The federal judiciary has published a set of proposed rules to govern
the twists and turns of electronic discovery, addressing issues such as
inadvertent disclosure of privileged information, treatment of
information that is not reasonably accessible and consequences of loss
or destruction of data. U.S. Magistrate Judge Ronald Hedges took issue
with an amendment to Rule 37, which creates a "safe harbor" to protect a
party from sanctions for failing to provide electronically stored
By Mary P. Gallagher|September 08, 2004 at 12:00 AM
Thank you for sharing!
Your article was successfully shared with the contacts you provided.
The federal judiciary, recognizing the challenges of litigating in a world of digital data, has published a set of proposed rules to govern the twists and turns of electronic discovery. The draft rules, published on Aug. 15 by the Advisory Committee on Federal Rules, address such issues as inadvertent disclosure of privileged information, treatment of information that is not reasonably accessible and consequences of loss or destruction of electronic data. They also include “meet and confer” provisions similar to those in Local Rule 26.1(d) of the District of New Jersey adopted last October, which encourage lawyers to address electronic discovery issues early on in the course of litigation. The most controversial of the proposed rules may be an amendment to Rule 37 that would create a narrow “safe harbor,” protecting a party from sanctions for failing to provide electronically stored information in some circumstances. A party would be protected if it “took reasonable steps to preserve the information after it knew or should have known the information was discoverable … and the failure resulted because of the routine operation of the party’s electronic system.” The party must also not have violated any court order requiring it to preserve electronically stored information. The safe harbor would apply only to sanctions under the rules and only to losses that occur once a lawsuit is filed. The proposed amendment is meant to deal with the fact that electronic data can disappear in cyberspace without anyone trying to destroy it, through programs that automatically recycle data, overwrite deleted information and discard data that has not been accessed for a certain period. “Every time you turn on a computer you’re overriding some data,” says Philip Sellinger, of Florham Park’s Greenberg Traurig. Once the subjects of litigation are identified, for example, a party might want to impose a “litigation hold” that preserves e-mail records and electronic files of key individuals and departments, the committee’s report suggests. The report also acknowledged a split of opinion on whether the standard of culpability for destruction of electronic files under Rule 37(f) should be the negligence standard embodied in the draft or a higher standard, requiring intentional or willful conduct. The committee is asking for feedback on that particular question. Sellinger, for one, says it should take more than mere negligence to expose a party to sanctions, “given the burden of dealing with the complexity of large companies’ computer systems today.” One suggestion made to the committee, though not reflected in the draft rule, is to create a presumption of prima facie compliance where a party took reasonable steps to notify the custodian of electronic information at the company of the need to preserve certain information, adds Sellinger. U.S. Magistrate Judge Ronald Hedges, who was the moving force behind Local Rule 26.1(d), sees Rule 37(f) as unnecessary, stating “the case law on spoliation and preservation of evidence is very well-defined throughout the courts.” Under court precedent, “if the record retention policy doesn’t comply with the duty to preserve, the policy is ineffective,” he says. Hedges says he does not see why electronic data should be singled out for special treatment. “If we’re going to have a safe harbor provision, it seems to me we ought to protect information in any format, not just an electronic medium.” Also proposed are changes to Rules 26 and 45, which are prompted by concern that electronically stored information can be so voluminous and so much more difficult to review that it increases the risk privileged material will slip through and be inadvertently turned over in discovery. A new subsection (B) to Rule 26(b)(5) provides that a party who produces privileged material without intending to waive the privilege, may, “within a reasonable time,” notify the recipient, who would have to “promptly return, sequester, or destroy the specified information and any copies.” The producing party would have to prepare a privilege log and otherwise comply with existing rules on withholding privileged material. The proposed Rule 45 revision sets up similar requirements for subpoenas. The draft rules merely set out a procedure for dealing with privilege waiver issues, leaving it with the courts to decide whether waiver has occurred. ‘QUICK PEEKS’ AND ‘CLAWBACKS’ Parties sometimes enter into agreements that allow for essentially the same procedure, enabling them to turn over documents without review and retrieve anything that turns out to be