24h-payday

Posts Tagged ‘litigation discovery’

A Comprehensive Look at the Newly Proposed eDiscovery Amendments to the Federal Rules of Civil Procedure

Tuesday, July 9th, 2013

You have probably heard the news. Changes are in the works for the Federal Rules of Civil Procedure that govern the discovery process. Approved for public comment last month by the Standing Committee on Rules of Practice and Procedure, the proposed amendments are generally designed to streamline discovery, encourage cooperative advocacy among litigants and eliminate gamesmanship. The amendments also try to tackle the continuing problems associated with the preservation of electronically stored information (ESI). As a result, a package of amendments has been developed that affects most aspects of federal discovery practice.

We will provide a comprehensive overview of the newly proposed amendments in a series of posts over the next few weeks. The posts will cover the changes that are designed to usher in a new era of cooperation, proportionality, and active judicial case management in discovery. We will also review the draft amendment to Federal Rule 37(e), which would create a uniform national standard for discovery sanctions stemming from failures to preserve evidence. This amendment has by far attracted the most interest, which is understandable given the far-reaching impact that such a change could have on organizations’ defensible deletion efforts. A final post will describe the timeline for moving the amendment package forward.

Cooperation

Drafted by the Civil Rules Advisory Committee, the proposed amendments are generally designed to facilitate the tripartite aims of Federal Rule 1 in the discovery process. To carry out Rule 1’s lofty yet important mandate of securing “the just, speedy, and inexpensive determination” of litigation, the Committee has proposed several modifications to advance the notions of cooperation and proportionality. Other changes focus on improving “early and effective judicial case management.” Judicial Conference of the United States, Report of the Advisory Committee on Civil Rules 4 (May 8, 2013) (Report). Today’s post will provide an overview of the draft amendment to Rule 1, which is designed to spotlight the importance of cooperation. Posts covering the proportionality and judicial case management amendments will follow shortly.

The Proposed Amendment to Rule 1

To better emphasize the need for cooperative advocacy in discovery, the Committee has recommended that Rule 1 be amended to specify that clients share the responsibility with the court for achieving the rule’s objectives. The proposed revisions to the rule (in italics with deletions in strikethrough) read in pertinent part as follows:

[These rules] should be construed, and administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.

Report, at 17.

Even though this concept was already set forth in the Advisory Committee Notes to Rule 1, the Committee felt that an express reference in the rule itself would prompt litigants and their lawyers to engage in more cooperative conduct. Indeed, while acknowledging that such a rule change would not “cure all adversary excesses,” the Committee still felt the amended wording “will do some good.” Report, at 16-17.

Perhaps more importantly, this mandate is also designed to enable judges “to elicit better cooperation when the lawyers and parties fall short.” Report, at 16. Indeed, such a reference, when coupled with the “stop and think” certification requirement from Federal Rule 26(g), should give jurists more than enough procedural basis to remind counsel and clients of their duty to conduct discovery in a cooperative and cost effective manner.

Though difficult to gauge the actual impact that such an amendment might have, the decision to spotlight cooperation could be beneficial if litigants and lawyers ultimately decide to conduct discovery with laser-like precision instead of the sledgehammer approach of the current regime. If implemented and followed as contemplated by the Committee, the proposed amendment to Rule 1 could help decrease the costs and delays associated with discovery.

 

Yet Another Victory: Court Rejects Sanctions for eDiscovery “Shortcomings”

Wednesday, May 29th, 2013

The news surrounding the eDiscovery industry is trending positive for organizations. Instances where companies have been sanctioned for alleged failures to preserve or produce electronically stored information (ESI) seem to be dropping. This is confirmed by various court opinions from 2012, together with reports from key industry players. In addition, the Civil Rules Advisory Committee is close to releasing for public comment draft amendments to Federal Rule of Civil Procedure 37(e) that might impact the sanctions equation. If enacted, the proposed changes could reduce the threat of sanctions relating to pre-litigation destruction of ESI.

Against this backdrop, organizations scored another sanctions victory this month as an Albany, New York-based federal court refused to impose sanctions on an enterprise for its so-called eDiscovery “shortcomings.” In Research Foundation of State University of New York v. Nektar Therapeutics, the defendant had sought an adverse inference instruction and monetary sanctions against the research foundation arm of the State University of New York for its alleged “grossly negligent” failure to preserve documents. The defendant argued that such punishment was justified given the foundation’s alleged failures to implement a timely litigation hold, to maintain “relevant backup-tape data” and to “suspend its auto-delete practices.”

