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Electronic Discovery: What You Need to Know and What It May Cost If You Don’tIn today’s electronic world, there is little doubt that electronic data stored on computers is discoverable. The concept is not new, but its scope and application are considerably broader than most people recognize. 10/27/2004 Part I: Introduction to Electronic Discovery In the last two years, the federal courts have issued an impressive number of electronic discovery decisions. The scope of electronic discovery and the means to obtain it follows a different path than paper-based discovery. Equally important, electronic discovery is front page news. Philip Morris was recently sanctioned $2,750,000 for failing to preserve electronic information.[2] Rambus recently lost the privilege over documents when the court found that the crime/fraud exception was applicable because Rambus had created a document retention policy to destroy documents as part of a patent licensing and litigation strategy.[3] As the news of these and similar cases spreads, lawyers will become more aware of the potential represented by electronic discovery. Though it enjoys recent popularity, electronic discovery is not new. Rule 34 has permitted discovery of electronic information since the 1970 amendment permitting the inspection and copying of “data compilations.” Comments to the 1970 amendments reveal that parties might be required to “print out computer data” or to produce the “electronic source itself.” In 1972, Adams v. Dan River Mills[4] concluded that the plaintiff was not limited to production of paper copies of computer data, but could also obtain the information in useable computer format (at the time, computer cards or tapes). By 1985, it was “axiomatic” that electronically stored information was discoverable.[5] Similarly, the 1993 Committee notes to Rule 26 expressly refer to computerized data and other electronically recorded information as subject to disclosure. In today’s world where an iPod is a fashion statement and where record labels gain fame (or infamy) by suing hundreds of people for the unauthorized sharing of copyrighted MP3 music files, this precedent may seem quaint. In today’s electronic world, there is little doubt that electronic data stored on computers is discoverable. The concept is not new, but its scope and application are considerably broader than most people recognize. What’s So Different About Electronic Data? At least in theory, electronic discovery is no different than its paper counterpart. Relevant documents—whether paper in a file cabinet or electronic documents stored on a hard drive—are subject to discovery. Computers, however, store information that is not apparent to the normal user. A computer keeps information about your documents, called “metadata” which may include the author’s name, the date a document was created, when it was lasted edited, and the number of edits. Printing a hard copy of the document does not reveal metadata. Depending on what you do with the document after opening it on your computer screen, the actions taken may change the metadata collected about that document. Paper documents were never this complex. Paper documents are also easier to destroy. Throwing paper away or running it through a shredder puts an unquestioned end to the paper. Conversely, hitting “delete” on your computer keyboard does not destroy an electronic document. Deleting a file merely eliminates reference to the document in the file allocation table, an index of sorts to your hard drive. Like throwing away an index for your file cabinet, destroying the index makes the documents in the file cabinet harder to find, but the documents survive even without the index. Documents “deleted” from a computer reside on the hard drive in unallocated slack space.[6] Unless and until the computer needs that space for a new file, the “deleted” file remains in that space on the drive and may be retrieved by technically proficient computer professionals. Since most every computer works this way, every computer has the potential to reveal data that the user thought was deleted. “Deleted” data is discoverable.[7] To protect against the loss of data from hardware failures or damage from natural disasters, computer networks are backed up at regular intervals. There are a variety of systems and storage media for backups ranging from hard drives and optical drives to backup tapes. The precise number and frequency of backups is a matter of choice or system design. Backups are invisible to the normal computer user because the backup is automatically performed once the system is installed.[8] The backup serves to capture important information at periodic intervals so the network can be restored to the status quo that existed immediately before the failure. Backup media is often the subject of discovery because it offers insight into information from earlier points in time that may no longer exist on individual computers. Since this historical data may be relevant to litigation, it is discoverable. There are reported opinions where the defendant amassed more than five hundred backup tapes.[9] The retention of backups may be influenced by regulatory obligations to keep information for a lengthy period.[10] Where financial information is concerned, Sarbanes-Oxley and its attendant regulations may impose requirements upon the retention and availability of financial records. Given the volume of data stored, backup systems often employ some form of data compression. Thus, the data kept on the backup must be “restored” before it can be used.