United States: ESI Discovery Best Practices, Part 7 – New FRCP One Year In – ESI Game Changer Or Business As Usual?

Last Updated: February 21 2017
Article by A. David Fawal

I was recently reminded that it has been over a year since my last ESI-related blog. My excuse is that I wanted to allow the new Federal Rules of Civil Procedure addressing ESI to percolate before writing on the repercussions. In my defense, I did close my last ESI blog with "In my next blog, I will address the rule changes and potential impact on ESI discovery practices." So, were the new rules the game-changer many thought they would be as to ESI? Or has it been business as usual? My answer: "both."

First, a brief refresher on the key ESI-related changes. The change that caused much of the debate prior to and after implementation of the new rules was the specific inclusion of proportionality in Rule 26(b) (with corresponding changes to Rules 30, 31 and 33). Rule 26(b) now lists six factors to be considered ("importance of issues at stake"; "amount in controversy"; "relative access to information"; "parties' resources"; "importance of discovery"; and whether the burden or expense outweighs its likely benefit). These factors were formerly found in Rule 26(b)(2)(C)(iii) but were moved with the latest rule change. In addition, new rule 26(c)(1) allows for cost-shifting ("allocation of expenses") as a curative to non-proportional discovery.

Notably, the new rule does not require a showing in advance by the requesting party that proposed discovery is proportional. However, it does impose an early obligation on parties to consider the factors in discovery requests, responses and objections.

Another important change was to Rule 37, which now includes a more robust process for imposition of sanctions for failure to provide ESI. Before sanctions can be assessed, there must be a showing that the information "should have been preserved", the "party failed to take reasonable steps to preserve" the information, and "the information cannot be restored or replaced." Even if all three of these are present, the rule goes further and requires a finding of prejudice to the requesting party before considering a range of options, to include sanctions.

Some have labeled these changes as "significant", while others note that proportionality was always an implied component to the limits of discovery under Rule 26, even though the rule change for the first time includes it as an express term. Even if proportionality has been an implied factor, the Committee Notes for the new amendments suggest that the committee intended there to be an increased emphasis on proportionality going forward. Actual results have been mixed. In some cases, judges, lawyers and litigants appear to be conducting much closer scrutiny of discovery requests in light of the new rules, and are having substantive early discussions or conferences to address ESI preservation and proportionality concerns. This is certainly in line with the Committee's apparent goal.

On the other hand, there are cases where nothing has changed, no early discussions of ESI, proportionality or preservation occurs, boilerplate objections are asserted, and only when a dispute arises after the fact are the parties, lawyers and courts forced to address ESI-related issues, often when it is too late to adequately remedy the problem. Of course, changing litigation and discovery practices is like trying to stop an aircraft carrier at full steam – it will eventually do so, but will cover a lot of ocean before it does. In fact, the Sedona Conference recently closed its Public Comment period for its 2016 Commentary on Proportionality in Electronic Discovery, with its six principles of proportionality updated to address the rule changes. In the draft, the Sedona Conference itself concedes that "many questions remain concerning how practitioners and judges will adjust." The draft is now undergoing review and revision with consideration of the public comments, and will hopefully be republished soon as a "final" version to provide further guidance and an "authoritative statement of the law, both as it is and as it should be."

In my opinion, the goal of new amendments is a worthy one – put the focus on these ESI-related issues early, before excessive time and money is spent by either or both parties. To accomplish this, lawyers and courts will need to be proactive to addressing ESI issues, and the new rules provide the road map. So, at least for now, I stand by my assertion above that the new rules are both a game changer and business as usual. How the civil litigation system will ultimately adjust is still a work in progress.

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.

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