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Where Angels Fear To Tread: Daubert, FRE 702 and eDiscovery

Monday, June 11th, 2012

One of the more intriguing aspects surrounding the use of predictive coding technology in the Da Silva Moore v. Publicis Groupe case involves the role courts should play in guarding against the use of unreliable expert testimony in eDiscovery. In Da Silva Moore, the plaintiffs argued that the court abdicated its gatekeeper role under Federal Rule of Evidence 702 and the U.S. Supreme Court’s decision in Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993) by not soliciting expert testimony to assess the reliability of the defendant’s predictive coding technology. That argument was ultimately rejected by the court, which held that Rule 702 and Daubert determine “admissibility of evidence at trial” and are “not applicable to how documents are searched for and found in discovery.”

While the Da Silva Moore decision appears to foreclose the use of Rule 702 and Daubert in eDiscovery, that view is not universally shared across the spectrum of American jurisprudence. Notably, in United States v. O’Keefe, 537 F.Supp.2d 14 (D.D.C. 2008), that court took a different approach. It found that a litigant must satisfy Rule 702 should it wish to challenge the propriety of an opposing party’s search terms in a discovery motion. This view was also embraced in Victor Stanley v. Creative Pipe, 250 F.R.D. 251 (D. Md. 2008). The Victor Stanley decision discussed how Rule 702 provides a useful framework for adjudicating complex factual eDiscovery questions such as the reliability of a particular “search and retrieval methodology” for electronically stored information (ESI).

These differing views regarding the application of Rule 702 and Daubert beg the question of what role (if any) they play in the discovery process. To understand this issue, it is worth examining the Daubert case and Rule 702 to determine whether, as the O’Keefe court so famously declared, complex eDiscovery search methodologies are really in a realm “where angels fear to tread.”

Daubert and Rule 702: The Trial Court as “Gatekeeper”

In Daubert, the Supreme Court held that the trial court has an important “gatekeeper” role under Rule 702 to ensure that only relevant, reliable scientific evidence that is helpful to a jury is admitted at trial. The Supreme Court provided a non-exclusive list of factors that a trial court could consider in determining whether a particular methodology was actually reliable. Those so-called Daubert factors were later found to apply “to all expert testimony, not just testimony based in science.”

Rule 702 was subsequently amended in 2000 to affirm the trial court’s gatekeeper function and to provide “some general standards that the trial court must use to assess the reliability and helpfulness of proffered expert testimony.” Rule 702 did not codify the Daubert factors. Instead, the Rule 702 standards were intended to guide the trial court to use “any or all of the specific Daubert factors where appropriate.” Thus, Daubert and Rule 702 work together to help trial courts assess the reliability of proffered expert testimony.

Does Rule 702 Apply to eDiscovery?

As it relates to eDiscovery, the question is: at what stage of the case do Daubert and Rule 702 apply? Like many legal questions, there does not appear to be a definitive answer. Indeed, the Advisory Committee Note to the 2000 Amendments to Rule 702 specifically declined to establish a precise procedural timetable for courts to exercise their “gatekeeping function over expert testimony.” Referring to instances where courts had applied the Daubert factors at both the summary judgment and in limine stages, the Advisory Committee reasoned that courts should be provided with “substantial discretion” to address Daubert related matters:

“Courts have shown considerable ingenuity and flexibility in considering challenges to expert testimony under Daubert, and it is contemplated that this will continue under the amended Rule.”

Rule 702 was thus designed to be “flexible” and provide courts with additional tools to scrutinize expert testimony on complex factual issues. Whether and when to do so, however, appear to be completely within the court’s discretion. It is therefore quite possible that a court could exercise its discretion to evaluate expert testimony on thorny pretrial matters such as eDiscovery.

How Could Daubert Affect Parties’ eDiscovery Efforts?

While there is no certainty that a party will have to satisfy Daubert to establish the reliability of its eDiscovery search and retrieval methodologies, organizations should still consider taking steps to be prepared. One preliminary step should include conducting research on the deployed eDiscovery technologies and the reliability of their supporting methodologies. Parties that do their homework and incorporate effective, enabling technologies into their eDiscovery process may be better situated to meet the Daubert standards and Rule 702. Moreover, such technologies, coupled with an effective eDiscovery response, will likely lead to more efficient and cost effective discovery. Such a realm is certainly where courts, clients and counsel – not just angels – are now daring to tread.

Computer-Assisted Review “Acceptable in Appropriate Cases,” says Judge Peck in new Da Silva Moore eDiscovery Ruling

Saturday, February 25th, 2012

The Honorable Andrew J. Peck, United States Magistrate Judge for the Southern District of New York, issued an opinion and order (order) on February 24th in Da Silva Moore v. Publicis Groupe, stating that computer-assisted review in eDiscovery is “acceptable in appropriate cases.”  The order was issued over plaintiffs’ objection that the predictive coding protocol submitted to the court will not provide an appropriate level of transparency into the predictive coding process.  This and other objections will be reviewed by the district court for error, leaving open the possibility that the order could be modified or overturned.  Regardless of whether or not that happens, Judge Peck’s order makes it clear that the future of predictive coding technology is bright, the role of other eDiscovery technology tools should not be overlooked, and the methodology for using any technology tool is just as important as the tool used.

