Citing “Diminishing Returns,” Court Declines to Compel Additional Discovery

Armstrong Pump, Inc. v. Hartman, No. 10-CV-446S, 2016 WL 7208753 (W.D.N.Y. Dec. 13, 2016)

“Implicit in both the language and the spirit of the 2015 Amendments is the obligation, at any stage of a case, to prevent parties from expending increasing time and energy pursuing diminishing returns.”

In this case, despite having viewed all of the at-issue documents and printing “approximately half of the total pages” (albeit under strict protocols), Plaintiff sought to compel “formal production” of all of the documents pursuant to the parties’ protective order, arguing that the documents did not contain “actual programming.” Defendant argued that the documents were “functionally equivalent to source code” and should not be subject to production.  Ultimately, the Court reasoned that discovery had “reached the point of diminishing returns” and declined to compel production, with limited exceptions.

In reaching its conclusion, the court first addressed the effects of the 2015 amendments to Fed. R. Civ. P. 26, reasoning that “proportionality has assumed greater importance in discovery disputes” and that the amended rule is intended to encourage more aggressive efforts from the judiciary to discourage discovery overuse. The court continued:

Discouraging discovery overuse does not end with the early stages of a case, however. Implicit in both the language and the spirit of the 2015 Amendments is the obligation, at any stage of a case, to prevent parties from expending increasing time and energy pursuing diminishing returns. Calling a halt to the pursuit of diminishing returns often will overlap with an assessment of duplicate or cumulative discovery. Sometimes the additional discovery sought technically would provide nominally probative information not yet in the parties’ hands. Either way, when adding a few more pages of documents requires five or six inches of motion papers, and when those few more pages would be added to over one million pages of total discovery, numerous pages of expert reports, and transcripts from depositions of all of the relevant players, there exists a point beyond which courts have to tell the parties that if they cannot yet prove their claims then they probably never will. See Alaska Elec. Pension Fund v. Bank of Am. Corp., No. 14-CV-7126 (JMF), 2016 WL 6779901, at *3 (S.D.N.Y. Nov. 16, 2016) (“Rule 26(b)(1)’s proportionality requirement means [that a document’s] ‘marginal utility’ must also be considered.”) (citations omitted); Updike v. Clackamas County, No. 3:15-CV-00723-SI, 2016 WL 111424, at *1 (D. Or. Jan. 11, 2016) (“There is a tension, however, among the objectives of Rule 1. As more discovery is obtained, more is learned. But at some point, discovery yields only diminishing returns and increasing expenses. In addition, as more discovery is taken, the greater the delay in resolving the dispute. Finding a just and appropriate balance is the goal, and it is one of the key responsibilities of the court in managing a case before trial to assist the parties in achieving that balance.”).

The court then turned to the state of discovery in the underlying case and concluded that discovery had “reached the point of diminishing returns,” noting specifically that discovery had been ongoing for six years; that Plaintiff had “furnished approximately 1.5 million pages of documents while [Defendant] ha[d] furnished over 160,000 pages of documents”; that the parties had conducted “at least a dozen depositions” and retained experts; and, notably, that Plaintiff had two opportunities to review and print the at-issue information and six years to undertake any additional discovery it desired. The court also indicated that Plaintiff failed to make clear what was in the unprinted pages to warrant further production.

Despite concluding that discovery had reached a point of diminishing returns, the court did acknowledge “one very narrow path to a limited, and final, production of discovery” and ordered Defendant to produce documents containing search terms identified by the court from the at-issue repository, exempting those that contained “definitions of input or output variables.”

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