E-Discovery in Virginia

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July 24, 2018


E-DISCOVERY

A. Electronically Stored Information – What Is It? Where Is It?

1. “ESI currently includes e-mail messages, word processing files, web pages, and databases created and stored on computers, magnetic disks (such as computer hard drives), optical disks (such as DVDs and CDs), and flash memory (such as ‘thumb’ or ‘flash’ drives), and increasingly on ‘cloud’ based servers hosted by third parties that are accessed through Internet connections. The technology changes rapidly, making a complete list impossible.” Federal Judicial Center, Managing Discovery of Electronic Information: A Pocket Guide for Judges 2 (2d Ed. 2012).

B. What Should Every Lawyer Know About E-Discovery and ESI?

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1. The Rules – Electronic discovery provisions of the Federal Rules of Civil Procedure, including Rules 26, 33, 34, 37, and 45, as well as the electronic discovery provisions of the state rules of procedure.

2. The Client – “In order to comply with [the mandatory disclosure requirement under Fed. R. Civ. P. 26] counsel must become knowledgeable about their client’s computer systems and ESI at the onset of litigation. Hence, Plaintiff’s counsel should have access to information from which it could readily discern what data is stored on each of Plaintiff’s systems, who uses the systems, the retention of the data stored and where and how the data is backed up or archived.” Nissan N. Am., Inc. v. Johnson Elec. N. Am., Inc., 2011 U.S. Dist. LEXIS 16022, at *10 (E.D. Mich. Feb. 17, 2011).

II. VIRGINIA’S E-DISCOVERY RULES

A. The Discovery of ESI

1. Va. Sup. Ct. R. 4:1(b)(7)

(7) Electronically Stored Information. A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause, considering the limitations of Rule 4:1(b)(1). The court may specify conditions for the discovery, including allocation of the reasonable costs thereof. 2. Va. Sup. Ct. R. 4:9(a)

(a) Scope.
Any party may serve on any other party a request (1) to produce and permit the party making the request, or someone acting on his behalf, to inspect, copy, test, or sample any designated documents or electronically stored information (including writings, drawings, graphs, charts, photographs, and other data or data compilations stored in any medium from which information can be obtained, translated, if necessary, by the respondent into reasonably usable form). 3. Va. Sup. Ct. R. 4:9(b)(i)

(b) Procedure.

(i) Initiation of the Request. . . . The request shall set forth the items to be inspected either by individual item or by category, and describe each item and category with reasonable particularity. The request shall specify a reasonable time, place, period and manner of making the inspection and performing the related acts. The request may specify the form or forms in which electronically stored information is to be produced.

B. Responding to a Request for ESI

1. Va. Sup. Ct. R. 4:9(b)(ii)

(ii) Response. . . . The response shall state, with respect to each item or category, that inspection and related activities will be permitted as requested, unless the request is objected to, including an objection to the requested form or forms for producing electronically stored information, stating the reasons for the objection. If objection is made to part of an item or category, the part shall be specified and production shall be permitted as to the remaining parts. If objection is made to the requested form or forms for producing electronically stored information /- or if no form was specified in the request /- the responding party must state the form or forms it intends to use. . .

C. Producing ESI

1. Va. Sup. Ct. R. 4:9(b)(iii)(B)

(B) Electronically Stored Information.
(1) Responses to a request for production of electronically stored information shall be subject to the provisions of Rules 4:1(b)(7) and 4:1(b)(8).

(2) If a request does not specify the form or forms for producing electronically stored information, or if a responding party objects to the requested form or forms of production, a responding party must produce the information as it is ordinarily maintained if it is reasonably usable in such form or forms, or must produce the information in another form or forms in which it is reasonably usable. A party need not produce the same electronically stored information in more than one form.

D. Requesting ESI from Non-Parties

1. Va. Sup. Ct. R. 4:9A(b) (b) Content of Subpoena Duces Tecum; Objections. Subject to paragraph (d) of this Rule, a subpoena duces tecum shall command the person to whom it is directed, or someone acting on his behalf, to produce the documents, electronically stored information, or designated tangible things (including writings, drawings, graphs, charts, photographs, and other data or data compilations stored in any medium from which information can be obtained, translated, if necessary, by the respondent into reasonably usable form) designated and described in said request, and to permit the party filing such request, or someone acting in his behalf, to inspect and copy, test, or sample any designated tangible things which constitute or contain matters within the scope of Rule 4:1(b) which are in the possession, custody or control of such person to whom the subpoena is directed, at a time and place and for the period specified in the subpoena. A subpoena may specify the form or forms in which electronically stored information is to be produced.

