Recent Amendments To The Federal Rules Of Civil Procedure Impose New Obligations To Preserve And Produce Electronic Data02.08.2007
On December 1, 2006, new amendments to the Federal Rules of Civil Procedure on electronic discovery became effective. The rules impose rigorous obligations of locating, preserving and producing electronic data on both client and lawyer and require early conferences between the parties on electronic discovery. Failure to comply with the rules may result in monetary or other sanctions. Below is a discussion of a few of the new rules.
Rule 26(f): Early Meet-and-Confer
Rule 26(f) requires the parties "to develop a discovery plan that addresses . . . any issues regarding discovery of electronically stored information and the forms in which it should be produced." To comply with this requirement, parties and their lawyers should familiarize themselves with the parties' electronic systems and document retention policies before the Rule 26(f) Conference. Lawyers and clients may consider hiring a technical expert to assist with the obligations imposed by this rule and to ensure that existing information is backed up or that the automatic delete mechanisms are changed.
Rule 26(b)(2): Discovery - Accessible v. Inaccessible Data
Rule 26(b)(2) provides a two-tier approach for discovery of electronic data. Tier 1 is the accessible material and Tier 2 is the identification of inaccessible material. A party may not need to provide discovery of electronic data from sources in Tier 2 if it causes undue burden or cost.
In a decision predating these amendments, Zubulake v. UBS Warburg, 217 F.R.D. 309 (S.D.N.Y. 2003) ("Zubulake I"), the court distinguished between accessible (active, online data, near-line data and offline storage) and inaccessible (back-up tapes, erased or damaged data). The court set a general rule that the responding party bears the costs of producing accessible data and that the cost to obtain inaccessible data may be shifted to the requesting party.
The obligation to preserve electronic data applies to both tiers of information. Even though inaccessible electronic data may not have to be produced, it must be preserved should a court decide that inaccessible electronic data must be produced.
Rule 26(f): Documents Containing Privileged Information
The sheer volume of electronic data will be an issue in many lawsuits, which will present major challenges for lawyers and clients to ensure that privileged documents are not produced. Rule 26(f) provides some guidance.
Rule 26(f) requires the parties to address at the Rule 26(f) Conference any issues related to assertions of privilege or work-product protection, including whether the parties should request the court to include the agreement in an order. The Comments to Rule 26(f) explain the types of agreements counsel can enter into to avoid an inadvertent waiver of privilege and suggests the court endorse such agreements.
Under an inadvertent disclosure agreement, privileged data that is inadvertently produced will not be result in a waiver, provided that the producing party identifies the documents mistakenly produced. Under these circumstances, the receiving party should return the documents and the production does not result in a waiver.
Another type of agreement suggested in the Comments is the "quick peek" agreement. Under a "quick peek" agreement, the parties agree that the responding party will provide certain requested materials without waiving any privilege. According to the Comments, such an agreement "can facilitate prompt and economical discovery by reducing delay before the discovering party obtains access to the documents and by reducing the cost and burden of review by the producing party." The agreement could protect from inadvertent disclosure of information that is not readily apparent, such as metadata embedded in a document.
One must keep in mind, however, that waiver of privilege is a matter of substantive law that varies by jurisdiction, and an inadvertent disclosure agreement may not protect against waiver as to third parties. If the court endorses the agreement, the more significant risks should be minimized.
Rule 34(b): Form of Data
A discovery request is read to encompass electronic data even if it is not specifically requested. The requesting party may specify the form or forms in which electronic data is to be produced. The responding party may object to the requested form of production. If the request does not specify the form of production, the responding party must produce the electronic data as it is ordinarily maintained or in reasonably useable form(s), and the responding party must state the form it intends to use.
Rule 37: "Safe Harbor"
Rule 37(f) includes a "safe harbor" provision, which precludes a court (absent exceptional circumstances) from imposing sanctions for "failing to provide electronically stored information lost as a result of the routine, good faith operation of an electronic information system."
To date, there appear to be no published decisions in which a court sanctioned a party solely for following its document retention and recycling policy. Sanctions have been awarded when the defendant destroyed electronic data in violation of a court order, in a manner that was willful or in bad faith or caused prejudice to the opposing party.
The amended federal rules give cause for companies to evaluate their computer systems before litigation and establish a regular policy concerning electronic data storage and deletions. Once litigation commences, companies and their lawyers must be vigilant in securing the data to prevent spoliation issues. Compliance with the rules is mandatory. More specific standards will develop as the rules are applied to situations that arise.