Plaintiffs’ Objections and Judge Peck’s Preemptive Strikes

In anticipation of the district court’s review, the order preemptively rejects plaintiffs’ assertion that defendant MSL’s protocol is not sufficiently transparent.  In so doing, Judge Peck reasons that plaintiffs will be able to see how MSL codes emails.  If they disagree with MSL’s decisions, plaintiffs will be able to seek judicial intervention. (Id. at 16.)  Plaintiffs appear to argue that although this and other steps in the predictive coding protocol are transparent, the overall protocol (viewed in its entirety) is not transparent or fair.  The crux of plaintiffs’ argument is that just because MSL provides a few peeks behind the curtain during this complex process, many important decisions impacting the accuracy and quality of the document production are being made unilaterally by MSL.  Plaintiffs essentially conclude that such unilateral decision-making does not allow them to properly vet MSL’s methodology, which leads to a fox guarding the hen house problem.

Similarly, Judge Peck dismissed plaintiffs’ argument that expert testimony should have been considered during the status conference pursuant to Rule 702 and the Daubert standard.  In one of many references to his article, “Search, Forward: will manual document review and keyword searches be replaced by computer-assisted coding?” Judge Peck explains:

My article further explained my belief that Daubert would not apply to the results of using predictive coding, but that in any challenge to its use, this Judge would be interested in both the process used and the results.” (Id. at 4.)

The court further hints that results may play a bigger role than science:

“[I]f the use of predictive coding is challenged in a case before me, I will want to know what was done and why that produced defensible results. I may be less interested in the science behind the “black box” of the vendor’s software than in whether it produced responsive documents with reasonably high recall and high precision.” (Id.)

Judge Peck concludes that Rule 702 and Daubert are not applicable to how documents are searched for and found in discovery.  Instead, both deal with the” trial court’s role as gatekeeper to exclude unreliable testimony from being submitted to the jury at trial.” (Id. at 15.)  Despite Judge Peck’s comments, the waters are still murky on this point as evidenced by differing views expressed by Judges Grimm and Facciola in O’Keefe, Equity Analytics, and Victor Stanley.  For example, in Equity Analytics, Judge Facciola addresses the need for expert testimony to support keyword search technology:

[D]etermining whether a particular search methodology, such as keywords, will or will not be effective certainly requires knowledge beyond the ken of a lay person (and a lay lawyer) and requires expert testimony that meets the requirements of Rule 702 of the Federal Rules of Evidence.” (Id. at 333.)

Given the uncertainty regarding the applicability of Rule 702 and Daubert, it will be interesting to see if and how the district court addresses the issue of expert testimony.

What This Order Means and Does not Mean for the Future of Predictive Coding

The order states that “This judicial opinion now recognizes that computer-assisted review is an acceptable way to search for relevant ESI in appropriate cases.” (Id. at 2.)  Recognizing that there have been some erroneous reports, Judge Peck went to great lengths to clarify his order and to “correct the many blogs about this case.” (Id. at 2, fn. 1.)  Some important excerpts are listed below:

The Court did not order the use of predictive coding

“[T]he Court did not order the parties to use predictive coding.  The parties had agreed to defendants’ use of it, but had disputes over the scope and implementation, which the Court ruled on, thus accepting the use of computer-assisted review in this lawsuit.” (Id.)

Computer-assisted review is not required in all cases

“That does not mean computer-assisted review must be used in all cases, or that the exact ESI protocol approved here will be appropriate in all future cases that utilize computer-assisted review. (Id. at 25.)

The opinion should not be considered an endorsement of any particular vendors or tools

“Nor does this Opinion endorse any vendor…, nor any particular computer-assisted review tool.” (Id.)

Predictive coding technology can still be expensive

MSL wanted to only review and produce the top 40,000 documents, which it estimated would cost $200,000 (at $5 per document). (1/4/12 Conf. Tr. at 47-48, 51.)

Process and methodology are as important as the technology utilized

“As with keywords or any other technological solution to eDiscovery, counsel must design an appropriate process, including use of available technology, with appropriate quality control testing, to review and produce relevant ESI while adhering to Rule 1 and Rule 26(b )(2)(C) proportionality.” (Id.)

Conclusion

The final excerpt drives home the points made in a recent Forbes article involving this and another predictive coding case (Kleen Products).  The first point is that there are a range of technology-assisted review (TAR) tools in the litigator’s tool belt that will often be used together in eDiscovery, and predictive coding technology is one of those tools.  Secondly, none of these tools will provide accurate results unless they are relatively easy to use and used properly.  In other words, the carpenter is just as important as the hammer.  Applying these guideposts and demanding cooperation and transparency between the parties will help the bench usher in a new era of eDiscovery technology that is fair and just for everyone.

Plaintiffs Object to Predictive Coding Order, Argue Lack of Transparency in eDiscovery Process

Friday, February 24th, 2012

The other shoe dropped in the Da Silva Moore v. Publicis Groupe case this week as the plaintiffs filed their objections to a preliminary eDiscovery order addressing predictive coding technology. In challenging the order issued by the Honorable Andrew J. Peck, the plaintiffs argue that the protocol will not provide an appropriate level of transparency into the predictive coding process. In particular, the plaintiffs assert that the ordered process does not establish “the necessary standards” and “quality assurance” levels required to satisfy Federal Rule of Civil Procedure 26(b)(1) and Federal Rule  of Evidence 702.

The Rule 26(b) Relevance Standard

With respect to the relevance standard under Rule 26, plaintiffs maintain that there are no objective criteria to establish that defendant’s predictive coding technology will reliably “capture a sufficient number of relevant documents from the total universe of documents in existence.” Unless the technology’s “search methodologies” are “carefully crafted and tested for quality assurance,” there is risk that the defined protocol could “exclude a large number of responsive email” from the defendant’s production. This, plaintiffs assert, is not acceptable in an employment discrimination matter where liberal discovery is typically the order of the day.

