Proportionality in Discovery

Proportionality in Discovery

Rule 26(b)(1) adds a third limit to the two just taught. Discoverable information must be nonprivileged and relevant to a claim or defense, and it must also be “proportional to the needs of the case,” which the rule measures by six listed considerations.¹ Privilege and relevance mark out the pool of information a party could ask for. Proportionality asks whether a request drawn from that pool is worth its cost in this lawsuit. The rule lists the considerations:

• 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.

No single factor controls the result, and each determination depends on the case.² Relevance is broad enough that, standing alone, it would reach nearly every document connected to a dispute, and collecting, reviewing, and producing that material can cost more than the dispute is worth. Discovery is mainly party-driven, and leaving it to adversaries risks, some would say assures, contention.³ The cost is large: by some estimates, discovery makes up between 50 and 90 percent of total litigation costs, and discovery abuse is a principal cause of delay and congestion in the courts.⁴ Placing proportionality in the definition of scope puts the cost-benefit question inside what a party may obtain. The same expense can be modest beside a large claim and crushing beside a small one, and an important issue can justify spending even when little money is at stake, so the factors can point in different directions within a single case. The court weighs them together, and a lawyer certifying a paper before it goes out must do the same.

The six considerations fall into three pairs, taken in turn below: the stakes of the case, the position of the parties, and the request itself.

Stakes of the Case

The first two considerations, the importance of the issues at stake in the action and the amount in controversy, look at the lawsuit as a whole before any single request is examined.⁵ The amount in controversy is the money sought, and it measures what the dispute is worth to the parties. The importance of the issues asks whether the case matters beyond that money, as the court in Oxbow asked when it looked to the case’s potential broad impact. Together the two set the scale against which a request’s cost is judged.

Scale comes first because proportionality polices cost, and a cost means nothing until it sits beside something. A rule that ignored the stakes would fail in both directions. A party with a small claim could be pressed to settle by a request that costs more than the claim could ever return, and a party facing a very large claim could resist reasonable discovery by pointing to a bill that is trivial beside what is at risk. Tying allowable spending to what the case is worth lets a court approve expensive discovery where the case can bear it and refuse the same discovery where it would defeat the purpose of suing.

In Oxbow Carbon & Minerals LLC v. Union Pacific Railroad Co., both factors worked on a single request. The defendants moved to compel the plaintiffs to add one more custodian, Koch, to the document search. Oxbow did not dispute that Koch’s records held documents responsive to the negotiated search terms and relevant to the litigation, and it had already produced about 1,300 of them from a sample. It objected instead on burden and cost-shifting grounds, arguing that the cost was so unreasonable that the court should order the defendants to cover production expenses.⁶ Oxbow declined to address the importance of the issues or the amount in controversy, among other factors, so the court weighed all six without its help. It concluded that adding Koch would be neither unduly burdensome nor unreasonably expensive in light of the case, granted the motion to compel, and ordered the plaintiffs to produce the remaining responsive documents at their own expense.⁷

On the importance of the issues, the court took Oxbow at its word. Oxbow had suggested that a favorable ruling could benefit America’s shippers and consumers by saving billions of dollars a year in reduced rail freight charges, and Koch himself had publicly accused the defendants of overreaching behavior that shortchanged consumers and intimidated customers. The defendants did not disagree with Oxbow’s estimate of the case’s significance, and the court found that the importance of the issues weighed in favor of the defendants’ request.⁸ A plaintiff who invokes wide consequences to show why its case matters has little room to ask for treatment as an ordinary private dispute once the other side asks for discovery.

On the amount in controversy, the court reasoned that, given the substantial damages Oxbow sought, the cost of producing information relevant to the defendants’ defense did not appear excessive, so this factor also favored the request.⁹ What moved the answer was how the cost compared with what the case put at stake.

Set that case beside Oxbow. Each turns on a request to search more people’s files. What separates the results is the ratio of cost to stakes, together with whether the case matters beyond the parties. A high price settles nothing by itself, and relevance settles nothing by itself; the comparison does the work.

The two factors are scored separately, and they can pull in opposite directions within a single case.

Oxbow describes the inquiry the same way: no single factor controls, and each determination is specific to the case.¹⁰ A question that reports only the price of a search, or only that the case is large, has handed you half the comparison, and the missing half decides the answer. The next pair of factors turns from the size of the case to the position of the parties.

Access and Resources

Rule 26(b)(1) lists the parties’ relative access to relevant information and the parties’ resources as the third and fourth considerations.¹² The first pair looked at the lawsuit. This pair looks at the litigants, and each factor answers a practical question about who should do the work. Relative access asks which side holds the information. Resources asks which side can afford to search for it and produce it. Both are comparisons between the parties, so the same request can be reasonable when aimed at one litigant and oppressive when aimed at another.