[11] Accessing documents from backup media can be time consuming and costly. Backup data can also be cumulative of data from active files. For instance, when an email is sent, a copy usually appears in both the sender’s out-box and the recipient’s in-box. That same e-mail may also have been copied during one or more back up procedures. A search of the company’s network files may reveal multiple copies of the same e-mail. If the e-mail has an attached word document, the word document will appear not only on the computer where it was created (which may be either a hard drive or a network server), but also in the mail box of the sender and the recipient. Personal digital assistants and similar devices, such as pocket PCs, palm devices or BlackBerry devices, are also subject to electronic discovery. Many of these devices can be used to send and retrieve e-mails. Since an e-mail deleted from a network may still exist on an individual employee’s PDA, parties may demand discovery of the contents of PDAs. Another feature of electronic discovery is “legacy systems” or “legacy data.” This refers to information stored on equipment formerly used, but which has since been discarded and replaced with new technology. For instance, a 5-1/4 inch floppy drive, a reel-to-reel tape drive, or punch cards might qualify as legacy data. Technology has advanced so far beyond these storage devices that the equipment needed to restore and read the legacy data is no longer commonly available. To obtain such data, one would have to find the old equipment, and install any software necessary to operate the system and read the data. The process of restoring legacy data may be cumbersome and costly. The Duty to Preserve Electronic Evidence A party is under a duty to preserve evidence within its control when one of two situations arise. When a lawsuit is filed,[12] or when a document request is served,[13] the receiving party has express notice of a claim and a corresponding duty to preserve evidence potentially related to those claims and/or defenses. But this duty can also arise before litigation, where the party reasonably should know that evidence may be relevant to anticipated litigation.[14] Preserving electronic evidence can be more difficult than preserving paper because electronic evidence often exists in unexpected places and because computers act upon data autonomously without user intervention.[15] Two recent opinions in the Zubulake v. UBS Warburg series[16] suggest limits on the preservation of electronic evidence to reduce potential burdens associated with its preservation. The Zubulake case began as a gender discrimination claim, but morphed into a series of electronic discovery opinions that define everything from what must be disclosed to who pays for its discovery and the duty of preserving electronic evidence. Zubulake became a discovery case when the plaintiff, who had collected over 450 pages of e-mails during her employment, observed that the defendant had produced only one hundred pages of e-mail evidence. While the early Zubulake opinions dealt with the burdens of discovery, two subsequent opinions addressed the defendant-employer’s failure to preserve e-mails sought during discovery. Zubulake recognized that the traditional duties of preservation extend not only to that information that the disclosing party may use to support its case, but also to evidence relevant to the claims or defenses of other parties to the case. To preserve this evidence, parties must suspend their routine document retention or document destruction policy and place relevant documents under a “litigation hold.” Typically, the litigation hold would apply to any evidence within a party’s possession, custody or control—a standard coextensive with the production duty itself under FRCP 34. Zubulake, however, concluded that the litigation hold does not apply to inaccessible backup tapes that may continue to be recycled according to the company’s routine document retention policies.[17] In this context, “inaccessible” does not mean that the backup tapes are beyond reach. Indeed, Zubulake contemplates that inaccessible backup tapes will continue to be recycled, suggesting that the they are not only within easy reach, but are still being used by the responding party. Zubulake went to some length to define and illustrate “accessible” and “inaccessible” electronic information. Accessible data is best illustrated by active, online data, near-line data and some forms of offline storage where data is kept in readily useable format that does not need restoration or manipulation before the data can be used. Since a party has “possession, custody or control” of both accessible and inaccessible data, traditional benchmarks for discovery loose their bearing where electronic information is concerned. Zubulake identified two exceptions to the general rule that backup tapes need not be preserved. First, backup tapes must be preserved if the backup media qualifies as “accessible data” under the definitions established in Zubulake IV. Second, if the party can identify where particular employee documents are stored on backup tapes, that ability creates a duty to preserve evidence of “key players” in the litigation wherever it may be found. Where a party can identify the location of key player documents, the duty to preserve such evidence applies irrespective of whether the backup media is accessible or inaccessible. There is no precedent for “inaccessible” paper documents that are admittedly within a party’s possession, custody or control. Consequently, the duty of preservation is arguable less for electronic data than it is for paper documents. Preservation duties are not limited to the parties themselves. Lawyers must explain to their client the types of information that may be relevant and must inquire where such evidence may be found.[18] Reasonable procedures must be established to inquire about evidence and to account for its collection and subsequent production.