Uniform Law Commission Approves Model e-Discovery Rules

minime2.jpgThe Uniform Law Commissioners have now adopted model rules of e-discovery for use by state courts.   Uniform Rules Relating To Discovery of Electronically Stored Information.  The proposed uniform rules of civil procedure essentially clone the bigger federal rules. Rex Blackburn, the Boise, Idaho, attorney who chairs the committee that drafted the new rules, explained why the Commissioners thought this was necessary:

With the emergence of electronic technology, the extent to which information is stored electronically has vastly increased, and will continue to do so. These new uniform rules should provide states with the necessary guidance governing discovery of electronically stored information.

The proposed state rules for e-discovery closely follow the federal rules. Just like the federal rules, the proposed state rules have provisions requiring early discussion of e-discovery, protection from production of not-reasonably-accessible information with cost shifting, privilege protection procedures, a default “ordinarily maintained” or “reasonably usable” production mode, and a safe harbor from sanctions for routine, good faith destruction.  It is interesting to see how the early discussion requirements in model State Rule 3 are required within 21 days of a party’s appearance, and are not tied into a court hearing or order as in Federal Rule 26.  That was designed to appeal to those states that have declined to adopt a counterpart to the federal “meet and confer” obligations of Rules 16 and 26.  There are several other more significant differences; some good and some bad.  I will review these at the end.

The Uniform Law Commission issued a Press Release on August 2, 2007, to announce the proposed e-discovery rules. The influential National Conference of Commissioners on Uniform State Laws hopes all states will now adopt these rules so that there will be uniformity of practice outside of the federal system, and will now lobby the state courts and legislatures to adopt these rules.  The Conference was formed in the early 1890s and claims to be the oldest state governmental association in the country. President Woodrow Wilson, former Supreme Court Justice Louis Brandeis, former Supreme Court Chief Justice William H. Rehnquist, and current Supreme Court Justice David Souter all served as uniform law commissioners.  It is the source of more than 250 uniform acts, including the Uniform Commercial Code, Uniform Fraudulent Transfer Act, Uniform Interstate Family Support Act, Uniform Enforcement of Foreign Judgments Act, and the Uniform Transfers to Minors Act. The Conference seeks “to secure uniformity of state laws where diversity obstructs the interests of all the citizens of the United States.” The model Discovery of Electronic Records Act has been over two years in the making. Final approval came at the 116th Annual Meeting in Pasadena, California, on August 2, 2007.

The Draft Text of the Rules included Prefatory and Reporters Notes, which, as always, were excluded from the final version approved as a model to be adopted by the states.  The Notes are not intended to be authoritative, but still are interesting to understand the thinking behind the committee that prepared the rules.  You might want to review the Draft Text for that reason.  Here are a few highlights of the Notes that I found interesting:

With very few exceptions, when the state rules and statutes concerning discovery in civil cases were promulgated and adopted, information was contained in documents in paper form. Those documents were kept in file folders, filing cabinets, and in boxes placed in warehouses. When a person or business or governmental entity decided a document was no longer needed and could be destroyed, the document was burned or shredded and that was the end of the matter. There was rarely an argument about sifting through the ashes or shredded material to reconstruct a memo which had been sent.

In today’s business and governmental world, paper is a thing long past. By some estimates, 93 percent or more of corporate information was being stored in some sort of digital or electronic format.  This difference in storage medium for information creates enormous problems for a discovery process created when there was only paper. Principal among differences is the sheer volume of information in electronic form, the virtually unlimited places where that information may appear, and the dynamic nature of electronic information.  

The Notes explain that the Commission Drafting Committee intentionally copied the new revisions to the Federal Rules, cloning their “spirit and direction,” and sometimes even using the exact same language.  

There are, however, a few substantive differences between the federal and proposed state rules.  One in particular caught my eye.  Unlike the federal rules, the proposed uniform state rules define the term “Electronically Stored Information” (“ESI”). The federal drafting committee did not define ESI on purpose, so that tomorrow’s not-yet-invented information technologies would more easily come within the scope of ESI. The state commissioners were apparently not as concerned about this possibility, and so they went ahead and defined ESI in Rule 1(3):

“Electronically stored information” means information that is stored in an electronic medium and is retrievable in perceivable form.

They also define “electronic” in Rule 1(2) to mean: “relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.” 

