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eDiscovery Case Law: At The Eleventh Hour, Encrypted Hard Drive Is Decrypted
 

In our previous post regarding the case U.S. v. Fricosu, Colorado district judge Robert Blackburn ruled that a woman must produce an unencrypted version of her Toshiba laptop's hard drive to prosecutors in a mortgage fraud case for police inspection.  The woman, Ramona Fricosu, had argued that the Fifth Amendment's privilege against self-incrimination protected her from having to disclose the password to her hard drive, which was encrypted using PGP Desktop and seized when investigators served a search warrant on her home.

In providing his ruling, Judge Blackburn referenced In re Grand Jury Subpoena to Boucher in which a password protected laptop was seized. After an initial magistrate judge ruling finding that the defendant could not be compelled to reveal the contents of his mind (via the password), the grand jury requested (which a Vermont District judge granted) to require the defendant to produce, not the password itself, but rather an unencrypted version of the drive.

While Judge Blackburn ruled that Fricosu was required to provide the government in this case with an unencrypted copy of the Toshiba laptop computer’s hard drive, he also ruled that the government would be “precluded from using Ms. Fricosu’s act of production of the unencrypted contents of the computer’s hard drive against her in any prosecution”.

Still, the defendant appealed.  On February 21st, the 10th U.S. Circuit Court of Appeals refused to get involved, saying Ramona Fricosu's case must first be resolved in District Court before her attorney can appeal.  She would have been required to turn over the unencrypted contents of the drive as of March 1.

However, at the last minute, Colorado federal authorities decrypted the laptop.  “They must have used or found successful one of the passwords the co-defendant (Scott Whatcott) provided them,” Fricosu’s attorney, Philip Dubois, said in a telephone interview.  Dubois said the authorities delivered to him a copy of the information they discovered on the drive, but he said he had not examined it.

So, what do you think?  Will disclosure of the password preclude a later appeal?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Trends: Brian Schrader of Business Intelligence Associates (BIA)
 

This is the fifth of the 2012 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscoveryDaily interviewed several thought leaders at LTNY this year and generally asked each of them the following questions:

  1. What do you consider to be the emerging trends in eDiscovery that will have the greatest impact in 2012?
  2. Which trend(s), if any, haven’t emerged to this point like you thought they would?
  3. What are your general observations about LTNY this year and how it fits into emerging trends?
  4. What are you working on that you’d like our readers to know about?

Today’s thought leader is Brian Schrader. Brian is Co-Founder and President of Business Intelligence Associates, Inc. (BIA).  Brian is an expert and frequent writer and speaker on eDiscovery and computer forensics topics, particularly those addressing the collection, preservation and processing functions of the eDiscovery process.

What do you consider to be the emerging trends in eDiscovery that will have the greatest impact in 2012?

Well, I think you don't have to walk around the floor very much to see that this year everybody is talking about predictive coding.  I think you're going to see that shake out a lot over the next year.  We've been doing predictive coding for about a year and a half now, and we have our own algorithms for that.  We have our review teams, and they've been using our algorithms to do predictive coding.  We like to call it “suggestive coding”.

What I expect you’ll find this year is a standard shakeout among providers because everybody talks about predictive coding.  The question is how does everybody approach it?  It's very much a black-box solution.  Most people don't know what goes on inside that process and how the process works.  So, I think that's going to be a hot topic for a while.  We're doing a lot of predictive coding and BIA is going to be announcing some cool things later this year on our predictive coding offerings.

Every provider that you talk to seems to have a predictive coding solution.  I'm really looking forward to seeing how things develop, because we have a lot of input on it and a lot of experience.  We have our review team that is reviewing millions and millions of documents per year, so we can compare various predictive coding engines to real results.  It gives us the ability to review the technology.  We look forward to being part of that conversation and I hope to see a little bit more clarity from the players and some real standards set around that process.

The courts have now also started to look at these algorithmic methods, Judge Peck in particular.  Everybody agrees that key word searching is inadequate.  But, people are still tentative about it – they say “it sounds good, but how does it work?  How are we going to approach it?”

Which trend(s), if any, haven’t emerged to this point like you thought they would?

Frankly, I thought we'd see a lot more competition for us in data collection.  A huge pain point for companies is how to gather all their data from all over the world.  It's something we've always focused on.  I started to see some providers focus on that, but now it looks like everybody, even some of the classic data collection providers, are focusing more on review tools.  That surprises me a bit, though I'm happy to be left with a wide-open field to have more exposure there.

When we first came out with TotalDiscovery.com last year, we thought we'd see all sorts of similar solutions pop up out there, but we just haven't.  Even the traditional collection companies haven't really offered a similar solution.  Perhaps it’s because everybody has a “laser focus” on predictive coding, since document review is so much more expensive.  I think that has really overpowered the focus of a lot of providers as they've focused only on that.  We have tried to focus on both collection and review.