Reliability under Rule 702

The plaintiffs also contend that the court abdicated its gatekeeper role under Rule 702 and the U.S. Supreme Court’s decision in Daubert v. Merrell Dow Pharmaceuticals by not soliciting expert testimony to assess the reliability of the defendant’s predictive coding technology. Such testimony is particularly necessary in this instance, plaintiffs argue, where the technology at issue is new and untested by the judiciary. To support their position, the plaintiffs filed a declaration from their expert witness that challenges its reliability. Relying on that declaration, the plaintiffs complain that the process lacks “explicit and defined standards.” According to the plaintiffs, such standards would typically include “calculations . . . to determine whether the system is accurate in identifying responsive documents.” They would also include “the standard of acceptance that they are trying to achieve,” i.e., whether the defendant’s “method actually works.”  Plaintiffs conclude that without such “quality assurance measurements in place to determine whether the methodology is reliable,” the current predictive coding process is “fundamentally flawed” and should be rejected.

Wait and See

Now that the plaintiffs have filed their objections, the eDiscovery world must now wait and see what will happen next. The defendant will certainly respond in kind, vigorously defending the ordered process with declarations from its own experts. Whether the plaintiffs or the defendant will carry the day depends on how the district court views these issues, particularly the issue of transparency. Simply put, the question is whether the process at issue is sufficiently transparent to satisfy Rule 26 and Rule 702? That is the proverbial $64,000 question as we wait and see how this issue plays out in the courts over the coming weeks and months.

Amending the FRCP: More Questions than Answers

Friday, October 14th, 2011

Outcry from many in the legal community has caused a number of groups to consider whether the Federal Rules of Civil Procedure (FRCP) should be amended.  The dialogue began in earnest a year ago at the Duke Civil Litigation Conference and picked up speed following an eDiscoverymini-conference” held in Dallas last month (led by the Discovery Subcommittee –  appointed by the Advisory Committee on Civil Rules).  The rules amendment topic is so hot that the Sedona Conference (WG1) spent most of its two day annual meeting discussing the need for amendments and evaluating a range of competing proposals.

During this dialogue (which I can’t quote verbatim) a number of things became clear to me…

1.  This rules amendment quandary is a bit of a chicken and egg riddle — meaning that it’s hard to cast support wholeheartedly for a rules change if there isn’t a good consensus for what a particular change would accomplish and what the long term consequences might be as technology quickly morphs.  As an example, if there was a redefined preservation trigger that started the duty to preserve when there was a reasonable “certainty” of litigation (versus a mere “likelihood”), would this really make a material impact?  Or, would this inquiry still be as highly fact specific as it is today?  Would this still be similarly prone to the 20/20 hindsight judgment that’s inevitable as well?

2. While it is clear that preservation has become a more complex and risk laden process, it’s not clear that this “pain” is causally related to the FRCP.  In the notes from the Dallas mini-conference, a pending Sedona survey was quoted, referencing the fact that preservation challenges were overwhelmingly increasing:

“[S]ome trends can be noted. 95% (of the surveyed members) agreed that preservation issues were more frequent. 75% said that development was due to the proliferation of information.”

3. Another camp of stakeholders complain that the existing rules (as amended in 2006) aren’t being followed by practitioners or understood by the judiciary.  While this may be the case, it then begs the critical question: If folks aren’t following the amended rules (utilizing proportionality, leveraging FRE 502, etc.) is it really reasonable to think that any new rules would be followed this time around?

4. The role of technology in easing the preservation burden represents another murky area for debate.  For example, it could be argued that preservation pains (i.e., costs) are only really significant for organizations that haven’t deployed state of the art information governance solutions (e.g., legal hold solutions, email archives, records retention software, etc.) to make the requisite tasks less manual.

5. And finally, even assuming that the FRCP is magically re-jiggered to ease preservation costs, this would only impact organizations with litigation in Federal court. This leaves many still exposed to varying standards for the preservation trigger, scope and associated sanctions.

So, in the end, it’s unclear what the future holds for an amended FRCP landscape.  Given the range of divergent perspectives, differing viewpoints on potential solutions and the time necessary to navigate the Rules Enabling Act, the only thing that’s clear is that the cavalry isn’t coming to the rescue any time soon.  This means that organizations with significant preservation pains should endeavor to better utilize the rules that are on the books and deploy enabling technologies where possible.

A Judicial Perspective: Q&A With Former United States Magistrate Judge Ronald J. Hedges Regarding Possible Discovery Related Rule Changes

Friday, September 9th, 2011

If you have been following my previous posts regarding possible amendments to the Federal Rules of Civil Procedure (Rules), then you know I promised a special interview with former United States Magistrate Judge Ron Hedges.  The timing of the discussion is perfect considering that a “mini-conference” is being hosted by a Federal Rules Discovery Subcommittee today (September 9th) in Dallas, TX.  The debate will focus on whether or not the Rules should be amended to address evidence preservation and sanctions.  I am attending the mini-conference and will summarize my observations as part of my next post.  In the meantime, please enjoy reading the dialogue below for a glimpse into Judge Hedges’ perspective regarding possible Rule amendments.

Nelson: You were recently quoted in a Law Technology News (LTN) article written by Evan Koblentz as saying, “I don’t see a need to amend the rules” because these rules haven’t been around long enough to see what happens.  Isn’t almost five years long enough?

