United States: The Age of e-Discovery

The "Age of Discovery" refers to those past centuries when Columbus, Magellan, and other explorers navigated to new worlds. Recently, the U.S. Supreme Court (Supreme Court) approved a package of proposed amendments to the Federal Rules of Civil Procedure regarding discovery of "electronically stored information, " including revisions and additions to Rules 16, 26, 33, 34, 37, and 45 as well as Form 35. Under the proposed amendments, which will take effect in December 2006, electronically stored information is explicitly recognized as a category distinct from "documents" and "things" for purposes of managing discovery. Thus, the Supreme Court has ushered in an "Age of e-Discovery" that will require careful "navigation" of a different sort. Much disaster can be averted by skillfully plotting your course in advance – starting even before the complaint is filed.

The proposed rule changes are designed to raise awareness of the need to address the handling of potentially cumbersome and costly e-discovery issues early in litigation. The amendments to Rules 16 and 26 suggest that the parties confer about e-discovery and that it be specifically addressed in the court’s scheduling order. Therefore, a basic familiarity with your company’s or client’s data storage schemes can speed up development of a workable discovery plan in the event of a lawsuit. How many servers are used? What data, in general, resides on each server? How accessible is that data? Does a search function exist, or could one be easily designed, to retrieve relevant data? Accessibility of data is a key concern because, under amended Rule 26(b)(2)(B), a party need not provide electronic data from sources that it identifies as "not reasonably accessible because of undue burden or cost." However, note that a lack of accessibility does not relieve a party of its obligation to preserve the electronic information.

Do not forget electronic information that might be stored in a location other than a main server. For example, individual employees may maintain some relevant data — such as e-mails or electronic notebooks — on their computer hard drives or on locally stored CD-ROMs.

Also, be aware of backups and "legacy data." Backups are usually made on a regular basis, to guard against data loss due to disasters such as fire, flood, or system malfunction. However, backups may not be organized to allow easy retrieval of individual documents. Legacy data is that which is stored using obsolete media formats, or dependent upon an obsolete computer language. Backups and legacy data may fall into the "not reasonably accessible" category, but must still be preserved and may require a showing of lack of accessibility.

The e-discovery rules apply not only to data stored before a lawsuit, but also to data generated and managed on an ongoing basis while the suit is pending. Under amended Rule 37(f), a party ordinarily will not be sanctioned for failure to provide electronic information that is "lost as a result of the routine, good-faith operation of an electronic information system." This rule is designed to recognize that routine computer operations require some data to be purged, overwritten, or otherwise altered on a regular basis. For example, deleted e-mails may need to be purged regularly to avoid clogging and slowing the e-mail system. Even the simplest actions such as opening an electronic document or turning off a computer can potentially alter information.

In order to avoid sanctions and show good faith, first know when the preservation obligation arises. This obligation, or "litigation hold," may be governed by the law of the specific jurisdiction or by a court order. Then, implement reasonable procedures to preserve potentially relevant data on an ongoing basis. For example, can features of the computer system be modified or temporarily disabled to avoid altering or deleting relevant information? Finally, make sure that all employees who might have access to relevant data, including those who might maintain such data on their personal computers or other localized storage, are aware of their preservation obligations, and that the retention policy is enforced.

Amended Rule 34(b) provides that a request for production may specify the form in which electronically stored information is to be produced. Furthermore, unless the parties agree or a court otherwise orders, a party need not produce electronically stored information in more than one form.

The form is important because an electronic document in its native form may contain "metadata," which is stripped away when the document is printed in hardcopy form, converted to an easy-to-manage image format such as PDF or TIFF, or perhaps even copied to a dedicated server for quick access. Metadata is coding that is generally not visible to the user, but contains information tracking changes and showing who has accessed the document. Loss of metadata thus might be viewed as spoliation by a party seeking information contained in the metadata. By the same token, a party may be willing to produce the visible contents of an electronic document, but object to producing its metadata on grounds of privilege or irrelevance.

The parties should discuss and agree upon the format in which electronic information will be provided, with the consent of the judge. Regardless of the form in which electronic information is produced, the producing party should preserve the information in its native form, in case an issue arises later in discovery.

With a little advance preparation, you will be ready to conquer the brave new world of e-discovery, and make the best decisions to reduce the burdens and costs for your company or client.

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.