Standing Committee Approves Revisions to ESI Preservation & Disclosure to Alleviate Corporate Burden

June 3rd, 2014

The Standing Committee of the Judicial Conference approved new amendments to the Federal Rules of Civil Procedures last week, including revisions to Rule 26(b) and 37(e).  The amendments were originally proposed in August 2013 and open for public comment through February 2014.  The Advisory Committee on Rules of Civil Procedure approved the amendments on May 2, 2014. The amendments garnered enormous feedback with three public hearings and more than 2,000 comment letters submitted. Both rules play a significant role in shaping the eDisocvery process for parties under investigation or involved in litigation.

 

Rule 26 governs disclosure requirements, including electronically stored information (ESI).  The rule provided vague limitations on the extent of ESI disclosure requirements; however, the new amendments would require proportionality in limiting ESI disclosure to a scope that is equivalent to the scope of the case.  The amendment includes language to restrict discovery to non-privileged matter with special consideration for the needs of the case, the significance of the issue and the burden and cost of discovery.

 

The amended provisions of Rule 37 address failures to provide ESI.  The rule prohibits court-imposed sanctions in instances where the loss of ESI is the result of a “routine, good-faith operation” of an electronic system. Under the amendments, bad faith, in which a party failed to take “reasonable steps” to preserve information, must be demonstrated to warrant any remedial measures.

 

Both amendments, which went through several rounds of revisions, were tailored to reduce subjectivity and reaffirm the boundaries of reasonable discovery requirements.  The amendments will now move to the Judicial Conference in September, then onto the Supreme Court and ultimately Congress for approval.  If the amendments move along on schedule, the revised rules could become effective as early as December 2015.  If approved, the new rules will provide more consideration to the increasing disclosure demands and costs on corporations in today’s expanding data environment.  The amendments also take a more critical view of recent actions from courts and government entities to require larger and larger disclosure volumes.

 

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