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Best Practices For Managing e-Discovery Rules

By Melissa Klein Aguilar — June 8, 2007

ecent revisions to the Federal Rules of Civil Procedure provide tools for grappling with the headaches created by electronic discovery, but they do require companies, their lawyers and judges to do lots of leg work. That was the message from U.S. District Court Judge Lee Rosenthal, committee chair on the revised rules of civil procedures, to attendees at Compliance Week 2007.

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The rules require “increased planning, increased preparation, and increased management at a level of detail that is much greater than was true for conventional discovery,” Rosenthal said during Thursday’s key note address. “Those demands apply to every player in the process,” including potential and actual litigants and in-house and outside lawyers and judges.

Judge Lee Rosenthal at Compliance Week 2007

Stressing the importance of practices that will enable litigants to judge “what you’ve done and why it’s reasonable” if discovery issues arise in the future, Rosenthal offered some best practices to conduct e-discovery under the December 2006 changes to the FRCP.

New “meet and confer” rules expressly require lawyers to talk early in a case about e-discovery in general and about issues of preservation, privilege waiver, and form of production. In order to comply with those requirements, Rosenthal said, “The most important thing you can do is not specifically addressed in the rules, but is clearly identified in the cases that were decided while the rules were being considered and since.”

“That is to have in place a written, carefully thought out data retention and destruction policy and procedure which clearly applies to electronically stored information as well as paper and takes into account the technological differences between them,” she continued.

While the rules don’t create preservation obligations, she added, “They are out there and they have to be taken seriously.”

“If you don’t talk about preservation early … and reach an understanding about what will and doesn’t have to be preserved, instead of a judge addressing areas of disagreement, you’re likely to find litigating spoliation accusations and sanctions motions later,” Rosenthal warned.

Rosenthal noted that electronic information makes it harder to do an effective privilege review. “Reviewing information for privilege is more difficult, more costly more time consuming and less reliable than with paper,” she said.

She urged would-be litigants to “give fair and full consideration” to protocols, sometimes called “quick peeks” or “clawbacks,” that allow production without full blown preproduction review—without waiving the right to later claim privilege.

A “reasonable” destruction and retention policy and procedure “shouldn’t require the retention of everything,” she said. Rather, it should set criteria for identifying which records will be archived and what can be destroyed.

Judge Lee Rosenthal fields questions from attendees of Compliance Week 2007, with the help of Compliance Week managing editor Matt Kelly

Such a policy “provides criteria and lets you, years later, explain the choices you made,” she said, adding, “It’s very easy to understate the level of detail” such policies need to have. Policies should address all types of communications being stored or capable of being stored within an organization, including instant messages, text messages, e-mail, voicemail, metadata, legacy data, and deleted data, even if they’re stored only briefly, she said. “Many forms of electronic communications, if they aren’t addressed in advance, can bite you later,” she said.

Retention policies should also set out and allow implementation of the steps necessary to suspend ordinary destruction practices and procedures to comply with preservation obligations, particularly those relating to litigation.

In addition, she advised companies to prepare an “information technology map” of their computing system or IT architecture before litigation hits.

Companies need a repeatable process for complying with discovery obligations that includes steps for identifying what’s relevant, preserving, collecting, searching, reviewing, and producing it in specific cases, Rosenthal said.

A new rule limits the power of courts to sanction parties for the failure to produce electronically stored information if the information requested has been destroyed or rendered inaccessible as a result of the routine operation of an electronic information system, as long as that operation is in good faith. While it’s not a safe harbor provision, Rosenthal said the rule “does make it much clearer” that judges in considering sanctions must treat an inability to produce electronic information differently than a failure to produce hard-copy information.

Companies should work with their inside and outside lawyers and IT personnel to understand all of the forms in which data is maintained. A recurring problem in e-discovery is sources that are “not reasonably accessible.” Such issues have mainly arisen in the context of unindexed back up tapes, deleted information that has to be forensically restored, and legacy information.

It’s critical for companies to know what sources of information they have that are not reasonably accessible and whether that information is available elsewhere, she advised.

The rules explicitly recognize judges’ authority to shift the cost of production to the requesting party as one condition for requiring that production. That authority previously existed but wasn’t expressly recognized in rule text or notes.

“We can expect to see lot of problems continue to be generated by this because e-discovery is so expensive,” she said. “Parties are likely to come to court with some frequency to ask for the shifting of costs.”

The courts in case law will have to set the limits and criteria for when it’s appropriate to shift costs and what should be a predicable way of assessing when that’s going to occur, she said. “We're not there yet, but the rule text and notes provide helpful guidance.”

Finally, she urged companies to tailor their discovery requests. “If it’s overbroad, you don’t get it,” she said.

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