On December 1, 2006, amendments to the Federal Rules of Civil Procedure went into effect. The new rules address the extraordinary increase in information conveyed and stored in electronic format. These amendments relate to "electronically stored information" (i.e., information stored on computers or other electronic media) during the discovery phase of litigation. Prior to these amendments, whether electronically stored information should be searched or produced during discovery was a point of confusion and disagreement for some. The amended rules have resolved that issue. Electronically stored information is discoverable according to the "e-discovery rules," as the amended Rules 16, 26, 33, 34, 37 and 45 are often called.
Will the e-discovery rules affect your business?
It depends. Obviously, compliance with the new rules is required of all parties to federal litigation filed on or after December 1, 2006, as well as some cases that were pending on the effective date. If your business is not currently involved in a federal lawsuit, or is not anticipating involvement in a federal lawsuit, it has no existing obligations under these rules.
Even though your business may not be subject to the new rules, a good practice is to be prepared. Being prepared to comply with the new e-discovery rules and the existing body of law regarding the preservation of discoverable information may include:
# Mapping Your Business's Computer Infrastructure and Documenting Your Record Retention Practices – Built-in to the new rules are a number of assumptions about the litigants, including that each litigant understands its own computer infrastructure and record retention procedures, and can relay this information as it currently stands and at the time of the events relevant to the dispute in short order (within 90-120 days from the service of the complaint) to its counsel. For many businesses, this is a false assumption.
In light of the new rules, your business should consider mapping its computer infrastructure to show how computers are networked, including all servers, firewalls, and routers with host name, IP address and purpose of the server written in plain English. Your business should also evaluate its record retention policies. Being able to provide information about your computer infrastructure and record retention policies will give outside counsel the necessary tools to comply with the e-discovery rules.
# Understanding When Your Company's Preservation Obligation Begins – The e-discovery rules do not specify when a business is duty-bound to preserve information. Recent case law confirms that this obligation begins when litigation is reasonably anticipated. Once a litigation threat is determined to be sufficiently legitimate, your company should consider developing a contingency plan for complying with the e-discovery rules.
# Understanding that Electronically Stored Information is Produced Differently – For some companies, the discovery process in litigation has consisted of searching, collecting, copying, and submitting its paper documents to its attorney for review and production to the opposing counsel. When dealing with electronically stored information, the process is different in some key respects and your business may experience increased litigation costs due to the differences.
Companies should expect a much greater volume of electronically stored information than with paper. Electronically stored information is typically stored in numerous places (copies may be found on various computers, servers, backup tapes, etc.), and work habits don't always lead to the deletion of draft versions of documents. Because the amount of electronically stored information at your business may be sizeable, your business may need to assist with the filtering of information not relevant to the litigation.
Once the electronically stored information is collected and filtered, it may be produced in a variety of formats, including:
# Native: Electronic stored information is produced as is. For example, if an Excel spreadsheet is collected, it would be produced as a .xls file.
# Quasi-paper: Electronically stored information is processed and converted into image files (TIFF/pdf).
# Quasi-native: Electronically stored information is taken from one database and transferred to another database for production.
# Paper: Electronically stored information is printed to paper.
Each production format has its advantages and disadvantages. Agreeing to the production format is the best practice for all parties to the litigation. However, if no agreement can be made, the new e-discovery rules do enforce a fall-back provision – either the electronically stored information is produced in native format or a form that is reasonably usable and searchable (quasi-paper).
In summary, the e-discovery rules have made it clear that electronically stored information, the information on your business's computers, is discoverable.Therefore, it is time for your business to get tech-savvy and get prepared because unless your business is immune to litigation, the e-discovery rules will impact it.