Electronic Data Production - Courts Begin To Set Parameters - Part I

Thursday, January 1, 2004 - 01:00
Anthony J. Marchetta

Part II of this Article, appearing in the February 2004 issue of The Metropolitan Corporate Counsel, will examine cost shifting, burden vs. probative value, and file preservation.Today, almost every corporation conducts a majority of its business in some form of electronic medium. Technology has become integral to the inner workings of every large corporation. Therefore, a working knowledge of a party's obligation to provide "hard copy" discovery will no longer suffice. This article provides a brief overview of some of the main issues which arise in the context of electronic discovery and the evolving body of law. As can be expected, most courts are new to these types of issues and are nowhere near reaching a consensus on the extent of electronic discovery which will be permitted, or how the burdens of such discovery will be allocated.

General Disclosure/Discovery Obligations

Since their inception in 1937, the Federal Rules of Civil Procedure have governed the discovery process. Federal Rule of Civil Procedure 26(a)(1)(B) mandates that prior to a discovery request, parties must disclose a copy or description of "all documents, data compilations, and tangible things...." Federal Rule of Civil Procedure 34 provides that a party may request production of "any designated documents." Although electronic discovery has only recently gained widespread use, the drafters of the Federal Rules long ago foresaw the impact technology could have on the discovery process. In 1970, Rule 34(a) was amended to broaden the definition of a document to include "other data compilations from which information can be obtained, translated, if necessary, by the respondent through detection services into reasonably useable form." Fed. R. Civ. P. 34(a). The advisory notes to the 1970 amendment to Rule 34(a) specifically explain that the definition of document was augmented "to accord with changing technology." Id.

The application of discovery rules to information residing in electronic form is well-settled and continues to be confirmed by courts. See e.g. Rowe Entertainment, Inc. v. The William Morris Agency Inc., 205 F.R.D. 421 (S.D.N.Y. 2002); Collette v. St. Luke's Roosevelt Hospital, 2002 WL 31159103 (S.D.N.Y. Sept. 26, 2002); Bryant v. Aventis Pharmaceuticals, Inc., 2002 WL 31427434 (S.D. Ind. Oct. 21, 2002); Anti-Monopoly, Inc. v. Hasbro, Inc., 1995 WL 649934 (S.D.N.Y. Nov. 3, 1995). Moreover, the district courts in at least three states, New Jersey, Arkansas and Wyoming, recently amended their local court rules to require attorneys to notify the court if electronic discovery will be requested or produced. Attorneys must also determine what electronic information will be used in the case, and understand how it is stored and how it can be retrieved.

Hard Copy vs. Electronic Version

Since many documents never reach tangible form, courts have considered the question of whether a party will be required to produce evidence in both electronic and paper form. Courts are divided on what form of a "document" a party is required to produce.

The Southern District of New York has held that producing information in hard copy form does not preclude a requesting party from receiving the same data in electronic form. Anti-Monopoly v. Hasbro, Inc., 1995 WL 649934. Similarly, the District Court of New Jersey held that both hard copy and electronic copies are required. In re Bristol-Myers Squibb Securities Litigation, 205 F.R.D. 437(D.N.J. Feb. 4, 2002). In Bristol-Myers, the court held that even though the plaintiffs had requested the documents in paper form, the defendants were required to disclose that the documents existed in electronic form. The court deemed the defendants' failure to disclose this information inappropriate and thus did not require the plaintiffs to pay the full price of the copies made. Conversely, the Seventh Circuit has held that since the defendant had supplied the plaintiff with e-mails in electronic form and converted them to a readable format, the plaintiff was not entitled to paper copies. Sattar v. Motorola, 138 F.3d 1164, 1171-72 (7th Cir. 1998).

An effective method for parties seeking to avoid an uncertain judicial mandate as to the form of production is to confer with opposing counsel to establish the scope of discovery. Reasonable parties should be able to reach an agreement about which form will be sufficient for discovery. Absent a showing of some other need, the parties should consider producing discovery only in the form that is used in the ordinary course of the client's business.

