportionality for brevity. The former referred the burden (usually economic) of discovery on a party relative to the amount in controversy or the importance of the issues in the litigation. The latter referred to the burden of discovery on the parties, relative to each other. The revisions to Rule 26(b)(1) bring these two types of proportionality front and center. I recall that for years after the 2006 amendments took effect, clients argued that a court should impose cost-shifting because of extreme “information asymmetry”, a.k.a., lack of horizontal proportionality. I do have a fear that by (re)placing proportionality prominently in rule 26 as it has, the Committee has encouraged that same line of reasoning in a whole new generation of practitioners. The Committee tries to forestall this argument by noting, “the burden of responding to discovery lies heavier on the party who has more information, and properly so.” Finally, the Committee notes reiterates an earlier iteration stating, “[t]he rule contemplates greater judicial involvement in the discovery process…” I find this last statement concerning because, in my experience, judges have shown a keen disinterest in discovery disputes.

Rule 37 – To refresh your memory, rule 37 deals mostly with failures in discovery and what to do about them. E.g., failure to preserve after a duty attaches. The changes to rule 37 will receive their own blog entry soon, but I find it fascinating how the concept of horizontal proportionality snuck its way into this revision. Neither the rule, nor its amendments mention proportionality. However, the Committee note states, “Another factor in evaluating the reasonableness of preservation efforts is proportionality” and that courts, “should be sensitive to party resources.” It gives an example of a party to a litigation utilizing a less costly method of preservation provided that it is substantially as effective as more costly methods. In other words, if a party skimps on its preservation efforts due to lack of resources, it may still be reasonable under a horizontal proportionality analysis.

More on the changes to rule 37 et seq. later. -td