Sunday, December 3, 2006

Changes to the Federal Rules of Civil Procedure – Evolution or Revolution? (part 3 of 3)

By: Courtney David Mills
IPA Technology Director and Litigation Paralegal at Hoover Hull LLP

This article is the third part of a three (3) article series intended to provide an overview of the changes to the FRCP which went into effect on December 1, 2006. The first article in this series provided a brief background and history of the rule amendments which began more than six (6) years ago. The second article in this series discussed the amendments to rules 16, 26, and 33. This article will discuss the amendments to the remaining rules, 34, 37, and 45. Each article is available on the Technology Section of IPA’s website.

Rule 34(a) & (b): Production of Documents, Electronically Stored Information, and Things and Entry Upon Land for Inspection and other Purposes; Procedure.

Trial Rule 34 would be amended to provide that any party may serve onto any other party a request to produce ESI. The rule would also permit the party making the request to inspect, copy, test or sample electronically stored information stored in any storage medium from which information can be obtained. The responding party is also required to translate, if necessary, any ESI that it produces into a “reasonably usable form.” A very important amendment to this rule also states that the request may specify the “form or forms” in which the ESI is to be produced. The three (3) general forms of production are: native, quasi-native, and converted. The producing party may object to the requested form or forms of production by stating the reason for the objection, i.e., overly burdensome, or cost prohibitive. If an objection is made to the form or forms of production, or if no specific form was requested, then the responding party would be required to state the form or forms that it intends to use for production purposes. If a request does not specify the form or forms for producing ESI, a responding party must produce the information in a form or forms in which it is ordinarily maintained, or in a form that is reasonably usable. A party need not produce the same ESI in more than one form. Although not required under the rules, the parties can stipulate to the production of ESI in more than one form for practical purposes, i.e. excel spreadsheets may be produced in native form so that cell formulas are visible and also produced in a quasi-native format so that the spreadsheets can be bates numbered for use during depositions.

Rule 37(f): Failure to Make Disclosures or Cooperate in Discovery Sanctions; Electronically Stored Information.

This section of Rule 37 is new and states that absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide ESI lost as a result of the routine, good faith operation of an electronic information system. This “safe harbor provision” will rely heavily upon document retention policies, and litigation hold policies to decide what is, or is not “routine, good faith operation.” There are also two important caveats to the safe harbor provision of T.R. 37. First, the safe harbor provision does not apply to information which is lost after a preservation hold is initiated or after litigation is initiated. Second, this rule was also intentionally left limited in its scope with its reference to not being able to impose sanctions “under these rules.” It does not affect other sources of authority to impose sanctions, violations of statutory responsibility or the rules of professional responsibility. The rule is further limited in that a judge is able to decide whether the facts of case fit the “exceptional circumstances” exemption of this rule.

Rule 45 Subpoena; Form; Issuance.

T.R. 45 has several very important provisions that will have a serious impact on both parties and non-parties alike. T.R. 45 has been amended to add that a subpoena shall command each person to whom it is directed to attend and give testimony or to produce and permit inspection, copying, testing, or sampling (the concept of sampling in the EDD context will be discussed in a later article) of among other things, ESI. In addition, a subpoena may specify the form or forms in which ESI is to be produced. Similarly to T.R. 34, if a subpoena does not specify the form or forms for producing ESI, a responding party would be required to produce the ESI in the form or forms that it is ordinarily maintained or in a form or forms that are reasonably usable. T.R. 45 also incorporates the provisions of T.R. 26(b)(2)(B), stating that a party or non-party responding to a subpoena, need not provide ESI from sources that the party identifies as not reasonably accessible due to undue burden or cost. However, motion practice on the issue, i.e. a motion to compel or a motion for a protective order, places the burden on the responding party to show that the information is not reasonably accessible because of undue burden or cost. Even if such a showing is made, the court may order discovery from that party, or non-party, if the requesting party shows good cause, considering the limitations that are set forth in Rule 26(b)(2)(C) (i.e. whether the discovery sought is unreasonable, burden of expense outweighs the benefit, etc.). The court may also specify conditions for production of the requested ESI and in certain situations allow cost shifting. Despite the serious costs to corporations and non-party entities, the courts have thus far been reluctant to allow cost shifting regarding production of ESI and even more hesitant to allow cost-shifting in the context of non-party discovery of ESI.

In summary, T.R. 34 no specifically references production of ESI and allows the requesting party to specify the “form or forms” of production. The addition to T.R. 37 creates a safe harbor protection regarding ESI that is “lost as a result of the routine, good-faith operation of an electronic information system.” T.R. 45 allows subpoenas to request production, inspection, copying, testing or sampling of ESI to parties and non-parties alike.

Whether the amendments to the FRCP live up the hype about revolutionizing the practice of law remains to be seen. However, the simple fact that legal community is discussing these issues, and embracing technology on an entirely new level says something about the direction of the debate. Now that the rules are in effect, it seems clear that paralegals and their attorneys have an undeniable ethical, and professional responsibility to become fluent in technological concepts as they relate to EDD and ESI. The intersection of legal theory and technological concepts is inevitable, and it will be challenging. As we all cope with the changes over the course of the coming year, remember what John F. Kennedy once said, “we choose to go...not because it is easy, but because it is hard, because that goal will serve to measure and organize the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win.”

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