Delaware eDiscovery Report : Delaware eDiscovery Lawyer & Attorney : Morris James Law Firm : Electronic Data Discovery, Document Retention

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UPDATE:

Apparently I am the only one who seems to be concerned with the Court of Chancery's unqualified allowance for parties to agree to forgo discovery of ESI.  Here are the other blog posts I found that have reported on the new guidelines, not a single one raises any concern:

Delaware Court of Chancery Provides Good Advice on Preservation (Losey)

Court of Chancery Issues Guidelines for Preservation of Electronically Stored Information (Brady)

Delaware’s influential Chancery Court issues preservation guidelines likely to have wide impact

Delaware Court of Chancery Issues Guidelines for Preservation of Electronically Stored Information

Delaware Court of Chancery Recently Established Guidelines for Preservation of ESI

ORIGINAL POST:

Last week, the Delaware Court of Chancery—one of the nation's premier business Courts—unexpectedly issued a one and a half page "Guidelines for Preservation of Electronically Stored Information."  Surprisingly, the Guidelines seem to allow parties to opt-out of document discovery entirely (see the last item below).  In summary, the Guidelines are as follows:

• There is a common law duty to preserve potentially relevant electronically stored information (ESI) within a party's possession, custody, or control once litigation is commenced or when litigation is "reasonably anticipated."
• Parties must take reasonable steps in good faith to meet their duty to preserve ESI.
• Parties and their counsel should confer early in the litigation regarding the preservation of ESI.
• Parties and their counsel must develop, oversee, and document a preservation process in collaboration with the appropriate client information technology personnel.
• Parties and their counsel should discuss the need to identify how custodians store their information, including document retention policies and procedures as well as the processes used to create, edit, send, receive, store, and destroy information for the custodians.
• Counsel should take reasonable steps to verify information they receive about how ESI is created, modified, stored, or destroyed.
• The preservation process should include a written litigation hold notice to individual custodians instructing them to take reasonable steps, act in good faith, and with a sense of urgency in preserving potentially relevant information.
• Parties and their counsel may face "serious consequences" for failing to take reasonable steps to preserve ESI.
• The reasonableness of a party's preservation process is judged on a case-by-case basis.
• Counsel for all parties should confer about the scope and timing of discovery of ESI and may agree to limit or forgo the discovery of ESI.

I am very interested to hear comments on this development.

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As explained by Ed McNally (one of the most renowned corporate litigators in the known universe), the Delaware Superior Court has created a commercial litigation division.  This is exciting for many reasons, not the least of which is the new division has rules regarding eDiscovery.  Morris James had the honor of providing input on the formation of those rules, and we are very pleased with the final results.  A brief summary of the rules:

The new rules require parties to meet and confer to discuss:

1. any issues relating to preservation of ESI;
2. the form in which each type of ESI will be produced and any problems relating thereto;
3. the scope of production, including the custodians, time period, file types and search protocol to be used to identify which ESI will be produced;
4. the method for asserting or preserving claims of privilege or of protection of ESI as trial-preparation materials, including whether such claims may be asserted after production;
5. the method for asserting or preserving confidentiality and proprietary status of ESI relating to a party or a person not a party to the proceeding;
6. whether allocation among the parties of the expense of preservation and production is appropriate; and,
7. any other issue relating to the discovery of ESI.

From those discussions, the parties are required to develop an eDiscovery plan for submission to the Court for entry as a order.  The rules then provide a safe harbor for destruction of documents outside the scope of the order.  The rules also provide a process for handling not reasonably accessible data, and they explicitly preserve privilege for inadvertently produced documents.

Please take a look at the Administrative Directive establishing the new Complex Commercial Litigation Division (CCLD) for the full details.

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In a recent Court of Chancery letter opinion in Dawson v. Pittco Capital Partners, CA No. 3148-CC, at page 2 in footnote 3, Chancellor Chandler wrote:

Federal Court decisions are “of great persuasive weight in the construction of parallel Delaware rules” due to the analogous nature of the Court of Chancery Rules and the Federal Rules of Civil Procedure. Cede & Co. v. Technicolor, Inc., 542 A.2d 1182, 1191 n.11 (Del. 1988).

Interesting.  Or, as Jimmy Stewart would say, "Well, that's very in'resting."

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