Upcoming Amendments to the FRCP And Implications On Class Action Defense Costs
On December 15, 2015, several amendments to the Federal Rules of Civil Procedure are scheduled to take effect, including one which may assist employers to reduce the cost of defending class actions. The scope of permissible discovery under Rule 26 will no longer be defined as “reasonably calculated to lead to the discovery of admissible evidence.” Amended Rule 26(b)(1) will instead require discovery to be proportional to the needs of the case. Parties may obtain discovery that is relevant to any party’s claim or defense and proportional to the needs of the case, with consideration of the following five factors: (1) the importance of the issues at stake in the action; (2) the parties’ relative access to relevant information; (3) the parties’ resources; (4) the importance of the discovery in resolving the issues; and (5) whether the burden or expense of the proposed discovery outweighs its likely benefit.
The Advisory Committee that drafted the amendments made this change to “restore the proportionality factors to their original place in defining the scope of discovery. This change reinforces the Rule 26(g) obligation of the parties to consider these factors in making discovery requests, responses, or objections.” The Advisory Committee made clear that the amendment to Rule 26 is not intended to place the burden of establishing proportionality on the party seeking discovery. Instead, the parties must consider proportionality when serving and responding to discovery requests, and courts must do the same when ruling on discovery disputes. Rule 26(c) now provides for protective orders relating to the allocation of expenses of discovery, a change consistent with the goal of looking at the expense of discovery.
While the concept of proportionality in discovery is not new, it is sometimes difficult to convince adversaries and courts that the cost of certain discovery should not be incurred based on the estimated value of the case. This can be difficult in the class action context where the value of the case often is not easily ascertainable early in discovery. There has been a slow trend in recent years in class action litigation of considering proportionality when resolving discovery disputes. This trend is now codified by the amendments to the rule.
Time will tell how the Rule 26 amendments and the increased role of proportionality impact class action defense. At a minimum, the revamped rule requiring proportionality considerations during discovery offer employers another arrow in their quiver to help manage class action defense costs beginning early in the case.