E-Discovery Basics: The 2006 changes to the FRCP

On December 1, 2006, the Federal Rules of Civil Procedure (FRCP) were changed, in an attempt to address electronic discovery.
(For the curious, the Rules which were changed were Rules 16, 26, 33, 34, 37 and 45, plus Form 35.)
For about ten years, the federal court system in the United States had struggled with how to handle electronic discovery, and the 2006 changes were an attempt to modernize the discovery process. The changes to the Federal Rules are significant because they are applied not only at the federal level, but also at the state level, as many states in the U.S. use the FRCP as a guideline for their own rules.
The 2006 changes defined the term "electronically stored information", and defined it broadly. (This term is sometimes shortened to "ESI".)
The term is meant to include any kind of information in electronic form.

Here is a brief summary of some of the changes:

- The rules require the parties to a lawsuit to discuss ESI when they meet to talk about the case (this is called the "meet-and-confer").
- The rules roughly adopted Judge Schiendlin's two-tiered system of reasonably accessible data and not reasonably accessible data.
- A "claw-back" procedure was established: if one party accidentally produced material that was subject to attorney-client privilege, the producing party can ask the other side to return or destroy the data.
- The rules created a "safe harbor" - a party usually cannot be sanctioned for not providing ESI that was lost or destroyed as part of the routine, good-faith operation of an ESI storage system.

The rule changes tried to address some of the major issues in electronic discovery:
- The court system wanted to encourage the parties to a lawsuit to be on the same page when dealing with ESI, and therefore they must talk about ESI when they meet and confer about the case, instead of ignoring the issue and then battling over electronic discovery later in the case.
- The drafters of the amendments wanted to encourage parties to quickly produce data; if they included privileged material by accident, the "claw-back" would (in theory) protect them. Of course, when this happens, the other side now has emails between an attorney and client, and can read them. They can't use or disclose the information, but they have it.
- The "safe harbor" was meant to calm some nerves: companies can destroy their data as part of their business routine. However, once a litigation hold is placed on the information, then the data can't be lost or destroyed.

The 2006 changes to the Federal Rules of Civil Procedure removed some uncertainty in the electronic discovery process. They weren't perfect, but they were a good attempt at modernizing the Rules.

E-Discovery Basics: Zubulake Part Two

Last week, I started to talk about one of the most important and influential electronic discovery cases of the past decade: Zubulake v. UBS Warburg. I'll pick up my discussion of this 2003 case where I left off...

Laura Zubulake had sued UBS, her employer, claiming gender discrimination. She asked UBS for emails relevant to her case. UBS said it did not have these emails, and that the costs of restoring its back-up tapes to recover the Zubulake emails would be very high (in the hundreds of thousands of dollars). UBS asked the court to consider first whether UBS had to give the emails to Zubulake, and if so, who had to pay the costs of getting the emails from storage on the back-up tapes.

Judge Shira Scheindlin looked to the Federal Rules of Civil Procedure, which allowed Zubulake to ask UBS for emails related to her case. The Rules presumed that UBS would have to pay the cost of recovering the emails from back-up tapes, but also gave the court the discretion to shift some or all the costs to the party asking for the emails (in this case, Zubulake).

This is the point where the case becomes very interesting to the electronic discovery world. Judge Scheindlin pointed out that in many cases involving restoring emails from a back-up tape, the party that is supposed to produce the emails argued that it would be far too expensive to recover the emails. In other words, why ask someone to pay $100,000 to find emails relevant to a case, when the case involves only $10,000? This was the argument made by many companies when they were asked for emails.

Judge Scheindlin noted that many courts had automatically assumed that electronic evidence meant much higher costs, and would deny email requests. This often ended the case, as a plaintiff couldn't get access to necessary evidence. Judge Scheindlin recognized that electronic data could be searched much more cheaply than paper documents could be read and reviewed - an office computer using a search engine could find something in seconds.

The judge created a three-step analysis:

First, how is the data stored? Is it accessible, or inaccessible?
The judge said 'accessible data' means data that is readily usable, and doesn't have to be restored. Examples include data stored on hard drives, CDs, DVDs, etc.
'Inaccessible data' means data that is on backup tapes, or has been erased or damaged. This data is inaccessible because something has to be done to it before it can be accessed. That "something" will cost time and money.
When faced with inaccessible data, the judge said that courts should consider shifting the restoration and production costs to the party asking for the data.

Second, in order to analyze whether to shift costs, the court needs to know what is in the inaccessible data. The judge suggested restoring a small sample of the requested inaccessible data to find out what is there.

Third, the judge developed a seven-step cost-shifting analysis:
1. How specifically is the request tailored to find relevant information? In other words, has the request been written so that it will discover documents relevant to the case?
2. Is this information already available from other sources?
3. What's the total cost of production, compared to the amount of the case?
4. What's the total cost of production, compared to each party's resources? (Does one party have deep pockets?)
5. Can each party control costs, and does each one want to?
6. How important are the issues at stake in the case?
7. What are the benefits to the parties of restoring the data?

The judge stressed that these seven factors are not a check-list and they don't have equal weight with each other. The first factors on the list are the most important, and they are less important as the list goes down.

The judge summarized the central questions of the seven-factor cost-shifting test as: 'does the request impose an "undue burden or expense" on the responding party?' and "how important is the sought-after evidence in comparison to the cost of production?"
In other words, "is it an undue expense?" and "is the data important enough to be worth the cost?"

Judge Scheindlin decided that UBS must produce accessible data, as UBS could do this quickly and cheaply.
The judge also decided that UBS must restore responsive emails from five back-up tapes so that the court could look at the data and begin its cost-shifting analysis.

And so ended the first Zubulake decision (known as Zubulake I). The story continues in Zubulake III! (The Zubulake II decision didn't address anything related to electronic discovery, so I won't talk about it.)

E-Discovery Basics, Part One

When talking about electronic discovery, it is helpful to have some context. This post is an attempt to give some quick background information that is useful but yet not too boring.

The United States is a common law country, which means that the law is usually created and updated through decisions made by the courts. When a judge decides a case, she normally looks to precedent to make her decision - how have other courts in her jurisdiction decided this kind of matter? The judge's decision usually then becomes precedent for future cases.
The common law system is contrasted with the civil law system, where laws are normally written by a legislature into a legal code - a list of statutes which are the body of the law.

There is another meaning to "civil law" in the U.S. - here, it is contrasted with criminal law. Civil law usually involves litigation between private parties.
Civil procedure is the body of law which describes how the court handles a civil case - these are rules describing how a case is started, how to communicate with the other side, how to interact with the court and the judge, how to request documents from the other side, etc.
Civil discovery normally takes place before a trial - each side follows the rules of civil procedure to request documents and other material from another party in the lawsuit. The party receiving the request is responsible for examining and searching its own data for anything responsive to the request.

At the federal level in the U.S., the Federal Rules of Civil Procedure describe how a civil case is handled by the court system. These rules also guide the discovery process.
At the state level in the U.S., most states follow the Federal Rules, usually adding some modifications. There are exceptions, though: California and New York (among other states) have their own civil procedure rules.

Electronic discovery is now a very, very large part of civil discovery. Because of the importance of e-discovery, the Federal Rules of Civil Procedure were updated in December 2006 to address electronic discovery. The impacts of these changes are still spreading through the legal system, and e-discovery has become an exciting area of the law.