On June 29, 2009, California Governor Arnold Schwarzenegger signed Assembly Bill 5 (the Electronic Discovery Act), establishing procedures for discovery of electronically stored information (ESI) in California civil cases. Discovery of ESI is also known as “e-Discovery.” The new law is largely similar to the 2006 e-Discovery amendments to the Federal Rules of Civil Procedure and took immediate effect in California.
ESI Is Broadly Defined
The Act defines ESI as “information that is stored in an electronic medium.” “Electronic” is broadly defined as “relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.” This definition allows the Act to apply to both current and future information storage technologies.
Format of Production
E-Discovery is now expressly permitted and production may include inspection, copying, testing, or sampling of ESI. The party requesting ESI production may specify the format of the requested information. The responding party may object to the requested format, but must then specify the format to be used in its response. If the requestor does not specify a format, the responding party must produce the ESI in either the format in which it is usually maintained or in a “reasonably usable” format. ESI does not need to be produced in more than one form. The Act also provides that the responding party shall, at the expense of the demanding party, translate any data compilations (e.g. databases) into a reasonably useable form.
Accessibility of Electronic Data
The party responding to an e-Discovery demand may oppose discovery if it is “from a source that is not reasonably accessible because of undue burden or expense.” The responding party will have the burden of demonstrating that the ESI is from such a source and must be specific in the response about which sources are not reasonably accessible. Even if a responding party succeeds in establishing that a source is not reasonably accessible, the court can still order discovery if the requesting party shows good cause. A court that orders production of not reasonably accessible information can set the conditions for discovery, including the allocation of costs.
The court may limit the frequency or extent of e-Discovery, even if it is from a reasonably accessible source, if any of the following is true:
- there is an information source that is more convenient, less burdensome, or less expensive;
- the information is unreasonably cumulative or duplicative;
- the requesting party already had ample opportunity to discover the information; or
- the burden of discovery likely outweighs its benefit.
ESI and Inadvertent Disclosure of Privileged Information or Attorney Work Product
The Act does not change any of California’s substantive law on whether inadvertent disclosure of privileged information or attorney work product waives the privilege. It does, however, establish a procedure for claims of privilege or protection.
Once a party receives notice of a privilege or protection claim, the party must immediately sequester the information and either return it or present it to the court conditionally under seal so that the claim can be determined. Until the claim is resolved, the party that received the contested information is precluded from either using or disclosing it.
Loss of ESI Despite Good Faith Efforts (Safe Harbor)
If a party fails to produce requested ESI because the information “has been lost, damaged, altered, or overwritten as a result of the routine, good faith operation of an electronic information system,” then the court must not impose sanctions on that party or its attorney. The Act includes a caveat, however, that this sanction exception “shall not be construed to alter any obligation to preserve discoverable information.” Therefore, if a system is set up to automatically delete information that a party has a normal duty to preserve, a party will have to show a good faith effort to change the system at the time the duty arose.
Third Party Subpoenas
The procedures for producing electronically stored information, as outlined in the Act, apply to third parties required to produce in response to a subpoena.