Judge Hedges: No.  For the simple reason that both attorneys and judges continue to need education on the 2006 amendments and, more particularly, they need to understand the technologies that create and store electronic information.  The amendments establish a framework within which attorneys and judges make daily decisions on discovery.  I have not seen any objective evidence that the framework is somehow failing and needs further amendment.

Nelson: You also said the “big problem” is that people don’t talk enough.  What did you mean?  Hasn’t the Sedona Cooperation Proclamation made a difference?

Judge Hedges: The centerpiece of the 2006 amendments (at least in my view) is Rule 26(f).  I think it is fair to say that the legal community’s response to 26(f) has been, to say the least, varied. Civil actions with large volumes of ESI that may be discoverable under Rule 26(b)(1) cry out for extensive 26(f) meet-and-confer discussions that may take a number of meetings and require the presence of party representatives from, for example, IT.  There is an element of trust required between adversary counsel (with the concurrence of the parties they represent) that may be difficult to establish – but some cooperation is necessary to make 26(f) work.  Overlay that reality with our adversary system and the duty of attorneys to zealously advocate on behalf of their clients and you can understand why cooperation isn’t always a top priority for some attorneys.

However, “transparency” in discussing ESI is essential, along with advocacy and the need to maintain appropriate confidentiality. That’s where the Sedona Conference Proclamation can make a big difference. Has the Proclamation done that? It’s too early to reach a conclusion on that question, but the Proclamation is often cited and, as education progresses in eDiscovery, I am confident that the Proclamation will be recognized as a means to realize the just, speedy, and inexpensive resolution of litigation, as articulated under Rule 1.

Nelson: You also mentioned that the Federal Rules Advisory Committee might be running afoul of the Rules Enabling Act.  Can you explain?

Judge Hedges: There is a distinction between “procedural” and “substantive” rules.  The Rules Enabling Act governs the adoption of the former.  Rule 502 of the Federal Rules of Evidence is an example of a substantive rule that was proposed by the Judicial Conference.  However, since Rule 502 is a rule dealing with substantive privilege and waiver issues, it had to be enacted into law through an Act of Congress.  I am concerned that proposals to further amend the Federal Rules of Civil Procedure may cross the line from procedural to substantive.  I am not prepared to suggest at this time, however, that anything I have seen has crossed the line.  Stay tuned.

Nelson: If you had to select one of the three options currently being considered (see page 264), which option would you select and why?

Judge Hedges: To start, I would not choose option 1, which presumes that the Rules can reach pre-litigation conduct consistent with the Rules Enabling Act.  My concern here is also that, in the area of electronic information, a too-specific rule risks “overnight” obsolescence, just as the Electronic Communications Privacy Act, enacted in 1986, is considered by a number of commentators to be, at best, obsolescent.  Note also that I did not use the word “stored” when I mentioned electronic information, as courts have already required that so-called ephemeral information be preserved.  Nor would I choose option 2.  Absent seeing more than the brief description of the category on page 264, it seems to me that option 2 is likely to do nothing more than be a restatement of the existing law on when the duty to preserve is “triggered.”

So, by default, I am forced to choose option 3.  I presume a rule would say something like, “sanctions may not be imposed on a party for loss of ESI (or “EI”) if that party acted reasonably in making preservation decisions.”  There are a number of problems here. First, in a jurisdiction which allows the imposition of at least some sanction for negligence, all the rule would likely do is be interpreted to foreclose “serious” sanctions. Isn’t that correct? Or is the rule intended to supersede existing variances in the law of sanctions?  At that point, does the rule become “substantive”?   Second, how will “reasonableness” be defined?  Reasonableness supposes the existence of a duty – in this case, a duty to preserve.  For example, is there a duty to preserve ephemeral data that a party knows is relevant?  We come back full circle to where we began.

Remember, Rule 37(f) (now 37(e)) was intended to provide some level of protection against the imposition of sanctions, just as the categories are intended to.  Right?  And five years later 37(e) remains defined variously to be a “safe harbor” or a “lighthouse” by some lawyers such as Jonathan Redgrave or an “uncharted minefield” by others like me.

Nelson: What about heightened pleading standards after the Iqbal and Twombly decisions?  Do these decisions have any relevance to electronic discovery and the topic at hand?

Judge Hedges: Let me begin by saying that I am no fan of Twombly or Iqbal. The decisions, however well intended, have led to undue cost and delay all too often.  Not only is motion to dismiss practice costly for parties, but it imposes great burdens on the United States Courts and, as often as not, leads to at least one other round of motion practice as plaintiffs are given leave to re-plead.  All the while, parties have preservation obligations to fulfill and, in the hope of saving expense, discovery is often stayed until a motion is “finally” decided.  I would like to see objective evidence of the delay and cost of this motion practice (and I expect that the Administrative Office of the United States has statistical evidence already).  I would also like to see objective evidence from defendants distinguishing between the cost of motion practice and later discovery costs.

Putting all that aside, and if I had to accept one option, I would choose to allow some discovery that is integrated to the motion practice.  First, even without the filing of a responsive pleading, there should be a 26(f) meet-and-confer to discuss, if nothing else, the nature and scope of preservation and the possibility of securing a Rule 502(d) order. Second, while I have serious concerns about “pre-answer discovery” for a number of reasons, I would have the parties make 26(a)(1) disclosures while a motion to dismiss is pending or leave to re-plead has been granted in order to address the likely “asymmetry of information” between a plaintiff and a moving defendant.  Once the disclosures are made, I would allow the plaintiff to secure some information identified in the disclosures to allow re-pleading and perhaps obviate the need for continued motion practice.

