Helping To Make Electronic Discovery Manageable, Affordable And Fair

Wednesday, December 1, 2004 - 00:00

The Editor interviews The Hon. Lee H. Rosenthal, United States District JudgeSouthern District of Texas and Chair, Federal Judicial Conference Civil Rules Advisory Committee.

Editor: How is electronic discovery being handled today?

Rosenthal: Discovery of electronically stored information raises a host of issues that differ from their hardcopy counterparts. The volume of data stored on computers, the variety of the data, and the fact that it is dynamic rather than static, distinguish electronic information from paper. Another problem is that electronically stored information may not be intelligible if it is separated from the software that created it. What has to be inspected, retrieved and produced, in what form, and who has to pay for it are questions frequently disputed. These questions can't be answered the same way for electronically stored information sought in discovery as they were answered when we were dealing with paper.

Judges, particularly those who have been on the bench for a long time, do not know as much as lawyers and litigants do about how electronic information is generated or retained. When disputes arise, as they do with increasing frequency, they are handled by the courts in a number of different ways. The case law is beginning to emerge, but it is still sparse. The cases that have been decided give sometimes inconsistent answers to some basic questions, such as whether production has to be made in both paper and electronic form; what tests are used to determine whether back up tapes have to be searched and information from them restored and organized and produced; and what tests are used to determine who pays for such work. Few discovery decisions are appealed, so there is little appellate case law. With pressure for greater predictability and certainty, local rules are beginning to develop. The more that local rules differ from each other, the further we move from what the Federal Rules of Civil Procedure were intended to provide in the first place, which is a set of rules that apply the same way in every federal district court in the country.

Editor: What is the role of the Judicial Conference Civil Rules Advisory Committee in helping to provide clarity and guidance for handling electronic discovery?

Rosenthal: The Judicial Conference is the internal policy-making body of the federal courts. The advisory committees, including the Advisory Committee on the Civil Rules, gather and study suggestions for addressing problems in the way the rules are stated or are applied. If the Committee decides that a particular problem in the rules needs to be addressed, and determines that the problem is susceptible to being addressed by a rule change, then the Committee will propose changes to a particular rule or will propose a new rule.

Comprised of judges, lawyers and academics from all around the country, the Civil Rules Committee will make a proposal to the Judicial Conference Standing Committee on Rules of Practice and Procedure that a particular amendment or new rule be published for a period of public comment. If the Standing Committee approves, the proposed rules are published and the Civil Rules Committee holds public hearings and receives written responses. The Committee then re-examines the proposed amendment or new rule in light of the comments received. If the Civil Rules Committee agrees on the changes that result from the re-examination, the proposal goes back to the Standing Committee with a recommendation that it be adopted. If that Committee agrees, the proposed rule changes are submitted to the Judicial Conference itself, made up of the chief judges of each circuit, a district judge representative from each circuit, and the Chief Justice of the Supreme Court. If the Judicial Conference agrees to the proposed changes, they are submitted to the Supreme Court. If the Supreme Court agrees, the proposed changes then go to Congress. If Congress does not take affirmative steps to veto the proposals, they become effective on December 1 of that year. It is by design a long and open process.

Editor: Please give an overview of the new package of rule amendments recently proposed by the Advisory Committee for governing discovery of electronic information.

Rosenthal: These proposed changes are a textbook example of how the process works. The Committee received numerous requests to consider changes to the rules to accommodate electronic discovery. We then tried to get as much information as we could about how the present discovery rules were working when applied to electronic information, and what problems were emerging that changing the rules might help resolve. We held two mini conferences, where we heard from lawyers and litigants with great experience in the area, and from people with a lot of technological knowledge. Last February we hosted a large conference at Fordham Law School, which was attended by people from plaintiffs' firms, defense firms, public interest groups, government lawyers, in-house lawyers from companies in a variety of industries and businesses, and vendors of products used in electronic discovery. We spent two days hearing from people with varied and diverse viewpoints and experiences.

We then developed a package of proposed amendments to the discovery rules, targeted to the features of electronic discovery that are different from paper discovery. I would urge everyone who is interested in reading the proposals to visit www.uscourts.gov and download a full set of the proposals.

The package addresses five areas:

(1) Early attention to electronic discovery. Under the proposed amendments to Rules 16 and 26(f) and Form 35, the parties' meet-and-confer conference would address issues relating to disclosure and discovery of electronically stored information, including the form of production, preservation issues and whether agreement can be reached on an approach to production that would protect against privilege waivers. The proposals are designed to apply when electronic discovery is anticipated. In those cases, getting the most difficult issues out on the table early is important. The proposed amendments and the accompanying notes provide guidance on the topics to be discussed and included in the parties' report to the court for discussion at a Rule 16 conference.

(2) Electronically stored information that is not reasonably accessible. The proposed amendment to Rule 26(b)(2) sets up a two-tier structure for this recurring and often difficult problem. The problem is that unlike paper, electronic information may exist in degrees of accessibility. Some is active data, readily accessed. Other data may have been "deleted," but can be recovered with great expense. Other data may be "legacy" data, left over from obsolete systems, that must be restored, again at great expense. Some data may be on back-up tapes, not kept for archival purposes, but for disaster recovery. Such tapes are not organized or searchable and may contain huge volumes of information, much of it irrelevant. A recurring problem is when such data must be inspected, restored, retrieved and produced, and at whose expense.

