Electronically stored information and the New Jersey court rules.

Author:Gardner, Robert H.
 
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  1. INTRODUCTION II. BACKGROUND A.THE TEXAS MODEL FOR E-DISCOVERY III. THE 2006 E-DISCOVERY AMENDMENTS TO THE FEDERAL RULES OF CIVIL PROCEDURE A. FEDERAL CASES IV. ESI, SOCIAL NETWORKING, AND THE NEW JERSEY COURT RULES A. PARTICULAR DEMANDS OF ESI DISCOVERY B. THE NEW JERSEY COURT RULES AND ESI C. DUTY TO PRESERVE ESI D. ESI, SOCIAL NETWORKING, THE CLOUD, AND THE NEW JERSEY COURT RULES 1. THE SCA 2. SUBPOENAS, ESI, AND THE UIDDA 3. NEW JERSEY V. CONCLUSION I. INTRODUCTION

    Rules regarding electronic discovery are a large and growing concern for businesses, individuals, and litigators who inevitably will be called in to resolve civil disputes and provide justice in criminal matters. (1) Since the beginning of the computerized era, businesses and individuals have quickly transitioned from hardcopy storage and transmission of information to electronic documenting, yet the rules of practice governing the discovery stage of litigation have been relatively slow to adjust to the practical realities of electronically stored information (ESI). (2) United States jurisdictions have dealt with new businesses and personal practices in a variety of ways. (3) The resulting patchwork of regimes, consisting of largely backward rules, has made navigating the modern discovery landscape difficult for practitioners and the judiciary alike. (4)

    ESI is defined as:

    any information created, stored, or best utilized with computer technology of any sort, including business applications, such as word processing, databases, and spreadsheets; Internet applications, such as email and the World Wide Web; devices attached to or peripheral to computers, such as printers, fax machines, pagers; web enabled portable devices and cell phones, and media used to store computer data, such as disks, tapes, removable drives, CDs, and the like. (5) In general, practice rules regarding discovery of ESI follow the same general guidelines prescribed for physical evidence. (6) The basic goals of evidentiary guidelines are the same regardless of the format of the evidence. (7) There are, however, several major differences between ESI and hard-copy documents which pose challenges to traditional discovery processes. (8)

    The first difference is one of volume. ESI, due to its relatively low storage costs as compared with physical records, leads to higher levels of retention and thus higher levels of document production. (9) For instance, many personal e-mail hosting sites automatically keep all correspondence unless otherwise instructed by the user; forty years ago, few individuals kept hard copies of all letters written and received; this informal analysis does not account for the increase in correspondence in the immediately-delivered and expense-free electronic realm, (10) To further illustrate the point, "large corporate computer networks create backup data measured in terabytes, or 1,000,000 megabytes: each terabyte represents the equivalent of 500 [m]illion typewritten pages of plain text." (11)

    The second key difference between ESI and hard-copy documentation is a difference in permanence. (12) ESI is both more and less permanent than real paper. ESI is generally nonpermanent because "digital transactions ... often create no permanent document in electronic or other form. ... After a customer has printed out an e-ticket and moved to a different screen, the e-ticket 'disappears.'" (13) An additionally non-intuitive aspect of ESI is the manner in which the information contained in "deleted" data tends to remain on computer systems. (14) Such a case, "the computer has merely been told to ignore the 'deleted' information and ... the physical space that the data takes up on the hard drive is available for overwriting when the space is needed." (15) Essentially, no data is permanently erased until the computer system has overwritten it with new information. In other words, "deleted" information may be discoverable, giving it a permanence that fundamentally alters the landscape of discovery. (16)

    The third major differentiating factor between ESI and physical records is one of cost. (17) On one hand, costs can be cut back-computerized data can be easier and faster to organize and authenticate than conventional documents. (18) On the other hand, the sheer volume of ESI compared to older methods of information storage, and the possibility of attempting recovery of metadata, backup files, and deleted data can increase discovery costs exponentially. (19) The ability to swamp an opposing party with a sweeping request for production--or conversely, to meet a discovery demand with a voluminous production--has led to increased cost pressures in cases heavily involving ESI. (20)

    Finally, this article will explore proposals to amend the New Jersey Court Rules in a manner which will make a litigant's duty to preserve records clearer--along with sanctions for failing to do so-as well as determine the most appropriate method of subpoenaing ESI.

