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Proportionality Arguments Must Be Fact-Based and Specific – Proportionality Update, Part 2

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A short series reviewing new decisions from 2018 and 2019 addressing proportionality under the December 2015 amendments to the Federal Rules of Civil Procedure

In “A 2019 Update on Proportionality Cases,” we reviewed the proportionality amendment to the Federal Rules of Civil Procedure and the key takeaways from our prior case law review.  In this part, we begin our update with a discussion of the Hurd, Firefighters’ Retirement, and Physicians Alliance cases.


In our prior review of cases, we reviewed early cases that made it clear arguments about proportionality should be fact-based and specific (e.g., Bard IVC Filters and Solo), rather than hypothetical or vague (e.g., Mitchell and Mann), and ideally, they should address all factors listed in the amended rule (e.g., First Niagara).  We begin our review of new cases with one case from the very end of 2017 and two from early 2018 that all reinforce this requirement for specific, fact-based proportionality arguments.

Hurd

In Hurd v. City of Lincoln, No. 4:16-CV-3029 (D. Neb. Dec. 21, 2017), the Plaintiff was pursuing an employment action against the Defendant City and sought to depose the Mayor.  The City sought to quash this notice of deposition to the Mayor as an undue burden disproportionate to the needs of the case.  At this point in discovery, the Plaintiff had already deposed several named defendants and witnesses, and the City had already “produced over 6,500 emails and attachments and over 49,000 pages of documents.”

The Court began its analysis by noting the joint responsibility of all parties in ensuring proportionality:

The burden of demonstrating the proportionality of the requested information is a collective responsibility between the parties and the court.  A party requesting discovery must show how the requested information is important to the issues and resolution of the case.  The responding parting must show the expense and burden of responding.  The court can then balance the parties’ interests and order discovery consistent with the proportionality mandated under the federal rules.  [emphasis added, internal citations omitted]

In this instance, the Plaintiff argued that the Mayor was “a crucial witness who ‘most likely played a part in some of the most critical decisions made,’” but the Plaintiff:

. . . fail[ed] to provide more than mere conjecture and conclusory statements regarding the potential testimony of [the Mayor] and that he is the sole source of that information.  Plaintiff has failed to show that any information the Mayor has cannot be obtained from his subordinates and/or other defendants or witnesses in this case.  [emphasis added]

In the absence of concrete information about the importance and uniqueness of the evidence, the Court found the requested deposition a disproportionate burden and quashed the notice.  The Court did not do so with prejudice, however, allowing for the possibility that later-discovered facts might change the analysis.

Firefighters’ Retirement

In Firefighters’ Retirement System v. Citco Group Limited, Civ. Action 13-373-SDD-EWD (M.D.La. Jan. 3, 2018), the parties agreed upon a list of custodians from whom to collect materials and a list of search terms to apply to those materials.  After extensive discovery had already taken place, Plaintiffs alleged that the Defendants’ responses to some interrogatories “‘were incomplete and inaccurate’ and thus resulted in ‘a flawed list of custodians’ and a ‘flawed electronic search for documents,’” and filed a motion to compel the Defendants to greatly expand their search for materials by contacting every employee to look for new custodians from whom to collect.

The Defendants opposed this motion on the grounds that it “would ignore the substantial discovery efforts already made in this case and would be incompatible with the proportionality requirement of the federal rules.”  In their opposition to the motion, the Defendants presented specific details about both the extensive discovery efforts made up to that point and the new efforts that would be required by the motion to compel:

. . . Defendants “collected documents from the three general sources litigants ordinarily . . . collect from: (a) hard copy files of each [] Defendant entity; (b) the shared drive files of each [] Defendant entity; and (c) email files of the 21 agreed-upon custodians using 56 agreed-upon search terms.”

. . .

. . . Defendants attached the affidavit of Mr. Diver, wherein he states that searching across all affiliated [] entities would mean searching the files of 235 affiliates and subsidiaries and would involve searching 170 terabytes of emails (which the [] Defendants state is the equivalent of 400 million documents).  [emphasis added]

In support of the motion, the Plaintiffs argued more generally and failed to “explain[] why the custodians and search terms used were unreasonable” or to “assert that a specific custodian (or even search term) should be added.”  In the absence of a sufficient justification, the court found the requested efforts to be disproportionate to the needs of the case:

That is simply unreasonable, and in essence is a request for the [] Defendants to “go back to square one” of their document production efforts despite the parties’ agreement regarding custodians and search terms, the [] Defendants apparent willingness to consider additional custodians and search terms, and Plaintiffs failure to identify or explain the necessity of any additional custodians or search terms.  Further, such a large scale search raises proportionality concerns and, especially in light of the parties’ previous agreements and efforts, would be unduly burdensome.  [emphasis added]

This case demonstrates once again the importance of specificity and concrete details to proportionality arguments.  General claims (for or against) are not sufficient.

Physicians Alliance

In The Physicians Alliance Corp. v. WellCare Health Ins. of Ariz., Inc., No. 16-203-SDD-RLB (M.D. La. Feb. 27, 2018), the producing party sought to avoid restoring and producing from archived backup tapes, initially claiming the effort would cost over $500,000.  Later in discovery, the party admitted to having made several mistakes in its representations about the backup tape costs.  In reality, the costs were dramatically lower than claimed, and not as many tapes were available as claimed.  In light of these facts, and in light of the amount in controversy exceeding $20 million, the Court concluded restoration and production of material from the available backup tapes was proportional and ordered it.

This outcome was, in part, due to the party’s inconsistent and inaccurate representations to the Court about tape availability and the costs and delays associated with those representations.  The court pointed out that “months of [its] time and efforts ha[d] been wasted” by these misrepresentations, and that the party had provided “no satisfactory explanation” about how it had calculated its earlier estimates for data that had “never existed.”

Thus, proportionality arguments not grounded in facts and specifics can not only fail, they can be held against the party advancing them if they are materially inaccurate.


Upcoming in this Series

In the next Part, we will continue our review with cases considering when other factors may outweigh financial factors in a proportionality analysis.


About the Author

Matthew Verga

Director, Education and Content Marketing

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. An twelve-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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