Recent Revisions to the FTC and ITC e-Discovery Rules

By Julia Romero Peter, Esq.

The Federal Trade Commission and International Trade Commission recently have revised its ediscovery rules.  Both sets of rules aim to expedite the ediscovery process, ease discovery burdens and clarify privilege procedures. 

FTC’s Revised Rules describe the image

On November 9, 2012, the FTC’s revised rules on ediscovery went into effect. These rules cover the compulsory process (16 C.F.R. §2.7), privilege claims (16 C.F.R. §2.11) and the duty to preserve information (16 C.F.R. §2.14(c)).

Rule 2.7 authorizes the Commission to issue a subpoena or CID ordering the recipient to testify or produce relevant material regarding a matter under investigation.  Electronically Stored Information (ESI) is defined as “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 includes metadata.

Rule 2.7 also requires a respondent to meet and confer with Commission staff “within 14 days after receipt of process or before the deadline for filing a petition to quash, whichever is first, to discuss compliance and to address and attempt to resolve all issues.”  Any privilege issues likewise should be raised with the Commission.

Rule 2.11 describes the specifics for withholding privileged material.  Privilege logs must be provided in a searchable electronic format and contain certain information.

Rule 2.11 also states that an inadvertent disclosure does not act as a waiver if the disclosure was inadvertent and the privilege holder “took reasonable steps to prevent disclosure” and “promptly took reasonable steps to rectify the error, including notifying Commission staff of the claim and the basis for it.”  The Commission must “promptly return or destroy the specified material . . . .”

Finally, Rule 2.14(c) provides that a respondent is relieved of its duty to preserve relevant information “after a period of twelve months following the last written communication from the Commission staff to the recipient or the recipient’s counsel . . . .”  This does not remove any obligation of respondent to preserve information for other investigations or litigation.

ITC’s Revised Rule

On May 15, 2013, the International Trade Commission revised its ediscovery rule related to Section 337 investigations (19 C.F.R. §210.27).  The rule will be effective 30 days after publication in the Federal Register.  The revisions bring the rule more in line with Federal Rule of Civil Procedure 26(b).  Generally, the revisions limit discovery when unduly burdensome or costly and address privilege issues.  

The first revision permits a party under certain circumstances not to produce requested ESI if it is “not reasonably accessible because of undue burden or cost.”  It also requires an administrative law judge to limit discovery if it is duplicative or “can be obtained from a less burdensome source” or where “the burden or expense of the proposed discovery outweighs its likely benefits.”   

The ITC revisions on privilege claims describes a “uniform set of procedures” for making privilege claims.  Claims must be “expressly” made when a party responds to a discovery request.  Moreover, privilege logs must be produced within 10 days of making the claims.  The ITC “believes discovery will be most efficient when relevant privilege and work product issues are identified as soon as possible.”

The revisions also describe procedures for addressing inadvertent disclosures.  Administrative law judges will need to apply federal and common law when deciding on the consequences of inadvertent disclosures, including whether the privilege holder “took reasonable steps to prevent disclosure” and other factors set forth in Federal Rule of Evidence 502.

Conclusion

In summary, the FTC stated that its foregoing revised rules “will streamline the FTC’s investigatory process [and] make updates to keep pace with electronic evidence discovery . . . .”     As a policy, the FTC stresses cooperation and “expects all parties to engage in meaningful discussions with staff to prevent confusion or misunderstandings . . . .”   Similarly, the ITC enacted its revisions with the hopes of cutting costs, decreasing discovery burdens and disputes and expediting resolution of Section 337 investigations.  It remains to be seen whether these hopes will come to fruition.







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