I think data processing has become a commodity.  In talking to customers, they don't really ask about it anymore.  They all expect that everybody has the same base level capabilities.  Everybody knows that McDonald's secret sauce is basically Thousand Island dressing, so it’s no longer unique, the “jig is up”.  So, it's all about the ends, the collection, and the review.

What are your general observations about LTNY this year and how it fits into emerging trends?

Well, predictive coding again.  I think there's an awful lot of talk but not enough detail.  What you're seeing is a lot of providers who are saying “we’ll have predictive coding in six months”.  You're going to see a huge number of players in that field this year.  Everybody's going to throw a hat in the ring, and it's going to be interesting to see how that all works out.  Because how do you set the standards?  Who gets up there and really cooperates? 

I think it's really up to the individual companies to get together and cooperate on this. This particular field is so critical to the legal process that I don't think you can have everybody having individual standards and processes.  The most successful companies are going to be the ones that step up and work together to set those standards.  And, I don't know for sure, but I wouldn't be surprised if The Sedona Conference already has a subcommittee on this topic.

What are you working on that you’d like our readers to know about?

Our biggest announcement is around data collection – we've vastly expanded it.  Our motto is to collect “any data, anytime, anywhere”.  We've been providing data collection services for over a decade, and our collection guys like to say they've never met a piece of data they didn't like.

Now, we've brought that data collection capability direction to TotalDiscovery.com.  The latest upgrade, which we’re previewing at the show to be released in March, will offer the ability to collect data from social media sites like Facebook, Twitter, as well as collections from Webmail and Apple systems.  So, you can collect pretty much anything through TotalDiscovery.com that we have historically offered in our services division. It gives you a single place to manage data collection and bring it all together in one place, and then deliver it out to the review platform you want.

We’re on a three-week development cycle, which doesn’t always mean new features every three weeks, but it does mean we’re regularly adding new features.  Mid-year in 2011, we added legal hold capabilities and we’ve also recently added other components to simplify search and data delivery.  Now, we’ve added expanded collection for social media sites, Webmail and Apple.  Later this year, we expect to release our predictive coding capabilities to enable clients to perform predictive coding right after collection instead of waiting until the data is in the review tool.

Thanks, Brian, for participating in the interview!

And to the readers, as always, please share any comments you might have or if you’d like to know more about a particular topic!

eDiscovery Case Law: Court Rules Exact Search Terms Are Limited
 

In Custom Hardware Eng’g & Consulting v. Dowell, 2012 U.S. Dist. LEXIS 146, 7-8 (E.D. Mo. Jan. 3, 2012), the plaintiff and defendant could not agree on search terms to be used for discovery on defendant’s forensically imaged computers.  The court directed each party to submit a proposed list of search terms and indicated that each party would be permitted to file objections to the opposing party's proposed list.  After reviewing the proposals, and the defendant’s objections to the plaintiff’s proposed list, the court ruled that the defendant’s proposed list was “problematic and inappropriate” and that their objections to the plaintiff’s proposed terms were “without merit” and ruled for use of the plaintiff’s search terms in discovery.

Plaintiff alleged the defendants formed a competing company by “illegally accessing, copying, and using Plaintiff's computer software and data programming source code systems” and sued defendants for copyright infringement, trade secret misappropriation, breach of contract and other claims.  The court ordered discovery of ESI on defendants' computers through use of a forensic process to recover and then search the ESI.  In July 2011, the plaintiffs provided a request for production to defendants that requested “any and all documents which contain, describe, and/or relate in any manner to any of the words, phrases and acronyms, or derivatives thereof, contained in the list [provided], irrespective of whether exact capitalization, alternative spelling, or any other grammatical standard was used.”  The defendants submitted their own proposed list, which “excludes irrelevant information by requiring precise matches between search terms and ESI”.

Referencing Victor Stanley (previous blog posts regarding that case here, here, here and here), Missouri District Court Judge Richard Webber noted in his ruling that “While keyword searches have long been recognized as appropriate and helpful for ESI search and retrieval, there are well-known limitations and risks associated with them.”  Quoting from The Sedona Conference Best Practices Commentary on the Use of Search & Information Retrieval Methods in E-Discovery, the court noted that keyword searches “capture many documents irrelevant to the user's query…but at the same time exclude common or inadvertently misspelled instances” of the search terms.

The defendant issued three objections to the plaintiff’s terms, which the court addressed as follows:

  • Plaintiffs’ Terms would Include an Unreasonable Number of Irrelevant Results: Assuming that the argument was based on a contention by the defendants that the discovery would be overly burdensome, the court noted that the “burden or expense of conducting such a search must be low, and Defendants have presented the Court with no evidence that suggests otherwise.”
  • Plaintiffs' Terms would Produce Privileged Results: The Court noted that a producing party can create a privilege log to exclude documents that would otherwise fit the search term results.
  • Some of Plaintiffs' terms will Encompass Only Irrelevant Information: Noting that the defendants' “objection is a conclusory statement, stated without any argumentation or other support”, the Court found that a search of these terms may produce "matter that is relevant to any party's claim or defense”.

