e-discovery 2.0

In past blogs I’ve discussed a number of cases that have expressed skepticism over the self collection of electronically stored information (ESI) in the electronic discovery process.  In many of these cases, the reviewing judge or magistrate has looked at this process with an increasingly jaundiced eye, in some cases using the self collection component as part of its rationale for sanctions.

My conclusion up until now has been that this collection methodology (where employees manually select and potentially harvest their own data) could be defensible if properly executed; meaning with the requisite level of attorney guidance and oversight.  And, while this is still technically accurate, I think the pendulum has swung far enough to proclaim that this approach is simply far too dangerous for most enterprises, except perhaps those that are extremely risk tolerant.

While there was no particular straw that broke the camel’s back, the trend in the case law now seems to be moving inextricably in one direction – i.e., that self (or manual) collection is no longer safe enough for average enterprises.  Just like tight rope walking without a safety net, self collection protocols aren’t inherently doomed to failure, but there isn’t much (probably any) margin for error.

In the recent case of Green v. Blitz U.S.A., (E.D. Tex. Mar. 1, 2011) we see yet another example of self collections gone awry.  In Green the Plaintiff sought to re-open her lawsuit despite a prior settlement, once she suspected that the defendant had failed to produce relevant ESI.  Finding that defendant had committed numerous discovery abuses, including not disclosing relevant evidence and failing to properly issue a litigation hold, the court put the hammer down, issuing a wide range of sanctions:

• Defendant had to pay plaintiff $250,000
• Defendant had to provide a copy of the court’s order to plaintiffs “in every lawsuit proceeding against it” for the past two years
• Defendant had to file the court’s order in every case that it is involved in for the next 5 years.

Self collection was again a material culprit in the culpable behavior.  It was revealed that the employee “solely responsible for searching for and collecting documents relevant to litigation” issued no litigation hold, conducted no electronic word searches for emails, and made no effort to speak with defendant’s IT department regarding how to search for electronic documents.  To exacerbate matters, the main individual in charge of collections was also closely tied to the research and development of the “flame arresters” that were at issue in this exploding gas can case.

Adding fuel to the fire (pun intended) was the fact that the responding company failed to locate or collect emails with the search term “flame arrester.”  The court went on to note that some of the smoking gun emails not only contained this “most obvious term to search for in electronic documents in this case”, but in fact “flame arrester” was used in the title of certain emails.

While folks have called this practice an example of a “fox guarding the henhouse,” in my mind it’s less that custodial bias renders self collection too risky for prime time.  While there are certainly examples like the Green case where bias likely was an issue, the bigger problem is that any significant reliance on custodians to direct a collection process (even a well supervised one) has too many failure points.  The most obvious (and innocent) scenario is where custodians simply can’t remember if they had responsive ESI or where such information might reside.  This problem can be particularly acute given the fact that litigation is almost always conducted in the rear view mirror.  Since I often can’t remember what I had for breakfast I don’t find it surprising that a custodian might not recall if they had data relating to a discrete issue 4-5 years ago.

As such, the contemporary “best practice” for the collection of ESI is quickly evolving past the old manual collection workflow.  Technology is rapidly making it quick and painless to conduct searches for blatantly relevant ESI (like emails with “flame arrester” in the title).  Not only can you conduct basic searches with existing technologies, but recent advancements around concept search and other analytical tools makes the failure to leverage these technologies seem that much more unreasonable.  For example, in the recent case of Northington v. H&M Int., (N.D. Ill. Jan. 12, 2011) the defendant was sanctioned, in part, because they didn’t search for minor misspellings of the plaintiff’s name.

When a court sees manual blunders like that in the Green case it’s not surprising to see such missteps cast as at least negligent and perhaps even more culpable.  This conclusion is made even easier when organizations like the Sedona Conference (in its Best Practices Commentary on the Use of Search and Information Retrieval Methods in E-Discovery) state:  “[i]n many settings involving electronically stored information, reliance solely on a manual search process for the purpose of finding responsive documents may be infeasible or unwarranted. In such cases, the use of automated search methods should be viewed as reasonable, valuable, and even necessary.”

