Amended FRCP 26(b) in Action: Trio of Recent Northern District of California Cases Address Who Has the Burden of Establishing the Proportionality Requirement

In January and February 2016, the Northern District of California issued a trio of decisions following the December 2015 amendments to Rule 26(b) of the Federal Rules of Civil Procedure, two of which echo the Advisory Committee Notes that "[t]he parties and the court have a collective responsibility to consider the proportionality of all discovery and consider it in resolving discovery disputes,"¹ and one of which states that "a party seeking discovery of relevant, nonprivileged information must show, before anything else, that the discovery sought is proportional to the needs of the case."²

The amended Rule 26(b) requires that, 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."³

On January 13, 2016, in a patent dispute captioned as Gilead Sciences, Inc. v. Merck & Co. Inc., 2016 WL 146574 (N.D. Cal. 2016), the court stated that while proportionality in discovery under the Federal Rules is nothing new, the amended Rule 26 "simply takes the factors explicit or implicit in these old requirements to fix the scope of all discovery demands in the first instance." The Gilead court stated:

"What will change—hopefully—is mindset. No longer is it good enough to hope that the information sought might lead to the discovery of admissible evidence. In fact, the old language to that effect is gone. Instead, a party seeking discovery of relevant, non-privileged information must show, before anything else, that the discovery sought is proportional to the needs of the case."

The Gilead court determined that Merck’s discovery request for "all sorts of compounds that bear no indication of any nexus to the disputes in this case" was disproportionate given "the absence of any reason to doubt the proof Gilead has tendered about the identity of the disputed compounds, and given the cost and potential delay introduced by the requested production."

On February 4, 2016, in a copyright-infringement case captioned as Goes International, AB v. Dodur Ltd., 2016 WL 427369 (N.D. Cal. 2016), the court granted a discovery request under the amended Rule 26, explaining that:

"The advisory committee's notes to Rule 26 state: '[C]onsideration of the parties' resources does not foreclose discovery requests addressed to an impecunious party, nor justify unlimited discovery requests addressed to a wealthy party.' … Both parties should tailor their efforts to the needs of this case. Discovery and its costs are neither shield to ward off nor hammer to throttle the opposing party. To the contrary: 'The parties and the court have a collective responsibility to consider the proportionality of all discovery and consider it in resolving discovery disputes.'"

In citing the collective responsibility of the parties, the Goes International decision did not mention the earlier Gilead decision regarding the party seeking discovery having to establish the requisite proportionality.

Most recently, on February 25, 2016, the Northern District of California issued a third decision applying the recently amended Rule 26 in a wage and hour putative class action captioned Guadalupe Salazar v. McDonald’s Corp., 2016 WL 146574 (N.D. Cal. 2016). The McDonald’s decision stated that:

"The Advisory Committee Notes explain that [r]estoring the proportionality calculation to Rule 26(b)(1) … does not place on the party seeking discovery the burden of addressing all proportionality considerations. Nor is the change intended to permit the opposing party to refuse discovery simply by making a boilerplate objection that it is not proportional.’ Fed. R. Civ. P. 26 advisory committee notes (2015 amendments). Rather, the “parties and the court have a collective responsibility to consider the proportionality of all discovery and consider it in resolving discovery disputes."

The McDonald’s decision noted that the amended Rule 26 places a "shared responsibility on all the parties" to consider the factors bearing on proportionality before propounding discovery requests, issuing responses and objections or raising discovery disputes before the courts.” (citing the advisory committee notes). Thereafter, the McDonald’s decision used a compare signal to reference both the Goes International decision for the proposition that the parties have a "collective responsibility" to consider proportionality and the Merck decision for the proposition that the "party seeking discovery … must show, before anything else, that the discovery sought is proportional to the needs of the case."

This trio of recent decisions is likely among the first in a long line of new cases that will construe amended Rule 26 and its proportionality requirements.