The Sedona Conference has published a second edition of its iconic The Sedona Principles: Best Practices Recommendations & Principles for Addressing Electronic Document Production (June 2007), which is available via download at www.thesedonaconference.org. The Sedona Conference is a nonprofit group, created in 1997, to tackle complex legal (primarily litigation) issues.

The latest update is a product of Sedona Conference’s Working Group One, an informal, “minithink tank” established in 2002 to provide a forum for jurists, lawyers, experts, and academics to address emerging problems and “best practices” in e-discovery. From an initial membership of about 20, WG1’s roster has grown to several hundred members, including consultant Craig Ball (author of LTN’s Ball in Your Court column); Ariana Tadler, a partner at Milberg Weiss; and Jonathan Redgrave, of Redgrave Daley Ragan & Wagner, among others. I am a founding member of WG1 and served as one of the editors of the update.

The original 2004 version of The Sedona Principles established 14 e-discovery “principles.” The revision reflects the ramifications of the 2006 EDD amendments to the Federal Rules of Civil Procedure, and attempts to address the rule changes without compromising the perspective of the original document’s authors. Here are highlights:

PRESERVATION STANDARDS

The Sedona Principles continue to provide de facto national standards for preservation obligations.

Sedona Principle 5 provides that “reasonable and good faith efforts” are required to accomplish preservation, but it is “unreasonable to expect parties to take every conceivable step to preserve all potentially relevant data.” This standard is representative of the evolving case law and will continue to provide guidance, since the 2006 Amendments do not directly address preservation standards.

Thus, the landmark case of Zubulake v. UBS Warburg, 220 F.R.D. 212 at 217 (S.D.N.Y. Oct. 22, 2003) (“Zubulake IV”), relied upon the Sedona Principles for the proposition that “as a general rule … a party need not preserve all backup tapes even when it reasonably anticipates litigation.” Many courts have cited or specifically followed that holding.

The leading case of Cache La Poudre Feeds, LLC v. Land O’Lakes, Inc., 2007 WL 684001 (D. Colo. March 2, 2007), for example, carefully blends the teaching of the Sedona Principles with case law in order to resolve complex challenges to a litigation hold process.

ACCESSIBILITY OF ELECTRONIC INFORMATION

The 2006 FRCP amendments distinguish in rule 26(b)(2)B) between production from sources of electronic information that are reasonably accessible and those that are not, limiting production from the latter absent a showing of good cause in light of the burdens and costs involved.

The unique aspect of the 2006 amendments is that it makes the distinction self-executing. By and large, the post-2006 FRCP amendment cases use a media-based approach in deciding what is and is not “reasonably accessible.” Thus, backup tapes, databases, and, typically, hard drives are presumed to be inaccessible because of the costs of access, retrieval, and review. Local district rules or guidelines in district courts in Delaware, Kansas, and the Northern District of Ohio also help define accessibility. However, a pure focus on the storage media has its limitations. For example, direct access to fragments of information on hard drives in order to create a mirror image implicate the inaccessiblity standard despite the fact that the source — the hard drive — is accessible.

The initial version of Sedona Principle 8 provided a similar, but better approach; namely, that the primary source of information should be “active data” which is “purposely stored in a manner that anticipates future use and permits efficient searching and retrieval.”

The second edition retains the focus on “active data” but incorporates the “accessibility” concept to help define the types of information that require proof that the need and relevance outweigh the costs and burdens “including the disruption of business and information management activities.”

METADATA AND FORMS OF PRODUCTION

As part of the 2006 amendments, Rule 34 now provides that electronically stored information can be produced — absent agreement or a court order — in either the form in which it was ordinarily maintained or in a “reasonably useable” form. Neither the rule nor the FRCP’s “Advisory Committee Comments” address the circumstances under which metadata or embedded data must be produced in a particular case.

Sedona Principle 12 initially provided a presumption that “[u]nless it is material to resolving the dispute, there is no obligation to preserve and produce metadata absent agreement of the parties or order of the court.” After considerable discussion, Sedona Principle 12 was revised to provide a more nuanced view of the need for metadata. It now provides that the form of production should take into account “the need to produce reasonably accessible metadata that will enable the receiving party to have the same ability to access, search, and display the information as the producing party where appropriate or necessary in light of the nature of the information and the needs of the case.”

The comments to Principle 12 explain the advantages and disadvantages of particular forms of production with relationship to the impact of the choices on metadata.

COST SHIFTING

One of the hallmarks of the original Sedona Principles was the tacit adoption of the logic that mandatory costshifting shifts the incentives away from excessive requests for e-discovery.

However, given the reluctance of the FRCP’s advisory committee to adopt that approach in the 2006 amendments, Sedona Principle 13 now states that the costs of retrieving and reviewing information which is not reasonably available “may” (instead of “should”) be shared by or shifted to the requesting party.

CULPABILITY FOR SANCTIONS

The original version of Sedona Principle 14 recommended that sanctions should be considered only where “an intentional or reckless failure to preserve and produce” information exists.

Rule 37(f), on the other hand, adopted an “intermediate” standard of “good faith” as the measure of required culpability. Qualification for this relief involves proof that the party undertook appropriate measures to preserve information at risk of loss and is arguably less forgiving than the “intentional or reckless” requirement in Sedona Principle 14.

Accordingly, Principle 14 has been revised to recommend that sanctions should not issue without a finding of a “culpable failure to preserve and produce,” leaving the issue to the individual facts of specific cases.

By Thomas Allman

Thomas Allman is former senior counsel to Mayer Brown.