Over the past eighteen months, federal courts have issued numerous important decisions clarifying the impact of the most recent amendments to Federal Rule of Civil Procedure 26(b), which went into effect December 1, 2015. These decisions have addressed the scope of discovery under the new rules and the requirement that discovery be proportional to the needs of the case. Understanding the contours of the new rules will continue to be important for parties seeking and responding to discovery in federal courts.
The New Rules and Their Purpose
As amended, Rule 26(b)(1) provides:
Scope in General. Unless otherwise limited by court order, the scope of discovery is 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).
Rule 26 was changed “to rein in popular notions that anything relevant should be produced and to emphasize the judge’s role in controlling discovery.” Noble Roman’s, Inc. v. Hattenhauer Distrib. Co., 314 F.R.D. 304, 307 (S.D. Ind. 2016). The 2015 amendments sent a clear signal to litigants and courts that proportionality is to be given greater emphasis, which in turn should reduce extraneous discovery. See Eramo v. Rolling Stone LLC, 314 F.R.D. 205, 209, n.2 (W.D. Va. 2016) (“[G]iven the 2015 amendment, the court will put a greater emphasis on the need to achieve proportionality, in determining whether to grant the motion to compel.”).
Of course, courts will not always strike down requests from parties seeking to compel discovery, even if compliance would be costly or burdensome. Parties seeking discovery who appropriately limit it to matters related to the claims or defenses, and are able to explain the relevance of their requests and how the proportionality factors weigh in their favor, are more likely to prevail in discovery disputes.
Discovery Must Be Relevant to Claims or Defenses, Not Just to the Subject Matter of the Action
One notable change to Rule 26(b)(1) is that it no longer provides that a court may order discovery “of any matter relevant to the subject matter involved in the action.” Compare Fed. R. Civ. P. 26(b)(1) (2015) with Fed. R. Civ. P. 26(b)(1) (2000). The current Rule 26(b)(1) contains no reference at all to the “subject matter of the action.” Noting this change, the Advisory Committee Notes state:
The amendment deletes the former provision authorizing the court, for good cause, to order discovery of any matter relevant to the subject matter involved in the action. . . . Proportional discovery relevant to any party’s claim or defense suffices, given a proper understanding of what is relevant to a claim or defense.
Fed. R. Civ. P. 26, 2015 adv. comm. note.
Even after the 2015 amendments, however, there are still misunderstandings regarding the permissible scope of discovery under Rule 26. In one case, a district court took pains to correct a special discovery master, who erroneously “considered relevancy to be as broad as the subject matter, which is broader than the scope of discovery contemplated by Rule 26.” Cole’s Wexford Hotel, Inc. v. Highmark Inc., No. CV 10-1609, 2016 WL 5025751, at *1 (W.D. Pa. Sept. 20, 2016), on reconsideration, 2017 WL 432947 (W.D. Pa. Feb. 1, 2017). Although the court “agree[d] with the special master that [the plaintiff] did not satisfy its burden to show that the information it request[ed] [wa]s relevant,” the court “reject[ed] the portion of the amended report and recommendation . . . which discussed the construction of the term ‘relevant’ under the 2015 amendments to Federal Rule of Civil Procedure 26.” Id. Specifically, the court rejected the special master’s statement that “[d]iscovery requests may be deemed relevant if there is any possibility that the information may be relevant to the general subject matter of the action.” Id. at *10 (internal quotation marks omitted and citation omitted). As the court noted, “discovery requests are not relevant simply because there is a possibility that the information may be relevant to the general subject matter of the action.” Id. at *1. Parties seeking discovery under the current rules should limit their requests to those that are demonstrably “relevant to any party’s claim or defense,” see Fed. R. Civ. P. 26(b)(1), and parties responding to discovery can emphasize the narrowed scope of discovery under current Rule 26.
Parties Seeking and Responding to Discovery Must Address Proportionality
The Advisory Committee Notes to the 2015 amendments state that: “[r]estoring the proportionality calculation to Rule 26(b)(1) does not change the existing responsibilities of the court and the parties to consider proportionality, and the change does not place on the party seeking discovery the burden of addressing all proportionality considerations.” Fed. R. Civ. P. 26, 2015 adv. comm. note. Despite this guidance, courts have arrived at different (and sometimes conflicting) conclusions regarding the burdens borne by litigants in discovery disputes.
