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The explosive growth of electronic discovery has triggered proposed changes to the Federal Rules of Civil Procedure. These changes are necessary � to provide needed guidance to both litigants and the courts, and to address the inherent problems and limitations with the rules that have developed with the advent of the paperless office. The FRCP were drafted back in the late 1970s and into the 1980s, when paper was the common method of business communication. Over the past several years, the enormous growth of electronic data and information has radically transformed the business environment. Many of the proposed amendments to the FRCP are directly related to the discovery aspect of electronically stored information. Rule 37 is Failure to Make Disclosure or Cooperate in Discovery; Sanctions. Specifically, Rule 37(f) addresses the issue of sanctions for the destruction of electronically stored data. Members of the corporate defense bar have offered a variety of proposals, known as safe harbor proposals, to try and limit the power of the courts to impose sanctions for inadvertent destruction of electronic data. A “safe harbor” already exists for certain corporate information-processing systems that don’t apply to pending or active litigation. A good example of this is enterprise-wide databases, which are updated with current information on a regular basis. Input on these issues has come from the corporate counsel of global leaders such as Microsoft, Intel, Exxon, and Cigna; the presidents of bar associations; and many leading defense attorneys. While corporations strive to create a safe harbor for business data, it is ultimately up to the courts to create a balance between the requesting and producing parties. THE REALITY OF RULE 37 The rules of discovery have been significantly affected by the transition from paper documents to electronic data. In the old world, if someone wanted to dispose of a document, he would throw it in the trash or put it through a shredder, never to be recovered. The document would be permanently gone. Today, if a document is deleted from a computer, the level of recoverability is increased, thanks to computer forensics and the elaborate backup systems employed by many corporations. The proposed amendments are intended to help Rule 37 cover these realities. The goal is to limit the court’s power to impose sanctions for the destruction of electronically stored information. The amended Rule 37(f) reads: “(f) Electronically Stored Information. Unless a party violated an order in the action requiring it to preserve electronically stored information, a court may not impose sanctions under these rules on the party for failing to provide such information if: “(1) the party took reasonable steps to preserve the information after it knew or should have known the information was discoverable in the action; and “(2) the failure resulted from loss of the information because of the routine operation of the party’s electronic information system.” While the first subsection will certainly spark commentary on the boundaries of “reasonable,” it is the definition of “the routine operation of the party’s electronic information system” that should elicit the greatest hue and cry. Ken Withers, a senior judicial education attorney responsible for developing educational programs for federal judges and attorneys employed by the U.S. courts, has encapsulated the realities of modern electronic information systems in a recent article. He wrote, “Any attempt to isolate, segregate, and preserve a certain set of potentially responsive information for pending or anticipated discovery is likely to throw a wrench into the entire information-processing assembly line.” THE COST OF PRESERVATION Routine backup of entire networks is no small task. This includes the regular daily, weekly, or monthly rotations where backup tapes � created as copies of data that reside on the server � are written over once the information that is saved on the tape is no longer needed. Once the information on a tape is 14 days old, many companies will reuse the tape to back up more-recent information. That then becomes a cycle. Corporate counsel are the strongest advocates of clear safe harbor provisions in routine data management. For example, Greg McCurdy, senior attorney for litigation at Microsoft, talked about what it would cost Microsoft to preserve just e-mail alone. Microsoft’s IT network maintains about 90,000 e-mail boxes for employees, vendors, and others. The e-mail generated by all these users is stored and routed on more than 100 servers. Those servers are backed up daily by about 15 tape drives. The main data center in Redmond, Wash., generates between 150 and 200 backup tapes a day, which hold about 15 terabytes of data, or approximately 1.5 million e-mails. The daily backup tapes are recycled every 14 days. The cost of 14 days’ worth of tapes is about $65,000, not including storage and management costs. If Microsoft had to stop recycling backup tapes for one year, the purchase of additional tapes alone could exceed $1.7 million