Nearly every company uses, maintains, and deletes electronically stored information (“ESI”) in the regular course of its business. Such materials include word processing files, spreadsheets, e-mails, attachments, instant messages, transaction logs, database records, audio/video files, and anything else that can be stored in electronic format. On December 1, 2006, significant amendments to the Federal Rules of Civil Procedure took effect that specifically address discovery issues relating to ESI. These amendments dramatically affect how companies should manage their ESI.
The sheer volume of ESI stored by a typical company requires information technology departments to have a firm grasp on how and where their companies store it. New Rule 26(a) (1)(B) now requires parties in federal litigation to produce, even before receiving a discovery request, either a copy of, or a description by category and location of, all potentially relevant ESI. To comply with this rule, and to avoid costly expenditures of time and money as well as mistakes often made under the time constraints of litigation, IT departments should always maintain an accurate inventory of ESI. This should include how the company stores its ESI and in what format it resides, regardless of whether it exists in backup media or in the hands of some third party.
Amended Rule 26(f) requires parties to meet within 120 days after commencement of the litigation to discuss e-discovery related issues. Particular topics of discussion ordinarily would include how a company stores and maintains ESI and whether the ESI is reasonably accessible, considering the burden or cost of retrieving and reviewing it. Again, in light of the staggering amount of ESI that may be at issue and the difficulty in determining whether particular ESI is reasonably accessible and thus subject to potential disclosure, a proactive approach coordinated between a company’s IT and legal departments is invaluable in preparing for these discussions.
The failure to maintain a robust ESI monitoring program risks disclosure of documents that otherwise would be protected by the attorney-client privilege. Without knowledge of where ESI is stored, a company may not even be able to find, let alone review, privileged materials before they are disclosed. Rule 26(b)(5)(B) does provide a procedure by which parties may try to effect the return of inadvertently disclosed ESI that may be privileged. Determining whether ESI material is privileged before disclosure is made, however, is clearly preferable to disclosing and retrieving. Effectively tracking sensitive materials to avoid inadvertent disclosure requires advance coordination between a company’s IT and legal departments. Problems are more likely to occur if a company attempts to identify privileged ESI for the first time after litigation begins.
Several steps should be taken by a company to maximize its ability to participate in electronic discovery and avoid unnecessary sanctions for failing to comply with the relevant amended rules.
• First, the location of all ESI should be determined and mapped. The search should include servers, backup media, deleted data, ESI that is no longer used, and ESI that is stored offsite or by third parties. For each storage location, the category and format of the ESI stored there should be noted.
• Second, record retention policies should be updated to account for ESI. Every company’s policy should cover email servers, backup media that is regularly overwritten, and any other source of materials where ESI is routinely deleted.
• Third, every company should have a litigation policy that imposes procedures by which ESI deleted in the normal course of business can be recovered if necessary after litigation begins.
• Fourth, the company’s ESI should be analyzed to determine how it can be stored to simplify the categorization, identification, and searching thereof should litigation result. Third party vendors and the advice of counsel may be useful in ensuring that this task is accomplished effectively and efficiently.
• Fifth, implementation of a comprehensive ESI maintenance system is a perfect opportunity to ensure that electronically stored trade secret information is adequately protected and preserved and that intellectual property assets are adequately cataloged and managed. Accomplishing these tasks at one time can create distinct efficiency savings. Consultation with the company’s attorneys will help identify how to coordinate these audits with implementation of an ESI management program.
It is never too early to begin managing ESI, particularly in light of the new amendments to the Federal Rules of Civil Procedure. Invariably the task is cheaper, easier, and more effectively accomplished before a lawsuit begins.