The court, however, did not accept the defendant’s sweeping allegations of discovery misconduct. Instead, the court found that the foundation’s preservation efforts passed legal muster. Among other things, the foundation had issued timely hold instructions, preserved relevant backup tapes and acted to prevent the deletion of custodial data. Significantly, the court then explained that it would not get wrapped around the proverbial axel due to some isolated “shortcomings” with the foundation’s preservation efforts:

While there may have been some shortcomings in [the foundation’s] document retention protocol, it was, at most, negligent in its effort to preserve evidence related to this litigation.

Moreover, sanctions were not appropriate since the defendant had not established that relevant evidence had been destroyed. In what ultimately amounted to a “no-harm, no-foul” approach, the court observed that the “spoliation motion fails, then, on the ‘inability [of the defendant] to adduce evidence suggesting the existence, let alone destruction, of relevant documents.’”

The Research Foundation case is important for at least three reasons. First, the court’s reluctance to issue sanctions for mere preservation “shortcomings” is consistent with the general discovery principle that a party’s efforts need not be perfect. Instead of trying to reach a mythical benchmark of infallibility, Research Foundation confirms that a party’s preservation efforts need only satisfy the standards of reasonableness and proportionality.

The second lesson from Research Foundation flows naturally from the first: the misperception that courts acquiesce to knee-jerk sanctions motions. With the judiciary gaining a better understanding of the digital age nuances associated with the preservation and production of ESI, courts are less likely to go along with gotcha sanctions requests. This is particularly the case where sanctions are sought against companies that have an effective information governance plan in place.

This, in turn, gives rise to the third and final take-home from Research Foundation. Given the cooling judicial climate toward sanctions and the efforts being taken by the advisory committee to alleviate preservation burdens, the time is ripe for organizations to implement a defensible deletion strategy. Such a comprehensive approach, which aims to reduce the storage costs and legal risks associated with the retention of ESI, stands to benefit companies that can justify deletion decisions based on reasonable information retention practices. Like the foundation in Research Foundation, organizations that have done so have been successful in avoiding court sanctions while at the same time eliminating ESI that has little or no business value.

 

The eDiscovery Trinity: Spoliation Sanctions, Keywords and Predictive Coding

Monday, May 20th, 2013

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”:

DuPont’s forensic experts ran a list of almost 350 “keywords,” which yielded thousands of “false positives” that nevertheless had to be translated, analyzed, and briefed. Of the nearly 18,000 “hits,” only 1,955 (roughly 10 percent) were determined to be even “potentially relevant.” Thus, to state the obvious, 90 percent of the results were wholly irrelevant to the issue, but DuPont still seeks to tax Kolon for having the bulk of those documents translated and analyzed.

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:

Of course, in the current world of litigation, where so many documents are stored and, hence, produced, electronically, the selection of search terms is an important decision because it, in turn, drives the subsequent document discovery, production and review.

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.

Breaking News: Court Orders Google to Produce eDiscovery Search Terms in Apple v. Samsung

Friday, May 10th, 2013

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.

Would Rule Changes Alleviate eDiscovery Burdens?

Wednesday, February 6th, 2013

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 Global Impact of eDiscovery and Data Protection Laws in Germany

Thursday, January 3rd, 2013

The acknowledged power of Continental Europe is Germany. Its steady economy and stable politics offer foreign companies an inviting prospect for investment. And yet, as organizations explore and begin developing business opportunities in Germany, they often become entangled in a web of unfamiliar legal issues. These issues, particularly eDiscovery and data protection laws, can be a costly and time consuming trap for unsuspecting companies. To avoid becoming ensnared by legal minutiae, attorney fees and lost opportunities, companies should consider gaining at least a basic understanding regarding the German eDiscovery and data protection landscape.

Discovery in Germany

By way of introduction, it should be noted that Germany, like most European countries, is a civil code country whose legal traditions are distinct from the common law notions that characterize the United States. According to its legal precepts, civil litigation in Germany is conducted in a vastly different fashion than in the U.S. For example, “discovery,” as it is known in the United States, does not exist in Germany. Interrogatories, categorical document requests and requests for admissions are simply unavailable as discovery devices. Instead, Germany only allows a limited exchange of documents, with the parties typically only disclosing information that supports their claims.

