e-discovery 2.0

We’ve all heard the phrase that “everything is bigger in Texas” and the little “mini-conference” held in Dallas, TX last Friday was no exception.  The Discovery Subcommittee held a small, one-day conference to tackle some big issues related to preservation and sanctions that could ultimately lead to amendments to the Federal Rules of Civil Procedure (Rules).

The Subcommittee’s primary purpose was to discuss “preservation and sanctions issues” by using the following topics as guidelines:

• The nature and scope of the current “problem”
• The role of technology
• Possible solutions to the problem

Counsel from large companies like Google, General Electric, and Exxon Mobil participated side by side with outside counsel from both plaintiffs’ and defense bar to discuss what some characterized as a lack of clear direction in the current Rules.  Government lawyers, academics, and federal judges including Judges David Campbell (D. Az.), Shira Scheindlin (S.D.N.Y.), Paul Grimm (D. Md.), John Facciola (D.D.C.), Lee Rosenthal (S.D. Tx.), Michael Mosman (D. Ore.), and Nan Nolan (N. D. Ill.) helped round out the field to make for a lively discussion with multiple perspectives represented.  The following summary highlights some of the key viewpoints and areas of contention debated throughout the day.[1]

The nature and scope of the problem

An underlying theme throughout the day was whether or not preservation and sanctions challenges warrant amending the Rules.  Not surprisingly, counsel for large organizations that commonly bear the brunt of large and frequent document requests lobbied for rule amendments that provide more certainty around when the duty to preserve evidence is triggered, the scope of that duty, and how sanctions are applied.

In support of this position, some corporate attorneys argued that the lack of certainty in the current Rules unfairly requires organizations to err on the side of preserving evidence early and broadly to avoid the risk of sanctions.  Since preserving evidence can be extremely expensive and the duty may be triggered before litigation even begins, they argue that changes to the Rules are necessary.  One corporate attorney framed the issue by providing specific details about costs associated with preserving data for different cases.  He explained that in one situation, his organization has spent more than $5 million to locate, collect, preserve, and maintain data for an ongoing matter even though a complaint has never been filed.  He went on to explain the dilemma by stating: “not preserving asks us to take a chance with our reputation.”

In response, a few attendees questioned how preservation related expenses could spiral so high even before attorney review.  Others pointed out that if the current Rules were better utilized, specifically the meet-and-confer provisions of Rule 26(f), then many preservation challenges could be minimized.  Supporters of better Rule 26(f) engagement complained that counsel for large organizations often refuse to discuss preservation related issues and thereby fuel problems related to the scope of preservation themselves.   Others suggested that if organizations enforced better information management policies instead of keeping “everything forever”, then the magnitude of the problem could be reduced.

Technology

The Subcommittee members generally agreed that the evolution of technology has led to massive data growth which creates new electronic data challenges.  Electronically stored information (ESI) is often duplicative, typically resides in many different technology systems, and can be difficult to locate on a case by case basis.  There was some thoughtful discussion about how data archiving and cloud computing technology are important tools for helping organizations manage these information problems more effectively.  Another commentator acknowledged that although “predictive coding” may be helpful for “reviewing” data, it requires significant human involvement and simply does not solve the problem at hand.

Surprisingly, aside from the comments above, the technology discussion focused mainly on the issue of what constitutes “possession, custody or control” under Rule 34 in today’s environment of social media, cloud computing, and mobile devices.  Unfortunately, there was no discussion of either the role legal technology solutions play in minimizing risk and cost or of the impact the current Rules have on public policy.  For example, the Subcommittee did not address whether organizations that invest in technology in order to automate their internal data management and electronic discovery process should be afforded more protection under Rule 26(b)(2)(B) (“not reasonably accessible because of undue burden or cost”) than organizations that choose not to invest in technology.  If an organization’s technology investment (or lack thereof) is not a factor, does Rule 26(b)(2)(B) have the unintended effect of stifling meaningful legal technology investment by some organizations?  Similarly, do advancements in legal technology diminish the need for a Rule amendment that, at its core, is geared toward reducing costs?  In my opinion, the manner in which organizations are using technology today is an important factor that warrants deeper discussion and a subject I intend to address in a future publication soon.  Stay tuned.

