FRCP Amendments: Discovery of Electronically Stored Information

By Christy M. Thornton
Lang, Richert and Patch

Introduction

Effective December 1, 2006, amendments to the Federal Rules of Civil Procedure place new obligations on attorneys using electronically stored information (“ESI”) in federal courts. The amendments force parties to address, early in the case, issues of how to best preserve, collect, and produce ESI.

The amendments were created in response to recognition that ESI raises different issues from conventional paper discovery. Characterized by an exponentially greater volume than hard copy documents, ESI presents a substantial risk of inadvertent production of privileged material. Preservation of ESI also raises an issue, since computer information, unlike paper, is dynamic; computers continuously overwrite, delete, and change stored information. In addition, ESI may become incomprehensible when separated from the system that created it. In response to these problems, the proposed amendments require counsel to address ESI issues from the outset of litigation.

The Ninth Circuit Federal District Courts and State Courts in California will soon revise their rules to address ESI. Accordingly, counsel should be aware of the new duty to properly communicate with clients and ensure discovery of all sources of relevant ESI.

Summary of Amended FRCP

Amended Rule 16: Pretrial Conferences; Scheduling; Management

  • Invites the court to address ESI in the Rule 16 scheduling order.
  • Gives the court discretion to enter an order adopting any agreements reached by the parties regarding privileges for material inadvertently produced in discovery.

Amended Rule 26(a)(1)(E): Duty of Disclosure

  • Requires a party to disclose, without awaiting a discovery request, all “electronically stored information. . . which the disclosing party may use to support its claims or defenses.”
  • At the early stage of initial disclosures, each party must disclose, by category and location, all potential sources of ESI that it may want to use in litigation.

Amended Rule 26(b)(2): Discovery Scope and Limits

  • Provides that a party need not produce electronically stored information that is not “reasonably accessible” because of undue burden or cost.
  • For example: deleted information, information kept on backup systems for disaster recovery purposes, and legacy data from systems no longer in use.

Amended Rule 26(b)(5): Claims of Privilege or Protection of Trial Preparation Materials

  • Allows a party to assert privilege after inadvertent production.
  • If a party has produced information in discovery that it claims is privileged or protected as trial-preparation material, it may notify the receiving party of the claim, stating the basis.
  • After receiving notification, the receiving party must return, sequester, or destroy the information, and may not use or disclose it to third parties until the claim is resolved.

Amended Rule 26(f): Meeting of Parties

  • Requires the parties to discuss, at their initial meeting, three issues relating to discovery of ESI:
      1. The form of producing electronically stored information (paper or electronically)
      2. Preservation of discoverable ESI; and
      3. Approaches to asserting claims of privilege or work-product protection after inadvertent production in discovery.
    • In order to be adequately prepared to discuss these matters at the conference, counsel must investigate and discuss with the client the best way for the client’s ESI to be preserved, collected, processed, and produced.
    • Amended Form 35 (“Report of Parties’ Planning Meeting”) requires that counsels’ Rule 26(f) reports cover ESI issues and any agreements counsel made about post-production privilege assertion.

    Amended Rule 33: Interrogatories to Parties

    • Allows a party to answer an interrogatory involving review of business records by providing access to the information, so long as the interrogating party can find the answer as readily as the responding party.

    Amended Rule 34: Production of Documents and Things

    • Authorizes requesting party to specify form of production. For example, the discoverable emails may be produced in their original Outlook format, or Word files can be produced in searchable PDF format.
    • If no format is requested, the responding party may provide the information in any format that is reasonably usable.

    Amended Rule 37(f): Failure to Make or Cooperate in Discovery; Sanctions

    • “Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide ESI lost as a result of the routine, good-faith operation of an electronic information system.”
    • This amendment provides a safe harbor for information lost due to the “routine operation of an electronic information system,” i.e., the ways in which such systems are generally designed to meet the party’s technical and business needs.
    • Recognizes that electronic information systems are designed to recycle, delete, and overwrite information in routine operation.
    • Does not provide a shield for a party that intentionally destroys specific information because of its relationship to litigation.

    Amended Rule 45: Subpoena

    • Recognizes that electronic discovery may be obtained from third parties.
    • Conforms the provisions for subpoenas to changes in other discovery rules related to discovery of ESI.

    Conclusion

    The volume and complexity of electronic evidence requires proactive planning to allow clients and counsel to manage potentially discoverable facts and data before litigation. In order to prevent discovery battles, sanctions, or, even worse, avoidable adverse verdicts as a result of those sanctions, litigants who anticipate use of ESI should keep several things in mind. First, counsel has a duty to become familiar with the client’s document retention policies. Although not required by the FRCP, other jurisdictions (federal district courts in Delaware, Kansas, and Wyoming) require interaction between counsel and an IT liaison who has knowledge of the client’s information management system. Second, do not blindly accept a client’s assertion that no ESI exists. Hidden data may remain somewhere in the system, despite the client’s belief that the information was deleted. Third, before the meet and confer conference, counsel should meet with their clients and prepare a robust data management system, which creates a method for preserving, collecting, processing, and producing the client’s ESI. Finally, both parties should work cooperatively to prepare for all likely ESI issues before discovery spats get out of control.