© 2014 The Texas Lawbook.
By David Coale – How much discovery is too much?
The Texas Supreme Court recently offered some important guidance on this practical question, holding that a request for “similar” insurance claim files was overly broad, even with limits as to place and time.
The Court’s holding echoes the federal concept of “proportionality” in discovery, which has motivated recent revisions to the Federal Rules of Civil Procedure. The opinion offers a good example of how that principle may play out in practice under the new rules.
Mary Erving sued her insurance carrier, alleging that it undervalued her claim. She then obtained an order allowing discovery about claims handled by the adjusters who reviewed her file, limited to properties in her town that were affected by the same storm. The carrier successfully sought mandamus relief from the order.
The plaintiff defended the discovery order as “(1) limited in time, because it compelled only production of evidence relating to the two storms at issue, and (2) limited by location, because it involved only properties in Cedar Hill.”
The Supreme Court found those limits inadequate, reasoning: “[Plaintiff] is correct that discovery must be reasonably limited in time and geographic scope. But such limits in and of themselves do not render the underlying information discoverable.”
Noting likely differences between her situation and those involved in other claims – such as property condition and the type of damage, the Court held: “Scouring claim files in hopes of finding similarly situated claimants whose claims were evaluated differently from [plaintiff’s] is at best an ‘impermissible fishing expedition.’”
This analysis echoes the concept of “proportionality” in discovery under the Federal Rules of Civil Procedure. That concept began to enter the case law about discovery in the United States Supreme Court’s 2007 opinion in Bell Atlantic Corp v. Twombly, with observations such as these:
“Probably, then, it is only by taking care to require allegations that reach the level suggesting conspiracy that we can hope to avoid the potentially enormous expense of discovery in cases with no ‘reasonably founded hope that the [discovery] process will reveal relevant evidence’ to support a § 1 claim.”
Over time, the “proportionality” concept has moved from the discovery rules to pervade the entire system of federal procedure.
In the proposed amendments to the Federal Rules (approved by the Judicial Conference in September 2014 and now before the Supreme Court), the advisory committee notes to Rule 1 say: “Effective advocacy is consistent with — and indeed depends upon — cooperative and proportional use of procedure.”
The Texas Supreme Court’s Lloyds opinion, while not based on the new Federal Rules, illustrates how the “proportionality” concept works in practice. The time and expense associated by discovery must be justified by a sufficient likelihood of finding useful information, and even fairly strict limits on time and place will not suffice if the subject matter of the discovery is too far removed from the claims at issue.
David Coale is a partner who specializes in appellate law at Lynn Tillotson Pinker Cox in Dallas. He is the editor of 600Camp.com, a blog that focuses on the U.S. Court of Appeals for the Fifth Circuit.
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