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Electronic Discovery Under the New Federal
Rules Amendments to the Federal Rules of Civil Procedure governing
electronic discovery took effect on Now that we have finally gotten
the hang of electronic filing, the United States Supreme Court has
approved amendments to the Federal Rules of Civil Procedure that will
radically affect the way we handle discovery of information stored
on computers. The amendments
took effect on December 1 and they will change electronic discovery
practice in a number of significant ways.
The amendments create a new category of items subject to discovery
and initial disclosure requirements — “electronically stored information”
(“ESI”) — along with procedures for requesting and producing ESI,
and a framework for resolving related disputes.
ESI that is not “reasonably accessible” will be subject to discovery
only for “good cause,” but may still need to be preserved pending
such a determination, based upon evolving standards for ESI litigation
holds. The amendments also provide a limited safe harbor from sanctions
for the good faith, routine destruction of ESI. A new procedure will govern disputes regarding inadvertent production
of privileged or attorney work-product ESI and documents. Finally, the amendments require that attorneys
confront electronic discovery issues early in a case, in connection
with the Rule 26(f) conference and initial disclosures. Although for now these procedures will apply only in federal court,
Minnesota state courts are grappling with the same issues regarding
electronic discovery that led to these amendments, so they are likely
to consider adopting similar rules in the near future. Procedures for Discovery Rule 34(a) is amended to add “electronically stored information”
to “documents” and tangible “things” as a third category of items
that may be requested.1 Although
data stored on computers were already considered “documents” subject
to discovery, by creating this new category the rules can now specifically
address how paper documents differ from electronic information, which
is dynamic and can exist in different forms. Rule 34(b) is amended to provide procedures for requesting
and producing ESI. The requesting
party is allowed (but not required) to request production of ESI and
to specify the form or forms in which it is to be produced. Different forms of production can be requested for different types
of ESI (such as word processing documents, emails, spreadsheets, and
databases). For example,
parties may request that spreadsheets and databases be produced in
the native form in which they are stored by the programs creating
them, that received correspondence be produced in searchable electronic
form, and that emails be produced in hard copy.
A responding party need not, however, provide any particular ESI
in more than one form. Even if ESI is not specifically requested, a request for “documents”
should be understood as encompassing ESI, unless prior discovery clearly
distinguished ESI from paper documents.2 The responding party may object to the requested form for producing
ESI. If it objects, or if
no form was requested, the responding party’s written response must
identify “the form or forms it intends to use” for producing ESI,
which implies the identification must precede the actual production. Amended Rule 34(b) also provides a default form for producing ESI. If no form has been requested, agreed
upon or ordered, the responding party must produce the ESI in the
form in which it is ordinarily maintained, or in a form that is “reasonably
useable.” Although the rule provides the responding party with a choice
between these two options, the Advisory Committee Note limits the
“reasonably useable” option. A responding party may not convert its
ESI from its ordinary form to a form that makes it less readily useable
in the litigation, even if it remains “reasonably useable.”3 For example, if the ESI is ordinarily searchable, it may not be produced
in a form that removes or significantly degrades this feature.4 Under either option for production, the responding party may
be required to “translate” ESI into reasonably useable form, and under
some circumstances it may be required to provide reasonable assistance
— which may even include “technical support” — to enable the requesting
party to use the ESI.5 Similarly,
a party may need to provide such reasonable assistance if it uses
the Rule 33(d) “business records” option of responding to an interrogatory
by identifying ESI from which the answer may ascertained.6
If the requesting party’s computer system has idiosyncratic features
that would make it unduly burdensome or costly to accommodate, producing
ESI in a form compatible with commercially available software should
satisfy the “reasonably useable” requirement.7 The requirement that, in the absence of agreement or order,
a responding party specify in advance how it intends to produce its
ESI is intended to allow the parties to attempt to resolve disputes
before production. Courts will undoubtedly need to address
issues regarding the amount of advance notice required, and the consequences
of providing inadequate or no advance notice. According to the Advisory
Committee Notes, a party that fails to provide advance notice runs
a risk that the requesting party can show a produced form is not “reasonably
useable” and that it is entitled to production in another form.8
This implies the failure to identify the form in advance of production
may not matter if the form produced turns out to be “reasonably useable.” But a party that violates the advance
notice requirement will be in a difficult position when trying to
convince the court that its form of production was proper. The requirement of advance notice is one of several features in the
amendments intended to impel parties to address ESI discovery issues
early on. Rule 34(a) is also amended to permit requests not only to inspect
and copy, but also to “test or sample” ESI (as well as paper documents).
Although this change is not meant to create a routine right of
direct access to an opposing party’s computer system, the Advisory
Committee Notes state that such access might sometimes be justified,
with issues of burden and intrusiveness addressed under the general
standards of Rules 26(b)(2) and 26(c).9 Testing or sampling may allow parties to resolve potential discovery
disputes by, for example, agreeing that certain categories of ESI
need not be formally produced, or be deferred for possible production
later. What if a party has ESI that is potentially responsive to a
Rule 34 request but is not “reasonably useable” by anyone? For example, ESI may be stored on backup tapes for disaster recovery
purposes only, on obsolete machines, or in obsolete formats. This issue is covered by a new provision
regarding the general scope of ESI discovery, which creates a two-tier
system, depending on whether or not the ESI is maintained on sources
that are “reasonably accessible.” Not “Reasonably Accessible” ESI Rule 26(b)(2) is amended to provide that a party need not provide
discovery of ESI “from sources that the party identifies as not reasonably
accessible because of undue burden or cost.”10 If the requesting party seeks discovery from such sources, the responding
party has the burden of proving the ESI source is not reasonably accessible.
