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The Northern District Court of California Provides Useful ESI Guidelines That Should Be Duplicated

Originally Published in Financial Complexity Made Clear, January 2013

By: David Nolte
Tel: (213) 787-4100
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Electronic data comprises a large portion of discovery and provides efficiencies in searching and manipulating the data for further analysis. Establishing a protocol for retention of electronic information and e-discovery of electronically stored information (ESI) is a critical step toward ensuring that relevant data is preserved and ultimately produced. It is important that the production format maintains its functional efficiencies so that the usefulness of the data is not degraded. However, in practice, parties often disagree on the appropriate approach and necessary burden and cost. Degradation is frequently violated, particularly with the production of accounting records and transaction databases.

Recent guidelines put forth by the Northern District of California offer a framework and resources for establishing an agreed upon plan for e-discovery of ESI. Other districts would be wise to follow in the steps of the Northern District and offer similar guidance. In the meantime, lawyers outside the district can use the Northern District's guidelines as a starting point for their own efforts to manage e-discovery.

The guidelines begin with an emphasis on cooperation and proportionality, both in (i) reasonably limiting discovery requests and making such requests targeted, clear, and specific and (ii) reasonably responding to such requests. They go on to discuss preservation and production, with a reference once again to proportionality and reasonableness, and a focus on getting relevant information early. Although the preservation obligation is not dependant on the use of a preservation letter, the Court emphasizes that any such letter should be consistent with the above guidelines in terms of specificity and reasonableness. Any unresolved disputes should be promptly raised with the Court.

Additionally, the Northern District provides a model stipulation for e-discovery and an ESI checklist to assist in the ESI meet and confer process. This checklist includes key points for discussions in the areas of (i) preservation, (ii) liaison, (iii) informal discovery about location and types of systems, (iv) proportionality and costs, (v) search, (vi) phasing, (vii) production, and (viii) privilege, such as:

  1. The ranges of creation or receipt dates for any ESI to be preserved.
  2. Whether or not to continue any interdiction of any document destruction program, such as ongoing erasures of e-mails, voicemails, and other electronically-recorded material.
  3. The identity of each party's e-discovery liaison.
  4. Identification of systems from which discovery will be prioritized (e.g., email, finance, HR systems).
  5. The nature and scope of burdens associated with the proposed preservation and discovery of ESI.
  6. Costs that the parties will share to reduce overall discovery expenses, such as the use of a common electronic discovery vendor or a shared document repository, or other cost-saving measures.
  7. Limits on the scope of preservation or other cost-saving measures.
  8. Whether there is potentially discoverable ESI that will not be preserved.
  9. The search method(s), including specific words or phrases or other methodology, that will be used to identify discoverable ESI and filter out ESI that is not subject to discovery.
  10. Sources of ESI most likely to contain discoverable information and that will be included in the first phases of FRCP 34 document discovery.
  11. Sources of ESI less likely to contain discoverable information from which discovery will be postponed or avoided.
  12. The formats in which structured ESI (database, collaboration sites, etc.) will be produced
  13. The formats in which unstructured ESI (email, presentations, word processing, etc.) will be produced.
  14. The extent, if any, to which metadata will be produced and the fields of metadata to be produced.
  15. The production format(s) that ensure(s) that any inherent searchablility of ESI is not degraded when produced.
  16. The handling of any production of privileged information or attorney work product.

While there is nothing particularly innovative in any of the individual guidelines themselves, their formal accumulation and emphasis by the Court provides a useful tool that counsel can look to in order to validate their requests and understand the Court's expectations. By providing such guidance, the Northern District is providing needed leadership in this essential and often contentious area of discovery.

Fulcrum Inquiry performs computer forensics and other services involving computerized data recovery and analysis.

David Nolte is a principal at Fulcrum Financial Inquiry LLP with over 30 years experience performing forensic accounting, auditing, business appraisals, and related financial consulting. He regularly serves as an expert witness.

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