Maine Evidence and Electronic Discovery

Seventh Circuit Adopts Set of Principles and Standing Order for Handling E-Discovery

The Seventh Circuit recently adopted an Electronic Discovery Pilot Program that will run through May 2010, at which point feedback from the program will be assessed and the program may be modified.  As the judge who chaired the committee reported in a news release, electronic discovery "is expensive, burdensome, time-consuming, and it is causing executives to make decisions about sometimes meritless litigation simply because of the costs involved in the litigation."

The Pilot Program report states that acommittee of more than 40 e-discovery practitioners was assembled last spring with the goal of developing a set of principles designed to "incentivize early and informal information exchange on commonly encountered issues relating to evidence preservation and discovery, paper and electronic."  Pilot Program at 9.  As the committee noted, "Too often these exchanges begin with unhelpful demands for the preservation of all data, which often are followed by exhaustive lists of types of storage devices. Such generic demands lead to generic objections that similarly fail to identify specific issues concerning evidence preservation and discovery that could productively be discussed and resolved early in the case by agreement or order of the court. As a result, the parties often fail to focus on identifying specific sources of evidence that are likely to be sought in discovery but that may be problematic or unduly burdensome or costly to preserve or produce."  Id.

The committee developed a draft Standing Order to be entered by participating judges in selected cases.  "Once adopted as standing orders, the Principles will serve as supplemental procedural guidelines to be followed by litigants."  Id. at 10. 

All too often discovery turns into a contentious, difficult process, which generally adds to the ultimate costs and frustrations of all involved.  The committee observed that an "attorney's zealous representation of a client is not compromised by conducting discovery in a cooperative manner."  Id. at 11.

The principles set forth a series of deadlines and meetings that have to take place early on in a case, prior to the initial status conference with the court, to get everyone thinking about the specific electronic discovery issues that will be implicated by a particular case.   Parties are required to appoint "e-discovery liaisons" to handle technical issues and to appear in court to explain the issues as necessary. 

With respect to document preservation, the committee's consensus was to avoid overly broad, blanket document protection orders.  "Vague and overly broad preservation requests do not further the goals of these Principles and are therefore disfavored. Vague and overly broad preservation orders should not be sought or entered."  Id. at 13. 

Under the principles, "the requesting party is responsible for the incremental cost of creating its copy of requested information. Counsel or the parties are encouraged to discuss cost sharing for optical character recognition (OCR) or other upgrades of paper documents or non-text-searchable electronic images that may be contemplated by each party," but "ESI and other tangible or hard copy documents that are not text-searchable need not be made text-searchable."  Id. at 15-16.

It is surprising that more courts haven't already followed the lead of the District of Maryland, which adopted its own set of guidelines more than a year ago (discussed in my prior post here).  What is interesting about the Seventh Circuit's program is that it specifically contemplates revisiting the principles next spring to assess how effective they have been in addressing the goals of the committee.  The feedback and changes that may be made to the principles going forward next summer no doubt will be influential in guiding others looking at ways to reasonably and cost effectively implement the e-discovery rules.

Other States Adopt New E-Discovery Rules

A few other states have adopted (or are in the process of adopting) amendments to their rules of civil procedure to specifically address electronic discovery, as Maine did with its new e-discovery rules effective as of last August.  (See my prior posts here and here on the Maine electronic discovery amendments.)

The Alaska Supreme Court issued Order No. 1682 on December 19, 2008, amending several of the state rules of civil procedure largely to track the 2006 amendments to the federal rules regarding e-discovery.  The Alaska rules go into effect as of April 15, 2009.

In Virginia, the Virginia Supreme Court likewise adopted a series of rules amendments addressing electronic discovery in an order issued on October 31, 2008.

Meanwhile, in California, the legislature is considering a new bill to amend California’s Civil Discovery Act to set forth procedures for electronic discovery issues.  Among other things, Assembly Bill 5, the “Electronic Discovery Act,” introduced on December 1, 2008, would "establish procedures for a person to obtain discovery of electronically stored information, as defined, in addition to documents, tangible things, and land or other property, in the possession of any other party to the action." 

