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Tips for Organizing ESI per the Document Request

By Amanda E. Gordon – March 14, 2016


Courts are being asked, with increasing frequency, to require parties responding to document requests to organize and label electronically stored information (ESI) to correspond to the document request categories for which it is produced. Responding parties often resist, arguing that this shifts the substantial expense of reviewing documents from the requesting party to them. Requesting parties retort that without organization, production of ESI can become nothing more than a data dump, a mass of useless information produced for the sole purpose of hiding a few critical documents.


If you find yourself on the responding side of this request, facing the daunting task of correlating thousands of emails, instant messages, and electronic documents at significant cost to your soon-to-be-unhappy client, you are bound to ask a question: Do I really have to do that? As with all good legal questions, the answer is “it depends”—namely, on how your court interprets Federal Rule of Civil Procedure 34(b)(2)(E).


The Federal Rules and ESI
ESI production is governed by Rule 34 of the Federal Rules of Civil Procedure, which states:


(E) Producing the Documents or Electronically Stored Information. Unless otherwise stipulated or ordered by the court, these procedures apply to producing documents or electronically stored information:

(i) A party must produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request;

(ii) If a request does not specify a form for producing electronically stored information, a party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms; and

(iii) A party need not produce the same electronically stored information in more than one form.


Long before our now technology-driven world, Rule 34(b)(2)(E)(i) provided a party with the option to produce documents in one of two alternative forms: (1) as they are kept in the usual course of business or (2) organized and labeled to correspond to the categories in the request. Therefore, historically, if a responding party did not want to correlate its discovery to the production requests, it could satisfy the rule by producing the records as a replica of the documents as they were ordinarily maintained. A small business, for example, could produce the documents kept in its file folders, boxes, or cabinets with indicators of discernible file folders. Individual documents could be distinguished by stapling pages together or fastening them with paper clips. The documents produced to the requesting party could be kept in the order they were maintained at the office, whether that was by client, date, topic, or custodian. If this standard was met, a requesting party could not require that the documents be rearranged or reconfigured to meet its specifications or liking.


However, with the advent of the electronic age and the boom of ESI in litigation, it quickly became apparent that applying the paper-document production requirements to the unique characteristics of ESI was not a good fit. Unlike paper documents, ESI is not physically stored and organized in file folders, boxes, or cabinets. In the usual course of business, ESI is placed randomly on hard drives or in a storage device and is organized and presented to users as needed for specific purposes by computer applications. Further, ESI can uniquely be produced in a number of forms. A data file can be printed on paper, converted into a portable document format (PDF) or tagged image file format (TIFF) digital image, or kept in the form it was created and maintained electronically (typically referred to as “native”). Although the underlying data may be the same, each form of production may present the data differently or allow the data to be accessed or manipulated differently. Finally, and what is perhaps most important to the development of this jurisprudence, ESI can be searched and sorted through the use of text-searching technologies.


Therefore, in 2006, Rule 34 was amended to set a slightly different standard for ESI production. Under the rule, a party may—but need not—request that ESI be produced in a specific form or forms, subject to objection by the opposing party. If no form is specified, then it must be produced in the form in which it is ordinarily maintained or in a reasonably usable form.


Which Rule Applies? The Federal Rule 34(b)(2)(E) Debate
The question that has divided the courts, and ultimately will decide whether you “really have to do that,” is whether ESI is subject to both Rule 34(b)(2)(E)(i) and the newly added Rule 34(b)(2)(E)(ii) or only Rule 34(b)(2)(E)(ii).


For years, many practitioners have assumed that these two provisions are mutually exclusive, with subpart (i) referring to tangible documents and subpart (ii) referring exclusively to ESI. But with increasing frequency, parties have begun to use Rule 34 as a tool against the volume and disarray often associated with ESI production by strategically questioning whether subpart (i) governs all production and subpart (ii) adds additional requirements applying only to ESI. If both (i) and (ii) apply to ESI, then ESI that is produced in a reasonably usable form, but not in the form in which it is ordinarily maintained, must be organized and labeled to correspond to the categories in the requests for production.


If you receive a request to organize ESI according to production requests, the bad news is that the vast majority of courts have treated subpart (i) and (ii) as supplementary rather than alternative. See, e.g., Venture Corp. Ltd. v. Barrett, 2014 U.S. Dist. LEXIS 147643 (N.D. Cal. Oct. 16, 2014) (concluding that both subparts apply to ESI); Diesel Mach. Inc. v. Manitowoc Crane, Inc., 2011 WL 677458, at *3 (D.S.D. Feb. 16, 2011) (holding that ESI was not produced in the usual course of business and thus must be labeled to correspond to categories in the requests); SEC v. Collins & Aikman Corp., 256 F.R.D. 403, 413 (S.D.N.Y. 2009) (holding that ESI produced in the course of an investigation, “which is by its very nature not routine or repetitive[,] cannot fall within the scope of the ‘usual course of business,’” and requiring the SEC to label its responsive ESI by category). Courts that have embraced this reading of the rule generally find that subpart (i) imposes an organizational requirement, while subpart (ii) focuses on the form of production unique to ESI. The organizational requirement maintains the purpose for which Rule 34 was first designed: to avoid party abuse associated with hiding critical documents among thousands of pages of innocuous materials in the hope that it will be overlooked. In other words, courts have imposed subpart (i) with the goal of preventing the “data dump.”


