One important limit on the scope of discovery obligations, including e-discovery and preservation obligations, is “proportionality.” This article discusses what proportionality means, how to achieve it in litigation, and the trend toward a new emphasis on proportionality in discovery.

What is proportionality?

Under the current Federal Rules of Civil Procedure, a discovery request is objectionable if “the burden or expense of the proposed discovery outweighs its likely benefit,” considering the following five factors:

  1. a) The needs of the case;
  2. b) The amount in controversy;
  3. c) The parties’ resources;
  4. d) The importance of the issue at stake in the action; and
  5. e) The importance of the discovery in resolving the issues.

FRCP 26(b)(2)(C)(iii). Virginia Supreme Court Rule 4:1(b)(1) contains a similar proportionality provision. In addition to this general proportionality requirement, the Federal Rules also specifically address proportionality in the context of e-discovery requests. The Rules provide that, “A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost.” FRCP 26(b)(2)(B). Virginia Supreme Court Rule 4:1(b)(7) contains a similar provision.

In short, if the burden or expense of complying with a request outweighs its likely benefit, the request is objectionable. This sounds simple in theory, but in practice, the parties will seldom agree on the “likely benefit” of the material being requested. 

How do litigants handle disputes over what is proportional?

There are two basic ways to deal with proportionality disputes during discovery: proactively, by negotiating an e-discovery agreement with opposing counsel, and reactively, by filing and responding to motions to compel and motions for protective orders. The proactive approach requires more work at the front end, but it can alleviate a lot of the work and uncertainty that comes with prosecuting discovery motions. The proactive approach involves trying to reach an agreement with opposing counsel setting the parameters and search methodologies to be used in e-discovery, or moving the Court for an order doing the same. E-discovery expertise is critical at this stage as attorneys negotiate the contours of an e-discovery agreement and/or move the Court for entry of a favorable order governing e-discovery. 

A good e-discovery agreement will typically address the following topics:

  • Order of Production – who produces what, when
  • Production Format – including whether metadata needs to be preserved
  • Confidentiality – including whether data will be returned or destroyed at the end of the litigation
  • Privilege – including whether the parties can “claw back” inadvertently produced documents
  • How discovery disputes will be addressed
  • How costs will be handled

In each of these areas, parties should consider proportionality. For example, agreeing to a claw-back provision can substantially reduce the parties’ costs in reviewing documents for privilege. This can make requests for voluminous electronic productions less expensive and thus less susceptible to proportionality challenges. Another important consideration is flexibility; discovery agreements should have some flexibility built into them, as discovery needs and burdens are likely to become clearer throughout the discovery process. 

What do the 2015 Amendments say about proportionality?

The 2015 amendments to the Rules of Civil Procedure, which go into effect in December, retain the proportionality requirement and, in fact, emphasize it. The drafters moved the proportionality requirement into the sentence that defines the scope of discovery: “Parties may obtain discovery regarding any non-privileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case . . . .” Proposed FRCP 26(b)(1). The Committee Notes clarify that this change does not substantively alter the responsibilities of the parties or the Court, but instead was meant to emphasize the proportionality requirement. 

Proportionality remains perhaps the most important bulwark against abuse of the discovery process. Litigants need to understand its contours in order to make cost effective decisions about their case. When a company is making pre-litigation decisions about what needs to be preserved for future discovery, it should consider the proportionality defense. However, pre-litigation decisions should err on the side of over-preservation, as there is no bright line test of what is proportional for a specific matter. Once litigation begins, businesses should work with their E-Discovery counsel to create a proactive strategy to limit discovery costs by only conducting discovery that is proportional to the case.

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