[19] Lawyers may not merely advise their clients of a “litigation hold” and expect that their instructions will be followed. After concluding electronic evidence had been lost because counsel failed to monitor and implement the litigation hold, Zubulake V itemized counsel’s obligations to monitor compliance with the duty of preservation. Counsel must: (i) communicate individually with IT personnel responsible for the computer systems; (ii) speak with employees that played key roles in the case; (iii) identify the client’s document retention policies, identify its computer network, and locate and preserve potentially relevant electronic information; and (iv) instruct all the client’s employees to produce copies of their active files relevant to the dispute and make certain that any backup media that is subject to the litigation hold are stored in a safe place. Sanctions for the Failure to Preserve or Produce Electronic Data Spoliation refers to the destruction or material alteration of evidence or the failure to preserve property for another’s use as evidence in a pending or reasonably foreseeable litigation.[20] While spoliation is considered a rule of evidence in federal court,[21] there are a handful of states where spoliation of evidence is a tort. Where federal jurisdiction rests upon diversity of citizenship, the spoliation of evidence may result in a tort cause of action rather than a motion for sanctions. Since the district court must apply the substantive law of the state where it sits, state law will dictate what is required to prove spoliation as a tort and the damages, if any, that may be awarded. State law may be different than the evidentiary standards applied in federal district court. Other than alerting the reader to the possibility of state tort causes of action, this article does not discuss the elements or ramifications of such state claims. Assuming state tort law does not apply, the federal courts have a wide range of sanctions under Rule 37 should a party violate a discovery order by destroying evidence. However, the courts are also vested with inherent power to impose sanctions for spoliation of evidence even if the conduct does not violate an exiting discovery order.[22] As an inherent power, sanctions are not governed by rule or statute, but by the control necessarily vested in courts to manage their own affairs to achieve the orderly and expeditious disposition of cases.[23] Because of their potency, these inherent powers must be exercised with restraint and discretion.[24] The range of possible sanctions include outright dismissal, the exclusion of evidence, an adverse jury instruction,[25] exclusion of expert testimony,[26] civil contempt sanctions to coerce compliance or to compensate the injured party,[27] and an award of attorneys fees.[28] While there are different expressions of the rule from circuit to circuit, spoliation customarily has three component parts. First, the alleged spoliator must have possession of the evidence and an obligation to preserve it at the time the evidence was destroyed.[29] The evidence destroyed also must have been “relevant” to the issues in the case.[30] Finally, all courts have some form of “culpability” requirement. The circuit courts disagree about the degree of fault necessary to justify a sanction under inherent powers. The Fifth Circuit mandates that such sanctions be levied only in cases of bad faith or willful abuse of the judicial process. Moreover, bad faith is judged by a necessarily stringent standard.[31] The Seventh Circuit adheres to a similar standard requiring the bad faith destruction of evidence.[32] While the Eighth Circuit requires bad faith or vexatious conduct for a dismissal or for an award of attorney’s fees, it does not require bad faith for every possible sanction the court may award.[33] The Third Circuit formulation states that sanctions, particularly an adverse inference instruction, must involve actual suppression or withholding of evidence. Accidental conduct is not sufficient.[34] In the First Circuit, bad faith is not a per se requirement. It may be sufficient if the conduct was “purposeful,” a “knowing disregard” or a “conscious abandonment” of evidence thought to be harmful.[35] The Second Circuit, the law governing the Zubulake decisions, is more liberal. In that circuit, a finding of bad faith or intentional conduct is not a sine qua non to sanctioning a spoliator with an adverse inference.[36] Negligence may suffice.[37] Zubulake is often quoted with little appreciation for the variability in standards among the circuits. This too is complicated by the different findings reached in Zubulake IV and Zubulake V regarding the culpability of UBS’s conduct. In the earlier opinion, the court found that UBS’s destruction of evidence was negligent, perhaps reckless, but not willful.[38] After further discovery uncovered the extent of UBS’s conduct, Zubulake V concluded that UBS acted willfully in destroying potentially relevant evidence.[39] Zubulake may not represent a uniform standard for inherent power sanctions for each of the eleven circuits, but is serves as vivid illustration of how the failure to preserve electronic data may transform the normal progress of a lawsuit into a protracted discovery battle over electronic discovery. Cost-Shifting and the Undue Burdens of Producing Electronic Data A demand for each and every e-mail relevant to a particular matter may require a search of all active computer files by each employee and the restoration of and search of every back up tape in the company’s possession. Since searching backup tapes may be costly and may reveal duplicates of active files, the responding party will frequently question the need for such a broad search. As electronic discovery has become a hot topic in the legal press, nearly everyone has heard of the recent Zubulake opinions. If they know little else, people that read newspapers know that there is some authority for objecting to electronic discovery. One way or the other, regardless of whether you are requesting or responding to electronic discovery, you are likely to encounter the proportionality test under Rule 26(b)(2). The proportionality test arose out of a concern that litigants were abusing the discovery process to wage a war of attrition against their opponents. The 1983 Comments to Rule 26(b) state that language was added to the rule to encourage judges to become more aggressive in dealing with discovery abuse. The limitations of Rule 26(b)(2) apply to all discovery, not just to document productions.