North Carolina Proposes Ediscovery Amendments

North Carolina has now joined the growing numbers of states that have either taken action or are currently considering action to amend state civil procedure rules to address electronic discovery. House Bill 380 was introduced on March 17, 2011 and is intended to “clarify the procedure for discovery of electronically stored information.” Included below is a “cliff notes” version of the proposed changes:

Rule 16: The pre-trial conference specified in this rule is optional and does not specifically list “electronically stored information” in the context of what is to be discussed at the conference. Wording of this rule was modified slightly (changing “judge” to “court”) and now requires the judge to make an order reciting the action taken at the conference, etc. if a conference is held.

Rule 26(b)(1): The language of this Rule has proposed amendments to include “electronically stored information” in the list of generally discoverable information, and defines ESI to mean: “reasonably accessible metadata that will enable the discovering party to have the ability to access such information as the date sent, date received, author, and recipients. The phrase does not include other metadata unless the parties agree otherwise upon motion of a party and a showing of good cause for the production of certain metadata.”

Rule 26(b)(3): A new subsection to this rule was added to address specific limitations on ESI, which include the existing provisions in Rule 26(b)(2) and the limitations set forth in Rule 34(b). The proposed language in this subsection also grants the court the ability to specify conditions for discovery, including allocation of discovery costs.

Rule 26(b)(7): Rule 26(b)(7)(a) addresses privilege and protecting trial-preparation materials. Specifically, the rule requires a party that is withholding information that is otherwise discoverable on the grounds that the information is privileged or subject to protection as trial-preparation material to expressly make the claim and describe the nature of the material not produced in a manner that allows the parties to assess the claim without revealing the information. Rule 26(b)(7)(b) addresses the inadvertent production of privileged material by noting the producing party may assert a claim of privilege by notifying the receiving party. At that point, the receiving party must promptly return, sequester or destroy the information, cannot use or disclose the information, must take reasonable steps to retrieve the information and may promptly present the information under seal to the court for determination of the claim. The producing party must preserve the information until the claim is resolved.

Rule 26(c): The section addressing protective orders now includes proposed language placing the burden of showing that requested ESI is not reasonably accessible because of undue burden and cost on the party seeking the protective order. The court may still order discovery from the source despite good cause after considering the limitations in Rule 26(b)(2).

Rule 26(f)(1-4): This subsection was completely re-written to specify that no earlier than 40 days after the complaint is filed and in action, a party’s attorney or unrepresented party may request a meeting on discovery, including ESI. If a request is filed, the parties shall meet not less than 21 days after the initial request was made. Even if the parties do not request such a meeting, the court may direct the parties to appear before it for a discovery conference. During the discovery meeting, the attorneys must be prepared to discuss a discovery plan and attempt in good faith to reach an agreement. If an agreement is not reached, the parties must submit to the court a joint report containing the parts of the plan that are agreed upon and the position of each party for each disagreement. Among other items, the discovery plan must include, with respect to ESI, a reference to the preservation of ESI, the media form, format or procedures by which production will occur, the allocation of costs of preservation, production and, if necessary, restoration, the method for asserting/preserving claims of privilege. The court is authorized under this rule to combine the discovery conference with a pre-trial conference under Rule 16.

Rule 34(a): The proposed language of this rule is amended to state: “Any party may serve on any other party a request (i) to produce and permit the party making the request, or someone acting on that party's behalf, to inspect and copy, test, or sample any designated documents, electronically stored information, or tangible things which constitute or contain matters within the scope of Rule 26(b) and which are in the possession, custody or control of the party upon whom the request is served…”

Rule 34(b): The proposed language of this rule is amended to note that the production request may specify the form or forms in which ESI is to be produced. A party may also state an objection to production of ESI from sources identified as not reasonably accessible because of undue burden or cost. The response may also state an objection to a requested form of ESI production. If the responding party objects, or if no form is specified in the request, the party must state the form(s) it intends to use. Parties must produce documents as kept in the usual course of business and must organize/label them to correspond to the categories in the request; if no form is specified, production must be in a reasonable usable form; production of ESI need not be produced in more than one form.

Rule 37(a)(2): If a motion is made based upon an objection to ESI production of sources identified as not reasonably accessible because of undue burden or cause, the objecting party has the burden of showing that the basis for the objection exists.

Rule 37(c): Absent exceptional circumstances, the court may not impose sanctions under these rules on a party for failing to provide ESI lost as a result of routine, good-faith operation of an electronic information system.

Rule 45: The proposed language of this rule includes ESI throughout and addresses the duties of responding to subpoenas, including that production of ESI must be in the manner ordinarily maintained or in a reasonably usable form and that the responding party must demonstrate that information is not reasonable accessible because of undue burden or cost.