The Sedona Conference Issues Helpful and Important Commentary on the Proportionality Concept Applicable to Electronic Discovery

Corporate Litigation

Action Item: The following set of six principles proposed by the Sedona Conference Working Group on Electronic Document Retention and Production should serve as practical guidance for litigants adhering to the proportionality standard now applicable to the e-discovery preservation and production process.

The Sedona Conference Commentary

The Sedona Conference is a nonprofit legal policy research and education organization that has a working group comprised of judges, attorneys, and electronic discovery experts who are dedicated to resolving electronic discovery issues.¹ The Sedona Conference has become a thought leader in the e-discovery space and its “Principles” and “Working Group” guideline papers are routinely cited as authority by courts and litigants across the country in connection with e-discovery disputes.² Since the Federal Rules of Civil Procedure (“FRCP”) were recently amended to significantly overhaul a party’s obligation to preserve, collect, and produce potentially relevant electronically stored information (“ESI”) and to interject the concept of “proportionality” into discovery, both courts and litigants have looked to the Sedona Conference for guidance. The most recent guidance from the Sedona Conference on these issues can be found in the 2016 public comment version of The Sedona Conference Commentary on Proportionality in Electronic Discovery (the “Sedona Commentary”).³ This note summarizes the Sedona “principles of proportionality” that should guide litigants throughout the proportionality analysis.

Recent Rule Changes

But first, here is a contextual primer on the relevant FRCP amendments:

• Rule 26(b)(1) was amended to emphasize the principle of proportionality, and now states that: “Parties may obtain discovery regarding any non-privileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case…”⁴ The rule lists six factors to be considered in determining proportionality—(1) “the importance of the issues at stake in the action,” (2) “the amount in controversy,” (3) “the parties’ relative access to relevant information,” (4) “the parties’ resources,” (5) “the importance of the discovery in resolving the issues, and” (6) “whether the burden or expense of the proposed discovery outweighs its likely benefit.”⁵
• Rule 37(e) was amended to address the parties’ obligations with respect to preserving ESI—in particular, by providing judges with a roadmap for remedying and/or punishing the unintentional loss or intentional spoliation of ESI that should have been preserved. The rule now requires parties moving for sanctions to show that ESI “should have been preserved in the anticipation or conduct of litigation,” but was lost because the other party “failed to take reasonable steps to preserve” it, and it “cannot be restored or replaced through additional discovery.”⁶ Upon finding prejudice from lost ESI, a court may either order strictly-curative measures or impose sanctions (including presuming the information was unfavorable to the party that lost it, providing a negative inference jury instruction, or dismissing the case)⁷ if it finds the intent to deprive the other party of the information’s use in the litigation.

The Six Principles

In light of these new rules’ significant impact, the Sedona Commentary provides six principles to guide litigants throughout the proportionality analysis to be applied throughout the ESI preservation and production process. The principals and a brief summary of each appears below:

Principle 1: The...