For The Defense, February 2012 - DRI Today

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Electronic Discovery Local Rules, Procedures, and Model Orders By G. Franklin McKnight and Kymberly Kochis The Progress of E-Discovery Courts have the authority to manage dockets and limit e-discovery in creative ways. Local rules provide a means to exercise this authority. Considering the vast information generated and stored by business entities today and the broad rules governing the preservation and production of electronic records, contending with electronic discovery in class action and complex litigation has become a burdensome and nebulous endeavor. When coupled with the threat of serious adverse consequences for failing to comply with discovery requests, aspects of e- discovery have driven potential litigants to implement “scorched earth” preservation tactics, engage in imprecise and extensive collection efforts, expansively review saved material, and produce voluminous electronic records to avoid arguments that the litigants’ preservation and production efforts were anything less than satisfactory. Recognizing that litigants need guidance in this area of the law, state and federal courts have implemented rules and issued opinions to assist litigants to measure their conduct against the preservation and the discovery standards. This guidance, however, has rarely drawn reasonable outer limits on e- discovery in class action and other complex litigation. The amount and diversity of potentially discoverable information in those cases is often substantial and the overall discovery standard—potentially relevant evidence—is exceedingly broad. Aware of the problems e- discovery presents and often having addressed e- discovery disputes firsthand, some jurisdictions and judges take additional measures to attempt to control discovery. This article looks at the requirements, restrictions, pronouncements, and penalties that courts and judges have imposed or recommended regarding e- discovery practice at the local level through local rules, recommended or required procedures, and model orders. It explores the different approaches that courts have taken to guiding e- discovery such as mandating early discussion and negotiation, restricting the scope of e- discovery, and enunciating cost- shifting principles. State and Federal Rules State and federal rules of civil procedure and developing case law provide general guidance on the discovery of electronically 30 ■ For The Defense ■ February 2012 ■ G. Franklin McKnight IV, an associate at Nelson Levine de Luca & Horst in Blue Bell, Pennsylvania, represents insurance company clients in institutional matters and applies his understanding of technology and knowledge management to develop strategic solutions to legal concerns. He is a member of DRI and its Electronic Discovery Committee. Kymberly Kochis is a partner at Nelson Levine de Luca & Horst where she represents clients in insurance and reinsurance litigation and regulatory matters as well as corporate governance.
stored information (ESI). These rules provide a framework to litigants and judges regarding the more or less reasonable e- discovery strategies litigants have sought to employ. However, the failure of these rules and opinions to establish meaningful upper limits on the amount of ESI that parties may potentially discover represents a major shortcoming for corporate defendants in complex litigation and class actions because broad discovery impacts numerous business units, departments, records storage locations, and personnel. While state and federal rules and case law provide guidance on how to evaluate e- discovery disputes, the standard governing discovery—potentially relevant evidence—remains broad and subject only to an individual court’s decision to restrict it in a particular case. Courts often hesitate to limit discovery without definitive guidelines on when they should curtail it. They hesitate to limit e- discovery unless one of the parties shows that the burden of compliance will have an immediate, concrete, and disabling impact. However, the impact of voluminous e- discovery presents greater challenges over time given the exponential growth of available information and the need to preserve, collect, review, produce, and store it. When courts do not closely scrutinize discovery requests, costs perpetually mount, which unfairly impacts companies in the long run. Local Rules, Guidelines, and Model Orders Bearing witness to the plight of litigants appearing before courts with some trepidation whether the courts will deem the litigants’ extensive preservation efforts adequate to address the nature and volume of discovery sought, courts and judges have proposed and adopted rules, model orders, and procedures to help define discovery obligations. As a first step, a number of courts have imposed local rules or adopted practices reinforcing requirements that the parties exchange information about electronic evidence and meet to confer early to hash out the parameters of e- discovery. For example, local rules may mandate that litigating parties affirmatively request and provide categories of the e- discovery that they will seek before having their initial conference with a court. In some forums, parties that do not reach an agreement on e- discovery may find themselves subject to a default order instead. These steps force parties to confront their e- discovery responsibilities as early as possible and, under the best circumstances, result in acceptable e- discovery agreements that survive as long as a dispute endures. However, under less desirable circumstances, parties will not come to an agreement, perhaps because one side feels that a discovery request is too broad and another side feels that the stakes could become too high to nail down e- discovery limitations. To handle these circumstances, courts and judges have acted under their local authorities modeled on Federal Rules of Civil Procedure 26(b)(2) and 83 to place meaningful requirements and restrictions on e- discovery practice and clarify e- discovery rules. These requirements and restrictions tackle e- discovery in different ways, ranging from adopting general guidelines often used by others or grounded in common sense practices to employing less objective standards. The default e- discovery standard prepared by the Ad Hoc Committee for Electronic Discovery of the U.S. District Court for the District of Delaware and similar rules used by Judge Savage of the U.S. District Court for the Eastern District of Pennsylvania, Judge McMahon of the U.S. District Court for the Southern District of New York, as well as the U.S. District Courts for the Middle District of Tennessee and the Northern District of Ohio instructively address a variety of topics including agreements between parties, discovery limits, inadvertent production, and cost shifting. For example, some orders based on this District of Delaware- originating standard have included the following: • Discovery into inaccessible systems is prohibited until discovery of accessible systems has been completed. • If sought, requests for records from inaccessible systems must be narrowly focused and include a factual basis supporting the request. • On-site inspections of electronic media are not permitted, absent exceptional circumstances. • For productions, image format is the default unless the parties agree on another. • A party must demonstrate particularized need for production of electronic documents in native format. • Electronic documents that contain privileged information must be immediately returned if the documents appear on their face to have been inadvertently produced or if there is notice of the inadvertent production. State and federal courts have implemented rules and issued opinions to assist litigants to measure their conduct against the preservation and the discovery standards. • While the costs of discovery shall ordinarily be borne by each party, costs may be apportioned upon a showing of good cause. The standard contains other provisions as well, governing the use of e- discovery liaisons and the activities of retention coordinators. The standard does not put specific limits on the volume of discovery that a party can seek, leaving this open. See D. Del., Default Standard for Discovery of Electronic Documents, http://www.ded.uscourts. gov/Announce/Policies/Policy01.htm (last visited Dec. 21, 2011). Other courts have adopted a wide variety of procedures governing e- discovery. For instance, the U.S. District Court for the Middle District of Florida has well- established standards addressing e- discovery that took effect in 2001. The standards offer parties broad discretion on what they can request on both material type and scope. Parties may request that electronic information be produced in hard copy, electronic form, or both forms. And “[a] party may also ask for the production of ancillary electronic information that relates to relevant electronic documents, such as information that would indicate (i) whether and For The Defense ■ February 2012 ■ 31
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