In Alley v. MTD Products, (WD.Pa. 2018, Case No. 3:17-cv-3), Judge Kim Gibson of the U.S. District Court for the Western District of Pennsylvania highlighted and discussed two often overlooked and under-appreciated aspects of discovery: the extent that one can undergo an inquiry that involves “discovery on discovery”; and proportionality as a limit on discovery.

Alley is a products liability action brought by a plaintiff against the manufacturer of an allegedly defective snow blower. In his complaint, the plaintiff alleged that he was injured when the “plastic rim” of the snow blower's tire burst during an attempt to inflate the tire using an air compressor.

As part of discovery in that case, the plaintiff served a request for production that included discovery regarding the defendant's “methods for storing, creating, retrieving and retaining electronically stored information.” Additionally, the plaintiff sought, “Any document including complaints and correspondence referencing any prior or subsequent claims against you which resulted from the same or similar circumstances as those set forth in the complaint … including any instance where an individual claims he sustained an injury as a result of use of a similar product.”

In response, the defendant moved for a protective order alleging: that the plaintiff was seeking improper “discovery on discovery” with respect to the methodology requests; and that the plaintiff's requests for documents pertaining to prior litigation was not “proportional” to the needs of this particular case.

While it is debatable as to whether the information sought was necessary in the Alley case, the fact that these discovery requests, almost verbatim, are common in most products cases, and Gibson actually granted the defendant's protective order against those requests makes Alley an interesting read. It also provides practitioners on both sides of the aisle an important insight and lesson into the limits of inquiry into those subject areas.

Discovery on Discovery

“Discovery on discovery,” the inquiry into the methods and procedures that a party uses to store information rather than an inquiry into the information itself, is commonplace in litigation that involves large amounts of electronically stored information (ESI); and in some situations such an inquiry can be critical to the litigation. These requests have become “template” requests that have been copied and pasted into most requests against corporate defendants—regardless of the information's utility to the given litigation. With respect to the Alley case, the plaintiff requested, among other things, the “identities of custodians of relevant evidence, the manner and location of storage of documents, the purpose for the creation of documents, how they are indexed, filed and maintained, etc.”.

In granting the defendant's motion for a protective order on the “discovery on discovery” issue, the Alley court recognized that generally federal courts will not compel a party to disclose its discovery process as a result of the adverse parties “mere suspicion” that the party's process has not produced adequate documents. Moreover, it held that without a showing of bad faith or unlawful withholding of documents, a party cannot seek discovery of another party's discovery processes. The court then went on to cite two other federal cases, Brand Energy & Infrastructure Services v. Irex (ED.Pa. 2018, No. 16-2499) and Ford Motor Co. v. Edgewood Properties, 257 FRD 418 (D.NJ. 2009) to support its opinion, noting that in those cases, discovery pertaining to the “servers” that the defendants used to access and store digital information, and the defendant's methodology for document collection and retention were deemed impermissible discovery.

Proportionality

Next the court addressed the plaintiff's request for “expert reports, deposition transcripts and copies of all discovery requests and responses from prior litigation” involving the product at issue. The Alley court again sided with the defendant and held that the requests were disproportional to the needs of the case.

The court noted that under Rule 26(b), an analysis of proportionality was necessary in deciding this type of discovery dispute. Federal Rule of Civil Procedure 26(b) notes that the there are six factors that must be looked at when deciding whether an otherwise proper request should be denied for proportionality reasons. Those six factors being: the importance of the issues at stake in the action; the amount in controversy; the parties' relative access to relevant information; the parties' resources; the importance of the discovery in resolving the issues; and whether the burden or expense of the proposed discovery outweighs its likely benefit.

While the court performed an analysis of the factors, it was clearly swayed by the parties' admission (tacitly by the plaintiff) that the amount in controversy was “about $100,000” (including plaintiff's $6,000 in medical bills). As the defendant produced an affidavit that complying with the discovery request would cost it “roughly” $100,000 or more, the court was hesitant to make the defendant spend on discovery an amount equal to or possibly more than the entirety of the plaintiff's claim. The court noted that since defendants had already produced “the names of the plaintiffs in prior cases, the courts where those cases were filed, and the names of the plaintiffs' attorneys in those cases,” the plaintiff's counsel had “sufficient information to seek out discovery materials from those prior cases “on his own.”

It should be noted, however, that the court did state—in a footnote—that it appreciated and recognized the fact that the nature of the “repositories” where electronic information is stored “creates complex mechanisms to store huge amounts and information” and that complexity “cannot be used in and of itself as a shield to avoid discovery requests …”. Notwithstanding, it held the discovery requests in the instant matter were disproportionate to the amount in controversy.

Takeaways

Alley is an interesting case, because—as noted above—it addressed requests—both on “discovery on discovery” and “prior lawsuits,” which are common in litigation today and denied them, respectively, on the grounds of impermissible discovery and proportionality.

While Alley does use sound reasoning and support for its ultimate holding, the fact is the discovery sought was not from left field, and was for the most part relevant to a products liability case like Alley. In fact, an e-discovery thought-leader, who I discussed this case with, indicated that the methodology and procedure of document collection and storage is critical to determining whether the process used to collect the sought after information was defensible and did not compromise the integrity of the data or metadata associated therewith. In other words, the methodology and procedure of collection can destroy critical data irrespective to the intention of the producing party to do so.

That said, a fair reading of Alley, makes it clear that Judge Gibson's decision turned more on proportionality. Additionally, it cannot be overlooked that the opinion was the court's very artful signal to the parties—who may not always see the forest for the trees—that the case should settle (e.g., the court sets forth a number of reasons why the evidence already obtained by the plaintiff was sufficient to make out a prima facie case and potentially for punitive damages as well).

Accordingly, while the case may not become—nor in my opinion should it become—a bright line rule regarding these types of discovery disputes, as there are many cases where the exact discovery sought in Alley is absolutely relevant and proper, it is an interesting read, and practitioners from both sides of the aisle would do well by reading it and understanding that the potential limits of discovery truly does reside in the court's view of fairness, proportionality and the potential for a case to settle.

I would like to thank Daniel E. Cummins of Foley Comerford & Cummins in Scranton, for bringing this case to my attention.

Will Sylianteng is the managing member of Wes Litigation Group, which he founded in 2013. He focuses his practice on litigation, subrogation and recovery, insurance coverage/bad faith and e-discovery. Contact him at [email protected].