Over the past several years, the Discovery Subcommittee of the Advisory Committee on Civil Rules of the U.S. Judicial Conference has been studying the impact of "electronic discovery" on litigation, as well as the adequacy of the current rules to handle disputes arising in the era of digital communications and documents. As a result of a number of conferences, the subcommittee recommended that the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States publish proposed rules for comments. The recommendation was adopted, and draft rules changes were published for public comment on August 9, 2004. The Report of the Civil Rules Advisory Committee (dated August 3, 2004) outlining the proposed rules and notes is available on the U.S. Courts web site at http://www.uscourts.gov/rules/comment2005/CVAug04.pdf.

Why Change the Rules?

The August 3, 2004 Memorandum from the Chair of the Advisory Committee on Civil Rules notes that the Committee spent five years examining whether the rules adequately accommodate discovery of information generated by, stored in, retrieved from, and exchanged through computers. Significantly, the memorandum noted that in the last few years, "electronic discovery has moved from an unusual activity encountered in large cases to a frequently-seen activity, used in an increasing proportion of the litigation filed in the federal courts."

The Committee identified several distinctive features of electronic documents that may warrant separate treatment in the rules:

  • The exponentially greater volume that characterizes electronic data that can make discovery more burdensome, costly, and time-consuming.
  • Electronically stored information may exist in dynamic databases that do not correspond to hard-copy materials.
  • Electronic information, unlike words on paper, is dynamic. The ordinary operation of computers—including the simple act of turning a computer on or off or accessing a particular file—can alter or destroy electronically stored information, and computer systems automatically discard or overwrite data as a part of their routine operation.
  • Computers often automatically create information without the operator’s direction or awareness, a feature with no direct counterpart in hard-copy materials.
  • Electronically stored information may be "deleted" yet continue to exist, but in forms difficult to locate, retrieve, or search.
  • Electronic data, unlike paper, may be incomprehensible when separated from the system that created it.

These differences can lead to increased costs and uncertainty as to how to treat electronic documents under the current rules and could result in inconsistent legal doctrine. In sum, the August 3 memorandum noted that "[i]f the rules do not change, they risk becoming increasingly removed from practice."

The Advisory Committee noted the increasing number of local rules addressing electronic discovery. Of course, as recognized by the Advisory Committee, local rules can be both a blessing and a burden — very beneficial for experiments to see how different standards work in practice but formulating disparate practices between jurisdictions that, over time, may make a uniform national standard harder to implement.

What are the Proposed Changes?

The Standing Committee on Rules of Procedure and Practice approved for publication proposed amendments to Civil Rules 16, 26, 33, 34, 37, and 45 dealing with the discovery of electronically stored information. There are seven distinct aspects to these proposed rule changes:

  1. "updating" the language in Rule 34 to reflect changes in technology that have made some of the language outdated;

  2. providing for explicit discussion of electronic discovery issues at the outset of litigation (Rules 16 and 26);

  3. creating a procedure whereby issues regarding the form of production are addressed early in the discovery process;

  4. providing a mechanism whereby interrogatory responses can refer to electronically stored information as well as business records (Rule 33);

  5. providing a general procedural mechanism whereby inadvertently produced privileged materials (including electronic data) are returned and establishing a process for any challenges to privilege claims;

  6. creating a two-tiered approach to electronic documents whereby discovery of documents or data that are not accessed in the ordinary course of business (or some other defined set of documents and data) are treated as subject to discovery only upon a showing of good cause; and

  7. establishing a "safe harbor" whereby the routine or automated deletion or destruction of certain data is not subject to sanction under Rule 37, provided certain conditions are met.

The first four propositions are not dramatic, nor are they expected to be particularly controversial. However, they are intended to be beneficial for the judiciary, bar, and parties by setting common expectations and understanding regarding the role of electronic discovery in civil litigation.

The fifth proposed modification—protecting privileges in the case of inadvertent productions—recognizes that the sheer volume and the unique character of electronic information significantly increases the likelihood of inadvertent productions and sets forth a procedure that allows for the information to be quarantined or destroyed until a substantive decision regarding privilege, if necessary, can be made. This quarantine process does not address the impact on privileges in light of the Rules Enabling Act, which precludes use of the rules process to affect substantive laws governing privilege. Nonetheless, the proposal essentially codifies emerging best practices, which would benefit all parties.

The sixth proposed change is to Rule 26(b)(2) and builds on a two-tier structure of discovery scope suggested in Rule 26(b)(1), applying the structure to the burden of discovery of electronically stored information. In essence, a party must provide discovery of relevant reasonably accessible electronically stored information without a court order, but a party need not review or provide discovery of electronically stored information that it identifies as not reasonably accessible. If the requesting party moves for discovery of purportedly inaccessible information—the second tier—the responding party must show that the information sought is truly not reasonably accessible. The court would then balance the burden or expense of the proposed discovery against its likely benefit, taking into account the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery, in resolving the issues as set forth in Rule 26(b)(2)(i), (ii), and (iii).