E. Responding a Subpoena Duces Tecum Requesting the Production of ESI

1. Va. Sup. Ct. R. 4:9A(c)(2) (2) Electronically Stored Information.(A) A person responding to a subpoena need not provide discovery of electronically stored information from sources the responder identifies as not reasonably accessible because of undue burden or cost. On motion to compel production or to quash a subpoena, the person from whom production is sought under the subpoena must show that the information sought is not reasonably accessible because of undue burden or cost. If that showing is made, the court may nonetheless order production of responsive material from such sources if the subpoenaing party shows good cause, considering the limitations of Rule 4:1(b)(1). The court may specify conditions for the production of such information, including allocation of the reasonable costs thereof. (B) If a subpoena does not specify the form or forms for producing electronically stored information, a person responding thereto must produce the information as it is ordinarily maintained if it is reasonably usable in such form or forms, or must produce the information in another form or forms in which it is reasonably usable. A person responding to a subpoena need not produce the same electronically stored information in more than one form.

III. FEDERAL E-DISCOVERY RULES

A. The Discovery of ESI

1. Fed. R. Civ. P. 26(b)(2)(B) (B) Specific Limitations on Electronically Stored Information. A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause, considering the limitations of Rule 26(b)(2)(C). The court may specify conditions for the discovery.

2. Fed. R. Civ. P. 26(b)(2)(C)

(C) When Required. On motion or on its own, the court must limit the frequency or extent of discovery otherwise allowed by these rules or by local rule if it determines that:

(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive;
(ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or

(iii) the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.

3. Fed. R. Civ. P. 34(a)(1)(A) (a) IN GENERAL. A party may serve on any other party a request within the scope of Rule 26(b):

(1) to produce and permit the requesting party or its representative to inspect, copy, test, or sample the following items in the responding party’s possession, custody, or control:

(A) any designated documents or electronically stored information—including writings, drawings, graphs, charts, photographs, sound recordings, images, and other data or data compilations—stored in any medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reason- ably usable form; . . .

4. Fed. R. Civ. P. 34(b)(1)(C)

(b) PROCEDURE.
(1) Contents of the Request. The request:
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(C) may specify the form or forms in which electronically stored information is to be produced.

B. Responding to a Request for ESI

1. Fed. R. Civ. P. 34(b)(2)(D) (D) Responding to a Request for Production of Electronically Stored Information. The response may state an objection to a requested form for producing electronically stored in- formation. If the responding party objects to a requested form—or if no form was specified in the request—the party must state the form or forms it intends to use.

C. Producing ESI

1. Fed. R. Civ. P. 34(E) (E) Producing the Documents or Electronically Stored Information. Unless otherwise stipulated or ordered by the court, these procedures apply to producing documents or electronically stored information: (i) A party must produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request;

(ii) If a request does not specify a form for producing electronically stored information, a party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms; and (iii) A party need not produce the same electronically stored information in more than one form.

D. Requesting ESI from Non-Parties

1. Fed. R. Civ. P. 45(a)(1)(A)(iii) (A) Requirements—In General. Every subpoena must:
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(iii) command each person to whom it is directed to do the following at a specified time and place: attend and testify; produce designated documents, electronically stored information, or tangible things in that person’s possession, custody, or control; or permit the inspection of premises; and 2. Fed. R. Civ. P. 45(a)(1)(C) (C) Combining or Separating a Command to Produce or to Permit Inspection; Specifying the Form for Electronically Stored Information. A command to produce documents, electronically stored information, or tangible things or to permit the inspection of premises may be included in a subpoena commanding attendance at a deposition, hearing, or trial, or may be set out in a separate subpoena. A subpoena may specify the form or forms in which electronically stored information is to be produced.

3. Fed. R. Civ. P. 45(a)(1)(D)

(D) Command to Produce; Included Obligations. A command in a subpoena to produce documents, electronically stored information, or tangible things requires the responding party to permit inspection, copying, testing, or sampling of the materials.

E. Responding a Subpoena Duces Tecum Requesting the Production of ESI

1. Fed. R. Civ. P. 45(d) (d) Duties in Responding to a Subpoena. (1) Producing Documents or Electronically Stored Information. These procedures apply to producing documents or electronically stored information: (A) Documents. A person responding to a subpoena to produce documents must produce them as they are kept in the ordinary course of business or must organize and label them to correspond to the categories in the demand.

(B) Form for Producing Electronically Stored Information Not Specified. If a subpoena does not specify a form for producing electronically stored information, the person responding must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms. (C) Electronically Stored Information Produced in Only One Form. The person responding need not produce the same electronically stored information in more than one form.

