Court Finds Foreign Discovery “Marginally Relevant” and “Not Proportional,” Declines to Compel Search

In re Bard IVC Filters Prod. Liab. Litig., —F.R.D.—, 2016 WL 4943393 (D. Ariz. Sept. 16, 2016)

In this case, the parties disagreed on the discoverability of communications between Defendants’ foreign subsidiaries and divisions and foreign regulators regarding the filters at issue in the case.  Following analysis of the effects of the December 1, 2015 amendments on Fed. R. Civ. P. 26(b)(1) and of the specific facts of the case, US District Court Judge David Campbell—Chair of the Committee on Rules of Practice and Procedure—determined that the at-issue communications were “only marginally relevant” and was persuaded that “the burden of [the] foreign discovery would be substantial.”  Thus, the court concluded that Defendants were not required to search their foreign entities for communications with foreign regulators.

Addressing Plaintiffs’ motion, the court first undertook a discussion of the “New Legal Standards Governing the Scope of Discovery” following the December 1, 2015 amendments to the Federal Rules of Civil Procedure. In his discussion, Judge Campbell addressed the issue of relevance and the change in the language of Fed. R. Civ. P. 26(b)(1) addressing admissibility.  Previously, Rule 26(b)(1) stated that inadmissible evidence was discoverable if it “appears reasonably calculated to lead to the discovery of admissible evidence”—a phrase that was sometimes incorrectly used to define the scope of discovery. “The 2015 amendments . . . eliminated the ‘reasonably calculated’ phrase as a definition for the scope of permissible discovery.” Now, the rule states that “[i]information within this scope of discovery need not be admissible in evidence to be discoverable.”  Judge Campbell noted, however, that many courts continue to rely on the old phrase, identifying a number of cases in the “[l]ast month alone” that had done so.  The court also noted continued reliance on cases applying earlier versions of Rule 26(b)(1) and explained:

Amended Rule 26(b)(1) was adopted pursuant to the Rules Enabling Act, 28 U.S.C. § 2072 et. seq. That statute provides that “[a]ll laws in conflict with such rules shall be of no further force or effect after such rules have taken effect.” Id., § 2072(b). Thus, just as a statute could effectively overrule cases applying a former legal standard, the 2015 amendment effectively abrogated cases applying a prior version of Rule 26(b)(1). The test going forward is whether evidence is “relevant to any party’s claim or defense,” not whether it is “reasonably calculated to lead to admissible evidence.”

Turning next to proportionality, Judge Campbell explained, among other things, that “[t]he 2015 amendments also added proportionality as a requirement for permissible discovery. Relevancy alone is no longer sufficient—discovery must also be proportional to the needs of the case.”

Following his discussion of the new standards, Judge Campbell addressed whether the communications sought in the present case were relevant and proportional.  Ultimately, the court concluded that the information sought was “only marginally relevant” where there were no foreign plaintiffs and “mere conjecture” regarding the potential for inconsistencies in communications with American versus foreign regulators.  The court next determined that the discovery was not proportional to the needs of the case, citing the marginal relevance of the information and the burden and expense alleged by Defendants, including the presence of foreign entities in 18 countries and the need to “identify the applicable custodians from these foreign entities for the last 13 years, collect ESI from these custodians, and search for and identify communications with foreign regulators.”  The court also reasoned that Plaintiffs’ discovery with respect to American regulators “should capture communications with foreign regulators that originate in the United States, as most appear to.”

Thus, the court concluded that Defendants need not search their foreign entities for communications with foreign regulators.

A copy of the court’s full opinion is available here.