Today, the U.S. Federal Trade Commission’s (FTC) new final rules for electronic discovery go into effect with the goal of streamlining e-discovery and making the investigative process more efficient and straightforward; many of these changes reflect similar recent revisions to the Federal Rules of Civil Procedure. The revisions address three areas of e-discovery in the FTC’s compulsory process: the scope and form of e-discovery (16 CFR §2.7); claims of privilege (16 CFR §2.11); and duty to preserve information (16 CFR §2.14(c)). These revisions should go a long way toward updating the FTC’s legal procedures to better reflect the realities of modern law and document discovery.
Rule 2.7 authorizes the FTC to issue a subpoena or civil investigative demand to compel its recipient to testify or produce material relevant to the FTC’s investigations. The revisions provide a clear definition for Electronically Stored Information (ESI)—“any writings, drawings, graphs, charts, photographs, sound recordings, images and other data or data compilations stored in any electronic medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form.”
This new, specific definition for ESI, which includes metadata, provides a foundation for the rest of the revisions to Rule 2.7. The revised rule also limits material sought by the FTC to items that “would be bounded by the nature and scope of the investigation” and specifies that ESI must be produced in the manner and form specified by the FTC. Absent any specific instructions from the FTC, “ESI must be produced in the form or forms in which it is ordinarily maintained or in a reasonably usable form.” As this could cause some concern with regard to privilege, the FTC encourages responding parties to bring those concerns to them for a discussion of possible solutions.
The revised rule 2.7 also requires that the recipient of FTC compulsory process meet and confer with FTC investigators “within 14 days after receipt of process or before the deadline for filing a petition to quash, whichever is first.” The respondent must also bring personnel knowledgeable about issues involving the ESI, as well as the methods of retrieval, to this initial meet and confer. These requirements may initially seem to place a heavier burden on respondents to FTC compulsory process orders, but the clarity of the new rules and requirement for ESI experts to be present should greatly simplify the process of responding to and resolving FTC complaints.
While rule 2.7 received the most significant changes, the FTC also made important revisions to rule 2.11 that provide specific instructions for privilege logs. In addition to being in a searchable electronic format, they must contain several different pieces of information:
- Document control number(s)
- Full title and full file name
- A description of material withheld
- Date(s) material was created and sent
- Email addresses from which and to which each document was sent
- The names, titles, business addresses, email addresses or other electronic contact information, and relevant affiliations of all authors and recipients of the material
- The factual basis for withholding the material
- Any other pertinent information to support the assertion of protected status
The FTC does allow the parties to agree to modify the logging requirements during the initial meet and confer should such modifications be appropriate to the matter. Finally, the revised rule 2.11 allows for inadvertently produced privileged material to be destroyed or returned as long as reasonable steps to prevent such disclosure were taken and the holder took prompt action to fix the error.
The last e-discovery rule to be revised is 2.14, which regards the duty of respondents to preserve information. The revision relieves recipients of FTC compulsory process from preserving relevant material after a period of twelve months following the last written communication from the FTC if the FTC has not notified the recipient that an investigation has closed. This of course does not waive any obligation the party may have to preserve documents for investigations by other government agencies, or for litigation.
This trend of government agencies and courts updating their rules to streamline the e-discovery process shows every sign of continuing—the United States International Trade Commission (ITC) has proposed a similar set of revisions to its e-discovery rules. The ITC is seeking comments on its proposed rules by December 4th of this year, and will likely finalize them the following year.