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Proportionality Analysis from the FRCP Should Include Relevancy Factors

The Way eDiscovery Should be Done….

 

 

 

proportional

Introduction

A recent District of Arizona case, ‘In re: Bard IVC Filters Products Liability Litigation’,  has created some definition and guidelines about how the scope of discovery under Rule 26(b)(1) should be treated.  For the last 11 months, the FRCP has been the subject of much discussion and analysis by various courts across the country.  Much of the focus has been on the new language, “proportional to the needs of the case,” and what is meant by the term, since it was not clearly defined by either the rule or the attached commentary.  It was purposefully left open for interpretation so that it could be applied to the specifics of each case, but this has resulted in some conflicting applications and confusion.

The Case

The District of Arizona has begun to frame the details that should help others focus on factors surrounding proportionality and the methods to apply them practically.  In Bard, the court denied plaintiffs’ discovery requests for the communications between the foreign Bard entities and foreign regulatory agencies that pertained to the IVC filters that were at issue.  The denial is based on a detailed review of the updated legal standards governing the scope of discovery under Rule 26(b)(1).  The new rules require a two-step inquiry: both the relevancy of the requested discovery and whether that discovery is proportional to the needs of the inquiry.

The Steps Taken by the Court

The court combined its analysis of the relevancy of the requested discovery with its analysis of the proportionality factors outlined in the new rule in order to reach their conclusion.

Step 1

In order to determine whether the discovery requested was in fact relevant, the court first performed an analysis of whether the discovery would likely discover communications between foreign Bard entities and foreign regulatory bodies. Bard  had set forth evidence showing that it’s communications with all regulators, foreign or domestic, were “largely controlled” within the United States. Based on this representation the court concluded that the information sought from foreign entities would likely have already been covered by existing discovery requests for information within the U.S. entities’ possession.

Additionally, the court reasoned that the foreign discovery requested would not be relevant since no plaintiffs in the MDL were from foreign countries. Given that the discovery sought was for a narrow purpose: to determine only if foreign communications were inconsistent with communications with U.S. regulators, the court concluded that the material would only be slightly relevant at best.

Step 2 

The second stage of inquiry under Rule 26(b)(1) focuses on proportionality, but the court linked its analysis to the relevance portion of step 1, linking the two together.  There were three proportionality factors under consideration:

  1. The importance of the discovery in resolving the outstanding case issues;
  2. The parties’ access to relevant information; and
  3. Whether the burden or expense of obtaining the discovery outweighed its likely benefits.

The Linkage

By linking the relevance discussion in Step 1 with the proportionality analysis in Step 2, the court was effectively examining the level of relevance on whether the information would be proportional.  The court reasoned that since the discovery requested was of marginal relevance.  Therefore the importance of discovery in helping to resolve the issues weighed against permitting the discovery to take place.

Regarding the factor surrounding the parties’ relative access to relevant information, the court concluded that this favored the plaintiffs.  But the court noted that this factor tipped the scale only slightly in favor of the plaintiffs and since the information was only “possibly relevant” it was not an overriding factor.

Finally, the court examined whether the burden or expense of the proposed discovery outweighed its likely benefit. Bard provided  the court with evidence that discovery would be burdensome since it would have to: 1) search ESI from 18 foreign entities over a 13-year period, 2) collect the ESI from these yet-unidentified custodians, and 3) identify communications with foreign regulators. These arguments persuaded the court that the burden of the foreign discovery would be substantial and outweighed the “mere possibility of finding a foreign communication inconsistent with United States communication.”

The court therefore concluded that defendants need not search ESI of foreign Bard entities because plaintiffs’ proposed discovery was not proportional to the needs of the case. In coming to this conclusion, the court relied heavily on its analysis of whether the discovery was relevant in the first place.

The Takeaway

In concluding that the plaintiffs proposed discovery was not proportional to the needs of the case, the court relied heavily on its analysis of whether the discovery was relevant to begin with.  Clearly, the court feels that both sections of 26(b)(1) need to be examined together to reach the proper conclusion.  Proportionality factors should not considered separately, but rather linked to an original relevance analysis to truly reach a considered opinion.

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