Friday, September 5, 2014
FRCP Amendments Will Narrow (Once Again) the Scope of Discovery
The changes proposed to the scope of discovery center around the third "theme" of the 2010 Duke Conference: proportionality. The proposed contraction of the scope of discovery under Rule 26(b) incited the most passionate public opposition of all the amendments. (For background given in earlier posts, click here, here, here, and here.)
The Advisory Committee's Report to the Chief Justice on the Duke Conference stated plainly that "there was no demand at the Conference for a change to the [26(b)(1)] rule language [on scope]; there is no clear case for present reform." Despite this, the proposed amendments will overhaul Rule 26(b)(1):
(b) Discovery Scope and Limits.
(1) Scope in General. Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged 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. — including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. All discovery is subject to the limitations imposed by Rule 26(b)(2)(C).
(2) Limitations on Frequency and Extent.
* * *
(C) When Required. On motion or on its own, the court must limit the frequency or extent of discovery otherwise allowed by these rules or by local rule if it determines that: * * *
(iii) the burden or expense of the proposed discovery is outside the scope permitted by Rule 26(b)(1) outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.
Breaking it down, these amendments will narrow and limit the scope of discovery in four ways:
- They will make so-called "proportionality" an element defining the general scope of discovery, rather than a court-imposed limitation on discovery that is otherwise within the general scope.
- They will eliminate the court's ability to broaden the general scope of discovery to "any matter relevant to the subject matter involved in the action."
- They delete as "clutter" a statement, which has been in 26(b) since 1946 (although back then, it applied only to depositions), that the scope of permissible inquiry includes information about the existence and location of documents and the identity of witnesses; and
- They delete, as misunderstood, another phrase that has been in Rule 26(b) since 1946: that information sought in discovery does not need to be admissible in evidence if it "appears reasonably calculated to lead to the discovery of admissible evidence."
In this post, I will discuss the proposed move of "proportionality" from its current position as a limitation on discovery in 26(b)(2)(C) to part of the definition of the scope of discovery in 26(b)(1).
When the amendments were first proposed for publication, the Committee asserted that the courts and parties have not sufficiently applied the "proportionality" concept as it is currently located in subsection 26(b)(2)(C): "The problem is not with the rule text but with its implementation -- it is not invoked often enough to dampen excessive discovery demands." Later, when describing the history of "proportionality" in Rule 26, the Committee's exasperation was almost palpable: "The present proposal is a fourth attempt that seeks to fulfill the purpose that has not yet been fully implemented." In its latest report to the Standing Committee in May 2014, the Committee said, "The purpose of moving these factors explicitly into Rule 26(b)(1) is to make them more prominent, encouraging parties and courts alike to remember them and take them into account in pursuing discovery and resolving discovery disputes."
So the Committee apparently thinks too many lawyers and judges are still, after thirty years of "proportionality" being included in Rule 26, too lazy or dull to read all the way to 26(b)(2)(C). I do not know whether the Committee did legal research on "proportionality" cited in existing case law, but my own research revealed too many discovery orders that considered proportionality to list here. (A few of them are: In re Cooper Tire & Rubber Co., 568 F.3d 1180, 1193-95 (10th Cir. 2009); Quintana v. Claire's Boutiques, Inc., 2014 WL 234219 (N.D. Cal., Jan. 21, 2014); Norfolk Southern Railway Co. v. Pittsburgh & West Virginia Railroad, 2013 WL 6628624 (W.D. Pa., Dec. 17, 2013); Raza v. City of New York, 2013 WL 6177392, *4, *11 (E.D.N.Y. Nov. 22, 2013); Ewald v. Royal Norwegian Embassy, 2013 WL 6094600, *7 (D. Minn. Nov. 20, 2013); Swanson v. ALZA Corp., CV1204579PJHKAW, 2013 WL 5538908 (N.D. Cal. Oct. 7, 2013) ("The Northern District Guidelines advocate for the proportionality set forth in Rule 26(b)(2)(C) and 26(g)(1)(B)(iii)."); Fisher v. Fisher, No. WDQ-11-1038, 2012 WL 2050785 (D. Md. June 5, 2012) ("In light of the cost-benefit balancing factors stated in Fed.R.Civ.P. 26(b)(2)(C), which direct the Court to 'limit the frequency or extent of discovery otherwise allowed' if, inter alia, 'the discovery sought . . . can be obtained from some other source that is more convenient, less burdensome, or less expensive,” the parties are directed as follows . . .").)
It is unclear how often the Committee would like to see 26(b)(2)(C) mentioned in orders on discovery or how it will finally be satisfied that judges and lawyers are citing proportionality enough.
During three days of public hearings, the Advisory Committee quibbled with plaintiffs' lawyers who opined that the proposed move of "proportionality" from 26(b)(2)(C) up to 26(b)(1) changed the scope of discovery and shifted the burden of proving proportionality from the producing party to the requesting party. But plaintiffs' lawyers are correct as a simple matter of statutory construction. Subsections 26(b)(1) and 26(b)(2) have different functions. The title of Rule 26(b) overall is "Discovery Scope and Limits." The title of subsection 26(b)(1) is "Scope in General." The title of subsection 26(b)(2) is "Limitations on Frequency and Extent."
