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What to Expect From Anticipated E-discovery Legislation in 2009
Construction Practices Newsletter
Winter 2008
This past summer, the California Legislature passed Assembly Bill 926 (AB 926), which included noteworthy additions to California's Civil Discovery Act in the form of rules governing discovery of "electronically stored information" (e-discovery). On September 27, 2008, Gov. Arnold Schwarzenegger vetoed, explaining: "The historic delay in passing the 2008-2009 state budget has forced me to prioritize the bills sent to my desk at the end of the year's legislative session. Given the delay, I am only signing bills that are the highest priority for California. This bill does not meet that standard and I cannot sign it at this time."
In light of across-the-board support for AB 926 in the California State Senate and Assembly, from the California Judicial Council, and from both plaintiffs' and defense attorney associations, there is every reason to expect Schwarzenegger will sign a re-presented version of AB 926 into law in 2009. Operating under that assumption, litigants and their counsel will be subject to these new e-discovery procedures starting next year, some of which are extensions of existing discovery procedures, others of which are "new territory" based on the unique nature of e-discovery.
Like traditional discovery regarding production of documents, there are four procedural considerations in e-discovery: the demand, protective orders, objections and production, and compelling production.
The Demand
Demands for e-discovery are made under the existing procedures for demanding production of documents. The demanding party is required to specify the forms in which it wants e-discovery to be produced. For example, a demand for electronic project plans can specify production in both hard copy and electronic form. Alternatively, the demanding party can opt to demand only electronic versions of such documents, which could provide a substantial costs savings where only a discrete aspect of a project is being litigated and only a small number of documents would ever need to be printed.
Protective Orders
The responding party can seek a protective order from the court if the e-discovery demanded is from a source that is not reasonably accessible due to undue burden or expense, the onus of proving undue burden or expense being on the responding party seeking the order. If the court agrees with the responding party, it may nevertheless order production of the e-discovery with a condition attached that the demanding party pay for part or all of the expense of gathering and production.
Objections and Production
As is the case with traditional hard-copy document demands, a party responding to e-discovery demands may object to a given demand, and must do so with specificity as to the bases for a given objection. The new procedures allow a responding party to object to an e-discovery demand on the grounds that the e-discovery is from source that is not reasonably accessible because of undue burden or expense and that the responding party will not search the source in the absence of an agreement with the demanding party or court order. This serves the same purpose as seeking a protective order and is cost effective as it may lead to agreements that reduce the burden and expense of production without need for a motion seeking a protective order.
If a demand for e-discovery does not specify the manner of production – hard copy and/or electronic – the responding party is obligated to produce only in the "native" electronic form of the documents sought. If the e-discovery is demanded in a specific electronic format other than in a pre-existing "native" format, the demanding party must bear the reasonable expense of the responding party's conversion of electronic documents from the "native" format to the demanded format.
In recognition that production of massive amounts of e-discovery carries with it a higher potential of a document with private or privileged information being produced, there are specific protections in the new procedures in favor of the producing party that provide for return of such documents upon notice to the demanding party as well as a prohibition of use of information in such documents while a motion seeking their return is pending.
Motions to Compel Production
E-Discovery is subject to already-existing procedures governing motions to compel production of withheld documents. However, as unique to e-discovery, the failure to provide electronic documents that have been lost, damaged, altered or overwritten as a result of the routine, good faith operation of an electronic system is not subject to sanctions.
On a practical level, there remains a substantial element of unpredictability when it comes to motions regarding e-discovery disputes – the judge considering the motion. This author has seen firsthand how judges with limited knowledge of how electronic data is handled, stored, and potentially corrupted can rule in ways imposing nearly (or even actually) impossible burdens on the producing party or, on the opposite end of the spectrum, deny the most legitimate grounds for compelling withheld e-discovery. Litigants and counsel would be wise to present their arguments regarding an e-discovery dispute in such a way that even the technologically challenged can understand better the digital world.
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