All of this would, of course, require active judicial management.  And one would hope that Congress, which seems so interested in conserving resources, would recognize the vital role of the United States Courts in securing justice for everyone and give adequate funding to the Courts.

Bit by Bit: Building a Better eDiscovery Collection Solution

Friday, July 29th, 2011

Is there a place in eDiscovery today for hard drive imaging and bit by bit copies, which collect deleted items or slack/unused hard disk space?  The answer is yes with some important limitations.  For the vast majority of matters, ESI can be collected without imaging drives or utilizing proprietary container files.  However, I occasionally still encounter folks who are victims of the dated and costly misconception that eDiscovery always requires the bit-level imaging of hard drives.

There are situations, though, where the existence of data (as opposed to its content) is central to the matter – when companies suspect employees of stealing proprietary information or when employees leave a company under suspicious circumstances.  In these and other similar situations, it may make sense to have the employee’s workstation hard drive imaged for full forensic analysis.  Even in these scenarios, I find that companies are more likely to hire an external investigator to perform this task to allay suspicions of tampering or bias, and the company generally would prefer that this investigator be the one to testify about this sensitive data acquisition.  Then, for ESI beyond the target employee’s hard drive, other collection methods may be used.  As we’re now midway through 2011 – a year in which I expect to see eDiscovery fully embraced by many corporations as a true business process – I wanted to analyze why the forensic disk image myth still exists, where it came from, and what the law really requires of an eDiscovery collections process.

Traditionally, cases that mentioned full forensic imaging of hard drives began their captions with United States v. or State v. because they were criminal matters.  In traditional civil litigation – even the behemoth eDiscovery cases that get all the bloggers blogging – forensic imaging simply is not required or needed.  In fact, in most cases, it will dramatically increase the cost associated with electronic discovery – this process adds unnecessary complexity in downstream phases of eDiscovery and leads to vast over-collection.  Why collect the Microsoft Office suite 50 times when what you are really required to preserve and collect are the files created with those programs?  When using disk imaging, program files are collected which drives up storage costs and requires the post-collection step of deNISTing (removing system files based on the NIST list).  Why not leave those system files behind and perform a targeted collection of only user-created content?    In addition, the primary rules governing civil litigation – the Federal Rules of Civil Procedure and Federal Rules of Evidence – simply do not require exact duplication of electronic files.  I am amazed that there are so many experts who are still pushing full forensic imaging and duplication in every case.  In fact, this goes against best practices published by The Sedona Conference, EDRM, and in the E-Discovery textbook co-authored by Judge Shira A. Sheindlin.

In comment 8c of the Sedona Principles, the authors call making forensic image backups of computers “the first step of an expensive, complex, and difficult process of data analysis that can divert litigation into side issues and satellite disputes involving the interpretation of potentially ambiguous forensic evidence.”  The comment goes on to say that “it should not be required unless exceptional circumstances warrant the extraordinary cost and burden.”  In a whitepaper authored for EDRM by three eDiscovery experts from KPMG, LLC, the authors discussed the high cost of forensic bit-level imaging and, instead, suggested that targeted collection of ESI would be sufficient in the vast majority of non-criminal matters.  They state, “[t]he challenge of Smart EDM [Evidence and Discovery Management] is to obtain targeted files in a forensically sound manner – chain-of-custody established, proven provenance, and metadata intact – without having to resort to drive imaging.”

In Electronic Discovery and Digital Evidence: Cases and Materials, written by Judge Shira A. Scheindlin, Daniel J. Capra, and The Sedona Conference, the authors state that,

“because imaging software is commonly available, and because the vast majority of training programs in the field of electronic discovery revolve around forensics, there is a growing tendency to want to ‘image everything.’  But unless an argument can be made that the matter at hand will benefit from a forensic collection and additional examination, there is no reason to do a forensic collection just because the technology exists to do it.”

So, with the top experts in the field saying the days of “image everything” should be over, why does it still happen?  Why are the victims of this antiquated workflow still paying the exorbitant costs of a solution that does not really meet their requirements?  Perhaps a historical perspective will be helpful in explaining.

Why Drive Imaging and Proprietary Containers?

I do not think there is any debate on the benefit of having a bit-level image of a hard drive in a criminal investigation.  However, traditionally, the investigators using these methods needed a way to get the imaged drive safely back to a lab for further analysis.  Companies or law enforcement agencies that hired third-party investigators to image drives had to transport the data, maintaining chain of custody, and preserving all contents in an un-alterable state through several phases of the investigation.  And, in criminal matters, it was especially important to maintain the integrity of the evidence when the electronic evidence was central to the government’s case.  Remember, the burden of proof in a criminal matter is “beyond a reasonable doubt” (along with a host of constitutional considerations).  Alteration of key evidence could certainly create reasonable doubt and hose the prosecution’s case (or, worse, the evidence gets tossed by the Court before the trial even begins).  The container file ensures that no matter who handles the evidence, checksums can prove that the contents were not altered since the initial imaging.

