What To Do When You’re Required To “Categorize” Your Electronically Stored Information

In this article, we will explain what a categorization requirement looks like and outline best practices for minimizing the pain of compliance.

California’s New Discovery Statute

Now, in at least one key jurisdiction, a modern trend seeks to impose an additional step in this process: If you regularly litigate complex commercial cases in California state court, you may have noticed that over the past three years, complying with document demands has become more complicated and—as a result—more expensive. Blame Sacramento. In 2019, California Governor Gavin Newsom signed Senate Bill 370. The new law, which took effect January 1, 2020, amended California’s Code of Civil Procedure (“C.C.P.”) to place additional requirements on the production of documents during discovery.

In previous years, C.C.P. section 2031.280 allowed litigants to choose how they produced documents in response to a request for production. Respondents could either produce documents “as they are kept in the usual course of business” or organize and label the documents “to correspond with the categories in the demand.” It does not take an eDiscovery specialist to recognize that the first option is less burdensome. The latter involves labeling each produced document to specify the request to which the document is responsive. Particularly in large civil cases, this can be expensive and time-consuming. Unsurprisingly, litigants frequently picked the first option.

S.B. 370 removed this choice. Producing documents as they were kept in the usual course of business was a great cost-saver for the producing party, but it required the recipient to expend time and resources figuring out which documents corresponded to which requests. The California State Legislature decided that the producing party was in a better position to connect these dots and shifted the burden accordingly. As of January 1, 2020, C.C.P. section 2031.280(a) now requires that all produced documents specify the requests to which they are responsive. That means no more production of documents “as they are kept in the usual course of business.”

A Requirement Borrowed From Government Enforcers

Requiring litigants to match documents to requests is unusual, but not entirely novel. Most states continue to model their production rules after Federal Rule of Civil Procedure 34, which affords parties the same two choices that California gave litigants before 2020: to produce documents “as they are kept in the usual course of business” or “organize and label them to correspond to the categories” in the opposing party’s request. But while S.B. 370 makes California an outlier among the states, the amended section 2031.280 bears a striking resemblance to the discovery rules that federal antitrust enforcers regularly impose.

For example, consider the Department of Justice Antitrust Division’s Standard Specifications for the production of documents. These rules, which have been in place since at least 2013, establish the format for complying with the Antitrust Division’s document requests. Like the new section 2031.280, the Standard Specifications require that respondents specify the subpoena or request paragraph number to which each produced document is responsive. This request applies not only to hard copies of documents, but also to emails and other ESI.

The Federal Trade Commission (“FTC”) also occasionally requires parties to match produced documents to their corresponding requests. Unlike the Antitrust Division, the FTC Bureau of Competition’s published Production Guide does not require specification as a bright line rule. In practice, however, the Commission’s requests for production of documents often require that all produced documents “be clearly and precisely identified as to the Request(s) to which they are responsive.”

How To Minimize The Pain of Complying With A “Categorization” Requirement

California may have moved closer to the kind of specification requirements that federal agencies prefer, but it remains unclear whether this shift is a harbinger of things to come in other states. At present, the issue remains confined to California state courts. Those litigating under the specter of the amended section 2031.280(a) should appreciate that the new discovery requirements could make document review and production more complicated and expensive. That said, parties retain several tools that can help control discovery costs.

First, check in with opposing counsel to assess what stipulations are feasible. Section 2031.280(a) may be the new statutory default, but parties can always agree to narrow the scope of discovery requests, or even to stipulate around the specification requirement entirely. Especially in large commercial disputes, both sides should recognize the potentially heavy cost of complying with the updated statute. Your opponent may be equally eager to avoid such costs.

Second, C.C.P. section 2031.060 remains a bulwark against unduly burdensome discovery requests. S.B. 370’s Senate Floor Analyses make plain that the legislature anticipated only a “slight” uptick in the producing party’s costs. The new law does not sanction abusive requests, intended to make document production excessively difficult or expensive. If a requesting party makes such demands, section 2031.060 provides a two-step process for seeking judicial protection. First, try to resolve the issue informally through a “meet and confer” conference. If the issue persists, the responding party may then seek a protective order from the court under section 2031.060(b), which protects litigants from having to comply with discovery requests that precipitate “undue burden and expense.”

Finally, take advantage of eDiscovery software to make document review and production as efficient as possible. Before starting review, create a chart that represents the applicable document requests. Set up tags that correspond to the requests in the chart. As reviewing attorneys work through the documents, they can use the tags to quickly specify the requests to which a particular document is responsive. Further, utilize appropriate technology assisted review methods to further help to categorize and identify documents – concept clustering and conceptual searches for example – can be used in partnership with more traditional targeted keyword searches to zero in on only those documents that may be responsive to one or more of those requests and organize the review. Using eDiscovery technology effectively will help to sort documents by corresponding request, expediting the review and production process.

There is no way around it: A categorization requirement necessarily makes the process of eDiscovery more costly and burdensome. But this pain can be minimized by identifying the requirement as early as possible in the discovery stage of litigation, exhausting all possible avenues for avoiding the requirement, and, if all else fails, creating a document review plan that is structured from the outset around the document requests at issue.