Proportionality and E-Discovery: Managing and Navigating E-Discovery in Inherently Disproportionate Adversary Matters

The Federal Rules of Civil Procedure were amended in 2015 and explicitly adopted the concept of proportionality:

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, 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.[1]

The Advisory Committee notes to the 2015 amendments state that the intent was to restore the proportionality calculation to the Rule and that “[t]he parties and the court have a collective responsibility to consider the proportionality of all discovery and consider it in resolving discovery disputes.”[2] It was not intended to offer a party opposing discovery a new shield, but rather to have parties consider the scope of discovery and the factors of proportionality early in the case, particularly in light of the ever-growing importance of e-discovery and growing quantity of electronically stored information (ESI).[3] “The proliferation of information and the costs associated with retrieving, reviewing and producing discovery in civil litigation have led to the 2015 amendments to the Federal Rules of Civil Procedure, which emphasize the concept of proportionality.”[4]

The Advisory Committee acknowledged that there will be proceedings where one party has little discoverable information while another party might have large quantities of information, including ESI, potentially leading to significant e-discovery.[5] A notion also recognized by courts:

The amended rules add “new text to provide explicit focus” for cases involving what is often called “information asymmetry” — situations in which one party has ready access to “vast amounts of information” and the other party has very little.… The party asserting [objections to discovery] bears the burden of showing their applicability. Satisfaction of that burden requires a specific, detailed showing of how a request is burdensome. A mere statement by a party that a request is “overly broad and unduly burdensome” is not adequate to voice a successful objection.[6]

The Advisory Committee’s intention was to encourage adversaries to address discovery early and in an efficient and productive manner, rather than resort to court intervention and unnecessary discovery disputes.

Disproportionate discovery burdens can be commonplace in adversary proceedings involving a trustee or a plan trustee. Often, trustees receive very little documentation from debtors, including ESI, but need to effectively gather this information either for pursuit of estate causes of action or for other general investigative or due diligence purposes. Trustees may also be forced to take additional steps to gather documentation and ESI from an opposing party. In addition, during litigation, trustees may be subject to discovery requests from third parties or others but frequently have little to no information available to produce. Nearly two years since the adoption of the 2015 amendments, courts have highlighted the need for cooperation[7] and other tools to help parties navigate discovery with proportionality factors in mind.

Take Proactive Steps Early

Disproportionate discovery requires counsel to take proactive steps to effectively manage what can easily become an unmanageable task and one prone to unnecessary disputes. As early as drafting a complaint or answering a complaint, or in the process of seeking Rule 2004 discovery, it is helpful to develop key factual and legal areas where discovery is needed and likely sources of discovery. Taking a shotgun approach to discovery at the outset is not only counterproductive to the concept of proportionality, it can lead to burdensome document and ESI production for both sides.

The parties are likely in a position to begin discussing discovery relatively early in an adversary proceeding or a Rule 2004 application for discovery, and at a minimum, no later than the Rule 26(f) meet and confer, parties must address discovery, including ESI.[8] To facilitate effective discovery and comply with meet-and-confer obligations, topics at a meet-and-confer should include:

• areas of discovery;
• the location and preservation of hard-copy documents and ESI;
• the quantity and format of ESI;
• the prospect of phased discovery;
• custodians of discoverable information;
• the method of collecting and preserving ESI;
• the use of search terms and protocols;
• the use of technology for collection and production;
• the format of production; and
• the existence and nature of privileged documents.[9]

Early, detailed discussion and agreement on the above areas will enable better-written discovery requests that are more in line with all parties’ expectations.

Discovery Is an Ongoing Process

Discovery, particularly involving large quantities of ESI, is best viewed as an iterative process; therefore, continuing cooperation among parties is essential. Not only is it unlikely that a single meet-and-confer will address all issues when the discovery is disproportionate, the use of technology tools is essential in creating effective search, production and review of large quantities of ESI.[10] Technology tools, such as search terms, date parameters and search protocols, which combine search terms using boolean logic, are key to eliminating nonresponsive documents from production and devising an efficient review set and review protocol.

In collection and production, parties should endeavor to use technology to reduce nonresponsive documents. Similarly, when reviewing large quantities of ESI, it should not be assumed that every document must be reviewed. When possible, parties should use technology to hone in on key documents for depositions, motions for summary judgment, and the theory of the case. These steps, by both parties, ultimately reduce the time and cost of exceedingly expensive e-discovery. Most importantly, continued cooperation will reduce the need for court intervention, which increases costs and causes unnecessary delay.