[40] Subpart (iii), the one most frequently applied in this context, allows the court to limit or prohibit discovery if the burden or expense outweighs its likely benefit, taking into account several factors described in the rule. Because it balances the burdens of the proposed discovery against its benefits, it has garnered the title of the “proportionality test.” If this test sounds familiar, it is because the proportionality test was derived from the standards applied to motions for protective order under Rule 26(c).[41] Under Rule 26(c), the courts required a showing of “good cause” in which they balance the harm suffered by the requesting party if the protective order is granted against the harm suffered by the responding party if the order is not granted. Where electronic information is concerned, the two most frequently cited cases dealing with burdensome objections are Rowe Entertainment, Inc. v. William Morris Agency, Inc.[42] and Zubulake v. UBS Warburg, LLC.[43] While these cases did not prohibit discovery of electronic information, they shifted the cost of that discovery after concluding that its production was unduly burdensome under Rule 26(b)(2). The Rowe opinion established an eight-factor test to evaluate the burdens of an electronic production. The Rowe opinion, issued by a magistrate judge in the Southern District of New York, was short-lived. About a year and a half after Rowe, Judge Shira Scheindlin issued the first of five Zubulake opinions. Judge Scheindlin found the Rowe test incomplete. In so doing, Zubulake announced three general principles of electronic discovery. First, it is not appropriate to shift the cost of electronic discovery where information is sought from accessible, active, or near online data. Second, cost-shifting is appropriate only where inaccessible data is sought.[44] Third, where offline, inaccessible data is sought and cost-shifting may be awarded, only the cost of restoring and searching the inaccessible data should be shifted. The responding party must continue to bear the cost of reviewing and producing the electronic information after it has been restored. After modifying the Rowe factors, Zubulake issued its own version of the proportionality test for electronic discovery. The Zubulake test examines the following factors:
These factors are not equally balanced. They appear in descending order of importance. The first two factors are the most important, factors 3 through 5 are less important, and factors 6 and 7 rarely come into play.[45] Consideration of these seven factors should inform the court whether the electronic discovery is burdensome and, if so, whether the responding or requesting party (or both) should pay for its production. Zubulake ultimately concluded that the requesting party should pay twenty-five percent of the cost of electronic discovery. While Zubulake is widely cited, it has some detractors. A district court in Illinois recently modified the Zubulake test by adding an additional, eighth factor.[46] On the other hand, a different court commented that all that is needed to evaluate a burdensome objection are the elements of Rule 26(b)(2).[47] Debating the merits of these tests may soon become an academic exercise given the proposed amendments to the Federal Rules of Civil Procedure. The proposed amendments include several changes directed specifically at electronic discovery. These changes, which tend to follow the Zubulake framework, are discussed in later portions of this article. The Zubulake burden analysis creates specialized rules and techniques for electronic discovery that are not common to its paper counterpart. Discovery requests for electronic data are more likely to draw such objections in large part because the rules are so specialized. Unless the practitioner masters these new electronic discovery standards, clients requesting discovery may be on the short end of a cost-shifting motion, and clients responding to discovery may unnecessarily bear the costs of that discovery. Potential Privilege Waiver During Electronic Discovery Production Document productions have always carried the risk that the producing party might inadvertently hand over privileged materials through mistake or neglect. But in a world where the average case in federal court rarely exceeded 200,000 pages of documents,[48] it was much easier for parties to manage that risk. The odds of missing privileged documents in an electronic production are increased because the volume of electronic evidence is usually greater and because the lawyers participating in the production are not technophiles. This risk is compounded by the ability to forward electronic files by e-mail. The relative ease of forwarding files increases the risk that someone may inadvertently distribute privileged communications to a nonconfidential recipient. There are three federal common law approaches[49] to the problem of inadvertent waiver. The first is represented by Dean Wigmore’s treatise on evidence.[50] This approach suggests that the privilege is destroyed by any involuntary disclosure. Any nonprivileged disclosure forfeits the privilege, no matter how slight.[51] Another approach represents the opposite extreme. It holds that a waiver cannot occur by inference, such as by negligence of counsel, because waiver requires an intentional abandonment of a known right.