United States: Preparing For Electronic Discovery In Litigation

The largest cost in litigation is discovery, an ever-growing percentage of which is electronic discovery ("e-discovery"). A 2012 study by the RAND Institute for Civil Justice found that the median cost for producing electronically stored information ("ESI") in the cases studied was $1.8 million.1 And these expenses are only increasing. In response, the Federal Rules of Civil Procedure (FRCP) have been amended several times in recent years, with the latest amendments taking effect on December 1, 2015. These changes have already begun to significantly impact the scope and costs of discovery, including e-discovery— particularly due to the renewed emphasis on the need for "proportionality."

Given the prevalence of electronic data and the myriad ways in which it is stored, combined with the shifting landscape of federal discovery rules, it is critical that attorneys and their clients educate themselves on the applicable rules and their practical implications for ESI and e-discovery in litigation.

Electronic Discovery Rules

The 2015 Committee Notes to the amended FRCP acknowledge the explosion of information and ESI, as well as advancements in technologies that are occurring. For instance, the notes to amended Rule 26(b)(1) state that "[c]omputer based methods of searching such information continue to develop, particularly for cases involving large volumes of electronically stored information," and "[c]ourts and parties should be willing to consider the opportunities for reducing the burden or expense of discovery as reliable means of searching ESI become available."

The 2015 amendments to the FRCP were designed to accomplish three primary goals: (1) clarify the consequences for failing to preserve ESI; (2) stress the importance of the proportionality principle in resolving discovery disputes; and (3) expedite litigation. As they relate to e-discovery, the amended rules can be grouped according to changes that affect cooperation, the pace of discovery, proportionality, cost allocation, responses and objections to document requests, and failure to preserve.2

COOPERATION

Amended Rule 1 provides that the civil rules are to be "construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding." The 2015 Committee Notes on this rule, as amended, emphasize that the "parties share the responsibility to employ the rules in the same way," and that "[e]ffective advocacy is consistent with—and indeed depends upon—cooperative and proportional use of procedure." The 2015 Committee Notes further advise that Rule 1 neither creates a new or independent source of sanctions nor abridges the scope of any other of the Federal Rules.

DRIVING THE PACE OF DISCOVERY

Unnecessary delays, lack of planning, or non-cooperation at the outset of a case can result in inefficiency and expense. The amendments to Rules 4, 16, 26, and 34 address these problems by shortening timelines and requiring parties to identify and discuss discovery issues early in the course of litigation.

Amended Rule 4(m) reduces the time permitted to serve a defendant with a summons and complaint from 120 days to 90 days. If service has not occurred within the prescribed period, then the court must either dismiss the action without prejudice or order that service be completed by a certain date. The 2015 Committee Notes advise that this change, together with the shortened times for issuing a scheduling order set by amended Rule 16(b)(2), will reduce delay at the beginning of litigation.

To further reduce delay at the outset of a case, amended Rule 16(b)(2) requires courts to issue a scheduling order 90 days after any defendant is served, or 60 days after any defendant makes an appearance, whichever is earlier. Issuance of the scheduling order may be delayed, however, if the court finds good cause.

Amended Rule 16(b)(1), aimed at encouraging productive discussions during the scheduling phase, removes the former rule's reference to conferences being conducted by "telephone, mail, or other means." The 2015 Committee Notes explain the deletion of this language, particularly discussions by mail, by stating that "[a] scheduling conference is more effective if the court and the parties engage in direct simultaneous communication."

Amended Rule 26(f)(3) adds "preservation" and "privilege" as topics to discuss at the Rule 16 conference. The amended rule requires parties to discuss whether they will seek an order under Federal Rule of Evidence 502—a valuable but underutilized rule that allows courts to prevent waiver of privilege. A coordinating amendment to Rule 16(b) explicitly allows scheduling orders to include terms related to preservation and Rule 502 orders.

To further facilitate discussions during the Rule 26(f) conference, amended Rule 26(d)(2) permits the parties to serve document requests under Rule 34 before the conference, but no earlier than 21 days after service of the summons and complaint. This change to the former rule, which prohibited any discovery requests before the Rule 26(f) conference, allows the parties to address issues presented by the document requests at the Rule 26(f) conference. The early Rule 34 requests will be considered served at the first Rule 26(f) conference.

Finally, amended Rule 16(b) allows a scheduling order to include terms requiring the parties to confer with the court before bringing any discovery-related motions.

PROPORTIONALITY

Discovery under former Rule 26(b)(1) was extraordinarily broad: parties could obtain information "regarding any nonprivileged matter that is relevant to any party's claim or defense," including any information that "appears reasonably calculated to lead to the discovery of admissible evidence." With the increasing volume of data created and maintained by companies, significant time and money can be spent responding to discovery requests. When the parties have similar discovery exposure, they each have an incentive to narrow discovery without court intervention. Such self-regulation does not exist, however, when the parties' discovery obligations are asymmetrical. Former Rule 26(b)(2)(C) required the court to limit discovery when it found that the "burden or expense of the proposed discovery outweighs its likely benefit," but discovery limitations were rarely raised by the court on its own and, when objections to scope were raised by a producing party, courts were reluctant to impose restrictions.