Possible solutions

Discussion about possible solutions to the problem revealed more about the contrasting viewpoints in the room.  Notably, the Department of Justice representatives and those typically aligned with the plaintiffs’ bar tended to lobby for better adherence to the framework contained in the existing Rules in lieu of drafting new Rules.  These folks generally appeared to fall into the “No New Rule” or “Not Yet” camp, and cited the relative newness of the 2006 Rule Amendments and the fact that only about one percent of federal cases involve sanctions in support of their position that Rule amendments are premature or not needed.  Along the same lines, many called for further study and evaluation of the issues through organizations such as The Sedona Conference and the 7th Circuit Electronic Discovery Pilot Program.  Others referenced the importance of looking to evolving case law for more guidance before moving forward with Rule amendments.

In stark contrast, those on the other side of the aisle that typically represent large organizations, lobbied for bright line rules or at least “guideposts” to provide more certainty regarding preservation.  For example, one participant suggested that the duty to preserve evidence should begin when a complaint is served.  Another suggested that the duty should be triggered when a potential litigant is “reasonably certain to be a party to litigation” – a standard that is arguably narrower than the commonly applied “reasonably anticipates litigation” standard articulated in Judge Scheindlin’s frequently cited Zubulake v. UBS Warburg line of decisions.

Those calling for more certainty regarding triggering events also provided recommendations for addressing the scope of the preservation duty and the application of sanctions.  A suggestion to incorporate language that presumptively limits the number of custodians (10) and documents (by age) met resistance on the grounds that trying to apply a one-size-fits-all rule fails to acknowledge that the facts and circumstances of every case are different and so too are the litigants.  Similarly, recommendations to limit sanctions for evidence spoliation to situations where a litigant’s conduct is “intentional” or “willful” were met with a chilly reception by those favoring better adherence to the current Rules.

Conclusion

Time did not permit comprehensive discussion and analysis of every perspective, but the mini-conference highlighted the complexity surrounding preservation and sanctions issues and revealed some polarized viewpoints about how to solve those issues.  Perhaps one glimmer of consensus was the acknowledgement that “pre-litigation” obligations to preserve evidence before service of a complaint is often challenging for large organizations.  However, whether this and other issues should be addressed through better education, more stringent enforcement of existing rules, or by modifying the existing rules to include more “guideposts” remains unsettled.

What do you think?  Please respond to the poll, above right, to let us know whether you think amending the Federal Rules of Civil Procedure (FRCP) is necessary to address some of the preservation and sanctions issues discussed above.

To join the conversation and receive automatic updates when new information is posted to this blog, please subscribe to e-discovery 2.0.

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[1] A more exhaustive list of participants and sample questions was incorporated into the Federal Rules Advisory Committee’s June 29, 2011 memorandum announcing the mini-conference.  Similarly, the events leading up to the mini-conference are described in more detail as part of my previous postings on the same subject.

The bashing of our judicial system seems to have reached a fevered pitch.  Groups like the American College of Trial Lawyers (“ACTL”) have proclaimed in a recent report that while the “civil justice system is not broken, it is in serious need of repair.”  The blame game seems to have judges and attorneys alike pointing fingers.  The Fellows of the ACTL (perhaps not surprisingly) seems to pin some of the blame on the judiciary:

“Judges should have a more active role at the beginning of a case in designing the scope of discovery and the direction and timing of the case all the way to trial. Where abuses occur, judges are perceived not to enforce the rules effectively.”

Groups like the Sedona Conference chalk up many of the ills to the failure to cooperate, so much so that they’ve orchestrated a cooperation proclamation – which has picked up enough support by the bench to have garnered several cites in the case law (see e.g., Mancia).

The bench for its part seems to put some of the onus on litigators and their reticence to get with the times.  William A. Gross. Constr. Assocs., Inc. v. Am. Mfrs. Mut. Ins. Co., 2009 WL 724954 (S.D.N.Y. Mar. 19, 2009) is the latest example of such a proclamation.  In this construction defect case, Judge Peck (a Sedona devotee) issues what he hopes will be a “wake-up” call to the bar about the need for “careful thought, quality control, testing, and cooperation with opposing counsel in designing search terms or ‘keywords’ to be used to produce emails or other electronically stored information (‘ESI’).”  In Gross, the court had to mediate an e-discovery dispute where the requesting party propounded a blatantly over-inclusive search request crafted by the requesting parties.  Unfortunately, the responding entity was a non-party and they simply dig their heads in the sand.  In order to facilitate a resolution this left the Court in the “uncomfortable position” of having to craft a “keyword search methodology for the parties, without adequate information from the parties (and Hill).”