The U.S. Court of Appeals for the Seventh Circuit recently commented on this key distinction when it observed in Heraeus Kulzer v. Biomet that “the German legal system . . . does not authorize discovery in the sense of Rule 26 of the Federal Rules of Civil Procedure.” The court went on to explain that “[a] party to a German lawsuit cannot demand categories of documents from his opponent. All he can demand are documents that he is able to identify specifically—individually, not by category.”

Another key distinction to discovery in Germany is the lack of rules or case law requiring the preservation of ESI or paper documents. This stands in sharp contrast to American jurisprudence, which typically requires organizations to preserve information as soon as they “reasonably anticipate” litigation.

Data Protection in Germany

Another critical, distinguishing characteristic of Germany’s legal traditions are its notions of data protection and individual privacy. Unlike the mostly laissez-faire approach in the U.S. to data protection, Germany has adopted a comprehensive framework to secure personal information from unreasonable government and corporate intrusions. To guard against such intrusions, Germany has strict requirements that govern any “processing” of personal information. In addition, corporate data processing in Germany must satisfy company Works Councils, which represent the interests of employees and protect their privacy rights. Those protections extend to domestic litigation and international data transfers, to which Works Councils and company Data Protection Officers may object.

Another important aspect to German data protection laws are the restrictions they place on transferring personal information across international borders. Companies with offices in Germany must ensure that the country where such data will be transferred has enacted laws that meet EU data protection standards. Transfers of personal data to countries that do not meet those standards are generally forbidden, with substantial fines imposed for non-compliance.

This backdrop of complexity suggests that companies exploring business opportunities in Germany should obtain a better understanding of its discovery and data protection laws. There are various resources that provide straightforward answers to these issues at no cost to the end-user. For example, global legal expert James Daley recently recorded two podcasts that discuss the challenges associated with German discovery and data privacy laws. Think tanks such as The Sedona Conference have also made available materials that provide significant detail on these issues, including its “International Overview of Discovery, Data Privacy, and Disclosure Requirements.”

By obtaining a greater awareness of the legal workings inside Germany, organizations can more capably develop a cooperative, proactive process for how they will address data preservation and production for cross-border litigation. By so doing, organizations can be better prepared to address potential eDiscovery and data protection snares that are inextricably intertwined with globalization.

Spotlighting the Top Electronic Discovery Cases from 2012

Friday, December 14th, 2012

With the New Year quickly approaching, it is worth reflecting on some of the key eDiscovery developments that have occurred during 2012. While legislative, regulatory and rulemaking bodies have undoubtedly impacted eDiscovery, the judiciary has once again played the most dramatic role.  There are several lessons from the top 2012 court cases that, if followed, will likely help organizations reduce the costs and risks associated with eDiscovery. These cases also spotlight the expectations that courts will likely have for organizations in 2013 and beyond.

Implementing a Defensible Deletion Strategy

Case: Brigham Young University v. Pfizer, 282 F.R.D. 566 (D. Utah 2012)

In Brigham Young, the plaintiff university had pressed for sanctions as a result of Pfizer’s destruction of key documents pursuant to its information retention policies. The court rejected that argument because such a position failed to appreciate the basic workings of a valid corporate retention schedule. As the court reasoned, “[e]vidence may simply be discarded as a result of good faith business procedures.” When those procedures operate to inadvertently destroy evidence before the duty to preserve is triggered, the court held that sanctions should not issue: “The Federal Rules protect from sanctions those who lack control over the requested materials or who have discarded them as a result of good faith business procedures.”

Summary: The Brigham Young case is significant since it emphasizes that organizations should implement a defensible deletion strategy to rid themselves of data stockpiles. Absent a preservation duty or other exceptional circumstances, organizations that pare back ESI pursuant to “good faith business procedures” (such as a neutral retention policy) will be protected from sanctions.

**Another Must-Read Case: Danny Lynn Elec. v. Veolia Es Solid Waste (M.D. Ala. Mar. 9, 2012)

Issuing a Timely and Comprehensive Litigation Hold

Case: Apple, Inc. v. Samsung Electronics Co., Ltd, — F. Supp. 2d. — (N.D. Cal. 2012)

Summary: The court first issued an adverse inference instruction against Samsung to address spoliation charges brought by Apple. In particular, the court faulted Samsung for failing to circulate a comprehensive litigation hold instruction when it first anticipated litigation. This eventually culminated in the loss of emails from several key Samsung custodians, inviting the court’s adverse inference sanction.

