Five Key Points from the Sedona Conference Commentary – Proportionality Series, Part 8

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A multi-part series reviewing decisions on proportionality in eDiscovery since the December 2015 amendments to the Federal Rules of Civil Procedure

In the first Part of this series, we reviewed the amendments made to Federal Rule of Civil Procedure 26(b)(1) in December 2015.  In the second Part, we reviewed one of the first decisions applying the amended rule.  In the third Part, fourth Part, and fifth Part, we reviewed relevant cases from 2016 and 2017, and in the sixth Part, we pulled together the key points from our case law survey.  In the seventh Part, we reviewed the Sedona Conference Principles of Proportionality, and in this final Part, we review five key points from its Comments.

The Role of Proportionality during Preservation

The first Principle in the Commentary addresses how proportionality should be taken into account during preservation, before litigation has commenced and the Federal Rules of Civil Procedure have become applicable.  The 2015 Advisory Committee Notes to amended Rule 37(e) suggest that proportionality should be a factor in assessing the reasonableness of pre-litigation preservation efforts.  The Sedona Conference Commentary fully endorses this analysis, but it wisely still suggests caution in preserving too narrowly at this early stage of the litigation process:

It is important to note that in applying principles of proportionality to preservation, a miscalculation can lead to the permanent loss of relevant information.  In contrast, a miscalculation during production can usually be cured.  In particular, at the preservation stage parties should be wary of applying too narrow a definition of what constitutes relevant ESI.  [emphasis added]

The Importance of Knowledge at the Time

In discussing the standards to be applied in assessing proportionality and discovery decisions, the Commentary recognizes how parties’ understanding of cases evolves over time and emphasizes the importance of assessing decisions after the fact based on the knowledge that was available to the party at the time:

This analysis should, in turn, depend on the date when the preservation obligation arose and the knowledge available to that party at the time when the information was, or could have been, preserved.

. . .

Therefore, a proportional approach to discovery must be measured by the information available to the parties “as of the time” requests, responses, or objections are served.  A requesting party may lack sufficient information to understand the burden or expense associated with responding to discovery, while a responding party may not fully appreciate the importance of the discovery to the ultimate disposition of the case.  [footnotes omitted; emphasis added]

The Benefits of Early Disclosure and Dialogue

Throughout the Commentary, the preservation, cost, and process benefits of early disclosure and dialogue between the parties are repeatedly emphasized, for example:

Parties often can reduce the risk of loss of relevant information with steps such as the following: (i) earlier or more complete disclosure about the substance of their claims and defenses; (ii) communication about the types of information each party considers to be within the duty to preserve . . . .

. . .

Propounding discovery requests at the early stages of the litigation allows parties time to explore compliance with the discovery requests, consider proportionality issues, and bring any disputes before the court for resolution.

. . .

Attention to these issues at an early stage can help shape the discovery process, give the parties the opportunity to resolve e-discovery issues, and allow the court to provide guidance and rulings on issues that the parties cannot resolve.

. . .

Preliminary steps of this sort may help the parties agree on cooperative discovery efforts and potentially yield savings by, for example, eliminating the need for some searches or date ranges, identifying custodians, or refining search terms to more effectively target and retrieve relevant information.  [emphasis added]

Moreover, Principle 3 states that “[u]ndue burden, expense, or delay resulting from a party’s action or inaction should be weighed against that party.”  As the Comments to that Principle explain:

Although a party’s conduct is not per se a proportionality factor, failure to engage in early, meaningful discussions designed to develop a discovery plan and avoid potential disputes may properly affect the outcome of any proportionality determination that a court makes. This is appropriate because a party can be sanctioned for failing “to participate in good faith in developing and submitting a proposed discovery plan as required by Rule 26(f).”  [footnote omitted; emphasis added]

The Application of Testing and Sampling

Throughout the Commentary, the many applications and potential benefits of running test searches, reviewing examples, and conducting formalized sampling are all also emphasized:

In some circumstances, the courts may order sampling of the requested information to determine whether it is sufficiently important to warrant discovery.

. . .

In addition, sampling can be used to demonstrate the rate of responsive information, to extrapolate the volume (and therefore costs) associated with reviewing the potentially responsive ESI.  Further, using sampling to demonstrate the rate of responsive information can support an argument that a data source is or is not likely to contain responsive information.

. . .

Early test searches or early case assessment technology might facilitate agreement on targeting collections or searches using certain date ranges, platforms or sources, file types, or custodians. In addition, the parties may need to negotiate whether or which search methods might be necessary to further assist in identifying relevant ESI.  [footnotes omitted; emphasis added]

The Advantages of Phased or Iterative Discovery

Finally, the Commentary makes the case for approaching discovery in a phased or iterative way to allow for process refinement and revision as the matter progresses and more is learned:

For these reasons, the court, or the parties on their own initiative, may find it appropriate to conduct discovery in phases, starting with discovery of clearly relevant information available from the most accessible and least expensive sources. . . .  Phasing may allow the parties to develop the facts of the case sufficiently to determine how to efficiently and effectively target subsequent discovery.  In addition, phasing discovery may allow the parties to focus first on the information that will be most helpful in assessing litigation risk and facilitating settlement discussions, or on case-dispositive legal issues that can be decided with minimal factual development. . . .  In short, phased discovery should be viewed as a way to promote the objectives of Rule 1.  [footnotes omitted; emphasis added]

For Assistance or More Information

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About the Author

Matthew Verga

Director of Education

Matthew Verga is an electronic discovery expert proficient at leveraging his legal experience as an attorney, his technical knowledge as a practitioner, and his skills as a communicator to make complex eDiscovery topics accessible to diverse audiences. A fourteen-year industry veteran, Matthew has worked across every phase of the EDRM and at every level from the project trenches to enterprise program design. He leverages this background to produce engaging educational content to empower practitioners at all levels with knowledge they can use to improve their projects, their careers, and their organizations.

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