The Court also found that the defendants' proposed list would be “problematic and inappropriate” and “would fail to produce discoverable ESI simply because of an inexact match in capitalization or phrasing between a search term and the ESI” and rejected that list, ordering use of the plaintiff’s list for searching.

So, what do you think?  Was that the right call, or was the plaintiff’s request overbroad?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Best Practices: Preparing Your 30(b)(6) Witnesses
 

When it comes to questions and potential issues that the receiving party may have about the discovery process of the producing party, one of the most common and direct methods for conducting “discovery about the discovery” is a deposition under Federal Rule 30(b)(6). This rule enables a party to serve a deposition notice on the entity involved in the litigation rather than an individual. The notice identifies the topics to be covered in the deposition, and the entity being deposed must designate one or more people qualified to answer questions on the identified topics.

While those designated to testify may not necessarily have day-to-day responsibility related to the identified topics, they must be educated enough in those issues to sufficiently address them during the testimony. Serving a deposition notice on the entity under Federal Rule 30(b)(6) saves the deposing party from having to identify specific individual(s) to depose while still enabling the topics to be fully explored in a single deposition.

Topics to be covered in a 30(b)(6) deposition can vary widely, depending on the facts and circumstances of the case. However, there are some typical topics that the deponent(s) should be prepared to address.

Legal Hold Process: Perhaps the most common area of focus in a 30(b)(6) deposition is the legal hold process as spoliation of data can occur when the legal hold process is unsound and data spoliation is the most common cause of sanctions resulting from the eDiscovery process.  Issues to address include:

  • General description of the legal hold process including all details of that policy and specific steps that were taken in this case to effectuate a hold.
  • Timing of issuing the legal hold and to whom it was issued.
  • Substance of the legal hold communication (if the communication is not considered privileged).
  • Process for selecting sources for legal hold, identification of sources that were eliminated from legal hold, and a description of the rationale behind those decisions.
  • Tracking and follow-up with the legal hold sources to ensure understanding and compliance with the hold process.
  • Whether there are any processes in place in the company to automatically delete data and, if so, what steps were taken to disable them and when were those steps taken?

Collection Process: Logically, the next eDiscovery step discussed in the 30(b)(6) deposition is the process for collecting preserved data:

  • Method of collecting ESI for review, including whether the method preserved all relevant metadata intact.
  • Chain of custody tracking from origination to destination.

Searching and Culling: Once the ESI is collected, the methods for conducting searches and culling the collection down for review must be discussed:

  • Method used to cull the ESI prior to review, including the tools used, the search criteria for inclusion in review and how the search criteria was developed (including potential use of subject matter experts to flush out search terms).
  • Process for testing and refining search terms used.

Review Process: The 30(b)(6) witness(es) should be prepared to fully describe the review process, including:

  • Methods to conduct review of the ESI including review application(s) used and workflow associated with the review process.
  • Use of technology to assist with the review, such as clustering, predictive coding, duplicate and near-duplicate identification.
  • To the extent the process can be described, methodology for identifying and documenting privileged ESI on the privilege log (this methodology may be important if the producing party may request to “claw back” any inadvertently produced privileged ESI).
  • Personnel employed to conduct ESI review, including their qualifications, experience, and training.

Production Process: Information regarding the production process, including:

  • Methodology for organizing and verifying the production, including confirmation of file counts and spot QC checks of produced files for content.
  • The total volume of ESI collected, reviewed, and produced.

Depending on the specifics of the case and discovery efforts, there may be further topics to be addressed to ensure that the producing party has met its preservation and discovery obligations.

So, what do you think?  Have you had to prepare 30(b)(6) witnesses for deposition?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Case Law: Fifth Amendment Doesn’t Extend to Encrypted Hard Drives – Or Does It?
 

In the case U.S. v. Fricosu, Colorado district judge Robert Blackburn has ruled that a woman must produce an unencrypted version of her Toshiba laptop's hard drive to prosecutors in a mortgage fraud case for police inspection.  The woman, Ramona Fricosu, had argued that the Fifth Amendment's privilege against self-incrimination protected her from having to disclose the password to her hard drive, which was encrypted using PGP Desktop and seized when investigators served a search warrant on her home.