Green is now the latest in a line of cases [See also, Ford Motor Co. v. Edgewood Properties Inc., (D.N.J. 2009) and Phillip M. Adams & Assoc., LLC v. Dell, Inc., (D. Utah 2009)] that have been highly critical of self collection efforts by individual custodians.  The better practice is to utilize technology to conduct collections from key players and perhaps leverage the custodians (and technology) to point out where relevant ESI might exist.  As such, a belt and suspenders approach is undoubtedly the safer way to go.  In this “dual protection” scenario “key custodians still search, identify, and self-collect what they think are relevant emails, but, as a fail safe, IT also collects all of the key custodians’ emails. Then attorneys search and identify relevant documents from this full, uncensored, unfiltered, collection. This double effort guards against the intentional and unintentional mistakes that can sometimes arise in self-collection.”

We know that electronic discovery is never going to be a perfect process, but self collections simply inject too much risk into an already complicated process.  Now is the time to change tactics and stop tight rope walking without a safety net.  After all, no enterprise wants to be the next to endure a highly publicized fall.

On February 21, 2011, U.S. Immigration and Customs Enforcement (ICE) filed a declaration as part of its ongoing case with the National Day Laborer Organizing Network (NDLON). That declaration, written by Ms. Pavlik-Keenan, made references to Clearwell that have since been selectively quoted and commented on by several of our competitors. Essentially, these competitors have tried to exploit the declaration and use it in a way which was not intended by ICE.

We realized on reading the Pavlik-Keenan Declaration (PK Declaration) that it contained many mis-statements. Until now, we have not responded publicly because this is an ongoing legal matter involving one of our customers, and we do not want to weaken ICE’s stated position. We also felt that, rather than speak out ourselves, it was more appropriate to approach ICE and ask for its help in correcting the public record. That process is ongoing, but there are now new documents from ICE in the public domain which correct some of the mis-statements in the PK Declaration. This blog post is based on information from these new documents.

When reading the PK Declaration, there are 4 important considerations to keep in mind:

#1: NDLON vs. ICE is a precedent-setting case

This is bleeding-edge stuff. The issue here is whether metadata is part of the public record and therefore discoverable under the Freedom of Information Act (FOIA). Judge Scheindlin says it is; ICE disagrees and is opposing her order to produce it. This is a grey area because the standards for FOIA are quite different from those for electronic discovery. Unlike with litigation, FOIA requests are governed by 9 exemptions which are designed to protect private information from being released to the public, and not by the FRCP. Should government agencies now be required to provide metadata, then they must redact that metadata to remove information covered by these 9 exemptions, which (according to the government) is difficult and expensive to do. To our knowledge, it’s also something that has hardly ever been done before, because people generally don’t redact metadata in a load file. So, prior to Clearwell’s use in this case, e-discovery products have typically not been used in this way.

#2: A declaration is an advocacy document, not a ruling from a judge.

This means the PK Declaration is designed to argue a point of view based on personal opinion, not be a statement of fact or legal conclusion. The stakes for the government in this matter are very high, since there are potentially thousands of FOIA requests which could be impacted by Judge Scheindlin’s ruling. So ICE has every incentive to argue forcefully that, whatever technology is used, the resources needed make it excessively expensive to comply with the court’s order. It just so happens that the technology used in this particular case is Clearwell.

#3: The PK Declaration is factually incorrect in several important areas.

There are many statements in the PK Declaration which are – quite simply – not true. To give 2 specific examples from the document:

A. Claim in PK Declaration: 11. … OPLA [Office of the Principal Legal Advisor] estimates that it was forced to expend more than $270,000.00 in upgrades, including the acquisition of a new $32,000.00 server, during this period in order to have access to and run the application.

A. Fact: Neither OPLA nor any other part of ICE paid a dime for upgrades or a new server. In reality, its use of the product for this matter is covered under ICE’s existing license, and we provided an extra server and services for free to help them meet a tight deadline. Clearwell’s “re-usable” license is specifically designed to allow customers to deal with unexpected cases at no incremental software cost, which is what happened here.

B. Claim in PK Declaration: 19. … ICE has been advised by the software vendor that ICE’s software, as it currently exists, cannot produce a “load file” that is compatible with Concordance 8X and/or Opticon 3X.

