On June 29, 2009, Governor Schwarzenegger signed into law California’s Electronic Discovery Act (AB 5). The bill contained an urgency clause, meaning that the Act took effect immediately. The Act largely mirrors the Federal Rules of Civil Procedure governing electronic discovery and imposes substantial new requirements for discovery in California state courts.
Until now, specific rules on electronic discovery in California were confined to the Federal Courts. California’s Electronic Discovery Act (the “Act”) amends California’s discovery rules and expressly permits discovery of electronically stored information (“ESI”). The Act provides that parties may demand copying, testing, sampling or inspection of such information. In doing so, the legislation recognizes that almost all cases now involve some form of electronic discovery.
Unlike the Federal Rules, the Act permits parties to seek discovery of ESI that is from a source that is not reasonably accessible because of undue burden or expense. The burden is on the responding party in the first instance to bring a motion for a protective order or to make written objections to such a request.
Under the Act, a party must take steps to preserve ESI when they are put on notice of litigation. This means that even if you have a company policy for the destruction of electronic documents, you must cease destroying documents that could be relevant to the case once you become aware of the litigation. Failure to do so may lead to severe monetary and legal penalties.
Recently, a California court of appeal reversed a jury verdict in the defendant’s favor and entered judgment in favor of the plaintiff because of the defendant’s failure to properly preserve and produce electronic documents. The court also awarded the plaintiff attorneys’ fees. (Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967.) Similarly, in an unpublished decision the same appeals court granted judgment to a plaintiff in the amount of over $17 million when the plaintiff proved the defendant destroyed electronic information. (Elec. Funds Solutions, LLC v. Murphy (2009) 2009 Cal.App.Unpub. LEXIS 4956.)
Call your counsel immediately if you are notified of possible litigation to discuss the steps you should take to preserve ESI. Attorneys and clients must work closely together to discuss the ramifications of ESI discovery, both in responding to discovery and requesting ESI from other parties. Luce Forward has expertise in handling electronic discovery for clients of all sizes and can recommend the best strategy for the collection, review, analysis, and production of ESI in a cost-effective manner.
Is your document retention policy updated to address the changes in California’s Electronic Discovery Act? It is important to review company policies to ensure they do not run afoul of the new rules.