[52] The third and apparently most common approach is the balancing approach where the focus is upon whether the party took reasonable steps to insure and maintain confidentiality. Under this approach, the court considers the relevant circumstances surrounding the disclosure. These include the reasonableness of the precautions taken, the time taken to rectify the error, the scope of the discovery, the extent of disclosure, and the issue of fairness.[53] If the number of documents is large and the time for screening them is short, that may suggest that no waiver was intended. These “circumstances” often exist with electronic discovery. Of course, there may be countervailing circumstances such as the number of professional consultants working to locate, screen and produce electronic information. The technicalities associated with electronic production complicate the privilege review process. Essentially, the persons most likely to be involved in the production—computer consultants or IT staff—are the least equipped to correctly analyze whether a privilege exists or applies. Conversely, the lawyers most likely to recognize privileged documents are the least likely to be intimately involved in the electronic search. Traditionally, this problem has been handled after the fact by litigation over whether the inadvertent disclosure of privileged materials constitutes a waiver of the privilege either in whole or in part. Proposed amendments to the Federal Rules creates a structured procedure for litigating the issue. The proposed rule is discussed below. Proposed Amendments to the Federal Rules On August 3, 2004, the Civil Rules Advisory Committee issued a proposed list of amendments to the Federal Rules of Civil Procedure for consideration by the Committee on Rule of Practice and Procedure of the Judicial Conference of the United States. While the proposed amendments are not limited to electronic discovery issues, there are a number of amendments that will dramatically affect the discovery of electronic information. The proposed rules are available on the Internet at http://www.uscourts.gov/rules/newrules1.html. The proposed amendments create new terminology to refer to electronic documents. All forms of electronic data—whether documents, photographs, or any other forms of media—are now termed “electronically stored information.” Minor changes to Rule 26(f) mandate that the parties discuss issues relating to electronic discovery during the discovery planning conference. Amendments to Rule 16(b) similarly make electronic discovery the subject of the court’s pretrial order, including provisions relating to protections against the inadvertent waiver of privileges. The proposed amendments, however, include several far-reaching proposals. Rule 26 Proposals Adoption of the proposed amendments would change Rule 26(b) by eliminating the need to disclose electronically stored information that the responding party deems “not reasonably accessible.” This is accomplished by adding a paragraph at the end of paragraph (b)(2): A party need not provide discovery of electronically stored information that the party identifies as not reasonably accessible. On motion by the requesting party, the responding party must show that the information is not reasonably accessible. If that showing is made, the court may order discovery of the information for good cause and may specify terms and conditions for such discovery. Comments accompanying the proposed amendments refer directly to the Zubulake case. Hence, the phrase “not reasonably accessible” draws upon the definitions enunciated in that case. The comments do not give examples of data that is “not reasonably accessible.” The comments merely state that what is “reasonably accessible” will depend on a variety of circumstances. That a party does not routinely access the information does not automatically mean that access will require substantial effort or cost. Given the discretion inherent in this language and given the explicit reference to Zubulake, judges may continue to rely upon the Zubulake case to define whether electronic information is reasonably accessible. Further, the comments suggest that the responding party must identify the information that has not been produced. The notice must inform the requesting party of the nature of the information that has not been reviewed and the basis for the contention that such information is “not reasonably accessible.” While not explicitly requiring a log to document what has not been produced, these comments suggest that a form of “inaccessibility log” should accompany the nondisclosure. Buried within the comments is a fundamental shift in the burden of proof. Normally, where the discovery sought appears relevant, the party objecting to it has the burden of proving that discovery should not be had.[54] This amendment to Rule 26 would transfer that burden of proof where the responding party objects on accessibility grounds. Once this objection is made, the requesting party must file a motion for the production of the allegedly inaccessible evidence. The motion shifts the burden to the responding party to show not that the discovery should not be had, but merely that the electronically stored information is “not reasonably accessible.” Once the accessibility showing is made, the court may order discovery only if the requesting party shows good cause.