Connecticut State Court Judges Adopt Electronic Discovery Rules

Connecticut state court judges recently adopted new electronic discovery rules.  The rules will become part of the Connecticut Practice Book for civil discovery and take effect on January 2, 2012.  

The judges present at the annual meeting unanimously adopted the new electronic discovery rules. You can read the new e-discovery rules here.  I removed the sections not relevant to civil cases.  The new rules or modifications are indicated by the underlined portions of the rule. 

Here is a quick hit list, and my brief commentary, of the new e-discovery rules in Connecticut state courts:

  • Definitions of electronic and electronically stored information (ESI) added to the list of definitions.  The new definitions are intentionally broad to adapt to new technology changes.
  • Grounds to move for a protective order in discovery include the terms and conditions of discovery of ESI and the allocation of costs between the parties.  This rule permits the court to take into account a series of factors in fashioning a protective order and cost shifting for discovery of ESI.
  • Litigants should be disclosing ESI that is readily accessible and likely to lead to the discovery of admissible evidence.  This basically clarifies that reasonably accessible ESI is no different than other types of discovery. 
  • Whether a litigant needs to disclose ESI that is not reasonably accessible will depend on a variety of factors that the court may consider. 
  • Court can shift the costs of production for ESI.
  • ESI added to the list of information a party can demand to inspect.
  • Safe harbor from sanctions for not only ESI, but all information, that is lost if the information is lost as the result of routine, good faith operation of a system or process in the absence of showing of intentional actions designed to avoid known discovery obligations.  This rule is based on the federal rule 37(f) safe harbor and the commentary indicates that good faith may require a party to stop or intervene a routine destruction policy.
  • Claw back provisions permit a party to notify an opponent of inadvertently disclosed privileged information.  There is a procedure the party must follow upon receipt of the notice.  The rule does not address issues of waiver of privilege by the inadvertent disclosure. 

Until Connecticut courts interpret these provisions, a good resource for attorneys may be found in the commentary to the rules.  Additionally, the new rules are based on  the Uniform Rules Relating to the Discovery of ESI adopted by the National Conference of Commissioners on Uniform State Laws in 2007.  There are various courts in other states that have interpreted these rules. 

You Must Preserve Evidence If A Lawsuit Is Likely

In the recent federal district court decision of Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities (download here) ,  Judge Shira Scheindlin clearly explained  and amplified the obligations to preserve and produce electronically stored evidence in litigation cases.  The case was brought by a group of investors seeking to recover 550 million dollars in losses from a hedge fund liquidation. 

The defendants in the case alleged that the plaintiffs failed to preserve electronically stored documents and filed misleading statements regarding discovery.  In deciding against the plaintiff’s on discovery issues, Judge Scheindlin summarized discovery obligations and stated:

the courts have a right to expect that litigants and counsel will take necessary steps to ensure that relevant records are preserved when litigation is reasonably anticipated, and that such records, are collected, reviewed, and produced to the opposing party….when this does not happen, the integrity of the judicial process is harmed and the courts are required to fashion a remedy…By now, it should be abundantly clear that the duty to preserve means what is says and that a failure to preserve records – paper or electronic – and to search in the right places for those records, will inevitably result in the spoliation of evidence. 

Judge Scheindlin’s decision is very lengthy and detailed.  You might ask, why should a company doing business in Connecticut care about what Judge Scheindlin says in a New York federal district court case?  Well, for starters, Judge Scheindlin is perhaps the most quoted and cited trial judge in the United States concerning electronic evidence following her series of decisions in the now famous case of Zubulake v. UBS Warburg.  Another reason is that Connecticut state court rules on obligations to preserve and produce electronically stored information are not well established or defined.  As such, a state court trial judge in Connecticut is very likely to be persuaded by anything Judge Scheindlin says on the issue of electronic discovery and, in particular, on obligations to preserve and produce electronic evidence, sanctions for failure to do so properly, and the cost and expense of producing such evidence.

Anyone facing potential litigation or reasonably anticipating litigation in Connecticut should understand the obligations to preserve and produce evidence.  Although Judge Scheindlin stated that these obligations should be abundantly clear, the fact is, they either are not clear or they are often ignored.  Every week, there are numerous case reports from across the country involving spoliation, destruction, and mishandling of electronic evidence.  Many times, the failure to preserve critical evidence happens well in advance of the litigation because the duty to preserve is overlooked, ignored, or not understood.

The full scope and extent of discovery obligations is too in depth for a blog post.  Nevertheless, Judge Scheindlin’s decision provides a framework for understanding some basic obligations and rules.  Here is my summary take away from the case:

  •  Any individual or business that reasonably anticipates litigation must issue a "timely" litigation hold in writing.  This means steps must be taken to preserve evidence and to stop its destruction. This also means that the duty to preserve evidence arises before litigation ever happens.  The duty to preserve arises when litigation is "reasonably anticipated."
  • Failure to initiate a written litigation hold may constitute gross negligence.
  • Failure to properly collect evidence from key players in the dispute is gross negligence or willfulness.  This means that evidence must be collected from the individuals that are most involved in the dispute. This type of conduct is more culpable and likely to lead to sanctions.
  • Destruction of emails or backup tapes after the duty to preserve arises may also consitute gross negligence and willful misconduct.
  • Failure to obtain evidence from "all" employees, as opposed to key players, is likely ordinary negligence and a lower degree of culpability.
  • Failure to take all appropriate measures to preserve electronically stored information is negligence and less culpable.

Failure to follow the above framework may result in sanctions ranging from fines and cost shifting to dismissal, preclusion of evidence, or an adverse inference instruction to the jury at the time of trial.  The sanction will depend on the degree of culpability ranging from negligence to gross negligence to intentional conduct.  The scope of sanctions will also depend on the relevance of the missing evidence and the prejudice to the innocent party.

The obligation to preserve evidence must be taken seriously once litigation is "reasonably anticipated."  The sanctions that can result from failure to abide by these obligations can dramatically impact the result of a lawsuit and can cause a party to lose an otherwise meritorious claim or defense.  Improper handling of electronic discovery can also cause an expensive detour in a litigation case that can be avoided with proper care and attention to discovery obligations.