The case of Venture Corp. Ltd. v. Barrett illustrates this point well. Plaintiffs Venture Corp. and Venture Design Services, Inc., produced approximately 41,000 pages on flash drive and by email with no custodial index, table, or other identifying information. The court held that both subpart (i) and (ii) of Rule 34(b)(2)(E) apply to the production of ESI and that the plaintiffs met neither option of subpart (i). It therefore ordered that plaintiffs “shall do three things: (1) either organize and label each document [they have] produced or [ ] provide custodial and other organizational information along the lines outlined above and (2) produce load files for [their] production containing searchable text and metadata.” 2014 U.S. Dist. LEXIS 147643, at *8–9.


The good news is that there appears to be a movement away from this reading of Rule 34. Legal scholars and, with increasing frequency, courts have found that requesting parties can avail themselves of the guarantees of subpart (i) or (ii) but not both. For example, in Anderson Living Trust v. WPX Energy Production, LLC, 298 F.R.D. 514 (D.N.M. 2014), the question was whether the defendants were required to arrange and label, to correspond to the categories in the plaintiffs’ requests, approximately 20,000 pages of documents stored in hard-copy form, which, at the plaintiffs’ request, were scanned and produced as searchable PDF files. After reviewing Rule 34’s text and legislative history, the court held that


the term “documents” in rule 34(b)(2)(E)(i) does not include ESI, and, thus, the rule 34(b)(2)(E)(i) requirement that documents be produced either in the usual course of business or labeled to correspond to categories in the request does not apply to ESI. Because rule 34(b)(2)(E) also allows parties to stipulate out of the default rules for production, the parties’ agreement to transmit hard copy documents in electronic form means that the production is governed by the rules applicable to ESI, under which the Defendants have met their obligations.


The court found that so long as the ESI produced under subpart (ii) was searchable, there was no longer any need to organize and label the documents to correspond to the categories in the request.


Practical Tips to Avoid Having to “Really Do That”
If churning through thousands of documents to correlate them with each production request put forward by opposing counsel makes you want to find a new career, here are three practical tips you can follow to (hopefully) avoid this task.


1. Know your rules and court preference on Rule 34—Don’t wait! Given the divide in the federal court system over the application of ESI to Federal Rule 34 and the ever-changing landscape regarding this issue, practitioners are encouraged to carefully survey their district to determine what standard has been applied before the start of discovery. Don’t wait until you’re faced with a motion to compel documents.


2. Use your Rule 26(f) conference to map out an ESI plan. Disputes over production can be avoided through early and clear communication of preferences by both parties and informal resolution of any anticipated differences. Under Rule 26(f), unless the court orders otherwise, the parties must meet “as soon as practicable” to discuss issues relating to the discovery and pretrial process. The rule specifically requires the parties to address the proper timing and scope of discovery in light of the type and complexity of the dispute, to discuss issues relating to document preservation, and—most importantly in some cases—to attempt to reach an agreement on how they will go about collecting and producing ESI.


Used correctly, a Rule 26(f) conference can be an effective tool to manage ESI production. Conversely, it is also a safety net for those later facing discovery demands. Courts generally subscribe to the concept that civil ESI discovery in the federal courts should be a self-managed process and are loath to interfere with stipulation between the parties. See, e.g., Melian Labs, Inc. v. Triology LLC, 2014 U.S. Dist. LEXIS 124343 (N.D. Cal. Sept. 4, 2014) (finding that, based on the Joint Rule 26(f) Report, which was a stipulation of the parties, defendant was not entitled to re-production of 1,281 pages of ESI in native format when it had already been produced in PDF format). This is not to suggest that zealous advocacy is inconsistent with cooperation in the discovery process. But if you find yourself faced with an out-of-the-blue motion to compel documents, you may be glad that you hashed out what exactly was required at the 26(f) conference.


3. Produce ESI in the usual course of business. Even if your court does treat subpart (i) and (ii) as supplementary rather than alternative, you still do not have to correlate thousands of documents to discovery requests if you have planned ahead and produced your ESI in the “usual course of business.” Courts have recognized that Rule 34 does not explain what it means to produce ESI as it is kept in the usual course of business, and there is very little case law to guide this determination. Practitioners are advised to carefully research their district for cases indicating their court’s preference.


Generally, however, courts have found that the manner of production should preserve the functional utility of the electronic information produced, which normally requires (1) preserving the format of the ESI and (2) providing sufficient information about the context in which it is kept and used. McKinney/Pearl Rest., L.P. v. Metro. Life Ins. Co., 2016 U.S. Dist. LEXIS 1999, at *31–35 (N.D. Tex. Jan. 8, 2016) (citing Teledyne Instruments, Inc. v. Cairns, 2013 U.S. Dist. LEXIS 153497, at *31 (M.D. Fla. Oct. 25, 2013)). For documents stored electronically, producing a forensic duplicate of a storage device is also sufficient.


Too often practitioners allow clients to address these concerns without proper direction. Work with your client immediately, engaging a third-party vendor if necessary, to identify and preserve any ESI and keep careful records tracing the source of your ESI.


Conclusion
While electronic discovery may seem second nature to a practitioner who has waded through thousands of corporate emails or client social media posts, it’s important to remember that rules associated with it are still in their infancy. If you “really” want to avoid the time and expense associated with organizing and labeling all of that ESI to correspond to the categories in the document request, it’s important to follow the current rules and monitor your district’s stance on this jurisprudence as it develops.


Keywords: litigation, business torts, electronically stored information, ESI, Rule 34(b)(2)(E)


Amanda E. Gordon is an associate in the Hartford, Connecticut, office of Robinson + Cole LLP.


 
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