Judge Peck’s exasperation with these antics was palpable.  Summing up the problem by citing Judge Grimm and Victor Stanley he stated: “This case is just the latest example of lawyers designing keyword searches in the dark, by the seat of the pants, without adequate (indeed, here, apparently without any) discussion with those who wrote the emails.”  He further noted: “[w]hile this message has appeared in several cases from outside this Circuit, it appears that the message has not reached many members of our Bar.”

After noting both Sedona and Judge Facciola (of O’Keefe and Equity Analytics fame) Peck’s opinion reached a crescendo:

“Electronic discovery requires cooperation between opposing counsel and transparency in all aspects of preservation and production of ESI. Moreover, where counsel are using keyword searches for retrieval of ESI, they at a minimum must carefully craft the appropriate keywords, with input from the ESI’s custodians as to the words and abbreviations they use, and the proposed methodology must be quality control tested to assure accuracy in retrieval and elimination of ‘false positives.’ It is time that the Bar-even those lawyers who did not come of age in the computer era-understand this.”

While it’s easy to see who Peck blames in this brouhaha, it takes (at least) two to tango.  Meaning that litigants on both sides of the “v” must move beyond the typical “seat of the pants” electronic discovery wrangling.  And, judges need to be savvy enough to spot the issues to help/force the parties into such an enlightened/cooperative state.  Nothing short will get the job done.

As Tiger Woods is to golf, the honorable Shira A. Scheindlin is to electronic discovery.  She has unquestionably been the most dominant/visible/outspoken jurist in the electronic discovery realm over the past decade, penning amongst others, the Zubulake opinion, which is commonly referred to as the gold standard in electronic discovery.

But, like Woods, who recently took a sabbatical to mend his surgically repaired knee, Judge Scheindlin has recently been eclipsed by several other notable electronic discovery jurists, namely Judge Grimm (of Victor Stanley and Mancia fame) and Judge Facciola (aka “the Italian Stallion“) both of whom made numerous “best of the year” electronic discovery case law lists.

With Securities and Exchange Commission v. Collins & Aikman Corp., 2009 WL 94311 (S.D.N.Y., Jan. 13, 2009) Judge Scheindlin serves notice that the sheriff is back in town.  She not only tackles a number of thorny electronic discovery topics, but ambitiously takes on the US government in the process.  It’s fairly lengthy opinion, well worth the read, so I’ll just excerpt out a few of the notable takeaways.

As a bit of background…  the Collins case centered around a securities fraud complaint brought by the SEC against the Collins & Aikman Corp. and its former CEO David A. Stockman.  The crux of the dispute surrounded questions concerning the government’s discovery obligations in civil discovery (versus in a purely SEC investigation per se).

There were four distinct but interrelated disputes, namely:

“(1) Whether identifying responsive documents that have been organized by the producing party invades the protection accorded to attorney work-product and how a government agency-acting in its investigative capacity-must respond to a request for the production of documents. (2) Whether a government agency may unilaterally restrict the scope of its search based on an assertion of an “undue burden” on limited public resources. (3) How much information the Government must disclose in order to allow an adversary-and the court-to assess an objection based on the deliberative process privilege. (4) Whether a government agency may unilaterally exclude its own e-mail from document production on the ground that most-but not all-will be privileged.”

Addressing the work product claims, the court found against the government, again reinforcing several recent opinions about electronic discovery search:

“The SEC contends that Stockman can search through the ten million pages and find substantially the same documents identified by the SEC without impinging on the thought processes of the SEC attorneys. Indeed-at significant expense and delay-Stockman could search the document databases using appropriate search terms, but the inaccuracy of such searches is by now relatively well known.  A page-by-page manual review of ten million pages of records is strikingly expensive in both monetary and human terms and constitutes “undue hardship” by any definition.” [Citing, George L. Paul and Jason R. Baron's article: Information Inflation: Can the Legal System Adapt?

