Exactly two years ago, the U.S. Supreme Court quietly enacted a package of changes to the Federal Rules of Civil Procedure, a set of legal guidelines that govern all levels of courts in the United States.
Among them were changes to rules 26 and 34 through 37, which clarify the issue of e-discovery of critical evidence.
These amendments, adopted by the court in April 2006 and placed into effect on Dec. 1, 2006, say businesses must be able to quickly find and make available relevant data when required by a court-federal or otherwise. Often, business information that could also serve as evidence in a criminal or civil lawsuit is required to be made available in as few as 30 days.
That means that every electronic document stored by businesses-e-mail, instant messages, computer logs, financials, voice mail, and all text and graphical documents-must be easily retrievable. It also means that an enterprise must have in place a standard, repeatable, predictable method of storing and accessing its digital data-including established rules about who has access, how long it is kept and where it is maintained.
To not produce such evidence in a timely fashion not only could irritate the presiding judge, but it also could result in stiff fines and responsibility for payment of extra court costs due to delays-not to mention possibly losing the case.
Two years later, most analysts and industry people contacted by eWEEK believe that these changes are well-known and observed by the Fortune 5000 and most midmarket-size companies around the world, most of which have legal staffs or law firms looking out for them at all times.
It’s the small to medium-size businesses that some observers are worried about. Just like a large enterprise, they, too, can be sued for any number of reasons. Often, the first time some small-business owners hear about the new rules governing storage of digital information is by reading about a related lawsuit in the news.
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<p>Craig Carpenter, general counsel and vice president of marketing at <a href=”http://www.recommind.com/”>Recommind</a>, an enterprise knowledge management/legal
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Craig Carpenter, general counsel and vice president of marketing at Recommind, an enterprise knowledge management/legal hold/enterprise search company, has watched the evolution of the way the federal courts approach the issue of digital data as evidence for about eight years.
“The biggest thing about the FRCP [rules update] is that it ratcheted up awareness of storing digital data for litigation purposes,” Carpenter told eWEEK. “ESI [electronically stored information] was always covered in the rules. Most people didn’t realize that; they thought the revisions actually created [the storage/access requirements]. But that isn’t the case.”
The 2006 changes in the rules served to clarify the way digital evidence should be stored and accessed.
Businesses fall into three camps when it comes to the FRCP rules changes, Carpenter said.
“First there are the Pfizers of the world, who’ve been dealing with this since long before the revisions. They already have processes built into place. What they’re nervous about is that all the technology they have isn’t really equipped to handle these new requirements,” Carpenter said. “So they’re actually building in more-and newer-infrastructure.”
An example of this, Carpenter said, is a major credit-card company-a client of Recommind’s-that had a new e-discovery project planned for next summer but moved it up to the beginning of 2009 for this reason.
The second group, Carpenter said, involves businesses “that hadn’t had to deal with this in the past, but the revisions woke them up, and they’ve started to address it. These are more kind of ‘mainstream America’ companies.”
Group No. 3 are those who didn’t know what was happening beforehand and still don’t know, Carpenter said.
“The good news is, they don’t get sued very often. The bad news is, when they do get sued, they’re in deep trouble,” Carpenter said.
Carpenter said that he consulted with an auto manufacturer a year ago when it wanted to institute an e-discovery/archiving system for its terabyte of e-mail-based data.
“They were trying to have five paralegals go through, one by one by one, using Windows desktop tools, trying to find certain e-mails,” Carpenter said.
“We tried to do the math for them and said, ‘Look, this is going to take you five years.’ I don’t know what they eventually did, but hopefully they got a service provider to help them.”
Two Years Later, Federal Digital Storage Rules Still a Mystery to Many
title=Reviewing Some Key Points in the Amendments}
The key event that caused the FRCP changes occurred in March 2000, when then-Vice President Al Gore reported that he could not immediately produce e-mails related to a probe by the Department of Justice into his fund-raising activities.
At the time, White House counsel Beth Nolan said the White House e-mails were recorded on a series of 625 tapes that would take up to six months to be searched. Setting up the tape-searching equipment alone would take two months, Nolan claimed.
Shortly afterward, a movement was started to shore up the court rules regarding digital data. This was led by Thomas Allman, senior counsel at the Chicago firm of Mayer, Brown, Rowe & Maw.
Basically, all U.S. businesses are now required to have full knowledge of the whereabouts of all their electronic data to produce evidence needed in a reasonable amount of time.
In litigation, for example, this would mean producing within 30 days relevant e-mails, text documents, spreadsheets or IMs that were originated months or years ago. The rules also dictate that two businesses involved in litigation must agree no later than 30 days before the first court date exactly what electronically stored evidence will be in play.
There is a caveat, however: Businesses do not have to keep everything. The rules say that documents deleted in the course of regular business are immune in the case of litigation.
“What a business needs to show is a repeatable, predictable process of data storage and accessibility,” Allman told eWEEK in 2006.
“If e-mail or any other documentation is killed out of the system as a result of regular practice-such as a monthly or yearly purge of old documents-then that is acceptable to the court as being in the course of regular business.”