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Proportionality Requirement in Revised Fed. R. Civ. P. 26(b)(1): U.S. District Court of Connecticut Interprets

Posted By USFN, Monday, February 22, 2016
Updated: Wednesday, February 24, 2016

February 22, 2016


by Jennifer M. McGrath
Hunt Leibert – USFN Member (Connecticut)

Discovery under the Federal Rules has long been governed by the principles of proportionality; however, the revised Rule 26(b)(1) — effective December 1, 2015 — has put increased importance on the concept and made it a central term of the Rule, which now reads:

Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering 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. Information within this scope of discovery need not be admissible in evidence to be discoverable. Rule 26(b)(1) (emphasis added).

The U.S. District Court of Connecticut is among the first to interpret the revised Rule in the context of a discovery dispute, and can be utilized to prohibit depositions of a party. In Williams v. Rushmore Loan Management Services LLC, 3:15-cv-00673 (RNC), an action concerning alleged violations of the Fair Debt Collection Practices Act (FDCPA), the plaintiff sought to depose two employees of the defendant loan servicer when, procedurally, he had already moved for summary judgment based on liability. The defendant loan servicer filed a motion for protective order, asserting that the FDCPA provides a maximum statutory penalty of $1,000 [15 U.S.C. § 1692K (a)(2)]; there is no provision for punitive damages, and the plaintiff was limited to actual damages [Gervais v. O’Connell, Harris & Associates, Inc., 297 F. Supp. 2d 435, 439-40 (D. Conn. 2003)], which he had described as “garden variety” emotional distress.

On February 16, 2016 the court granted the loan servicer’s motion for protective order, finding the requested depositions of the servicer’s employees to be of “marginal utility” in the case, and holding that the cost of preparing for (and taking) the out-of-state depositions was “disproportionate to the needs of the case and the plaintiff’s potential recovery.”

The court’s decision in Williams sets an important precedent and reinforces the parties’ obligations to consider proportionality when serving discovery. By requiring litigants to show a logical nexus between the claims and defenses in an action and the discovery sought, the court eliminates “unnecessary or wasteful discovery” (as U.S. Supreme Court Chief Justice Roberts instructed in his 2015 Year-End Report, which was cited by the Connecticut District Court in Williams).

Counsel for loan servicers can utilize this recent decision to limit or prohibit deposition practice in consumer claims under the FDCPA, RESPA, and other statutory claims in which the actual damages are relatively small.

Editor’s Note: The author’s firm represented Rushmore Loan Management Services, LLC in the summarized proceedings.

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