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Electronic content-a federal case

Newly amended Federal Rules of Civil Procedure (FRCP) concerning electronically stored information took effect in all federal courts on Dec. 1, 2006. This affects a large number of constituencies, ranging from CIOs to records managers to lawyers and judges.

These rules came about because 95 percent of records are created and stored electronically and, as a result, all discovery is now e-discovery. Of course, it's commonly accepted that the volume of electronically stored information is exponentially greater than the volume of stored paper records. But e-mail is the main culprit; a single knowledge worker can easily generate 25,000 e-mails per year; a company with 100,000 employees could find itself with 2.5 billion e-mails in its archives.

Another reason for the new rules is that electronic information is dynamic; a lot of it changes without operator intervention.

The pertinent sections

New rule 26(f) requires parties in proceedings to discuss "any issues relating to preserving discoverable information." The need to preserve evidence has to be balanced with the need to continue routine activities, because halting the operation of a computer system could put a company out of business.

Rule 34 adds electronically stored information as a separate category of information, stipulating that the rule covers all types of information, regardless of how or where it is stored. It is clear that this is not meant to create a "routine right of direct access to a party's electronic information system, although this might be justified in some circumstances."

Rule 26(b)(2)(B) covers "inaccessible data." This rule addresses electronically stored information that is considered inaccessible by virtue of the undue burden and expense of retrieving it. A party is not required to provide discovery from sources that it identifies as not reasonably accessible due to the burden and cost that would be incurred, unless the requesting party can demonstrate "good cause."

Unfortunately, the rule does not define the term "inaccessible," which may turn out to be a good thing. (It also fails to identify "sources," which can be defined as "places where data or information is stored.") What is "inaccessible" today might—with a change in technology—very well become accessible tomorrow; more importantly, what is accessible today might not be accessible tomorrow.

Sources that might be considered inaccessible at a given point might include backup media and deleted data. One thing is clear: If a document or data point is regularly accessible in the normal course of business, a party may not make it "inaccessible" to avoid producing it.

The amendments to the Federal Rules of Civil Procedure also include a "safe harbor" provision for the loss of electronically stored information. New rule 37(f) prohibits a court from imposing sanctions for failing to provide electronically stored information lost as a result of normal system operations. This means that, since IT systems may routinely modify, overwrite and delete information, companies need not worry about such lost electronically stored information. The only time a company must intervene is if litigation is reasonably anticipated, at which time a litigation hold would serve notice to all records custodians that the normal operation of the system must be suspended. Keep in mind that, in the knowledge economy, everyone is his or her own records custodian.

Implications of FRCP amendments

In the wake of the Dec. 1, 2006, amendments to the Federal Rules of Civil Procedure, all U.S. companies (and some multinationals) must: meet early in litigation to discuss a preservation and discovery plan, scope of discovery and production; field technology experts as witnesses; maintain an inventory of information assets classified by system; be mindful of metadata when archiving or disclosing information; enable and encourage central storage of electronic information; make policies available and accessible; and have established procedures for suspending destruction of documents.

This general overview is not meant as a substitute for the advice of a qualified attorney; only an attorney can provide you with the legal advice you need to ensure that you are complying with the new rules.


Jonathan B. Spira is chief analyst at Basex (basex.com), e-mail jspira@basex.com.

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