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December 7, 2020

Proportionality: Cost Remains The Bottom Line in eDiscovery

Proportionality - The Bottom Line in eDiscovery is Cost

We are at the five-year mark of rules changes designed to emphasize proportionality in federal civil discovery practice. Since December 1, 2015, many courts have examined the six proportionality factors memorialized in Federal Rule of Civil Procedure 26(b)(1) to measure the appropriateness of discovery. Of those factors, cost—the expense and time required to comply with a discovery response—remains the most significant in terms of determining whether a responding party must comply with a disputed discovery request. The recent case of SiteLock LLC v. GoDaddy.com LLC exemplifies this point and spotlights the importance of quantifying cost to demonstrate the proportionality or disproportionality of a particular discovery request.

Proportionality

Rule 26(b)(1) proportionality requirements place “reasonable limits” on the nature and scope of discovery. Those limits necessarily temper requesting parties from seeking every conceivably relevant document in discovery.

Nevertheless, proportionality also imposes a corresponding obligation on responding parties to quantify the costs of responding to discovery. Objecting to a discovery request on proportionality grounds is not enough. Instead, responding parties must provide metrics substantiating estimated manhours and dollars to be incurred in addressing discovery. Colloquially referred to as “hard” or “concrete” information, such details are essential if a responding party intends to show that a discovery request is not proportional to the needs of the case and thereby preclude compliance with such a request.[1]

Without such information, responding parties should expect courts to overrule their proportionality-based objections. SiteLock LLC v. GoDaddy.com LLC is particularly instructive on this issue.[2]

SiteLock v. GoDaddy.com

Like many discovery disputes, Sitelock involved parties who could not cooperate. Moreover, counsel were so suspicious of each other that they resorted to using a court reporter to transcribe their meet and confer sessions. Even that measure proved insufficient when one of the parties accused the other of conspiring with the court reporter to supposedly manipulate the transcript of those meet and confers. In this atmosphere of distrust, GoDaddy failed to engage in the “bottom-line proportionality”[3] analysis that Rule 26(b)(1) requires of responding parties seeking to stave off compliance with discovery.

The discovery at issue included three document requests Sitelock propounded to obtain relevant communications between GoDaddy and its customers relating to the breached commercial contract at issue in the parties’ lawsuit. In response to GoDaddy’s various objections (including proportionality), Sitelock moved to compel.

While observing that the information Sitelock requested was relevant, the court agreed with GoDaddy that its proportionality objections might have merit. Given the number of custodians possibly in play and the number of emails that might have to be reviewed, the court explained that proportionality considerations could justify limiting the extent of Sitelock’s requested discovery.

Nevertheless, the court could not render a decision on GoDaddy’s proportionality objection because the parties had yet to explore what “reasonable limits” could be placed on Sitelock’s discovery. To ensure the parties fully addressed this issue, the court admonished GoDaddy to offer “concrete information” regarding its anticipated production costs. Among other things, the court suggested that GoDaddy consider running search terms and imposing date parameters on the document universe to help assess its projected production costs.

Despite the court’s admonition, GoDaddy failed to offer Sitelock any specific details that would substantiate its position on proportionality. After six weeks of waiting (in vain) for that information, Sitelock renewed its motion to compel, which the court granted.

While GoDaddy’s opposition repeated its mantra of disproportionality and estimated its production would cost millions of dollars, the court found those projections to be grossly exaggerated. The court expressed its dismay that GoDaddy failed to develop or run search terms, impose date limitations, prioritize custodians, or consider other options to obtain the “concrete information” the court requested so it could develop a proportional solution. In its discovery order, the court ordered GoDaddy to search the email accounts for 30 prioritized custodians, run limited search terms proposed by Sitelock, and produce relevant, responsive documents.

Establishing the Bottom Line in Proportionality

Responding parties generally cannot ward off meritorious discovery by relying on conclusory proportionality objections. They need to develop detailed cost and time estimates that can legitimately substantiate their burdens and costs. As Sitelock teaches, this is usually accomplished by doing one or a combination of the following: identifying priority custodians, reviewing document samples from those custodians, running searches against the relevant document universe, and imposing date range parameters. Taking these steps or other measures as may be appropriate is typically essential for ascertaining the bottom line and thus determining the appropriate balance between a responding party’s costs and a requesting party’s needs in discovery.



[1] The Sedona Conference, Commentary on Proportionality in Electronic Discovery, 18 Sedona Conf. J. 141, 167 (2017).

[2] SiteLock LLC v. GoDaddy.com LLC, No. 19-cv-02746, 2020 WL 6135189 (D. Ariz. Oct. 19, 2020).

[3] I would like to recognize Ralph Losey for developing the concept of “bottom-line proportionality.” An accomplished litigation attorney and renowned eDiscovery expert, Ralph has pioneered technological and practical innovations in electronic discovery practice. Ralph has mentored many lawyers (including me) on eDiscovery issues and I am grateful for his professional guidance.

Philip Favro
Philip Favro
Philip Favro acts as a trusted advisor to organizations and law firms on issues surrounding discovery and information governance. Phil provides guidance on data preservation practices, litigation holds, data collection strategies, and ESI search methodologies. In addition, he offers direction to organizations on records retention policies and the need to manage dynamic sources of information found on smartphones, cloud applications, and social networks. Phil is available to serve as a special master on issues related to electronic discovery. Phil is a nationally recognized thought leader and legal scholar on issues relating to the discovery process. His articles have been published in leading industry publications and academic journals and he is frequently in demand as a speaker for eDiscovery education programs. Phil is a member of the Utah and California bars. He actively contributes to Working Group 1 of The Sedona Conference where he leads drafting teams and serves as the Steering Committee project manager. Prior to joining Driven, Phil practiced law in Northern California where he advised a variety of clients regarding business disputes and complex discovery issues. He also served as a Judge Pro Tempore for the Santa Clara County Superior Court based in Santa Clara, California.
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