a year. SMALL HARBOR More and more companies today are seeing the need to protect data critical to business and to implement disaster recovery systems. Rapid advances in data storage media and compression technologies will continually make data preservation easier and cheaper. Unfortunately, though, setup, maintenance, and recovery are still relatively expensive. Currently, there are three main automated systems employed by corporations to control the volumes of e-mail: backup tape recycling, spam filters, and auto-deletion of unneeded e-mail. These systems, in turn, are essential in enhancing employee productivity and preventing electronic data systems from drowning in data. • Backup tape recycling: As time passes, information from backup tapes becomes increasingly inaccessible. For last week’s backup tapes, records may still exist, such as indices or catalogues of which documents were in what files and when and how those files were backed up. A rough guess of where a particular file resides can be made. As more time passes, locating files becomes more difficult. The technology changes or is upgraded, the original software or hardware used to make the tapes no longer exists, or the IT staff has changed. The result is a considerable increase in the time and effort needed to locate specific information. Some of the safe harbor comments received to date state a preference for backup tapes to be considered inaccessible unless requested by court order and with proven good cause. • Spam filters: Spam is defined as electronic junk mail, often unsolicited. Automatic filters can be employed to delete e-mails classified as spam. The e-mail messages are blocked and cannot be used by employees for any business purposes. For instance, Microsoft currently receives an average of approximately 250 million to 300 million external messages a month, double the volume from 12 months ago. The increase is mostly due to spam. Microsoft now uses e-mail-filtering software, and deletes 85 to 90 percent of the incoming e-mail as spam. Unless specific to the litigation at hand, the courts are going to have to decide whether e-mail blocked by spam filters should or should not be subject to preservation within a safe harbor. • Automatic deletion of unneeded e-mail: For basic economic reasons alone, corporations do not provide unlimited storage space for employees’ e-mails. In some companies, employees are periodically required to file pertinent e-mail and delete the rest. Other entities have automatic deletion software. When the e-mail becomes 30 or 60 days old, the software will automatically delete any e-mail that is not filed into storage. If there is no threat of litigation, or the party is preserving what needs to be preserved, it is a controversial issue as to whether there should be a safe harbor for the automatic deletion of e-mail. SPECIFIC REQUESTS ARE GOOD General preservation orders are commonplace in litigation. They command preservation of documents and information relevant to the litigation. The general or blanket preservation order does not take into consideration, though, how it might affect routine electronic information systems. A blanket preservation order can be financially burdensome for both parties, considering that there could be cost-sharing or cost-shifting designated by the court in electronic discovery. Clarification on precisely what needs to be saved and accessible could benefit both parties. If there is good cause for a responding party to preserve data, the requesting party can submit a specific preservation order. Under the proposed amendments, the requesting party is entitled to data that is reasonably accessible and relevant. If electronic data is relevant but not reasonably accessible, objections are inevitable regarding the definitions of accessibility. This is a key issue that will determine the breadth of the provisions. IT’S ALL ABOUT BALANCE There will never be a lack of documents or data. Until the world becomes paperless, and the costs of storage, maintenance, and management of electronic information significantly decreases, it will be up to the courts to interpret the scope of FRCP 37(f). In the meantime, relief for corporations can come from the implementation of specific preservation orders, specifying which electronic information systems are subject to preservation requests. A blanket preservation order does not reflect the current state of technology and business communications. Reasonable and specific preservation orders do work for both sides. It is likely that within the next year, the safe harbor proposals will be finalized and implemented. The text of the proposed amendments and a form to submit comments are at www.uscourts.gov/rules/newrules1.html. Anyone interested in commenting on the proposed rules should do so before Feb. 15. Howard J. Reissner is CEO of Planet Data Solutions Inc., a provider of litigation support, information, and data management services to law firms, corporations, and governments. He is a member of the New York Bar and can be reached at [email protected].

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