    The ongoing departure from old discovery norms has placed stress on the previous regimes of practice rules in a few key areas. Because of the aforementioned changes in the nature of discovery, the New Jersey procedural rules, which largely track the Federal Rules of Civil Procedure (FRCP), are an ill fit. These rules, adhering to outdated norms, are cumbersome at best. The foregoing assessment provides some background for how New Jersey's discovery regime could be adjusted to better fit the norms of modern communication.

  2. BACKGROUND

    1. THE TEXAS MODEL FOR E-DISCOVERY

    The Texas state legislature jumped ahead of the federal courts by promulgating rules specific to e-discovery throughout the 1990s, ultimately enacting rule 196.4 in 1999. (21) This movement for new rules arose out of concerns borne by prominent members of the Texas judiciary regarding the possibility that ESI would be overlooked in litigation, confusion between requestors and responders spawned by the various formats in which electronic data can be stored, and the potentially astronomical costs of ediscovery. (22) To address these topics, rule 196.4 effectively requires payment of reasonable expenses for extraordinary steps taken to produce information not reasonably available to the responding party in its normal course of business. (23)

    Importantly, cost-shifting under 196.4 must be done by the court; responding parties cannot "unilaterally undertake extraordinary steps and send the requesting party a bill." (24) Because of privacy issues necessarily present where responding parties are ordered to bring in third parties to examine electronic records, requesting parties must show that less intrusive means would be ineffective. (25) Similar rules have been enacted by Idaho (26) and Mississippi, (27) both containing provisions on discretionary cost-shifting.

  3. THE 2006 E-DISCOVERY AMENDMENTS TO THE FEDERAL RULES OF CIVIL PROCEDURE

    While there is limited case law on ESI, especially in New Jersey, a foundation has been laid from which basic conclusions can be drawn. The New Jersey rules regarding ESI follow the general trend that the state's civil procedural rules track with the FRCP. For this reason, the 2006 amendments to the FRCP, intended to help facilitate e-discovery, (28) are a practical starting place for analysis.

    The 2006 amendments made five important changes: (29) (1) encouraging that ESI discovery be addressed early in litigation; (2) addressing the forms of ESI to be produced; (3) handling discovery situations where ESI is not reasonably accessible; (4) providing a procedure for privilege as a post-production safe harbor for sheltering ESI; and (5) tailoring sanctions for non-compliance with ESI discovery. (30) Through these changes, the 2006 updates attempted to address many of the issues that accompanied the emergence of ESI.

    The practical consequences of the 2006 amendments are manifold. First, due to the broad scope of e-discovery, a rule 26 conference must be held as soon as possible and at least 21 days before a scheduling conference. (31) This means that parties have a duty to search their records in good faith. Rule 34 addresses the scope of e-discovery by saying that the rules apply to any ESI, regardless of how it is stored. (32) For example, ESI now includes data from things such as "instant messaging, sound recordings, proprietary database files and information stored on a personal digital assistant." (33)

    While all relevant ESI must be disclosed, not all of the requested ESI must be produced.34 Production is further limited by a cost-benefit analysis that is done to determine "whether the expense of the proposed discovery outweighs its likely benefit. ..." (35) This idea of a cost-benefit analysis creates a safe harbor for sheltering ESI, which is that ESI is not discoverable if its production would be overly burdensome and disrupt the operations of the producing party. (36)

    This idea of a cost-benefit analysis as a way to determine what ESI is discoverable provides an opportunity for parties to limit ESI production. (37) Since many businesses do not store ESI in their active computer networks they can claim that production of documents is burdensome. (38) This puts the onus on the requesting party to become familiar with their opponent's methods of storing ESI, so that they can request documents from specific off-site systems and thus minimize the burden of producing documents. (39)

    Making such requests will allow parties to have a sense of what documents are destroyed over the course of normal business and which are being purposefully destroyed, which could be grounds for the imposition of sanctions. (40) Yet, this awareness is complicated by the fact that ESI destruction policies are necessarily different from policies regarding paper documents. (41) For example, e-mails may only be stored for a short period of time, whereas the final electronic copies of a contract may be stored for a much longer period. (42)

    Diversity among the...

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