Cases from Late 2016 – Proportionality Series, Part 4

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A multi-part series reviewing decisions on proportionality in eDiscovery since the December 2015 amendments to the Federal Rules of Civil Procedure

In the first Part of this series, we reviewed the amendments made to Federal Rule of Civil Procedure 26(b)(1) in December 2015.  In the second Part, we reviewed one of the first decisions applying the amended rule.  In the third Part, we reviewed four cases from the first half of 2016.  In this Part, we continue our discussion of proportionality in eDiscovery with a review of three cases from the second half of 2016.

Case Law Survey Part 2

In this case law survey, we are reviewing a variety of cases from across 2016 and 2017 that have touched on proportionality in discovery since the December 2015 Amendments.  We are reviewing them in chronological order:

  • First Niagara Risk Mgt., Inc. v. Folino, 317 F.R.D. 23 (E.D. Pa. Aug. 11, 2016)
    • In this breach of contract and breach of fiduciary duty case, the Plaintiff former employer sought to search the Defendant former employee’s electronic devices, and the Defendant opposed this request on several grounds, including its disproportionate burden. In addressing this opposition, the Court provided a factor-by-factor analysis using the updated list of factors in amended Rule 26:

To analyze his defense we again use the factors from the recently-amended Rule 26.  The issues at stake are of grave importance to First Niagara, who has allegedly uncovered a plan by one of its top executives to start a competing business and employing former First Niagara employees.  The first factor therefore weighs in favor of granting First Niagara’s motion.  The amount in controversy is unknown at this time, so the second factor weighs in favor of Folino, who avers that unknown damages cannot justify exorbitant discovery requests.  Folino has access to the information on his emails and text messages while First Niagara does not, so the third factor weights in favor of First Niagara.  The parties’ resources weigh in favor of neither party because, while First Niagara is a corporation and Folino is an individual, his complaints about costs ring hollow from someone who just sold two companies for over $5 million.  The importance of discovery in resolving the issues in this case weighs heavily in favor of First Niagara, who needs to conduct broad discovery to uncover the scope of Folino’s alleged misdeeds.  Finally, as to the sixth factor, the burden or expense of discovery for Folino, which is substantial, does not outweigh the benefit of discovery for First Niagara, who, again, has uncovered evidence that one of its top executives may have started a competing company while under its employ.  Weighing these factors makes clear that the potential harm First Niagara’s discovery requests may impose on Folino does not outweigh the presumption for disclosure of those requests[emphasis added]

  • In re Bard IVC Filters Prods. Liab. Litig., 317 F.R.D. 562 (D. Ariz. Sept. 16, 2016)
    • In this products liability case, the Plaintiffs sought discovery of all relevant communications between any of the Defendants’ foreign subsidiaries and any foreign regulatory bodies over a long period of time. The Court assessed the significant burden that would be involved in satisfying the request and found it disproportionate to the potential benefit of the additional production:

Defendants argue that the burden or expense of the proposed discovery outweighs its likely benefit, and they provide some specifics.  They note that Bard has entities in Canada, Korea, Australia, India, Singapore, Malaysia, Italy, Ireland, the United Kingdom, Denmark, the Netherlands, Sweden, Norway, Finland, Mexico, Chile, Brazil, and China.  Plaintiffs seek discovery of all communications these entities have had with foreign regulatory authorities involving all Bard IVC filters since 2003.  To comply with Plaintiffs’ requests, Defendants assert that they would be required to identify the applicable custodians from these foreign entities for the last 13 years, collect ESI from these custodians, and search for and identify communications with foreign regulators.  The Court is persuaded by these specifics that the burden of this foreign discovery would be substantial. 

Plaintiffs are engaging in substantial discovery with respect to Defendants’ communications with American regulators, including extensive ESI searches and depositions of relevant witnesses.  This discovery should capture communications with foreign regulators that originate in the United States, as most appear to.  The Court concludes that the burden and expense of searching ESI from 18 foreign entities over a 13-year period outweighs the benefit of the proposed discovery – a mere possibility of finding a foreign communications inconsistent with United States communication[internal citations omitted; emphasis added]

  • Hespe v. City of Chicago, Case No. 13-C-7998 (N.D. Ill. Dec. 15, 2016)
    • In this sex discrimination case, the Defendant city sought access to search the Plaintiff employee’s personal electronic devices, while the Plaintiff claimed to have already produced all relevant materials from those devices. In assessing the proportionality of the request, the Magistrate Judge accorded great weight to the burden the privacy and confidentiality violation would place on the Plaintiff:

Rule 26(b)(2)(C)(iii) incorporates by reference Rule 26(b)(1), which, as Judge Mason explained, requires discovery to be “proportional to the needs of the case.”  Judge Mason explained that defendants’ request to perform a forensic inspection of plaintiff’s electronic devices for ESI was not proportional to the needs of the case because plaintiff had turned over all the ESI defendants had requested, which was presumably all the ESI she possessed, and in any case “the burden and expense of inspecting plaintiff’s devices and online accounts likely outweigh any benefit because copies of the documents and communications are sufficient to defend [against] plaintiff’s claims in this discrimination case.”  Moreover, Judge Mason explained, inspection of plaintiff’s electronic devices is not “proportional to the needs of this case” because any benefit the inspection might provide is “outweighed by plaintiff’s privacy and confidentiality interests.”  [internal citations omitted; emphasis added]

The District Judge went on to overrule the Defendants’ objections to the Magistrate Judge’s rulings.

Upcoming in this Series

In the next Part of this series, we will wrap up our case law survey with a review of a few cases from 2017.

About the Author

Matthew Verga

Director of Education

Matthew Verga is an electronic discovery expert proficient at leveraging his legal experience as an attorney, his technical knowledge as a practitioner, and his skills as a communicator to make complex eDiscovery topics accessible to diverse audiences. A fourteen-year industry veteran, Matthew has worked across every phase of the EDRM and at every level from the project trenches to enterprise program design. He leverages this background to produce engaging educational content to empower practitioners at all levels with knowledge they can use to improve their projects, their careers, and their organizations.

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