The access factor follows from how discovery runs. Discovery is mainly party-driven: the lawyers ordinarily make the required disclosures and answer discovery requests themselves, without a court order.¹³ The side that holds the records therefore does the searching, and the requester cannot search files it cannot see. Greater access on the responder’s side counts toward requiring the responder to search, and price alone does not carry the objection, because access is a separate factor the court weighs. Suppose a driver sues an automaker over an alleged design defect. The design files sit with the automaker, and the driver has no other route to them. The access factor favors the request, and an automaker with ample means gets little help from the resources factor either.

The resources factor guards against the opposite failure. An expense that a well-funded party absorbs unnoticed can be prohibitive for a modest one, and the rule refers to the parties’ resources in the plural, so the means of the requester count along with those of the responder. A party with greater means can fairly be asked to bear more of the search, and a party with modest means should not be buried under demands it cannot afford to answer. Wealth carries no penalty, though. A party with large means keeps the protection of the other five considerations, and an irrelevant or out-of-proportion request does not become acceptable because the responder could afford to answer it.

The two requests in the bakery’s case involve the same parties and the same dispute. What moved the answer was who could reach each category of document and what the bakery could afford to do about it. A request gains from the access factor when the responder is the practical source of the material, and it loses when the requester already holds the material. The comparison runs category by category, which keeps it from collapsing into a rule that the larger party always pays.

Neither factor works alone. Oxbow Carbon & Minerals LLC v. Union Pacific Railroad Co. shows how a court combines them with the rest of the list: it weighs all six considerations, no single one controls, each determination is specific to the case, and the party resisting discovery must specifically object and show that the request imposes an undue burden or expense.¹⁴ The decision matters for this pair chiefly because of what the resisting party left out. Oxbow declined to address the parties’ relative access to information or the parties’ resources, along with three other factors, and relied primarily on the argument that burden and cost outweighed the benefits.¹⁵ The court weighed all six anyway, found that adding the disputed custodian would be neither unduly burdensome nor unreasonably expensive, and ordered production.¹⁶ An objection that speaks only of cost leaves the court to finish the comparison on whatever the record shows, though the objector alone knows what its files hold and what it can afford.

A separate default governs who pays. The responding party presumptively bears the expense of complying with a discovery request, but it may invoke the court’s discretion under Rule 26(c) for protection from undue burden or expense, including an order conditioning discovery on the requesting party’s payment of the costs.¹⁷ The responder holds the records and is positioned to search them, which explains the default. Because the default leaves the requester paying nothing, the proportionality factors and the possibility of a cost condition are what put a price on a broad request. Cost-shifting remains the exception. The resisting party in Oxbow asked that the defendants cover the expense of production, and the court found that the circumstances did not warrant shifting costs.¹⁸

Access and resources are where a court looks when a responder asks to depart from the default. Take a modest party that holds the only copy of important records. The access factor favors production, and the resources factor favors protection. Rule 26(c) lets the court reconcile the two by conditioning the discovery on the requester’s payment of costs instead of choosing between full production at the responder’s expense and none at all.¹⁹

A question that calls the defendant a large corporation has supplied one side of two comparisons. It must also say who holds the information and what the request would cost before you can score the factors. Greater means is a reason to expect a party to bear more of its own search. It does not make every request proportional, and it does not shift the other side’s expenses to the wealthier party. A question that says the responding party will pay for its own search describes the ordinary default, and no one has violated a rule.

Importance Versus Burden

The last two considerations set the value of a request against its price: the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.²¹ The earlier pairs described the lawsuit and the litigants. These two describe the request itself, asking what it will contribute to the case and what it will cost to answer. Neither means much alone. A costly request can be justified when the information is central to deciding the case, and an inexpensive one can still be unjustified when it adds nothing the requester needs. A court makes this comparison when a request is challenged, and a lawyer should make it before serving or answering the request.

