Companies and lawyers have rightly focused on the far-reaching, important 2006 electronic discovery amendments to the Federal Rules of Civil Procedure. Equally important state rules have not received the same airplay. Now, the Judicial Council of California has issued proposed electronic discovery amendments to both the California Code of Civil Procedure and the California Rules of Court for comment by 5:00 p.m., Friday, January 25, 2008. These proposals, if enacted, would dramatically change electronic discovery in California. They would have far-reaching implications for how companies engage in electronic records management and electronic discovery. Every company with significant electronic data or electronic discovery issues in California should scrutinize these proposed changes carefully and consider commenting on them.
Inaccessible Information: A Potential Quagmire
The most interesting, and likely controversial, effect of the proposed amendments concerns the discoverability of inaccessible information. The newly amended Federal Rules allow a “two-tier system” of discovery where parties need not initially search (though they must, in some cases, preserve) “inaccessible” sources of electronically stored information. A federal court requesting party must obtain that discovery through leave of court.
The California proposal reverses the federal court balance. The Judicial Council proposed amendments would require a responding party to seek a protective order to prevent discovery of information that is not reasonably accessible due to undue burden or expense. See Proposed Amendment to Cal. Civ. Proc. Code § 2031.060. Bringing a motion for a protective order in every California state court case (when the party need not follow the same process in federal court) could create a substantial burden on parties with inaccessible sources of electronically stored information. That procedure also has the potential to create significant uncertainty if a party loses a motion for a protective order in a state case, leading to the discovery of the inaccessible data. The resulting discovery of that information could impact the protected nature of that data under the federal rules. Given the substantial consideration over a period of several years that led to the federal rule, most states with separate electronic discovery rules have chosen to follow the federal rules more closely.
Even if a responding party demonstrates, through the protective order procedure, that the subject information is inaccessible, a court can still order discovery if the requesting party shows good cause. See Proposed Amendment to Cal. Civ. Proc. Code § 2031.060. The proposal’s authors specifically request comments on whether the rule should instead (similar to the federal rule) employ a balancing test (i.e., the proposed discovery outweighs the likely burden or expense, taking into account the amount in controversy, the resources of the parties, the importance of the issues, and the importance of the requested discovery in resolving the issues). Similar to the federal rules, the proposed amendments would allow a court to place conditions on discovery of inaccessible information, including allocating discovery expense. Under the amendments, a court can limit discovery if the information is available from less burdensome sources, if it is duplicative, if the burden of production is out of proportion to the benefit, or if the requesting party already had ample opportunity to obtain the information through discovery.
Definition of Electronically Stored Information
The 2006 amendments to the Federal Rules avoided a “limiting or precise definition” of “electronically stored information” to avoid the possibility that the development of technology would surpass the development of amendments. Fed. R. Civ. P. 34(a) advisory committee’s note to 2006 amendment. The Federal Rule covers information “stored in any medium” as long as “it can be retrieved and examined.” Id. In contrast, the California proposal limits “electronically stored information” to “information that is stored in an electronic medium” and defines “electronic” as “relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.” Proposed Amendment to Cal. Civ. Proc. Code § 2016.020.
Form of Production
The newly amended Federal Rules and the California state law proposal contain nearly identical provisions governing the form of production of electronically stored information. Both permit a requesting party to specify the form or forms in which it wants electronically stored information to be produced and require a responding party to include in its response the form it intends to use if no form is specified or if it objects to the specified form. The two sets of rules also specify that a party need not produce the same electronically stored information in more than one form and that production defaults to the form in which information is ordinarily maintained or to a form which is reasonably usable. See Proposed Amendments to Cal. Civ. Proc. Code §§ 2031.030(a), 2031.280; Fed. R. Civ. P. 34(b). Neither set of rules defines “reasonably usable.” However, the Federal Rules explain that the option to produce in a reasonably usable form does not mean that a responding party is free to convert electronically stored information from the form in which it is ordinarily maintained to a different form that makes it more difficult or burdensome to use. The California state law proposal does not contain any explanation of “reasonably usable.”
