The Sedona Conference Working Group on Electronic Document Retention & Production has released its Commentary addressing a litigant’s obligations to preserve, manage and identify Not reasonably Accessible sources of information. The Commentary is an important resource providing guidance on the difficult problem of what to preserve and how to manage what has been preserved in the context of NRA sources in civil discovery.
The Commentary begins with a reference to the importance of seeking agreement on preservation issues early in a case. However, it notes, there are many situations where preservation issues must be dealt with before there is an opportunity to seek agreement. To that I would add, there are many cases where agreement simply is not possible and court intervention must be sought. In the interval between the triggering of the preservation duty and the resolution of the issue by the court, which could take a while, the practicalities of the issue must still be dealt with.
The Commentary makes the following recommendations:
Guideline 1: Where litigation is anticipated but no plaintiff has emerged or other considerations make it impossible to initiate a dialogue, the producing party should make preservation decisions by a process conforming to that set forth in the Decision Tree in Figure 1 and as described above.
As a practical matter, the first step is part of the litigation hold process, determining what information would be relevant to the incipient case or investigation. This can be a difficult process, which requires that thought be given to both claims and defenses. It is very important that this step be well documented, because of the possibility that relevant information will be destroyed because you simply did not anticipate relevance. The standard is “should have known.” This in turn brings into play the initial preservation letter sent to the opponent. The more specific the letter, the more likely a court will consider it in determining whether information should have been preserved. Several cases, discussed in the Commentary, have held that a failure to notify a party that material is likely to be relevant will defeat a later motion for sanctions. The Commentary also points out the absolute necessity to notify an opponent if the information is temporary or ephemeral.
The second step also is part of the litigation hold procedure. Once you know the parameters of relevancy, you have to find the sources where that relevant information is likely to be stored.
The third step, determining relative accessibility, is the heart of the process. The focus of NRA is undue burden or cost. The Commentary divides the analysis into two steps, analyzing the factors relevant to inaccessibility and analyzing the burden or cost. The Commentary sets forth twelve factors that it contends should be analyzed, six media based factors and six data complexity factors:
Media Based Factors:
- Active on-line data, e.g., hard drives, PDAs and network storage;
- Near-line data, e.g. robotic storage devices such as optical disks;
- Offline storage/archives, e.g., removable optical disks or magnetic tape media which can be labeled and stored;
- Backup tapes, e.g., sequential access devices typically not organized for retrieval of individual documents;
- Physically damaged media;
- Legacy media, which cannot be read by existing equipment.
Data Complexity Factors
- Transient complexity, e.g., web pages that are constantly overwritten;
- Hidden complexity, e.g., deleted filed after recycle bin has been emptied;
- Extraction complexity, e.g., files found in the slack space;
- Preservation complexity, e.g., cache and temp files;
- Search complexity, e.g., static graphical images not OCRd;
- Dispersion complexity, number of PDA devices that need to be reviewed.
This step also requires careful documentation to assist the court in a later determination of whether the preservation decisions were reasonable.
The fourth step involves a determination of whether the information in NRA sources may be available in more accessible sources. Again, the court may later be asked to assess the reasonableness of the decision made here, so documentation is essential.
The last step involves assessment of proportionality, “if the burdens and costs of preservation are disproportionate to the potential value of the sources of data at issue, it is reasonable to decline to reserve the sources.” Rule 26(b)(2)(C) provides the test.
Guideline 2: As soon as feasible, preservation issues should be openly and cooperatively discussed in sufficient detail so the parties can reach mutually satisfactory accommodation and also evaluate the need, if any, to seek court intervention or assistance.
Under Rule 26(f), preservation issues are to be discussed at the parties’ meet and confer. The Commentary suggests that waiver of subsequent spoliation claims may result where the parties do not discuss this issue. Where agreement cannot be reached, strong consideration should be given to approaching the court.
Guideline 3: In conjunction with the initial discussions or where appropriate in the response to discovery requests, parties should clearly identify the inaccessible sources reasonably related to the discovery or claims which are not being searched or preserved.
Rule 26(b)(2)(B) requires identification of sources the party does not intend to search. That identification may take place on several occasions. NRA sources that may contain information that a party may use to support its claims or defenses should be disclosed as part of the initial disclosures under Rule 26(a)(1).
Rule 26(f) suggests that the parties discuss reasonable accessibility of sources. The Rule indicates that this should include sufficient detail to allow the requesting party to determine whether to seek production form NRA sources. The Commentary suggests the following topics:
- Type of back-up and disaster recovery media used.
- Identity and version of legacy software or systems, and when such software or systems achieved “legacy” status within an organization.
- Information sufficient to describe the system(s) or protocols used by the party to map, archive, and manage the back-up processes and procedures.
- Information describing sources of information that are or may be duplicative or substantially similar to the information sought – and the processes used to locate those sources.
- Internal or third-party estimates of costs associated with accessing the various sources of data involved.
- Detail about the capture and retrieval protocol under consideration, and the internal cost of data capture and retrieval (human capital of an organization to restore or extract data).
- “Extenuating circumstances,” including any potential opportunity-cost issues associated with allocating internal staff to restore or extract data (e.g., an organization relying on a new product roll-out for survival).
- The anticipated form or forms of production to be sought, the need for metadata, and the form of preservation of information pending discovery.
Obviously, documentation of these discussions is essential.
A party making objections to discovery requests based upon NRA, must also disclose potential sources of information not being searched.
Guideline 4: A party should exercise caution when it decides for business reasons to move potentially discoverable information subject to a preservation duty from accessible to less accessible data stores.
While several cases discussed in the Commentary refuse to sanction a party for moving discoverable information to an NRA source, the courts also refused to shift the cost of production to the requesting party. Thus, careful consideration should be given to such a decision.
Guideline 5: It is acceptable practice, in the absence of an applicable preservation duty, for entities to manage their information in a way that minimizes accumulations of inaccessible data, provided that adequate provisions are made to accommodate preservation imperatives.
Simply put, there is no duty to preserve information unless and until it may be relevant to litigation or an investigation. The corollary to this is that when a preservation duty arises, the organization must be in a position to implement a litigation hold.
Guideline 6: An entity should encourage appropriate cooperation among legal and other functions and business units within the organization to help ensure that preservation obligations are met and that resources are effectively utilized.
The Commentary cites to a case where the court sanctioned a party for failing to conduct a “methodical survey of [Defendants] sources of information.” There are other cases where the courts have sanctioned parties for similar conduct. It is essential that counsel work with the organization’s IT group to impose and monitor legal holds and prepare for discussions with opposing counsel.