New Electronic Discovery Provisions in the Federal Rules of Civil Procedure:

How They May Affect Your Organization

On December 1, amendments to the Federal Rules of Civil Procedure that govern electronic discovery took effect. "Discovery" refers to the usual information-exchange process that parties to lawsuits undergo, including answering written questions and exchanging paper documents. E-discovery is the process of exchanging electronic data, which can present challenges for any organization.

Electronic data has been subject to discovery for a long time – ever since it existed. The amendments to the Federal Rules now specifically address what they call "Electronically Stored Information," or ESI, as a category of information, and provide guidance about how ESI should be preserved and disclosed.

Technically, the Federal Rules only apply to a person or organization if they are in a lawsuit in federal court. However, anyone could sue or be sued in federal court, and the Rules' e-discovery requirements are such that if you wait until you are actually in litigation before you assess your electronic data system and analyze how to respond to a discovery request, you will be at a distinct disadvantage. In addition, the obligation to preserve evidence can arise even before suit is filed – such as when a letter threatening suit is sent – and this obligation affects how an organization deals with its e-data daily. For example, it affects how an organization decides to retain or destroy data, even such routine decisions as how long to retain e-mail files.

So preparing in advance can be a great help, in the event litigation does occur – it can save time, reduce costs, and lessen risks in the long run. Organizations can take several steps now to put themselves in better position to manage potential e-discovery obligations.

1. Perform an e-data inventory. If your organization becomes involved in litigation, your attorney will need to become familiar quickly with your computer system, the types of electronic information it has, the sources of that information, and how it is processed and stored. It's a good idea to develop an e-data inventory or map describes where all e-data may be found.

2. Assess your organization's e-data policies and procedures. This is an opportunity to review your organization's data retention/destruction policy and make sure it is accurate, up to date, and consistent with your e-data inventory. This is also a good time to assess whether your organization's regular data destruction protocol is actually being followed. In addition, your organization should have a "litigation hold" policy and process, which institutes preservation of information when litigation is started, or reasonably anticipated. It also must be consistent with your e-data inventory.

3. Designate custodians of your e-data. Your organization should have at least two people who are knowledgeable and responsible for each type and source of your e-data – someone who can serve as a resource both to the organization and its attorneys about what electronic information the organization has, and how accessible it is.

In addition, under the Rules a party to a federal lawsuit is not necessarily obligated to produce e-data that is not reasonably accessible, but it is advisable to assess ahead of time what portions of your organization's data fit that description – things such as information on outmoded (or "legacy") systems or damaged drives, for example – and be able to explain why the data is not reasonably accessible. This may be important in the litigation when a court is trying to decide whether to require that the information be disclosed at all, or who should bear the cost.

Taking these and other steps, and coordinating them with both in-house and outside counsel, can help protect your organization, and at the least will save time and money if e-discovery issues arise.

For further information, please contact Skip Whaley, Phil Whistler or Jim Petersen.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.