David Martin ~ Medtronic Inc. VP & Senior Counsel Litigation

Proportionality is The New Black

Kelly Friedman ~ Davis LLP Partner; Chair of Sedona Canada

Joshua Kubicki ~ Applied Discovery Sr. Director Corporate & Legal Services

What is Proportionality?

“the just, speedy, and inexpensive determination of every action.”

FRCP R. 1

“the just, most expeditious and least expensive determination of every civil proceeding on its

merits.”

Ontario Rules Civil Procedure R. 1.04

Vs

Buckingham Palace Single Family Home

Proportionality in the end serves the same purpose as “all you can eat” but achieves it through a more refined and moderate approach. It focuses on the end (merits) not the means (process).

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Discovery Abuse

ACTL & IAALS 2008 Survey:

1500 Respondents - 50/50 split among Plaintiff & Defense counsel

Lawyers rather than clients drive excessive discovery

45% said discovery is abused in almost every case

Zealous Advocacy – separating the practice of litigation from the process of litigation : a fine line between abuse of process and excessive tactics

HHS Simon Brown (UK) ~ “We do not wear wigs and gowns at the case management conference because it is a business meeting . . . We are determining the most efficient and proportionate way of conducting the business of litigation.”

Cooperation – Lawyers already practice cooperation and it is intertwined with proportionality. Settlement conversations, off the record conversations, depo scheduling, etc.

What is “winning?”

Why proportionality should matter to in-house counsel

• Corporations have been held to ransom – should not be forced to settle because the costs of discovery are exorbitant

• Whether a party is entitled to discovery is no longer governed solely by “any possibility” of relevance and the resources of the producing party

• Overall concept: discovery required/permitted is determined by a cost-benefit analysis, where benefits are ends of justice, not subjective benefits to a particular party

Where to Start:

The Rules

• FRCP 26(b)(2)  “Not reasonably accessible”• FRCP 26(b)(2(B) Specific Limitations of Electronically Stored

Information • FRCP 26(b)(2)(C)(i)  "unreasonably cumulative or

duplicative or from other source more convenient, less burdensome or less expensive“

• FRCP 26(b)(2)(C)(iii)  “burden vs benefit”• FRCP 26(f)(3) Discovery Plan • FRCP 26(g)(i) Propounding or responding to conduct

“proportionality analysis prior to sending discovery requests or objecting to requests"

Proportionality in US Federal Rules of Civil Procedure

…and in Seventh Circuit Principle 1.03(Discovery Proportionality)

• “The proportionality standard set forth in Fed. R. Civ. P. 26(b)(2)(C) should be applied in each case when formulating a discovery plan. To further the application of the proportionality standard in discovery, requests for production of ESI and related responses should be reasonable targeted, clear, and as specific as practicable.” [Seventh Circuit Electronic Discovery Pilot Program, October 2009]Note: Phase Two of the pilot is expected to close on June 1, 2011 after having been run for a year; based on revisions to Phase 1.

Proportionality in Canada Ontario Rules of Civ. Pro, as illustrative example

• Guiding principle: “In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding” [Rule 1.1]

• Discovery plan – in writing, updated, shall consult the Sedona Canada Principles; if not, court may refuse relief/costs [Rule 29.1.03]

(3) The discovery plan shall be in writing, and shall include,…(e) any other information intended to result in the expeditious and cost-effective completion of the discovery process in a manner that is proportionate to the importance and complexity of the action.

(4)  In preparing the discovery plan, the parties shall consult and have regard to the document titled “The Sedona Canada Principles Addressing Electronic Discovery” developed by and available from The Sedona Conference.”

Ontario Rules cont.Proportionality in Discovery

Rule29.2.03 (1) In making a determination as to whether a party or other person

must answer a question or produce a document, the court shall consider whether,

(a) the time required for the party or other person to answer the question or produce the document would be unreasonable;

(b) the expense associated with answering the question or producing the document would be unjustified;

(c) requiring the party or other person to answer the question or produce the document would cause him or her undue prejudice;

(d) requiring the party or other person to answer the question or produce the document would unduly interfere with the orderly progress of the action; and

(e) the information or the document is readily available to the party requesting it from another source.

Overall Volume of Documents (2) In addition to the considerations listed in subrule (1), in determining

whether to order a party or other person to produce one or more documents, the court shall consider whether such an order would result in an excessive volume of documents required to be produced by the party or other person.

