Rabiej on Accessibility of ESI

Rabiej on Accessibility of ESI


Quinby v. WestLB, 2005 U.S. Dist. LEXIS 35583 (S.D.N.Y. Dec. 15, 2005) and Treppel v. Biovail Corp., 2006 U.S. Dist. LEXIS 4407 (S.D.N.Y. 2006) reach opposite conclusions on whether converting relevant accessible electronically stored information (ESI) into inaccessible ESI pending litigation violates preservation obligations. John K. Rabiej, Chief of the Rules Committee Support Office, which staffs the Judicial Conference's Standing and Advisory Rules Committees, and author of several chapters in Moore's Federal Practice and Weinstein's Federal Evidence, discusses the facts of each case and explains their rationales. He writes:
 
     In reaching his decision [in Treppel], Judge Francis noted that ESI would be effectively destroyed if it is converted from an accessible form into an inaccessible form. Judge Francis relied on Residential Funding ... [v. Degeorge Financial Corp., 2002 U.S. App. LEXIS 20422 (2d Cir. 2002)] concluding that “permitting the downgrading of data to a less accessible form – which systematically hinders future discovery by making the recovery of the information more costly and burdensome – is a violation of the preservation obligation.” Judge Francis did not sanction the defendant because the converted ESI had not been downgraded and remained accessible. Judge Francis opined, however, that if the defendant had converted the ESI into an inaccessible backup tape . . . he would have found such action sanctionable. Presumably, the defendant in Treppel was not sanctioned because the ESI was retained on an accessible mirror image of the data. . . .
 
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    [In Quinby] Judge Pitman ruled that the conversion of the ESI did not violate any preservation obligation but added that if “a party creates its own burden or expense by converting into an inaccessible format data that it should have reasonably foreseen would be discoverable material at a time when it should have anticipated litigation, then it should not be entitled to shift costs of restoring and searching the data.”
 
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     The preservation standard articulated by Judge Francis in Treppel would impose significant restrictions. It is correct that sanctions for spoliation would be limited to situations in which the conversion of the form of ESI hindered discovery “by making the recovery of the information more costly and burdensome.” Thus, converting data from an active database to a mirror image would not degrade its searchability. But other conversions routinely undertaken for business purposes, like storing ESI off-site or microfilming the data, would risk sanctions because it might increase retrieval burdens and costs. The Treppel standard, even as limited by Judge Francis, would inevitably lead to unnecessary satellite litigation about whether a particular form change actually increases retrieval burdens. Any change in the form of ESI would invite scrutiny and challenge. Even apparently innocuous conversions, including converting ESI from WordPerfect to Word, might be sanctionable because the search capabilities may be negatively affected; for example, differences in metadata might increase search costs. Because parties risk severe penalties if they violate their preservation obligations, such a preservation standard, though limited, would have the unfortunate effect of constraining a party in making business decisions that are entirely proper.
 
(footnotes omitted)