Relevance never ends the inquiry, because the rule requires that discoverable matter be both relevant and proportional.²² Convolve, Inc. v. Compaq Computer Corp. shows the gap. The court found that requiring Compaq to disclose all of its bills of materials for every computer system that might have incorporated an accused drive, or one that was not accused but is AAM-supportable, would demand an expenditure of time and resources far out of proportion to the marginal value of the materials to the litigation. The documents did not show the specific instances in which a relevant drive was actually installed in a Compaq system.²³ The benefit side of the comparison turns on that marginal value, meaning what the discovery would actually add. Discovery serves to narrow and clarify the issues and to ascertain the facts, or where the facts can be found, so a request earns weight as it advances that work.²⁴

Discovery that goes to what the opposing party has put in issue carries its own weight. A plaintiff who sues over an alleged product defect and seeks damages for personal injuries puts the extent of those injuries in issue, and the defendant will want its own or a neutral physician to examine the plaintiff to ascertain the true extent of the injuries. Rule 35 authorizes the examination, but because it is invasive, the Rule requires a court order absent the parties’ agreement. In most personal injury cases, though, the plaintiff, conceding the inevitable, stipulates to the examination.²⁵ The order requirement is a separate safeguard for invasive discovery and no part of the proportionality factors, but the example shows that a request central to the issues usually goes uncontested. Oxbow shows the same kind of benefit from a different angle. The plaintiffs did not dispute that the added custodian’s records held documents responsive to the negotiated search terms and relevant to the case, and they had already produced about 1,300 such documents from a sample.²⁶ A source that has already yielded relevant material is a source whose remainder promises more, which is the opposite of the bills of materials in Convolve, where the documents did not show actual installations.

Once a request is relevant, the next question is who must prove that its cost is too high. The party resisting discovery carries that burden. In Oxbow, the court explained that the movant first shows that the opposing party’s answers were incomplete and how the requested information is relevant, after which the burden shifts to the other side to explain why discovery should not be permitted, and that the resisting party must specifically object and show undue burden or expense.²⁷ One district judge, quoting an earlier opinion, put the working rule this way: as long as the parties request information relevant to the claims at issue, the requests are tendered in good faith, and they are not unduly burdensome, discovery shall proceed, and the party resisting production bears the burden of establishing lack of relevancy or undue burden.²⁸ The allocation tracks who holds the facts. Whether a search is burdensome depends on the responder’s own systems, files, staff, and costs, none of which the requester can see.

The resisting party’s showing has to consist of facts. In Labrier v. State Farm Fire and Casualty Co., the court reasoned that because the rules allow broad discovery, the burden typically falls on the party resisting to explain why discovery should be limited, and that a bare assertion that requested discovery is unduly burdensome is “ordinarily insufficient to bar production.” It pointed to another court that was not persuaded of undue burden where the objecting party gave no estimate of the hours or the money compliance would take.²⁹ The evidence that counts is concrete: how many hours, at what cost, using which systems or files, and whether a narrower search would deliver most of the value for less.

Numbers alone do not win the comparison, as Oxbow shows. The plaintiffs relied primarily on the contention that burden and cost outweighed the benefits, and they left unaddressed the importance of the issues, the amount in controversy, the parties’ relative access to information, the parties’ resources, and the importance of the discovery in resolving the issues. The court weighed all six factors, found that adding the custodian would be neither unduly burdensome nor unreasonably expensive in light of the case, and ordered the remaining production at the plaintiffs’ own expense.³⁰ A cost figure is half a ledger. The objector who supplies it must also be ready to show why the benefit and the stakes do not justify it, or the court will do that arithmetic without the objector’s help.

A court that finds a request out of proportion has more than one remedy. It may refuse to order the discovery. It may enter a protective order, since Rule 26(c) lets a court grant orders protecting a party from undue burden or expense, and the orders it authorizes include one forbidding the disclosure or discovery.³¹ It may also adjust who pays, because the responding party presumptively bears the expense of complying but may seek an order conditioning discovery on the requesting party’s payment of the costs.³² Because the responder presumptively pays, cost-shifting is the exception, and the court in Oxbow found it unwarranted after weighing the factors.³³ The graduated remedies fit the problem because disproportion is a matter of degree. A request often has a legitimate core and an excessive edge, and an all-or-nothing choice would force a court either to impose the full cost on the responder or to deny discovery the case needs. A cost condition keeps information flowing and gives the requester a price to weigh.

The same weighing underlies the burden certification taught earlier in this chapter. By signing a discovery request, response, or objection, a lawyer certifies that it reflects knowledge, information, and belief formed after a reasonable inquiry.³⁴ A lawyer who writes unduly burdensome into an objection asserts a fact about cost, and the reasonable inquiry is what should have produced the hours and dollars that Labrier looks for. A court weighing the same request after a dispute arises does what the signer should have done first. A certification that violates the rule without substantial justification draws a sanction the court must impose, as the sanctions sections below explain.³⁵

The third and fourth steps carry the weight in practice. A fact pattern that reports an objection as burdensome and stops there has described an unsubstantiated objection, which ordinarily fails. A fact pattern that reports only a large price has left out the benefit and the stakes that the price must be compared with. The answer that names the missing half of the ledger is usually the answer the question is looking for.