06/11/2010

e-Discovery Alert: Control Discovery Costs

Proportionality becomes larger issue, comparing discovery costs to what is at stake in the litigation.

At the May 2010 Federal Rules Advisory Committee program at Duke University, DRI (The Defense Research Institute) proposed a rule change that would, along with other specifics, require courts to consider proportionality, comparing discovery costs to what is at stake in the litigation. (White Paper: Reshaping the Rules of Civil Procedure for the 21st Century (May 2, 2010). This and other proposals offered at the conference can be found here.) The concept is not new. In 1993, the Federal rules were amended because of the "information explosion of recent decades" to give the courts broader discretion to limit discovery. Electronic information and document discovery has since exploded in a way that could not have been contemplated in 1993. But a greater emphasis on proportionality may be emerging with practical implications:

In Rimkus Consulting Group, Inc. v. Commarata, 2010 WL 645253 (S.D. Tex. Feb. 19, 2010), Judge Lee Rosenthal, current Chair of the Federal Rules Advisory Committee, noted that reasonableness of discovery burdens in a $550 million case (referring to Scheindlin's Pension Committee Case) may be different than in a suit to enforce a noncompetition agreement.

The Seventh Circuit Court of Appeals Principles of Discovery, developed as part of its pilot study program includes:

Principle 1.03 (Discovery Proportionality)
The proportionality standard set forth in Fed. R. Civ. P. 26(b)(2)(C) should be applied in each case when formulating a discovery plan. To further the application of the proportionality standard in discovery, requests for production of ESI and related responses should be reasonably targeted, clear, and as specific as practicable.
The February 2010 report by the New York State Court, Electronic Discovery in the New York State Courts, signaled an intention to focus on proportionality, referring to comments by participants who suggested:

. . . that judges should have the ability to set an "e-discovery budget" that keeps costs within reasonable limits given the size of the case.

It is too early to draw definite conclusions, but the topic is receiving considerable attention. It is receiving enough attention that it may be appropriate to give proportionality greater emphasis in the discovery planning, including discussions with the opposing parties and court. A discovery plan that considers proportionality and priorities, while at the same time allowing the parties to discover the essential facts, may be both cost effective and defensible.