The day the search warrant was carried, Fricosu spoke with her imprisoned ex-husband Scott (indicted with Fricosu in the case) by phone. The conversation was recorded, and Fricosu implied that relevant information could be found on the encrypted laptop:

Scott: (SC [simultaneous conversation]) oh yeah that’s right it was on your laptop wasn’t it

Ramona: I think so but I’m not sure

Scott: OK

Ramona: yeah cause they kept asking me for passwords and I said, ya know no I just didn’t answer them

Scott: right (SC). Because when you went there you took your laptop

Ramona: yeah I think so I think I did

Scott: and so (SC) it would been on there

Ramona: yeah

Scott: OK

Ramona: and my lawyer said I’m not obligated by law to give them any passwords or anything they need to figure things out for themselves

Based on this conversation, the government sought a warrant under the “All Writs Act, 28 U.S.C. § 1651, requiring Ms. Fricosu to produce the unencrypted contents of the computer.”  Fricosu declined, “asserting her privilege against self-incrimination under the Fifth Amendment”.

In providing his ruling, Judge Blackburn referenced In re Grand Jury Subpoena to Boucher in which child pornography was identified on the defendant's laptop during a border search in Vermont. When the laptop was later seized, it was determined to be password protected. A magistrate judge initially sided with the defendant finding that he could not be compelled to reveal the contents of his mind, which is what the act of producing the password would be.  Revising the grand jury’s request to require the defendant to produce, not the password itself, but rather an unencrypted version of the drive, a Vermont District judge granted that request.

With that case as precedent, Judge Blackburn ruled that Fricosu was required to provide the government in this case with an unencrypted copy of the Toshiba laptop computer’s hard drive.  However, Judge Blackburn also ruled that the government would be “precluded from using Ms. Fricosu’s act of production of the unencrypted contents of the computer’s hard drive against her in any prosecution”.

Fricosu’s attorney has indicated he plans to appeal the ruling and noted that his client may not even be able to decrypt the hard drive, stating “If that's the case, then we'll report that fact to the court, and the law is fairly clear that people cannot be punished for failure to do things they are unable to do”.

So, what do you think?  Should production of the hard drive have been compelled?  Does the preclusion from using evidence from the hard drive against her in prosecution address any Fifth Amendment concerns?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Social Tech eDiscovery: Facebook Law Enforcement Policies Revisited

One of the very first posts we published on this blog, over 16 months ago, was a post regarding Facebook’s Subpoena Policy, describing and providing a link to Facebook’s Law Enforcement page to request information from Facebook.  With numerous cases involving discovery of information on Facebook, (including this one, this one, this one, this one, this one and this one – all just in the past year), it seems appropriate to revisit this page to see if anything has changed.

The first thing that has changed is the link itself.  The old link we published 16 months ago no longer takes you to that page – it defaults to the general Facebook help page.  So, I had to “go hunting” for the new location for the law enforcement page.  It took a few tries, but I did finally find it here.  If you prefer your Facebook Law Enforcement information in downloadable document form, the link to the PDF is here.

The page has a lot more information than the old page.  Sections include:

  • US Legal Process Requirements: Notes that Facebook discloses account records solely in accordance with their terms of service and applicable law, including the federal Stored Communications Act (“SCA”), 18 U.S.C. Sections 2701-2712, which requires a valid subpoena, court order or search warrant to compel disclosure of Facebook content.
  • International Legal Process Requirements: A Mutual Legal Assistance Treaty request or letter rogatory may be required to compel the disclosure of the contents of an account.  More information found here.
  • Account Preservation: Link to form to request preservation of account records for up to 90 days pending receipt of formal legal requests.
  • Emergency Requests: Email address for a law enforcement official to obtain an emergency request form in cases “involving imminent harm”.
  • Child Safety Matters: What to do when requests relate to child exploitation or safety concerns.
  • Data Retention and Availability: Reiteration that Facebook does “not retain data for law enforcement purposes unless we receive a valid preservation request before a user has deleted that content from our service”, with links to 1) how a Facebook user can request their account to be permanently deleted (with no recovery), 2) Facebook’s Statement of Rights and Responsibilities and 3) Facebook’s Data Use Policy.
  • Form of Requests: Information required with requests for information, including 1) name of the issuing authority, badge/ID number of responsible agent, email address from a law-enforcement domain, and direct contact phone number; 2) email address, user ID number or username of the Facebook profile.
  • User Consent: Instructions for users who have consented to provide their own information to law enforcement officials using Facebook’s Download Your Information feature (previously featured on this blog here).
  • Notification: What to do if officials believe that notification would jeopardize an investigation.
  • Testimony: Facebook’s declaration that they do not provide expert testimony support, but if “a special form of certification is required”, the requestor should attach it to the records request.
  • Cost Reimbursement: Facebook’s statement that they “may seek reimbursement for costs in responding to requests for information as provided by law”, without specifying what those costs might be (which is different than the specific costs stated in the previous page).
  • Contact Information: To submit records requests via email, snail mail or fax – but only if you’re a law enforcement officer.

So, what do you think?  Have you needed to request information from Facebook for litigation purposes?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Trends: Our 2012 Predictions
 

Yesterday, we evaluated what others are saying and noted popular eDiscovery prediction trends for the coming year.  It’s interesting to identify common trends among the prognosticators and also the unique predictions as well.

But we promised our own predictions for today, so here they are.  One of the nice things about writing and editing a daily eDiscovery blog is that it forces you to stay abreast of what’s going on in the industry.  Based on the numerous stories we’ve read (many of which we’ve also written about), and in David Letterman “Top 10” fashion, here are our eDiscovery predictions for 2012:

  • Still More ESI in the Cloud: Frankly, this is like predicting “the Sun will be hot in 2012”.  Given the predictions in cloud growth by Forrester and Gartner, it seems inevitable that organizations will continue to migrate more data and applications to “the cloud”.  Even if some organizations continue to resist the cloud movement, those organizations still have to address the continued growth in usage of social media sites in business (which, last I checked, are based in the cloud).  It’s inevitable.
  • More eDiscovery Technology in the Cloud As Well: We will continue to see more cloud offerings for eDiscovery technology, ranging from information governance to preservation and collection to review and production.  With the need for corporations to share potentially responsive ESI with one or more outside counsel firms, experts and even opposing counsel, cloud based Software-as-a-Service (SaaS) applications are a logical choice for sharing that information effortlessly without having to buy software, hardware and provide infrastructure to do so.  Every year at LegalTech, there seems to be a few more eDiscovery cloud providers and this year should be no different.
  • Self-Service in the Cloud: So, organizations are seeing the benefits of the cloud not only for storing ESI, but also managing it during Discovery.  It’s the cost effective alternative.  But, organizations are demanding the control of a desktop application within their eDiscovery applications.  The ability to load your own data, add your own users and maintain their rights, create your own data fields are just a few of the capabilities that organizations expect to be able to do themselves.  And, more providers are responding to those needs.  That trend will continue this year.
  • Technology Assisted Review: This was the most popular prediction among the pundits we reviewed.  The amount of data in the world continues to explode, as there were 988 exabytes in the whole world as of 2010 and Cisco predicts that IP traffic over data networks will reach 4.8 zettabytes (each zettabyte is 1,000 exabytes) by 2015.  More than five times the data in five years.  Even in the smaller cases, there’s simply too much data to not use technology to get through it all.  Whether it’s predictive coding, conceptual clustering or some other technology, it’s required to enable attorneys manage the review more effectively and efficiently.
  • Greater Adoption of eDiscovery Technology for Smaller Cases: As each gigabyte of data is between 50,000 and 100,000 pages, a “small” case of 4 GB (or two max size PST files in Outlook® 2003) can still be 300,000 pages or more.  As “small” cases are no longer that small, attorneys are forced to embrace eDiscovery technology for the smaller cases as well.  And, eDiscovery providers are taking note.
  • Continued Focus on International eDiscovery:  So, cases are larger and there’s more data in the cloud, which leads to more cases where Discovery of ESI internationally becomes an issue.  The Sedona Conference® just issued in December the Public Comment Version of The Sedona Conference® International Principles on Discovery, Disclosure & Data Protection: Best Practices, Recommendations & Principles for Addressing the Preservation & Discovery of Protected Data in U.S. Litigation, illustrating how important an issue this is becoming for eDiscovery.
  • Prevailing Parties Awarded eDiscovery Costs: Shifting to the courtroom, we have started to see more cases where the prevailing party is awarded their eDiscovery costs as part of their award.  As organizations have pushed for more proportionality in the Discovery process, courts have taken it upon themselves to impose that proportionality through taxing the “losers” for reimbursement of costs, causing prevailing defendants to say: “Sue me and lose?  Pay my costs!”.
  • Continued Efforts and Progress on Rules Changes: Speaking of proportionality, there will be continued efforts and progress on changes to the Federal Rules of Civil Procedure as organizations push for clarity on preservation and other obligations to attempt to bring spiraling eDiscovery costs under control.  It will take time, but progress will be made toward that goal this year.
  • Greater Price/Cost Control Pressure on eDiscovery Services: In the meantime, while waiting for legislative relief, organizations will expect the cost for eDiscovery services to be more affordable and predictable.  In order to accommodate larger amounts of data, eDiscovery providers will need to offer simplified and attractive pricing alternatives.
  • Big Player Consolidation Continues, But Plenty of Smaller Players Available: In 2011, we saw HP acquire Autonomy and Symantec acquire Clearwell, continuing a trend of acquisitions of the “big players” in the industry.  This trend will continue, but there is still plenty of room for the “little guy” as smaller providers have been pooling resources to compete, creating an interesting dichotomy in the industry of few big and many small providers in eDiscovery.

So, what do you think?  Care to offer your own predictions?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Trends: 2012 Predictions – By The Numbers

With a nod to Nick Bakay, “It’s all so simple when you break things down scientifically.”

The late December/early January time frame is always when various people in eDiscovery make their annual predictions as to what trends to expect in the coming year.  I know what you’re thinking – “oh no, not another set of eDiscovery predictions!”  However, at eDiscovery Daily, we do things a little bit differently.  We like to take a look at other predictions and see if we can spot some common trends among those before offering some of our own (consider it the ultimate “cheat sheet”).  So, as I did last year, I went “googling” for 2012 eDiscovery predictions, and organized the predictions into common themes.  I found eDiscovery predictions here, here, here, here, here, here and Applied Discovery.  Oh, and also here, here and here.  Ten sets of predictions in all!  Whew!

A couple of quick comments: 1) Not all of these are from the original sources, but the links above attribute the original sources when they are re-prints.  If I have failed to accurately attribute the original source for a set of predictions, please feel free to comment.  2) This is probably not an exhaustive list of predictions (I have other duties in my “day job”, so I couldn’t search forever), so I apologize if I’ve left anybody’s published predictions out.  Again, feel free to comment if you’re aware of other predictions.

Here are some of the common themes:

  • Technology Assisted Review: Nine out of ten “prognosticators” (up from 2 out of 7 last year) predicted a greater emphasis/adoption of technological approaches.  While some equate technology assisted review with predictive coding, other technology approaches such as conceptual clustering are also increasing in popularity.  Clearly, as the amount of data associated with the typical litigation rises dramatically, technology is playing a greater role to enable attorneys manage the review more effectively and efficiently.
  • eDiscovery Best Practices Combining People and Technology: Seven out of ten “augurs” also had predictions related to various themes associated with eDiscovery best practices, especially processes that combine people and technology.  Some have categorized it as a “maturation” of the eDiscovery process, with corporations becoming smarter about eDiscovery and integrating it into core business practices.  We’ve had numerous posts regarding to eDiscovery best practices in the past year, click here for a selection of them.
  • Social Media Discovery: Six “pundits” forecasted a continued growth in sources and issues related to social media discovery.  Bet you didn’t see that one coming!  For a look back at cases from 2011 dealing with social media issues, click here.
  • Information Governance: Five “soothsayers” presaged various themes related to the promotion of information governance practices and programs, ranging from a simple “no more data hoarding” to an “emergence of Information Management platforms”.  For our posts related to Information Governance and management issues, click here.
  • Cloud Computing: Five “mediums” (but are they happy mediums?) predict that ESI and eDiscovery will continue to move to the cloud.  Frankly, given the predictions in cloud growth by Forrester and Gartner, I’m surprised that there were only five predictions.  Perhaps predicting growth of the cloud has become “old hat”.
  • Focus on eDiscovery Rules / Court Guidance: Four “prophets” (yes, I still have my thesaurus!) expect courts to provide greater guidance on eDiscovery best practices in the coming year via a combination of case law and pilot programs/model orders to establish expectations up front.
  • Complex Data Collection: Four “psychics” also predicted that data collection will continue to become more complex as data sources abound, the custodian-based collection model comes under stress and self-collection gives way to more automated techniques.

The “others receiving votes” category (three predicting each of these) included cost shifting and increased awards of eDiscovery costs to the prevailing party in litigation, flexible eDiscovery pricing and predictable or reduced costs, continued focus on international discovery and continued debate on potential new eDiscovery rules.  Two each predicted continued consolidation of eDiscovery providers, de-emphasis on use of backup tapes, de-emphasis on use of eMail, multi-matter eDiscovery management (to leverage knowledge gained in previous cases), risk assessment /statistical analysis and more single platform solutions.  And, one predicted more action on eDiscovery certifications.

Some interesting predictions.  Tune in tomorrow for ours!

So, what do you think?  Care to offer your own “hunches” from your crystal ball?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Year in Review: eDiscovery Case Law, Part 4
 

As we noted the past three days, eDiscovery Daily has published 65 posts related to eDiscovery case decisions and activities over the past year, covering 50 unique cases!  Yesterday, we looked back at cases related to discovery of social media.  One final set of cases to review.

We grouped those cases into common subject themes and have been reviewing them over the next few posts.  Perhaps you missed some of these?  Now is your chance to catch up!

SANCTIONS / SPOLIATION

Behold the king!  I’ll bet that you won’t be surprised that the topic with the largest number of case law decisions (by far!) related to eDiscovery are those related to sanctions and spoliation issues.  Late in 2010, eDiscovery Daily reported on a Duke Law Journal article that indicated back then that sanctions were at an all-time high and the number of cases with sanction awards remains high.

Of the 50 cases we covered this past year, over a third of them (17 total cases) related to sanctions and spoliation issues.  Here they are.  And, as you’ll see by the first case (and a few others), sanctions requested are not always granted.  Then again, sometimes both sides get sanctioned!

No Sanctions for Scrubbing Computers Assumed to be Imaged.  In this case, data relevant to the case was lost when computers were scrubbed and sold by the defendants with the permission of the court-appointed Receiver, based on the Receiver’s mistaken belief that all relevant computers had been imaged and instruction to the defendants to scrub all computers before selling.  Because of the loss of this data, defendants filed a motion for spoliation sanctions for what they described as “the FTC’s bad-faith destruction of Defendants’ computer systems.”  Was the motion granted?

