e-discovery 2.0

The world of eDiscovery appears to be revolving around a trifecta of issues that are important to both clients and counsel. A discovery-focused conversation with litigants and lawyers in 2013 will almost invariably turn to some combination of this eDiscovery trinity: Spoliation sanctions, keyword searches and predictive coding. This should not come as a surprise since all three of these issues can have a strong impact on the cost, duration and disposition of a lawsuit. Indeed, the near universal desire among parties to minimize discovery costs and thereby further the resolution of cases on the merits has driven the Civil Rules Advisory Committee to explore ways to address the eDiscovery trinity in draft amendments to the Federal Rules.

While the proposed amendments may or may not succeed in reducing discovery expenses, the examples of how the eDiscovery trinity is playing out in litigation are instructive. These cases – bereft of the additional guidance being developed by the Advisory Committee – provide valuable insight on how courts, counsel and clients are handling the convergence of these issues. One such example is a recent decision from the DuPont v. Kolon Industries case.

Spoliation, Keywords and a $4.5 Million Sanction

In DuPont, the court awarded the plaintiff manufacturer $4.5 million in fees and costs that it incurred as part of its effort to address Kolon’s spoliation of ESI. In an attempt to stave off the award, Kolon argued that DuPont’s fees were not justified due to “inefficiencies” associated with DuPont’s review of Kolon’s document productions. In particular, Kolon complained about the extensive list of search terms that DuPont developed to comb through the ESI Kolon produced. According to Kolon, DuPont’s search methodology was “recklessly inefficient”:

Kolon then asserted that the “reckless inefficiency” of the search methodology was “fairly attributable to the fact that DuPont ran insipid keywords like ‘other,’ ‘news,’ and ‘mail.’” Had DuPont been more precise with its keywords searches, argued Kolon, it “would have saved vast amounts of time and money.”

Before addressing the merits of Kolon’s arguments, the court observed how important search terms had become in discovery:

After doing so, the court rejected Kolon’s arguments, finding instead that DuPont’s search methodology was reasonable under the circumstances. The court based its decision on the source of those search terms (derived from Kolon documents suggesting that ESI had been deleted), the “considerable volume” of Kolon’s productions and the nature of DuPont’s search (an investigation for deleted evidence).

The Impact of Predictive Coding on DuPont’s Search Efficiency

While DuPont considered the issues of spoliation and keywords in connection with the imposition of attorney fees and costs, it was silent on the impact that predictive coding might have had on the fee award. Indeed, neither the court’s order, nor the parties’ briefing considered whether the proper application of machine learning technology could have raised the success rate of DuPont’s searches for documents relevant to Kolon’s spoliation above the ten percent (10%) figure cited by Kolon.

On the one hand, many eDiscovery cognoscenti would likely assert that a properly applied predictive coding solution could have produced the same corpus of relevant documents at a fraction of the cost and effort. Others, however, might argue that predictive coding perhaps would not yield the results that DuPont obtained through keyword searches given that DuPont was looking for evidence of deleted ESI. Still others would contend that the issue is moot since DuPont was fully within its right to determine how it should conduct the search of Kolon’s document productions.

Whether predictive coding could have made a difference in DuPont is entirely speculative. Regardless, the debate over keyword searches versus machine learning technology will likely continue unabated. As it stands, the DuPont case, together with the recent decision from Apple v. Samsung, confirm that keywords may be an acceptable method for conducting searches for relevant ESI. The issue, as the DuPont court observed, turns on “the selection of the search terms.”

Nevertheless, the promise of predictive coding cannot be ignored, particularly if the technology that is used could ultimately reduce the costs and duration of discovery. Given that this debate is far from settled, these issues, along with spoliation sanctions, will likely continue to dominate the eDiscovery airwaves for the foreseeable future.

