New federal rules for electronic discovery in civil cases go into effect on December 1, 2006. So what exactly does this mean? These guidelines will alter how lawyers and their clients participate in litigation. The amendments were made to acknowledge the importance of electronically stored information (ESI) in litigation and to incorporate the disclosure of electronically stored information into overall discovery of the Federal Rules of Civil Procedure. Let’s review some of the highlights of this new legislation.
Early attention to electronic discovery
Amended Rule 16(b) requires parties to include in their initial scheduling order provisions for “disclosure or discovery of electronically stored information.” Similarly, Rule 26(f)(3) requires the parties to discuss e-discovery issues and determine the electronic format in which to produce ESI. In other words, parties must attempt to resolve significant details early, such as whether e-discovery will be produced in electronic format, on hard-drive copies or CDs, or simply printed to paper copies.
Amended Rules 16(b) and 26(f) also contemplate the parties’ discussion of privilege issues in production of such data. The large amount of data that will likely be produced raises issues of expense and delay in conducting an appropriate review of all materials, even those with no litigation relevance or use, but which may be fairly subject to discovery under Rule 26. Certain electronic formats provide for the retention of embedded or meta data, often reflecting the primary information not visible to an ordinary user of that data. Whether this information is even subject to discovery and, if so, how to address privilege issues arising from such data, are appropriate subjects of discussion prior to the initial scheduling order.
Amended Rules 26(b)(5)(A) & (B) provide procedures for making privilege claims and to conduct in camera review of produced materials for which a subsequent claim of privilege is asserted. In particular, Rule 16 provides that “any agreements the parties reach for asserting claims of privilege or protection as trial-preparation material after production” may be included in the scheduling order. This provision speaks to what is traditionally known as “clawback” arrangements, whereby parties agree to return to one another privileged materials inadvertently produced. The proposed rule invites parties to include such provisions into the Rule 16 scheduling order.
Software and formats outdated, costly to recover
An organization’s ability to recover data presents a big hurdle for litigants. Data may be irretrievable because it was created using old software or because it is stored on media, such as backup tapes, never intended for easy access. In such an instance, the burden and the cost of converting it to readable form is unreasonable. To address these concerns, the new rules provide that A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause, considering the limitations of Rule 26(b)(2)(C). The court may specify conditions of the discovery.
In short, this section of the proposed amendments requires the producing party to identify the sources it claims to be inaccessible due to undue burden or cost and which therefore will not be searched. It is not clear from the amended rule specifically when this identification must actually take place.
Upon a motion to compel, the proposed rule provides that the burden is on the producing party to show that documents requested are not reasonably accessible. If that burden is met, then the requesting party must show good cause to obtain the information.
As case law and the committee notes reflect, even inaccessible material may be ordered produced under certain conditions, including the shifting of the cost of production to the requesting party. The committee notes to Rule 26(b)(2)(B) outline a number of factors to be taken into account in assessing whether good cause has been shown to require production of information that is not reasonably accessible, including
- the specificity of the discovery request,
- the quantity of information available from other sources, and
- the importance of the issues at stake in the litigation.
Before asserting inaccessibility, parties must be prepared to address each of these factors and accurate technical information will be necessary to support any assertions of inaccessibility.
Format for production
ESI can be stored in numerous different forms. For example, a letter or spreadsheet, produced as a paper printout, also may exist in various software, as scanned images, or as an email message. Under amended Rule 34(b), a requesting party may specify the form for producing ESI. If the responding party objects or if no form was specified, the responding party must state the form or form it intends to use. If the parties cannot agree, or if a form has not been specified by the court, then under Rule 34(b) the default form of production is either the form in which the information is maintained or a form reasonably usable, which may mean searchable, if the information was maintained in a searchable format.
A safe harbor
The amended rules address the problem of courts awarding sanctions for honest mistakes. The absence of a rule addressing sanctions was perceived to create situations in which either unfair penalties were imposed or companies erred on the side of caution, keeping too much material and exacerbating the volume problem that lies at the heart of the e-discovery challenge. The revised rules address the sanctions issue in Rule 37(f), which provides that:
“Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good faith operation of an electronic information system.”
Importantly, Rule 37(f) does not excuse a party from evaluating and fulfilling its obligation to preserve discoverable evidence. When evaluating good faith, a party’s specific preservation steps obviously will play a role, and it will remain a caseby-case determination of whether the loss of information was truly the result of good-faith error or willful or negligent blindness to the requirements of electronic data preservation. Courts increasingly expect parties to be familiar with the operation of their computer systems and are less and less inclined to “excuse” failures in this area, such as a failure to suspend auto-delete operations.
Rule 45: Third-party obligations
Amended Rule 45, which governs subpoenas to third parties, contains changes that essentially mirror the definitional and procedural amendments addressed above.