Many vendors now offer logical image containers as an alternative to doing a full bit-level image of the drive.  However, in corporate eDiscovery, this is still overkill because the tools and solutions being used downstream still have to unpack or parse these proprietary container formats for processing and analysis.  In fact, even software from the vendors who created these container formats must “crack them open” to get to the contents within.  This seems to add a layer of complexity that has not been needed since the days of the external examiner coming in with her forensic toolkit to do drive images. The format was created to solve a very specific problem, and little thought was given to the use of this format in a holistic process like what is typically seen in civil eDiscovery.   There is no longer a need for a container for portability of evidence because it is most likely going to be processed in place after collection while residing on a secure evidence store on the company’s network.  I have heard “what if our collections methods are challenged?”  And to that, I would respond that we are not in criminal court and that the requirement in civil court is reasonableness, not perfection.  Now, if an employee is suspected of wrongdoing and the potential deletion of files will dramatically alter the case, then by all means, hire a forensic investigator and follow all of the protocols established over the last several decades in computer forensic science.

Fast forward to the 21st century

Corporations are bringing eDiscovery in-house; they are building a business process around it to minimize risk and drive enormous cost savings, and in today’s world of civil litigation, there simply is not a need for these drive images or proprietary containers.  First of all, the burden of proof in a civil matter is “by a preponderance of the evidence.”  What this means is that the burden is satisfied if there is greater than 50% chance that a proposition is true.  This is a much lower standard than in criminal cases.  But, burden of proof goes more to the weight evidence is given by the court or jury.  Before that is even considered, evidence must pass several hurdles of admissibility.  As we will explore, these standards of admissibility have also been the recipients of significant bolstering from vendors over the years.

The Path to Admissibility

There are several hurdles to admissibility for any type of evidence, and because they are not within the scope of this post, I will forego any discussion of relevance, FRE 403, or the hearsay rules.  I will focus on the issues that tend to be associated with electronic evidence: authentication and the “best evidence rule”.  There are some examiners and perhaps even vendors that would argue electronic evidence is simply not admissible if not collected using bit-level imaging (and sometimes 2 copies – one that is referred to by examiners as the “best evidence” copy and another “working copy” to be analyzed).  This is simply not true.  What we will find is that the collection method will go more to the weight of the evidence rather than the minimum showing needed for admissibility (hence, the discussion of burden of proof above).

All evidence must be authenticated pursuant to FRE 901.  This is a “don’t pass Go” threshold requirement for admissibility.  FRE 901 is satisfied by “evidence sufficient to support a finding that the matter in question is what its proponent claims.”  Notwithstanding a “self-authenticating” piece of evidence pursuant to FRE 902, the proponent must establish the identity of the exhibit by stipulation, circumstantial evidence, or the testimony of a witness with knowledge of its identity and authorship.  Typically, objections to this process would tend to go toward whether the exhibit is an original, was altered, or the witness with whom the proponent is attempting to authenticate the exhibit is not able to so based on lack of personal knowledge or some other defect.  Mostly these objections deal with the authenticity of the contents of the exhibit, and the rules in Article X of the FRE are helpful here.  Rule 1001 defines an “original” with respect to data stored in a computer or similar device as “any printout or other output readable by sight, shown to reflect the data accurately.”  This is a far cry from a bit-by-bit forensic image!  Rule 1002 – often referred to as the “Best Evidence Rule” – requires that “[t]o prove the content of a writing, recording, or photograph, the original writing, recording, or photograph is required, except as otherwise provided in these rules or by Act of Congress.”  Not only do these rules not require exact duplication of the electronic files, but they do not require imaging the entire 80GB hard drive to collect the 100MB of files that are potentially relevant to the case.  What they do require, though, is the ability to show that a document being proffered is the same document that was originally created.  In Re Vee Vinhnee, 336 B.R. 437, 444 (B.A.P. 9th 2005). Also, Judge Grimm sets out an extremely comprehensive analysis of what is required for the admissibility of electronic evidence in civil litigation in Lorraine v. Markel American Insurance Company, 241 F.R.D. 534 (D.Md. May 4, 2007).  In Lorraine, he notes that In Re Vee Vinhee may set out the most demanding test for admissibility of ESI.

Maintaining Forensic Integrity

So, how do I combat the claims that “they must have altered that document” or “Your, honor, I swear that line about ‘acceptable losses’ was not in the safety memo when I created it”?  This is where hash value becomes a wonderful thing.  Computing the hash of an electronic file, or computing a hexadecimal checksum based on analysis of the contents of an electronic document, is essentially like recording the DNA of an electronic file.  If the file is altered, its hash value would be different.  So, by computing the hash value at the source, in transit, and at the destination, I can ensure that the electronic file is in exactly the same state as it was at the source (or, that the collected document is the same as the document originally created).  Now, add the ability to report on that information and those container files and full forensic disk images really do become extreme overkill.

The important distinction here is that the term “forensic” does not refer to a type of technology or the products of a specific vendor – despite claims and propaganda to the contrary.  Forensic refers to the methodology used by the person collecting the evidence – whether it is finger prints from a weapon or electronic files from an employee’s laptop.  Forensic imaging, however, refers to the process by which an entire hard disk is copied bit by bit to create an exact duplicate of that hard drive in a forensic manner.  It is entirely possible for a collection of ESI to be “forensically sound” by simply employing the technique described above of taking hash values at each stage of the process to be able to prove that the files were not altered during collection.  As long as chain of custody is also maintained (much easier to do now that we are not using multiple tools, vendors, locations, and people to do the job), then the process should meet the threshold admissibility requirements of the Federal Rules of Evidence.

Opponents will still bring up claims that the evidence must have been altered, or the expert familiar only with forensic imaging technologies will try to use the argument that only vendor X’s technology is “court vetted,” so any other method is not acceptable.  But, to these opponents, I would argue two points:

  1. No technology is “court vetted”.  The operator’s use of the technology in the specific case (in a specific jurisdiction) was acceptable to the court to meet the threshold showings required by FRE 901, 1001, and 1002 – as well as any rules of procedure governing the production of discovery in either a civil or criminal matter.  Wow – that would be a very long footnote on a marketing slide…probably why it is not usually mentioned.
  2. The process is forensically sound, and you can prove that the documents were not altered from collection through production by referencing the hash value and maintaining copies of the original native files analyzed on a secured preservation store.  This would exceed the requirements of FRE 901, 1001, and 1002 – but would provide protection against claims going to the “weight” of the evidence by opponents who would cry foul.

What Now?

So, where does all of this leave us?  First, in the vast majority of civil litigation matters where electronic discovery is being performed, forensic bit by bit imaging of computer hard drives is simply not required.  Vendors have promoted this practice over the years, but all this has done is over-complicate the eDiscovery process for many unsuspecting litigants and dramatically increase costs because the model simply does not scale.  Moreover, the effort and cost required to deal with these full drive images downstream in the process is often overlooked by these vendors and overzealous consultants.  Next, we now know there is a better way – targeted, forensically-sound collection of ESI using streamlined and automated solutions that maintain custodian relationship – even for shared data sources – throughout the eDiscovery lifecycle, preventing form of production disputes and other calamities that have plagued this industry for the last decade.  There is a better way to collect ESI that will provide exponential cost savings all the way to production.

Top 5 Cases That Shaped Electronic Discovery in 2008

Friday, December 12th, 2008

Picking five out of the sea of electronic discovery cases isn’t as easy as it sounds.  Sure, a few, like our “Case of the Year” will be no-brainers, but others aren’t as clear cut.  And, they’re certainly open to debate.  But, in my humble opinion here’s THE list, counting down David Letterman style:

5) Mancia v. Mayflower Textile Servs. Co., 2008 WL 4595175 (D. Md. Oct. 15, 2008)

If there ever was an opinion written by a judge to make a larger societal point, Mancia was certainly it.  Judge Paul Grimm, who’ll appear on this list in another slot as well, has clearly taken the mantle from Judge Scheindlin as the leading electronic discovery jurist.  He’d heretofore authored a number of significant opinions in this area, including Hobson and Thompson. Now, in Mancia he used a garden variety discovery dispute, which was typically rife with boilerplate objections and other obstreperous tactics, to highlight the Sedona Conference’s Cooperation Proclamation.

The lasting takeaway from the opinion is the notion that “[c]ourts repeatedly have noted the need for attorneys to work cooperatively to conduct electronic discovery, and sanctioned lawyers and parties for failing to do so.” To support this notion he cites the Sedona Conference Proclamation and the little used FRCP 26(g).  This opinion is noteworthy because it gives precedent to bolster the Sedona initiative and should provide a ready citation for all those counsel who aren’t getting the level of cooperation they need from the opposition.  It remains to be seen if other judges will follow suit, but this could be the beachhead for a more cooperative electronic discovery process in 2009 and beyond.

4) Flagg v. City of Detroit, 252 F.R.D. 346 (E.D. Mich. 2008)

Flagg highlights the growing need to reconcile the electronic discovery landscape, which typically focuses somewhat myopically on email, with the larger informational trends which are now categorized by the use of blogs, social networking sites, instant messaging, and text messaging.  Flagg was one of the first to determine text messages (e.g., messages exchanged among certain officials and employees of the City of Detroit via city-issued text messaging devices) were discoverable under the standards of FRCP 26(b)(1).  The holding further demonstrated the challenges of conducting electronic discovery across information systems that mix personal information with business communications.  This type of information commingling will continue to escalate, causing significant long term electronic discovery challenges due to thorny privacy, privilege and policy implications.

3) Rhoads Indus., Inc. v. Bldg. Materials Corp. of Am., 2008 WL 4916026 (E.D. Pa. Nov. 14, 2008)

Rhoads is one of the first cases post Federal Rule of Evidence (FRE) 502, which recently created a national standard (versus the previous split in jurisdictions) and now states a “middle ground” for the determining of inadvertent disclosure during electronic discovery.  The key provision is (b)(2) which provides protection only if “the holder of the privilege or protection took reasonable steps to prevent disclosure.”  So, Rhoads took that “reasonableness” question head on in a scenario where the plaintiff Rhoads admittedly (yet inadvertently) produced over eight hundred privileged, electronic documents.  The decision is significant because it used the five-factor test stated in Fidelity, but put an undue weighting on the final test which was: “whether the overriding interests of justice would be served by relieving the party of its errors.”   This approach potentially threatens the development of sound case law that will be necessary to help the deployment of FRE 502 into practice because it casts too much uncertainty with its weighting of “fairness” (a problematically vague notion) in the analysis.  It will be interesting to see if/how this approach is subsequently adopted as we enter the New Year.

2) Qualcomm Inc. v. Broadcom Corp., 2008 WL 66932 (S.D. Cal. Jan. 7, 2008)

This for many was the case of the year given it’s far reaching implications for the legal community.  Some have argued that this isn’t an e-discovery abuse case per se, but more of an example of discovery abuses that just so happened to be centered around ESI.  In either case, the fraud, resulting cover-up, sanctions, ethical issues and privilege discussions made for insightful and thought provoking reading throughout 2008.  The lasting takeaway from Qualcomm appears to be the implications of not just committing discovery abuses, but the failure of having a well thought out e-discovery plan that is actively executed/monitored by outside counsel.  The resulting tension between outside counsel, inside counsel and the internal IT department may continue to escalate if more cases like this make the headlines in 2009.

1)  E-Discovery Case of the Year: Victor Stanley, Inc. v. Creative Pipe, Inc., 2008 WL 2221841 (D. Md. May 29, 2008)

Judge Grimm’s hallmark opinion has had the legal community buzzing over the past several months and the reason appears pretty straight forward.  In Victor Stanley Grimm builds on the holdings in Seroquel, O’Keefe and Equity Analytics, to boldly cast doubt on a practice so routine that it’s literally shocked the legal community into reevaluation:

(“[D]etermining whether a particular search methodology, such as keywords, will or will not be effective certainly requires knowledge beyond the ken of a lay person (and a lay lawyer) . . . .”

The notion that electronic discovery search is beyond the ability of most attorneys has caused tremors within the litigation support community who had a long history of blindly receiving keywords from counsel, running them and turning back over the results – often blissfully unaware of the extent to which those keyword searches actually located relevant information.  Victor Stanley‘s analysis of the “reasonableness” of search protocols also has impact on the FRE 502 and therefore cements its place alongside other e-discovery “must reads” such as Zubulake and Morgan Stanley.

The cases above are my Top 5.  What additional cases do you think were important?  Please let me know by commenting on the cases you think shaped electronic discovery in 2008 and why.

Learn More On: Frcp Electronic discovery.

Federal Rule of Evidence 502: Help or Hype?

Thursday, November 13th, 2008

There’s a lot of excitement (and corresponding uncertainty) about the recent passing of Federal Rule of Evidence 502 (FRE 502), which was signed into law on Sept 19th.  The main reason that the legal community is excited about FRE 502 is because of the potential for cost savings by reducing the amount of money associated with the e-discovery review process, which is routinely viewed as the most expensive area in the entire e-discovery process.

In combination with the codification of a national standard to determine when a privilege has been waived, FRE 502 is primarily designed to make the use of claw-back agreements a truly viable prospect when doing e-discovery privilege review.  It should provide some panacea (ideally) for rapidly escalating e-discovery costs.  Or, at least that was the impetus behind the rule’s creation – according to the Comments:

“The proposed new rule facilitates discovery and reduces privilege-review costs by limiting the circumstances under which the privilege or protection is forfeited, which may happen if the privileged or protected information or material is produced in discovery. The burden and cost of steps to preserve the privileged status of attorney-client information and trial preparation materials can be enormous. Under present practices, lawyers and firms must thoroughly review everything in a client’s possession before responding to discovery requests. Otherwise they risk waiving the privileged status not only of the individual item disclosed but of all other items dealing with the same subject matter. This burden is particularly onerous when the discovery consists of massive amounts of electronically stored information.”

In short, FRE 502 is designed to establish uniform, nationwide standards for waiver of attorney-client privilege and work product protection, with the main goal being to protect producing parties against the inadvertent disclosure of privileged materials or work product in either federal or state proceedings.  The salient section is subsection (b) which states that when a disclosure of privileged information is made in a federal proceeding or to a federal agency, the disclosure does not constitute a waiver if:

  1. the disclosure is inadvertent;
  2. the holder of the privilege or protection took reasonable steps to prevent disclosure; and
  3. the holder promptly took reasonable steps to rectify the error, including (if applicable) following Federal Rule of Civil Procedure 26(b)(5)(B).

The end game here is presumably to increasingly leverage automated review methodologies to save costs.  But, in order to facilitate this type of review methodology without taking on unhealthy levels of risk means that claw-back provisions must be as airtight at possible to prevent inadvertent electronically stored information (ESI) productions.  And yet, exactly how FRE 502 will work in practice is up to debate since there isn’t any case law interpreting it yet.

One area that’s top of mind is how this new Rule will impact the recent decisions on e-discovery search, including the Victor Stanley case authored by Chief Magistrate Judge Grimm.  Since FRE 502 contains a core “reasonableness” prong in section (b) it’s likely that Grimm’s proclamation about e-discovery search will still be controlling.  Grimm fundamentally had to evaluate whether the producing party’s search protocols and procedures were in fact reasonable.

“Defendants, who bear the burden of proving that their conduct was reasonable for purposes of assessing whether they waived attorney-client privilege by producing the 165 documents to the Plaintiff, have failed to provide the court with information regarding: the keywords used; the rationale for their selection; the qualifications of M. Pappas and his attorneys to design an effective and reliable search and information retrieval method; whether the search was a simple keyword search, or a more sophisticated one, such as one employing Boolean proximity operators; or whether they analyzed the results of the search to assess its reliability, appropriateness for the task, and the quality of its implementation.” (footnotes omitted).

In Victor Stanley, the producing party wasn’t able to demonstrate reasonableness because they didn’t strategically craft out their strategy nor conduct any sampling to make sure that the e-discovery search worked as designed.  This type of analysis would still seem to come into play under FRE 502 and so, as Grimm states, the use of either a best practices or collaborative approach to e-discovery would seem to be as important as ever.

Given that backdrop it’s just as important as ever that parties “show their work” when it comes to e-discovery search.   Whether FRE 502 will really make parties feel safe enough to use automated review processes (thereby reducing costs) will remain to be seen.  But, this first step which unifies standards and expectations is at least a very positive step.