Ironically, however, Apple was subsequently sanctioned for failing to issue a proper hold notice. Just like Samsung, Apple failed to distribute a hold until several months after litigation was reasonably foreseeable. The tardy hold instruction, coupled with evidence suggesting that Apple employees were “encouraged to keep the size of their email accounts below certain limits,” ultimately led the court to conclude that Apple destroyed documents after its preservation duty ripened.

The Lesson for 2013: The Apple case underscores the importance of issuing a timely and comprehensive litigation hold notice. For organizations, this likely means identifying the key players and data sources that may have relevant information and then distributing an intelligible hold instruction. It may also require suspending aspects of information retention policies to preserve relevant ESI. By following these best practices, organizations can better avoid the sanctions bogeyman that haunts so many litigants in eDiscovery.

**Another Must-Read Case: Chin v. Port Authority of New York, 685 F.3d 135 (2nd Cir. 2012)

Judicial Approval of Predictive Coding

Case: Da Silva Moore v. Publicis Groupe, — F.R.D. — (S.D.N.Y. Feb. 24, 2012)

Summary: The court entered an order that turned out to be the first of its kind: approving the use of predictive coding technology in the discovery phase of litigation. That order was entered pursuant to the parties’ stipulation, which provided that defendant MSL Group could use predictive coding in connection with its obligation to produce relevant documents. Pursuant to that order, the parties methodically (yet at times acrimoniously) worked over several months to fine tune the originally developed protocol to better ensure the production of relevant documents by defendant MSL.

The Lesson for 2013: The court declared in its order that predictive coding “is an acceptable way to search for relevant ESI in appropriate cases.” Nevertheless, the court also made clear that this technology is not the exclusive method now for conducting document review. Instead, predictive coding should be viewed as one of many different types of tools that often can and should be used together.

**Another Must-Read Case: In Re: Actos (Pioglitazone) Prods. Liab. Litig. (W.D. La. July 10, 2012)

Proportionality and Cooperation are Inextricably Intertwined

Case: Pippins v. KPMG LLP, 279 F.R.D. 245 (S.D.N.Y. 2012)

Summary: The court ordered the defendant accounting firm (KPMG) to preserve thousands of employee hard drives. The firm had argued that the high cost of preserving the drives was disproportionate to the value of the ESI stored on the drives. Instead of preserving all of the drives, the firm hoped to maintain a reduced sample, asserting that the ESI on the sample drives would satisfy the evidentiary demands of the plaintiffs’ class action claims.

The court rejected the proportionality argument primarily because the firm refused to permit plaintiffs or the court to analyze the ESI found on the drives. Without any transparency into the contents of the drives, the court could not weigh the benefits of the discovery against the alleged burdens of preservation. The court was thus left to speculate about the nature of the ESI on the drives, reasoning that it went to the heart of plaintiffs’ class action claims. As the district court observed, the firm may very well have obtained the relief it requested had it engaged in “good faith negotiations” with the plaintiffs over the preservation of the drives.

The Lesson for 2013: The Pippins decision reinforces a common refrain that parties seeking the protection of proportionality principles must engage in reasonable, cooperative discovery conduct. Staking out uncooperative positions in the name of zealous advocacy stands in sharp contrast to proportionality standards and the cost cutting mandate of Rule 1. Moreover, such a tactic may very well foreclose proportionality considerations, just as it did in Pippins.

**Another Must-Read Case: Kleen Products LLC v. Packaging Corp. of America (N.D. Ill. Sept. 28, 2012)

Conclusion

There were any number of other significant cases from 2012 that could have made this list.  We invite you to share your favorites in the comments section or contact us directly with your feedback.

Breaking News: Recusal Motion in Da Silva Moore Case Denied

Thursday, November 8th, 2012

In what might be characterized as the most anticipated ruling in the eDiscovery world over the past several months, the district court in Da Silva Moore v. Publicis Groupe today denied the plaintiffs’ motion to recuse the Honorable Andrew Peck as the assigned magistrate to that action. In rejecting the plaintiffs’ recusal request, United States District Court Judge Andrew Carter held that “Judge Peck’s decision accepting computer-assisted review, reached upon consideration of the applicable law, was not influenced by bias, nor did it create any appearance of bias.”

