Some heavy but pertinent reading below. There has been unanimous approval by the Judicial Conference of the US on approved changes to the Federal Civil Procedures Rules that will significantly impact electronic discovery practice and procedure in federal courts. Unless the Supreme Court disapproves the amendments by next May
the changes will take effect in 12/06. The major changes can be
encapsulated as the recognition of "electronically stored information" as a distinct component electronic discovery and specific guidelines around ESI. I've excerpted and commented some of the proposed amendments below.
In short, this recognition at the Federal level shows the continued need and importance for solutions that enable electronic discovery, it recognizes that electronic data discovery is now a standard way of life and that state and local rules will not suffice as the creation of electronic information continues to grow. I do not think that most software vendors will manage to keep up with these rules and the effect that they have on their solutions and marketing positions. As we continue to see the market evolve and solutions converge towards legal discovery and archival it is important that we
do stay aware of these rulings. More information can be found at http://www.uscourts.gov/rules rules6.html <http://www.uscourts.gov/rules/newrules6.html>
Best,
Peter Mojica
Clarifying and Conforming Proposed Amendments to Rules 33 and 34. The proposed amendment to Rule 33 provides that a party may answer an interrogatory involving review of business records by providing access to ESI if the burden of finding the answer is substantially the same for either party.
The proposed amendment to Rule 34 explicitly recognizes ESI as a category subject to discovery that is distinct from "documents" and "things" to clarify that there are differences among them important to managing discovery. Rule 34 is also amended to authorize a requesting party to specify the form of
production and for the responding party to object. Absent an order, agreement, or a request for a specific form, a party may produce responsive ESI only in one form - the form in which the party ordinarily maintains it or in a reasonably usable form.
They are recognizing that the amount of information is in many cases simply to much. This effects several industries, especially those that focus n evidence preparation, that are specific to how law firms produce evidence, this can negate the transformation of electronic information into paper, where defendants overwhelm plaintiffs counsel with 1000's of boxes of paper. This makes our strategy for continuing to build and expand web based tools and profiles for data access the continued correct direction. Other vendors are stopping at the archival and basic search and query and interfacing into third party tools for evidence preparation or what they generally term e-discovery. Our view is that these industries of archival and e-discovery are converging and this recognition at the federal level will continue to support that view.
Addressing Inadvertent Privilege Waiver - Proposed Amendment to Rule 26(b)(5). The proposed amendment to Rule 26(b)(5) provides a procedure for asserting privilege after production that is parallel to the similar proposals for Rules 16 and 26(f). The volume of ESI searched and produced in response to discovery can be enormous, and certain features of the forms in which such information is stored make it more difficult to review for privilege and work-product protection than paper. Thus, the inadvertent production of privileged or protected material is a substantial risk. See Report at 10-11. Under the proposed amendment, a producing party may notify the receiving party, within a reasonable time, of a claim that privileged material or work product was inadvertently produced. 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. If the receiving party disclosed the information before being notified, the receiving party also must take reasonable steps to retrieve the information. The receiving party has the option of submitting the information directly to the court to decide whether the information is privileged or protected as claimed and, if so, whether a waiver has occurred.
Again, the federal courts are recognizing that the amount of information is overwhelming, and thus saying that mistakes will be due to the volume and course corrections are allowed. So, one side or the other can call a time-out and say we shouldn't have given you those documents, please return and forget you ever saw them. If counsel follows the above changes to Rules 33 and 34 and provides electronic access ESI then a full chain of custody is maintained within our systems. For example, ACME Corp. has to produce records to plaintiff counsel, after deciding what they will provide they provide access to the data instead of sending the data. What this actually does, is give ACME Corp. a full audit trail of what plaintiff looked at and when, it becomes part of the audit trail for the chain of custody. It may actually be better than providing paper of CD's/DVD's of files. In the later case, ACME Corp has no idea if plaintiff looked at every document provided, by providing access defendants can know not only what they looked at, but more specifically what, if anything, they did not look at.
