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International Trade Commission Proposes E-Discovery Rule Changes

Created on November 28, 2012

Last month, the United States International Trade Commission (USITC) published an official “Notice of Proposed Rule Making," which announced proposed amendments to its Rules of Practice and Procedure regarding e-discovery practices. The agency is accepting public comments on the changes through December 4th.

The changes are primarily focused on discovery proceedings associated with section 337 of the Tariff Act of 1930. Section 337 investigations most frequently involve claims regarding intellectual property rights, including allegations of patent infringement and trademark infringement by imported goods, according to the USITC's website.

In a press release announcing the proposed rule changes, the USITC cited increasing concerns that e-discovery was becoming an overly expensive and time-consuming undertaking, and the changes are necessary to “mitigate unnecessary burdens and costs to the parties in section 337 investigations and to third parties...."

The proposed changes address two primary areas that are currently not covered by the USITC's official Rules of Practice and Procedure: (1) placing limits on the scope of e-discovery and (2) addressing issues surrounding privileged electronically stored information (ESI).

Limiting the scope of discovery

Proposed changes to place limits on the scope of e-discovery track fairly closely to the Federal Rules of Civil Procedure (FRCP), according to Mark Michels, a director for Deloitte Financial Advisory Services who specializes in e-discovery issues. He covered the topic in a recent Law Technology News article. The proposal would amend the current rules to state that “a person need not provide discovery of electronically stored information from sources that the person identifies as not reasonably accessible because of undue burden or cost." Not only does the language of the proposed rule change closely reflect the FRCP, but the comments section of the notice further explains that case law developed under the FRCP would “provide guidance" for the application of the proposed changes.

The United States International Trade Commission (USITC) is one of a growing number of government agencies attempting to modernize rules surrounding electronic discovery.

Also similar to the FRCP is a proposed provision limiting discovery if an Administrative Law Judge (ALJ) determines that the discovery sought is duplicative or can be obtained from a less burdensome source, the party seeking discovery has had ample opportunity to obtain the information, or the burden of the proposed discovery outweighs its likely benefit. However, according to a post on the ITC 337 Law Blog, the commentary diverges somewhat from the FRCP by, among other things, “requiring the ALJ to limit discovery if the person from whom discovery is sought has waived the legal position that justified the discovery or has stipulated to the facts pertaining to the issue to which the discovery is directed."

Addressing privilege issues

The proposed changes would provide a formalized procedure for claiming privilege. The USITC rules do not currently have a provision for privilege log production. The amendments would provide uniform privilege log instructions and establish a time frame by which a privilege log would need to be produced, going beyond the level of detail included in the FRCP. Additionally, the proposed privilege provisions include a procedure for addressing situations where privileged information has been inadvertently produced. This change also goes further than its FRCP counterpart by providing strict timelines for rectifying such situations, according to the ITC 337 Law Blog.

Michel's asserts that the proposed privilege rule amendment “appears to reject the provisions of Federal Rule of Evidence 502, which permit parties to craft non-waiver agreements, such as the claw-back agreement allowing parties to recover privileged material produced to the opposing party without a costly privilege review procedure."

The E-Discovery Beat's Take

The USITC's proposed rule changes provide further evidence that e-discovery and the rules governing it are slowly but surely creeping outside the civil litigation bubble. Even though there remains a high degree of ambiguity and judicial discretion built into the proposed changes, it's significant that these issues are being brought to the forefront. For practical purposes, an amplified focus on e-discovery by government agencies, like the USITC, means any organization who frequently deals with regulatory compliance and governmental activities must take pause and evaluate their e-discovery processes and the technologies that are in place to support them. For example, parties subject to frequent section 337 investigations should strongly consider how they plan to address the USITC's new privilege log requirements, assuming they are left in the final version of the rule changes. Michel's suggests that many parties will be challenged to comply with this provision based on current practices. For these organizations, failing to modernize their e-discovery processes now could have drastic consequences in the near future.

To learn more about the e-discovery rules and trends in regulatory compliance and government investigations, view Exterro's recent webcast, “Litigation, Investigations and Regulations, Oh My!."