Proportionality Limits Scope of Permissible E-Discovery
By Katerina E. Milenkovski, Litigation News Associate Editor – December 24, 2014

A federal magistrate judge has denied a motion to compel e-discovery, finding a lack of proportionality between the costs of production and the benefits to be gained. The court noted that searching for electronically stored information (ESI) is only one discovery tool and should not be a substitute for traditional discovery methods.

In United States v. Univ. Nebraska at Kearney, the government brought a complaint against the University of Nebraska alleging that the university had violated the Fair Housing Act by denying students’ requests to live with emotional assistance service animals in university housing. As part of discovery, the government served a list of proposed terms to be used to search the university’s ESI. Those terms were tailored to discriminatory intent in general and were not limited to discrimination in the context of housing. The university objected, noting that a vendor-created frequency list for those terms showed that the results of the search would cost more than $1,000,000 to retrieve, review and produce.

The government revised the search parameters, but the university continued to object, noting that the revised search terms were not limited to accommodations in a housing or residential context and required the university to search for and produce ESI for every person with a disability who sought any kind of accommodation from the university.

The university estimated that the revised search terms would produce more than 50,000 documents and cost more than $150,000 to produce, in addition to the $122,000 that the university had already spent to process the ESI requests. The government offered that the university could simply produce all of the documents identified by the search, without review, and subject to a clawback agreement. The university objected, saying that a clawback approach would violate the rights of third parties by revealing personal information without their notice and consent. The government then filed a motion to compel.

Noting that the university had already produced all documents related to reasonable accommodations within university housing, a magistrate judge in the U.S. District Court for the District of Nebraska found that the government’s proposed ESI discovery far exceeded the scope of the allegations in the case and was not reasonably calculated to lead to the discovery of admissible evidence and that the costs of producing the ESI would far outweigh any benefits that might be gained.

No Factual Support for Government’s Broad Discovery Requests
I absolutely agree with the holding,” says Aaron H. Gould, Newark, NJ, cochair of the E-Discovery Subcommittee of the ABA Section of Litigation’s Pretrial Practice and Discovery Committee. “I think one of the government’s biggest mistakes was that they tied their exceedingly broad document requests to a legal standard but didn’t tie it to any facts they had developed through actual discovery in this case.” Noting that one of the government’s proposed searches—“document* w/25 policy”—was likely to bring back a large pool of irrelevant documents, Gould suggests, “I think the judge saw it as a fishing expedition.”

The Numbers Make or Break the Argument
In an e-discovery dispute, it is essential to make a persuasive a proportionality argument. “Do not argue undue burden of ESI without hard numbers,” advises Jeffrey G. Close, Chicago, IL, cochair of the Section of Litigation’s Pretrial Practice and Discovery Committee. “I hear it from judges all the time. No vague hand waving. Relevance was a close call in this case, but the court found that the balance tipped in favor of non-production because the demonstrable costs outweighed the unproven relevance of the documents sought.”

“Getting the numbers, the costs, the time required, is essential to defeating these types of motions,” agrees Gould. “Otherwise, there’s no meat behind your argument. What if the keywords only turned up 5,000 documents as opposed to 50,000? You can’t really show it’s not proportional if there is a small subset that is easy to review and not as costly.”

Clawback Option Not a Workable Solution
The government's request that the court order production of all documents subject to clawback of anything privileged surprised Close. The comments to Federal Rule of Evidence 502 suggest that 502(d) was intended to allow the courts to enforce production-without-waiver (sneak peek) arrangements, or agreements between the parties, “not to order sneak-peak production over one party’s objection,” explains Close. “Even assuming that the courts have the discretion to do so, whether they ever should, is doubtful. I do not believe I have seen a case where a sneak peak has been ordered over a party's objection, and I hope I never do,” says Close.

“I find the notion of clawback not to be a practical option in any setting and I don’t know of any attorney that is going to agree to that,” notes Gould. “You are still going to have proprietary and confidentiality issues, and while the other side might not be able to use all of the documents as evidence, the cat is out of the bag. They can’t unlearn what they saw. Courts should not be allowing that as a compromise to a discovery dispute over what are, on their face, overly broad document requests,” Gould continues.

Standing E-Discovery Orders Are Helpful
Both Gould and Close have seen federal courts, including courts in Pennsylvania and Maryland, use standing orders on the scope of e-discovery and agree that they are helpful. “How did this case get this far without there being an agreed upon plan?” questions Gould. “There should have been an agreement from the outset as to the scope of ESI.” “The advantage to such standing orders is that they require demonstrable evidence of a legitimate reason for exceeding or changing limits,” observes Close.

Keywords: e-discovery, ESI, clawback, discovery, proportionality, Federal Rule of Evidence 502

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