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Delaware Federal District Court Adopts ESI Discovery Guidelines

January 12, 2012
Edward M. McNally
Delaware Business Court Insider

Litigation now costs too much. Pretrial discovery of electronically stored information (known as ESI) is a major cause of this litigation cost escalation. E-mail alone has greatly increased the recording of what used to be private conversations that largely escaped discovery or human memory and facilitated communication that in the past would not have been sent if only because it was too much trouble to write a letter. This trend has only accelerated with the rise of social media. Is all this ESI worth the cost to uncover?

The U.S. District Court for the District of Delaware has now taken a bold step to address the cost of civil litigation due to ESI discovery. The court recently adopted its "Default Standard for Discovery, Including Discovery of Electronically Stored Information." These new standards expand the court's previous ESI standards, first adopted in 2004 and later amended in 2007. As was the case with the 2007 standards, the parties are still free "to reach [their own, different] agreements cooperatively on how to conduct discovery." While the parties to litigation have frequently done just that and crafted their own ESI discovery procedures, the 2007 standards successfully prodded parties to reach agreements and provided useful guidelines to do so. These new standards will have a similar, laudatory effect.

THE KEY PRINCIPLE: PROPORTIONALITY

The new standards have a common theme throughout mdash; the principle that discovery should be proportionate to what is at stake in the litigation. This reflects the core command set out in Rule 1 of the Federal Rules of Civil Procedure: Discovery "should [be conducted] to secure the just, speedy and inexpensive determination of every action and proceeding." This often-praised mdash; but seldom followed mdash; rule is implemented by the various specifics of the new standards.

LIMIT THE PRESERVATION DUTY

One of the biggest drivers of the cost of ESI in litigation is the duty to preserve data. This duty is often thought to include even data created after the litigation has started. Thus, businesses may be told to shut down their normal data destruction policies and to archive ESI for the years the litigation takes to resolve. That is expensive. Moreover, as most litigation concerns only past events that lead to a dispute, preserving post-litigation ESI is usually unnecessary.

The new standards address this problem of excessive ESI preservation in two ways. First, the standards provide that absent a "showing of good cause," the parties may continue "on a going-forward basis, the procedures used by them in the ordinary course of business to back up and archive data." The parties only need to "preserve the nonduplicative discoverable information currently in their possession, custody or control." Thus, there is no duty to preserve ESI created after the litigation began.

Second, the standards explicitly set out "the categories of ESI [that] need not be preserved." Those categories include voice messages, instant messages, "electronic data stored on a mobile device" and iPhone and BlackBerry ESI that is "routinely saved elsewhere." This should cut down on both excessive ESI preservation and even searches for ESI in some categories of mobile devices.

LIMIT PRIVILEGE DISPUTES

A second driver of litigation costs is concerns over preserving attorney-client privilege. That has led to careful reviews of vast amounts of ESI to screen out privileged communications and to create often-huge privilege logs, at great expense. The standards address these problems by specifically limiting privilege logs to communications generated before the complaint is filed, by excluding from discovery communications (such as document hold letters) dealing with ESI preservation and by requiring nonwaiver orders that require the return of privileged communications mistakenly produced.

LIMIT THE SCOPE OF ESI DISCOVERY

The scope of ESI is another driver of costs in ESI discovery. E-mails are routinely forwarded to many people with little real connection to the issues in the litigation but are then made potential "custodians" of ESI whose computers must be searched. This can get to ridiculous extremes, involving hundreds of corporate personnel. The standards also address this "scope" problem.

Under the standards, the parties are required to promptly confer on ESI discovery, including the categories of ESI to be preserved. Each party is only required to disclose the "10 custodians most likely to have discoverable information," a limitation that ties in nicely with the limits on depositions in F.R. Civ. P. 30. The standards state that the failure to give notice of any issue that relates to the discovery of ESI may result in loss of the right to pursue such information later. This will help cut down on any need to redo ESI searches for new issues.

LIMIT ESI SEARCHES

Arguments over how to search for relevant ESI continue to plague ESI discovery and drive up its costs. Often, parties will insist on using search terms that are both too numerous and too broad. This leads to identifying too much ESI. That then drives up the costs of document reviews by all parties.

The standards recognize that the use of search terms is still the common way to locate potentially responsive ESI. However, once a producing party discloses the search terms it intends to use, the requesting party is limited to "no more than 10 additional terms." Moreover, the search terms shall be "focused," not "over-broad," and shall only be used to gather ESI from the no more than 10 custodians identified as likely to have relevant ESI and from those noncustodial data sources identified as having relevant ESI.

LIMIT THE TYPE OF ESI PRODUCED

Finally, the standards address the format to use in producing ESI, require production "in text searchable image files" except "files not easily converted to image format ... should be produced in native format" and set out the types of metadata for all ESI produced. This, too, should reduce disputes and costs.

While ESI discovery continues to be costly, the standards set out by the Delaware court are a big step toward reducing those costs. The standards deserve a careful reading as they are more detailed than stated here. Hopefully, they will be followed.