Under the amended rule, the Committee made a few significant changes to combat the problems associated with asymmetric discovery. Amended Rule 26(b)(1) limits discovery to relevant, non-privileged information that is "proportional to the needs of the case." The rule lists relevant proportionality considerations as "the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit."3 As amended, Rule 26(b)(1) no longer includes language to the effect that discovery may include any information "reasonably calculated to lead to the discovery of admissible evidence."4

COST ALLOCATION

Former Rule 26(c)(1) authorized protective orders to preclude unduly burdensome or expensive discovery. Although not stated in the former rule, courts could issue protective orders that allocated some of the cost to the requesting party. Because the former rule was silent on cost allocation, parties sometimes disputed the court's authority to shift costs. Amended Rule 26(c) (1) states that the protective order may include "specifying terms, including time and place or the allocation of expenses, for the disclosure of discovery." As the 2015 Committee Notes explain, "[e]xplicit recognition [of cost shifting] will forestall the temptation some parties may feel to contest this authority." The Committee was careful to note, however, that this change does not alter the standard practice of having the responding party bear the cost of responding to discovery requests.

RESPONSES AND OBJECTIONS TO DOCUMENT REQUESTS

Parties responding to Rule 34 production requests typically list a litany of objections and often fail to specify whether any of the stated objections will be relied on as grounds to withhold any of the documents sought be the requesting party. Amended Rule 34 requires responding parties to state the specific grounds on which the party is objecting and whether any documents are being withheld on the basis of a given objection. The Committee intended for this change to facilitate meaningful meet-and-confer discussions between the parties.

FAILURE TO PRESERVE

The ability of courts to sanction a party for the spoliation of evidence is limited under the FRCP. Former Rule 37(e) permitted such sanctions, but only when a party failed to provide electronically stored information in violation of a court order. Because former Rule 37(e) applied to such a narrow set of circumstances, courts turned to their inherent authority or state laws to sanction parties for their failure to preserve evidence resulting in disparate standards for what constitutes a party's duty to preserve and wide-ranging sanctions for violations of that duty. Without clear guidance on what sanctions might be imposed for the spoliation of evidence, companies often over-preserved data to avoid the risk of severe penalties.

To provide clarity and consistency on sanctions for failure to preserve, amended Rule 37(e) was completely rewritten. Under amended Rule 37(e), the court may impose sanctions on an offending party for failing to preserve ESI where the ESI (1) "should have been preserved in the anticipation or conduct of litigation"; (2) is lost "because a party failed to take reasonable steps to preserve it"; and (3) "cannot be restored or replaced through additional discovery." If these three conditions are met, the court will determine whether or not another party is prejudiced by the offending party's loss of the ESI. Under amended Rule 37(e)(1), the court may impose "curative measures" on the offending party based on a finding that another party was prejudiced from losing the information, but such measures may be "no greater than necessary to cure the prejudice." Under amended Rule 37(e)(2), if the court determines that the offending party "acted with the intent to deprive another party of the information's use in the litigation"— regardless of prejudice—then the court may (a) presume that the lost information was unfavorable to the offending party, (b) instruct the jury that it may or must presume the information was unfavorable to the offending party, or (c) dismiss the action or enter a default judgment.

Thus, under the amended rule, sanctions are not permitted if evidence is lost despite a party's reasonable efforts to preserve it. Further, even if a party failed to try to preserve information, sanctions are not automatic. Under amended Rule 37(e)(1), a court may order "curative measures," but only upon a finding that another party was prejudiced from losing the information. More severe sanctions, such as an adverse inference or the entry of default judgment, are permitted under amended Rule 37(e)(2), but only when the court finds that a party "acted with the intent to deprive another party of the information's use in the litigation."

* * *

The amendments to FRCP encourage early and enhanced case management and cooperation, which should provide an opportunity for counsel who are familiar with a client's electronic systems and well-versed in the real world issues of discovery to obtain substantial savings in time and money. The amendments relating to proportionality and sanctions may result in a reduction in the costs associated with overly broad discovery and over-preservation of data. It is important to note, however, that the amended rules do not altogether eliminate the reality of asymmetric discovery. The notes acknowledge that one party may have more information than another and will therefore often bear a heavier burden in responding to discovery. Nevertheless, the amendments' focus on cooperation and proportionality in e-discovery provides a springboard by which to engage with the other side early on in discovery. It also encourages active judicial management of discovery to resolve disputes.

Get the full report

Footnotes

1. Rand Institute for Civil Justice, where the money goes: understanding litigant expenditures for producing electronic discovery 17 (2012).

2. Wai Feng Trading Co. v. Quick Fitting, Inc., 2016 U.S. Dist. LEXIS 77672 (D.R.I. June 14, 2016) (invoking the policies of the amended FRCP and discussing a number of rules including FRCP 1, 26(b), 26(f), and 34).

Originally published 22 September 2016

Visit us at mayerbrown.com

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2016. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.