Newly Amended Federal Civil Rule 26(b)(1): Injecting Healthy Doses of Proportionality and Relevance to Curtail the Scope of Discovery

Defense Digest, Vol. 23, No. 2, June 2017

By David J. Oberly, Esq.*

A sweeping collection of modifications to the Federal Rules of Civil Procedure recently went into effect that will drastically change the way discovery is conducted in federal court. Taken together, these recent changes are designed to place a greater focus on proportional discovery, elevated collaboration and reduced gamesmanship. Of note, wholesale modifications were made to Rule 26(b)(1), relating to the scope of discovery and the principle of proportionality, that will have a far-reaching impact on types of civil litigation conducted in the federal courts across the county.

In order to limit ever-increasing discovery costs and burdens that have skyrocketed in recent years with the proliferation of electronically stored information, extensive changes were made to Rule 26, which defines the scope of permissible discovery. In particular, two noteworthy modifications to Rule 26(b)(1) were implemented with the specific intent of significantly narrowing the contours of permissible discovery. To achieve this goal, the amendments taper and limit the overall scope of discovery by making proportionality and relevance the new staples of Rule 26(b)(1) and by explicitly injecting proportionality considerations within the main definition of permissible discovery.

Perhaps most importantly, the scope of discovery under Rule 26 has been redefined and limited as discovery must now be relevant and proportional, as opposed to simply being reasonably calculated to lead to other admissible evidence. The prior version of Rule 26(b)(1) did little to limit discovery, allowing for the discovery of “any nonprivileged matter that is relevant to a party’s claim or defense,” “any matter relevant to the subject matter involved in the action” where good cause could be shown, and even inadmissible evidence so long as the information or documentation “appear[ed] reasonably calculated to lead to the discovery of admissible evidence.” Importantly, with the amendments to Rule 26(b)(1), the phrase “reasonably calculated to lead to the discovery of admissible evidence”—which was often used to argue that the scope of discovery should be expansive—was eliminated from the Rule. The revised Rule now states only that information need not be admissible to be discoverable. This change was necessary to make clear that the limitation on discovery cannot be expanded by discovery claimed to be reasonably calculated to lead to admissible evidence.

In its place, Rule 26(b)(1) now provides that discovery must be “proportional to the needs of the case.” In addition, the amended Rule also retained the language requiring that discovery be limited to matters “relevant to any party’s claim or defense.” Thus, the scope of discovery is now defined based on matters specifically relevant to the claims and defenses put forth in the litigation. This particular amendment provides further clarification that the scope of discovery is no longer linked to the probability of discovering admissible evidence. Because many practitioners previously relied on the argument that discovery was permitted where information or documentation was “reasonably calculated” to lead to something beneficial to the party’s cause, this language was eliminated in order to emphasize that discovery should not be permitted beyond the defined scope. Accordingly, two requirements must now be met in order to establish that discovery requests fit within the parameters of Rule 26(b)(1)—relevance and proportionality.

The amended Rule further narrows and limits discovery by inserting a list of proportionality factors into Rule 26(b)(1)’s main definition of the permissible scope of discovery. These proportionality factors are aimed at providing the litigants with a set of limiting principles intended to aid in gauging proportionality. These factors entail “[t]he 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.”

Much of the amended language relating to Rule 26(b)(1)’s proportionality factors was simply moved up from Rule 26(b)(2)(C)(iii) and explicitly incorporated within the defined scope of discovery. While prior Rule 26(b)(2)(C)(iii) contained very similar discovery-limiting factors for consideration, federal courts frequently failed to take these considerations into account and rarely applied them to narrow the scope of discovery. These proportionality considerations, which were previously only triggered following a party’s request for a protective order under Rule 26(b)(2), are now included in the main definition of the scope of discovery, and they now constitute a mandatory consideration of the parties at the outset of the discovery process whenever discovery requests or responses are made. This emphasis placed on the proportionality factors through their inclusion in the primary component of Rule 26 highlights the duty imposed by Rule 26(g) that litigants consider proportionality both when requesting and responding to discovery. Moreover, by explicitly tying a proportionality mandate into the more narrowed definition of scope of discovery, the amendments place further emphasis on the fact that discovery must incorporate a balancing of interests and should be confined to the specific claims and defenses put forth by the litigants.

Importantly, amended Rule 26(b)(1) does not place the burden of establishing proportionality on the party requesting discovery. Nor is the revised Rule intended to allow the responding party to resist discovery by asserting boilerplate objections that the requested discovery is not proportional. Rather, the parties now have a collective obligation to take proportionality into consideration both when serving and responding to discovery requests. Likewise, courts have an identical obligation when ruling on discovery disputes as well.

The scope and proportionality focuses of the Rule 26(b)(1) amendments are complemented with an amendment to Rule 26(c)(1) inserting language that authorizes protective orders that include the “allocation of expenses” arising from discovery, allowing a court to shift the costs of providing discovery in the context of protective orders. This particular amendment to Rule 26 was provided to promote the responsible use of discovery proportional to the needs of the case. As a result, Rule 26(c)(1) now offers a basis for recourse to a party who is forced to respond to abusive discovery served with the intent to ratchet up the cost of litigation to exorbitant, unnecessary levels, and it allows courts to protect a party from undue burden and expense in such situations. Beyond that, in linking the expense of discovery to the litigant who seeks to benefit from the discovery, this particular revision further promotes Rule 26’s focus on encouraging parties to closely consider whether discovery requests are genuinely required to support the propounding party’s claims or defenses.

With the burgeoning expansion of electronically stored information and its role in litigation, the necessity of proportionality in discovery has become absolutely essential. The amendments to Rule 26 should rein in discovery abuse, narrow and focus the scope of allowable discovery, and reduce today’s often exorbitant discovery costs. Ultimately, Rule 26(b)(1)’s strong emphasis on proportionality will provide a greater benefit to defendants, who almost always prefer to limit the scope of discovery, as courts now have additional ammunition to curtail unreasonably broad discovery requests and re-focus the litigation on the actual claims and defenses asserted in a given case. The ultimate impact of these changes, however, will depend in large part on how these amendments are incorporated and applied in real time by the courts. Moving forward, all litigants and their attorneys are well advised to develop an understanding of the amendments to Federal Civil Rule 26 and the potential impact these changes could have in operating in federal courts and engaging in the litigation discovery process in particular.

*David is an associate in our Cincinnati, Ohio office. He can be reached at 513.372.6817 or djoberly@mdwcg.com.

^{Defense Digest, Vol. 23, No. 2, June 2017. Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2017 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}