e-discovery 2.0

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

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

Spoliation, Keywords and a $4.5 Million Sanction

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

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

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

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

The Impact of Predictive Coding on DuPont’s Search Efficiency

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Much of the writing in the eDiscovery community focuses on the consequences of a party failing to adequately accomplish one of the nine boxes of the Electronic Discovery Reference Model. Breaking news posts frequently report on how spoliation and sanctions are typically issued for failure to suspend auto-deletion or to properly circulate a written litigation hold notices. This begs the question, aside from becoming perfectly adept in all nine boxes of the EDRM, how else can an organization protect themselves from discovery wars and sanctions?

One way is explore the possibilities Alternative Dispute Resolution (ADR) has to offer. While there is no substitute for the proper implementation of information governance processes, technology, and the people who manage them; there are alternative and creative ways to minimize exposure. This is not to say that ESI is less discoverable in ADR, but it is to say with the proper agreements in place, the way ESI is handled in the event of a dispute can be addressed proactively.  That is because although parties are free to use the Federal Rules of Civil Procedure in ADR proceedings, they are not constricted by them. In other words, ADR proceedings can provide parties with the flexibility to negotiate and tailor their own discovery rules to address the specific matter and issues at hand.

Arbitration is a practical and preferred way to resolve disputes because it is quick, relatively inexpensive and commonly binding. With enough foresight, parties can preemptively limit the scope of discovery in their agreements to ensure the just and speedy resolution of a matter. Practitioners who are well versed in electronic discovery will be the best positioned to counsel clients in the formation of their agreements upfront, obviating protracted discovery. While a similar type of agreement can be reached and protection can be achieved with the Meet and Confer Conference in civil litigation, ADR offers a more private forum giving the parties more contractual power and less unwanted surprises.

For example, JAMS includes this phrase in one of their model recommendations:

JAMS recognizes that there is significant potential for dealing with time and other limitations on discovery in the arbitration clauses of commercial contracts. An advantage of such drafting is that it is much easier for parties to agree on such limitations before a dispute has arisen. A drawback, however, is the difficulty of rationally providing for how best to arbitrate a dispute that has not yet surfaced. Thus, the use of such clauses may be most productive in circumstances in which parties have a good idea from the outset as to the nature and scope of disputes that might thereafter arise.

Thus, arbitration is an attractive option for symmetrical litigation where the merits of the case are high stakes and neither party wants to delve into a discovery war. A fair amount of early case assessment would be necessary as well, so parties have a full appreciation about what they are agreeing to include or not include in the way of ESI.  Absent a provision to use specific rules (American Arbitration Association or Federal Arbitration Act), the agreement between parties is the determining factor as to how extensive the scope of discovery will be.

In Mitsubishi Motors v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 625 (1985), the U.S. Supreme Court has explained that the “liberal federal policy favoring arbitration agreements’…is at bottom a policy guaranteeing the enforcement of private contractual agreements. As such, assuming an equal bargaining position or, at least an informed judgment, courts will enforce stipulations regarding discovery, given the policy of enforcing arbitration agreements by their terms.” Please also see an excellent explanation of Discovery in Arbitration by Joseph L. Forstadt for more information.

Cooperation amongst litigants in discovery has long been a principle of the revered Sedona Conference. ADR practitioners facing complex discovery questions are looking to Sedona’s Cooperation Proclamation for guidance with an eye toward negotiation by educating themselves on ways to further minimize distractions and costs in discovery.  An example of one such event is at The Center for Negotiation and Dispute Resolution at UC Hastings, where they are conducting a mock Meet and Confer on May 16, 2013. The event highlights the need for all practitioners, whether it be the 26 (f) conference for litigation or the preliminary hearing in the case of arbitration, to assess electronic discovery issues with the same weight they do claims and damages early on in the dispute.

It is also very important that arbitrators, especially given the power they have over a matter, to understand the consequences of their rulings. Discovery is typically under the sole control of the arbitrator in a dispute, and only in very select circumstances can relief be granted by the court. An arbitrator that knows nothing about eDiscovery could miss something material and affect the entire outcome adversely. For parties that have identified and addressed these issues proactively, there is more protection and certainty in arbitration. Typically, the primary focus of an arbitrator is enforcing the contract between parties, not to be an eDiscovery expert.

It is also important to caution against revoking rights to discovery by entering into mutual agreements to unreasonably limit discovery.  This approach is somewhat reminiscent of the days when lawyers would agree not to conduct discovery, because neither knew how. Now, while efficiency and cost savings are a priority, we must guard against a potential similar paradigm emerging as we may know too much about how to shield relevant ESI.

