Over the past few years, especially in light of the COVID-19 pandemic and shift to a remote work from home environment, discovery has increasingly focused on the search, collection, review, and production of electronically stored information (“ESI”). As a result, on Monday, April 11, 2022, the New York Commercial Division formally amended Rules 1, 8, 9, 11-c, 11-e and 11-g to address standards and procedures applicable to the shifted focus on ESI. As noted in the Office of Court Administration’s September 7, 2021 memorandum, these changes “address e-discovery in a more consolidated way, [and] modify the rules for clarity and consistency.” View the changes.
The majority of modifications apply to Rule 11-c, which is amended to apply to electronic discovery from both nonparties and parties. Our review of the amendments to Rule 11-c appear to update the NY Commercial Division’s rules on e-discovery to align more closely to established principles enshrined in the Federal Rules of Civil Procedure, as outlined below.
Parties are expected to consult more frequently about e-discovery
In general, the new rules require parties to consult more frequently on an informal basis regarding broad issues related to electronic discovery. For example, parties are required to confer, prior to a preliminary or compliance conference with the court, on any topics related to electronic discovery. Appendix A to Rule 11-c provides an outline of topics that parties should discuss prior to the preliminary conference, including, but not limited to, the scope of preservation, potential conflicts between discovery obligations and applicable laws, and the identification of custodians, timeframe and sources of ESI, including any ESI sources that are not reasonably accessible. Under the new rules, parties may request the specific format in which ESI is produced; however, the responding party has the right object to such a request. This aligns with the Federal Rule of Civil Procedure 34(b)(2)(D). Any topics related to the discovery of ESI upon which the parties cannot preliminarily agree are to be addressed with the court at the preliminary conference.
All parties are encouraged to review Appendix A to Rule 11-c, titled Guidelines for Discovery of ESI (the “Guidelines”), which at, or before, the commencement of proceedings. In general, the Guidelines encourage parties to share information relating to the electronic discovery process and to resolve any disagreements through informal meetings outside of the court and to tailor ESI requests to what is reasonable and proportionate.
The costs and burdens of discovery are explicitly considered
The amendments also address issues surrounding the costs and efficiency of electronic discovery. Consistent with existing case law, the new rule provides specific factors to consider when assessing whether the costs and burdens of discovery of ESI are proportionate to its benefits. These factors include “the nature of the dispute, the amount in controversy, and the importance of the materials requested to resolving the dispute.” These factors are similarly contemplated under Federal Rule of Civil Procedure 26(b)(1). Although Rule 26(b)(1) focuses on whether discovery is “proportional” to the claims and defenses of the case – rather than focusing on merely the cost and burden of discovery – the rule requires parties to consider similar factors as amended Rule 11-c, such as: (1) the importance of the issues at stake in the action, (2) the amount in controversy, (3) the parties’ relative access to relevant information, (4) the parties’ resources, (5) the importance of the discovery in resolving the issues and (6) whether the burden or expense of the proposed discovery outweighs its likely benefit.
Parties are encouraged to use technology to efficiently review electronic discovery
Under the new rules, parties are also encouraged to use “efficient means to identify ESI for production,” including technology-assisted review (TAR), and are required to confer at the outset of discovery and throughout the discovery period regarding any “technology-assisted review mechanisms.”
Adds a claw-back provision for inadvertent disclosure of privileged materials
The amendments explicitly include a claw-back provision for inadvertent disclosure of ESI that is subject to either attorney-client privilege or the work product doctrine. The unintentional production of such information is not deemed a waiver to the privilege, so long as the producing party (i) took reasonable precautions to prevent disclosure, and (ii) promptly notified the receiving party in writing after learning of the inadvertent disclosure and requested that the receiving party return or destroy the ESI. This provision follows the Federal Rule of Evidence 502(b).
Requires parties to take “reasonable steps” to preserve information, a concept borrowed from the Federal Rules
Lastly, the amended rules require parties to “take reasonable steps” to preserve relevant ESI, which is also consistent with Federal Rule of Civil Procedure 37(e).