[55] This rule creates two kinds of electronic evidence for discovery purposes. The first type is represented by relevant active files which are discoverable without a showing of good cause. The second category is relevant files that are “not reasonably accessible.” This is referred to by commentators as the “two-tiered approach” to electronic discovery. While there are two categories for electronic evidence, there is a third category for paper discovery which is not covered by any of the new rules designed for electronic information. Thus, paper documents must be produced under the traditional standards—relevant documents within a party’s possession, custody, or control are discoverable. Where paper is involved, the responding party retains the burden of proof to justify his objections. The proposed amendments also change the procedure for handling claims of privilege. Rule 26(b)(5) will divided into subparagraphs (A) and (B). The current text of Rule 26(b)(5) becomes subparagraph (A) while the following new language becomes subpart (b)(5)(B): When a party produces information without intending to waive a claim of privilege it may, within a reasonable time, notify any party that received the information of its claim of privilege. After being notified, a party must promptly return, sequester, or destroy the specified information and any copies. The producing party must comply with Rule 26(b)(5)(A) with regard to the information and preserve it pending a ruling by the court. This language is designed to define a mechanism to deal with inadvertent production of privilege materials. This amendment anticipates that the sheer volume of electronic data will increase the frequency of such disputes. The amendment, which is not limited to electronic data, does not specify when or how a waiver occurs or whether it may be cured. This omission is intentional. The reference to “privilege” in Rule 26 has traditionally meant an evidentiary privilege as determined by the Federal Rules of Evidence.[56] Rule 501 of the Federal Rules of Evidence provides, in pertinent part: …in civil actions and proceedings, with respect to an element of a claim or defense as to which State law supplies the rule of decision, the privilege of a witness, person, government, State or political subdivision thereto shall be determined in accordance with State law. (FRE §501 [emphasis supplied]) In diversity cases, state law determines the applicability of privileges.[57] Where federal jurisdiction is based upon a federal question, the federal common law determines the applicability of a privilege.[58] Consequently, the proposed amendment to Rule 26 does not establish substantive rules of privilege. Instead, it creates a framework to raise and decide the issue regardless of what substantive law may apply. Rule 34 Proposals The two biggest changes concerning the production of electronically stored information concern the format of its production. The proposed rule allows the requesting party to specify the format in which electronically stored information is produced. The responding party may object to that format designated by the requesting party. If this language survives, it may generate a great deal of cost-shifting litigation as the conversion of electronic data is often attempted for strategic reasons, as in Rowe Entertainment, Inc. v. William Morris Agency. There, the responding party proposed to convert electronic data into TIFF images. The responding party, however, objected because TIFF files are mere images that cannot be searched electronically.[59] While Rule 34 allows the requesting party to specify a format, it also contains default provisions in the event that no electronic format is specified in the document request. Where no format is specified, the responding party must produce the information in the form in which it is ordinarily maintained (i.e., the native format for the application involved) or in an electronically searchable form. The rules do not define what is or what qualifies as “electronically searchable.” The rules do state that electronically stored information need only be produced in one form. Since the information must be produced in “searchable form,” the strategic maneuver of converting data to TIFF images will no longer be acceptable unless it is specified by the requesting party. Rule 37 Proposals A new subdivision is added to Rule 37 at subparagraph (f) which reads: Unless a party violated an order in the action requiring it to preserve electronically stored information, a court may not impose sanctions under these rules on the party for failing to provide such information if:(1) the party took reasonable steps to preserve the information after it knew or should have known the information was discoverable in the action; and This is intended as a safe harbor to address the automated features often programmed into computers that may result in overwriting (and thus erasing) data during routine operations. If applicable, this provision protects parties from harsh sanctions for spoliation occasioned by the routine operation of computer systems. It is not, however, a safe harbor for every ship at sea. It applies only to electronic information, not to paper documents. It does not protect the intentional destruction of evidence, nor does it protect conduct that violates a discovery order. According to the comments, this proposed rule does not apply to the destruction of electronic evidence occurring before the lawsuit is commenced. If the proposed language survives the adoption process, counsel concerned about the preservation of evidence would be well advised to seek an appropriate preservation order. The proposed Rule 37 amendment begins with an interesting introductory phrase. It begins: “A court may not impose sanctions under these rules….” As demonstrated above, most of the cases dealing with sanctions for failing to preserve electronically stored information were decided using the court’s inherent powers, not relying upon the Federal Rules of Civil Procedure. By definition, inherent powers are not governed by any rule or statute. Strictly speaking, the literal wording of the amendment does not eliminate the possible award of sanctions for spoliation under the court’s inherent powers. If this “safe harbor” was