Key to managing the risks and costs associated with electronic discovery in state court is resisting the common misunderstanding that each state has, at least in substantial part, followed the lead of federal courts. Such an assumption may increase risks and costs should litigation arise. Indeed, development of e-discovery rules in state court has been far from uniform, with states pursuing a number of divergent paths to govern this burgeoning area.
Generally, states have substantially adopted the Federal Rules of Civil Pro­cedure; enacted a unique set of rules that are an amalgam of a variety of sources; or ignored the issue altogether. The consequences to parties operating in multiple jurisdictions are far-reaching, as satisfactory document preservation and production of electronically stored information (ESI) in one state may be entirely unacceptable in another. Accordingly, awareness of these rules before a dispute arises is essential. For a broad understanding of how states are approaching e-discovery in each of the three categories, examples of each are discussed below.
• Substantial adoption of the Federal Rules of Civil Procedure. California and approximately 21 other states have adopted a statute or rules governing e-discovery statute. Most of these states have generally followed the Federal Rules of Civil Procedure, though the specifics of each state’s rules vary. California’s rules, contained in the Electronic Discovery Act, follow the Federal Rules model closely. Calif. Civ. Proc. Code § 2016.20 et. seq. California’s rules governing information that is “not reasonably accessible” and its safe-harbor provisions covering information destroyed through the “routine, good faith operation of an electronic information system” are substantively identical to the equivalent federal rules. Calif. Civ. Proc. Code §§ 2031.60(c)-(e), (i)(1), 2031.300 (d)(1). California has also adopted Fed. R. Civ. P. 45′s protection for third-party subpoena recipients, who shall be protected “from undue burden or expense resulting from compliance.” Calif. Civ. Proc. Code § 1985.8(k).
Like the Federal Rules, the Electronic Discovery Act gives California courts the same broad discretion over e-discovery that they have over conventional discovery. Even if the producing party shows that discovery of ESI will be burdensome or expensive, a court may order discovery of relatively inaccessible ESI subject to certain restrictions, such as cost-­shifting among the parties. Calif. Code Civ. Proc. § 2031.060(e). On the other hand, courts may limit discovery if they decide that it is possible to get the same information from a more convenient or less expensive source. Calif. Code Civ. Proc. § 2031.060(f).
Although there will always be particularities even among states that have in large part adopted the federal model for e-discovery, such as California, the general uniformity is a welcome trend in an inherently complicated and continually changing area of the law.
• Enactment of a unique set of rules. New York, along with approximately seven other states, have charted their own paths for regulation of e-discovery. 150 Nassau Assocs. LLC v. RC Dolner LLC, No. 601879/04, 2011 WL 556290 (New York Co., N.Y., Sup. Ct. Feb. 9, 2011). In New York state, the Commercial Division of the Supreme Court — the trial-level court — has largely led the way, developing e-discovery rules that emphasize early identification of issues and cooperation of the parties without significant court oversight.
Prior to the preliminary conference, for example, the Commercial Division rules require counsel to “confer with regard to anticipated electronic discovery issues,” including agreeing on “a data preservation plan,” disclosing “the programs and manner in which [each party's ESI] is maintained” and estimating the “anticipated cost of data recovery,” with a “proposed initial allocation of such cost.” N.Y. Commercial Division Rule 8(b). The need to agree on allocation of costs, however, has led to significant disputes as New York courts, including the Commercial Division, recently began ordering the requesting party to bear the responding party’s production costs. Response Personnel Inc. v. Aschenbrenner, 909 N.Y.S.2d 433, 433-34 (N.Y. App. Div. 1st Dep’t 2010). But the courts have differed as to the contours of the rule. Some courts require requesting parties to pay only for production of ESI that is not “readily available,” Silverman v. Shaoul, 913 N.Y.S.2d 870, 874 (New York Co., N.Y., Sup. Ct.2010), while others require requesting parties to pay all but “inconsequential” costs. Response Personnel, 909 N.Y.S.2d at 434.
During the preliminary conference, parties must appear “sufficiently versed in matters relating to their clients’ technological systems to discuss competently all issues relating to electronic discovery[.]” N.Y. CPLR §§ 202.10(b), 202.70(g). If counsel is not sufficiently familiar with the technicalities of e-discovery, in addition to the whereabouts and form of the client’s ESI, counsel must be accompanied by someone (not necessarily a lawyer) who is able to address both. Indeed, with the advent of e-discovery issues, the preliminary conference has morphed from a routine hearing into a complicated and often highly contentious event.
Accordingly, states with unique and highly demanding e-discovery rules, such as New York, require particularized care and the expertise of local practitioners. The potential fallout, which could include sanctions and adverse inferences, is simply not worth the risk.
• No e-discovery rules. Illinois is among the approximately 20 states that have not yet adopted rules to expressly address e-discovery. However, the Illinois Supreme Court Rules do recognize “the increasing reliability on computer technology and thus obligate…a party to produce…materials which have been stored electronically.” Ill. Sup. Ct. R. 201(b)(1) (cmt). Likewise, the comments to Rule 214, regarding discovery of documents, make clear that the definition of “documents” includes “all retrievable information in computer storage, so that there can be no question but that a producing party must search its computer storage when responding to a request to produce documents pursuant to .” Ill. Sup. Ct. R. 214 (cmt).
When necessary, Illinois courts have relied upon Illinois’ existing rules and the federal courts to address e-discovery issues. For example, in Citadel Inv. Group LLC v. Teza Technologies LLC, No. 09 CH 22478, 2009 WL 3416124, (Cook Co., Ill., Cir. Ct. Oct. 16, 2009), Citadel filed a motion for sanctions against Teza Technologies and its principal, who also was named as a defendant after Citadel discovered that he had deleted potentially relevant ESI from two personal computers after the court had ordered such materials to be preserved. Applying Ill. Sup. Ct. R. 219(c), the court declined to impose sanctions on Teza, which it recognized had hired a third-party vendor to help collect and preserve relevant documents, but sanctioned Teza’s principal, finding that he knew and understood the preservation order inasmuch as he had discussed the obligations with his counsel, but had deliberately deleted the information.
Other Illinois courts have looked to the federal courts for guidance in handling e-discovery issues. In Vision Point of Sale Inc. v. Haas, No. 04 CH 2387, 2004 WL 5326424 (Cook Co., Ill., Cir. Ct. Sept. 27, 2004) (Trial Order), the court looked to the Federal Rules of Civil Procedure and Zubulake v. UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. 2003), and Zubulake v. UBS Warburg LLC, 216 F.R.D. 280 (S.D.N.Y. 2003), in crafting a plan for the periodic forensic search of computers currently in use by one of the defendants and the preservation of other older computers no longer in use. The Vision Point of Sale court included cost-shifting provisions in its order, which shifted some of the preservation and forensic exam costs from the defendant to the requesting party.
Given the wide-ranging rules on e-­discovery under state law, discovery of ESI in state court raises a host of issues not necessarily found in federal courts, which may increase the risks and costs of discovery. Therefore, identifying key differences in one’s relevant jurisdiction(s) prior to a dispute will no doubt limit potential exposure should a lawsuit arise.
Anthony Diana is a litigation partner in the New York office of Mayer Brown and is co-leader of the firm’s e-discovery practice. Ethan Hastert and Eric Evans are associates, respectively, in the Chicago and Palo Alto, Calif., offices. Associate Robert Entwisle of Chicago contributed substantially to the preparation of this article.