As we’ve discussed previously, and as the legal profession is by now well aware, the discovery provisions of the Federal Rules of Civil Procedure were significantly amended effective December 1, 2015. One of the foundational changes was to Rule 26(b)(1), and was intended to reduce the scope of discovery generally. The old excuse for ridiculous over-discovery – “reasonably calculated to lead to the discovery of admissible evidence” – is no more. The new, more restrictive, language defining the scope of discovery is “any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case.” Fed. R. Civ. P. 26(b)(1). As the committee notes to this amendment explain, the old language was frequently misunderstood to permit discovery into material that was itself irrelevant to litigation:
The former provision for discovery of relevant but inadmissible information that appears “reasonably calculated to lead to the discovery of admissible evidence” is also deleted. The phrase has been used by some, incorrectly, to define the scope of discovery. As the Committee Note to the 2000 amendments observed, use of the “reasonably calculated” phrase to define the scope of discovery “might swallow any other limitation on the scope of discovery.” The 2000 amendments sought to prevent such misuse by adding the word “Relevant” at the beginning of the sentence, making clear that “‘relevant’ means within the scope of discovery as defined in this subdivision …” The “reasonably calculated” phrase has continued to create problems, however, and is removed by these amendments. It is replaced by the direct statement that “Information within this scope of discovery need not be admissible in evidence to be discoverable.”
Committee Note to Rule 26, 2015 US Order 0017 (April 29, 2015).
That’s all well and good, but since amended Rule 26 became effective, it has become evident that some courts continue to do the same thing they’ve always done, giving lip service to the new rule, but effectively applying the old standard. One recent example is Hodges v. Pfizer, Inc., 2016 WL 1222229 (D. Minn. March 28, 2016) – yet another Stevens-Johnsons Syndrome case, this time against Advil − in which the plaintiff sought, and obtained, excessive discovery concerning: (1) dealings with foreign regulators (“seven countries and three areas,” id. at *3) who do not follow the same standards as the FDA; (2) “financial documents” concerning Advil, including “profits (gross and net) . . . sales forecasts, advertising budgets, business plans, marketing plans, and financial plans” for a ten-year period, id. at *4; and (3) old “sales and marketing documents . . . from before June 2005, when the FDA required manufacturers to include new warnings about” this condition. Id. at *4. While the opinion doesn’t mention the date of injury, we thought it might be 2010 (five years after the label change) and since we have a PACER account and know how to use it, we were able to confirm that date as correct.
All three requests were granted despite their obvious remoteness from a U.S. case involving a single injury in 2010. Indeed, in 2010, any Advil made in 2005 would have long since been expired. While the new rule was cited, it was construed solely by reference to pre-amendments cases – in particular, one holding that “relevance” in Rule 26 “is to be construed broadly and encompasses ‘any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case.’” Id. at *2 (quoting a 1997 D. Minn. case that in turn quotes Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978)).
That’s where at least part of the problem lies. Oppenheimer is obsolete – overtaken by at least two sets of rules amendments. The case is almost 40 years old. To use it to perpetuate the same broad view of discovery scope that the 2015 “claims or defenses” amendment to Rule 26 expressly rejected is unsupportable. We discussed the intent of the 2015 amendments at length here, relying upon Chief Justice Roberts’ contemporaneous report concerning them.
So, what went down in Oppenheimer? Oppenheimer was a securities class action. Through discovery, the plaintiff demanded that the defendant essentially do plaintiff’s work for him – to provide the information that would identify who was, and was not, a member of the putative class. Id. at 350. The Court was asked to determine whether identification of class members was properly addressed by discovery, or alternatively under Fed. R. Civ. P. 23. The Court held that Rule 23 controlled:
Rule 23 . . . deals comprehensively with class actions, and thus is the natural place to look for authority for orders regulating the sending of notice. It is clear that Rule 23(d) vests power in the district court to order one of the parties to perform the tasks necessary to send notice. . . . Since identification simply is another task that must be performed in order to send notice, we agree . . . that Rule 23(d) also authorizes a district court in appropriate circumstances to require a defendant’s cooperation in identifying the class members to whom notice must be sent.
Id. at 354-55 (footnotes omitted). What about the discovery rules? “[W]e do not think that the discovery rules are the right tool for this job.” Id. at 354.