intended to restrict the inherent power of trial courts, there is considerable doubt whether the Federal Rules Committee can wield such power. Part II—Survey of Electronic Discovery in Aviation Cases In re Air Crash at Detroit Metro, 130 FRD 634 (E.D.Mich. 1989) After the crash of a passenger jet, the airline brought a motion to compel the manufacturer of the aircraft to produce relevant flight simulation data for MD-80 on computer-readable nine-track magnetic tape even though the aircraft manufacturer had already provided hard copies of the data retrieved from the magnetic tape. The manufacturer argued that they had already produced the requested data, albeit not in computer-readable form, and that the Federal Rules of Civil Procedure do not require a party to “create” requested discovery, but rather to produce “existing” discovery materials. Id. at 635. The court rejected the manufacturer’s argument and granted the motion to compel the manufacturer to produce the data in a computer-readable form. Id. at 636. However, since the requested discovery did not exist, the court ordered the airline to pay the reasonable and necessary costs associated with the manufacture of the computer-readable tape. Id. Northwest Airlines v. Local 2000, C.A. No. 00-08DWF/AJB (D.Minn. Feb. 2, 2000) The defendants moved for a protective order denying or limiting the plaintiff’s access to computer hardware and information contained on the computer hard drives. The plaintiff in turn moved for an order compelling defendants to respond to their discovery requests. The court issued a detailed order governing the electronic discovery in this case, which ordered the plaintiff’s expert to act as a neutral third party on behalf of the court to collect and image the defendants’ personal hard drives and to provide the parties with a report of all “data deemed responsive.” Id. at *4. The court ordered the defendants to physically produce their computer equipment at various offices of counsel for the purposes of examining and copying all information contained on the hard drives. Id. Stricklen v. FAA, 1994 U.S. App LEXIS 19533 (9th Cir. 1994) (unpublished) The petitioner pilot challenged the NTSB judgment which had affirmed an FAA order revoking the pilot’s airline transport pilot’s license because the pilot rolled an aircraft not certified to perform aerobatic maneuvers, performed the roll while carrying a passenger without a parachute, failed to report the maneuver, and operated the aircraft before thorough inspection to confirm the plane’s airworthiness. Id. at *1-2. The pilot contended that the FAA’s destruction of radar data within its control should have given rise to the inference that the data would have supported his contention that the aerobatic maneuver was necessary to avoid a head-on collision with another aircraft. Id. at 5. The appellate court found that argument to be without merit, concluding that the tapes were destroyed pursuant to FAA policy. Id. at 5-6. There was no further substantive discussion of electronic discovery issues. Busey (FAA Administrator) v. Meili, 1991 NTSB LEXIS 108 (NTSB Administrative Hearing 1991) The respondent pilot appealed the initial decision by the administrative law judge suspending his commercial pilot license for sixty days on allegations that he had operated an aircraft in a careless and reckless manner within a Group II terminal control area (“TCA”) with authorization from the ATC prior to operation in that area. The pilot asserted that he was prejudiced because the FAA administrator did not retain a copy of his communications with the tower, which may have been able to prove that he told the tower that he was too busy trying to land to radar-identify his aircraft, which would also have allegedly proved that he was not the TCA violator. The appellate court affirmed the administrator’s order. There was no further substantive discussion of electronic discovery issues. Spezzaferro v. FAA, 807 F.2d 169 (Fed. Cir. 1986) The petitioner employees, air traffic controllers for the FAA, sought review of a judgment by the Merit Systems Protection Board that denied a back pay claim and a discovery request seeking FAA personnel and payroll records. The employees had been removed from their positions by adverse action for their alleged participation in an illegal strike. The FAA provided the employees with a computer printout of relevant payroll data, but the employees argued that the bare printouts without the data on which they were based prevented them from acquiring sufficient information to raise specific objections to the FAA’s calculation methods and results. The board denied the discovery requests finding that the documents requested would shed no light on the accuracy or fairness of the FAA’s selected method of calculating overtime pay, which was based on computer payroll records from all FAA facilities nationwide, kept in the regular course of business. The court affirmed the decision of the board. There was no further substantive discussion of electronic discovery issues. Ruta v. Delta Airlines, Inc., 324 F.Supp.2d 524 (S.D.N.Y. 2004) The passenger plaintiff in this case had been removed from the aircraft on the order of the captain. The passenger filed suit against the airline, which subsequently filed a motion for summary judgment. Id. at 526. The court granted the airline’s motion on the ground that many of plaintiff’s claims were preempted by the FAA Act of 1958 and/or the Airline Deregulation Act of 1978. Id. The plaintiff sought reconsideration on the ground that her claims for spoliation of evidence had been “overlooked” by the court. Id. at 525. The plaintiff’s spoliation claim was based on her contention that a report made by the pilot concerning the incident had been lost or destroyed. Id. She argued that even the negligent loss of such a relevant piece of evidence is sanctionable as spoliation. Id. at 528. The report had allegedly been generated and stored on a computer and there was no evidence that any efforts had been made to retrieve the reports from the computer. Id. The court ordered that the magistrate hold a hearing and that the report prepared by the captain be produced as a sanction, which the court would then attach as an additional exhibit to the motion for reconsideration as newly discovered evidence. Id. at 528-529. McGilvra v. NTSB, 840 F.Supp.100 (D. Col. 1993) The husband of an airplane crash victim brought suit against the NTSB seeking release of the cockpit voice recorder tape for accident reconstruction purposes pursuant to a FOIA request. 