Even if that showing is made, the court can still order its production,
but only if the requesting party shows “good cause.”
The good cause inquiry is based on the existing factors identified
in Rule 26(b)(2)(C), which balance the costs and potential benefits
of any form of discovery (including reasonably accessible ESI).
The court can specify conditions for discovery, such as making
the requesting party bear part or all of the reasonable cost of locating,
retrieving and producing the ESI. This two-tier system reflects the fact that some ESI can be
retrieved and searched only with considerable effort. Such ESI may include data on disaster recovery back-up tapes; “deleted”
data that may be restored through computer forensics; legacy data
on obsolete systems; and databases that cannot readily create data
useable for litigation purposes.
The amended rule contemplates that parties will continue with
the ordinary practice of searching only sources of information that
are reasonably accessible and likely to contain responsive, relevant
information.11 The difference
is that now a responding party must identify, by category or type,
sources of potentially responsive ESI that were not searched because
they are not reasonably accessible.
The requesting party should ordinarily first sort through information
obtained from more easily accessed sources — computer, paper and human
— before deciding whether to seek ESI from sources that are difficult
to access. This procedure is intended to obviate
expensive recovery of backup data, discovery expense that is rarely
necessary or helpful to the resolution of a case. If the requesting party believes that the first-tier information
is insufficient, it has the opportunity both to challenge the inaccessibility
designation and to attempt to show good cause. These issues may be decided together or
in stages. The Advisory
Committee Notes acknowledge that the requesting party may need focused
discovery on the issues of accessibility (the burden and cost of locating,
restoring and retrieving potentially responsive ESI) and good cause
(the likelihood of finding relatively important ESI).12
Such discovery may include requiring the responding party to conduct
sampling on the “inaccessible” sources, allowing some form of inspection,
or depositions of information technology personnel.
As with any discovery disputes, counsel should first try to resolve
or narrow the issues before seeking relief from the court.13 The Advisory Committee Notes to amended Rule 26(b)(2) point
out that a party may still have a duty to preserve
ESI, even if its source has been identified as not reasonably accessible.14 The amended rules do not attempt to define
that duty. They do, however,
create a safe harbor from sanctions under the rules for the routine,
good faith destruction of ESI. Limited Safe Harbor Anyone who is a party to litigation, or reasonably anticipates
being a party, has a duty to preserve unique, relevant evidence that
might be useful to an adversary.15
This preservation duty requires a party to impose what’s commonly
known as a “litigation hold” or “legal hold” and suspend ordinary
document destruction practices.
But this standard is difficult to apply to ESI, which is necessarily
dynamic: electronic information is regularly modified, overwritten
and deleted. For example, backup tapes are typically reused periodically; “deleted”
information is regularly overwritten and made inaccessible; metadata
is changed to reflect more recent access; and programs are set to
automatically discard old or disused data.
Such automatic features and routine operations are essential to
the efficient use of computers.
Thus, courts recognize the obligation to preserve evidence requires
reasonable efforts to retain
ESI that may be relevant to pending or threatened litigation, but
it is not reasonable to take every conceivable step to preserve all
potentially relevant data.16 A new provision, Rule 37(f), recognizes that parties cannot
realistically be required to preserve all potentially relevant ESI. It provides: “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.” The Advisory Committee Notes state that
“good faith” may require a party to suspend the routine operation
of a computer system in order to comply with its preservation obligations.17 By tying “good faith” to compliance with
the duty to preserve, the Advisory Committee Notes indicate that the
safe harbor may apply only where there was no violation of preservation
obligations to begin with, and hence no basis for spoliation sanctions. Rule 37(f) may therefore serve only the limited purpose of clarifying
that sanctions may not be imposed whenever the routine functioning
of a computer system destroys ESI.
On the other hand, Rule 37(f) expressly adopts a “good faith”
rather than a negligence standard,18 so it remains possible that a
party may violate its preservation obligations by failing to adopt
a reasonable ESI litigation hold, but successfully rely on the safe
harbor due to its good faith. Early Attention The amended rules require counsel to discuss in their Rule
26(f) conference any issues relating to ESI discovery, including litigation
holds, forms of production, and procedures for asserting claims of
inadvertent production of privileged information (discussed below).19 ESI discovery will ordinarily be addressed in counsels’ joint report
to the court and in the court’s subsequent Rule 16 scheduling order. In addition, initial disclosures under
Rule 26(a)(1) will include ESI a party may use to support its claims
or defenses.20 As a practical
matter, these changes will require counsel to become somewhat familiar
with a client’s computer system early in the case.
