Focusing On Reasonableness and Cost Trends in E-Discovery and Record Retention

In May 2002 we published an article entitled "One Eye on Business Needs and One Eye on Future Litigation: Retention and Destruction of Electronically Stored Information." That article described the need for corporations to think carefully about the storage and disposal of electronic information, especially as it relates to threatened or pending litigation. Generally, we said last year that a corporation that is involved in litigation (and in some cases, merely anticipated litigation) has a duty to preserve information that it reasonably should know will be discoverable. We stated that there was uncertainty in the law regarding exactly when this duty arises (e.g., at the filing of a lawsuit, or upon notice of a dispute that could lead to litigation). We also said that it was unclear precisely what kinds of electronically stored information would be discoverable, given that the federal rules, and most state rules, provide only for production of "documents." We also warned that the penalties for failing to fulfill the duty to preserve information could be severe.

The law relating to discovery of electronically stored information is developing rapidly. In the time since we published "One Eye," a few important trends have emerged. First, it appears that the definition of "document" provides no meaningful limitation on the discoverability of electronic information. Such information is producible, regardless of the medium of storage and regardless of whether the information is ever presented in anything resembling a "document," as that word is commonly understood. Second, the battle over production of electronic information is being fought almost exclusively over whether retrieval and production of the information is overly burdensome, which is an inherently subjective inquiry. Finally, it seems that courts are responding to the widening scope of potentially discoverable sources of electronic information by ordering the requesting party to bear some or all of the cost of searching and producing electronic information.

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