In Carr v. State Farm Mutual Automobile Insurance Co., for example, a district court placed the burden of “showing that the discovery fails the proportionality calculation mandated by Rule 26(b)” on the shoulders of the party resisting discovery. 312 F.R.D. 459, 468 (N.D. Tex. 2015). The court noted that:
the amendments to Rule 26(b) and Rule 26(c)(1) do not alter the basic allocation of the burden on the party resisting discovery to – in order to prevail on a motion for protective order or successfully resist a motion to compel – specifically object and show that the requested discovery does not fall within Rule 26(b)(1)’s scope of proper discovery (as now amended) or that a discovery request would impose an undue burden or expense or is otherwise objectionable.
Id. at 469. Addressing the proportionality factors, the court stated:
[A] party seeking to resist discovery on these grounds still bears the burden of making a specific objection and showing that the discovery fails the proportionality calculation mandated by Rule 26(b) by coming forward with specific information to address – insofar as that information is available to it – 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.
Id. at 468.
Similarly, in First Niagara Risk Management, Inc. v. Folino, the court placed the burden on the party resisting discovery to “show that the factors in Rule 26 weigh in favor of . . . denying [the] request [of the party seeking discovery] for otherwise relevant information.” 317 F.R.D. 23, 28 (E.D. Pa. 2016). There, however, the court stated that “[a] party moving to compel discovery pursuant to Fed. R. Civ. P. 37 bears the initial burden of proving the relevance of the material requested.” Id. at 25 (emphasis added). After finding that “the material requested by [the party seeking discovery] [wa]s relevant to their breach of contract, breach of fiduciary duty, tortious interference, and other claims in this matter,” id. at 28, the court analyzed the proportionality factors set out in Rule 26(b)(1):
- The first factor weighed in favor of discovery, because “[t]he issues at stake [we]re of grave importance to [the party seeking discovery], who ha[d] allegedly uncovered a plan by one of its top executives to start a competing business and employ former . . . employees [of the party seeking discovery].” Id.
- The second factor weighed against discovery, because “[t]he amount in controversy [wa]s unknown at th[e] time.” Id.
- The third factor weighed in favor of discovery, because the party resisting discovery “ha[d] access to the information on his emails and text messages while [the party seeking discovery] d[id] not.” Id.
- The fourth factor, the parties’ resources, “weigh[ed] in favor of neither party because, while [the party seeking discovery] [wa]s a corporation and [the party resisting discovery] [wa]s an individual, [the] complaints [by the party resisting discovery] about costs
r[u]ng hollow from someone who just sold two companies for over $5 million.” Id.
- The fifth factor, “[t]he importance of discovery in resolving the issues in th[e] case[,] weigh[ed] heavily in favor of [the party seeking discovery], who need[ed] to conduct broad discovery to uncover the scope of [the] alleged misdeeds [by the party resisting discovery].” Id.
- The sixth factor weighed in favor of discovery, because the burden or expense of discovery for the party resisting discovery was “substantial” but “d[id] not outweigh the benefit of discovery for [the party seeking discovery], who, again, ha[d] uncovered evidence that one of its top executives may have started a competing company while under its employ.” Id.
Finding that the discovery sought was proportional to the needs of the case, id. at 27-28, the court granted the motion, compelling the party resisting discovery to “allow for a broad search of his electronic devices—including emails and text messages.” Id. at 25-26. The court’s conclusion that the discovery sought was proportional was predicated on a showing of relevance by the party seeking discovery.
Going even further, in Gilead Sciences, Inc. v. Merck & Co., the district court placed the burden on the “party seeking discovery of relevant, non-privileged information” to “show, before anything else, that the discovery sought is proportional to the needs of the case.” No. 5:13-cv-04057-BLF, 2016 U.S. Dist. LEXIS 5616, at *4 (N.D. Cal. Jan. 13, 2016). There, the party seeking discovery sought production of information about certain “tubes and their contents, including the tubes themselves,” even though the party resisting discovery had confirmed that the compounds in the tubes were unrelated to the compound at issue in the patent infringement action. See id. at *5-6. The court concluded:
In the absence of any reason to doubt the proof [that the party resisting discovery] ha[d] tendered about the identity of the disputed compounds, and given the cost and potential delay introduced by the requested production, [the] request [by the party seeking discovery] [wa]s precisely the kind of disproportionate discovery that Rule 26—old or new—was intended to preclude.
