Executive Summary: The rule that defines the scope of discovery was amended on December 1, 2015. The scope of discovery still turns broadly on relevance. However, the amended provision now requires that requested discovery be “proportional to the needs of the case.” This can be especially helpful in curbing discovery abuse in NPE cases. One expressly enumerated factor for assessing proportionality is the “amount in controversy.” As a result, defendants now have a better benchmark to narrow or alternately cost-shift discovery requests that are disproportional to the amount in controversy, which are too often the norm in NPE cases.
The amendments to the Federal Rules of Civil Procedure (FRCP) that took effect on December 1, 2015 include modification to Rule 26(b) which defines the scope of discovery. As amended, Rule 26(b) now provides that parties may obtain discovery that is “relevant to any party’s claim or defense and proportional to the needs of the case.” The new proportionality requirement now offers parties a means to curb abusive discovery requests. The following redlines illustrate the amendments to Rule 26(b):
|Illustrated Amendments to the Scope of Discovery|
|Scope in General. Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense |
Given relevance needs to be proportional to the “needs of the case,” potentially including the “amount in controversy,” defendants need to assess whether early damages disclosures can serve to limit discovery requests that otherwise would be unduly burdensome or expensive. In other words, should a defendant make robust damages disclosures early, they are likely to provide the court with a benchmark to assess whether the plaintiff’s discovery requests are disproportional to the needs of the case. Doing so provides better arguments for narrowing discovery, cost-shift and perhaps even obtaining a protective order. To the extent early damages disclosures are not feasible or desirable, it should be noted that courts have assessed the “needs of the case” on the other enumerated factors set out in Rule 26(b).
It is too early to tell how often and under what circumstances district courts will narrow scope of discovery or impose cost-shifting to the requesting party. Docket Navigator forecasts only six decisions on this issue in 2016 with a 50/50 outcome. Decisions concerning discovery are highly fact dependent and proportionality under Rule 26(b) will be no different. At a minimum, however, defendants need to consider – preferably early in the case — how “proportionality” can help mitigate burdensome or expensive discovery requests in NPE “cost of litigation” cases.