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Discovery Burden Per FRCP Rule 26(b)(1) Factors Insufficiently Stated in Opposition-Court Grants Motion to Compel

Posted on December 6th, 2017

Follow ILS for future updatesPlaintiffs are five related companies (“Oxbow”) that mine and sell coal and petroleum coke (“petcoke”). Oxbox’s Amended Complaint alleges that Union Pacific (“UP”) and BNSF Railway Company (“BNSF”), the railroad companies that ships Oxbow’s petcoke, conspired together to engage in anti-competitive conduct from 2004 to 2012 in violation of the Sherman Antitrust Act.

Defendants requested via a motion to compel that the Court add Oxbow’s founder and CEO, William I. Koch (“Koch”), as a document custodian whose records should be subject to search for responsive materials pursuant to Plaintiffs’ discovery requests. Defendants further argued that Koch possessed relevant, unique information responsive to their requests, and that Oxbow had improperly refused to produce this information based on the grounds that production of his documents would be disproportionately burdensome and duplicative of the documents produced from the search of the other Oxbow document custodians’ files. Defendants also asserted that this discovery request was proportional to the case, given the tens of millions of dollars that Oxbow seeks in damages.

The opinion first touched on the general propositions set forth in FRCP Rule 37 and Rule 26(b)(1): regarding enforcement rights, providing authority for a a party to move for an order compelling disclosure of discovery from a party who fails to comply with its discovery obligations, and regarding scope, that a party may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved.

The Court then addressed the situation that Oxbow did not dispute that Koch’s records contained documents responsive to the parties’ negotiated search terms and relevant to the litigation. Rather, the Court observed that the situation entailed Oxbow objecting to Defendants’ request that it be compelled to review and produce discovery from Koch’s remaining documents because doing so would be unduly burdensome and because the benefit to Defendants would not justify that effort and expense.

In deciding this point, the Court held that it was unpersuaded by Oxbow’s arguments. The Court found that in Oxbow’s briefing, Oxbow declined to address any of the other proportionality factors highlighted in Rule 26—namely, the importance of the issues at stake in this action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, or the importance of the discovery in resolving the issues in this case (referring to Fed. R. Civ. P. 26(b)(1)).  The Court pointed out that Oxbow merely stated that the burden and cost of complying with Defendants’ request would outweigh its likely benefit. The Court went on to consider that in weighing the six Rule 26 proportionality factors instead demonstrated that adding Koch as a custodian of documents to be searched for material responsive to Defendants’ discovery requests in this matter would be neither unduly burdensome nor unreasonably expensive. The Court found that the circumstances did not warrant shifting the costs of doing so to Defendants. The Court therefore granted Defendants’ motion to compel and ordered Plaintiffs to produce all remaining responsive documents from Koch’s file, at Plaintiffs’ expense.

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