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Two More New Decisions on Proportionality in Discovery

In Firefighters’ Retirement System v. Citco Group Limited and Nece v. Quicken Loans, Inc., courts consider when requested discovery is disproportionate


As we discussed in one of our recent series, significant amendments to the Federal Rules of Civil Procedure became effective in December 2015, including a revision to Federal Rule of Civil Procedure (“FRCP”) 26(b)(1), which brought the existing-but-overlooked concept of proportionality front and center in an attempt to combat the runaway cost and scale of discovery in the digital era.  The amended version incorporates a multi-factor proportionality test directly into the general discovery scope definition and places “proportional” on equal footing with “relevant” as a discoverability criteria.

Two more new decisions addressing the question of proportionality in discovery can now be added to our collection: Firefighters’ Retirement System v. Citco Group Limited, Civ. Action 13-373-SDD-EWD (M.D.La. Jan. 3, 2018) and Nece v. Quicken Loans, Inc., No. 16-cv-2605-T-23CPT (M.D. Fla. Feb. 27, 2018).

Firefighters’ Retirement System v. Citco Group Limited

In this case, 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 is another example – like those we reviewed previously – of the importance of specificity and concrete details to proportionality arguments.  General claims (for or against) are not sufficient.

Nece v. Quicken Loans, Inc.

In this case about unauthorized phone solicitation, the Plaintiff was attempting to establish a class action and sought extensive discovery related to anyone else who might have had similar issues with the Defendant.  Specifically, the Plaintiff requested:

All documents of any type or kind or records of communications received by Defendant or any third party from a proposed class member requesting that Defendant not contact that consumer or customer.

. . .

All consumer and/or customer communications of any type or kind, or records of communications, received by Defendant revoking consent for Defendant or any third party to contact that consumer or customer.

The Defendant provided extensive discovery (“already produced 12,000-plus pages of records relating to 450,000 phone numbers and individuals”) but objected to these requests on the grounds of burden and proportionality.  The Plaintiff filed a motion to compel the requested production, which was partially granted by the Magistrate Judge, and the Defendant filed a motion for reconsideration with the District Judge.

In support of its objection, the Defendant “explained that the requests require collecting and reviewing at least three million e-mails, a review that might cost millions of dollars” and “submitted proof that compliance with the May 5 order would require dozens of employees to spend months on document review.”  The District Judge weighed this against the potential value of the case (“Again, the record shows that [the Defendant] called [the Plaintiff] twelve times.  The TCPA provides $500 in damages per violation.”), as well as the extensive discovery already completed, and concluded that the “requests impose on [the Defendant] a burden disproportional to the needs of this action” [emphasis added].

This is another good example of the amendments working as intended to prevent discovery from being turned into an open-ended fishing expedition disproportionate to the case.


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 eleven-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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