Safe Harbor
The newly amended Federal Rule of Civil Procedure 37(c) has received extensive comment, including dispute over whether it amounts to a “safe harbor” for data destruction or not. The proposed California state rule analogue, unlike its federal counterpart, styles itself as an actual “safe harbor” from sanctions for information “lost, damaged, altered, or overwritten as the result of the routine good faith operation of an electronic information system.” The proposed rule, similar to the Advisory Committee notes to the federal rule, states that it is not intended to alter a party’s preservation obligations. The safe harbor is contained in code provisions regarding sanctions for unsuccessfully making or opposing a motion for a protective order, unsuccessfully making or opposing a motion to compel discovery responses, or failing to obey an order compelling a response. See Proposed Amendment to Cal. Civ. Proc. Code §§ 2031.060, 2031.300, 2031.310, 2031.320.
Privileged Information
The proposal foregoes the controversial “claw back” and “sneak peek” provisions designed to expedite document production in the Federal Rules. Instead, the proposal merely provides that if a producing party inadvertently produces privileged information, it may notify the receiving party. The receiving party then must “immediately” sequester the information and either return the information or present it under seal to the court for determination of the privilege issues. See Proposed Amendment to Cal. Civ. Proc. Code § 2031.285(b). “Immediately” is not defined. Subsection (d) indicates a receiving party has 30 days to present the information under seal to the court, but it is unclear whether “30 days” is meant to be synonymous with the “immediately” requirement in subsection (b). The proposal does not purport to determine whether a party waives any privilege protection with inadvertent production; it merely provides a mechanism for a court to make that determination.
Meet and Confer
One of the most significant changes to the federal rules was the creation of a new meet and confer requirement in Rule 26(f). The proposed amendments to the California Rules of Court create a similar obligation for the parties to meet and confer regarding electronically stored information in state court proceedings. If any party informs any other party that discovery of electronically stored information is reasonably likely, all parties must meet and confer at least 45 days before the initial case management conference. See Proposed Amendments to Cal. Rule of Court 3.724(b). The proposal does not define “reasonably likely.” The proposals’ authors specifically request comments on whether an attorney should have to tell his or her client that he or she has received notice that the discovery of electronic information is likely to be sought.
The requirement that the meet and confer be held 45 days before the initial case management conference means the parties may have to hold a meet and confer regarding electronic discovery before the meet and confer regarding other issues in the case, which they must hold 30 days before the initial case management conference. Topics to be discussed at the meet and confer regarding electronic discovery include the form of production, the time for production, the scope of discovery, any claims of privilege or confidentiality, and the cost of production of electronically stored information, including its allocation.
Additional Amendments
Several of the other proposed amendments will likely be less controversial, including amendments to explicitly allow discovery of electronically stored information, and to allow a party to subpoena electronically stored information. See Proposed Amendments to Cal. Civ. Proc. Code §§ 2031.010, 1985.8. A proposed amendment to California Rule of Court 3.728 would allow a court to issue “appropriate orders relating to the discovery of electronically stored information.” Other aspects of the proposal merely indicate that if the amendments pass, instead of “demanding an inspection,” a requesting party will “make a demand for inspection, copying, testing, or sampling.” See Proposed Amendments to Cal. Civ. Proc. Code §§ 2031.020, 2031.040, 2031.050, 2031.220, 2031.240, 2031.250, 2031.260, 2031.270, 2031.290.
The complete proposal and a comment form are available at: http://www.courtinfo.ca.gov/invitationstocomment/documents/w08-01.pdf.
This alert was prepared by Bingham's complex and class action litigation partner Geoff Howard and associate Erin Smart.
Geoff Howard is managing partner of Bingham's San Francisco office, and former chair of the Complex & Class Action Litigation Group. He is a recognized authority on electronic discovery, and chairs PLI's Electronic Discovery for Corporate Counsel seminar. His comments on electronic discovery have been published by Reuters, CBS MarketWatch, the National Law Journal, the Legal Times and the San Francisco Daily Journal.
Erin Smart's work is focused on litigation and ediscovery issues. She co-authored "Discovery Channels," which was published in the Los Angeles Daily Journal in September 2007.
Clients rely on Bingham’s Electronic Document Retention and Discovery Practice as part of Bingham's focus on high stakes litigation where technological savvy offers a competitive advantage. For more information on this alert or other electronic document retention and discovery issues, please contact any of the following attorneys:
Gary Adler, Co-leader, gary.adler@bingham.com, 212.705.7803
Geoff Howard, Co-leader, geoff.howard@bingham.com, 415.393.2485
Erin Smart, erin.smart@bingham.com, 650.849.4896
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