New E-Discovery Rules: Avoid Costly Consequences By Understanding What The Amendments Allow And Require

The Federal Rules of Civil Procedure regarding electronic discovery were amended last December. These amendments significantly affect how litigants address e-discovery issues. Attorneys, including in-house counsel, must now understand their clients' electronic information systems and sources of electronic evidence at the earliest stages of a lawsuit. This article discusses the amendments and their implications for business entities involved in federal litigation.

On December 1, 2006, the E-Discovery amendments to the Federal Rules of Civil Procedure took effect. These significantly affect how corporations must address issues related to electronic document retention and production. Among other things, the new rules provide guidance and clarification regarding the discoverability of inaccessible data, such as backup tapes, and how to deal with the inadvertent disclosure of privileged information when large amounts of electronic data are produced in litigation. Some of the key provisions are discussed here.

CHANGES TO CASE MANAGEMENT

According to Rule 26, parties are now required to address e-discovery issues at the outset of litigation. Prior to the first case management conference, parties must discuss "any issues relating to preserving discoverable information." The initial discovery plan the parties submit to the court must address "any issues relating to disclosure or discovery of electronically stored information, including the form or forms in which it should he produced." Likewise, initial disclosures must identify any electronically stored information (ESI) that a party intends to use to support its claims or defenses.

Thus, lawyers need to understand their clients' ESI systems at the commencement of a lawsuit. The failure to understand these issues early could result in a party taking ill-advised positions at the Rule 26 conference, which could have adverse effects later in the litigation.

WHAT'S NOT DISCOVERABLE?

The amendments make explicit what was already established by case law: that ESI is discoverable. But there is now one major exception to that rule: ESI is presumptively not discoverable if the responding party identifies its sources as "not reasonably accessible because of undue burden or cost. Inaccessible data sources include, among other things, backup tapes intended for disaster recovery.

In recent years many expensive discovery battles have been fought over whether a party can force its adversary to restore and...