(D) Inaccessible Electronically Stored Information. The person responding need not provide discovery of electronically stored information from sources that the person identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the person responding must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause, considering the limitations of Rule 26(b)(2)(C). The court may specify conditions for the discovery.

IV. MANAGING E-DISCOVERY

A. Preservation

1. “A person who anticipates litigation has a duty to preserve material evidence that may be relevant.” Taylor v. Mitre Corp., No. 1:11-cv-1247, 2012 U.S. Dist. LEXIS 161318, at *4 (E.D. Va. Nov. 8, 2012) (O’Grady, J.) (citing Silvestri v. Gen. Motors Corp., 271 F.3d 583, 591 (4th Cir. 2001)). “The duty to preserve material evidence arises not only during litigation but also extends to that period before the litigation when a party reasonably should know that the evidence may be relevant to anticipated litigation.” Id. at 591 (emphasis added).“The Court recognizes that litigants are not required to preserve ‘every shred of paper, every e-mail or electronic document, and every back up tape.’” E.I. du Pont de Nemours & Co. v. Kolon Indus., 803 F. Supp. 2d 469, 496 (E.D. Va. 2011) (Payne, J.) (quoting Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 217 (S.D.N.Y. 2003)). “Indeed, ‘[s]uch a rule would cripple large corporations.’” Id. However, “[a] party that anticipates litigation, however, is ‘under a duty to preserve what it knows, or reasonably should know, is relevant in the action, is reasonably calculated to lead to the discovery of admissible evidence, is reasonably likely to be requested during discovery, and/or is the subject of a pending discovery request.’” Id. (quoting Samsung Elecs. Co. v. Rambus, Inc., 439 F. Supp. 2d 524, 543 (E.D. Va. 2006), vacated on other grounds, 523 F.3d 1374 (Fed. Cir. 2008)) (citation and quotation marks omitted). “Consequently, upon anticipation of litigation, parties ‘must suspend [their] routine document retention/destruction polic[ies] and put in place a ‘litigation hold’ to ensure the preservation of relevant documents.’” Id. (quoting Zubulake, 220 F.R.D. at 218). “A party’s discovery obligations do not end with the implementation of a ‘litigation hold’ -- to the contrary, that’s only the beginning. Counsel must oversee compliance with the litigation hold, monitoring the party’s efforts to retain and produce the relevant documents. Proper communication between a party and her lawyer will ensure (1) that all relevant information (or at least all sources of relevant information) is discovered, (2) that relevant information is retained on a continuing basis; and (3) that relevant non-privileged material is produced to the opposing party.” Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 432 (S.D.N.Y. 2004); Kolon Indus., 803 F. Supp. 2d at 501 (“[A] company in Korea that admittedly is unfamiliar with litigation in the United States, its counsel and executives should have affirmatively monitored compliance with the orders.”).

B. Planning

1. Fed. R. Civ. P. 16(b)(3)(B)(iii)
(3) Contents of the Order.
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(B) Permitted Contents. The scheduling order may:
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(iii) provide for disclosure or discovery of electronically stored information;

2. Fed. R. Civ. P. 26(f)(3) (3) Discovery Plan. A discovery plan must state the parties’ views and proposals on:
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(C) any issues about disclosure or discovery of electronically stored information, including the form or forms in which it should be produced;
(D) any issues about claims of privilege or of protection as trial preparation materials, including-if the parties agree on a procedure to assert these claims after production-whether to ask the court to include their agreement in an order;

3. Va. Sup. Ct. R. 4:13 The court may in its discretion direct the attorneys for the parties to appear before it for a conference to consider:
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(2) A plan and schedule of discovery;
(3) Any limitations on the scope and methods of discovery;
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(5) The possibility of obtaining admissions of fact and admissions regarding documents and information obtained through electronic discovery;
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(8) issues relating to the preservation of potentially discoverable information, including electronically stored information and information that may be located in sources that are believed not reasonably accessible because of undue burden or cost;

C. Collection

1. “[T]he selection of custodians is more than a mathematical count. The selection of custodians must be designed to respond fully to document requests and to produce responsive, nonduplicative documents during the relevant period.” Kleen Prods. LLC v. Packaging Corp. of Am., 10 C 5711, 2012 U.S. Dist. LEXIS 139632, at *46 (N.D. Ill. Sept. 28, 2012). “To adequately respond to a request for production, the respondent must ‘conduct a reasonable search for responsive documents.’ Parties, along with their employees and attorneys, have a duty to act ‘competently, diligently, and ethically’ with respect to discharging discovery obligations. This requires a joint effort ‘to identify all employees likely to have been authors, recipients or custodians of documents’ responsive to the requests for production. Parties ‘jeopardize the integrity of the discovery process by engaging in halfhearted and ineffective efforts to identify and produce relevant documents.’