Active Data vs. Deleted Data

Courts have also grappled with the distinction between "active" data and archived or "deleted" data, and whether all are discoverable. As most attorneys should know by now, when a user "deletes" a file, the operating system does not actually erase the file, but rather marks the space the file occupied as free for later use, if needed. On the larger hard drives and networks utilized by most corporations, the capacity for file storage is massive and the files may not be overwritten for years, if ever. Some courts have required that information residing in deleted files be made available for discovery. Despite the sizable expense of retrieving these files, some courts have required "mirror images" of hard drives to be provided at the producing party's expense, when the likely benefit outweighs the burden. Simon Property Group L.P. v. mySimon, Inc., 194 F.R.D. 639, 641 (S.D. Ind. 2000); see also Playboy Enterprises, Inc. v. Welles, 60 F. Supp. 2d 1050, 1053 (S.D. Cal. 1999).

In Simon Property Group, the court held that electronic data, including deleted files, falls under the definition of a document under Fed. R. Civ. P. 34, and is therefore discoverable. Simon Property Group, 194 F.R.D. at 640. In Kleiner v. Burns, the Kansas District Court discussed the parties' disclosure obligations and strongly intimated that any and all deleted material would be discoverable. Kleiner v. Burns, 2000 WL 1909470, *4 (D. Kan. Dec. 15, 2000). While stopping short of ordering the production of deleted data, the court directed the defendant to at least disclose all back-up copies of files or tapes that would provide information about any deleted electronic data. Id.; see also Renda Marine, Inc. v. U.S., 58 Fed. Cl. 57 (U.S. Ct. Fed. Cl. August 29, 2003) (because e-mails were deleted after litigation was commenced, the defendant was ordered to pay for and produce back-up tapes from the date it learned of the existence of the litigation).

Other courts have been more circumspect in determining when deleted files are discoverable and have held that the Federal Rules of Civil Procedure do not require restoration of back-up tapes containing deleted data. McPeek v. Ashcroft, 202 F.R.D. 31, 33 (D.D.C. 2001) (stating that the body of case law is "idiosyncratic" and presents no clear-cut rule). Moreover, courts have determined that retrieving deleted files is intrusive, and in some cases the cost may not be justified by the expected probative value of the evidence. Strasser v. Yalamanchi, 669 So.2d 1142, 1145 (Fla. Ct. App. 1996) ("if the trial court finds that there is no other less intrusive manner to obtain the information, then the computer search might be appropriate").

The case of Rowe Entertainment v. William Morris presents a logical, commonsense approach to the discoverability of deleted data. The court in Rowe held that if a responding party maintained electronic data in order to use it in "current activity," then that data should be available for discovery at the party's own expense. Rowe, 205 F.R.D. at 430-431. However, the court articulated the prudent rule that a responding party should not bear the costs of producing deleted files that are not used in the course of business activity or retained for any business purpose. Id. at 431. "[A] party that happens to retain vestigial data for no current business purposes, but only in case of emergency, or simply because it has neglected to discard it, should not be put to the expense of producing it." Id. Just as a party would not be required to sift through its trash to retrieve disposed hard copy documents, it should not be compelled to pay for the resurrection of deleted files that have no use in the normal course of business. Id. If a party does not access back-up tapes or deleted e-mails in the normal course of business, then the opposing party should have to make a showing of particularized need before a further and possibly more expensive search is conducted. A similar analysis was used by the court in Medtronic v. Michelson, 2003 WL 21468573 (W.D. Tenn. 2003), which allowed access to network back-up tapes. The requesting party was ordered to pay part of the production costs.

Hidden Data

The decision of whether to produce electronic copies in addition to hard copies becomes important in the context of hidden data contained in documents, sometimes called "metadata." This information is stored as part of the file, but is not immediately visible by opening the document. Metadata contains information that can, in certain circumstances, be used in litigation. Information such as the date and time of creation of a document, the identity of the user who created the file, or when it was opened or edited may be available. Because metadata contains this type of information, it can be especially relevant to issues regarding whether a person had knowledge or notice. To date, very few courts have addressed the issue of producing hidden electronic data in discovery. See Momah v. Albert Einstein Med. Center, 164 F.R.D. 412 (E.D. Pa. 1996)(where need to discover whether document was back dated was established, court allowed discovery of information showing date document was created and last edited). It seems clear that hidden data in electronic files will be discoverable if a particularized need is shown. Attorneys should expect discovery requests addressing this type of data.

Anthony J. Marchetta and John P. Scordo are Partners, and Seamus Morley is a Summer Associate with the law firm of Pitney, Hardin, Kipp & Szuch LLP.

Please e-mail the authors at amarchetta@daypitney.com or jscordo@daypitney.com with questions about this article.