Two-Tier Discovery: Proposed Amendment to Rule 26(b)(2). The proposed amendment to Rule 26(b)(2) would require a court order for production of ESI that is "not reasonably accessible because of undue burden or cost." The proposal recognizes a "distinctive, recurring problem" in e-discovery and builds on existing rules to facilitate early production of relevant and accessible ESI. And, it specifically references the 1983 proportionality amendments first empowering judges to limit or forbid discovery where costs and burdens outweigh benefits, explicitly implemented in the adoption of "two-tier" discovery in the 2000 Copy right 8 2005 Washington Legal Foundation 4 ISBN 1056 3059 amendments. See Report at 11-13.
The amendment requires the responding party to identify, "by category or type," the sources of potentially responsive information that it has not searched or produced because of the costs and burdens of accessing the information. If the requesting party moves for production of such information, the responding party has the burden to show that the information is not reasonably accessible. Even if the responding party makes this showing, a court may order discovery for good cause, "considering the limitations of Rule 26(b)(2)(C)," and "may specify conditions for the discovery." Such conditions "may also include payment by the requesting party of part or all of the reasonable costs of obtaining information from sources that are not reasonably accessible." See Committee Note at 45, 48.
Here we see that at the Federal level they want to impose a standard of reasonableness for request for electronic information. This has already been hashed out in lower court rulings and this takes into account that not all ESI is equal in terms of finding and producing it. The court is saying that they will be the final arbiter when asking for data that is not easily accessible; this can potentially mean; stored on tape, across thousands of local hard disks, other and its still open to interpretation, probably the best litigator wins unless precedence exists or more prior rulings are established at the Federal level which establish precedence moving forward. The accessibility of programs like Google Desktop and other freeware tools and the "accessibility" that they provide can create a condition where data that was unreasonable to produce can suddenly become reasonable to produce and require production of more data during initial discovery with no cost to the requesting party. I believe that those companies that are mindful of data accessibility and this rule of reasonableness will err on the side of caution for deploying or permitting use of certain systems, operating systems and software as ubiquitous technologies within their organizations. Massive indexing and search a capability across the board with no controls is not necessarily a good thing with respect to litigation, the archival approach continues to bear well for the long-term.
Sanctions - Proposed Amendment to Rule 37(f). Under the addition to Rule 37: "absent exceptional circumstances, sanctions cannot be imposed for loss of electronically stored information resulting from the routine, good faith operation of an electronic information system."
The proposed rule recognizes that all electronic information systems are designed to recycle, overwrite, and change information in routine operation, even without "specific direction or awareness," not because of any relationship between the content of particular information and litigation, but because they are necessary functions of regular business operations. The proposed rule also recognizes that suspending or interrupting these features can be prohibitively expensive and burdensome, again in ways that have no counterpart in managing "static" hard-copy information. Even when litigation is anticipated, it can be very difficult to interrupt or suspend the routine operation of computer systems to isolate and preserve discrete parts of the information they overwrite, delete, or update on an ongoing basis, without creating problems for the larger system. Routine cessation or suspension of these features of computer operation is also undesirable; the result would be even greater accumulation of duplicative and irrelevant data that must be reviewed, making discovery more expensive and time-consuming.
However, sanctions are not avoided simply by showing that information was lost by routine operation of an information system. It also must be shown that the operation was in good faith. One factor in the good faith determination may involve intervention to modify or suspend certain features of a system's routine operation to prevent the loss of information, if that information is subject to a preservation obligation. When and if such an obligation arises depends on the substantive law and the circumstances of each case; the amendment does not create a new preservation obligation. The logic behind the proposal is that the cost and disruption of interrupting routine computer systems are not justified when there exist other means for preserving necessary and relevant information, such as: a "litigation hold" process, early discussion of the need for such extreme preservation measures, and entry of preservation orders tailored to the specific case. The proposed rule should provide necessary guidance in a troublesome area distinctive to electronic discovery.