These definitions seem awkward and ambiguous to me. One wonders why they talk about “retrievable in perceivable form”? Why this focus on perception? If it is not perceivable, then how would you know it had been restored? What information could be retrieved, but in an “imperceivable form”? Imperceivable by whom or what? If a human being could not perceive it, but a machine could, would it still be imperceivable? What if it were sounds that only my dog could hear? Or infrared light? As to the definition of “electronic”, what does “similar capabilities” mean? What if the capabilities of a new technology were completely new?  Would all the states have to revise their definitions to clarify that the information the new technology stored or created was covered by these rules?  Bottom line, there is ambiguity inherent in these definitions as to what information is, or is not, covered by the rules, and what might be in the future. The attempt to gain certainty by defining these terms has, ironically, only added uncertainty. I think the federal rules got it right on this point, and predict that these proposed state rule definitions will only lead to trouble in the long run.

Another significant difference is found in the approach to protection of not-reasonably-accessible ESI.  Federal Rule 26(b)(2)(B) protects such information from production unless the requesting party makes a good cause showing.  The Federal Rule itself does not spell out the considerations for such good cause; but only refers to the limitations of Rule 26(b)(2)(C). You have to look to the Rule Commentaries to find a non-exhaustive list of seven considerations:

(1) the specificity of the discovery request;
(2) the quantity of information available from other and more easily accessed sources;
(3) the failure to produce relevant information that seems likely to have existed but is no longer available on more easily accessed sources;
(4) the likelihood of finding relevant, responsive information that cannot be obtained from other, more easily accessed sources;
(5) predictions as to the importance and usefulness of the further information;
(6) the importance of the issues at stake in the litigation; and
(7) the parties’ resources.

Model State Rule 8(c) takes a different approach and specifies the good cause considerations in the Rule itself.  Moreover, there are only four considerations listed, instead of seven, and this list of four is exhaustive.

The court may order discovery of electronically stored information that is from a source that is not reasonably accessible because of undue burden or expense if the party requesting discovery shows that the likely benefit of the proposed discovery outweighs the likely burden or expense, taking into account (1) the amount in controversy, (2) the resources of the parties, (3) the importance of the issues, and (4) the importance of the requested discovery in resolving the issues. (numbers added)

The four considerations listed in the state rule are taken directly from old Federal Rule 26(b)(2)(C) which states in part:

(C) The frequency or extent of use of the discovery methods otherwise permitted under these rules and by any local rule shall be limited by the court if it determines that:  . . . (iii) the burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues.  . . .  (emphasis added)

The proposed state rule thus follows the federal big brother by incorporating part of 26(b)(2)(C), but deviates significantly by limiting the court to only these four factors.  The wording does not include the rest of 26(b)(2)(C), and does not include the first four federal commentary criteria: (1) specificity of request, (2) quantity available from other sources, (3) failure to produce other more reasonably accessible relevant information, and (4) likelihood of finding other relevant information from more easily accessible sources.  Under the proposed rules, a state court would arguably be prohibited from considering anything other than the four rather simplistic 26(b)(2)(C) type factors specified. This does not appear to be as well thought out and balanced as the federal approach, and will, I predict, draw strong opposition from the Plaintiff’s Bar.

Another significant difference can be found in proposed state Rule 8(e) which articulates a “proportionality” limitation on the production of all ESI, even readily accessible live data: 

(e) The court shall limit the frequency or extent of discovery of electronically stored information, even from a source that is reasonably accessible, if the court determines that:

(1) it is possible to obtain the information from some other source that is more convenient, less burdensome, or less expensive;
(2) the discovery sought is unreasonably cumulative or duplicative;
(3) the party seeking discovery has had ample opportunity by discovery in the proceeding to obtain the information sought; or
(4) the likely burden or expense of the proposed discovery outweighs the likely benefit, 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.

Rule 8(e) is an improvement over the wording of the federal rules where you have to consult old Rules 1 and 26(b)(2)(C) to find these proportionality limitations, and even then, not as clearly as many would like. See my July 12, 2007, Blog on the Second Edition of the Sedona Principles and the Need for Proportionality. This provision will also be opposed by the Plaintiff’s Bar, but more as a knee jerk reaction that anything else. The protection from needlessly expensive discovery cuts both ways. The costs of e-discovery must be contained somehow. Otherwise, as Justice Breyer recently pointed out, in the future only the very rich will be able to afford to litigate.

One Response to Uniform Law Commission Approves Model e-Discovery Rules

  1. […] by the National Conference of Commissioners on Uniform State Laws, whose model rules I have previously written about. But the California Judicial Council stripped the other language in the Uniform Laws that tempered […]

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