What that tells us is that what the Court had to say about the discovery rules generally – as they stood in 1978 – is entirely dictum. Oppenheimer did not make any precedential ruling about discovery, or about Rule 26. To the contrary, it held that that discovery rules were inapplicable.
Beyond that, the dictum in Oppenheimer is facially inapplicable to the new language of Rule 26. The Court stated:
The key phrase in this definition − “relevant to the subject matter involved in the pending action” − has been construed broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case.
Id. at 315 (citing Hickman v. Taylor, 329 U.S. 495, 501 (1947) – a case about work-product protection) (emphasis added). That “key phrase” no longer exists. The phrase was precisely what the 2015 amendments got rid of, and the committee that drafted those amendments did so equally precisely (as quoted above – and there are more quotes to the same effect) to reduce the scope of discovery.
The phrase that Oppenheimer described in 1978 is simply no longer the test of discoverability. Rather, “[p]roportional discovery relevant to any party’s claim or defense suffices, given a proper understanding of what is relevant to a claim or defense” is. Committee Note to Rule 26, 2015 US Order 0017 (April 29, 2015). Nor would Oppenheimer even support discovery into old labeling used long before an accident. “[I]t is proper to deny discovery of matter that is relevant only. . . to events that occurred before an applicable limitations period, unless the information sought is otherwise relevant to issues in the case.” 437 U.S. at 352.
Unfortunately, Hodges is not alone in erroneously relying on the Oppenheimer’s obsolete observation as if it were somehow applicable to the “claims or defenses” scope-of-discovery standard in current Rule 26(b)(1). The “key element” language is found in headnote six of Oppenheimer. According to Westlaw, Oppenheimer has been cited in 73 cases since December 1, 2015. Of those 73 cases, obsolete headnote six has been cited in 53 of them. Plainly, a concerted effort is underway to misquote Oppenheimer – leaving out that the “key element” is precisely the language amended out of the rule – in order to gut the 2015 amendment.
A few examples should suffice. The most recent case of the lot, Rhone v. Schneider National Carriers, Inc., 2016 WL 1594453 (E.D. Mo. April 21, 2016), granted a motion to compel while citing the Oppenheimer language – conveniently omitting the “key phrase” part and beginning its quotation with “broadly construed.” Id. at *1. In Lightsquared Inc. v. Deere & Co., 2015 WL 8675377 (S.D.N.Y. Dec. 10, 2015), although conceding that “discovery no longer extends to anything related to the ‘subject matter’ of the litigation,” the opinion nevertheless cited to Oppenheimer to hold that “relevance is still to be ‘construed broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on’ any party’s claim or defense.” Id. at *2. United States ex rel. Shamesh v. CA, Inc., 2016 WL 74394 (D.D.C. 2016), is even worse – using the obsolete Oppenheimer dictum to evade the 2015 amendments altogether: “Like before, relevance is still to be ‘construed broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on’ any party’s claim or defense.” Id. at *7 (quoting Oppenheimer).
These decisions are simply erroneous. Oppenheimer expressly construed language deleted by the 2015 amendments because it was being used to allow excessively broad discovery. To the extent Oppenheimer is relevant to anything anymore, we recommend its holding that plaintiffs – the requesting party − be required to pay for discovery that they sought of electronically stored information:
Both opinions [below] suggest that the fact that part of these records are kept on computer tapes justifies imposing a greater burden on [defendants] than might be imposed on a party whose records are kept in another form. . . .
* * * *
We do not think these reasons justify the order in this case. There is no indication or contention that these petitioners have acted in bad faith to conceal information from respondents. In addition, although it may be expensive to retrieve information stored in computers when no program yet exists for the particular job, there is no reason to think that the same information could be extracted any less expensively if the records were kept in less modern forms. Indeed, one might expect the reverse to be true, for otherwise computers would not have gained such widespread use in the storing and handling of information. Finally, the suggestion that petitioners should have used “different systems” to keep their records borders on the frivolous. . . . [W]e do not think a defendant should be penalized for not maintaining his records in the form most convenient to some potential future litigants whose identity and perceived needs could not have been anticipated.
437 U.S. at 362-63
In short, it is disingenuous in the extreme for those pursuing discovery to justify their overreaching demands with obsolete dictum from Oppenheimer. To do so only undermines the years of efforts that went into the reform of discovery represented by 2015 Amendments.