Navigating 'Control' in a Matrix of ESI Discovery

• Author: Brian A. Zemil
• Pages: 20-20

20 | SEC TION OF LITIGATION

CIVIL PROCEDURE UPDATE

My last column discussed w hether the recent

amendments to Federa l Rule of Civil Procedure

37 displaced the federa l courts’ inherent author-

ity to impose sanc tions for lost electronically

stored information ( ESI). A related issue is

whether a part y has control of, and potential liabilit y for

sanctions for loss of, E SI possessed by a third par ty. Rule 37

does not, however, refer to “control”—a term th at the rules

and advisory notes do not de ne.

This ambigu ity has led courts to bootstrap Rule 3 4’s con-

trol standard onto Rul e 37 and use different te sts to resolve

control-related disputes . The inquiry is fact-speci c and the

legal standa rd varies by and even wit hin jurisdictions. To

minimi ze the risk of potentially case- ending sanctions, attor-

neys should proact ively identify potential cont rol-related

disputes and tai lor their litigation plans to account for the

applicable legal st andard.

Rule 34 refers to a par ty’s responsibility to pre serve

and produce ESI in it s “possession, cu stody, or control.”

Discoverable ESI resides i n many different places, includ-

ing network server s, websites, and the cloud . The advisory

committee ack nowledged that, when storing ESI in mult iple

places, part ies face the specter of sanctions if t heir discover-

able ESI is not preserve d by nonparties.

To avoid sanctions, counsel needs to k now who controls

discoverable ESI. C ourts have adopted three different t ests

to determine when a pa rty “controls” documents outside its

possession and cu stody: the Legal Right Stand ard, the Legal

Right Plus Stand ard, and the Practical Abilit y Standard.

Although dist inct, each test focuses on the r elationship

between par ties and the various third par ties that house ESI.

The three prevai ling tests are not uniform ly applied across

circuits, a nd they even experience some crossover with in the

same jurisdic tion. For example, courts in the Si xth and Tenth

Circuits apply both t he Legal Right Standard and t he Legal

Right Plus Stand ard, while various jurisdict ions adopt the

Practical Abi lity Standard.

Federal courts i n the Third, Fifth, Si xth, Seventh, Ninth,

Tenth, and Eleventh Circu its apply the Legal Right Standa rd.

This test imp oses the narrowe st requirements relat ing to a

party’s ESI pre servation and production obligations. Thes e

courts nd “control” where a cont ract provides that a party

owns the requested E SI or can access it upon request. Cour ts

have also found that a lega l right to obtain E SI exists by vir-

tue of a principal-a gent relationship (e.g., employer-employee,

client-attor ney, company-di rector).

Courts adopti ng the Legal Right Plus Stand ard are the First,

Fourth, Si xth, and Tenth Circuits. Simi lar to the Legal Right

Standard, t his test additionally requires a pa rty to disclose the

identities of third pa rties that possess that pa rty’s discoverable

ESI. Such di sclosures enable adverse parties to subpo ena the ESI

they seek dire ctly from the third-part y custodian.

The Practica l Ability Standard is the broadest applic ation

of control. It is used by cour ts in the Second, Fourth, E ighth,

Tenth, Eleventh, and Dist rict of Columbia Circuits, but has

been rejected by t he Seventh Circu it. This pragmatic yet neb-

ulous standard c enters on whether a par ty has the “practical

ability” to obtain t he ESI, without requiring its le gal owner-

ship or possession. Unde r this standa rd, a party’s access to

ESI typic ally is sufc ient to establish control. The decisions

applying this test de velop a body of control-ty pe relationships

between a par ty and nonparty in the context of employer and

employee; service provider a nd account holder; principal and

agent; client and cus tomer.

Courts consider mu ltiple factors when determining

whether a part y has the “practical ability” to produce doc u-

ments in posses sion of a third part y, including the relation-

ship between th e party and t he custodian, how the custodian

has handled the E SI in the past, and any other relevant ci r-

cumstanc es impacting t he custodian’s willingness to give t he

documents to accou nt holders in servi ce provider relation-

ships. Rosehoff, Ltd. v. Truscot t Terrace Holding s involved

the most common form of E SI—emails. There , a federal

court found that a pa rty had the practical abilit y to obtain

ESI from the th ird-party server company becau se it previ-

ously cooperated with t he subpoenaed part y, voluntarily pro-

ducing emails when r equested.

Litigants should prepa re early to navigate a legal land-

scape that lacks a u niform stand ard for determin ing control.

The differi ng court approaches require counsel to conduct a

jurisdiction -by-jurisdict ion analysis, and i n certain circuits

a court-by-cour t assessment, to determine what st andards

apply. Be prepared by understand ing the issues and s tarting

early in a case to ass ess the scope of any cont rol-related ESI

obligations. Then prepa re your client’s Rule 26 initial disclo-

sures, which requ ire production of ESI in a party ’s posses-

sion, custody, or control supporti ng a claim or defense. Early

preparation will help f rame discovery-related control disputes

and reduce the risk of ca se-ending sanctions.

If you nd yourself l itigating the issu e, remember that

courts wil l seek to balance the burden and cost of produc-

tion with the relevanc e and importance of the requested E SI.

Also, counsel shou ld work with the client ’s corporate repre-

sentatives to ensure t hat the Rule 30(b)(6) witness is knowl-

edgeable about informat ion under the corporat e party’s

control, even if the E SI is in a nonparty’s possession.

A digital versio n of all Civil Procedure U pdates, including lin ks to

resources an d authorities, is availabl e at http://bit.ly/LN452- civpro.

Navigating “Control” in a Matrix of

ESI Discovery

By Brian A. Zemil , Litigation News A ssociate Editor

Published in Litigation News Volume 45, Number 2, Winte r 2020. © 2020 by the Ame rican Bar Associati on. Reproduced with p ermission. All rights r eserved. This in formation or any por tion thereof may no t be copied or disseminate d in any

form or by any means or sto red in an electronic da tabase or retrieval sy stem without the ex press writt en consent of the Amer ican Bar Associatio n.