Into the Weeds: Is it Time to Rethink the Vanguard Decision?

In yesterday’s blog post, we discussed a Washington Judge’s sanction order against counsel for failing to conduct a reasonable inquiry into the existence of insurance policies that may be liable to pay a portion of a judgment. I concluded, discussing Nevada law, that:

The Supreme Court in Vanguard made clear it is not up to the defendant or its insurance company to decide how much insurance coverage to disclose. Under current NRCP and Supreme Court precedent, any and all policies must be disclosed. https://nevadalaw.info/2025/07/24/judge-sanctions-law-firm-1-million-for-failing-to-disclose-defendants-insurance-policies/

Today, I want to discuss whether that is the right result. Specifically, I question whether Vanguard’s strict application that every policy must be disclosed is warranted in the era of proportional discovery.

In Vanguard, the defendant “disclosed some of its primary insurance agreements” pursuant to the then-current NRCP. When Plaintiff learned Vanguard had other policies, it sought their disclosure. The special master and the district court found the NRCP “requires disclosure of any insurance agreement that may be used to satisfy a judgment.” Vanguard Piping v. Eighth Jud. Dist. Ct., 129 Nev. 602, 605, 309 P.3d 1017, 1018 (2013). The Supreme Court held the rule “requires disclosure of any and all insurance agreements that may be liable to pay a portion of a judgment regardless of whether the party has already disclosed policies with limits that exceed that party’s potential liability.” Id.

Vanguard was decided in 2013. In 2019, the Nevada Supreme Court made what it called “exhaustive” changes to the NRCP, including the adoption of the proportionality standard long used in our federal courts. Advisory Committee Notes — 2019 Amendments Preface. Under NRCP 26(b)(1) and Venetian Casino Resort, LLC v. Eighth Jud. Dist. Ct., 136 Nev. 221, 224, 467 P.3d 1, 5 (Nev. App. 2020), parties must inquire whether the information sought is relevant to a claim or defense and whether it is proportional to the needs of the case.

Under Rule 26(b)(1)’s proportionality analysis, a party seeking discovery must employ common sense and must “size and [narrowly] shape” their discovery requests to the requisites of a case. Morrison v. Quest Diagnostics Inc., 2016 WL 355120 at *1–2 (D. Nev. Jan. 27, 2016) (quoting Roberts, C.J.); Roberts v. Clark Cnty. Sch. Dist., 312 F.R.D. 594, 603 (D. Nev. 2016) (quoting Roberts, C.J.). Moreover, counsel and the court have an affirmative obligation to work cooperatively to determine how much discovery is needed in any given case, depending on the contours of the claims and defenses. Roberts, 312 F.R.D. at 603 (quoting Roberts, C.J.). The Venetian court made clear that a court abuses its discretion when it decides a motion to compel or a motion for protective order without considering whether the discovery sought was proportional to the needs of the case. Venetian, 136 Nev. 221, 467 P.3d 1 (Nev. App. 2020).

The question, then, is how would disclosure “of any and all insurance agreements that may be liable to pay a portion of a judgment regardless of whether the party has already disclosed policies with limits that exceed that party’s potential liability” be proportional to the needs of the case? Vanguard, 129 Nev. at 605, 309 P.3d at 1018. If the goal is truly to only require that parties disclose information that is needed considering, among other things, “the amount in controversy,” how is disclosure of a policy “with limits that exceed that party’s potential liability” proportional to the needs of the case? Stated another way, NRCP 16.1’s

requirement to disclose any policy that may be required to pay all or part of any judgment entered in the action seems inconsistent with Rule 26(b)(1)’s proportionality standard. If a primary policy is sufficient to satisfy in full all of a plaintiff’s potential claims, how is it proportional to require disclosure of a supplemental policy that will never be used to satisfy a part of any judgment? The courts have not determined which rule has priority. However, as the failure to disclose an insurance policy may be grounds for Rule 26(g) sanction, one should either err on the side of disclosure or seek a protective order rather than merely withholding the policy without disclosing its existence.

Young, A Litigator’s Guide to Nevada Discovery Law, 21 (2023). It may be time to rethink Vanguard when it comes to requiring the disclosure of policies that exceed a party’s potential liability.