Electronic Data and Discovery

Effective December 1, 2006, the Federal Rules of Civil Procedure were amended to address issues relating to the discovery and preservation of electronically stored information.  While electronically stored information has always been subject to discovery in the litigation process, these amendments establish new obligations as to how your company stores, preserves and manages electronically stored information that may relate to pending and potential business, employment or other types of disputes.  The following is a summary of the procedural amendments that are likely to affect your business:

1. Rule 26(a) - Initial Disclosures.

• As part of a party's initial disclosure duty after a lawsuit is filed, it must now either produce or identify all electronically stored information that the party may use to support its claims or defenses.

2. Rule 26(b)(2)(B) - Inaccessible sources.

• In response to a request for production of documents during the discovery phase of a lawsuit, a party may identify specific electronically stored information that is not reasonably accessible due to undue burden or cost.  Once identified as inaccessible, this electronically stored information is presumptively not discoverable and need not be produced without a court order.
• In the event that the party requesting the documents files a motion to compel the production of electronically stored information objected to on the grounds that it is not reasonably accessible, the party claiming inaccessibility has the obligation to show the court that its objection is well founded.  Even if the producing party is able to make a showing of inaccessibility, the court may still order the production of the documents if the moving party shows good cause for requesting the documents.

3. Rule 26(f) - Conference.

• The parties must discuss at the Rule 26(f) discovery conference (which is supposed to occur as soon as practicable and in any event at least 21 days before a scheduling conference is held or a scheduling order is due) any issues that might arise relating to electronically stored information.  These conversations may include, but are not limited to:  the parties' document retention policies; the types of data the parties retain; format in which the data is retained and will be produced; and the possibility of disputes regarding the breadth of possible discovery and/or whether certain information is reasonably accessible.
• The purpose of these discussions is to limit potential discovery disputes by forcing the parties to discuss potential issues prior to an escalation that requires court intervention.
• It should be noted that the parties are still expected to discuss, as contemplated by the pre-amendment rules, any other issues relating to the discovery of non-electronically stored information.

4. Rule 34 - Production of Documents.

• The requesting party may specifically seek electronically stored information as part of a request for the production of documents.
• The requesting party may specify the format in which the electronically stored information is to be produced (e.g. text searchable pdf, tiff, or various load files).
• If the producing party believes that the request is unduly burdensome due to the format in which the electronically stored information has been requested, the producing party must object, state the basis for its objection, and state the format in which the information will be produced.
• If the request does not specify the format in which the electronically stored information is to be produced, the producing party must specify the format it intends to use.

5. Rule 37(f) - Safe Harbor.

• Absent exceptional circumstances, a court may not impose sanctions on a party for failing to provide electronically stored information lost as a result of the routine, good faith operation of an electronic information system.
• This rule contemplates that the parties will have document retention policies and comply with the policy in a good faith manner.
• The comments to Rule 37 state that the good faith operation of a document retention policy may require intervention to prevent the destruction or loss of electronically stored information and documents, if that information is subject to a preservation obligation.

These amendments are another good reason why all businesses should have and follow a formal document retention policy. 

If you have any questions regarding these amendments, would like to discuss your company's document retention policy or would like to schedule an on-site meeting with a member of the our litigation group.