After tabling the rules last year during the state budget crisis, California Governor Arnold Schwarzenegger signed into law on June 29, 2009 the Electronic Discovery Act (the "Act"), which amends the California Code of Civil Procedure to address discovery of electronically stored information ("ESI").  The Act by its terms is effective immediately, which means that litigants in California state courts must begin complying with it now. 

The rules should look familiar to anyone who has been involved in federal court litigation during the past several years, as they largely track the ESI amendments to the Federal Rules of Civil Procedure that took effect at the end of 2006.  Like the federal rule amendments, the Act addresses several discrete topics concerning ESI, including limits on discovery of ESI that is not reasonably accessible, the format in which ESI must be produced, the inadvertent production of privileged materials, and a limited "safe harbor" for the good faith loss or deletion of ESI.  The Act governs party discovery as well as discovery served on third parties.

Discovery of ESI That Is Not Reasonably Accessible

Like the federal rules, the Act imposes limits on the discovery of ESI that is "not reasonably accessible because of undue burden or expense."  If a party is served with a request seeking such ESI, it may either object to the request or move for a protective order.  See CCP §§ 2031.060(c) and 2031.210(d).  If the responding party objects, it must identify the "types or categories of sources" of ESI that it claims are not reasonably accessible.  See CCP § 2031.210(d).  In the event that the issue is brought before a court on a motion to compel or motion for protective order, the responding party has the initial burden of proving that the requested ESI is from a source that is not reasonably accessible due to undue burden or expense.  See CCP §§ 2031.060(c) and 2031.310(d).  If the responding party meets its burden, the requesting party may only obtain production of the ESI if it establishes "good cause."  See CCP §§ 2031.060(e) and 2031.310(e). 

However, the court can impose limitations on the discovery of ESI - even accessible ESI - if it determines that: (a) the ESI can be obtained from another source that is more convenient, less burdensome or less expensive; (b) the discovery sought is unreasonably cumulative or duplicative; (c) the requesting party has had ample opportunity to obtain the information sought; or (d) the burden or expense of the proposed discovery outweighs the likely benefit taking into account the amount in controversy, the resources of the parties, the importance of the issues in the litigation, and the importance of the requested discovery in resolving the issues.  See CCP §§ 2031.060(f) and 2031.310(g).  Moreover, the Act provides that where a court orders the production of inaccessible ESI, it can set conditions for such discovery, including allocation of the expense of the discovery.  See CCP §§ 2031.060(e) and 2031.310(f).

Like the federal rules, the Act does not define the phrase "not reasonably accessible."  Thus, it will be left to the courts to work out what that means under any given set of facts.  Typically, the analysis focuses on the burden or expense involved in restoring, converting or otherwise manipulating the data before it can be analyzed or read.  Because technology is constantly evolving and improving, materials that are today considered "not reasonably accessible" may not be viewed the same way a few years from now. 

The Form in Which ESI Must Be Produced

Like the federal rules, the Act allows the requesting party to specify the format in which it wants the responding party to produce ESI.  See CCP § 2031.030(a)(2).  If the requesting party is specific about the form of production, the responding party may object to the specified form, in which case the response must state the form in which the responding party intends to produce the ESI.  See CCP § 2031.280(c).  If, on the other hand, the form of production is not specified in the request, the responding party must produce ESI in the form in which it is "ordinarily maintained" or a form that is "reasonably usable."  See CCP § 2031.280(d)(1).  In addition, the Act provides that, with respect to "data compilations," the responding party must, if necessary, translate the information into a reasonably usable form at the "reasonable expense" of the requesting party.  See CCP § 2031.280(e).

"Claw Back" for Inadvertent Production of Privileged Materials

Given the huge volumes of data that often must be processed and reviewed in contemporary discovery, the potential for the inadvertent production of privileged material is heightened.  Accordingly, the Act (like the federal rules) includes a "claw back" provision to establish procedures governing such inadvertent productions.  If a responding party realizes that it has produced material that it believes is privileged or work product, it may notify the receiving party, who then must immediately sequester the information and either return it (and all copies) to the responding party or present the information to the court conditionally under seal until the court can rule on the claim of privilege.  See CCP § 2031.285(b). 

Keep in mind, however, that this provision does not alter the substantive analysis that a court will apply to the claim of privilege (including whether the inadvertent production constituted a waiver); rather, it merely establishes a protocol for dealing with such inadvertent productions.  Thus, this provision is no substitute for a thorough and careful privilege review.

Limited "Safe Harbor" for Good Faith Loss or Deletion of ESI

The Act provides a limited "safe harbor" from sanctions where a party has lost or deleted discoverable ESI in good faith as a result of the routine operation of a computer system.  (This is another provision that tracks a parallel provision in the federal rules.)  Under the Act, "absent exceptional circumstances," a court may not impose sanctions on a party or attorney for failing to produce ESI that has been "lost, damaged, altered, or overwritten" as a result of the "routine, good faith operation of an electronic information system." Therefore, to qualify for the safe harbor, the loss of ESI must have been due to the operation of a computer system that was both "routine" and in "good faith."  See CCP §§ 2031.060(i)(1), 2031.300(d)(1), 2031.310(j)(1) and 2031.320(d)(1). 

Notably, the Act expressly states that the safe harbor does not "alter any obligation to preserve discoverable information."  See CCP §§ 2031.060(i)(2), 2031.300(d)(2), 2031.310(j)(2) and 2031.320(d)(2).  Accordingly, the normal duty to preserve evidence still applies where there is pending or foreseeable litigation, including the duty to suspend automatic deletion programs if necessary to preserve potentially relevant evidence.  The failure to do so could lead a court to decide that the destruction of ESI was not in "good faith" and, thus, not protected by the safe harbor.

No Case Management Provision

One notable difference between the federal rules and the Act is that the Act does not require the parties to discuss issues concerning ESI in advance of the initial case management conference, which is a requirement under the federal rules.  Notwithstanding the absence of such a requirement, it is often useful to have such discussions with opposing counsel and, if possible, reach agreements about issues related to the production of ESI in order to avoid costly disputes later on.

Definition of ESI

Under the Act, ESI is defined as "information that is stored in an electronic medium," and the word "electronic" is defined as "relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities."  CCP § 2016.020.  It seems clear that the inclusion of the words "or similar capabilities" was meant to convey the legislative intent for a broad and inclusive definition of ESI that will encompass new technologies that may be developed in the future.

While these rules should not come as a surprise to any party or attorney who has litigated in federal court since December 2006, they provide welcome clarification to the rules in California state court with respect to discovery of ESI.  They also provide welcome consistency between the ESI rules that apply in the California state courts and in the federal courts.