privileged. They are known as “quick peek” and “clawback” agreements. Sellinger worries the proposed rules could be used to justify requiring disclosure without opportunity for adequate prior review. Judges eager to move cases along might be inclined to hold parties to unreasonable time frames. The risk of inadvertent disclosure is real, he says, due to time pressures and the fact that paralegals commonly handle predisclosure review. There is also the Pandora’s box problem: Even if no waiver occurs, and the information is returned, adversaries still got a look at data that could help them and hurt you. It is a fundamental problem with clawback agreements, says Hedges, adding, “I have a hard time understanding how the lawyer is going to take out of his head what the document says when it’s turned back.” Yet another question is as to the spillover consequences. For instance, a state court, not subject to the federal rules, could deem there had been a waiver for purposes of the state proceeding, Sellinger warns. LEGACY DATA A third major area addressed by the proposed rules involves how to deal with discovery of data that is not readily accessible — for example, “legacy data” currently unused and stored on an obsolete system, deleted data and inactive data stored for disaster recovery purposes. A typical example would be information wiped from a computer hard drive on an employee’s departure, says Sellinger. The data can be recovered but it takes time and money. An amendment to Rule 26(b)(2) would provide that such information need not be reviewed or turned over. But if an adversary moves for disclosure, the party would have to show the information was “not reasonably accessible.” The court could then require disclosure only for good cause and on specified terms and conditions. The procedure mirrors the two-tier approach that generally applies to disputed discovery in Rule 26(b)(1), leading Hedges to call the draft rule unnecessary and potentially confusing. In Sellinger’s view, the question is whether the rule should automatically shift the cost of producing information that is not reasonably accessible rather than merely allowing the judge to do so. The “meet and confer” provisions in the draft rules, like Local Rule 26.1(d), encourage lawyers to address electronic discovery issues at the outset. Parties would be required to discuss at the Rule 26(f) conference “any issues relating to disclosure or discovery of electronically stored information,” as well as whether they should agree to an order guarding against inadvertent waiver of privilege. Changes to Form 35 and Rule 16 would allow the parties to include the electronic discovery matters in their conference report and allow the court to set them out in the scheduling order. NO PRYING INTO COMPUTER SYSTEMS Unlike the local rule, the proposed federal rules do not require counsel to review a client’s information management systems prior to the Rule 26(f) conference but an accompanying note recommends that lawyers familiarize themselves with those systems beforehand. The local rule also goes beyond the federal proposal in requiring attorneys to identify a person with knowledge of the client’s system who can facilitate anticipated discovery. In addition, proposed changes to Rules 33 and 34 would:
This content has been archived. It is available exclusively through our partner LexisNexis®.
To view this content, please continue to Lexis Advance®.
LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.
ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.
Data breaches and cybersecurity threats targeting corporations are a major challenge facing in-house counsel and their IT counterparts. Learn how to take your security defenses to the next level to protect against overlooked internal threats.
Critical audit matters (CAMs). The term itself sounds like a big deal, and a new report from Intelligize indicates that in fact, they are. The report shows that CAMs will significantly impact public companies’ disclosures, accounting controls and even investor relations in the near future. Gain more insight with this report into how public companies are preparing for CAMs reporting.
Data breaches and cybersecurity threats targeting law firms are a major challenge facing legal professionals and their IT counterparts. Learn how to take your security defenses to the next level to protect against overlooked internal threats.
With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
Dynamically explore and compare data on law firms, companies, individual lawyers, and industry trends.
Exclusive Depth and Reach.
Legal Compass includes access to our exclusive industry reports, combining the unmatched expertise of our analyst team with ALM’s deep bench of proprietary information to provide insights that can’t be found anywhere else.
Big Pictures and Fine Details
Legal Compass delivers you the full scope of information, from the rankings of the Am Law 200 and NLJ 500 to intricate details and comparisons of firms’ financials, staffing, clients, news and events.
As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters.
Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss.
Tailored just for you. In your inbox. Every day.