Read more about 7 recent opinions shaping the e-discovery landscape.

In Southern District of New York Judge Colleen McMahon’s February 2012 decision in Pippins v. KPMG LLP, McMahon made clear that the court would have been willing to hear arguments about limiting or expanding the scope of preservation based on a proportionality argument. In a Fair Labor Standards Act case filed by former KPMG employees, KPMG had moved for a protective order to limit the scope of its preservation obligations. Its primary argument was that the cost of preserving the hard drives of thousands of former employees—at least $1.5 million, KPMG estimated—would be disproportionate to what was at stake in the case.

McMahon rejected the motion. KPMG had refused to give a random sample of its hard drives over for analysis of their relevance to the case, and without the information necessary to conduct the analysis, McMahon concluded she couldn’t conclude the cost of preserving the hard drives outweighed the benefit. “Even assuming that KPMG’s preservation costs are both accurate and wholly attributable to this litigation—which I cannot verify—I cannot possibly balance the costs and benefits of preservations when I’m missing one side of the scale (the benefits). … In short, KPMG is hoist on its own petard,” McMahon wrote.

Withers says the lesson here is an important one. The court was willing to talk proportionality and hear arguments about limiting or expanding the scope of preservation, but KPMG didn’t actually engage in a proportionality analysis.

“The lesson—particularly for responding parties that hold big data—is that yeah, it’s expensive, but you need to argue not only the expense but also the value or lack of value of the resolution of the issues that are really involved in the case,” Withers says.

Earlier this month, the Advisory Committee on Civil Rules voted to send amendments to several of the Federal Rules of Civil Procedure to its Standing Committee on Rules of Practice of Procedure with a recommendation that they be approved later this year. One amendment would speak directly to the proportionality issue. The proposed amendment to Rule 26(b)(1)—which addresses the scope of discovery—would limit discovery to what is “proportional to the needs of the case considering the amount in controversy, the importance of the issues at stake in the action, 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.”