What Does “Proportional To The Needs Of The Case” Mean And, Where Should This Language Be Applied?

Never Spend Your Money Before You Have It, And Never Allege Discovery Issues Before You Have Them.

Author: Ashley E. Morgan
Case Citation: Physicians All. Corp. v. WellCare Health Ins. of Ariz., Inc., No. 16-203-SDD-RLB (M.D. La. Feb. 27, 2018)

Employee/Personnel/Employer Implicated: Defendant Company and Counsel
eLesson Learned: The producing party must make a conscientious effort to explain clearly and with evidentiary support why the evidence demanded is or is not proportional to the case.
Tweet This: Best Practice Is To Not Waste Months Of The Court’s Time With Baseless Representations That Could Have Been Easily Disproven With Reasonable Diligence

The recent e-Discovery amendments to the Federal Rules of Civil Procedure place proportionality front and center. Still, despite the frequency in which “proportionality” is expressed in connection with e-Discovery, its meaning is not always easy to put into words. Thankfully court rules, commentators and case law provide guidance about factors to consider when examining e-Discovery proportionality.

At issue in Physicians All. Corp. v. WellCare Health Ins. Of Ariz., Inc., was the proportionality of a request for production. Plaintiff’s Request for Production No.35 sought production of all “documents and/or communications contained on any personal or business systems, electronic databases, serves, or document management systems” used by certain custodians.

Defendant objected to the request on the basis that it was overbroad, unduly burdensome, sought irrelevant information, and was not proportional to the needs of the case. Specifically, Defendant represented to the Court that the restoration of certain backup tapes from the years 2003-2004 and 2011 would cost $211,500 and $372,800 respectively. Much of the data on the backup tapes was believed by defendant to be cumulative of prior productions, carried little relevance, and was not reasonably accessible.

Plaintiff responded with the filing of the instant Motion to Compel Production. This motion sought the production of all data from the backup tapes for the years 2003-2004 and 2011.

As an offer of good faith, Defendant responded that it would retain an outside consultant to work with their Information Technology department on understanding the underlying technical issues.

In 2015, Federal Rule of Civil Procedure 26(b)(1) was amended to state expressly that to be discoverable, information must be not only relevant but “proportional” to the needs of the case.

Fed. R. Civ. P. 26(b)(1) provides that discovery may be limited if the burden or expense of the proposed discovery outweighs its likely benefits. However, it is not enough to simply claim a burden, but the producing party must make a conscientious effort to explain clearly and with evidentiary support why the evidence demanded is or is not proportional to the case.

Upon retaining an outside consultant, Defendant was made aware that the true costs of restoring the 2003-2004 backup tapes would be $7,319.83 to $12,968.83 and that no backup tapes were ever made for the year 2011. Along those same lines, Plaintiff confirmed that only 71% of the data recovered was duplicative of other information produced.

Here, production of the requested backup tapes was appropriate as Plaintiff was able to demonstrate that the discovery sought was proportional to the needs of the case. The amount in controversy exceeded $20 million, and Defendant had sole access to the relevant information sought. Given the modified estimates for recovering information, there are adequate resources for Defendant to produce any recoverable documents.

Consequently, the Court ultimately found that the likely benefit of the discovery sought outweighed any burden or expenses placed on Defendant. Thankfully, the Court only ordered that the Plaintiff’s Motion to Compel Production be granted and did not impose any sanctions for the countless months and money that had been wasted on Defendant’s unfounded claims of discovery being excessively burdensome.

As the saying goes, it’s better to be safe than sorry and in this case, most discovery issues could have been avoided if Defendant had just exercised reasonable diligence at the start of litigation. The fact that Defendant claimed the cost of recovery for the 2011 tapes was nearly half a million dollars only for it to later emerge that the tapes for that year never existed at all demonstrates extreme bad faith. Best practice would be for a litigant to always thoroughly investigate all discovery issues before brushing them off as not being proportional. As a result, had Defendant just done their due diligence from the start, it could have saved hours upon hours of time and money.

Ashley is a 2016 magna cum laude graduate of Seton Hall University located in South Orange, New Jersey where she earned her B.A. in Political Science, History, and Philosophy. She will receive her J.D. from Seton Hall University School of Law in 2019. After graduation, Ashley will serve as a clerk to a trial judge in the Superior Court of New Jersey in the Bergen vicinage.

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