Here's a continuation of my postings about the Electronic Discovery Institute's online e-discovery certification program, that you can subscribe to for just $1. I last blogged about this program on July 14, 2017. Go to https://www.lawinstitute.org/ to sign up for it.
The course I took tonight concerns how the Federal Rules of Evidence and the Federal Rules of Civil Procedure address the discovery of electronically stored information.
The course is taught by Martin Tully, a partner at Akerman LLP; Jonathan Redgrave, the only attorney to serve on the advisory committee on electronic records at the National Archives and Records Administration; and John Barkett, partner at Shook, Hardy & Bacon LLP.
The 2006 Amendments
Amendments to the Federal Rules of Civil Procedure became effective in December 2006. Prior to that time there were a patchwork of local rules regarding the use of electronic evidence. Tully noted that the amendments were a watershed event that marked ESI as an explicit category of discovery. Identifying sources of ESI was required under FRCP 26(a)(1); and ESI needed to discussed at the Rule 16 scheduling conference and the parties 26(f) meet and confer. ESI issues have to be addressed early in the process.
FRCP Rule 1 calls for the just, speedy and inexpensive administration of legal matters. Redgrave remarked that It has been frustrating that electronic evidence has often led to more time consuming and more expensive cases.
The amendments to the rules reflected a desire for a culture change. New commentary was made to Rule 1 calling for greater cooperation in a system that is traditionally adversarial. Changes in Rule 16 encouraged judges to become more active in case management.
Tully discussed how both courts and parties can point to the FRCP’s emphasis on the need for cooperation, especially under Rule 1. Calling for meet and confers early in the case are a synonym for cooperation. There must be an early and transparent process for ESI production.
Rule 16 Conference and Rule 26(f) Conference
Certain matters should be discussed as part of a pretrial conference. The proposed amendments in 2015 called for electronic information to be preserved. Parties should discuss an agreement under FRE 502 to get an order to deal with privileged information.
Barkett advised litigants to prepare a discovery plan, so judge can produce a case management order, that will address the disclosure of ESI and associated issues. Lawyers should also discuss the clawback of privileged information after it was produced. Privilege review is very expensive and can be avoided by a clause in a case management order allowing the data to be clawed back. The Advisory committee proposed amendments to the rules in 2015 that said preservation should be discussed at the meet and confer and the scheduling conference.
This section address data not reasonably accessible because of undue burden or costs. A typical category of such data is that found on back-up tapes. Most organizations make a daily back-up in case of disaster – referred to as disaster recovery tapes. Rule 26(b)(2)(B) says that if a party is in possession of ESI that is not reasonably accessible because of undue burden or cost, they must notify their opponent, who can make inquires, and can challenge this position. If opponent can show good cause, the court may order the production. Court can do so with conditions – such as cost shifting. The producing party usually pays the cost of production. But if costs shift the requesting party may have to pay some portion of the production. In the famous Zubulake case UBS Warburg had 77 back-up tapes. The court asked if the tapes contained unique information. The court only ordered the production of certain tapes; and the requesting party had to pay 25% of the cost of production. There have been decisions ordering 100% cost shifting.
This section says that proportionality requires a balancing of factors in order to determine when discovery might not be needed at all or where cost shifting is necessary – the means of parties, stakes in the case, and the importance of issues are all taken into consideration. There needs to be a subjective measure: a $5K case shouldn’t involve $50k worth of discovery
This section concerns the clawback of privileged material. There must be notice to an opponent that the privileged data was produced, and the information must be destroyed; sequestered or returned. And it must be done promptly.
FRE 502 sets forth a rule that there’s a presumption against a subject matter waiver if a document is produced. A protective order governing the production of privileged documents can be prepared. According to Tully, in most casing not obtaining a FRE 502 order is a huge mistake. Some say it is tantamount to malpractice.
FRE 502(d) was adopted by Congress and applies in federal and state courts under the supremacy clause. It says that if there is inadvertent production, an order can provide for data to be returned. This order will apply in not only the present proceeding but any federal, agency or state court proceeding. MRPC 4.4b says that if a counsel receives data that is privileged, you have duty to notify the sender that the information has been received and follow the instructions of the sender as to its disposition.
Reviewing all produced documents for privileged information is a very expensive process. Quick peek and clawbacks are designed to address this problem. In Quick Peek review, an opposing party reviews a complete data set to see what it needs. This is not a favored practice because it is hard to unring the bell.
2015 Amendments to Rule 26
Redgrave said that the most significant proposed change regarding proportionality factors was the amendment of 26(b)(1). However, already under FRCP 26(g) both sides had to certify that their requests were proportional. The concept of relative access to information was introduced. When making an argument that a discovery request is not proportional, a party must present evidence of its burden through affidavits or testimonial evidence. It must t present facts that are persuasive to the court. Staging or tiering of discovery may lead to a border review of what necessary for the resolution of the case.
The amendment of Rule 26 to deal with the proportionality concept, had factors re-ordered so that cost and burden are not the overarching consideration, but just two of many.
FRCP 34 concerns requests for production. In the committee notes to the rules, it is specified that ESI is included in the word ‘documents’. The rule states that the requesting party can designate the form in which the ESI should be produced, which can be its native form. If you fail to designate the form, the opponent can produce it in any form, including hard copy. The producing party only has to produce in one form, a reasonably usable form.
Tully said the amended rule seeks to require parties to be more specific in what they are requesting and producing parties must address the responding parties’ objections. Objections must be specific; blanket objections are not allowed. The producing party has to state if there is something they are not producing pursuant to an objection.
Rule 37(e) & Sanctions
FRCP 37 addressed what happens if data is lost or altered inadvertently. If lost during routine operations of business, sanctions are not required.
In the amendments proposed for 2015, the advisory committee addressed ESI related sanctions with the aim of giving more bright line standards. There was a difference between the various circuits, as to what kind of conduct could require an adverse inference or default judgment.
While there was more focus on inquiring as to whether or not a party acted with the intent to deprive another party of information, serious sanctions are still available if data is spoliation is inadvertent.
Remedial or punitive sanctions may be considered. The preamble to the rule discusses the requirements for sanctions, noting that if ESI should have been preserved in anticipation of litigation, and cannot be restored or replaced with additional discovery, the court may order measures no greater than necessary to cure the prejudice from the loss of the information. FRCP 37(e)(2) says that if a party intended to destroy the information, there still must actual partial loss of information for sanctions to be imposed. A party must take reasonable steps to preserve data, but preservation need not be perfect. Missing information can be elicited through depositions.
Tully said that Rule 37(e) was designed to address the over preservation of data, but didn’t address the inherent authority of a court to sanction a party. The proposed amendments for 2015, indicate that FRCP 37 will now crowd out the authority of the court and all sanctions must go through 37e. Sanctions themselves must meet a threshold. The court can then either impose curative measures to remedy the loss – do as little as necessary to cure the prejudice.
FRCP 45 concerns subpoenas on non-parties. The Rule 34 requirement to produce in a requested form applies to non-parties. Courts are often more forgiving to third parties but they have been sanctioned by courts.