The Texas Supreme Court sets a framework for requesting access to Electronically Stored Information (ESI) such as tracked changes and comments in Microsoft Word documents, notes in PowerPoint, and other dynamic information.
By Robert K. Wise & Kennon L. Wooten, authors of Texas Discovery: A Guide to Taking and Resisting Discovery Under the Texas Rules of Civil Procedure, a comprehensive guide to the Texas discovery practice.
The Texas Supreme Court’s May 26, 2017 opinion in In Re State Farm Lloyds, Nos. 15-0903 and 15-0905, is the Court’s second foray into the rules regarding electronic discovery. In re Weekly Homes, L.P., 295 S.W. 309 (Tex. 2009) (orig. proceeding), was its first and delineated the parameters for assessing a request for direct access to electronically-stored information (ESI).
Is Access to Metadata Required?
In State Farm Lloyds, State Farm Lloyds was sued by its insured homeowners for underpaying hail-damage claims. The homeowners sought, and the trial court ordered, ESI to be produced in its native or “near-native” form rather than in static-image forms (e.g., PDF, TIFF, and JPEG) into which State Farm converted claims-related ESI in the ordinary course of business. The homeowners argued that production of ESI in the requested form was needed to obtain metadata that tracked changes and comments in Microsoft- Word documents, speaker notes in presentations, and animations or other dynamic information that was unavailable in static-image forms.
State Farm Lloyds objected to producing ESI in the requested form because (1) its ordinary business practice was to upload claims information in static, read-only forms, which stripped metadata from the uploaded files, and (2) native or “near-native” production would require development of a new process involving the review of the upstream data sources to determine whether native files exist and, if so, engineering an extraction process. After the trial court overruled State Farm Lloyds’ objection and ordered it to produce ESI in the requested form, State Farms Lloyds sought mandamus relief. The intermediate appellate court denied mandamus relief. So did the Texas Supreme Court, but without prejudice, to allow the trial court to reconsider its decision in light of the Court’s opinion and guidance.
“Neither Party May Dictate the Form of Electric Discovery”
State Farm Lloyds contains three core holdings. Initially, it holds that, under the Texas discovery rules, “neither party may dictate the form of electric discovery.”
Next, the case holds that, if the producing party objects to the requested form for ESI’s production because unreasonable efforts are required to produce it in that form and a “reasonably usable” form is readily available, the trial court must conduct a case-specific proportionality analysis balancing the following factors: (1) the likely benefit of producing the ESI in the requested form, including the “cumulative effects” of the trial court’s order; (2) the case’s specific needs; (3) the amount in controversy; (4) the parties’ financial and technological resources; (5) the importance of the issues at stake in the litigation; (6) the importance of the proposed discovery in resolving the litigation; and (7) any other articulable factor bearing on proportionality.
Finally, the case holds that metadata’s relevance in litigation “must be obvious or at least linked, more or less concretely, to a claim or defense[,]” noting that “metadata may be necessary to the litigation when the who, what, where, when and why ESI was generated is an actual issue in the case, not merely a helpful or theoretical issue.”
The decision also is important for at least two other reasons. First, it aligns electric-discovery practice under the Texas discovery rules with those under the federal discovery rules. Second, the Court, quoting Weekly Homes, noted that the Texas discovery rules in general “are not inconsistent with the federal rules or the case law interpreting them” even though they may not “mirror the federal language.” Accordingly, in e-discovery disputes in Texas state courts, practitioners can, and should, rely on cases interpreting the pertinent federal rules as guidance.
Robert K. Wise & Kennon L. Wooten are authors of Texas Discovery: A Guide to Taking and Resisting Discovery Under the Texas Rules of Civil Procedure, a comprehensive guide to the Texas discovery practice. Robert K. Wise is a founding member of Lillard Wise Szygenda PLLC in Dallas. Kennon Wooton is a partner at Scott Douglass & McConnico LLP in Austin.
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