Id. at *7 (emphasis added).
In reaching this conclusion, the court noted that the demands of the party seeking discovery left the party resisting discovery in the “untenable” “position of having to produce discovery on all sorts of compounds that bear no indication of any nexus to the disputes in this case” and quipped that compelling discovery “would be like requiring GM to produce discovery on Buicks and Chevys in a patent case about Cadillacs simply because all three happen to be cars.” Id. Thus, to be safe, parties seeking discovery should endeavor to make an initial showing of both relevance and proportionality when moving to compel.
Similarly, in Eramo v. Rolling Stone LLC, the district court required the party seeking discovery to make not only an initial showing of relevance but also an initial showing of proportionality. See 314 F.R.D. 205, 211 (W.D. Va. 2016). In that case, the plaintiff sought to compel a non-party to produce certain documents. Id. at 207. The court stated:
Where a prima facie showing of discoverability has been made by the party seeking discovery, “the burden shifts ... to the resisting party to show lack of relevance by demonstrating that the requested discovery (1) does not come within the broad scope of relevance as defined under Fed.R.Civ.P. 26(b)(1), or (2) is of such marginal relevance that the potential harm occasioned by discovery would outweigh the ordinary presumption of broad discovery.”
Id. at 209 (internal quotation marks omitted, citation omitted, and emphasis added). The court found that the information sought was “discoverable as [the party seeking discovery] ha[d] made a prima facie showing of relevance and proportionality, which ha[d] not been sufficiently refuted by [the non-party resisting discovery.]” Id. at 211. The court made clear that its earlier reference to the “prima facie showing of discoverability” referred not just to relevance but also to proportionality. This case demonstrates the possibility that courts may conflate relevance and proportionality and impose upon parties seeking discovery the initial burden of making a prima facie showing of both.
Some courts, on the other hand, have expressly rejected the view that parties seeking discovery bear an initial burden of showing relevance and proportionality. In Samsung Electronics America Inc. v. Chung, the district court stated:
[T]he Court does not believe that, under Rules 26(b) and 26(g) and Fifth Circuit law, the burden to demonstrate why requested discovery should not be permitted shifts to a responding party only if and when the discovery’s proponent first meets a threshold burden to prove that it is asking for documents within the scope permitted by Rule 26(b)(1). That is, the Court disagrees with statements in other district court decisions that, as part of a burden-shifting test, an initial burden lies with the party moving to compel to show clearly that (as Rule 26(b)(1) now provides) the information sought is relevant to any party’s claim or defense and proportional to the needs of the case.
No. 3:15-CV-4108-D, 2017 WL 896897, at *14 (N.D. Tex. Mar. 7, 2017). Given the disagreement among federal courts on what initial burdens parties seeking to compel discovery must bear, parties seeking discovery should heed the admonition that:
[t]he party seeking discovery, to prevail on a motion to compel, may well need to make its own showing of many or all of the proportionality factors, including the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, and the importance of the discovery in resolving the issues, in opposition to the resisting party’s showing.
Id. at *11. Out of an abundance of caution, parties moving to compel discovery should consider making persuasive showings of both relevance and proportionality in their opening briefs.
By limiting the scope of discovery to matters that are “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 amendments to the Federal Rules provide support for litigants who want discovery to be more narrowly tailored. However, although the 2015 amendments may appear to favor parties resisting discovery, some courts have placed burdens on parties seeking to compel discovery. Courts in the post-amendment landscape have been encouraged by the Advisory Committee Notes to be more actively involved in the management of discovery, see Fed. R. Civ. P. 26, 2015 adv. comm. note (“The present amendment again reflects the need for continuing and close judicial involvement in the cases that do not yield readily to the ideal of effective party management.”), and parties on both sides must be prepared to make and support arguments regarding relevance and proportionality if they wish to prevail in discovery disputes.