The Texas Supreme Court heard arguments March 9 in a case that will have far-reaching consequences in the discovery process.
The case, In re State Farm Lloyds, Cause No. 15-0903, concerns whether parties have to produce electronic documents in their “native” or “near-native” format (for example, how the document is maintained on the party’s computer system) pursuant to Texas Rule of Civil Procedure 196.4.
The plaintiffs, who sued State Farm for fraud and breach of contract relating to storm damage, won in the trial court and the appeals court and argued for native production. State Farm argued that the rule does not require native format, but that production of a “static” image (such as a PDF) satisfies the rule. The plaintiffs replied that native documents offer far more information contained in the file’s metadata, such as when the document has been altered, how it has been altered and who altered it.
At argument, the Court’s questioning focused on reasonableness of the inquiry. Reasonableness can take many forms but, in the electronic discovery process, reasonableness generally concerns two areas: (1) What is the scope of the request compared to the claims at issue; and (2) What is the cost of gathering the information?
The Court’s opinion is expected in the next few months. Until then, all parties in litigation should consider how they maintain electronic information and the ease or difficulty with which it can be produced. Discovery of electronic information can be labor-intensive and costly. A party would be wise, long before litigation is initiated, to implement practices that make the production of electronic information more streamlined. If the information is kept on a proprietary system, the party will have to take efforts to demonstrate the relevance (or not) of the information if produced in native format and its usefulness (or not) apart from the proprietary system.
Health care litigation is one area where this case will have lasting influence. As a part of the American Recovery and Reinvestment Act, all public and private health care providers and other eligible professionals were required to adopt “meaningful use” of electronic medical records more than three years ago in order to maintain Medicaid and Medicare reimbursement.
Savvy parties in litigation are aware that these records are kept electronically and may seek to obtain them in native format to review the metadata. Health care providers should ensure policies are in place to maintain the electronic information and ensure that any amendments to the record are made in accordance with a neutral policy that keeps in mind that all changes can be subject to review.
If you have any questions about how these requirements will have an impact on your case or your business, please contact Jordan Parker, Chair of the Cantey Hanger LLP Litigation Section, or Tim Davis at 817-877-2800.