One of the clear eDiscovery trends that has taken root during the past year is defensible deletion. Indeed, there are any number of news stories reporting that more organizations are taking steps to eliminate electronically stored information (ESI) that has little to any business value. This is further confirmed by industry surveys whose empirical data suggests that a tipping point has been reached on the issue of defensible deletion. For example, in a recent survey conducted by the eDJ Group, over 96% of the respondents recognized that “defensible deletion of information is necessary in order to manage growing volumes of digital information.” The report accompanying the eDJ Group survey succinctly summarized the new-found urgency surrounding defensible deletion: “Deletion isn’t just a nice corporate “housekeeping” idea; it is now a necessity…”

Nevertheless, many organizations remain on the defensible deletion sidelines. While they see the potential value in getting rid of useless ESI, they are often hesitant to do so for a variety of reasons. As described in a recent Inside Counsel webinar, those reasons include any or some combination of the following:

1. The Lack of an Organized Process
2. Ineffective Technology
3. Budget Constraints
4. Fear of Repercussions Stemming from Data Destruction

While these reasons are understandable given the challenges associated with developing a defensible deletion strategy, they can be addressed with an effective information governance plan.

This fact was recently spotlighted by United States Magistrate Judge Paul Grewal, Anne Kershaw, Founder and Principal of A.Kershaw, PC // Attorneys & Consultants, and Eric Lieber, the Director of Legal Technology at Toyota Motor Sales, at the Legal Tech conference in New York. What is most evident and important from the various video excerpts of their discussion is the panelists’ general agreement that the judiciary has recognized that companies may destroy ESI in many instances without adverse consequences. That the judiciary is leaving the door open for organizations to defensibly delete ESI in a reasonable fashion belies the myth that all data must be kept forever. This is consistent with other industry voices, which have observed that the risk of eDiscovery sanctions is dropping. And as the panelists confirmed, this risk could decrease even further if the proposed amendments to Federal Rule of Civil Procedure 37(e) are implemented.

With the threat of sanctions reduced, there are now fewer obstacles outside the organization to get in the way of developing an effective information governance plan. Such a plan, which includes an organized process with sufficient budget to engage necessary personnel and acquire effective technologies, is not mission impossible. Instead, companies whose personnel work cooperatively to find a solution that decreases the massive amounts of stored ESI will likely echo the sentiments of John “Hannibal” Smith from the 1980s television series the A-Team: “I love it when a plan comes together!”

Apple obtained a narrow discovery victory yesterday in its long running legal battle against fellow technology titan Samsung. In Apple Inc. v. Samsung Electronics Co. Ltd, the court ordered non-party Google to turn over the search terms and custodians that it used to produce documents in response to an Apple subpoena.

According to the court’s order, Apple argued for the production of Google’s search terms and custodians in order “to know how Google created the universe from which it produced documents.” The court noted that Apple sought such information “to evaluate the adequacy of Google’s search, and if it finds that search wanting, it then will pursue other courses of action to obtain responsive discovery.”

Google countered that argument by defending the extent of its production and the burdens that Apple’s request would place on Google as a non-party to Apple’s dispute with Samsung. Google complained that Apple’s demands were essentially a gateway to additional discovery from Google, which would arguably be excessive given Google’s non-party status.

Sensitive to the concerns of both parties, the court struck a middle ground in its order. On the one hand, the court ordered Google to produce the search terms and custodians since that “will aid in uncovering the sufficiency of Google’s production and serves greater purposes of transparency in discovery.” But on the other hand, the court preserved Google’s right to object to any further discovery efforts by Apple: “The court notes that its order does not speak to the sufficiency of Google’s production nor to any arguments Google may make regarding undue burden in producing any further discovery.”

This latest opinion from the Apple v. Samsung series of lawsuits is noteworthy for two reasons. First, the decision is instructive regarding the eDiscovery burdens that non-parties must shoulder in litigation. While the disclosure of a non-party’s underlying search methodology (in this instance, search terms and custodians) may not be unduly burdensome, further efforts to obtain non-party documents could exceed the boundaries of reasonableness that courts have designed to protect non-parties from the vicissitudes of discovery. For as the court in this case observed, a non-party “should not be required to ‘subsidize’ litigation to which it is not a party.”

Second, the decision illustrates that the use of search terms remains a viable method for searching and producing responsive ESI. Despite the increasing popularity of predictive coding technology, it is noteworthy that neither the court nor Apple took issue with Google’s use of search terms in connection with its production process. Indeed, the intelligent use of keyword searches is still an acceptable eDiscovery approach for most courts, particularly where the parties agree on the terms. That other forms of technology assisted review, such as predictive coding, could arguably be more efficient and cost effective in identifying responsive documents does not impugn the use of keyword searches in eDiscovery. Only time will tell whether the use of keyword searches as the primary means for responding to document requests will give way to more flexible approaches that include the use of multiple technology tools.

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