LawyersUSA

On Dec. 1, 2006, amendments to the Federal Rules of Civil Procedure addressing electronic discovery took effect.

The amendments were intended to incorporate e-discovery into the existing structure of the federal court system and to guide attorneys through the process.

Major changes included a requirement that parties address the issue of electronically stored information at the outset of litigation and a two-tier system for discovery based on the accessibility of the information sought. In addition, the amendments established a "safe harbor" rule for information that may have been destroyed and a "claw back provision" for accidentally disclosed privileged material.

One year later, the integration process has gone fairly smoothly.

"This year was all about putting the new federal rules into practice," said Michele Lange, a staff attorney at Kroll OnTrack, an Eden Prairie, Minn. computer forensics company that specializes in electronic evidence. "There was also advancement in that lawyers working with the new rules are starting to make an effort to really understand the technology involved."

To date, the case law has centered primarily on the issue of preservation of electronically stored information - "the paramount issue for practitioners," said Ken Withers, the director of judicial education and content at the Sedona Conference, a non-profit organization in Phoenix, Ariz. that works to advance law and policy in areas like electronic discovery.

The other major area of dispute is lack of preservation - spoliation of evidence and the potential for sanctions.

One side effect of the new amendments is that some attorneys have started to appreciate the magnitude of electronic discovery and scale back their demands, according to Thomas Allman, co-chair of the e-discovery committee for the Lawyers for Civil Justice and a member of the steering committee of the electronic discovery working group for the Sedona Conference.

"There was a tendency in discovery to ask for more than what you want, but lawyers are re-ordering the way they are doing things based on the new two-tiered process of accessibility," he said.

In addition, lawyers are doing their homework earlier and being more open and transparent with opposing counsel, which is helping reduce disputes that lead to sanctions or litigation, Allman said.

Shawn Kee, a partner in the Denver office of labor and employment firm Jackson Lewis, agreed.

"In the majority of cases, things have worked out fairly well," he said. "Counsel are really trying to work together."

The most important issue with e-discovery, said Kee, is "preservation and its scope."

Kee, who primarily defends companies in employment claims, said that initially e-discovery was viewed negatively by his clients as "just something that can be used against us."

But in reality, "there are a lot of cases where individual plaintiffs have had to face the same issues as our clients," he explained. "In a case I have right now, in addition to a personal e-mail account the plaintiff has a blog and a couple of other personal webpages out there. All of that is discoverable and should be preserved."

Because the cost of preservation can be exorbitant, Kee said that over the last year he has increasingly seen clients adopting e-discovery readiness programs.

"If you have a program in place, it is a lot cheaper to comply with a demand when litigation occurs," he said.

A good program allows a company to get "a good handle on what data you have and are maintaining, including how it is stored and where it is stored, and working through these issues to come up with the best way to preserve it," Kee added.

The flip side of preservation - spoliation and the possibility of sanctions - has also generated a great deal of case law and discussion over the last 12 months.

Under amended Rule 37(f), "[a]bsent exceptional circumstances, a court may not impose sanctions under these rules 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 was "one of the more controversial rules that took effect last year, and it caused a lot of fear for government agencies and corporate entities," said Withers.

Those entities were concerned that some of their routine practices of destroying information might be interpreted as destruction of evidence.

"But courts have really been focusing on the extent of the harm caused by the loss of information," Withers noted. "If evidence has only marginal value, or is repetitive or duplicative or not reliable, then there is no real prejudice."

Alternatively, courts have looked to whether the destruction - even if a party was acting in good faith - results in extreme prejudice to the other side.

Withers noted the Columbia Pictures v. Bunnell case, in which the court found that RAM data - ephemeral data that the company argued it deleted on a regular basis - was discoverable and the defendant had an obligation to preserve it. (No. CV 06-1093FMCJCX (C.D. Cal. 2007).) (For more information on the case and its possible ramifications, see "Is RAM data discoverable?" Lawyers USA, Aug. 13, 2007. Search terms for Lawyers USA Archives: Stephenson and Bunnell.)

"In particular cases, information like RAM could be critical and a party could be sanctioned because of the importance of the data," Withers said. "The Bunnell case illustrates that lawyers need to be aware of even esoteric information that might need to be preserved or face sanctions."

Rule 26(f) mandates that parties develop a discovery plan during their pre-trial, Rule 16(b) "meet and confer" conferences.

But the meet and confer requirement for attorneys to discuss e-discovery issues early in litigation has expanded in practice, Withers said.

"In some cases, a one-off meeting between counsel clearly won't solve all the problems posed by electronic discovery," he said.

In response, some lawyers have expanded the meeting into a series of status meetings throughout the different stages of litigation. In addition, in cases with more complicated technological issues, lawyers are starting to seek an independent, third-party opinion to help guide them through the discovery process - a Rule 26(f) consultant of sorts, Withers said.

While cooperative discovery is a positive for lawyers and litigants, there is at least one negative side effect of all this added time and work.

"The consequence [of added electronic discovery] is that the pro se or small party plaintiff can't litigate in the federal courts - it's cost prohibitive," Withers said.

Looking ahead to 2008 and beyond, attorneys say more changes are in store.

Allman predicts the next phase will include a focus on the "quality of the search and production effort."

For example, instead of litigation over whether or not something should have been preserved, cases will examine "the search itself - did [the party] go far enough? Were the correct key words used to search? Was a Boolian search okay, or would a concept search have returned better results?"

Lange agreed.

"In 2008, we will see courts dive deeper into more advanced e-discovery topics, and we'll see judges start to lay out 'best practices' in opinions instead of just scratching the surface on what the new rules require," she said.

Lange also noted that as technology continues to develop, new products are entering the market to help lawyers manage their e-discovery burdens, from preservation to searching.

"Tools and services are going to continue to appear in the marketplace to make this process cheaper, faster and easier," she predicted.

As the federal court system becomes more comfortable with its new rules, the states are slowly starting to address the issue of electronic discovery.

Allman said between 10 and 14 states have adopted similar versions of the Federal Rule amendments, while a few others have adopted the main points with some alterations. However, about half the states haven't even addressed the issue and what he called "the major commercials states - California, Illinois, Michigan, New York, Ohio and Pennsylvania" haven't acted at all.

There's another open issue: international discovery.

"There are a lot of multi-national corporations with offices or headquarters here in the United States with a lot of information overseas that may be subject to litigation that takes place here," Withers said.

And the rest of the world has very different court systems and rules on electronic discovery. In Europe, for example, privacy regulations are much stricter than the United States, he said.

Questions or comments can be directed to the writer at: correy.stephenson@lawyersusaonline.com