As we look to the future, especially for serial litigants, one can imagine a perfect world in arbitration for predictive coding. In the Federal courts, we have seen over the past two years or so an emergence of the use of predictive coding technologies. However, even when the parties agree, which they don’t always, they still struggle with achieving a meeting of the minds on the protocol. These disputes have at times overshadowed the advantage of using predictive coding because discovery disputes and attorney’s fees have overtaken any savings. In ADR there is a real opportunity for similarly situated parties to agree via contract, upfront on tools, methodologies and scope. Once these contracts are in place, both parties are bound to the same rules and a just and speedy resolution of a matter can take place.

Confidentiality in the digital age is certainly an elusive concept. As more organizations turn to social networking sites, cloud computing, and bring your own device (BYOD) policies to facilitate commercial enterprise, they are finding that such innovations could provide unwanted visibility into their business operations. Indeed, technology has seemingly placed confidential corporate information at the fingertips of third parties. This phenomenon, in which some third party could be examining your trade secrets, revenue streams and attorney-client communications, brings to mind an iconic colloquy from the movie Ocean’s Eleven involving Tess (Julia Roberts) and Terry Benedict (Andy Garcia). Tess caustically reminds the guarded casino magnate that: “You of all people should know Terry, in your hotel, there’s always someone watching.”

That someone could always be “watching” proprietary company information was recently alluded to by Chief Judge Alex Kozinski of the Ninth Circuit Court of Appeal. Speaking on the related topic of data privacy at a panel sponsored by The Recorder, Judge Kozinski explained that technological advances that enable third party access to much of the data transmitted through or stored in cyberspace seemingly removes the veneer of confidentiality from that information. Excerpts from Judge Kozinski’s videotaped remarks can be viewed here.

That technological innovations could provide third parties with access to proprietary information is certainly problematic as companies incorporate social networking sites, cloud computing and BYOD into more aspects of their operations. Without appropriate safeguards, the use of such innovations could jeopardize the confidentiality of proprietary company information.

For example, content that corporate employees exchange on social networking sites could be accessed and monitored by site representatives under the governing terms of service. While those terms typically provide privacy settings that would allow corporate employees to limit the extent to which information may be disseminated, they also notify those same users that site representatives may access their communications. Though the justification for such access varies from site to site, the terms generally delineate the lack of confidentiality associated with user communications. This includes ostensibly private communications sent through the direct messaging features available on social networks like LinkedIn, Twitter, MySpace, Facebook and Reddit.

In like manner, providers of cloud computing services often have access and monitoring rights vis-à-vis a company’s cloud hosted data. Memorialized in service level agreements, those rights may allow provider representatives to access, review or even block transmissions of company data to and from the cloud. Provider access may, in turn, destroy the confidentiality required to preserve the character of company trade secrets or maintain the privileged status of communications with counsel.

BYOD also presents a difficult challenge for preserving the confidentiality of company data. This is due to the lack of corporate control that BYOD has introduced into company’s information ecosystem. Unless appropriate safeguards are deployed, employees may unwittingly disclose proprietary information to third parties by using personal cloud storage providers for storage or transmission of company data. In addition, family, friends or even strangers who have access to the employee device could retrieve such information.

Given the confluence of the above referenced factors, the question becomes what steps an organization can take to preserve the confidentiality of its information. On the social network front, a company could deploy an on site social network environment that would provide a secure environment for its employees to communicate about internal corporate matters. Conceptually similar to private clouds that house data behind the company firewall, an on site network could be jointly developed with a third party provider to ensure specific levels of confidentiality.

For the enterprise that is considering cloud computing for its ESI storage needs, it should require that a cloud service provider offer measures to preserve the confidentiality of trade secrets and privileged messages. That may include specific confidentiality terms or a separate confidentiality agreement. In addition, the provider should probably have certain encryption functionality to better preserve confidentiality. By so doing, the enterprise can better satisfy itself that it has taken appropriate measures to ensure the confidentiality of its data.

To address the confidentiality problems associated with BYOD, a company should prepare a cogent policy and deploy technologies that facilitate employee compliance. Such a policy would discourage workers from using personal cloud storage providers to facilitate data transfers or for ESI storage. It would also delineate the parameters of access to employee devices by the employee’s family, friends, or others. To make such a policy more effective, employers will need to develop a technological architecture that reasonably supports conformity with the policy.