B. Fact: There are many customers using Clearwell today to produce “load files” for any of several industry leading formats in its export/production options, including Concordance, Summation, EDRM XML and Opticon. Clearwell also offers “Configurable Templates” to produce in any form that is requested.

To address these inaccuracies, on April 11, 2011, the US Attorneys’ Office took the highly unusual step of filing a supplementary declaration to (in their words) “clarify” its earlier statements. In the newly filed Document 86, Declaration of Ryan Law, it states:

6. … “the $270,000.00, which includes $32,000.00 for acquisition of a new server, has not yet been spent. … Clearwell loaned a new server to ICE for the duration of the January 17, 2011 production.”

7. … “ICE was not stating that Clearwell does not allow for the production of such a load file, just that ICE cannot do it with its current software.” All that’s required is a configuration file.

In addition to specific statements, such as those listed above which are now being clarified, the PK Declaration also makes broad generalizations about Clearwell which are untrue. ICE has released new information to address the most widely circulated of these:

C. Claim in PK Declaration: 14. … the agency should abandon the Clearwell application and discontinue its use.

C. Fact: ICE is a happy Clearwell customer who regularly takes reference calls on our behalf from other Federal agencies. As evidence of this, on April 8, 2011 (i.e., 6 weeks after the PK Declaration was filed), the contracting officer at ICE issued a letter (referenced in Document 86) which states that Clearwell “meets the government’s needs and performed in a satisfactory manner. As a result…ICE exercised the option (effective September 23, 2010) to extend the term of the contract through September 22, 2011.” You can read more about this in today’s press release.

#4: The PK Declaration misrepresents how Clearwell is being used at ICE.

ICE purchased Clearwell in 2009 for use by OPLA (Office of Principal Legal Advisor) on civil litigation matters. FOIA requests are handled by a different department with whom we had no contact until, without our knowledge, ICE FOIA decided to borrow Clearwell from ICE OPLA to respond to the FOIA request from NDLON in December 2010. In 16 working days, Clearwell was used to process a large volume of information and produce nearly 15,000 pages of Opt-Out Records (Document 79, Filed 3/30/11, Declaration by Sarahi Uribe). To help ICE meet its deadline, two Clearwell consultants worked onsite during this period – at absolutely no cost to ICE.

Much of this is recounted in the first Declaration of Ryan Law (Document 68, Filed 3/23/11), in the section entitled “Description of Events that Led to the Use of Clearwell”. I draw from that document below:

21: I [Ryan Day] consulted with other program offices within ICE and determined that using the e-discovery platform “Clearwell”, which is owned by the ICE Office of the Principal Counsel (“OPLA”), would offer the best chance for the Agency to meet its court-ordered disclosure requirement.

24: Clearwell was not obtained by ICE for FOIA applications. During the three-year application procurement and development process, OPLA did not take FOIA needs into consideration in determining the relevant capabilities the application would require.

26: At the time of the Court’s December 9, 2010 order, the Clearwell application was untested and was not yet approved for use. At that time, OPLA was in the beginning stages of establishing protocols for the use of the software and had originally anticipated a pilot phase of testing to begin in February or March 2011.

27: ICE OPLA was able to deploy Clearwell on December 20, 2011 for use by the FOIA Office on a provisional basis specifically to meet the January 17, 2011 deadline imposed for the production of records responsive to the Plaintiff’s request for “opt-out” records.

***

There is still a lot that we cannot say publicly about the PK Declaration, out of respect for ICE (our customer) who’s engaged in active litigation. But we would be happy to provide further information to concerned parties under NDA.

It’s widely known that Microsoft is a Clearwell customer, and uses our product for e-discovery across a wide range of matters. One such matter is the case of Datel Holdings v. Microsoft Corporation, which is presently in District Court for the Northern District of California. As part of those proceedings, Microsoft mentioned Clearwell in its Opposition to Datel’s Motion to Compel that was ruled upon on March 11, 2011:

Defendant explains that after potentially responsive documents were collected from custodians, they were loaded into a computerized document processing system known as “Clearwell.” Clearwell extracted metadata from each document and converted the documents into a format that allowed for text searching. Once the documents were processed through Clearwell, they were entered into an online platform, where they were reviewed by attorneys. For reasons still unknown to Defendant, Clearwell truncated some “Re-auth” documents during processing.

