What Does Schwarzenegger Veto of ESI Bill Mean?

Governor Schwarzenegger vetoed Assembly Bill 926 on October 9th of this year. According to Arnold, his veto was due to the ongoing burdens associated with implementing an overdue state budget. As they pertain to handling of Electronically Stored Information (ESI), this bill would have brought many civil codes in alignment with the FRCP rules changes of 2006. Many other states are implementing similar legal reform.

After the federal rule changes nearly two years ago, California took a wait-and-see approach to the handling ESI. The thought was to give the federal system a chance to set precedence and clear up some of the ambiguity. At this point, many questions still remain unanswered about lockstep ESI methodologies, but the industry as a whole has become much more cognizant about the subject and some solid standards have emerged.

By delaying approval, the Governor may have done a disservice to a community of lawyers that are still stumbling blindly around the topic. As we have seen at ALC, the FRCP rule changes forced many attorneys to change their traditional behaviors for managing document discovery. In the first year alone, we saw many firms fighting their obligations to properly handling ESI and in those cases risked hemorrhaging costs and sanctions. The two biggest areas that we consult on daily, safe-harbor and meet-and-confers, can easily be attributed to those changes.

With the advent of the new FRCP, attorneys found solace in safe harbor protections. Although this was not the biggest point of interest with the new rules, it has become a major function in current eDiscovery methodologies. As long as there are reasonable and good faith efforts to collect and produce data, law firms and corporate general counsel can wade through eDiscovery with more ease and for less money.

To further the safety net, the federally mandated meet-and-confer conferences for ESI production (Rule 26f) have created a safe environment for adversaries to discuss data issues with transparency. This has changed some traditional strategies that lawyers have employed for years. But, after the learning curve, this rule has enabled parties on both sides of litigation, to prepare for and manage review and productions in a timely and cost efficient manner.

Much of the proposed language awaiting approval for California civil code mirrors the language of the 2006 FRCP changes. Obviously, there are many other nuances that affect data discovery and after two years there is still significant grey area; however, it appears that the courts were being proactively ambiguous when developing these rules. No matter how they are viewed, these rules force attorneys to address and resolve data discovery issues productively. Until California adopts some of these guidelines for state level litigation, there will continue to be lawyers who exhibit unintentional and inadvertently risky behavior. Perhaps more important is the amount of money (yes – taxpayers money as well) that will be wasted on lawsuits by corporations and individuals, until these changes take hold in our local system. We’ll see how much more money the state wastes, before the Governor finds it important enough to sign in the previously vetoed bill.

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