Modern technology

The wide-spread use of e-mails, databases and laptops has changed the way that companies and attorneys alike conduct business. The recent proposed amendments to the Federal Rules of Civil Procedure regarding electronic discovery highlight the fact that e-discovery is a growing part of court proceedings.

Being well versed in relevant procedural rules relating to e-discovery is important to ensure that necessary information is preserved, located, and possibly produced in the event of litigation. The new amendments, scheduled to become effective in December, provide a reminder about the importance of having document-retention policies that take into consideration electronically stored records and data.

“The amendments are going to force companies to look at their policies ahead of time, before litigation starts, or in the early stages, to make sure that they don’t run afoul of their responsibility to preserve electronic as well as paper records,” says Pauline Massih, a partner in Alschuler Grossman Stein & Kahan LLP’s Business Litigation Department.

Smart Business spoke with Massih about the proposed amendments and what steps in-house counsel should take in response to the changes.

How has electronic discovery impacted the legal system?
E-discovery is dynamic in nature, voluminous in scope, and multiplying at a far greater rate than paper records. By one account, we’re receiving 20 percent more e-mails per day than a year ago. The sheer volume of information that is now available has had an impact on discovery and the ability of parties to seek and exchange information. It has put greater responsibility on each and every company to assess what kind of records they have, understand how that information is stored, and for how long.

As we move from file cabinets to file servers, the universe of information a company must review in order to make sure it has complied with its discovery and regulatory obligations has definitely expanded.

What are the proposed amendments to the Federal Rules of Civil Procedure regarding electronic discovery?
The federal rules are playing a little bit of catch up in regard to e-discovery. After approximately five years, the U.S. Judicial Conference Advisory Committee on the Federal Rules proposed a series of rule amendments relating to e-discovery. The proposed amendments are intended to lead to greater certainty, less burden and lower costs. They fall into five main categories.

The first category relates to the separate treatment and definition of electronically stored information under Rule 34. The second category requires counsel to include e-discovery in their initial disclosures and planning conferences under Rules 16 and 26. The third category provides procedures under Rule 26(b)(5) for a party to assert privilege or work product after inadvertent production of e-discovery.

The fourth category allows relief from production under Rule 26(b)(2) if the information is not ‘reasonably accessible because of undue burden or costs.’ The last category is designed to provide a safe harbor from sanctions under Rule 37(f) for companies that, because of automatic retention policies, may have inadvertently deleted otherwise responsive electronically stored information.

What impact will the proposed amendments have on the manner in which parties handle written discovery?
The proposed rules will clearly require considerably more attention by in-house counsel to early preparation for e-discovery. The impact of the amendments will be more on the front end in forcing litigants to assess the universe of electronically stored information on their systems, including off-site back-up tapes, voicemails and e-mails. The proposed amendments underscore the need for effective corporate policies governing the use and retention of electronic information, especially e-mail correspondence.

What steps should in-house counsel take to respond to the changing rules regarding electronic discovery?
All in-house counsel should review their company’s document-retention policies with a new eye to the issue of e-discovery. They need to determine which business records are truly important and which are superfluous. Generally, ‘important’ documents include those necessary to meet governmental requirements, contracts, insurance policies, personnel files, tax-related documents, certain corporate policies and official correspondence. Superfluous material — such as personal e-mails, personal correspondence, preliminary drafts of letters, brochures and newsletters — do not typically need to be preserved in the same manner, but still need to be explored and dealt with.

Creating schedules for document management and guidelines for litigation holds are also critical. If a lawsuit or a government investigation is pending, threatened or even reasonably foreseeable, then automatic retention policies must be suspended and effective preservation policies put into effect.

Lastly, whatever policy is in place must actually be complied with through proper training of key personnel and system-wide application.

PAULINE MASSIH is a partner in Alschuler Grossman Stein & Kahan LLP’s Business Litigation Department. Reach her at (310) 255-9120 or [email protected].