Electronic discovery: 2006 amendments to the Federal Rules of Civil Procedure.

Rule 34 allows a party to request any designated documents or electronically stored information--including writings, drawings, graphs, charts, photographs, sound recordings, images, and other data or data compilations--stored in any medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form. (89)

Although the Advisory Committee states that Rule 34 covers current storage technologies as well as those of the future, the plain meaning of this rule does not support the district court's holding. A reasonable reading of Rule 34 leads one to the conclusion that the discoverable electronic data contemplated by the Advisory Committee is data that is stored for a prolonged period of time; something more than just temporary in time. The illustrative examples of ESI included in Rule 34 all have the common factor that each is stored semi-permanently. Each can be stored on a computer's hard drive or other digital medium until a user manually deletes the information, or is damaged or deleted by a computer process. In contrast, RAM is inherently transient. RAM is not used to store or record data, rather it is a working area where data is manipulated during a computing process. Data processed in RAM is constantly overwritten, usually in less than a second. (90)

Rule 34 certainly formalizes and expands the types of ESI that is discoverable. However, in its attempt to be flexible enough to include future technologies, Rule 34 defines ESI too broadly. As shown by Columbia Pictures, the broad definition of ESI allows other forms of electronic data to be discovered, even when it was not intended to be.

B. Early Attention to e-Discovery Issues

Perhaps the Amendment's best effort to address e-discovery issues is requiring parties to resolve potential problems early in the discovery phase. Changes to Rule 26 include the addition of ESI to the topics that must be addressed by the parties during the meet-and-confer discovery planning phase. (91) Rule 26 requires parties to meet within thirty days after a complaint is filed to discuss issues relating to the preservation of relevant ESI, the format in which ESI should be produced and potential claims of privilege with regards to ESI. (92) Once parties have agreed on a discovery plan, or have attempted to without success, a report of the meet-and-confer conference should be delivered to the court for approval or modification. In the event that parties do not reach an agreement, the court is asked to take a more active role and impose a discovery plan it deems proper. (93)

In order to address one of the most litigated e-discovery issues, Rule 34 recommends that the requesting party to choose a format in which ESI should be produced. (94) If the requesting party does not request a specific format, the rule requires production in one of two formats. The "responding party must produce [ESI] in a [format] in which it is ordinarily maintained or in a [format] that [is] reasonably useable." (95)

C. What is Accessible?

Rule 26(b)(2) attempts to make a distinction between what is accessible and inaccessible ESI by establishing a protocol for how ESI should be produced. A responding party is not required to produce ESI that it designates inaccessible due to undue burden or cost (96), but a requesting party may move the court to compel production of the ESI deemed inaccessible (97). At that point, the responding party must affirmatively show that production of the requested ESI will be unduly burdensome due to volume, time or cost. (98) Even after the responding party shows undue burden, the court may still order discovery upon a showing of good cause by the requesting party. (99) However, good cause compulsion is limited to where (a) discovery may be "unreasonably cumulative or duplicative, or obtainable" from a less burdensome source (100), (b) the requesting party has had enough time to get the information via discovery (101), or (c) the burden of discovery outweighs "the amount in controversy, parties' resources, the importance of issue at stake and ... the importance of the proposed discovery in resolving the issues (102)."

D. "Claw-Back" of Privileged Information

To address the issue of inadvertent disclosure of privileged data, changes to Rule 26 set up a mechanism for "clawing-back" such data. Rule 26(b)(5) gives the producing party an opportunity to notify the requesting party that privileged data has been inadvertently produced and to request that the data not be used. (103) After notification, "a party must promptly return, sequester, or destroy the specified information and any copies it has...." (104) The requesting party then has the option to move the court for a hearing on privilege or attorney work product. (105)

Although the amendment to Rule 37 is a good step forward, it still does not address the all-important question of whether inadvertently producing privileged data constitutes a waiver of that privilege or protection. However, proposed amendments to the Federal Rules of Evidence (FRE) may provide guidance on the issue. Finding that the current law on waiver of privilege and work product was in part responsible for the rising costs of discovery, the Supreme Court's Judicial Committee Conference proposed FRE 502. (106) Proposed FRE 502 does not deal comprehensibly with attorney-client privilege or attorney work product. Rather, it deals primarily with issues involved in the disclosure of protected information in federal court or to federal agencies. (107) As proposed, FRE 502 would limit the scope of waiver to only the information disclosed. (108) It would also protect against inadvertent disclosure when made at the federal level, if the holder took reasonable steps to prevent such disclosure and employed reasonable prompt measure to retrieve the information. (109)

E. "Safe Harbor" From Sanctions

Perhaps the single Amendment most important to lawyers and their clients is found in Rule 37, which now gives parties a "safe harbor" from spoliation sanctions when a party fails to preserve potentially relevant data. (110) The rule states: "[a]bsent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide [ESI] lost as a result of the routine, good faith operation of an electronic information system." (111)

The Advisory Committee notes to Rule 37 recognize that the suspension or interruption of information systems can be unduly burdensome or expensive. (112) However, a party is still required to preserve data in anticipation of litigation. (113) A party would not be able to exploit their information system's retention policy to avoid sanctions. To benefit from the safe harbor rule, a party will have to show that the spoliation of ESI was in good faith and not the result of intentional or negligent destruction. (114)

IV. HOW TO PREPARE FOR E-DISCOVERY

Despite the Amendments, there still remains uncertainty with regards to e-discovery. Therefore, attorneys are well advised to become familiar with the Amendments and the rapidly evolving case law. The following are practical guidelines to help attorneys navigate through the maze that is e-discovery.

A. Pre-discovery Plan

Attorneys need to prepare for e-discovery even before a complaint is filed or the duty to preserve arises. Attorneys must become familiar with their clients information systems and take an active role in forming a document retention policy. (115)

Learning the layout of the corporate network and knowing the people responsible for managing the systems will facilitate implementing a litigation hold as quickly as possible and with minimal interruption to business operations. An attorney should inquire about the size, location and types of ESI that a client deals with during the normal course of business. Additionally, attorneys should collect information regarding operating systems and applications, file-naming and saving conventions, archiving and backup schedules, and the identity of all personnel with access to corporate networks. Of particular interest should be the email retention policies, protocol for terminating employees, what and how are former employees' data preserved or deleted, how customer data is preserved, and the time it takes stop and copy data from a live network.

With the Amendments and clients' information in hand, an attorney should review and make necessary changes to existing retention policies or create new policies. Rational retention policies created after considering legitimate business needs and infrastructure limitations are the most defensible. An example of such retention policy should include:

The retention policy should also include a "legal hold" policy that would apply once the duty to preserve arises. An employee or a company that sees a lawsuit on the horizon must stop destroying potentially relevant evidence and must take affirmative steps to preserve such evidence even before a request to preserve is receive from other parties or a complaint is filed. (117) Therefore, it would also be wise to train certain employees to be aware for complaints that have the potential to lead to litigation.

The litigation hold should be designed to include all forms of ESI, and to be implemented quickly to preserve unchanged ESI. The retention policy should be in writing and circulated routinely via email or memoranda to managers and heads of departments in order to establish a "common practice." By following an objective, preexisting policy, a company can formulate a response to e-discovery request and limit the amount of data that needs to be located and searched. (118) More importantly ESI destroyed pursuant to a reasonable retention policy is more likely to withstand spoliation sanctions. (119)

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