Just over two years ago, the Delaware Chancery Court issued its first set of guidelines for practitioners for the preservation of electronically stored information (“ESI”). One year ago, the Court published non-binding Guidelines for Practitioners (“Guidelines”) to help lawyers and their clients handle procedural issues that arise when litigating before it. This year, the Court of Chancery has announced rule changes and new discovery guidelines intended to bring the Court’s Rules and Guidelines in line with current practice. The most recent changes, amending Rules 26, 30, 34 and 45 in order to account for modern discovery demands, took effect on January 1, 2013. These changes are consistent with similar changes to the Federal Rules of Civil Procedure. As amended, the Rules now account for the discovery of ESI. While the Delaware Court of Chancery’s Guidelines are most helpful for practitioners before the Delaware courts, the Guidelines also provide useful practice points for litigation counsel generally.
Guidelines for Practitioners . . .
According to a press release issued by the Court, the newly expanded Guidelines (available at http://courts.delaware.gov/Chancery/guidelines.stm) “explain the Court’s expectations regarding parties’ responsibility to confer early and often regarding discovery” and “are intended to assist the Bar in developing reliable and transparent procedures for electronic discovery.” Dec. 4, 2012 Press Release: Court of Chancery Announces Rule Changes and New Discovery Guidelines, available at http://courts.state.de.us/chancery/rulechanges.stm. In an effort to achieve these goals, the Guidelines address various aspects of the discovery process while simultaneously emphasizing the Court’s reluctance to adopt a “one-size-fits-all” approach.
The new and improved Guidelines contain an entire section dedicated to discovery, broken down into three components: (1) the preservation of ESI; (2) the collection and review of documents in discovery; and (3) expedited discovery in advance of a preliminary injunction hearing.
. . . for the Preservation of Electronically Stored Information
The first section of the Guidelines reiterates the best practices articulated by the Court in its stand-alone issuance two years ago. Court of Chancery Guidelines for Preservation of Electronically Stored Information, available at http://courts.delaware.gov/forms/download.aspx?id=50988. With respect to preserving ESI, the Court reminds all counsel of their duty to take reasonable steps to preserve information that potentially is relevant to the litigation and that is within the party’s possession, custody, or control. The Court encourages a party and its counsel — both in-house and outside — to take a collaborative approach to the identification, location, and preservation of potentially relevant ESI, to develop written instructions to disseminate in the form of a litigation hold notice to the custodians of potentially relevant ESI, and to document the steps taken to prevent the destruction of potentially relevant ESI. The Court urges parties and their counsel to confer regarding the preservation of ESI early in the litigation process, and encourages opposing parties to confer about the scope and timing of discovery of ESI.
. . . for the Collection and Review of Documents in Discovery
In the second section of the discovery related portion of the Guidelines, the Court addresses the collection and review of documents in discovery, with a special focus on identifying privileged documents and properly preparing privilege logs – what the Court deems “[o]ne of the most difficult parts of the discovery process.” Guidelines, II.7.b. Again, the Court encourages counsel to meet and confer promptly after the start of discovery to develop and implement a discovery plan that accounts for ESI. The Court notes the importance of transparency in this process, indicating that open communication concerning search terms, cutoff dates, etc., can help parties identify potential areas of disagreement sooner rather than later, as well as provide parties with some protection if problems arise further along in the process. The Guidelines emphasize the importance of retaining experienced outside counsel to be actively involved in establishing and monitoring the procedures used to ensure that documents are properly and timely collected, reviewed and produced. In the same vein, the Court reminds counsel of the importance of interviewing custodians who may be in possession of responsive documents to identify how and where the custodians maintain their records.
Apropos of the vulnerability of ESI to deletion or modification, counsel are warned to exercise care in developing the necessary procedures to preserve and collect ESI. Guidelines, II.7.b.v. On the other hand, the Court notes that counsel also should consider issues of burden and expense to ensure that the costs of litigation are proportionate to what is at stake. The Guidelines specifically note the necessity for parties to discuss the appropriate extent of electronic discovery and “try to reach a case-specific accord based on a candid appraisal of the information base each side has, the costs of employing various electronic discovery techniques, and the stakes at issue in the case.” Id. The Court also emphasizes its expectation that Delaware counsel play an active role in the discovery process, at a minimum discussing with co-counsel the Court’s expectations. Guidelines, II.7.b.vi.
Notably, the Court devotes over three pages of this section of the Guidelines to advising practitioners on best practices for reviewing documents for privilege and preparing privilege logs. Emphasizing the systemic over-designation of documents as privileged, the Court urges senior lawyers to provide clear guidance to junior attorneys about “how the privilege assertion process should unfold.” Guidelines, II.7.b.vii.(a). The Court provides specific instructions concerning how documents on a privilege log should be described, and warning that it is inconsistent with the spirit of these guidelines “for parties who receive a proper privilege log to use it as the basis for a claim that the generation of the privilege log waived privilege in any way.” Guidelines, II.7.b.vii.(c). As the Court advises, “[r]ote repetition of ‘Communication for the purpose of providing legal advice’” is not an adequate explanation of the basis for the assertion of attorney-client privilege. Id.
The Court concludes this portion of the Guidelines by emphasizing how befitting the “goose and gander” rule may be to parties seeking constructive discovery solutions. As the Court counsels, what is good for one party is generally good for the other. Where parties communicate in good faith, each will better understand the basis for the other’s production of privileged documents, thereby reducing the incidence of discovery disputes concerning the assertion of privilege. Guidelines, II.7.b.viii.
. . . for Expedited Discovery in Advance of a Preliminary Injunction Hearing
Lastly, the Court issued a new component of the Guidelines to set forth typical practice as to the conduct of expedited discovery in advance of a preliminary injunction hearing in high stakes commercial and corporate litigation. Guidelines, II.7.c.i. Although this component of the Guidelines is not limited in scope to e-discovery, the Court’s recommendations necessarily encompass aspects of e-discovery by addressing document collection, review, and production, generally. With respect to document collection, the Court encourages parties to collect and produce the “core documents” associated with the application for preliminary injunction as promptly as possible and then make good-faith and reasonable efforts to agree on and limit the number of custodians from which each party collects. Even in expedited discovery, the Court urges counsel to interview the custodians from whom they have collected documents to better ascertain any potential sources of relevant documents. As noted throughout the Guidelines, the Court expects Delaware counsel to play an active role in this process, noting that its “expectations are not lessened in expedited litigation, and, if anything become more important because of the absence of any room in the schedule to redress discovery shortcomings.” Guidelines, II.7.b.iii.
With respect to document review and production, the Court encourages parties to produce significant documents as soon as possible and all other documents on a rolling basis, with outside litigation counsel actively overseeing the document collection, review and production. More noteworthy, however, is the Court’s encouragement “that parties make agreements that reduce the time, expense and burden associated with conducting a document-by-document privilege review and preparing privilege and redaction logs so that the merits of the application may be developed in the limited time available and fairly presented to the Court.” Guidelines, II.7.b.v. The Court also encourages parties to agree to forego redaction logs where the information in such a log would be redundant of information already available on the face of the redacted document. Lastly, the Court notes that parties sometimes agree to forego a document-by-document privilege review altogether in favor of a “quick peek” agreement through which the party seeking discovery is permitted to review responsive documents without the producing party waiving privilege as to qualifying documents.
The Guidelines may be an early precursor for the emergence of similar rules and expectations in courts throughout the country. In light of how rapidly e-discovery law is expanding, this extensive guidance from the Delaware courts on how best to handle the challenges of electronic discovery is both useful and welcomed.