Friday, August 12, 2016

Just Published: The Sedona Conference Commentary on Rule 34 and Rule 45 "Possession, Custody, or Control"

The Sedona Conference has issued its final Commentary on Rule 34 and Rule 45 "Possession, Custody, or Control."  17 Sedona Conf. J. ____ (forthcoming 2016).

From the Abstract:

Rule 26(a) of the Federal Rules of Civil Procedure allows for the discovery of “documents, electronically stored information, and tangible things” in the responding party’s “possession, custody, or control.” Similarly, Rule 34(a) and Rule 45(a) obligate a party responding to a document request or subpoena to produce “documents, electronically stored information, and tangible things” in that party’s “possession, custody, or control.” Yet, the Rules are silent on what the phrase “possession, custody, or control” means. Therefore, parties must look to case law for a definition. Unfortunately, the case law across circuits (and often within circuits themselves) is unclear and, at times, inconsistent as to what is meant by “possession, custody, or control,” resulting in a lack of reliable legal—and practical—guidance. The inconsistent interpretation and application of Rules 34 and 45 in this context are especially problematic because parties remain absolutely responsible for preserving and producing information within their “possession, custody, or control” and face material consequences, including sanctions, for their failure to do so.

. . . .

This Commentary is intended to provide practical, uniform, and defensible guidelines regarding when a responding party should be deemed to have “possession, custody, or control” of documents and all forms of electronically stored information (hereafter, collectively referred to as “Documents and ESI”) subject to Rule 34 and Rule 45 requests for production. A secondary, corollary purpose of this Commentary is to advocate abolishing use of the common‐law “Practical Ability Test” for purposes of determining Rule 34 and Rule 45 “control” of Documents and ESI. Simply stated, this common‐law test has led to inequitable situations in which courts have held that a party has Rule 34 “control” of Documents and ESI even though the party did not have the actual ability to obtain the Documents and ESI. Therefore, this Commentary recommends that courts should interpret and enforce Rule 34 “possession, custody, or control” obligations in ways that do not lead to sanctions for unintended and uncontrollable circumstances. To support that recommendation, this Commentary also looks to several well‐established legal doctrines upon which to model the contemporary scope of a party’s duty to identify, preserve, and collect Documents and ESI, such as reliance upon a modified version of the business judgment rule. Helping resolve the disparity among circuits to bring a uniform, national standard to this important area of the law is consistent with Sedona’s mission of moving the law forward in a just and reasoned way.  


Principle 1:      A responding party will be deemed to be in Rule 34 or Rule 45 “possession, custody, or control” of Documents and ESI when that party has actual possession or the legal right to obtain and produce the Documents and ESI on demand.

Principle 2:      The party opposing the preservation or production of specifically requested Documents and ESI claimed to be outside its control, generally bears the burden of proving that it does not have actual possession or the legal right to obtain the requested Documents and ESI.

Principle 3(a): When a challenge is raised about whether a responding party has Rule 34 or Rule 45 “possession, custody, or control” over Documents and ESI, the Court should apply modified “business judgment rule” factors that, if met, would allow certain, rebuttable presumptions in favor of the responding party.

Principle 3(b): In order to overcome the presumptions of the modified business judgment rule, the requesting party bears the burden to show that the responding party’s decisions concerning the location, format, media, hosting, and access to Documents and ESI lacked a good faith basis and were not reasonably related to the responding party’s legitimate business interests.

Principle 4: Rule 34 and Rule 45 notions of “possession, custody, or control” should never be construed to override conflicting state or federal privacy or other statutory obligations, including foreign data protection laws.

Principle 5: If a party responding to a specifically tailored request for Documents or ESI (either prior to or during litigation) does not have actual possession or the legal right to obtain the Documents or ESI that are specifically requested by their adversary because they are in the “possession, custody, or control” of a third party, it should, in a reasonably timely manner, so notify the requesting party to enable the requesting party to obtain the Documents or ESI from the third party. If the responding party so notifies the requesting party, absent extraordinary circumstances, the responding party should not be sanctioned or otherwise held liable for the third party’s failure to preserve the Documents or ESI.

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