The Federal Rules of Civil Procedure – Rule 26 (or, FRCP 26 for short) sets out the duties of how you have to disclose information to the other side in a lawsuit. While you’re not required to disclose absolutely every piece of information in your possession (that would be impossibly difficult), you must hand over everything relevant and “proportional to the needs of the case.”
But what does that mean, you ask? Continue reading below to learn more about your duty to disclose under FRCP 26 and the golden rule of proportionality.
The Scope of Discovery under FRCP 26
FRCP 26 sets out the scope of discovery in Rule 26(b)(1). It reads as follows:
Scope in General. Unless otherwise limited by court order, the scope of discovery is as follows: 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 this scope of discovery need not be admissible in evidence to be discoverable.
You’ll notice that this provision requires two things before a piece of information is discoverable: relevance and proportionality.
In American law, “relevant” just refers to information that tends to make a disputed fact more or less probable and is of consequence in determining the action. (See Federal Rules of Evidence – Rule 401.)
Proportional is a little bit more complicated. You’ll see that FRCP 26(b)(1) sets out six factors for a court to consider and balance when deciding whether the information sought is proportional to the needs of the case. Again, they are as follows:
- 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
- Whether the burden or expense of the discovery outweighs its likely benefit
We’ll go through each consideration, in turn, to explain what it means and how it might apply to your case.
The Importance of the Issues at Stake in the Action
This consideration refers to how important the issue to which the discovery would apply is in the context of the action as a whole.
For example, say you’re being sued for breach of contract and the other party seeks discovery with respect to information that will establish when the contract was signed. If the issue of the timing of the contract is extremely important and in dispute in the case, a judge is more likely to compel this discovery. If, however, timing is not important in your case and it’s largely agreed, a judge will be less likely to compel this kind of discovery.
The Amount In Controversy
A judge will consider the total amount of damages sought in the action when deciding if a discovery request is proportional.
For example, if you’re suing for a breach of contract and seeking $75,000 in damages, a judge will be less inclined to order extensive discovery than he or she would be in a case involving $750,000 or $10,000,000 in damages.
While it might seem unfair to persons with smaller cases, the rationale behind including this as a consideration is to keep the costs of discovery from spiraling so far out of control that they dwarf the damages either party might hope to receive.
Relative Access to Relevant Information
A judge will consider if either one side of an action or the other has relatively greater access to relevant information than the other and will be less likely to order discovery where only one side substantially bears the burden of expensive discovery.
For example, if you run a one-person company and you sue a multinational conglomerate, you are less likely to be successful in a motion to compel extensive and expensive discovery if you are seen to be exploiting your own lack of discoverable information as a tactical advantage.
The Parties’ Resources
Courts are less likely to order extensive discovery when the party responsible for discovery has few or no resources to carry out that discovery. In other words, a large, sophisticated, and wealthy company will be expected to undertake more extensive discovery efforts than a small, unsophisticated, and cash-strapped company or individual.
The Importance of the Discovery in Resolving the Issues
A judge is less likely to order discovery if the information sought is of little importance to the central issues in the case. On the flip side, crucial information relevant to a central issue is very likely to be made the subject of an order for discovery.
The Burden or Expense of the Discovery
Where the burden or expense associated with producing the discovery outweighs the benefit the information will provide the court with respect to determining the issues at hand, a court will be less likely to order discovery.
For example, if the proposed discovery is only peripherally relevant to a minor issue but will cost the plaintiff or defendant a significant amount of money to obtain, a judge will likely not order the discovery. At the same time, if the proposed discovery is materially relevant to a central issue and won’t cost much to obtain, a judge is much more likely to order the discovery.
FRCP 26: A Balancing Act
It’s important to remember that the factors listed in Rule 26(b)(1) must be balanced against one another on a case-by-case basis. Different factors might be relevant in different cases or take on more significant weight depending on your circumstances.
SIDENOTE:
For an outstanding example of a court considering the six proportionality factors in FRCP 26, have a look at Oxbow Carbon & Minerals LLC v. Union Pacific Railroad Company. In this case, the court analyzed each of the relevant factors in the context of the case’s particular facts (which involved an antitrust allegation by the plaintiffs against the defendants resulting in an alleged overpayment for commercial rail freight service) and ordered production of the disputed discovery.
Each case is different. One involving two tiny companies with limited resources and relatively small disputed damage amounts will entail a different analysis than one involving two huge conglomerates with billions of dollars at stake.
Final Thoughts
Your discovery obligations are often not incredibly easy to discern. Because the proportionality analysis does not involve bright-line rules, but rather a set of principles to be balanced in the unique circumstances of each case, what is discoverable in one case might not be in another.
However, a fair reading of FRCP 26 and its proportionality rule should provide you and your lawyers with a reasonable amount of guidance on the issue of what needs to be disclosed and what doesn’t.
The post FRCP 26: The Scope of Discovery appeared first on Lumix.