Judge Carter’s decision is particularly significant as it leaves undisturbed Judge Peck’s orders regarding the use of predictive coding and his declaration that computer-assisted review in eDiscovery is “acceptable in appropriate cases.” Moreover, Judge Carter gave another judicial imprimatur to predictive coding with his determination that it “does not inherently favor one party over the other in this case.”

With today’s ruling, Judge Carter has perhaps finally brought to a close the contentious sideshow that nearly overshadowed the first known case involving the use of predictive coding in eDiscovery. With its potential to reduce the costs and delays associated with the review of ESI, predictive coding holds incredible promise for the future of eDiscovery.

New Gartner Report Spotlights Significance of Email Archiving for Defensible Deletion

Thursday, November 1st, 2012

Gartner recently released a report that spotlights the importance of using email archiving as part of an organization’s defensible deletion strategy. The report – Best Practices for Using Email Archiving to Eliminate PST and Mailbox Quota Headaches (Alan Dayley, September 21, 2012) – specifically focuses on the information retention and eDiscovery challenges associated with email storage on Microsoft Exchange and how email archiving software can help address these issues. As Gartner makes clear in its report, an archiving solution can provide genuine opportunities to reduce the costs and risks of email hoarding.

The Problem: PST Files

The primary challenge that many organizations are experiencing with Microsoft Exchange email is the unchecked growth of messages stored in portable storage tablet (PST) files. Used to bypass storage quotas on Exchange, PST files are problematic because they increase the costs and risks of eDiscovery while circumventing information retention policies.

That the unrestrained growth of PST files could create problems downstream for organizations should come as no surprise. Various court decisions have addressed this issue, with the DuPont v. Kolon Industries litigation foremost among them. In the DuPont case, a $919 million verdict and 20 year product injunction largely stemmed from the defendant’s inability to prevent the destruction of thousands pages of email formerly stored in PST files. That spoliation resulted in a negative inference instruction to the jury and the ensuing verdict against the defendant.

The Solution: Eradicate PSTs with the Help of Archiving Software and Retention Policies

To address the PST problem, Gartner suggests following a three-step process to help manage and then eradicate PSTs from the organization. This includes educating end users regarding both the perils of PSTs and the ease of access to email through archiving software. It also involves disabling the creation of new PSTs, a process that should ultimately culminate with the elimination of existing PSTs.

In connection with this process, Gartner suggests deployment of archiving software with a “PST management tool” to facilitate the eradication process. With the assistance of the archiving tool, existing PSTs can be discovered and migrated into the archive’s central data repository. Once there, email retention policies can begin to expire stale, useless and even harmful messages that were formerly outside the company’s information retention framework.

With respect to the development of retention policies, organizations should consider engaging in a cooperative internal process involving IT, compliance, legal and business units. These key stakeholders must be engaged and collaborate if a workable policies are to be created. The actual retention periods should take into account the types of email generated and received by an organization, along with the enterprise’s business, industry and litigation profile.

To ensure successful implementation of such retention policies and also address the problem of PSTs, an organization should explore whether an on premise or cloud archiving solution is a better fit for its environment. While each method has its advantages, Gartner advises organizations to consider whether certain key features are included with a particular offering:

Email classification. The archiving tool should allow your organization to classify and tag the emails in accordance with your retention policy definitions, including user-selected, user/group, or key-word tagging.

User access to archived email. The tool must also give end users appropriate and user-friendly access to their archived email, thus eliminating concerns over their inability to manage their email storage with PSTs.

Legal and information discovery capabilities. The search, indexing, and e-discovery capabilities of the archiving tool should also match your needs or enable integration into corporate e-discovery systems.

While perhaps not a panacea for the storage and eDiscovery problems associated with email, on premise or cloud archiving software should provide various benefits to organizations. Indeed, such technologies have the potential to help organizations store, manage and discover their email efficiently, cost effectively and in a defensible manner. Where properly deployed and fully implemented, organizations should be able to reduce the nettlesome costs and risks connected with email.