This is the last and most interesting. It discusses sanctions. On the surface it can be interpreted that accidents such as erasure of data might be OK, as long as you can show that you were running your systems under the good faith premise. The second paragraph does add clarity that this is not as simple, and that efforts must be made to preserve and prevent loss of information. The "other means" of preserving information and not interrupting routine systems is what we provide with the archival platform. This continues to add more emphasis that major corporations should not build applications internally for managing content that is regulated and possibly destined for legal discovery, which today means nearly all data, from telephone call logs, conversations, etc.
Best,
Peter Mojica
Clarifying and Conforming Proposed Amendments to Rules 33 and 34. The proposed amendment to Rule 33 provides that a party may answer an interrogatory involving review of business records by providing access to ESI if the burden of finding the answer is substantially the same for either party.
The proposed amendment to Rule 34 explicitly recognizes ESI as a category subject to discovery that is distinct from "documents" and "things" to clarify that there are differences among them important to managing discovery. Rule 34 is also amended to authorize a requesting party to specify the form of
production and for the responding party to object. Absent an order, agreement, or a request for a specific form, a party may produce responsive ESI only in one form - the form in which the party ordinarily maintains it or in a reasonably usable form.
They are recognizing that the amount of information is in many cases simply to much. This effects several industries, especially those that focus n evidence preparation, that are specific to how law firms produce evidence, this can negate the transformation of electronic information into paper, where defendants overwhelm plaintiffs counsel with 1000's of boxes of paper. This makes our strategy for continuing to build and expand web based tools and profiles for data access the continued correct direction. Other vendors are stopping at the archival and basic search and query and interfacing into third party tools for evidence preparation or what they generally term e-discovery. Our view is that these industries of archival and e-discovery are converging and this recognition at the federal level will continue to support that view.
Addressing Inadvertent Privilege Waiver - Proposed Amendment to Rule 26(b)(5). The proposed amendment to Rule 26(b)(5) provides a procedure for asserting privilege after production that is parallel to the similar proposals for Rules 16 and 26(f). The volume of ESI searched and produced in response to discovery can be enormous, and certain features of the forms in which such information is stored make it more difficult to review for privilege and work-product protection than paper. Thus, the inadvertent production of privileged or protected material is a substantial risk. See Report at 10-11. Under the proposed amendment, a producing party may notify the receiving party, within a reasonable time, of a claim that privileged material or work product was inadvertently produced. 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. If the receiving party disclosed the information before being notified, the receiving party also must take reasonable steps to retrieve the information. The receiving party has the option of submitting the information directly to the court to decide whether the information is privileged or protected as claimed and, if so, whether a waiver has occurred.
Again, the federal courts are recognizing that the amount of information is overwhelming, and thus saying that mistakes will be due to the volume and course corrections are allowed. So, one side or the other can call a time-out and say we shouldn't have given you those documents, please return and forget you ever saw them. If counsel follows the above changes to Rules 33 and 34 and provides electronic access ESI then a full chain of custody is maintained within our systems. For example, ACME Corp. has to produce records to plaintiff counsel, after deciding what they will provide they provide access to the data instead of sending the data. What this actually does, is give ACME Corp. a full audit trail of what plaintiff looked at and when, it becomes part of the audit trail for the chain of custody. It may actually be better than providing paper of CD's/DVD's of files. In the later case, ACME Corp has no idea if plaintiff looked at every document provided, by providing access defendants can know not only what they looked at, but more specifically what, if anything, they did not look at.
Two-Tier Discovery: Proposed Amendment to Rule 26(b)(2). The proposed amendment to Rule 26(b)(2) would require a court order for production of ESI that is "not reasonably accessible because of undue burden or cost." The proposal recognizes a "distinctive, recurring problem" in e-discovery and builds on existing rules to facilitate early production of relevant and accessible ESI. And, it specifically references the 1983 proportionality amendments first empowering judges to limit or forbid discovery where costs and burdens outweigh benefits, explicitly implemented in the adoption of "two-tier" discovery in the 2000 Copy right 8 2005 Washington Legal Foundation 4 ISBN 1056 3059 amendments. See Report at 11-13.
