December 11, 2006

On December 1, 2006, certain of the Federal Rules of Civil Procedure were amended to provide consistent ground rules for parties dealing with Electronically Stored Information (“ESI”) in discovery.  Everyone talks about the amendments in the abstract, but you may still be wondering what they are.  Below we provide a simple summary of four specific changes to the discovery process most likely to affect you as a result of these broader amendments to the Federal Rules. 

1.  Amended Rule 34(b):  Specifying the forms of production. 

• In a request for documents, the requesting party may specify the forms in which various types of ESI are to be produced. 
• If the responding party does not agree with the requested forms, it must object to the requested form in its response, state the reasons for the objection, and specify which forms it intends to use. 
• The responding party also must specify the form of production it intends to use where the document request does not specify any form of production for ESI.
• Unless the parties otherwise agree or a court otherwise orders, the responding party must produce ESI in a “reasonably usable” form, or in the form in which it is ordinarily maintained. 

Note that the question whether a particular format is "reasonably usable" in the context of a particular case is open to interpretation by the courts.  For many types of ESI, including email, a text-searchable PDF should be considered "reasonably usable." 

2.  New Rule 26(b)(2)(B):  Adjusted procedure for discovery of information from sources that are "not reasonably accessible." 

• When a producing party identifies a source as “not reasonably accessible” in its response to a document request, the party need not provide discovery from that source absent a court order. 
• On motion to compel or for a protective order, the responding party bears the burden of showing that the information truly is “not reasonably accessible.”  Even if that showing is made, however, the court may still order discovery from that source if the requesting party shows “good cause.” 

Note that the definition of "reasonably accessible" is open to interpretation by the courts.  Also note that courts still have the traditional discretion to grant protective orders under Rule 26 (now Rule 26(b)(2)(C)) to limit discovery wherever the burden or expense outweighs its likely benefit.  Even though "inaccessible" data need not be produced initially, there still remains an obligation to preserve that data.

3.  Amended Rule 26(f):  More discussion at the 26(f) conference.

• The initial Rule 26(f) discovery planning conference must now include a discussion of any issues relating to disclosure or discovery of ESI, including the forms in which ESI should be produced. 
• The parties must discuss whether ESI in certain locations is reasonably accessible, and the burden of retrieving and reviewing that ESI.
• Parties are also expected to discuss any issues relating to preserving discoverable information (including non-electronic information).

The Advisory Committee notes to this amendment provide additional detail about the new areas of discussion expected at the Rule 26(f) conference.  It may be important for the parties to discuss their computer systems in order to develop a discovery plan that takes into account the capabilities of those systems.  "In appropriate cases identification of, and early discovery from, individuals with special knowledge of a party's computer systems may be helpful."  It will be necessary for counsel to have sufficient familiarity with the client's computer systems and data to be able to identify which sources of ESI will and will not be searched, which data will and will not be preserved, and in what format each type of ESI should be produced.  Note that the parties’ discussion regarding preservation "should pay particular attention to the balance between the competing needs to preserve relevant evidence and to continue routine operations critical to ongoing activities."

4.  New Rule 37(f):  Safe Harbor for good-faith disposal of ESI.

• Absent exceptional circumstances, a court may not impose sanctions 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.
• “Good faith” may require a party to modify or suspend certain features of routine data destruction mechanisms to ensure that relevant information is preserved.

One of the best ways to ensure protection under Rule 37(f) is to adopt and implement a robust program for the retention and routine disposal of ESI, coupled with a consistent methodology for identifying and preserving ESI that is relevant to pending or reasonably foreseeable litigation.  Note that Rule 37(f) applies only to sanctions under these rules and does not affect other sources of authority to impose sanctions or rules of professional responsibility. 

Your most essential task now is to hire litigation counsel who can help your company meet these new requirements and advocate for interpretations that benefit your strategic position.