California Assembly Bill 5 is very similar to Assembly Bill 926, which likewise would have amended the state's Civil Discovery Act to include e-discovery rules but was vetoed by Governor Arnold Schwarzenegger in the fall of 2008.  According to the governor's veto message, that earlier bill was vetoed because the "historic delay in passing the 2008-2009 State Budget has forced me to prioritize the bills sent to my desk at the end of the year’s legislative session.  Given the delay, I am only signing bills that are the highest priority for California.  This bill does not meet that standard and I cannot sign it at this time."

Maryland Court's Protocol for Discovery of Electronic Information

In case you haven’t seen it before, the U.S. District Court in Maryland has issued a Suggested Protocol for Discovery of Electronically Stored Information.  The protocol is quite detailed and comprehensive, and sets forth a process by which parties should address issues concerning the production of ESI.

Although not mandatory, the protocol alerts practitioners in matters before that court that “compliance with this Protocol may be considered by the Court in resolving discovery disputes, including whether sanctions should be awarded pursuant to Fed. R. Civ. P. 37.”  Id. at 2; see id. at 24-25 (If a party is not reasonably prepared for the Fed. R. Civ. P. 26(f) Conference of Parties in accordance with the terms of this Protocol, that factor may be used to support a motion for sanctions by the opposing party for the costs incurred in connection with that Conference.”).

The protocol recognizes that discovery of ESI may not be appropriate in every case, and assumes that parties “will consider the nature of the claim, the amount in controversy, agreements of the parties, the relative ability of the parties to conduct discovery of ESI, and such other factors as may be relevant under the circumstances” before seeking ESI.  Id. at 1.

Where discovery of ESI appears warranted based on the circumstances of a particular case, the protocol details a process by which parties and their counsel should begin addressing ESI-related issues early on.  The protocol envisions a very detailed Rule 26(f) conference, and even exchanges of pertinent information prior to the Rule 16(f) conference, such as “information relating to network design, the types of databases, database dictionaries,” and the like.  Id. at 5.  The protocol advises that a “reasonable request for a prior exchange of information should not be denied,” and that if the court later determines that the Rule 26(f) conference was “not productive” due to lack of meaningful participation by people with specific ESI knowledge, sanctions may be warranted.  Id. at 6-7. 

The protocol provides a thorough description of litigation hold procedures that the parties should consider and address, and asks the parties to identify IT personnel to serve as the “ESI coordinator” for the case.  Id. at 11. 

Importantly, the protocol instructs counsel that they should “[b]ecome reasonably familiarwith their respective clients’ current and relevant past ESI,” including “[o]bsolete or “legacy” systems containing ESI.”  Id. at 12.  Representatives of the parties, in addition to counsel, are required to participate in the Rule 26(f) conference.  Id. at 24.

The protocol instructs parties to discuss the format for producing ESI, and sets up a default for producing ESI in static format if the parties cannot agree upon another format.  Id. at 17.

Judges and commentators have looked to this protocol for guidance in resolving ESI disputes, and it is likely that other courts may follow the Maryland court’s lead in adopting similar protocols.

Don't Forget the Rules Can Protect Both Parties During Discovery

There can be some sanity when it comes to electronic discovery.  Here’s a recent example of where a party requesting electronic discovery went too far, and paid the price.

In CBT Flint Partners, LLC v. Return Path, Inc., 2008 WL 4441920 (N.D. Ga. Aug. 7, 2008) (click here), the plaintiff previously filed an emergency motion to compel production of discovery, which the court had granted in part, but only on the condition that the plaintiff pay the defendant $300,000 as the costs of defendant conducting a privilege review of the requested materials.  The defendant filed a cross-motion seeking additional cost-shifting and attorneys’ fees related to the discover dispute raised by the plaintiff.

As the court summarized the situation, the plaintiff’s discovery requests “essentially called for every document at [defendant] that deals with the accused products in this case, which meant, in effect, every document in the company.”  Id. at *1.  The briefing on the discovery dispute stretched to 212 pages, with 147 exhibits.  In moving to compel, the plaintiff “made no effort either in meet-and-confer sessions or in its Emergency Motion to identify specific categories of documents that were relevant and not being provided,” and “engaged in no substantive discussion whatsoever about what discovery it really needed or why.”  Id.  The defendant actually had substantially completed production of the requested discovery less than two weeks after the deadline plaintiff sought to impose by his motion, which “included the production in native format of over 1.4 million documents that were produced as result of electronic searching that was performed by [defendant] based on 102 search terms that were ultimately selected by Plaintiff.”  Id. at *2. 