The amendment requires the responding party to identify, "by category or type," the sources of potentially responsive information that it has not searched or produced because of the costs and burdens of accessing the information. If the requesting party moves for production of such information, the responding party has the burden to show that the information is not reasonably accessible. Even if the responding party makes this showing, a court may order discovery for good cause, "considering the limitations of Rule 26(b)(2)(C)," and "may specify conditions for the discovery." Such conditions "may also include payment by the requesting party of part or all of the reasonable costs of obtaining information from sources that are not reasonably accessible." See Committee Note at 45, 48.
Here we see that at the Federal level they want to impose a standard of reasonableness for request for electronic information. This has already been hashed out in lower court rulings and this takes into account that not all ESI is equal in terms of finding and producing it. The court is saying that they will be the final arbiter when asking for data that is not easily accessible; this can potentially mean; stored on tape, across thousands of local hard disks, other and its still open to interpretation, probably the best litigator wins unless precedence exists or more prior rulings are established at the Federal level which establish precedence moving forward. The accessibility of programs like Google Desktop and other freeware tools and the "accessibility" that they provide can create a condition where data that was unreasonable to produce can suddenly become reasonable to produce and require production of more data during initial discovery with no cost to the requesting party. I believe that those companies that are mindful of data accessibility and this rule of reasonableness will err on the side of caution for deploying or permitting use of certain systems, operating systems and software as ubiquitous technologies within their organizations. Massive indexing and search a capability across the board with no controls is not necessarily a good thing with respect to litigation, the archival approach continues to bear well for the long-term.
Sanctions - Proposed Amendment to Rule 37(f). Under the addition to Rule 37: "absent exceptional circumstances, sanctions cannot be imposed for loss of electronically stored information resulting from the routine, good faith operation of an electronic information system."
The proposed rule recognizes that all electronic information systems are designed to recycle, overwrite, and change information in routine operation, even without "specific direction or awareness," not because of any relationship between the content of particular information and litigation, but because they are necessary functions of regular business operations. The proposed rule also recognizes that suspending or interrupting these features can be prohibitively expensive and burdensome, again in ways that have no counterpart in managing "static" hard-copy information. Even when litigation is anticipated, it can be very difficult to interrupt or suspend the routine operation of computer systems to isolate and preserve discrete parts of the information they overwrite, delete, or update on an ongoing basis, without creating problems for the larger system. Routine cessation or suspension of these features of computer operation is also undesirable; the result would be even greater accumulation of duplicative and irrelevant data that must be reviewed, making discovery more expensive and time-consuming.
However, sanctions are not avoided simply by showing that information was lost by routine operation of an information system. It also must be shown that the operation was in good faith. One factor in the good faith determination may involve intervention to modify or suspend certain features of a system's routine operation to prevent the loss of information, if that information is subject to a preservation obligation. When and if such an obligation arises depends on the substantive law and the circumstances of each case; the amendment does not create a new preservation obligation. The logic behind the proposal is that the cost and disruption of interrupting routine computer systems are not justified when there exist other means for preserving necessary and relevant information, such as: a "litigation hold" process, early discussion of the need for such extreme preservation measures, and entry of preservation orders tailored to the specific case. The proposed rule should provide necessary guidance in a troublesome area distinctive to electronic discovery.
This is the last and most interesting. It discusses sanctions. On the surface it can be interpreted that accidents such as erasure of data might be OK, as long as you can show that you were running your systems under the good faith premise. The second paragraph does add clarity that this is not as simple, and that efforts must be made to preserve and prevent loss of information. The "other means" of preserving information and not interrupting routine systems is what we provide with the archival platform. This continues to add more emphasis that major corporations should not build applications internally for managing content that is regulated and possibly destined for legal discovery, which today means nearly all data, from telephone call logs, conversations, etc.