After losing the first battle, the SEC argued that even if the compilations were not protected as work product, it could produce the "complete, unfiltered, and unorganized investigatory file" since this was how the documents were "maintained in the usual course of its business."  This second attempt was similarly unpersuasive as Judge Scheindlin held that the "usual course of business" exemption did not apply:

"[C]onducting an investigation-which is by its very nature not routine or repetitive-cannot fall within the scope of the “usual course of business.” While the SEC routinely collects and maintains regulatory submissions such 10-K reports, in its investigative capacity the agency conducts tailored probes of a company or an industry, requiring the gathering of records from diverse sources. Many if not most of the 1.7 million documents in the SEC production here were likely collected in the agency’s investigatory role. Thus it is no surprise that the complete collection is maintained as it was collected-in large disorderly databases. The documents can only be provided in a useful manner if the agency organizes or labels them to correspond to each demand.”

Next, Judge Scheindlin addressed the SEC’s decision to “unilaterally” limit its search to “centralized compilations” which ultimately “turned up nothing.”  She found that the SEC’s “blanket refusal to negotiate a workable search protocol” was “patently unreasonable” citing both Mancia and the Sedona Conference’s Cooperation Proclamation:

“Rule 26(f) requires the parties to hold a conference and prepare a discovery plan. … Had this been accomplished, the Court might not now be required to intervene in this particular dispute. I also draw the parties’ attention to the recently issued Sedona Conference Cooperation Proclamation, which urges parties to work in a cooperative rather than an adversarial manner to resolve discovery issues in order to stem the ‘rising monetary costs’ of discovery disputes.”

As the coup de gras, Judge Scheindlin addressed and rejected out of hand the SEC’s most untenable claim that it would not produce e-mail “generated or received by the Commission itself” because “nearly all responsive e-mails will be privileged, protected, or non-substantive.”

“Because e-mails are inherently searchable, the SEC’s blanket refusal to produce any in-coming or outgoing e-mails is unacceptable. Without even an attempt to negotiate search terms that would weed out privileged, protected, or irrelevant e-mails, the SEC cannot reasonably assert that a routine aspect of modern discovery-search and review of a party’s e-mail-is beyond its capability. Essentially, the SEC’s position is that the cost of such a search is simply too high, but it has made no effort to document the cost or the likelihood that it would produce relevant, nonprivileged material. The concept of sampling to test both the cost and the yield is now part of the mainstream approach to electronic discovery.”

At the end of the day, the Collins opinion seems to make statement the Judge Scheindlin is back with a vengeance and she’s serving notice that the government isn’t above the law:

“Like any ordinary litigant, the Government must abide by the Federal Rules of Civil Procedure.”

Besides knocking the government down a peg, Judge Scheindlin throws her judicial weight behind a number of important but nascent trends, including the Sedona Cooperation Proclamation, the related need to meet & confer, the use of sampling and the challenges of electronic discovery search. While none of these notions are groundbreaking, her substantial backing means increasing clarity for lawyers and litigation support practitioners everywhere.  And, that’s certainly welcome.

It’s a new year in legal technology, and the visions of sugarplums dancing in our heads quickly give way to visions of LegalTech 2009. After all, who can help but dream about another opportunity to brave the icy streets of New York City in February? Fond memories of attempting to wolf down a stale croissant and cold cup of coffee while jostling for an uptown cab outside the New York Hilton can set even the most jaded litigation support manager’s heart aflutter.

The weather and the Manhattan traffic may remain the same, but, as we’re all painfully aware, this year’s show takes place in the context of a dramatic global recession that is having a huge impact on the legal industry’s use of technology, particularly electronic discovery. It’s in challenging times that innovation often thrives the most, so this year’s LegalTech may actually yield a surprising number of new ideas and technologies.

Innovation aside, this year’s LegalTech will likely have a bit of a different “look and feel” from last year:

	LegalTech 2008	LegalTech 2009
Dining hot spot	Le Cirque	Le Hot Dog Cart
Evening activity	Attending swanky club parties hosted by eager and generous vendors	Watching Law and Order in your hotel room while eating Chinese take-out
Cheap giveaway	Demo CDs	Devalued CDOs
Hilton elevator waiting time	20 minutes	20 minutes
Top discussion topic while waiting for the elevator	Managing the costs and risks of electronic discovery	Managing the costs and risks of electronic discovery

Some things, of course, never change. Fortunately, the team at Incisive Media has been working overtime to put together a stellar lineup of practitioners, legal experts, and judges to provide insight into some of the key issues of legal technology. While electronic discovery is top-of-mind for many, there’s a lot of more than that on tap. Key sessions include:

• Patrick Oot, Director of Electronic Discovery and senior litigation Counsel at Verizon will lead the first-ever LegalTech Town Hall meeting, to be featured on YouTube. The Town Hall will be an interactive discussion where participants will be able to submit questions in real-time to a panel of experts for immediate feedback and insight on the topics that are of top concern.
• John W. Woods, a partner at Hunton and Williams, will deliver a keynote on “How eDiscovery is Changing the Relationship Between Law Firms and their Corporate Clients”. Clearly there’s a sea change going on here, which seems to be being accelerating by the economy, and it will be very interesting to hear what John has to say.
• Finally, LegalTech would not be complete without a contribution from a leading light of the bench. And this year, none other than United States Magistrate Judge John M. Facciola of Peskoff v. Faber and United States v. O’Keefe will be presiding. Ralph Losey said he’s “just about my favorite judge of all time” and it’s sure to be a fantastic session to get up to speed on the cutting edge of electronic discovery law.

The fantastic speaker lineup, of course, just scratches the surface. LegalTech is also an incredible networking opportunity to meet with fellow practitioners and vendors. However, it can be a little overwhelming, particularly to first-time attendees. So, we thought we’d close with a video that Monica Bay put together last year that provides a quick “how-to” guide for making the most of your time at LegalTech.

As a final note, I’ll be attending the E-Discovery 2.0 LinkedIn Happy Hour before B-Discovery’s LegalTech event.  It’s at the Hilton’s Bridges Bar from 8:00 – 9:00pm on Monday February 2^nd.  Come by and say hello.  If you are not a member of the E-Discovery 2.0 LinkedIn group, sign up here.  See you at the show!

Concept or content search continues to be a hot topic within the e-discovery community.  There’s a continuous stream of articles that discuss it.  Some that point out the positive.  Others that point out the limitations.  The courts have also gotten involved in the discussion.  Judge Grimm refers to concept search in e-discovery in Victor Stanley, Inc. v. Creative Pipe, Inc., 2008 WL 2221841 (D. Md. May 29, 2008).  Judge Facciola discusses concept search in Disability Rights Council of Greater Washington v. Washington Metropolitan Transit Authority, 242 F.R.D. 139 and other opinions.  Despite (or maybe because of) all the commentary on this topic, I find that while a lot of people think that concept search in e-discovery is good, many are not fully sure of exactly what concept search is, and how it is practically useful in e-discovery.   It’s pretty clear that after several years of commentary and hype, concept search has become something of a buzzword associated with many myths and misconceptions.  In an effort to better understand what concept search is and how it can help in e-discovery, I want to dispel two of the most common myths I have heard.

The “Concept Search is Concept Search” Myth

The first myth around concept search actually revolves around what it is.  In my experience, people tend to lump two different technologies together when talking about concept search: concept search and concept categorization.  It’s very common, for example, to see commentators say concept search even when what they are really talking about is concept categorization.  To make matters more confusing, people also use a plethora of other names including content search, content clustering or concept clustering when what they really mean is concept categorization.

So, what are the differences between concept search and concept categorization?  First, let’s start with concept search.  Concept search technologies find documents containing “concepts”.  I think that the Sedona Conference’s “Best Practices Commentary on the Use of Search & Information Retrieval Methods in E-Discovery“, provides a good definition of “concept” when used in a search context: “the combination of [a] query term and the additional terms identified by the thesaurus.”  In other words, concept search technologies find documents containing a specified term plus additional terms with similar meanings derived from a thesaurus.

Concept categorization, on the other hand, is actually not a search technology at all.  Concept categorization technologies do not “find” documents.  Rather, they categorize or group documents based on their similarity.   There are many different ways to group documents based on similarity.  Techniques include statistical (which assesses similarity based on word frequency), Bayesian classification (which weights words differently depending on factors in addition to statistical frequency, such as where the terms appear in a document), and semantic indexing (which takes into account the fact that many words used in a similar context may have a similar meaning).  It would take more time to describe these technologies in detail but the Sedona commentary has a good summary of these different technologies if you are interested in learning more.

As should now be apparent, these technologies are very different and using the same words to describe them is confusing.  It’s why it’s not surprising that a lot of the users of e-discovery services and software don’t have a strong understanding of what these technologies are or what benefits they can actually provide in practice.  Dispelling the myth that they can be lumped together is a critical first step in any conversation about concept search and how it can help in e-discovery.  This leads us to a second myth, that Concept Search is better than Keyword Search.  I’ll discuss this in my next blog post.