The plaintiff “filled the record with invective in both challenging the motives of [defendant] with respect to allegedly delaying discovery and challenging the honesty of [defendant’s] counsel with respect to their representations to the Court.”  Id.  Because of those allegations, the court reviewed hundreds of pages of e-mails, letters and other documents submitted with the briefs, and found that “based on its review of this entire record, Plaintiff's accusations that there had been a long campaign of stonewalling, delaying, and lying by [defendant’s] attorneys are just not true.”  Id. In particular, the court flat out rejected plaintiff’s accusation that it was the defendant which selected the electronic discovery search terms, rather than the plaintiff, finding plaintiff’s representation “extremely disturbing.”  Id. at *3. 

Based on all of that, the court held under Rule 37 that plaintiff was required to reimburse the defendant for 75% of its fees in responding to the discovery motion, which led to an award of over $86,000 in fees for the defendant.

Sometimes it may seem like no one is listening when a party responding to requests for electronic discovery complains about the burdens and costs involved, in relation to the potential relevance of what is being requested.  But at least in this case, the judge seems to have taken the time to dig into the dispute to prevent further abuse.

Technical Changes to the New Maine Rules for Electronic Discovery

In my July 16, 2008 post, we discussed the Maine Supreme Judicial Court's adoption of 2008 Me. Rules 12, which promulgated new electronic discovery rules in Maine along the lines of the federal rules.

The Maine SJC has now issued 2008 Me. Rule 14, effective August 1, 2008, making some technical changes to its prior amendments to Rules 34 and 37.  Nothing substantive seems to have changed with these latest corrections.

Electronic Discovery Comes to Maine: Supreme Judicial Court Adopts New Rule Amendments

On July 8, 2008, in 2008 Me. Rules 12, the Maine Supreme Judicial Court adopted a series of amendments to the Maine Rules of Civil Procedure, effective as of August 1, 2008, designed to bring the state rules in line with the federal rules regarding electronic discovery.  The rules largely track the federal electronic discovery rules, with two significant exceptions.  Indeed, the advisory committee notes welcome reference to the federal advisory committee notes for further guidance, stating that they are “instructive and should guide interpretation of the Maine amendments.”  Me. R. Civ. P. 26 adv. comm. notes (July 2008).

As in the federal rules, Rules 33 and 34 now specifically recognize that the scope of documents subject to discovery requests include “electronically stored information.”  The requesting party may “specify the form or forms in which electronically stored information is to be produced.”  Me. R. Civ. P. 34(b).  The responding party may object “to the requested form or forms for producing electronically stored information,” as appropriate.  Id.  And where a request does not specify the form for producing electronically stored information, “a responding party must produce the information in a form or forms in which it is ordinarily maintained or in a form that is reasonably usable.  A party need not produce the same electronically stored information in more than one form.”  Id.

Rule 26 has been amended to provide specific limitations on the scope of necessary production of electronically stored information, as in the federal rules.  A new Rule 26(b)(6) provides:

A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or expense.  On application under Rule 26(g) to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or expense. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause, considering the limitations and remedies of Rule 26(c).  The court may specify conditions for the discovery and shall impose on the requesting party the reasonable expense of producing such electronically stored information.

The new rule is materially identical to its federal counterpart, except for one significant change.  Under the federal rule, in the event the court determines that production of the requested electronic data would be unduly burdensome and expensive, but that there nonetheless is good cause to require its production, the rule simply provides that the court “may specify conditions for the discovery,” which could include cost-shifting to the requesting party.  Fed. R. Civ. P. 26(b)(2)(B).  The new Maine rule, on the other hand, specifically requires that, if the production would be unduly burdensome and expensive for the responding party, but should be required for good cause anyhow, the court “shall impose on the requesting party” the reasonable expenses for the production. 

The advisory committee recognized that “discovery is not unlimited,” and assuming that “some ‘undue burden or expense’ remains … the rule, unlike its federal counterpart, mandates that the requesting party pay the reasonable expense of that production.”  Me. R. Civ. P. 26 adv. comm. notes (July 2008).  On the other hand, “if there is some burden or cost that is not ‘undue,’ production should simply be ordered as routine discovery.”  Id. 

