The unsignaled intersection at 26 & 45: how to safely guide third parties across the e-discovery superhighway.

• Author: McKinney, Stephen F.

BY NOW, we've all been there--and all too often. An enterprising personal injury lawyer, a sophisticated mass tort lawyer, or highly skilled corporate counsel unleashes upon your client one of the newest and arguably most powerful weapons in the modern discovery arsenal a humble request for production or an unassuming subpoena. Although these documents can be short in length, modern production requests and subpoenas often ask for "each and every electronic record in [the recipient's] possession, however stored and in whatever format, related to or touching in any way upon the [product, transaction, incident ...] at issue in this litigation." Instantly, the merits of the dispute or third-party request are swept aside into what seems like utter irrelevance in the face of the prospect of the money, manpower, and general business disruption associated with responding to a broad request for electronic information.

1. New Roads and Heavy Traffic

   We are living in a nearly totally digitalized world. Digital information is no longer a marginal curiosity or extravagance for our clients it is now their life's blood. E-mail traffic has surpassed telephone and postal communications in volume many times over, with American businesses generating 3.5 billion e-mail messages per day. A small company of 10 employees will create 250,000 pages (125 boxes) of e-mail annually. A University of California study concluded that 93% of all information generated/created annually in the United States is originally produced in digital form.

   Unfortunately, as digital information has made business more efficient and cheaper to operate, the primary corporate management tool for such information has become redundancy: duplicate, duplicate, duplicate. This problem is compounded by the fact that the primary "disaster recovery" tool for most application software (e.g. Microsoft Word) is also redundancy.

   As a result, the document production challenge for litigators has increased dramatically as increasing amounts of information are stored exclusively in digital media, in various formats and various locations. Our clients--from the largest to the smallest--all rely on electronic data every single day and the rules of the road on the information superhighway are still developing.

   Sometimes in fits and starts, with bad facts leading to even worse results, and sometimes with sober consensus, the law has struggled to develop workable rules for this new road. That struggle, as reflected in recent case law and the 2006 amendments to some of the Federal Rules of Civil Procedure, has begun in perhaps the most logical place--providing guidance to parties in civil litigation. There are, however, few such rules guiding nonparties, their attorneys and the courts at the, as yet, unsignaled intersection at Rules 26 and 45 of the Federal Rules of Civil procedure and their state law cognates. This paper will briefly examine the nature of the cross traffic at this intersection and suggest both some new rules and some interim navigational aids.

2. E-Discovery and Rule 26: Solutions for Two-Way Traffic

   The December 1, 2006 amendments to the Federal Rules of Civil Procedure did not alter the fundamental principles underlying civil discovery. Rather, the amendments codified the emerging case law, making clear that electronically stored information, if relevant, is evidence that must be preserved and produced in civil litigation, (1) In addition, the amended Rules set forth certain obligations of parties as well as certain procedures that should be followed, taking into account the unique nature of, and challenges associated with, electronic data. (2)

   The fundamental process of producing electronically stored information is analogous to the process utilized for producing large quantities of hard copy documents, including identifying sources of potentially relevant information, preserving and searching those sources, reviewing the search results for relevancy and privilege, and finally producing the relevant documents and accompanying privilege logs. (3) Electronically stored information, however, presents significant challenges in both scope and scale that were not as pervasive in the pre-e-discovery days. As a technologically driven culture, we have taken the previous limitations on what information our clients could retain (i.e. physical storage space) and have, in effect, made document retention virtually unlimited through digital technology. There is now the potential for an overwhelming volume of responsive, electronically stored information for a fairly simple and routine lawsuit. Additionally, document retention programs, advanced management software, the existence of hard to resurrect back-up data, and the sophisticated computer professionals required to manage and cull the mountains of e-data can be tremendously expensive. Thus, the greatest strides in the evolution of e-discovery law under Rule 26 have addressed the concerns associated with the sometimes staggering costs and huge volumes of documents identified as potentially relevant or responsive to a simple discovery request.

   Under Rule 26, it is generally presumed that the responding party will bear the expense or burden of complying with a discovery request, but the responding party may request an order under Rule 26(c) conditioning discovery on the requesting party's partial or full payment of the costs of discovery. (4) Cost-shifting from the responding party to the requesting party should be considered only when the burden or expense of electronic discovery outweighs the likely benefit. (5) Because responding to electronic discovery is often expensive and time consuming, the most common and widely accepted method of dealing with these issues in this context is a balancing test or guideline for the court to apply. Accessible data must be produced and paid for by the responding party. (6) The considerations from the Zubulake series of cases have become the standard for e-discovery under Rule 26. For inaccessible data, the following considerations are appropriate in determining cost allocation:

   1. The extent to which the request is specifically tailored to discover relevant information;

   2. The availability of such information from other sources;

   3. The total cost of production, compared to the amount in controversy;

   4. The total cost of production, compared to the resources available to each party;

   5. The relative ability of each party to control costs and its incentive to do so;

   6. The importance of the issues at stake in the litigation; and

   7. The relative benefits to the Parties of obtaining the information. (7)

   The revised rules have responded to issues raised in the e-discovery case law and also provide further protections and considerations for parties during the discovery process. For example, the 2006 amendments to Rule 26 provide:

   A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably...