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Posts Tagged ‘e-discovery trends’

FOIA Matters! — 2012 Information Governance Survey Results for the Government Sector

Thursday, July 12th, 2012

At this year’s EDGE Summit in April, Symantec polled attendees about a range of government-specific information governance questions. The attendees of the event were primarily comprised of members from IT, Legal, as well as Freedom of Information Act (FOIA) agents, government investigators and records managers. The main purpose of the EDGE survey was to gather attendees’ thoughts on what information governance means for their agencies, discern what actions were being taken to address Big Data challenges, and assess how far along agencies were in their information governance implementations pursuant to the recent Presidential Mandate.

As my colleague Matt Nelson’s blog recounts from the LegalTech conference earlier this year, information governance and predictive coding were among the hottest topics at the LTNY 2012 show and in the industry generally. The EDGE Summit correspondingly held sessions on those two topics, as well as delved deeper into questions that are unique to the government. For example, when asked what the top driver for implementation of an information governance plan in an agency was, three out of four respondents answered “FOIA.”

The fact that FOIA was listed as the top driver for government agencies planning to implement an information governance solution is in line with data reported by the Department of Justice (DOJ) from 2008-2011 on the number of requests received. In 2008, 605,491 FOIA requests were received. This figure grew to 644,165 in 2011. While the increase in FOIA requests is not enormous percentage-wise, what is significant is the reduction in backlogs for FOIA requests. In 2008, there was a backlog of 130,419 requests and was decreased to 83,490 by 2011. This is likely due to the implementation of newer and better technology, coupled with the fact that the current administration has made FOIA request processing a priority.

In 2009, President Obama directed agencies to adopt “a presumption in favor’” of FOIA requests for greater transparency in the government. Agencies have had pressure from the President to improve the response time to (and completeness of) FOIA requests. Washington Post reporter Ed O’Keefe wrote,

“a study by the National Security Archive at George Washington University and the Knight Foundation, found approximately 90 federal agencies are equipped to process FOIA requests, and of those 90, only slightly more than half have taken at least some steps to fulfill Obama’s goal to improve government transparency.”

Agencies are increasingly more focused on complying with FOIA and will continue to improve their IT environments with archiving, eDiscovery and other proactive records management solutions in order to increase access to data.

Not far behind FOIA requests on the list of reasons to implement an information governance plan were “lawsuits” and “internal investigations.” Fortunately, any comprehensive information governance plan will axiomatically address FOIA requests since the technology implemented to accomplish information governance inherently allows for the storage, identification, collection, review and production of data regardless of the specific purpose. The use of information governance technology will not have the same workflow or process for FOIA that an internal investigation would require, for example, but the tools required are the same.

The survey also found that the top three most important activities surrounding information governance were: email/records retention (73%), data security/privacy (73%) and data storage (72%). These concerns are being addressed modularly by agencies with technology like data classification services, archiving, and data loss prevention technologies. In-house eDiscovery tools are also important as they facilitate the redaction of personally identifiable information that must be removed in many FOIA requests.

It is clear that agencies recognize the importance of managing email/records for the purposes of FOIA and this is an area of concern in light of not only the data explosion, but because 53% of respondents reported they are responsible for classifying their own data. Respondents have connected the concept of information governance with records management and the ability to execute more effectively on FOIA requests. Manual classification is rapidly becoming obsolete as data volumes grow, and is being replaced by automated solutions in successfully deployed information governance plans.

Perhaps the most interesting piece of data from the survey was the disclosures about what was preventing governmental agencies from implementing information governance plans. The top inhibitors for the government were “budget,” “internal consensus” and “lack of internal skill sets.” Contrasted with the LegalTech Survey findings from 2012 on information governance, with respondents predominantly from the private sector, the government’s concerns and implementation timelines are slightly different. In the EDGE survey, only 16% of the government respondents reported that they have implemented an information governance solution, contrasted with the 19% of the LegalTech audience. This disparity is partly because the government lacks the budget and the proper internal committee of stakeholders to sponsor and deploy a plan, but the relatively lows numbers in both sectors indicate the nascent state of information governance.

In order for a successful information governance plan to be deployed, “it takes a village,” to quote Secretary Clinton. Without prioritizing coordination between IT, legal, records managers, security, and the other necessary departments on data management, merely having the budget only purchases the technology and does not ensure true governance. In this year’s survey, 95% of EDGE respondents were actively discussing information governance solutions. Over the next two years the percentage of agencies that will submit a solution is expected to triple from 16%-52%. With the directive on records management due this month by the National Archives Records Administration (NARA), the government agencies will have clear guidance on what the best practices are for records management, and this will aid the adoption of automated archiving and records classification workflows.

The future is bright with the initiative by the President and NARA’s anticipated directive to examine the state of technology in the government. The EDGE survey results support the forecast, provided budget can be obtained, that agencies will be in an improved state of information governance within the next two years. This will be an improvement for FOIA request compliance, efficient litigation with the government and increase their ability to effectively conduct internal investigations.

Many would have projected that the results of the survey question on what drives information governance in the government would be litigation, internal investigations, and FOIA requests respectively. And yet, FOIA has recently taken on a more important role given the Obama administration’s focus on transparency and the increased number of requests by citizens. While any one of the drivers could have facilitated updates in process and technology the government clearly needs, FOIA has positive momentum behind it and seems to be the impetus primarily driving information governance. Fortunately, archiving and eDiscovery technology, only two parts of information governance continuum, can help with all three of the aforementioned drivers with different workflows.

Later this month we will examine NARA’s directive and what the impact will be on the government’s technology environment – stay tuned.

7th Circuit eDiscovery Pilot Program Tackles Technology Assisted Review With Mock Arguments

Tuesday, May 22nd, 2012

The 7th Circuit eDiscovery Pilot Program’s Mock Argument is the first of its kind and is slated for June 14, 2012.  It is not surprising that the Seventh Circuit’s eDiscovery Pilot Program would be the first to host an event like this on predictive coding, as the program has been a progressive model across the country for eDiscovery protocols since 2009.  The predictive coding event is open to the public (registration required) and showcases the expertise of leading litigators, technologists and experts from all over the United States.  Speakers include: Jason R. Baron, Director of Litigation at the National Archives and Records Administration; Maura R. Grossman, Counsel at Wachtell, Lipton, Rosen & Katz; Dr. David Lewis, Technology Expert and co-founder of the TREC Legal Track; Ralph Losey, Partner at Jackson Lewis; Matt Nelson, eDiscovery Counsel at Symantec; Lisa Rosen, President of Rosen Technology ResourcesJeff Sharer, Partner at Sidley Austin; and Tomas Thompson, Senior Associate at DLA Piper.

The eDiscovery 2.0 blog has extensively covered the three recent predictive coding cases currently being litigated, and while real court cases are paramount to the direction of predictive coding, the 7th Circuit program will proactively address a scenario that has not yet been considered by a court.  In Da Silva Moore, the parties agreed to the use of predictive coding, but couldn’t subsequently agree on the protocol.  In Kleen, plaintiffs want defendants to redo their review process using predictive coding even though the production is 99% complete.  And, in Global Aerospace the defendant proactively petitioned to use predictive coding over plaintiff’s objections.  By contrast, in the 7th Circuit’s hypothetical, the mock argument predicts another likely predictive coding scenario; the instance where a defendant has a deployed in-house solution in place and argues against the use of predictive coding before discovery has begun.

Traditionally, courts have been reticent to bless or admonish technology, but rather rule on the reasonableness of an organization’s process and depend on expert testimony for issues beyond that scope.  It is expected that predictive coding will follow suit; however, because so little is understood about how the technology works, interest has been generated in a way the legal technology industry has not seen before, as evidenced by this tactical program.

* * *

The hypothetical dispute is a complex litigation matter pending in a U.S. District Court involving a large public corporation that has been sued by a smaller high-tech competitor for alleged anticompetitive conduct, unfair competition and various business torts.  The plaintiff has filed discovery requests that include documents and communications maintained by the defendant corporation’s vast international sales force.  To expedite discovery and level the playing field in terms of resources and costs, the Plaintiff has requested the use of predictive coding to identify and produce responsive documents.  The defendant, wary of the latest (and untested) eDiscovery technology trends, argues that the organization already has a comprehensive eDiscovery program in place.  The defendant will further argue that the technological investment and defensible processes in-house are more than sufficient for comprehensive discovery, and in fact, were designed in order to implement a repeatable and defensible discovery program.  The methodology of the defendant is estimated to take months and result in the typical massive production set, whereas predictive coding would allegedly make for a shorter discovery period.  Because of the burden, the defendant plans to shift some of these costs to the plaintiff.

Ralph Losey’s role will be as the Magistrate Judge, defense counsel will be Martin T. Tully (partner Katten Muchin Rosenman LLP), with Karl Schieneman (of Review Less/ESI Bytes) as the litigation support manager for the corporation and plaintiff’s counsel will be Sean Byrne (eDiscovery solutions director at Axiom) with Herb Roitblat (of OrcaTec) as plaintiff’s eDiscovery consultant.

As the hottest topic in the eDiscovery world, the promises of predictive coding include: increased search accuracy for relevant documents, decreased cost and time spent for manual review, and possibly greater insight into an organization’s corpus of data allowing for more strategic decision making with regard to early case assessment.  The practical implications of predictive coding use are still to be determined and programs like this one will flesh out some of those issues before they get to the courts, which is good for practitioners and judges alike.  Stay tuned for an analysis of the arguments, as well as a link to the video.

Courts Increasingly Cognizant of eDiscovery Burdens, Reject “Gotcha” Sanctions Demands

Friday, May 18th, 2012

Courts are becoming increasingly cognizant of the eDiscovery burdens that the information explosion has placed on organizations. Indeed, the cases from 2012 are piling up in which courts have rejected demands that sanctions be imposed for seemingly reasonable information retention practices. The recent case of Grabenstein v. Arrow Electronics (D. Colo. April 23, 2012) is another notable instance of this trend.

In Grabenstein, the court refused to sanction a company for eliminating emails pursuant to a good faith document retention policy. The plaintiff had argued that drastic sanctions (evidence, adverse inference and monetary) should be imposed on the company since relevant emails regarding her alleged disability were not retained in violation of both its eDiscovery duties and an EEOC regulatory retention obligation. The court disagreed, finding that sanctions were inappropriate because the emails were not deleted before the duty to preserve was triggered: “Plaintiff has not provided any evidence that Defendant deleted e-mails after the litigation hold was imposed.”

Furthermore, the court declined to issue sanctions of any kind even though it found that the company deleted emails in violation of its EEOC regulatory retention duty. The court adopted this seemingly incongruous position because the emails were overwritten pursuant to a reasonable document retention policy:

“there is no evidence to show that the e-mails were destroyed in other than the normal course of business pursuant to Defendant’s e-mail retention policy or that Defendant intended to withhold unfavorable information from Plaintiff.”

The Grabenstein case reinforces the principle that reasonable information retention and eDiscovery processes can and often do trump sanctions requests. Just like the defendant in Grabenstein, organizations should develop and follow a retention policy that eliminates data stockpiles before litigation is reasonably anticipated. Grabenstein also demonstrates the value of deploying a timely and comprehensive litigation hold process to ensure that relevant electronically stored information (ESI) is retained once a preservation duty is triggered. These principles are consistent with various other recent cases, including a decision last month in which pharmaceutical giant Pfizer defeated a sanctions motion by relying on its “good faith business procedures” to eliminate legacy materials before a duty to preserve arose.

The Grabenstein holding also spotlights the role that proportionality can play in determining the extent of a party’s preservation duties. The Grabenstein court reasoned that sanctions would be inappropriate since plaintiff managed to obtain the destroyed emails from an alternative source. Without expressly mentioning “proportionality,” the court implicitly drew on Federal Rule of Civil Procedure 26(b)(2)(C) to reach its “no harm, no foul” approach to plaintiff’s sanctions request. Rule 2626(b)(2)(C)(i) empowers a court to limit discovery when it is “unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive.” Given that plaintiff actually had the emails in question and there was no evidence suggesting other ESI had been destroyed, proportionality standards tipped the scales against the sanctions request.

The Grabenstein holding is good news for organizations looking to reduce their eDiscovery costs and burdens. By refusing to accede to a tenuous sanctions motion and by following principles of proportionality, the court sustained reasonableness over “gotcha” eDiscovery tactics. If courts adhere to the Grabenstein mantra that preservation and production should be reasonable and proportional, organizations truly stand a better chance of seeing their litigation costs and burdens reduced accordingly.

Will Predictive Coding Live Up to the eDiscovery Hype?

Monday, May 14th, 2012

The myriad of published material regarding predictive coding technology has almost universally promised reduced costs and lighter burdens for the eDiscovery world. Indeed, until the now famous order was issued in the Da Silva Moore v. Publicis Groupe case “approving” the use of predictive coding, many in the industry had parroted this “lower costs/lighter burdens” mantra like the retired athletes who chanted “tastes great/less filling” during the 1970s Miller Lite commercials. But a funny thing happened on the way to predictive coding satisfying the cost cutting mandate of Federal Rule of Civil Procedure 1: the same old eDiscovery story of high costs and lengthy delays are plaguing the initial outlay of this technology. The three publicized cases involving predictive coding are particularly instructive on this early, but troubling development.

Predictive Coding Cases

In Moore v. Publicis Groupe, the plaintiffs’ attempt to recuse Judge Peck has diverted the spotlight from the costs and delays associated with use of predictive coding. Indeed, the parties have been wrangling for months over the parameters of using this technology for defendant MSL’s document review. During that time, each side has incurred substantial attorney fees and other costs to address fairly routine review issues. This tardiness figures to continue as the parties now project that MSL’s production will not be complete until September 7, 2012. Even that date seems too sanguine, particularly given Judge Peck’s recent observation about the slow pace of production: “You’re now woefully behind schedule already at the first wave.” Moreover, Judge Peck has suggested on multiple occasions that a special master be appointed to address disagreements over relevance designations. Special masters, production delays, additional briefings and related court hearings all lead to the inescapable conclusion that the parties will be saddled with a huge eDiscovery bill (despite presumptively lower review costs) due to of the use of predictive coding technology.

The Kleen Products v. Packing Corporation case is also plagued by cost and delay issues. As explained in our post on this case last month, the plaintiffs are demanding a “do-over” of the defendants’ document production, insisting that predictive coding technology be used instead of keyword search and other analytical tools. Setting aside plaintiffs’ arguments, the costs the parties have incurred in connection with this motion are quickly mounting. After submitting briefings on the issues, the court has now held two hearings on the matter, including a full day of testimony from the parties’ experts. With another “Discovery Hearing” now on the docket for May 22nd, predictive coding has essentially turned an otherwise routine document production query into an expensive, time consuming sideshow with no end in sight.

Cost and delay issues may very well trouble the parties in the Global Aerospace v. Landow Aviation matter, too. In Global Aerospace, the court acceded to the defendants’ request to use predictive coding technology over the plaintiffs’ objections. Despite allowing the use of such technology, the court provided plaintiffs with the opportunity to challenge the “completeness or the contents of the production or the ongoing use of predictive coding technology.” Such a condition essentially invites plaintiffs to re-litigate their objections through motion practice. Moreover, like the proverbial “exception that swallows the rule,” the order allows for the possibility that the court could withdraw its approval of predictive coding technology. All of which could lead to seemingly endless discovery motions, production “re-dos” and inevitable cost and delay issues.

Better Times Ahead?

At present, the Da Silva Moore, Kleen Products and Global Aerospace cases do not suggest that predictive coding technology will “secure the just, speedy, and inexpensive determination of every action and proceeding.” Nevertheless, there is room for considerable optimism that predictive coding will ultimately succeed. Technological advances in the industry will provide greater transparency into the black box of predictive coding technology that to date has not existed. Additional advances should also lead to easy-to-use workflow management consoles, which will in turn increase defensibility of the process and satisfy legitimate concerns regarding production results, such as those raised by the plaintiffs in Moore and Global Aerospace.

Technological advances that also increase the accuracy of first generation predictive coding tools should yield greater understanding and acceptance about the role predictive coding can play in eDiscovery. As lawyers learn to trust the reliability of transparent predictive coding, they will appreciate how this tool can be deployed in various scenarios (e.g., prioritization, quality assurance for linear review, full scale production) and in connection with existing eDiscovery technologies. In addition, such understanding will likely facilitate greater cooperation among counsel, a lynchpin for expediting the eDiscovery process. This is evident from the Moore, Kleen Products and Global Aerospace cases, where a lack of cooperation has caused increased costs and delays.

With the promise of transparency and simpler workflows, predictive coding technology should eventually live up to its billing of helping organizations discover their information in an efficient, cost effective and defensible manner.  As for now, the “promise” of first generation predictive coding tools appears to be nothing more than that, leaving organizations looking like the cash-strapped “Monopoly man,” wondering where there litigation dollars have gone.

Look Before You Leap! Avoiding Pitfalls When Moving eDiscovery to the Cloud

Monday, May 7th, 2012

It’s no surprise that the eDiscovery frenzy gripping the American legal system over the past decade has become increasingly expensive.  Particularly costly to organizations is the process of preserving and collecting documents, a fact repeatedly emphasized by the Advisory Committee in its report regarding the 2006 amendments to the Federal Rules of Civil Procedure (FRCP).  These aspects of discovery are often lengthy and can be disruptive to business operations.  Just as troubling, they increase the duration and expense of litigation.

Because these costs and delays affect the courts as well as clients, it comes as no surprise that judges have now heightened their expectation for how organizations store, manage and discover their electronically stored information (ESI).  Gone are the days when enterprises could plead ignorance for not preserving or producing their data in an efficient, cost effective and defensible manner.  Organizations must now follow best practices – both during and before litigation – if they are to safely navigate the stormy seas of eDiscovery.

The importance of deploying such practices applies acutely to those organizations that are exploring “cloud”-based alternatives to traditional methods for preserving and producing electronic information.  Under the right circumstances, the cloud may represent a fantastic opportunity to streamline the eDiscovery process for an organization.  Yet it could also turn into a dangerous liaison if the cloud offering is not properly scrutinized for basic eDiscovery functionality.  Indeed, the City of Los Angeles’s recent decision to partially disengage from its cloud service provider exemplifies this admonition to “look before you leap” to the cloud.  Thus, before selecting a cloud provider for eDiscovery, organizations should be particularly careful to ensure that a provider has the ability both to efficiently retrieve data from the cloud and to issue litigation hold notices.

Effective Data Retrieval Requires Efficient Data Storage

The hype surrounding the cloud has generally focused on the opportunity for cheap and unlimited storage of information.  Storage, however, is only one of many factors to consider in selecting a cloud-based eDiscovery solution.  To be able to meet the heightened expectations of courts and regulatory bodies, organizations must have the actual – not theoretical – ability to retrieve their data in real time.  Otherwise, they may not be able to satisfy eDiscovery requests from courts or regulatory bodies, let alone the day-to-day demands of their operations.

A key step to retrieving company data in a timely manner is to first confirm whether the cloud offering can intelligently organize that information such that organizations can quickly respond to discovery requests and other legal demands.  This includes the capacity to implement and observe company retention protocols.  Just like traditional data archiving software, the cloud must enable automated retention rules and thus limit the retention of information to a designated time period.  This will enable data to be expired once it reaches the end of that period.

The pool of data can be further decreased through single instance storage.  This deduplication technology eliminates redundant data by preserving only a master copy of each document placed into the cloud.  This will reduce the amount of data that needs to be identified, preserved, collected and reviewed as part of any discovery process.  For while unlimited data storage may seem ideal now, reviewing unlimited amounts of data will quickly become a logistical and costly nightmare.

Any viable cloud offering should also have the ability to suspend automated document retention/deletion rules to ensure the adequate preservation of relevant information.  This goes beyond placing a hold on archival data in the cloud.  It requires that an organization have the ability to identify the data sources in the cloud that may contain relevant information and then modify aspects of its retention policies to ensure that cloud-stored data is retained for eDiscovery.  Taking this step will enable an organization to create a defensible document retention strategy and be protected from court sanctions under the Federal Rule of Civil Procedure 37(e) “safe harbor.”  The decision from Viramontes v. U.S. Bancorp (N.D. Ill. Jan. 27, 2011) is particularly instructive on this issue.

In Viramontes, the defendant bank defeated a sanctions motion because it timely modified aspects of its email retention policy.  The bank implemented a policy that kept emails for 90 days, after which the emails were deleted.  That policy was promptly suspended, however, once litigation was reasonably foreseeable.  Because the bank followed that procedure in good faith, it was protected from sanctions under Rule 37(e).

As the Viramontes case shows, an organization can be prepared for eDiscovery disputes by appropriately suspending aspects of its document retention policies.  By creating and then faithfully observing a policy that requires retention policies be suspended on the occurrence of litigation or other triggering event, an organization can develop a defensible retention procedure. Having such eDiscovery functionality in a cloud provider will likely facilitate an organization’s eDiscovery process and better insulate it from litigation disasters.

The Ability to Issue Litigation Hold Notices

To be effective for eDiscovery purposes, a cloud service provider must also enable an organization to deploy a litigation hold to prevent users from destroying data. Unless the cloud has litigation hold technology, the entire discovery process may very well collapse.  For electronic data to be produced in litigation, it must first be preserved.  And it cannot be preserved if the key players or data source custodians are unaware that such information must be retained.  Indeed, employees and data sources may discard and overwrite electronically stored information if they are oblivious to a preservation duty.

A cloud service provider should therefore enable automated legal hold acknowledgements.  Such technology will allow custodians to be promptly and properly notified of litigation and thereby retain information that might otherwise have been discarded.  Inadequate litigation hold technology leaves organizations vulnerable to data loss and court punishment.

Conclusion

Confirming that a cloud offering can quickly retrieve and efficiently store enterprise data while effectively deploying litigation hold notices will likely address the basic concerns regarding its eDiscovery functionality. Yet these features alone will not make that solution the model of eDiscovery cloud providers. Advanced search capabilities should also be included to reduce the amount of data that must be analyzed and reviewed downstream. In addition, the cloud ought to support load files in compatible formats for export to third party review software. The cloud should additionally provide an organization with a clear audit trail establishing that neither its documents, nor their metadata were modified when transmitted to the cloud.  Without this assurance, an organization may not be able to comply with key regulations or establish the authenticity of its data in court. Finally, ensure that these provisions are memorialized in the service level agreement governing the relationship between the organization and the cloud provider.

District Court Upholds Judge Peck’s Predictive Coding Order Over Plaintiff’s Objection

Monday, April 30th, 2012

In a decision that advances the predictive coding ball one step further, United States District Judge Andrew L. Carter, Jr. upheld Magistrate Judge Andrew Peck’s order in Da Silva Moore, et. al. v. Publicis Groupe, et. al. despite Plaintiff’s multiple objections. Although Judge Carter rejected all of Plaintiff’s arguments in favor of overturning Judge Peck’s predictive coding order, he did not rule on Plaintiff’s motion to recuse Judge Peck from the current proceedings – a matter that is expected to be addressed separately at a later time. Whether or not a successful recusal motion will alter this or any other rulings in the case remains to be seen.

Finding that it was within Judge Peck’s discretion to conclude that the use of predictive coding technology was appropriate “under the circumstances of this particular case,” Judge Carter summarized Plaintiff’s key arguments listed below and rejected each of them in his five-page Opinion and Order issued on April 26, 2012.

  • the predictive coding method contemplated in the ESI protocol lacks generally accepted reliability standards,
  • Judge Peck improperly relied on outside documentary evidence,
  • Defendant MSLGroup’s (“MSL’s”) expert is biased because the use of predictive coding will reap financial benefits for his company,
  • Judge Peck failed to hold an evidentiary hearing and adopted MSL’s version of the ESI protocol on an insufficient record and without proper Rule 702 consideration

Since Judge Peck’s earlier order is “non-dispositive,” Judge Carter identified and applied the “clearly erroneous or contrary to law” standard of review in rejecting Plaintiffs’ request to overturn the order. Central to Judge Carter’s reasoning is his assertion that any confusion regarding the ESI protocol is immaterial because the protocol “contains standards for measuring the reliability of the process and the protocol builds in levels of participation by Plaintiffs.” In other words, Judge Carter essentially dismisses Plaintiff’s concerns as premature on the grounds that the current protocol provides a system of checks and balances that protects both parties. To be clear, that doesn’t necessarily mean Plaintiffs won’t get a second bite of the apple if problems with MSL’s productions surface.

For now, however, Judge Carter seems to be saying that although Plaintiffs must live with the current order, they are by no means relinquishing their rights to a fair and just discovery process. In fact, the existing protocol allows Plaintiffs to actively participate in and monitor the entire process closely. For example, Judge Carter writes that, “if the predictive coding software is flawed or if Plaintiffs are not receiving the types of documents that should be produced, the parties are allowed to reconsider their methods and raise their concerns with the Magistrate Judge.”

Judge Carter also specifically addresses Plaintiff’s concerns related to statistical sampling techniques which could ultimately prove to be their meatiest argument. A key area of disagreement between the parties is whether or not MSL is reviewing enough documents to insure relevant documents are not completely overlooked even if this complex process is executed flawlessly. Addressing this point Judge Carter states that, “If the method provided in the protocol does not work or if the sample size is indeed too small to properly apply the technology, the Court will not preclude Plaintiffs from receiving relevant information, but to call the method unreliable at this stage is speculative.”

Although most practitioners are focused on seeing whether and how many of these novel predictive coding issues play out, it is important not to overlook two key nuggets of information lining Judge Carter’s Opinion and Order. First, Judge Carter’s statement that “[t]here simply is no review tool that guarantees perfection” serves as an acknowledgement that “reasonableness” is the standard by which discovery should be measured, not “perfection.” Second, Judge Carter’s acknowledgement that manual review with keyword searches may be appropriate in certain situations should serve as a wake-up call for those who think predictive coding technology will replace all predecessor technologies. To the contrary, predictive coding is a promising new tool to add to the litigator’s tool belt, but it is not necessarily a replacement for all other technology tools.

Plaintiffs in Da Silva Moore may not have received the ruling they were hoping for, but Judge Carter’s Opinion and Order makes it clear that the court house door has not been closed. Given the controversy surrounding this case, one can assume that Plaintiffs are likely to voice many of their concerns at a later date as discovery proceeds. In other words, don’t expect all of these issues to fade away without a fight.

First State Court Issues Order Approving the Use of Predictive Coding

Thursday, April 26th, 2012

On Monday, Virginia Circuit Court Judge James H. Chamblin issued what appears to be the first state court Order approving the use of predictive coding technology for eDiscovery. Tuesday, Law Technology News reported that Judge Chamblin issued the two-page Order in Global Aerospace Inc., et al, v. Landow Aviation, L.P. dba Dulles Jet Center, et al, over Plaintiffs’ objection that traditional manual review would yield more accurate results. The case stems from the collapse of three hangars at the Dulles Jet Center (“DJC”) that occurred during a major snow storm on February 6, 2010. The Order was issued at Defendants’ request after opposing counsel objected to their proposed use of predictive coding technology to “retrieve potentially relevant documents from a massive collection of electronically stored information.”

In Defendants’ Memorandum in Support of their motion, they argue that a first pass manual review of approximately two million documents would cost two million dollars and only locate about sixty percent of all potentially responsive documents. They go on to state that keyword searching might be more cost-effective “but likely would retrieve only twenty percent of the potentially relevant documents.” On the other hand, they claim predictive coding “is capable of locating upwards of seventy-five percent of the potentially relevant documents and can be effectively implemented at a fraction of the cost and in a fraction of the time of linear review and keyword searching.”

In their Opposition Brief, Plaintiffs argue that Defendants should produce “all responsive documents located upon a reasonable inquiry,” and “not just the 75%, or less, that the ‘predictive coding’ computer program might select.” They also characterize Defendants’ request to use predictive coding technology instead of manual review as a “radical departure from the standard practice of human review” and point out that Defendants cite no case in which a court compelled a party to accept a document production selected by a “’predictive coding’ computer program.”

Considering predictive coding technology is new to eDiscovery and first generation tools can be difficult to use, it is not surprising that both parties appear to frame some of their arguments curiously. For example, Plaintiffs either mischaracterize or misunderstand Defendants’ proposed workflow given their statement that Defendants want a “computer program to make the selections for them” instead of having “human beings look at and select documents.” Importantly, predictive coding tools require human input for a computer program to “predict” document relevance. Additionally, the proposed approach includes an additional human review step prior to production that involves evaluating the computer’s predictions.

On the other hand, some of Defendants’ arguments also seem to stray a bit off course. For example, Defendants’ seem to unduly minimize the value of using other tools in the litigator’s tool belt like keyword search or topic grouping to cull data prior to using potentially more expensive predictive coding technology. To broadly state that keyword searching “likely would retrieve only twenty percent of the potentially relevant documents” seems to ignore two facts. First, keyword search for eDiscovery is not dead. To the contrary, keyword searches can be an effective tool for broadly culling data prior to manual review and for conducting early case assessments. Second, the success of keyword searches and other litigation tools depends as much on the end user as the technology. In other words, the carpenter is just as important as the hammer.

The Order issued by Judge Chamblin, the current Chief Judge for the 20th Judicial Circuit of Virginia, states that “Defendants shall be allowed to proceed with the use of predictive coding for purposes of the processing and production of electronically stored information.”  In a hand written notation, the Order further provides that the processing and production is to be completed within 120 days, with “processing” to be completed within 60 days and “production to follow as soon as practicable and in no more than 60 days.” The order does not mention whether or not the parties are required to agree upon a mutually agreeable protocol; an issue that has plagued the court and the parties in the ongoing Da Silva Moore, et. al. v. Publicis Groupe, et. al. for months.

Global Aerospace is the third known predictive coding case on record, but appears to present yet another set of unique legal and factual issues. In Da Silva Moore, Judge Andrew Peck of the Southern District of New York rang in the New Year by issuing the first known court order endorsing the use of predictive coding technology.  In that case, the parties agreed to the use of predictive coding technology, but continue to fight like cats and dogs to establish a mutually agreeable protocol.

Similarly, in the 7th Federal Circuit, Judge Nan Nolan is tackling the issue of predictive coding technology in Kleen Products, LLC, et. al. v. Packaging Corporation of America, et. al. In Kleen, Plaintiffs basically ask that Judge Nolan order Defendants to redo their production even though Defendants have spent thousands of hours reviewing documents, have already produced over a million documents, and their review is over 99 percent complete. The parties have already presented witness testimony in support of their respective positions over the course of two full days and more testimony may be required before Judge Nolan issues a ruling.

What is interesting about Global Aerospace is that Defendants proactively sought court approval to use predictive coding technology over Plaintiffs’ objections. This scenario is different than Da Silva Moore because the parties in Global Aerospace have not agreed to the use of predictive coding technology. Similarly, it appears that Defendants have not already significantly completed document review and production as they had in Kleen Products. Instead, the Global Aerospace Defendants appear to have sought protection from the court before moving full steam ahead with predictive coding technology and they have received the court’s blessing over Plaintiffs’ objection.

A key issue that the Order does not address is whether or not the parties will be required to decide on a mutually agreeable protocol before proceeding with the use of predictive coding technology. As stated earlier, the inability to define a mutually agreeable protocol is a key issue that has plagued the court and the parties for months in Da Silva Moore, et. al. v. Publicis Groupe, et. al. Similarly, in Kleen, the court was faced with issues related to the protocol for using technology tools. Both cases highlight the fact that regardless of which eDiscovery technology tools are selected from the litigator’s tool belt, the tools must be used properly in order for discovery to be fair.

Judge Chamblin left the barn door wide open for Plaintiffs to lodge future objections, perhaps setting the stage for yet another heated predictive coding battle. Importantly, the Judge issued the Order “without prejudice to a receiving party” and notes that parties can object to the “completeness or the contents of the production or the ongoing use of predictive coding technology.”  Given the ongoing challenges in Da Silva Moore and Kleen, don’t be surprised if the parties in Global Aerospace Inc. face some of the same process-based challenges as their predecessors. Hopefully some of the early challenges related to the use of first generation predictive coding tools can be overcome as case law continues to develop and as next generation predictive coding tools become easier to use. Stay tuned as the facts, testimony, and arguments related to Da Silva Moore, Kleen Products, and Global Aerospace Inc. cases continue to evolve.

UK Sanctions Order Emphasizes the Importance of Effective eDiscovery Tools

Wednesday, March 21st, 2012

The buzz in the eDiscovery world has focused on predictive coding and the related order issued last month in the Da Silva Moore v. Publicis Groupe case. Yet in that order, the Moore court emphasized that predictive coding would not become the exclusive tool for eDiscovery. The strong inference from the Moore case was that organizations should be prepared to deploy any number of tools in addition to predictive coding technology to effectively and efficiently address discovery obligations. To ignore these other weapons in the litigator’s arsenal would be to put the client’s case at risk.

This point was emphasized last month in a Wasted Costs Order originating from the United Kingdom. In West African Gas Pipeline Company Limited (WAPCo) v. Willbros Global Holdings Inc., the High Court ordered the claimant to pay the defendant a minimum of £135,000 after finding the claimant “failed to provide proper disclosure” under the Civil Procedure Rules. A subsequent hearing was also held to determine the additional costs the claimant must pay to address its shortcomings in discovery (called “disclosure” in the UK).

The principal basis for the High Court’s Civil Procedure Rule 44.3 cost order was the claimant’s failure to properly deduplicate documents. As the court observed, “a significant proportion of duplicates had not been removed,” which was due to “a problem with the de-duplication process.” In rendering its order, the court concluded that: “Whilst I accept that de-duplication of electronic documents has a number of technically complex facets, if appropriate software is properly applied it can remove multiple copies of the same or similar documents.”

As renowned eDiscovery thought leader Chris Dale recently observed in a post regarding this issue, a deduplication failure in 2012 might rightfully be perceived as either old news or even small potatoes. Yet just like Judge Peck’s order in Moore v. Publicis Groupe, the WAPCo case emphasizes the significance of deploying the right tools to meet the challenges of eDiscovery on either side of the Atlantic Ocean. That UK “firms [are] scared witless by the West African Gas Pipeline judgment,” as Mr. Dale observes, gives additional credence to this point.

For law firms looking to better address these issues, there are any number of technologies and vendors that can help provide answers. For most firms, efficient search and analysis tools are probably the best bet for properly reducing the amount of potentially relevant information that must be reviewed prior to production. Others may be ready in the near future for the more advanced features of predictive coding technology.  Either way, having the right combination of eDiscovery technologies to support an intelligent litigation response effort will more likely yield successful results in litigation.

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.