Spoliate Evidence, Don’t Go to Jail, but Pay a Million Dollars.  Defendant Mark Pappas, President of Creative Pipe, Inc., was ordered by Magistrate Judge Paul W. Grimm to "be imprisoned for a period not to exceed two years, unless and until he pays to Plaintiff the attorney's fees and costs". However, ruling on the defendants’ appeal, District Court Judge Marvin J. Garbis declined to adopt the order regarding incarceration, stating it was not "appropriate to Order Defendant Pappas incarcerated for future possible failure to comply with his obligation to make payment…". So, how much was he ordered to pay?  Now we know.  That decision was affirmed here.

Deliberately Produce Wrong Cell Phone, Get Sanctioned.  In this case, the plaintiff originally resisted production of a laptop and a cell phone for examination, but ultimately produced a laptop and cell phone. The problem with that production? After examination, it was determined that neither device was in use during the relevant time period and the actual devices used during that time frame were no longer in plaintiff’s possession. When requested to explain as to why this was not disclosed initially, the plaintiff’s attorney explained that he was torn between his “competing duties” of protecting his client and candor to the court.  Really?

Destroy Data, Pay $1 Million, Lose Case.  A federal judge in Chicago has levied sanctions against Rosenthal Collins Group LLC and granted a default judgment to the defendant for misconduct in a patent infringement case, also ordering the Chicago-based futures broker's counsel to pay "the costs and attorneys fees incurred in litigating this motion" where plaintiff’s agent modified metadata related to relevant source code and wiped several relevant disks and devices prior to their production and where the court found counsel participated in "presenting misleading, false information, materially altered evidence and willful non-compliance with the Court’s orders."

Conclusion of Case Does Not Preclude Later Sanctions.  In this products liability case that had been settled a year earlier, the plaintiff sought to re-open the case and requested sanctions alleging the defendant systematically destroyed evidence, failed to produce relevant documents and committed other discovery violations in bad faith. As Yogi Berra would say, “It ain’t over ‘til it’s over”.

Written Litigation Hold Notice Not Required.  The Pension Committee case was one of the most important cases of 2010 (or any year, for that matter). So, perhaps it’s not surprising that it is starting to become frequently cited by those looking for sanction for failure to issue a written litigation hold. In this case, the defendant cited Pension Committee, arguing that plaintiff’s failure to issue a written litigation hold and subsequent failure to produce three allegedly relevant emails allowed for a presumption that relevant evidence was lost, thereby warranting spoliation sanctions.  Was the court’s ruling consistent with Pension Committee?

No Sanctions Ordered for Failure to Preserve Backups.  A sanctions motion has been dismissed by the U.S. District Court of Texas in a recent case involving electronic backups and email records, on the grounds that there was no duty to preserve backup tapes and no bad faith in overwriting records.

Discovery Violations Result in Sanctions Against Plaintiff and Counsel.  Both the plaintiff and plaintiff's counsel have been ordered to pay sanctions for discovery abuses in a lawsuit in Washington court that was dismissed with prejudice on June 8, 2011.

Meet and Confer is Too Late for Preservation Hold.  A US District court in Indiana ruled on June 28 in favor of a motion for an Order to Secure Evidence in an employment discrimination lawsuit. The defendant had given the plaintiff reason to believe that emails and other relevant documents might be destroyed prior to Rule 26(f) meeting between the parties or Rule 16(b) discovery conference with the court. As a result, the plaintiff formally requested a litigation hold on all potentially relevant documents, which was approved by US Magistrate Judge Andrew Rodovich.

Court Orders Sanctions in Response to "Callous and Careless Attitude" of Defendant in Discovery.  A Special Master determined that multiple discovery failures on the part of the defendant in an indemnity action were due to discovery procedures "wholly devoid of competence, yet only once motivated by guile". Accordingly, the court ordered sanctions against the defendant and also ordered the defendant to pay all costs associated with its discovery failures, including plaintiff's attorney fees and costs.

Court Upholds Sanctions for Intentional Spoliation of Unallocated Space Data.  The Supreme Court of Delaware recently upheld the sanctions against the defendant for wiping the unallocated space on his company’s computer system, despite a court order prohibiting such destruction. In this case, Arie Genger, CEO of Trans-Resources, Inc., argued that sanctions against him were unreasonable and made a motion for the court to overturn its previous decision regarding spoliation of discovery materials. Instead, after due process, the court upheld its earlier decision.

Sanctions for Spoliation, Even When Much of the Data Was Restored.  A Virginia court recently ordered sanctions against the defendant in a case of deliberate spoliation of electronic discovery documents. In this case, the defendant was found to have committed spoliation "in bad faith" in a manner that constituted a "violation of duty… to the Court and the judicial process."

