Amended civil rules for e-discovery sent to Supreme Court

The Judicial Conference of the United States has approved amendments to the Federal Rules of Civil Procedure to address e-discovery. These proposed rules were developed by the Judicial Conference's Committee on Rules of Practice (CRP) and after extensive public hearings and submissions by the bench and bar. They will take effect at the end of 2006 unless the Supreme Court refuses to act or Congress intervenes to prevent their adoption, neither of which is expected to occur.

Limits on initial production obligations

A two-step approach to 'discovery' ('disclosure' under UK practice) will first focus on readily accessible data sources before determining if it is necessary to search sources which are difficult to access. Thus, under Rule 26(b)(2)(B), a producing party need not initially provide "electronically-stored information" (a term added to Rule 34(a) to supplement "documents") which is "not accessible without undue burden or cost".

The court can order such data produced if 'good cause' exists. To do so, the court must balance the costs and potential benefits of discovery and may attach conditions, including shifting some or all of the reasonable production costs to the requesting party.

This approach codifies existing practice, whereby producing parties produce information from accessible sources, such as active information from e-mail accounts of key actors, before turning to, for example, back-up tapes created for disaster recovery purposes or attempts to reconstruct deleted information. However, the proposed rule also requires a party to identify any sources of inaccessible electronic information not being produced. A listing "by category or type" – such as backup tapes or deleted information – should be sufficient, but the producing party must be prepared to provide enough detail to permit a meaningful evaluation if challenged.

Relationship to preservation obligations

The rules do not spell out the scope of the duty to preserve electronic information or the events which may trigger its application, leaving that to the common law and statutory enactments. The difficult decisions on when and how to apply a 'litigation hold' to preserve electronic information, including inaccessible information, must be made by the producing party in individual cases. Parties must make reasonable and good faith efforts to retain information that may be relevant to pending or threatened litigation, but it is unreasonable to expect them to take every conceivable step to preserve all potentially relevant data.

In some cases, substantial sanctions have been imposed on parties who, after the fact, have been deemed to have misjudged or avoided preservation obligations. In response, the proposed Rule 26(f) will require early discussion of any issues relating to preservation of evidence, thus increasing the likelihood of timely resolution of disputes. The proposed Committee Note also discourages use of ex parte preservation orders and suggests that any preservation agreements or orders be carefully tailored to the circumstances.

A safe haven from sanctions

Proposed Rule 37(f) exempts from rule-based sanctions – absent "exceptional circumstances"- the failure to provide electronically-stored information lost because of the "routine, good faith operation of an information system."

The CRP concluded it is unrealistic and undesirable to expect parties to stop systems that automatically discard or overwrite information without an intent to destroy information because of its relationship to litigation.

Typical examples would include dynamic databases, systems which provide automatic deletion of stale information and the recycling of disaster recovery back-up tapes. However, a party seeking to act in good faith may need to intervene to modify or suspend certain features of specific information systems when a preservation obligation is deemed to exist.

Treatment of privileged information

In addition to early discussion of issues relating to preserving discoverable information, proposed Rule 26(f) will also require that the parties "meet and confer" to discuss – and hopefully agree upon – the "form or forms" in which electronically-stored information will be produced. Under proposed Rule 34(b), a requesting party may specify a preference, but the producing party may object and have the issue settled by the court. Absent such an agreement or order, the producing party must produce the information in either a form or forms "in which it is ordinarily maintained" or in a "form or forms that are reasonably usable".

The parties are also encouraged to discuss issues relating to inclusion in orders of voluntary agreements governing the process for claiming privilege or trial-preparation exemptions from discovery. The CRP heard testimony that the dramatic increase in the volume of electronically-stored information has created unique problems which accentuate the need for such procedures, despite tough issues of potential waiver and possible congressional limitations on rule-making. Rule 26(b)(5)(B) will provide a default 'clawback' process for the inadvertent production of privileged or trial-preparation materials. A party receiving such materials must return, sequester or destroy the information and may not use it until the claim is adjudicated.

It is clear that issues relating to "discovery" and "disclosure" of electronic information are evolving in parallel on both sides of the Atlantic and efforts to promote a dialogue are useful.

Thomas Allman is a senior counsel at Mayer Brown Rowe & Maw in Chicago.