The seventh area is a proposed amendment to Rule 37 to provide a "safe harbor" to a party that fails to provide electronically stored information, under specified circumstances. In essence, the proposed amendment would protect a party from sanctions under the Civil Rules for failing to provide electronically stored information lost because of the routine operation of the party’s computer system. The safe harbor would not apply if the party violated an order issued in the action requiring it to preserve electronically stored information, or if the party failed to take reasonable steps to preserve the information after it knew or should have known the information was discoverable in the action. As currently framed, the proposed amendment does not define the scope of a duty to preserve and does not address the loss of electronically stored information that may occur before an action is commenced.

The safe harbor is the most controversial and least settled proposal. Indeed, the Advisory Committee memorandum reflects the extensive debate on the issue and includes a reference to a possible alternative Rule 37(f) that frames an amendment in terms of intentional or reckless failure to preserve electronically stored information lost as a result of the ordinary operation of a party’s computer system.

The Advisory Committee has invited comments on all aspects of the proposed amendments and has indicated certain areas in which comment will be particularly helpful, including:

  • whether the proposed Rule 26(b)(2) and Note give sufficient guidance to litigants, lawyers, and judges on determining the proper limits of electronic discovery and on appropriate terms and conditions, including allocating the costs of such discovery.
  • whether proposed Rule 37(f) and Note adequately and accurately describe the kind of automatic computer operations, such as recycling and overwriting, that should be covered by a "safe harbor."

There are also three public hearings scheduled to take testimony on the proposed amendments: January 12, 2005 in San Francisco; January 28, 2005 in Dallas; and February 11, 2005 in Washington, D.C.

Further information regarding the rules amendment process is available at http://www.uscourts.gov/rules/submit.html, or you can contact Jones Day attorneys for further information.

Other E-Discovery Guidance

August 2004 Amendments to ABA Civil Discovery Standards. At the August 2004 Annual Meeting of the American Bar Association, the Association considered and adopted recommended amendments to its Civil Discovery Standards addressing electronic discovery. The changes and summary documents explaining the modifications are published by the Litigation Section of the ABA at http://www.abanet.org/litigation/documents/home.html. The documents explain that while the 2004 amendments "are not intended to restate the law or replace existing court rules," they are designed to supplement existing rules and address practical aspects of electronic discovery not addressed by the rules.

The Sedona ConferenceSM. The Sedona ConferenceSM Working Group Addressing Electronic Document Retention and Production currently involves more than 120 participants, members, and observers who have contributed their talents and perspectives under the auspices of The Sedona ConferenceSM to address leading-edge issues involving electronic document retention and production.

The Working Group’s first publication, The Sedona Principles for Document Production, offers 14 principles and commentary to state a view of the law that should apply to the preservation and production of electronic documents in litigation. First published in the spring of 2003, the document was revised and expanded to reflect new developments in the law in January 2004. The document has been discussed at numerous legal seminars throughout the country and has been cited in articles and legal memoranda as well as in the recent decisions in Zubulake v. UBS Warburg (S.D.N.Y.).

In September 2004, the Working Group released its second major publication: The public comment draft of The Sedona Guidelines: Best Practice Guidelines & Commentary for Managing Information & Records in the Electronic Age. This document addresses the complexities of managing information and records in the digital age, looking at the issues from the legal, records management, and information technology perspectives. The fifth of these proposed guidelines addresses the "legal hold" process for litigation. Comments are being taken through March 1, 2005, and a revised document will be published by the summer of 2005. The document is a companion to The Sedona Principles.

Jones Day’s E-Discovery Committee

Jones Day lawyers have been dealing with e-discovery issues for years. In recent years, as businesses have increasingly come to rely on electronic documents (especially e-mail) to conduct their affairs, discovery of such e-documents has become an important issue in litigation. Indeed, several high-profile, headline-grabbing cases have shown that e-documents, and the e-discovery process, can have a significant impact on the course and outcome of litigation.

Jones Day lawyers across the Firm have been heavily involved in these issues. Their experiences have established a valuable base on which to draw when e-discovery issues arise in—or in anticipation of—the next case. The E-Discovery Committee was formed in 2000 to collect the experiences of lawyers throughout the Firm and make the work product developed by those lawyers accessible.

Our lawyers have been significantly involved in the discussion and debate regarding potential rules amendments in this area. Six members of the firm’s E-Discovery Committee have been actively involved in The Sedona ConferenceSM effort. Jonathan Redgrave (Washington) is the chair of the Working Group, Editor-in-Chief of The Sedona Principles, and also one of the Editors-in-Chief of The Sedona Guidelines. Other Jones Day lawyers participating in The Sedona ConferenceSM Working Group include Sharon Alexander (Dallas), Steven Bennett (New York), Laura Ellsworth (Pittsburgh) (one of the Managing Editors for the 2004 Annotated Sedona Principles), Jeffrey Joyce (Dallas) (a contributing editor for the 2004 Annotated Sedona Principles), and Ted Hiser (Cleveland) (a Senior Editor for The Sedona Principles).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.