Federal Rule of Civil Procedure 26(b) governs the appropriate scope of discovery in federal litigation. In December 2015, the Supreme Court amended Rule 26(b) to emphasize the proportionality factors that had been previously tucked away in subsection (b)(2) and were often overlooked by courts and litigants. The amendment also added consideration of “the parties’ relative access to relevant information” to the list of proportionality factors. As amended, Rule 26(b) now states in relevant part:
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 the scope of discovery need not be admissible in evidence to be discoverable.
Thus, under amended Rule 26(b), information is discoverable only if (1) it is relevant to any party’s claim or defense and (2) is proportional to the needs of the case.
While the advisory committee notes refute the notion that the amendments were meant to restrict the scope of discovery, they were expressly intended to restore the proportionality factors to their original place in defining the scope of discovery. The committee notes also explain that the new requirement for considering the parties’ relative access to information reflects the common reality of “information asymmetry,” where one party may have little discoverable information and the other party may have vast amounts of information. These considerations are especially pronounced in patent cases, where discovery costs have historically been notoriously high and the documentary evidence is often unequally distributed between small plaintiffs and large defendants.
While many wondered whether the amendments would have any measurable effect on patent practitioners, the data suggests they have. For example, in the first year after the 2015 amendments, courts applied proportionality and limited discovery four times more often than before the amendments. And while courts consistently confirm that the amendments were not intended to alter the existing responsibilities of the court and the parties to consider proportionality, courts more consistently engage in a thorough analysis of the proportionality factors and look for specific evidence relating to proportionality in analyzing discoverability.
Following the 2015 amendments, courts have emphasized that a party resisting discovery cannot defeat a motion to compel by broadly objecting on the basis of proportionality without showing why a particular discovery request is not proportional to the needs of the case. Nor can a generic reference to a party’s small size or limited resources, without more, sustain a proportionality objection. But importantly, some courts have found an independent duty to assess proportionality, even if the parties do not raise it. For example, in the Curtis v. Metro. Life Ins. Co., No. 3:15-cv-2328-B case, the Northern District of Texas made clear that a court must limit disproportionate discovery even absent a motion from the parties.
It is also worth noting that the cost to litigate patent infringement suits plummeted between 2015 and 2017. Though this decline can reasonably be attributed, at least in part, to an increase in early disposition of cases under Alice and an uptick in inter partes review challenges, it is also clear that the proportionality amendments have urged practitioners to approach discovery with more precision and focus. Seventy-two percent of eDiscovery professionals revealed in an informal poll performed by Kroll Ontrack that the amendments have had a positive impact on eDiscovery. Eighty-five percent of respondents indicated that parties are making more of an effort to cooperate with each other as a result of the amendments, and 70 percent of respondents stated that they are updating their document retention policies in response to the new rules.
In sum, though “proportionality in discovery under the Federal Rules is nothing new,”—as the Northern District of California articulated in Gilead Sciences, Inc. v. Merck & Co, Inc. just after Rule 26(b) was amended—what will change, hopefully, is mindset.”
Ryan Hargrave is a Principal in McKool Smith’s Dallas office. Her practice focuses on complex commercial and intellectual property litigation matters in United States District Courts, the International Trade Commission, and the Court of Appeals for the Federal Circuit.