The Texas Supreme Court Provides a 'Form of Production' Road Map for Litigants
By its own admission, the Texas Supreme Court has had fewoccasions to enter the fray of electronic discovery, but did so inthe recent mandamus proceeding In re State Farm Lloyds,Relator . In this case, homeowners sued State Farm allegingunderpayment of hail damage claims. Plaintiffs sought, and thetrial court imposed, a requirement that electronically storedinformation be produced in native or near-native form rather thanthe reasonably useable, static image forms such as PDF, TIFF andJPEG into which State Farm regularly converted ESI.
In denying mandamus and allowing State Farm to seekreconsideration by the trial court, the Texas Supreme Courtarticulated a detailed proportionality analysis for determining theappropriate form of production in future disputes, aligning it withstate and federal rules and case law.
Form ofProduction
Plaintiffs asserted production in native form was necessary toobtain metadata. Specifically, the plaintiffs expert asserted thattracked changes and comments in Microsoft Word documents, speakernotes in PowerPoint and animations or other dynamic informationwere necessary and not available in static format.
State Farms Enterprise Claims System, however, used for claimshandling, required users to upload information that they created instatic, read-only formats, stripping metadata from the uploadedfiles. State Farm contended that native production would requiredevelopment of a new process that would necessitate review of theupstream data locations, determining whether native files exist andthen engineering an extraction process.
In most litigation, ESI is collected in its original native formfrom various locations (such as laptops and servers), processed andloaded into an e-discovery review tool where it is reviewed forproduction in native form, allowing the producing party to reviewand produce the kind of metadata sought by the plaintiffs in thiscasetrack changes, speaker notes and the likeeven if files areproduced in TIFF or PDF. In this case, due to the limitations ofState Farms system, this standard was not available, leaving thecourt with two choices: allowing production in static form fromState Farms ECS system or requiring the development of a newprocess that would involve additional time and expense.
Framework for Analysis
The court recognized that metadata may be discoverable ifrelevant, but stated that this does not mean production in ametadata-friendly format is necessarily required and noted a weakpresumption against the production of metadata has taken hold.
The court held that, while a requesting party must specify theform of production under Texas Rule of Civil Procedure (TRCP)196.4, that party does not have a unilateral right to define theform. In their analysis, the court compared the Texas Rule withFederal Rule of Civil Procedure (FRCP) 34, which does not permiteither party to unilaterally dictate the form of production forESI. Instead, the form of production is subject to theproportionality overlay embedded in [the Texas] discovery rules andinherent in the reasonableness standard to which ourelectronic-discovery rule is tethered.
Given State Farms objection to production in native form andthe courts finding that TRCP 196.4 does not give one party theright to determine form of production, the court established theframework for the trial court to conduct an analysis under TRCP192.4 to determine whether the differences in utility and usabilityof the requested native form outweighed the enhanced burden andcost of a native production. This application of proportionalityprinciples aligns electronic-discovery practice under the TexasRules of Civil Procedure with electronic-discovery practice underthe Federal Rules of Civil Procedure. Thus, the form of productionissue must be subjected to a proportionality analysis asarticulated in TRCP 192.4 and its analog in FRCP 26(b)(1).
The Proportionality Road Map
In looking at the potential benefit of metadata production, thecourt found that if the benefits of native form are negligible,nonexistent, or merely speculative, any enhanced effortsor expense attending the requested form of production is undue andsufficient to deny the requested discovery. On the other hand,showing of a particularized need for the requested form weighsheavily in favor of permitting it, but may warrant cost shifting tothe requesting party.
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The relevance of metadata must be obvious or at least linked,more or less concretely to a claim or defense. As a generalproposition, metadata may be necessary to the litigation when thewho, what, where, when and why ESI was generated is an actual issuein the case, not merely a helpful or theoretical issue, such as ina wrongful termination case where timing and authorship of employeeevaluations may be key.
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The amount in controversy plays a pivotal role in determiningwhether production in a specified form is justified.
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Beyond financial resources, the court adds to the resourceanalysis whether the requesting party has the technologicalresources to make proper use of the ESI in the form requested. Anyassociated burden would be unwarranted if the potential benefits ofnative production could not be captured.
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The trial court must also evaluate the importance of the issuesat stake in the litigation, as well as determine whether theproposed native form of production will aid in the resolution ofthe dispute.
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Finally, the court leaves open the option to add any otherarticulable fact bearing on proportionality, recognizing that theadvancement of technology might exceed the speed of the courts toarticulate appropriate factors.
Over the course of 29 pages and 88 footnotes, the Texas SupremeCourt provided a detailed road map for analysis and resolution ofparties disputes regarding form of production. It is unlikely thatmany courts will choose to forge a significantly different path,given the similarities to the Federal Rules as articulated in thecourts analysis. Given the lack of direction from appellate courtson this topic, lawyers should embrace this analysis as a guide toaddressing and resolving these types of form of productiondisputes.