In other words, subsection 26(b)(1) currently has two elements defining the party-initiated "scope in general": the requested information must be, first, nonprivileged and second, relevant to any party's claim or defense. Subsection 26(b)(2) currently allows the court, on motion of the producing party or sua sponte, to limit "discovery otherwise allowed by these rules" (i.e., nonprivileged and relevant to any party's claim or defense) if the discovery is not proportional in accordance with the factors of subsection (b)(2)(C)(iii).
The proposed amendment to 26(b)(1) will add a third element defining the party-initiated scope of discovery: now, the requested information will need to be, first, nonprivileged, second, relevant to any party's claim or defense, and third, "proportional to the needs of the case." Neither the producing party nor the court will need to bring up proportionality to limit otherwise nonprivileged, relevant discovery. Proportionality will limit discovery from the get-go.
At the hearings, the Committee's unflinching answer to those who noticed the obvious effect of this change was to deny its importance. The Committee asserts that current Rule 26(g)(1)(B)(iii) already requires the requesting party to certify that "to the best of the person's knowledge, information, and belief formed after a reasonable inquiry: . . . (iii) [it is] neither unreasonable nor unduly burdensome or expensive, considering the needs of the case, prior discovery in the case, the amount in controversy, and the importance of the issues at stake in the action."
But Rule 26(g) does not define the "scope in general" of discovery; that function is fulfilled by 26(b)(1). Moreover, the requesting party's 26(g) certification contains the express qualification that the request is not disproportional "to the best of the person's knowledge, information, and belief formed after reasonable inquiry." And in order for the court to impose sanctions on the requesting party, the certification must have been violated "without substantial justification." These are significant limitations on the current so-called proportionality certification.
In its May 2014 report to the Standing Committee, the Advisory Committee also asserted that putting proportionality into 26(b)(1) simply "restores" it to the place it occupied in the 1983 version. But one suspects that the Committee's ability to analyze statutes is better than that. The 1983 version of 26(b)(1) provided:
(b) Discovery Scope and Limits. Unless otherwise limited by order of the court in accordance with these rules, the scope of discovery is as follows:
(1) In General. Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, including the existence, description, nature, custody, condition and location of any books, documents, or other tangible things and the identity and location of any books, documents, or other tangible things and the identity and location of person having knowledge of any discoverable matter. It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appear reasonably calculated to lead to the discovery of admissible evidence.
The frequency or extent of use of the discovery methods set forth in subdivision (a) shall be limited by the court if it determines that: (i) the discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity by discovery in the action to obtain the information sought; or (iii) the discovery is unduly burdensome or expensive, taking into account the needs of the case, the amount in controversy, limitations on the parties' resources, and the importance of the issues at stake in the litigation. The court may act upon its own initiative after reasonable notice or pursuant to a motion under subdivision (c).
Thus, the proportionality factors in the second paragraph of the 1983 version of 26(b)(1) were not part of the first paragraph's scope of discovery "in general." Rather, the court on motion or sua sponte could "limit" the "general" scope of discovery if the discovery was not proportional. The Advisory Committee's note to the 1983 amendments to Rule 26(b)(1) made this clear:
Rule 26(b)(1) has been amended to add a sentence to deal with the problem of over-discovery. The objective is to guard against redundant or disproportionate discovery by giving the court authority to reduce the amount of discovery that may be directed to matters that are otherwise proper subjects of inquiry. The new sentence is intended to encourage judges to be more aggressive in identifying and discouraging discovery overuse. The grounds mentioned in the amended rule for limiting discovery reflect the existing practice of many courts in issuing protective orders under Rule 26(c).
Proportionality has never defined the general scope of discovery, and the statement that the amendments will simply "restore" proportionality to its former place is disingenuous.
Trying to head off a bewildering and intractable discussion of how the proposed amendment would change a party's burden on a motion to compel, the Advisory Committee attempts to mollify plaintiffs' lawyers by adding the following proposed Committee note:
Restoring [sic] the proportionality calculation to 26(b)(1) does not change the existing responsibilities of the court and the parties to consider proportionality, and the change does not place on the party seeking discovery the burden of addressing all proportionality considerations.
In my view, this comment does nothing to help the party seeking discovery. It repeats the inaccurate implication that the proportionality element has merely been "restored" to the scope of discovery. And by negative implication, it places on the party seeking discovery the burden of addressing some – though not "all" – of the proportionality considerations.
More generally, it is puzzling why the Committee thinks putting an "explanation" in the Advisory Committee Notes will carry the day when key language (all of which dates back to 1983) has been deleted from, changed, or moved in the text. For example, Justice Scalia has repeatedly declined to rely on Advisory Committee Notes for interpretation of a federal rule.
Nb, you're not missing anything. The Committee did move the factor "the importance of the issues at stake in the action" up to the first-mentioned factor, apparently to counteract the idea that the amount in controversy should be paramount. The proposed new rule would not prevent discovery in your case, but the defendant would certainly have more ammunition in resisting it.
Posted by: Patricia Moore | Sep 5, 2014 2:18:26 PM
It seem the proposed change to (b)(1) could work a sea change in certain areas of civil practice -- for example, I recall a Fair Debt Collection Practices case from my clerkship where the amount demanded was under $1,000 and the case was really driven by plaintiff's counsel and his ultimate request for fees 50 times that much. The scope of discovery in that case was huge but it seems this state of affairs could change in cases driven by fees. Am I missing something?
Posted by: Brad P | Sep 5, 2014 10:58:58 AM