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The 2020 Venetian Case: Confirmation of Nevada’s New Scope of Discovery Standard and “Good Cause” Analysis

Author: Kris D. Klingensmith

Guest Editor: Jeremy Freedman

October 5, 2020 2:09pm

New Scope of Discovery & Required Analysis

The Nevada Rules of Civil Procedure were amended in March 2019 to change the scope of discovery and to require a proportionality test. In a recent decision, the Nevada Supreme Court outlined the analysis the district courts must use to determine (1) whether the discovery sought is proportional to the needs of the case based on a list of factors in the new language and (2) whether good cause had been shown such that a protective order should issue.  Venetian Casino Resort, LLC v. Eighth Judicial Dist. Court, 136 Nev. Adv. Op. 26 (Nev. 2020).

In the Venetian case, the defendant Venetian’s motion for protective order was granted by the Discovery Commissioner; however, the district court agreed with the plaintiff’s objection and rejected the Discovery Commissioner’s Report and Recommendations. Id. at 4. The court found that the documents were “relevant” and ordered the Venetian to disclose the documents in dispute. Id. at 6. The district court further denied the Venetian’s request in the protective order in which the Venetian had sought to redact certain information from those documents. Id. at 5.  The Supreme Court ordered the district court to vacate the discovery orders, finding that the district court decided the issue arbitrarily based on its failure to conduct the appropriate analysis. Id. at 13.

In arriving at their decision, the Supreme Court discussed the importance and purpose of the changes to the NRCP. The advisory committee notes confirm the changes allowed the district court to “eliminate redundant or disproportionate discovery and reduce the amount of discovery.” Id. at 7-8. Further, Federal cases have noted that the new rules resulted in relevance no longer being “enough” for allowing discovery as it must now be relevant and proportional to the needs of the case. Id. citing In re Bard IVC Filters Prod. Liab. Litig., 317 F.R.D. 562, 564 (D. Ariz. 2016); see also Samsung Elecs. Am., Inc. v. Yang Kun Chung, 321 F.R.D. 250, 279 (N.D. Tex. 2017). Finally, the Court confirmed that the district court must consider the list of factors to be considered in determining whether the discovery is proportional to the needs of the case:

(1) the importance of the issues at stake in the action; (2) the amount in controversy; (3) the parties’ relative access to relevant information; (4) the parties’ resources; (5) the importance of the discovery in resolving the issues; and (6) whether the burden or expense of the proposed discovery outweighs its likely benefit.

Id. at 8; NRCP 26(b)(1). Once a court considers the foregoing factors it can “and must – limit proposed discovery that it determines is not proportional to the needs of the case . . .” Vallejo v. Amgen, Inc., 903 F.3d 733, 742 (8th Cir. 2018) (quoting Carr v. State Farm Mut. Auto. Ins., Co., 312 F.R.D. 459, 468 (N.D. Tex. 2015)). A failure to do so is an abuse of discretion on the part of the district court.

“Good Cause” Analysis

After establishing the appropriate scope of discovery and required analysis district courts must use, the Court discussed the appropriate analysis to determine when “good cause” has been shown such that a protective order should issue pursuant to NRCP 26(c)(1). The Court adopted a three-part test used in the Ninth Circuit to determine good cause under FRPC 26. Id. at 10 citing In re Roman Catholic Archbishop of Portland in Or., 661 F.3d 417, 424 (9th Cir. 2011). Using that approach, the district courts must first determine if a “particularized harm would occur due to public disclosure of the information.” In re Roman, at 424. Broad allegations of harm that are “unsubstantiated by specific examples or articulated reasoning” are insufficient to satisfy this requirement. Id. (quoting Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th Cir. 1992).

If a party is able to do so, the district court must then “balance the public and private interests to decide whether a protective order is necessary.” Id. at 11, citing In re Roman661 F.3d at 424. The Court approved the “non-mandatory and non-exhaustive” list of factors found in the Glenmede Trust Co. v. Thompson case that a court may consider to determine whether good cause exists to grant protection:

(1) whether disclosure will violate any privacy interests; (2) whether the information is being sought for a legitimate purpose or for an improper purpose; (3) whether disclosure of the information will cause a party embarrassment; (4) whether confidentiality is being sought over information important to public health and safety; (5) whether the sharing of information among litigants will promote fairness and efficiency; (6) whether a party benefiting from the order of confidentiality is a public entity or official; and (7) whether the case involves issues important to the public.

Glenmede Trust Co. v. Thompson, 56 F.3d 476, 483 (3d Cir. 1995). Third, even if the court finds that the factors weigh in favor of granting protection, the court must still consider “whether redacting portions of the discovery material will nevertheless allow disclosure.” Id. citing Roman Catholic, 661 F.3d at 425.

Takeaway

Knowledge of these changes will allow you to use them to your advantage in defending a lawsuit as counsel, adjuster or the defendant individual/entity.  Based on the intent of the rule, it should result in less discovery as courts should attempt to keep the discovery proportional to the needs of the case.  Challenge discovery that has been conducted before that appeared to you to be redundant, wasteful and/or ultimately unimportant to the final resolution, whether settlement or trial.  As the courts adjust to this new standard, there may be opportunities to significantly limit or alter the discovery that other parties may attempt to conduct.

Further, knowledge of the “good cause” test for protective orders outlined above will assist counsel and/or their clients to protect or prevent disclosure of certain documents or information.  The court has provided exactly what must be shown to obtain protection.  Work with the client to obtain information, affidavits, etc. that will assist in showing the “particularized harm” that will be suffered.  This is critical to meet the first requirement of the three-part test.  Be clear, resolute and firm in explaining to the court why protection is required under each prong.

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