By developing cogent and reasonable policies, training employees and deploying effective, enabling technologies, organizations can better prevent unauthorized disclosures of confidential information. Only by taking such professionally recognized best practices can companies hope to shield their proprietary data from the prying eyes of third parties in the digital age.

At eDiscovery 2.0, we have consistently followed the reports that Gibson Dunn has released on the state of eDiscovery. This is for good reason given its reputation as an excellent source of information on the trends affecting individual organizations and the industry as a whole.

The recently released 2012 annual report is no different, except that the overall tone is more positive. Instead of spotlighting the continuing problem of sanctions, the report showcases predictive coding and rules reform as the key eDiscovery trends leading into 2013. Describing these trends as being potential game-changers, the report also notes that “many questions remain” and warns that the impact of these trends may affect organizations in unanticipated and perhaps troubling ways.

Predictive Coding

In its report, Gibson Dunn happily indicates that unlike previous years, predictive coding technology appears to be ready for prime time. With several decisions from 2012 expressly or tacitly approving the use of predictive coding, the report speculates that many organizations and their counsel could become adopters of the technology. As the technology becomes more widespread and additional court decisions provide judicial imprimatur to the technology, the prospects increase that predictive coding could “drastically alter the way in which documents are reviewed for production.”

Nevertheless, challenges remain before this gradually increasing trend becomes a fully blown industry norm. While the promise of predictive coding is in its potential for rapid and cost effective document review, the report questions whether the technology will live up to that hype. Indeed, Gibson Dunn asks whether predictive coding is like any other review tool: “is it merely the latest review technology that, while useful, neither obtains widespread adoption nor revolutionizes the landscape?” Such questions are particularly legitimate given the substantial costs associated with most of the reported predictive coding cases. Indeed, the recent case of Gabriel Technologies v. Qualcomm exemplifies this predictive coding cost paradox.

Rules Changes

Another positive industry development that is fraught with questions concerns potential changes to the Federal Rules of Civil Procedure. As the report indicates, the federal Civil Rules Advisory Committee has made significant progress on a proposed draft amendment to Rule 37(e). Designed to broaden the existing protection against sanctions, the proposal would theoretically safeguard an organization’s pre-litigation destruction of information from sanctions in most circumstances. The lone exceptions would include destruction that was “willful or in bad faith and caused substantial prejudice in the litigation” or that “irreparably deprived a party of any meaningful opportunity to present a claim or defense.” While such a rule undoubtedly could reduce the costs and risks associated with ESI preservation, ambiguities in the draft language, together with statements in the draft advisory committee note, could ultimately water down the proposal’s intended protections.

Another encouraging rule change being considered by rules-makers includes an effort to better emphasize proportionality limitations on the Rule 26(b)(1) permissible scope of discovery. While characterized by the report as an “underused” though “increasingly important” doctrine, a proportionality amendment to Rule 26(b)(1) could do much to bring the problematic costs and delays of eDiscovery under control.

The report also sounded a note of caution on the proportionality front. Referring to the Sedona Conference’s recently updated Commentary on Proportionality in Electronic Discovery, the report observes that technology will be a key aspect in any proportionality analysis. With that background, Gibson Dunn cautions against misusing the efficiencies of cutting edge eDiscovery technologies to increase the scope of production under the guise that such discovery will comport with proportionality principles:

Other Industry Trends

Gibson Dunn spotlighted several other key trends from 2012 in its 33-page report. Among them were developments in cross-border eDiscovery, the increasing importance of foreign data protection laws, congressional attempts to bolster domestic privacy regulations, the correlation between ESI preservation and courts sanctions, and discovery of information found on social networking sites. These and other industry trends confirm that “progress is being made in addressing e-discovery’s challenges[,] [t]he dense fog that often seems to surround e-discovery appears to have lifted somewhat, and the collective anxiety lowered a little.”

Despite such sanguine observations, risks remain for organizations and their lawyers. The report concludes by raising the specter of sanctions, which will likely continue to be an unpredictable hobgoblin unless meaningful rules reform takes place. Until that time, clients and counsel alike should be proactive in adopting industry best practices to better ensure compliance with existing rules and jurisprudence.

The 7^th Circuit Pilot Program sponsored an educational mock hearing and expert panel discussion in Chicago last May to tackle important issues related to the use of predictive coding technology. The long awaited video footage of the event is finally here and available for review courtesy of Symantec.