The Maine amendments also add a new subsection (B) to Rule 26(b)(5), that tracks Fed. R. Civ. P. 26(B)(5)(B), providing:

If information is inadvertently produced in discovery that is subject to a claim of privilege or of protection as trial preparation material, the party making the claim may notify any party that received the information of the claim and the basis for  it.  After being notified, a party must promptly return, sequester, or destroy the specified information and any copies it has and may not use or disclose the information until the claim is resolved. A receiving party may promptly present the information to the court under seal for a determination of the claim. If the receiving party disclosed the information before being notified, it must take reasonable steps to retrieve it. The producing party must preserve the information until the claim is resolved.

The amendment follows the existing common law procedures for inadvertent disclosures set forth in Corey v. Norman Hanson & DeTroy, 1999 ME 196, ¶ 19, 742 A.2d 933, 941, and the advisory committee intended for the new rule to adhere to the principle that “an inadvertent production does not, without more, automatically waive a privilege.”  Me. R. Civ. P. 26 adv. comm. notes (July 2008).  The drafters made clear that the “intent of the amendment is to recognize that given tight discovery schedules and the volume of electronically stored or other information produced, a producing party may not have identified every document on which a claim of privilege may be appropriate.”  Id.

The amendments also include a change in the standard scheduling order that is issued in every case, to set a deadline for a “conference of counsel concerning discovery” at the outset of the case.  Me. R. Civ. P. 16(a)(1).  However, the conference itself apparently is not mandatory, as the new form scheduling order will only require such a conference “if requested by any party.”  Me. R. Civ. P. 16 adv. comm. notes (July 2008) (also stating that the “parties may decide not to have such a conference,” and the “parties should be free to decide for themselves whether a conference need be held”). 

Interestingly, the advisory committee notes for Rule 16 appear to back away some from the idea that some form of electronic discovery may be appropriate in every case (as the amended language to Rules 26, 33 and 34 might suggest).  The committee state that the fact “that the discovery rules provide for the production of such information does not suggest that discovery of electronically stored information is appropriate in every case.”  Id. 

In the event that such a conference does take place, and agreements are reached regarding the scope or form of discovery, the parties are required to “document an agreement concerning the preservation and production of information in order to prevent disputes later in the case.”  Id.  The agreement is not to be filed with the court, unless a dispute about its meaning or a party’s compliance later arises.  According to the advisory committee, the objective of the discovery conference is to “reduce the likelihood of disputes later in the case, including claims of spoliation of evidence,” as an attempt to reduce the likelihood of “substantial sanctions” for spoliation, as has occurred in other jurisdictions.  Id.  “Maine lawyers now have the tools to reduce that exposure.”  Id.

Finally, a new subsection (f) has been added to Rule 37, tracking Fed. R. Civ. P. 37(e), to provide, “Absent exceptional circumstances, the court shall not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good faith operation of an electronic information system.”

Although these amendments generally follow the federal rules, the mandatory cost-shifting for certain electronic data productions in Maine Rule 26, and the explicit recognition in Maine Rule 16 (at least in the advisory committee notes) that electronic discovery may not be appropriate at all in certain cases, diverge from the language of the federal rules.  As with everything, it will be interesting to see how these new rules are actually applied by Maine courts.

Introduction to Electronic Discovery Issues

Hello and welcome to the blog.  As the message to the left says, with this blog, we hope to have a dialogue about issues concerning electronic discovery and evidence, both in Maine and elsewhere.  Feel free to contact me with any questions or comments – just click on my email address.

So by now electronic discovery (or e-discovery for short) is something that just about everyone has heard about.  (It’s even defined in Wikipedia, as is just about everything else.)  And chances are, at least if you’ve been litigating any cases in federal court in the last couple of years, it’s something you’ve had to deal with, as well. 