Federal Directive Hits Two Birds (RIM and eDiscovery) with One Stone

Thursday, October 18th, 2012

The eagerly awaited Directive from The Office of Management and Budget (OMB) and The National Archives and Records Administration (NARA) was released at the end of August. In an attempt to go behind the scenes, we’ve asked the Project Management Office (PMO) and the Chief Records Officer for the NARA to respond to a few key questions. 

We know that the Presidential Mandate was the impetus for the agency self-assessments that were submitted to NARA. Now that NARA and the OMB have distilled those reports, what are the biggest challenges on a go forward basis for the government regarding record keeping, information governance and eDiscovery?

“In each of those areas, the biggest challenge that can be identified is the rapid emergence and deployment of technology. Technology has changed the way Federal agencies carry out their missions and create the records required to document that activity. It has also changed the dynamics in records management. In the past, agencies would maintain central file rooms where records were stored and managed. Now, with distributed computing networks, records are likely to be in a multitude of electronic formats, on a variety of servers, and exist as multiple copies. Records management practices need to move forward to solve that challenge. If done right, good records management (especially of electronic records) can also be of great help in providing a solid foundation for applying best practices in other areas, including in eDiscovery, FOIA, as well as in all aspects of information governance.”    

What is the biggest action item from the Directive for agencies to take away?

“The Directive creates a framework for records management in the 21st century that emphasizes the primacy of electronic information and directs agencies to being transforming their current process to identify and capture electronic records. One milestone is that by 2016, agencies must be managing their email in an electronically accessible format (with tools that make this possible, not printing out emails to paper). Agencies should begin planning for the transition, where appropriate, from paper-based records management process to those that preserve records in an electronic format.

The Directive also calls on agencies to designate a Senior Agency Official (SAO) for Records Management by November 15, 2012. The SAO is intended to raise the profile of records management in an agency to ensure that each agency commits the resources necessary to carry out the rest of the goals in the Directive. A meeting of SAOs is to be held at the National Archives with the Archivist of the United States convening the meeting by the end of this year. Details about that meeting will be distributed by NARA soon.”

Does the Directive holistically address information governance for the agencies, or is it likely that agencies will continue to deploy different technology even within their own departments?

“In general, as long as agencies are properly managing their records, it does not matter what technologies they are using. However, one of the drivers behind the issuance of the Memorandum and the Directive was identifying ways in which agencies can reduce costs while still meeting all of their records management requirements. The Directive specifies actions (see A3, A4, A5, and B2) in which NARA and agencies can work together to identify effective solutions that can be shared.”

Finally, although FOIA requests have increased and the backlog has decreased, how will litigation and FOIA intersecting in the next say 5 years?  We know from the retracted decision in NDLON that metadata still remains an issue for the government…are we getting to a point where records created electronically will be able to be produced electronically as a matter of course for FOIA litigation/requests?

“In general, an important feature of the Directive is that the Federal government’s record information – most of which is in electronic format – stays in electronic format. Therefore, all of the inherent benefits will remain as well – i.e., metadata being retained, easier and speedier searches to locate records, and efficiencies in compilation, reproduction, transmission, and reduction in the cost of producing the requested information. This all would be expected to have an impact in improving the ability of federal agencies to respond to FOIA requests by producing records in electronic formats.”

Fun Fact- Is NARA really saving every tweet produced?

“Actually, the Library of Congress is the agency that is preserving Twitter. NARA is interested in only preserving those tweets that a) were made or received in the course of government business and b) appraised to have permanent value. We talked about this on our Records Express blog.”

“We think President Barack Obama said it best when he made the following comment on November 28, 2011:

“The current federal records management system is based on an outdated approach involving paper and filing cabinets. Today’s action will move the process into the digital age so the American public can have access to clear and accurate information about the decisions and actions of the Federal Government.” Paul Wester, Chief Records Officer at the National Archives, has stated that this Directive is very exciting for the Federal Records Management community.  In our lifetime none of us has experienced the attention to the challenges that we encounter every day in managing our records management programs like we are now. These are very exciting times to be a records manager in the Federal government. Full implementation of the Directive by the end of this decade will take a lot of hard work, but the government will be better off for doing this and we will be better able to serve the public.”

Special thanks to NARA for the ongoing dialogue that is key to transparent government and the effective practice of eDiscovery, Freedom Of Information Act requests, records management and thought leadership in the government sector. Stay tuned as we continue to cover these crucial issues for the government as they wrestle with important information governance challenges.