A party does not ‘meet its discovery obligations by sticking its head in the sand and refusing to look for [documents].’ It is inexcusable, furthermore, to respond to a request for production without reviewing the computer of a primary actor in the sequence of events leading to litigation.” Robinson v City Arkansas City, Kan., No. 10-1431-JAR-GLR, 2012 U.S. Dist. LEXIS 23806, at *4 (D. Kan. Feb. 24, 2012) (citations omitted).

D. Production

1. There is a presumption that “‘the producing party should bear the cost of responding to properly initiated discovery requests.’” Adair v. EQT Prod. Co., No. 1:10CV00037, Case No. 1:10CV00041, 2012 U.S. Dist. LEXIS 75132 (W.D. Va. May 31, 2012) (quoting Thompson v. U.S. Dep’t of HUD, 219 F.R.D. 93, 97 (D. Md. 2003); see also Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 358 (1978) (providing that the party responding to a discovery request ordinarily bears the expense associated with doing so). Also, “[a] party that seeks an order from the court that will allow it to lessen the burden of responding to allegedly burdensome electronic records discovery bears the burden of particularly demonstrating that burden and of providing suggested alternatives that reasonably accommodate the requesting party’s legitimate discovery needs.” Id. (quoting Hopson v. Mayor & City Council of Baltimore, 232 F.R.D. 228, 245 (D. Md. 2005)). “Accessibility of the ESI is, at the very least, a highly significant factor in the determination of whether to consider cost-shifting in the e-discovery context.” Adair v. EQT Prod. Co., Case No. 1:10CV00037, Case No. 1:10CV00041, 2012 U.S. Dist. LEXIS 90250, at *14 n.7 (W.D. Va. June 29, 2012) (Jones, J.). “Some . . . courts have held that cost-shifting is available only when the information sought is relatively inaccessible, and this inaccessibility is the the cause of the undue burden or cost to the producing party.” Adair, 2012 U.S. Dist. LEXIS 75132, at *10 (citing Helmert v. Butterball, LLC, No. 4:08CV00342 JLH, 2010 U.S. Dist. LEXIS 60777 (E.D. Ark. May 27, 2010) (stating that “[c]ourts should not consider cost shifting when ESI is kept in an accessible format”).

2. “[C]ertain e-discovery expenses may be recoverable as costs to the prevailing party.” Adair, 2012 U.S. Dist. LEXIS 90250, at *15-16 n.8 (citing CBT Flint Partners, LLC v. Return Path, Inc., 676 F. Supp. 2d 1376, 1381 (N.D. Ga. 2009) (“The enormous burden and expense of electronic discovery are well known. Taxation of these costs will encourage litigants to exercise restraint in burdening the opposing party with the huge cost of unlimited demands for electronic discovery.”)). Compare Fells v. Virginia Dept. of Transp., 605 F. Supp. 2d 740, 743 (E.D. Va. 2009) (refusing to tax “electronic records initial processing, Metadata extraction, [and] file conversion”) (internal quotation marks omitted) and Klayman v. Freedom’s Watch, Inc., No. 07-22433, 2009 U.S. Dist. LEXIS 121660, at *2 (S.D. Fla. 2008) (refusing to tax the cost of hiring “experts at a huge hourly cost to search for and retrieve discoverable electronic documents”) with Race Tires America, Inc. v. Hoosier Racing Tire Corp., No. 07- 1294, 2011 U.S. Dist. LEXIS 48847, at *26-30 (W.D. Pa. May 6, 2011) (awarding costs for creating a litigation database, imaging hard drivers, scanning documents, processing and indexing data, extracting metadata, and enabling documents to be OCR searchable) and United States Bankr. v. Dorel Indus., Case No. A-08-CA-354-SS, 2010 U.S. Dist. LEXIS 78096, at *11-14 (W.D. Tex. Aug.

2, 2010) (granting costs under § 1920(3) for the creation of an electronic database) and Lockheed Martin Idaho Techs. Co. v. Lockheed Martin Advanced Envtl. Sys., No. CV-98-316-E-BLW, 2006 U.S. Dist. LEXIS 52242, at *8 (D. Idaho July 27, 2006) (awarding costs under § 1920(4) for a litigation database that “was necessary due to the extreme complexity of this case and the millions of documents that had to be organized”).

E. Discovery Sanctions

1. Fed. R. Civ. P. 37(e)

(e) Failure to Provide Electronically Stored Information. Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.