Under the proposed amendment, each party must produce relevant, reasonably accessible electronically stored information, but need not review or provide information that it identifies as not reasonably accessible. The requesting party can then go to court and ask for discovery of such information, the second tier. If such a request is made, and the responding party shows that the information sought is not reasonably accessible, the requesting party has the burden of showing good cause for production of that information. If good cause is shown, the judge can order it. As with all discovery, the judge can impose conditions on the production. The judge can condition production of information that is not reasonably accessible on terms that will make the production fair, by, for example, limiting the amount of information to be produced, requiring sampling, or allocating the cost of production.

(3) Handling belated assertions of privilege. Document production risks waiver of privilege by inadvertent production of privileged information. Because electronic information is so voluminous, the cost and delay of the traditional privilege review are exacerbated. The proposed amendment to Rule 26(b)(5) sets up a procedure that would require a producing party to act within a reasonable period to notify the receiving party that it has produced privileged information without intending to waive the privilege. After the notification, the receiving party must return, sequester, or destroy the information and may not disclose it to a third party. The producing party then has to preserve that information, put it on a privilege log, and ask the court to decide whether the information is in fact privileged and whether the privilege has been waived. The standard for determining whether the privilege applies or has been waived is appropriately left to the applicable substantive law.

(4) Adapting Rules 33 and 34 to electronic discovery. The proposed change to Rule 33 clarifies that an answer to interrogatories that involves review of a business record should encompass electronically stored information. Rule 33(d) as it applies to paper has always said that producing records is a substitute to answering an interrogatory only if the burden of deriving the answer will be substantially the same for either party. We have provided guidance in the proposed committee notes to clarify that if a responding party is providing access to electronically stored information in order to answer an interrogatory, there may be a need to provide support that will allow the interrogating party to gather the answer as readily as the responding party.

The proposed change to Rule 34 includes electronically stored information as a category of material that must be produced on an equal footing with documents and tangible things. The present rule just talks about documents and things. Electronically stored information is neither a document nor a thing. The proposed amendment to Rule 34(b) provides that a request for production can specify the form in which electronically stored information could be produced. The objections to a production request can include objections to the requested form. If there is no request for a specific form and the parties do not agree to a particular form, the rule provides two options as a default. One option is to produce the information in a form in which it is ordinarily maintained. The second is to produce it in an electronically searchable form. We tried to provide a computer analogy to the choices the rule currently provides for producing hardcopy documents.

(5) Sanctions related to discovery of electronically stored information. Preservation obligations are set by common law and increasingly by statute. The federal rules themselves do not establish the presence or extent of a preservation obligation, and they should not. The rules do, however, provide for sanctions for a failure to comply with discovery obligations. The proposed addition of a new Rule 37(f) would provide a narrow safe harbor responsive to a unique feature of computers - they routinely and automatically overwrite and recycle information and data. The problem is that unless that feature is suspended, information is inevitably deleted or destroyed. To achieve a predictable balance that protects each party's interests, we proposed a limited safe harbor for a party that cannot provide information in discovery because that information was lost as a result of the routine operation of the computer system. This safe harbor does not apply if the party violated an order requiring it to preserve electronically stored information or if the party failed to take reasonable steps to preserve the information after it knew or should have known the information was discoverable. The proposal attempts to balance the need of litigants to obtain information that they need and are entitled to receive in discovery with the need of companies, government agencies and individuals to run the computers that are essential to their daily operations and lives.

Editor: Where can our readers learn more information if they would like to submit comments or testimony to the Advisory Committee?

Rosenthal: I want to emphasize how much we rely on the public's comments. Amending the Federal Rules of Civil Procedure is an open process. I encourage your readers to visit www.uscourts.gov to participate in the rule-making process. Written comments can be submitted by email, appropriately enough. Public hearings will be held on January 12 in San Francisco, on January 28 in Dallas, and on February 11 in Washington, DC. The comment period ends on February 15, 2005. The Advisory Committee will meet in April to consider the comments and testimony and to decide whether to revise the proposed amendments and recommend that they be added to the Civil Rules.

Working on the Advisory Committee has been a wonderful part of my work as a judge. The Advisory Committee is made up of trial and appellate judges, academics, and lawyers who come from varied practice areas and who represent both plaintiffs and defendants. We are assisted by our reporters, Professor Edward Cooper of the University of Michigan Law School, and, for discovery matters, Professor Rick Marcus of Hastings Law School. They are two of the leading proceduralists of our day. That is a high accomplishment. We bring these engaged and thoughtful people together and try to reach agreement on the best ways to improve civil litigation. We then solicit comments from the public to try to make the proposals better. It is a marvelous process.

I encourage your readers to help us make this new package of proposed rule amendments as good as they can be. We all want the same thing. We want to have cases resolved fairly, on the merits, not based on the burdens and costs and delays of discovery. Litigation depends on discovery, but discovery can swamp litigation. We must all try to make discovery manageable, affordable and fair. I hope your readers will share their thoughts on how to improve the rules to accomplish this task.