The event begins with U.S. Chief Judge for the Northern District of Illinois, James F. Holderman, welcoming a courtroom packed full of people eager to learn more about novel issues presented by increased usage of predictive coding technology in litigation. National Archives Director of Litigation, Jason R. Baron, follows with opening remarks about the role of information retrieval in eDiscovery to set the stage for a lively mock hearing and panel discussion about a number of hot topics related to the use of predictive coding technology. Notable speakers include Maura R. Grossman, Counsel at Wachtell, Lipton, Rosen & Katz; Dr. David Lewis, co-founder of the TREC Legal Track; Ralph Losey, Partner at Jackson Lewis; Matt Nelson, eDiscovery Counsel at Symantec; Jeff Sharer, Partner at Sidley Austin; and Martin T. Tully, Partner and National eDiscovery Practice Group Chair, Katten Muchin Rosenman LLP.

The hypothetical hearing centers on a dispute between parties to a patent litigation matter regarding the use of predictive coding technology. Plaintiffs argue defendants should use predictive coding technology to assist with the production and review of documents. Defendants counter that they have a process in place for responding to discovery requests that is sufficient and that includes the use of legal technology approaches like keyword search that are commonly used during discovery. The hearing participants take positions (not necessarily their own) about important issues such as the reliability of predictive coding technology, steps needed to establish a protocol that is fair to both parties, and cost shifting. Ralph Losey does an excellent job playing the role of “judge” and summarizes key arguments made by each party before ruling from the bench at the conclusion of the hearing.

Following the mock hearing, Losey and others debated important issues related to the use of predictive coding as part of a lively panel discussion.  The panel discussion covered a broad range of interesting issues, but some of the liveliest discussion related to the following topics:

•  Should parties be required to disclose their use of predictive coding technology?
• Is it appropriate to use keyword searches to cull electronically stored information (ESI) prior to using predictive coding technology?
• Could the misapplication of statistics be the downfall of predictive coding?

The mock argument and panel discussion are among several excellent resources practitioners should consider reviewing to help them navigate a rapidly shifting and sometimes confusing predictive coding technology landscape.  Please feel free to share your comments and feedback below and be sure to visit the 7^th Circuit Pilot Program’s homepage for more information about the group’s efforts to help clarify some of the most complex and important eDiscovery issues facing litigators today.

This post was co-authored by Symantec’s Allison Walton, eDiscovery Counsel

You have heard this one before. Changes to the Federal Rules are in the works that could alleviate the eDiscovery burdens of organizations. Greeting this news with skepticism would probably be justified. After all, many feel that the last set of amendments failed to meet the hype of streamlining the discovery process to make litigation costs more reasonable. Others, while not declaring the revised Rules a failure, nonetheless believe that the amendments have been doomed by the lack of adherence among counsel and the courts. Regardless of the differing perspectives, there seems to be agreement on both sides that the Rules have spawned more collateral disputes than ever before about the preservation and collection of ESI.

What is different this time is that the latest set of proposed amendments could offer a genuine opportunity for organizations to slash the costs of document preservation and collection. Chief among these changes would be a revised Rule 37(e). The current iteration of this rule is designed to protect companies from court sanctions when the programmed operation of their computer systems automatically destroys ESI. Nevertheless, the rule has largely proved ineffective as a national standard because it did not apply to pre-litigation information destruction activities. As a result, courts often bypassed the rule’s protections to punish companies who negligently, though not nefariously, destroyed documents before a lawsuit was filed.

The current proposal to amend Rule 37(e) (see page 127) would substantially broaden the existing protection against sanctions. The proposal would shield an organization’s pre-litigation destruction of information from sanctions except where that destruction was “willful or in bad faith and caused substantial prejudice in the litigation” or “irreparably deprived a party of any meaningful opportunity to present a claim or defense.”

In making a determination on this issue, courts would be forced to examine the enterprise’s information retention protocols through more than just the lens of litigation. Instead, they would have to consider the nature and motives behind a company’s decision-making process. Such factors include:

•  The extent to which the party was on notice that litigation was likely
• The reasonableness and proportionality of the party’s efforts to preserve the information
• The nature and scope of any request received to preserve information
• Whether the party sought timely judicial guidance regarding any preservation disputes

By seeking to punish only nefarious conduct and by ensuring that the analysis includes a broad range of considerations, organizations could finally have a fighting chance to reduce the costs and risks of preservation.

Despite the promise this proposal holds, there is concern among some of the eDiscovery cognoscenti that provisions in the draft proposal to amend Rule 37(e) could water down its intended protections. Robert Owen, a partner at Sutherland Asbill & Brennan LLP and a leading eDiscovery thought leader, has recently authored an insightful articlethat spotlights some of these issues. Among other things, Owen points out that the “irreparably deprived” provision could end up diluting the “bad faith” standard. This could ultimately provide activist jurists with an opportunity to re-introduce a negligence standard through the backdoor, which would be a troubling development for clients, counsel and the courts.

These issues and others confirm the difficulty of establishing national standards to address the factual complexities of many eDiscovery issues. They also point to the difficult path that the Civil Rules Advisory Committee still must travel before a draft of Rule 37(e) can be finalized for public comment. Even assuming that stage can be reached after the next rules committee meeting in April 2013, additional changes could still be forthcoming to address the concerns of other constituencies. Stay tuned; the debate over revisions to Rule 37(e) and its impact on organizations’ defensible deletion efforts is far from over.

The eDiscovery frenzy that has gripped the American legal system over the past decade has become increasingly expensive. Particularly costly to both clients and the courts is the process of preserving and reviewing ESI. As a solution to these costs, many are emphasizing the concept of “proportionality.” Proportionality typically requires that the benefits of discovery be commensurate with its corresponding burdens.

Despite nearly universal agreement that eDiscovery should be governed by proportionality standards, there remains a polarizing debate that threatens to curtail the impact of proportionality. That debate is centered on disagreements over the scope of ESI preservation, the standard for permissible discovery and the use of cutting edge review technologies like predictive coding.

To better understand these issues and to explore feasible solutions, Philip Favro, Discovery Counsel at Symantec, will lead a lively discussion at LegalTech New York among industry leaders such U.S. Magistrate Judge Frank Maas, Ariana Tadler of Milberg LLP and Shawn Cheadle, General Counsel (Military Space) at Lockheed Martin Space Systems Co. The panelists will take stances on either side of difficult questions like:

•  Should proportionality standards apply to the preservation of ESI to help address the high costs of retaining so much data?
• Will the proportionality rule ever be used to rein in lawyers and judges that have distorted the standard of discovery from reasonableness to perfection?
• Can predictive coding facilitate proportional discovery when lawyers are unwilling to share their training set of documents?

While our expert panelists are well-versed in both sides of the proportionality debate, we had a little fun imagining what they might be going through before they take the stage on Tuesday, January 29^th.  Watch this video to get an exclusive behind-the-scenes look into the LTNY Locker Room.

In addition, don’t miss our microsite for the complete plenary session description and a look at Symantec’s LTNY 2013 presence. We hope you stay tuned to eDiscovery 2.0 from now until the show to hear what Symantec has planned for the supersessions, our special event, contest giveaways and product announcements.

The patent infringement litigation involving chipmaker Rambus took another twist this week as the court in Micron Technology v. Rambus declared several Rambus patents to be unenforceable as an eDiscovery sanction for its destruction of evidence. In a crushing blow to Rambus’ dynamic random access memory (DRAM) chips litigation strategy, the court reasoned that such a “dispositive sanction” was the only remedy that could address the chipmaker’s “bad faith” spoliation of email backup tapes, paper documents and other ESI.

At the heart of the Micron court’s sanctions order was its finding that Rambus implemented its information retention policy in bad faith. While acknowledging that retention policies may be “employed for legitimate business reasons such as general house-keeping,” the court found that the policies at issue were designed to deprive the chipmaker’s litigation adversaries of evidence that could impugn its patents. Furthermore, Rambus deviated from its policies to ensure that evidence favorable to its claims would be preserved. For example, after ordering the destruction of 1,270 email back-up tapes pursuant to its retention schedule, the chipmaker intervened to save a lone back-up tape after determining that “it contained data that could be used … to establish a conception date for an invention.” Such selective use of its retention policies belied Rambus’ contention that the policies were neutral and conclusively showed that the policies were tactically deployed to “seek an advantage in litigation.”

While the Micron court’s sanctions order will likely set up another round of appeals before the Federal Circuit, the lesson to be learned by organizations is the importance of developing a reasonable information retention policy. Indeed, had Rambus followed good faith business procedures within the parameters recently delineated by the Federal Circuit, it is unlikely that the destruction would have been seen as spoliation. The Micron ruling should not affect the current judicial trend that absent a preservation duty or other exceptional circumstances, organizations may use document retention protocols to destroy stockpiles of data that have no meaningful business value.