V. RECENT CASES

A. Decisions from the Federal District Courts in Virginia

1. Hanwha Azdel, Inc v. C&D Zodiac, Inc., No. 6:12-cv-23, 2012 U.S. Dist. LEXIS 182046 (E.D. Va. Dec. 27, 2012) (Ballou, M.J.) – Plaintiff filed a motion to compel, alleging that defendant had not produced ESI in a manner sufficient to satisfy Fed. R. Civ. P. 34. Defendant produced ESI “in a format that lack[ed] any index or other meaningful organization to permit Plaintiff to use and review the document production efficiently.” The court agreed and ordered defendant to pay the reasonable costs of plaintiff not to exceed $8,463.00 to convert defendant’s ESI production into a readily usable format.

2. Adair v. EQT Prod. Co., No. 1:10cv00037, Case No. 1:10cv00041, 2012 U.S. Dist. LEXIS 90250 (W.D. Va. June 29, 2012) (Jones, J.) – In a case where the parties had entered into a protective order and clawback order addressing the possible production of inadvertently produced privileged documents, defendant objected to magistrate judge’s determination that cost-shifting is not necessary because production can proceed using electronic searches for responsiveness and privilege and without individual review. Defendant claimed that only individual review of each document prior to production would be an adequate protection from unwarranted disclosure. The district court rejected defendant’s argument, stating that it had not “shown that the use of electronic searching would substantially increase the number of inadvertently produced documents.”

3. United States v. Universal Health Servs., No. 1:07cv54, 2011 U.S. Dist. LEXIS 86566 (W.D. Va. Aug. 5, 2011) (Sargent, M.J.) – Commonwealth did not make the showing that it should be excused from producing ESI due to undue burden or cost. The court ordered the Commonwealth to produce back-up tapes to defense counsel for use by a commercial vendor to retrieve the e-mails in a format useable by the Commonwealth to search for responsive documents.

4. E.I. du Pont de Nemours & Co. v. Kolon Indus., 803 F. Supp. 2d 469 (E.D. Va. 2011) (Payne, J.) – Having found intentional and bad faith deletion of relevant files and e-mails by key employees, the court imposed sanctions in the forms of attorneys’ fees, expenses, and costs related to the motion for sanctions for spoliation of evidence, and an adverse inference instruction. The court held that it would inform the jury that certain of defendants’ executives and employees, after learning that defendant had sued plaintiff, deleted much electronically stored information that would have been available to plaintiff for use in presenting its case. The jury then should be allowed to infer that the unrecoverable deleted information would be helpful to plaintiff and harmful to defendant. The jury also should be told that the fact of deletion, without regard to whether the deleted material was recovered, may be taken into account in assessing the element of defendant’s intent and knowledge.

B. Decisions from the Circuit Courts in Virginia

1. Global Aero. Inc. v. Landow Aviation, L.P., Consolidated Case No. CL 61040, 2012 Va. Cir. LEXIS 50 (Loudoun County Apr. 23, 2012) – Permitting defendants to proceed with the use of predictive coding for purposes of the processing and production of ESI but permitting the receiving party to raise issues related to completeness, the contents of the production, and predictive coding technology as production progressed.

2. Womack v. Yeoman, 83 Va. Cir. 401 (Richmond 2011) – The circuit court orders plaintiff’s counsel to pay costs incurred by defendant’s counsel in responding to plaintiff’s objections to the inclusion of photographs and text postings in defendant’s witness list. The circuit court noted that “social media and internet searches are regularly becoming a normal step in an attorney’s matter of public information.” The circuit court held that there was no violation of the Stored Communications Act because defendant’s counsel did not recover any information protected by any privacy settings or obtain any electronic communications that were not readily accessible to the general public.

3. Lester v. Allied Concrete Co., 83 Va. Cir. 308 (Charlottesville 2011) – In this wrongful death case, the circuit court awarded sanctions against client and attorney for deliberatively deleting Facebook photos that were responsive to a pending discovery request. The attorney was also referred to the Virginia State Bar for an apparent violation of Rule 3.4(a) of the Virginia Rules of Professional Conduct, which mandate that a lawyer shall not counsel or assist his client in altering, destroying, or concealing a document or other material having potential evidentiary value for the purpose of obstructing a party’s access to evidence.

4. Albertson v. Albertson, 73 Va. Cir. 94 (Fairfax County 2007) – In this divorce action, the circuit court finds that under Va. Sup. Ct. R. 4:9, a court has the power to require a party to produce his actual hard drives so the requesting party can “inspect and copy” the writings, photographs, or data compilations stored therein. The circuit court found that “pursuant to the powers governing discovery,” it could grant “authority” for parties to access information otherwise protected by the Virginia Computer Crimes Act.


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