5 USCS §551 et seq. and 49 USCS §1905(d). The NTSB denied the FOIA request, arguing that it was prohibited from disclosing the cockpit voice recordings. The parties filed cross-motions for summary judgment. The court reasoned that Exemption 3 of the FOIA allows withholding information if the matters are specifically exempted from disclosure by statute and, specifically, Section 1905(c)(1), which states that the NTSB “shall withhold from public disclosure cockpit voice recordings and transcriptions, in whole or in part, of oral communications between flight crew members and ground stations, that are associated with accidents…investigated by the Board.” Id. at 102. The court thus denied the plaintiff’s motion for summary judgment and granted the NTSB’s motion holding that the NTSB has no discretion whether or not to withhold a cockpit voice recording. Id. The court further explained that disclosure of the cockpit voice recordings to parties to the investigation is not a “public” disclosure under the FOIA. Id. INA Aviation Corp. v. U.S., 486 F.Supp. 695 (EDNY 1979), aff’d without opinion, 610 F. 2d 806 (2d Cir. 1979): The plaintiff was the president and owner of INA Aviation and the holder of an instrument pilot certificate. The plaintiff crashed his twin engine Piper PA-31 Navajo seven miles from the airport allegedly due to inclement weather conditions. Id. at 697. The plaintiff sued the United States for negligence in allegedly failing to promptly notify him of changes in weather conditions and for untimely and inaccurate weather reporting. Id. The government argued that it was not their negligence, but rather the plaintiff’s in underestimating the distance, time, and fuel required for his flight and for striking a bridge while landing in foggy weather that was the cause of the accident. Id. at 699. The government brought a motion for summary judgment. The plaintiff argued that the government’s alleged intentional destruction of certain records—namely, the ceilometer and runway visual value traces—should entitle the plaintiff to an inference that the weather conditions had deteriorated to below landing minimums. Id. at 700. The government argued that their retention policy, pursuant to the FAA manual, requires the orderly destruction of records, some within twenty to sixty days, and that all papers potentially relevant to an accident cannot be saved. Id. The government further argued that FAA employees cannot be expected to anticipate the plaintiffs’ legal theories, and that requests for records are not enough to put the government on notice that they must put a litigation hold in place. Id. The court agreed with the United States’ argument and found that there was no evidence that the destruction of the tracing records was intentional. The court granted the government’s motion for summary judgment. Id. at 702. [Note: there is a split of authority in subsequent cases in the Second Circuit as to whether “bad faith” is required for spoliation.] B & B Advisory Services, LLC v. Bombardier Aerospace Corp., 2003 U.S. Dist. LEXIS 15269 (E.D. La. 2003) The plaintiff was the purchaser of a partial interest in an aircraft. The plaintiff sued the management company that managed the aircraft on the purchaser’s behalf. In the process of discovery on class certification issues, the purchaser attempted to compel the production of all flight logs and computer entry logs from Flexjet regarding the measuring and billing of flight time of all Flexjet customers past and present. Id. at *21. The court denied the motion on grounds that the information sought was not related to preclass certification issues. Id. There was no substantive discussion of electronic discovery issues. Id. Conclusion Electronic data may be no different than any other evidence once it reaches the courtroom, but finding it and bringing it into the courtroom is an entirely different process. Electronic evidence exists in quantities, in formats and in locations unfamiliar to traditionalists accustomed to paper discovery. To understand where the evidence lies and how it may be unintentionally altered or destroyed, lawyers must possess a technical sophistication that simply was not necessary to produce paper documents. While the scope of discovery is no different, there are objections to electronic production that have no corollary to paper discovery. The concept of “possession, custody and control” is partially replaced by “inaccessible” or “not reasonably accessible.” Computer discovery is different than paper discovery and ignoring those differences may cost the client money or result in the loss of valuable evidence. Useful Links and Internet Resources http://www.discoveryresources.org http://www.kenwithers.comhttp://www.krollontrack.com (includes helpful case law list) http://www.lexisnexis.com/applieddiscovery.com (includes helpful case law list) http://www.uscourts.gov/rules/newrules1.html (proposed amendments to FRCP) This article was presented at the ABA Annual Air & Space Law TIPS Conference, “Practical Views from the Cockpit to the Courtroom,” Washington, DC, October 21-22, 2004. Footnotes
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