The California Judicial Counsel has proposed what many practitioners are characterizing as blatantly unfair e-discovery rules with respect to Electronically Stored Information that is not reasonably accessible. The public comment period ends on January 25. So if you have clients that do business in California, or if you are a company that does business there, particularly if you have sizable amounts of ESI stored on your computer hard drives, you may want to act fast.
The Federal Rules
Rule 26(b)(2)(B) provides as follows:
A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause, considering the limitations of Rule 26(b)(2)(C). The court may specify conditions for the discovery.
In sum, the party resisting discovery of sources of data that are not reasonably accessible – think backup tapes, legacy systems, corrupted media, or hard drive slack space – must first identify those sources, and then, if a motion to compel is filed by the party seeking production, must establish that those sources are in fact not reasonably accessible by showing that production of the data from those sources would be unduly burdensome or too expensive. The few cases that have analyzed the issue since the adoption of the amended rules in 2006 have assessed the burden on the party in the context of the case. See, e.g., In Re. Goetz, Case No. 3:98-0168 (M.D. Tenn. October 9, 2007), discussed here.
If the party resisting discovery successfully establishes that the sources are not reasonably accessible, the burden is on the party seeking discovery to establish good cause, in light of Rule 26(b)(2)(C), which states:
The frequency or extent of use of the discovery methods otherwise permitted under these rules and y any local rule shall be limited by the court if it determines that: (i) the discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity by discovery in the action to obtain the information sought; or (iii) the burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues. The court may act upon its own initiative after reasonable notice or pursuant to a motion under Rule 26 (c).
Rule 26(b)(2)(C) requires a balancing of the costs and potential benefits of discovery. The Advisory Committee Notes further inform the good cause inquiry:
Appropriate considerations may include: (1) the specificity of the discovery request; (2) the quantity of information available from other and more easily accessed sources; (3) the failure to produce relevant information that seems likely to have existed but is no longer available on more easily accessed sources; (4) the likelihood of finding relevant, responsive information that cannot be obtained from other, more easily accessed sources; (5) predictions as to the importance and usefulness of the further information; (6) the importance of the issues at stake in the litigation; and (7) the parties’ resources.
In sum, the Federal Rules provide very specific guidance to Judges and the parties as to what considerations should go into a determination of whether a party should be required to produce data from a source that is not reasonably accessible.
The Proposed California Rules (Underscored)
(a) When an inspection, copying, testing, or sampling of documents, tangible things, or places, or electronically stored information has been demanded, the party to whom the demand has been directed, and any other party or affected person or organization, may promptly move for a protective order. This motion shall be accompanied by a meet and confer declaration under Section 2016.040.
(b) The party or affected person or organization seeking a protective order regarding the production, inspection, copying, testing, or sampling of electronically stored information on the basis that such information is not reasonably accessible because of undue burden or expense bears the burden of so demonstrating.
(d) If the party or affected person or organization from whom discovery of electronically stored information is sought establishes that the information is from a source that is not reasonably accessible because of undue burden or expense, the court may nonetheless order discovery if the requesting party shows good cause.
(e) If the court finds good cause for the production of electronically stored information from a source that is not reasonable accessible, the court may set conditions for the discovery of the electronically stored information, including allocation of the expense of discovery.
(f) The court shall limit the frequency or extent of discovery of electronically stored information, even from a source that is reasonably accessible, if the court determines:
(1) That it is possible to obtain the information from some other source that is more convenient, less burdensome, or less expensive;
(2) That the discovery sought is unreasonably cumulative or duplicative;
(3) That the party seeking discovery has had ample opportunity by discovery in the action to obtain the information sought; or
(4) That the likely burden or expense of the proposed discovery outweighs the likely benefit, taking into account the amount in controversy, the resources of the parties, the importance of the issues in the litigation, and the importance of the requested discovery in resolving the issues.
There are two problems here that are likely to significantly increase expenses in California State litigation. First, the party resisting discovery must file a motion for a protective order. It is not sufficient to just identify the sources that are not reasonably accessible, and then wait to see if the opposing party feels that the data that might be found in those sources is worth the cost involved in filing a motion and potentially having to pay the actual costs of production itself. Thus every case involving inaccessible data, which is virtually every case – if any computer hard drive has had any potentially relevant file deleted from it, the slack space is likely to contain at least portions of that file – will require a motion for a protective order.
Second, there is no connection set forth in the proposed rules between subsection (e), which sets forth the good faith provision, and subsection (f), which articulates the considerations, as there are in the corollary federal rule. Moreover, the “appropriate considerations” set forth in the Advisory Committee Notes are nowhere to be found.
These are not minor inconsistencies. The California rules, if adopted as proposed, will significantly impact the cost of discovery in that State’s courts. If you or your clients do significant business in that State, you should consider voicing your opinion by January 25.