This is the sixth article in a series of short informational pieces relating to one of the hottest topics in litigation over the past five years - electronic discovery. The purpose of these articles is to provide your business entity with some guidelines on how to most efficiently organize to deal with electronic discovery. The articles will continue to be emailed regularly over the next few months. If you are new to our distribution, or if you would like to view previous articles in this series relating to ESI, visit our website.
As noted in one of our earlier ESI Alerts, a party can be compelled to produce ESI (electronically stored information) in several different contexts: as a party to litigation, as a subject of a governmental investigation, or in response to a third-party subpoena. Under Rule 26 (b) (2) (B) of the Federal Rules of Civil Procedure, only ESI that is "reasonably accessible" must be produced. ESI that is not reasonably accessible because of "undue burden and cost" normally does not have to be produced. The burden of proving that ESI is not reasonably accessible is on the party objecting to the production request.
Unfortunately, the Rules do not define what is "reasonably accessible" or the key phrase "undue burden and cost". The Comments to the Rule discuss the issue in terms of volume of information and ability to search for it. And, The Sedona Conference, one of the major think tanks in the area of e-discovery, has noted that the definition might lie in whether the primary source of the requested ESI is active data and information or whether it is back-up tapes or legacy data from old, obsolete systems that requires forensic analysis to find, with the former being reasonably accessible and the latter not. (See Sedona Principle #8.)
In W.E. Aubuchon Co., Inc. v. BeneFirst, LLC, 245 F.R.D. 38 (D. Mass. 2007), the federal district court characterized sources of ESI from most accessible to least accessible: (1) active online data (e.g. hard drives), (2) near-line data (typically robotic storage devices such as optical disks) and offline storage/archives (removable optical disks or magnetic tape media that can be labeled and stored on a shelf or rack), (3) backup tapes, and (4) erased, fragmented or damaged data, which can be only be accessed after significant forensic processing.
In determining whether ESI is reasonable accessible, the Rules envision a balancing test and list factors that courts should weigh in determining whether ESI is inaccessible due to cost and undue burden. Those factors include:
- The specificity of the discovery request
- The quantity of information available from other more easily accessible sources
- The failure to produce relevant information that seems likely to have existed but is no longer available
- The likelihood of finding relevant, responsive information that cannot be obtained from other more easily accessed sources
- Predictions as the to the importance and usefulness of the information sought
- The importance of the issues at stake in the litigation
- The respective resources of the parties.
An analysis of this type must be done on a case-by-case basis, resulting in little, if any, specific guidance.
In dealing with accessibility issues, e-discovery commentators encourage litigants to use a two-tiered process that focuses on early negotiation. Often, more easily accessible sources will provide a party with sufficient information necessary to process or defend a claim. Thus, it is important for counsel and clients to attempt to agree on protocols at the outset. For this reason, Rule 26 (f) of the Federal Rules imposes an obligation on parties and counsel to conduct an "early meeting" to discuss issues such as accessibility. In those situations, an early agreed upon discovery plan could mean that there will be no need to deal with the more difficult sources of information later. Of course, this approach demands a level of cooperation that is often absent in litigation. However, given the likely very significant costs of e-discovery, clients will be best served to insist on a more cooperative approach. (See, The Sedona Conference Cooperation Proclamation.)
As noted above, ESI that is not reasonably accessible because of cost and undue burden does not normally have to be produced. Clearly, there are exceptions to the usual rule. Federal Rule of Civil Procedure 26 (b) (2) (C) deals with the exceptional circumstance. To obtain ESI that is not reasonably accessible, the requesting party must obtain a court order compelling production under the criteria set out in the Rule. The showing that must be made by the requesting party is fairly stringent. One of the devices often used by the courts in this situation is to have the parties engage in forensic testing, i.e. sampling, to see if a full scale search is justified. For example, in Zubulake v. UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. 2003), Judge Sarah Scheindlin, a recognized e-discovery guru, ordered that five backup tapes be restored and sampled before deciding whether to require further restoration.
Intimately related to the accessibility issue is the issue of cost of production. It is standard operating procedure in discovery (electronic and paper) for the producing party to bear the cost of compiling the requested information. But, often that is not the case when the sought-after material is electronic and there are accessibility issues. In other words, where the ESI is on the harder end of the accessibility scale, courts show a much greater willingness to make the requesting party pay some or all of the production costs.
In the next Legal Watch Series: Preparing for E-Discovery newsletter, we will explore "cost shifting".
About the Author
For more information or questions regarding E-Discovery and the Rules for Electronically Stored Information Management, contact Michael R. Palumbo.
Michael R. Palumbo focuses his practice on commercial and real estate litigation. Particular areas of experience include banking (UCC Articles 3 & 4) litigation; title insurance, escrow agent and Deed of Trust litigation; and quiet title, adverse possession, homeowners' associations and real estate agent disputes. He has participated in more than 50 trials in the Superior Courts of Arizona and District Court of Arizona, in most of which he was lead counsel. Mr. Palumbo can be reached at 602.262.5931 or firstname.lastname@example.org.