The proportionality puzzle: When are discovery demands excessive?
The more than 300 e-discovery specialists who gathered for Day Two of the ACEDS 2011 E-Discovery Conference were treated to a practical dissection of one of the critical questions in the discovery field: "How much is too much?"
The issue of proportionality in e-discovery gets a great deal of attention, but is rarely applied effectively or even understood thoroughly. In a dynamic conference session--moderated by William Hamilton, chairman of the ACEDS Advisory Board and a partner at Tampa’s Quarles and Brady, and Charles Intriago, founder and president of ACEDS--four experts detailed the challenges and best practices that e-discovery practitioners should follow in the battle for proportionality.
The panelists: Alvin Lindsay, a partner at Hogan Lovells, who represents corporations in complex litigation matters that often extend beyond national borders; Patrick Montoya, a plaintiff’s lawyer and partner at Colson Hicks; David Yerich, director of E-Discovery for UnitedHealth Group, and Joshua Kubicki, senior director of legal and corporate practices, Applied Discovery.
Each of them described how proportionality plays a role in different stages of the e-discovery process.
Proportionality and Rule 26
The proportionality rule in the Federal Rules of Civil Procedure does not oblige one party to pay for more discovery than the value of the case unless there is good cause. Rule 26(b)(2)(C) provides that courts should limit discovery where "the burden or expense of proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of issues at stake in the action, and the importance of discovery in resolving the issues."
Montoya, who has won many multimillion-dollar verdicts and settlements on behalf of plaintiffs, said that one of the glaring differences between large and small cases is that the large ones usually pay not attention to proportionality. In some cases, like complex commercial litigation or massive class action—including the BP oil spill, Toyota acceleration case and Chinese drywall multidistrict litigation—the concept of proportionality is essentially off the table. This is because the case’s value is astronomically high, and the discovery involved is expected to be great in scope and expense.
Where no proportionality exists
Montoya described the balancing that a plaintiffs’ lawyer must perform to weigh the cost of review of inordinate amounts of data against the amount that is likely to be recovered, which must also cover the attorneys’ own fees. That analysis sometimes leaves so little for the plaintiff that the case becomes unattractive to pursue.
Proportionality in preservation
On the defense side Yerich, of UnitedHealth Group, said proportionality starts with preservation. As one who oversees all the processes, protocols and tools used by the healthcare giant’s e-discovery regulatory and legal matters, he said that how companies handle – and even fear – proportionality can affect e-discovery costs. The current uncertainty concerning the standards applied to preservation has led many organizations to engage in excessively liberal preservation efforts, regardless of any proportionality standard. Preservation of irrelevant or unneeded electronically stored information (ESI) can be overwhelming.
"To show your burden is to know your ESI," Yerich told the crowd, which included attorneys, paralegals, and litigation and information technology (IT) support professionals from 18 states and three countries. "Come with a better plan and let the costs speak for themselves," he said.
Kubicki, attorney and legal practice director at Applied Discovery, recommended applying proportionality "each step of the way, not just at the start of a matter." He said that using intelligent search tools could help reduce time and costs while increasing efficiency and accuracy of the e-discovery process.
Pitting proportionality against relevance
Lindsay, who is a prolific e-discovery attorney, author and lecturer based in Miami, spelled out the implications of allowing legal disputes to be resolved on the basis of e-discovery costs. Basing the resolution of serious disputes on such collateral matters as e-discovery, he said, harms the fairness of the justice system itself.
He said there are two competing standards in the courtroom: relevance and proportionality. On one hand, parties have a duty to identify, preserve and produce relevant ESI or risk e-discovery sanctions. On the other hand, Rule 26(b) requires upholding standards of proportionality of cost, time and scope. This puts constraints on identifying, preserving, collecting and reviewing relevant ESI, and can frustrate the goal of fairness and justice if relevant ESI is excluded from production. For this reason, Lindsay proposedthat relevance, not proportionality, should be the guiding standard.
He also suggested that data sampling is “the most underused solution” in e-discovery. A good data sampling methodology can turn up useful information about larger document collections, indicating whether they are likely to be responsive or not relevant. Data sampling usually has a reasonably low cost because a smaller volume of data is analyzed, and avoids a page-by-page review.
As part of their conference materials, attendees received a CD with speaker presentations and other written works and resources. They will have access to additional material from the panelists on a special post-conference website available next week. The session, "How Much Is Too Much: The Compelling Case for Proportionality," was one of 17 panels of the ACEDS 2011 Annual E-Discovery Conference, held at the Westin Diplomat March 23-25 in Hollywood, Florida.