We’ll leave for another day an exhaustive discussion of how the current e-discovery rules that apply in federal court were developed.  But the starting point, of course, is the amendments to the Federal Rules of Civil Procedure that went into effect in December 2006.  Because of the shift in the corporate world from recording everything in paper files stuffed in a file cabinet somewhere to storing things on computers, in email and on discs, the rules had not kept up with the times, and there was no uniform practice for dealing with discovery related to electronic forms of documents.  Discovery in big cases used to involve sitting in a warehouse somewhere looking through boxes of musty paper.  Now it often involves sitting at your computer scanning through millions of pages of documents and emails that have been downloaded from a company’s server (although we can’t avoid the warehouses entirely, especially for cases involving long-running disputes).

The federal rules now specifically acknowledge that “electronically stored information” is subject to discovery in the normal course, Fed. R. Civ. P. 34(a)(1)(A), at least unless it is “not reasonably accessible because of undue burden or cost.”  Fed. R. Civ. P. 26(b)(2)(B).  As with most things, the devil is in the details, and the focus in most e-discovery disputes is on how accessible the information is, the other party’s need for it, and what the costs would be to retrieve it.  In theory, the parties are supposed to try to agree on the scope of e-discovery at the onset of a lawsuit, Fed. R. Civ. P. 26(f), and the court’s initial scheduling order should address the basic scope of electronic discovery.  Fed. R. Civ. P. 16(b)(3).  And of course, to make sure people actually follow the amended rules, there’s always the threat of sanctions if a party fails to produce electronic information that is requested by an opponent, unless the information is “lost as a result of the routine, good-faith operation of an electronic information system.”  Fed. R. Civ. P. 37(f).

Until the last few years, there wasn’t much guidance from the courts on the business of electronic discovery and how to handle the nitty-gritty details of it, like when the obligation to preserve documents arises, how to determine the scope of electronic data that must be preserved or how to balance the costs between the parties. Judge Shira Scheindlin of the U.S. District Court for the Southern District of New York has been the trend setter in addressing these types of issues in a series of opinions in Zubulake v. UBS Warburg LLC, a case involving gender discrimination and retaliation.  Judge Scheindlin’s decisions have provided the framework both for the development of the 2006 amendments to the federal rules, and for how many courts analyze e-discovery issues as they arise today.  See Zubulake v. UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. 2003) (analyzing production of e-mails from backup tapes and consideration of cost-shifting) (“Zubulake I") ; Zubulake v. UBS Warburg LLC, 2003 U.S. Dist. LEXIS 7940 (S.D.N.Y. May 13, 2003) (“Zubulake II”) (involving plaintiff’s ability to disclose contents of deposition of defendant’s employee concerning company’s email retention policies); Zubulake v. UBS Warburg LLC, 216 F.R.D. 280 (S.D.N.Y. 2003) (“Zubulake III”) (addressing costs of restoring backup tapes); Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003) (“Zubulake IV”) (awarding sanctions against defendant for violating the duty to preserve evidence); Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004) (“Zubulake V”) (holding that jury would be given an adverse inference instruction with respect to e-mails that had been destroyed by defendant's employees in defiance of instructions by counsel not to do so).

Basically, Judge Scheindlin held in Zubulake I and III that the party producing electronic data generally bears the costs of production unless the request for production constitutes an undue burden – in which case the requesting party would bear the cost of production.  To determine whether the production would involve an “undue burden,” Judge Scheindlin adopted a multi-part test that focuses on elements such as the need for the information, the availability of the information from other sources, whether the discovery request is appropriately tailored, and the costs and benefits for all concerned.

And in Zubulake IV and V, Judge Scheindlin dealt with the much more unpleasant task of figuring out what form of sanctions to impose on a defendant for failing to preserve electronic evidence.  That’s the stage no corporate party ever wants a judge to have to reach.  And it’s clear that counsel has a vital role in making sure that his client adheres to the rules requiring preservation of electronic evidence.  Just ask the lawyers who represented Qualcomm and were referred to their state bar authorities by a federal magistrate judge after it came to light that they and their client had failed to produce 300,000 pages of responsive emails.  Click here to read more about that, if you’re not familiar with the case.

Here in Maine, the state rules of civil procedure don’t specifically address the issue of electronic discovery the way the federal rules do.  Although there is talk that that may change.

In future postings, we'll explore any decisions in Maine federal or state courts that deal with e-discovery issues.  And we'll also highlight new and notable decisions from elsewhere that are likely to be considered by Maine judges when these issues inevitably arise.