In order to address the issues raised by the new rules, counsel
may need to know what types of ESI the client has, whether they are
likely to contain relevant information, and the burdens of preserving,
accessing, reviewing and producing them.
Learning this will frequently require consulting with clients’
information technology personnel, who frequently are the only ones
that can accurately address these issues. Claims of Privilege ESI discovery poses a greater risk of inadvertent disclosure
of attorney-client privileged and attorney work product information
than does production of paper documents, because of both sheer volume
and the difficulty and burden of ensuring thorough preproduction review. The amended rules accordingly adopt a procedure for handling disputes
over inadvertent disclosure.21
Rule 26(b)(5) will allow a party to provide notice that it has
inadvertently produced information subject to a claim of attorney-client
privilege or work-product protection.
After being notified, a receiving party may not use or disclose
such information until the issue is resolved.
The receiving party must also promptly return, sequester, or destroy
the information and take reasonable steps to retrieve it from others
to whom it has disclosed it. The rule will also permit a receiving
party to resolve the issue by presenting the information to court
for in camera review. The new rule does not address the substantive issue of what
constitutes a waiver. It merely
provides a default procedure for resolving inadvertent production
disputes. Parties are free to agree on other procedures.
Amended Rule 26(f) directs the parties to address privilege issues
during their Rule 26(f) conference, and any resulting agreement on
procedures governing claims of privilege will ordinarily control.22
Among alternate procedures counsel may consider are “clawback”
and “quick peek” agreements, which potentially allow ESI to be provided
to opposing counsel with minimal advance review.
Under a clawback agreement the production of privileged material
is presumed inadvertent and does not constitute a waiver; the receiving
party must return the privileged material upon prompt demand until
the issue is resolved.23 Under a “quick peek” agreement the requesting
party reviews potentially responsive materials and identifies what
it wants produced, and the producing party then reviews that presumably
smaller subset and produces only materials that are not privileged.24
State Court Practice Although the new procedures governing ESI discovery apply only
to federal cases for now, they will undoubtedly have some effect on
Minnesota state court practice over time.
What that effect will be and how soon it will occur remains to
be seen. The Minnesota Supreme Court Advisory Committee
on Rules of Civil Procedure is likely to consider the issue of electronic
discovery and take a hard look at the federal rules’ approach sometime
in 2007, and it has traditionally tended to recommend adoption of
federal rule changes that will work in state court practice. Of course, Minnesota’s Rule 26 does not
provide for initial disclosures or mandatory discovery conferences,
and that is unlikely to change anytime soon.
But since Minnesota state courts are faced with the same electronic
discovery issues as federal courts, it is reasonable to assume that
some of the other features of the new federal rules will influence
state court practice and eventually find their way into the Minnesota
Rules of Civil Procedure. Conclusion The new federal electronic discovery rules will bring about
major changes in the way we seek and provide discovery in federal
court. Since electronic information has become
ubiquitous, it will be a rare federal case that remains unaffected. These changes will involve more than merely
revising our discovery forms (although that will be necessary, too). The new rules will require us to become
more familiar with the ways our clients create, store and use their
electronic information. We
will need to consider what potentially relevant ESI they have, what
is reasonably accessible, and how we will review and produce it —
and be thinking along similar lines about our adversary’s ESI.
Although the less computer-savvy among us may be tempted to try
to stick to state court, these issues will follow us there. The new
rules can be thought of as Version 1.0 — inevitably there will be
bugs to work out. But they
represent a thoughtful attempt to address the central role that electronic
information plays in our lives and the lives of our clients. Notes 2 Report, at 72. 3 Id. at 75. 4 Id. 5 Id. at 68-69, 73.
6 Id.
at 67. 7 Id. at 63. 8 Id. at 74-74. 9 Id. at 73. Rule 45’s provisions for subpoenas to
produce documents are also being revised to conform with the other
amendments. Id. at 89-100. 10 Id. at 43-44. 11 Id. at 40, 46. 12 Id. at 46-47. 13 Id. at 46. 14 Id. 15 See, e.g., E*Trade
Sec. LLC v. Deutsche Bank AG, 230 F.R.D. 582, 591 (D. Minn. 2005)
(citing Zubulake v. UBS Warburg LLC, 220 F.R.D.
212, 217 (S.D.N.Y. 2003)). 16 See generally
“The Sedona Principles: Best Practices, Recommendations and Principles
for Addressing Electronic Document Discovery” (The Sedona Conference
Working Group Series, July 2005 Version), at 28-30, available at http://www.thesedonaconference.org/content/miscFiles/publications_html. 17 Report, at 85. 18 Id. at 82-83. 19 Id. at 43-44. 20 Id. at 28. 21 Id. at 55-56. 22 Id. at 56. 23 See Conference
of Chief Justices, “Guidelines for State Trial Courts Regarding Discovery
of Electronically-Stored Information,” at 9 n.9 (Aug. 2, 2006), available
at http://www.ncsconline.org/WC/Publications/CS_ElDiscCCJGuidelines.pdf. 24 Id. WAYNE MOSKOWITZ is a partner at Maslon Edelman Borman & Brand, LLP, where he practices appellate and complex business litigation. |