"Untimely" Motion for Sanctions for Spoliation Denied.  A recent ruling by the US District Court of Tennessee has denied a motion for sanctions for spoliation on the grounds that the motion was "untimely." In this case, the plaintiff argued that the defendants' admitted failure to preserve evidence "warrants a harsh penalty," but the court found in favor of the defense that the motion was untimely.

Defendant Sanctioned for Abandonment and Sale of Server; Defendants' Counsel Unaware of Spoliation.  An Illinois District Court ordered heavy sanctions against the defense for spoliation "willfully and in bad faith" of documents stored on a server, in a case revolving around damages sought for breach of loan agreements.

Facebook Spoliation Significantly Mitigates Plaintiff’s Win.  In this case with both social media and spoliation issues, monetary sanctions were ordered against the plaintiff and his counsel for significant discovery violations. Those violations included intentional deletion of pictures on the plaintiff’s Facebook page as instructed by his Counsel as well as subsequent efforts to cover those instructions up, among others.

Lilly Fails to Meet its eDiscovery Burden, Sanctions Ordered.  In this case, a Tennessee District court found that “Lilly failed to take reasonable steps to preserve, search for, and collect potentially relevant information, particularly electronic data, after its duty to preserve evidence was triggered by being served with the complaint.” As a result, the court ordered sanctions against Lilly. How far did the court go with those sanctions?

Court Grants Adverse Inference Sanctions Against BOTH Sides.  Have you ever seen the video where two boxers knock each other out at the same time? That’s similar to what happened in this case. In this case, the court addressed the parties’ cross motions for sanctions, ordering an adverse inference for the defendants’ failure to preserve relevant video surveillance footage, as well as an adverse inference for the plaintiff’s failure to preserve relevant witness statements. The court also awarded defendants attorneys’ fees and costs and ordered re-deposition of several witnesses at the plaintiff’s expense due to other plaintiff spoliation findings.

Next week, we will begin looking ahead at 2012 and expected eDiscovery trends for the coming year.

So, what do you think?  Of all of the cases that we have recapped over the past four days, which case do you think was the most significant?  Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Case Law: Plaintiff Not Required to Review Millions of Pages of Unallocated Space
 

While plaintiff “should have known better than to agree to search terms” that arguably resulted in recovery from unallocated space files of 65 million pages of documents for plaintiff to review for privilege, a magistrate judge in I-Med Pharma, Inc. v. Biomatrix, Inc., No. 03-3677 (DRD), (D.N.J. Dec. 9, 2011) properly excused plaintiff from its stipulation to produce such documents after reviewing them for privilege.

Plaintiff alleged that defendants breached a distribution agreement relating to eye-drops after one of the defendants was acquired by another defendant. A stipulation among the parties provided for a keyword search by defendants’ expert of plaintiff’s computer network, servers, and related storage devices using English and French terms, including “claim”, “revenue*”, and “profit*”. The search resulted in over 64 million hits just in unallocated space of plaintiff’s computer systems.

District Judge Dickinson Debevoise affirmed a magistrate judge’s order excusing plaintiff from a privilege review of the estimated equivalent of 65 million documents in the unallocated space that contained an agreed search term. Judge Debevoise stated its concern over the cost of such a review:

“A privilege review of 65 million documents is no small undertaking. Even if junior attorneys are engaged, heavily discounted rates are negotiated, and all parties work diligently and efficiently, even a cursory review of that many documents will consume large amounts of attorney time and cost millions of dollars.”

Judge Debevoise rejected defendant’s suggestion that plaintiff could simply review documents with the word “privileged” and produce everything else:

“Even when dealing with intact files, potentially privileged information may often be found in emails, memoranda, presentations, or other documents that are not explicitly flagged as privileged or confidential. And since the data searched here is likely to contain fragmented or otherwise incomplete documents, it is entirely possible for privileged material to be found without its original identifying information.”

Defendants had not shown that relevant, non-duplicate information likely would be found in the unallocated space, according to the court. Thus, plaintiff should have known better than to agree on the search terms, but requiring a privilege review of the results would not be fair or just. Judge Debevoise added a list of factors that parties should consider in evaluating reasonableness of search terms:

“In evaluating whether a set of search terms are reasonable, a party should consider a variety of factors, including: (1) the scope of documents searched and whether the search is restricted to specific computers, file systems, or document custodians; (2) any date restrictions imposed on the search; (3) whether the search terms contain proper names, uncommon abbreviations, or other terms unlikely to occur in irrelevant documents; (4) whether operators such as "and", "not", or "near" are used to restrict the universe of possible results; (5) whether the number of results obtained could be practically reviewed given the economics of the case and the amount of money at issue.”

So, what do you think?  Did common sense prevail or should the plaintiff have been held to the agreement?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: Applied Discovery (free subscription required).

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.