In itself, this sounds unremarkable. But we’ve noticed that some of our small competitors have been using this statement, and particularly the last line of it, to suggest that there are problems with the Clearwell product.

We realize that, as the market leader, there will always be small competitors seeking to leverage any opening to their advantage. Usually, we ignore this nonsense. But this time, to set the record straight, we asked our customer at Microsoft to respond on our behalf

Here’s what Joe Banks, who manages the e-discovery team at Microsoft, wrote about the issue and gave us permission to publish:

Statement from Microsoft:

In regard to the Declaration of Hojoon Hwang referenced in the 3/11/11 Order granting in part and denying in part plaintiff’s Motion to Compel in Datel Holdings LTD v. Microsoft, No.C-0905535EDL in the Northern District of California, the statement ‘For reasons still unknown to Defendant, Clearwell truncated some ‘Re-auth’ documents during processing’ should be corrected.  Microsoft subsequently learned that the cause of the truncation was the Microsoft software (AD/RMS Bulk Protection Tool) employed to decrypt previously encrypted content, and the truncation issue had nothing to do with Clearwell’s technology whatsoever.  Shortly after Mr. Hwang’s declaration was filed, he clarified – on the record in open court on February 22 – that Microsoft’s decryption process was the true cause of the data truncation:

6 A lot of Microsoft documents, including e-mails, are

7 encrypted when they are sent. And for production purposes, we

8 have to decrypt it. In that process, some of the material got

9 cut off.

Microsoft does not use Clearwell technology to decrypt its data.  In actuality, Clearwell’s Engineering and Support teams were instrumental in helping to identify the root cause of the truncation issue.  Microsoft continues to use Clearwell’s processing and analysis technology on this matter and greatly appreciates the partnership and support Clearwell provides without fail.

At Clearwell, we’re constantly ruminating on innovative ways to help make our customers’ e-discovery process more efficient. Given the astronomical growth of social gaming, we began asking ourselves, “How can we harness the power and passion of millions of social gamers for the greater good?”

Questions like this really get our engineers cooking, and what they came back with is, to steal a word from one of our most popular product launches a year ago, simply “magical”.

Starting today, Clearwell’s eDiscovery World leverages the red-hot consumer social gaming trend to provide dramatic and previously unattainable increases in e-discovery technology training and productivity. In fact, the promise of eDiscovery World is so great that we have added social gaming as a core part of our product architecture across all Clearwell modules, from legal hold through production.

And we’re not stopping there. We believe that strategic social gaming delivers such powerful benefits to a best practices e-discovery process, that we’ve proposed modifying the EDRM diagram to account for this critical new requirement for truly end-to-end discovery.

Prior to today, unstructured obsession with social gaming has actually been an obstacle keeping end-to-end e-discovery from becoming a reality in many organizations. Interviews conducted across law firms, service providers, and every major enterprise vertical indicate that the time spent protecting crops from withering and urban blight from descending upon virtual cities has left insufficient hours with which to implement next-generation electronic discovery technology. As a result, legal costs have continued to rise and the risk of sanctions has grown substantially. One Director of E-Discovery at a Fortune 100 company, when grilled about his organization’s failure to implement a robust legal hold process, pleaded, “Can you spare some Facebook credits so I can buy a chicken?”

Now, Clearwell has turned this challenge into a tremendous opportunity. In eDiscovery World, we provide an alternative to traditional social gaming that allows users to perform end-to-end e-discovery in a virtual environment – first in training mode to gain e-discovery process knowledge and experience, and then working with live documents and high-stakes cases. All stages of the e-discovery process are functional in the eDiscovery World environment, which is backed by a robust cloud computing platform able to support the largest and most complex cases. Best of all, in addition to the substantial productivity gains our beta customers have already achieved, many have even found their employees clamoring to forego significant portions of their salaries in order to earn precious Facebook credits, thus delivering dramatic cost savings for the organization.

eDiscovery World is truly a win-win, and we couldn’t be more excited about it. Enjoy!