Limitless Scope: Historically the scope of discovery has been expanded to include evidence that has “any possibility” of relevant data.

Access to Trial: on average it is taking two years to get to trial

Sanctions are on the increase as Judges become more educated on best practices and technology

Why the concept may take hold in US

Why the concept has taken hold in Canada

Positive production obligation vs. specific document requests

Loser pays rule vs. cost shifting

Privilege and privacy protection

Absence of Sanctions

US & Canada Commonality

Expansion and complexity of ESI

Moore + Kryder = complex and voluminous data

The expanding digital universe will exceed 35 zettabytes by 2020, IDC predicts

Costs – yes it is that simple

Class Actions – growth in Canada

How to practice Proportionality:

Execution

Raise discovery disputes  BUT  engage in GOOD

FAITH solution negotiation

In negotiation terms/breadth of discovery most lawyers argue for everything because they simply do not know

better or know what to ask for.

Involvement of client in discovery negotiation is KEY

Not just a 1 time event

• The Proportionality Analysis is a continuing process throughout the discovery process and is law suit specific

• Starting the analysis at the beginning of a law suit may be too late.  Remember that the analysis is based upon the state of the records kept by the party. There is an underlying but unstated presumption that if the party kept the records the records must be business records and they must be important.

Action Steps

WHAT - Steps did the party take - - to preserve or to reasonably dispose of e data,  to select, to review to disclose

WHEN -Did the actions or activities take place - -designed to  preserve or to reasonably dispose of or to select to review and

disclose

HOW - Did the party implement the action - -to preserve or to reasonably dispose of electronic data, to preserve and select

and disclose

WHY – this process and procedure - - in the identification of ESI to preserve or reasonably dispose, select and

disclose data

This analysis requires party specific information including analysis of business purpose of data, privacy and 3rd party protection issues, corporate culture considerations, and statutory provisions.

Guiding Principle:

It is not a question of argument.

It is a question of ACTIONS based upon FACT.

How to start:

Prepare

Be PreparedE-discovery Cost Control begins before Litigation

COMPANY WIDE STANDARDS based upon COMPANY CULTURE  required

Proportionality argument requires understanding of company technology and internal practice ( Company Culture )

Requires Fundamental understanding of both Plaintiff and Defendants theory of the case

Requires clear and accurate cost estimate based upon facts and circumstances

Know the Client

Know the Data

Know the Matter

Know the Costs

Downstream Impact

Greater amounts of ESI equals greater cost for processing and review

Increased potential of liability exposure (priv & confidential info)

Potential delays due to technical or volume challenges

Business interruption for multiple collections and/or interviews

Data sequestered outside or normal retention schedules

Evidence of disproportionate discovery OR what to consider given your unique situation in establishing your proportionality capability

What to use:

Tools

understand technology enough to not only understand your own capabilities so as to understand real costs BUT this IQ may inform you as to opposing counsel’s capabilities

Pre-Litigationthoughtful, reasonable, and good faith

preservationPhased-Discovery – learn as you go most easily identifying relevant sources first

Engage opposing counselearly (and often) to determine a discovery plan (what do I need to

preserve?)Sampling

where the amount of data or costs is burdensome – to determine likelihood of case determinant information

Technology IQ

Examples

US Adoption:

Cases

Are U.S. judges (finally) embracing proportionality?

• Tamburo v. Dworkin, 2010 WL 487346 (N.D. Ill. Nov. 17, 2010)

• Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp. 2d 598 (S.D. Tex. 2010)

• Bellinger v. Astrue, 2010 WL 1268063 (E.D.N.Y. April 2, 2010)

• Mancia v. Mayflower Textile Servs. Co., 253 FRD 354 (E.Md. 2008)

• Orbit One Communications, Inc. v. Numerex Corp., 692 F. Supp. 2d 373 (S.D.N.Y. 2010)

• Pension Committee of the University of Montreal Pension Fund v. Banc of America Securities, 2010 U.S. Dist. LEXIS 4546 (SDNY January 15, 2010)

Further proportionality resources

• Wealth of resources on www.thesedonaconference.org, including The Sedona Conference® Commentaries (Canada and US versions) on Proportionality (Oct. 2010)

• John L. Carroll, Proportionality in Discovery: A Cautionary Tale, 32 Campbell L. Rev. 455 (2010)

• Final Report of the Joint Project of The American College of Trial Lawyers Task Force on Discovery and The Institute for the Advancement of the American Legal System, March 11, 2009 (www.actl.com)