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Electronic Discovery

Court Reduces, But Allows, Reimbursement of eDiscovery Costs – eDiscovery Case Law

In some cases, such as this case and this case, the prevailing party received reimbursement of eDiscovery costs, whereas in this case, this case and this case requests for reimbursement of costs was denied (or reversed) by the courts.  In this case, the prevailing party was awarded a reduced amount, but still received reimbursement of eDiscovery costs.

In Moore v. The Weinstein Company LLC, No. 3:09-cv-0166, 2012 U.S. Dist. (M.D. Tenn. Dec. 18, 2012), noting it had wide discretion to determine costs recoverable by a prevailing party under federal statutes providing for the taxation of costs, a court reduced costs awarded for eDiscovery expenditures based on its analysis of which costs were reasonable, necessary, and taxable.

In this case involving Samuel David Moore, professionally known as Legendary Soul Man Sam Moore, and others as plaintiffs, the defendants prevailed on a motion for summary judgment and subsequently filed a bill of costs. The plaintiffs, however, objected to the costs, and therefore U.S. Magistrate Judge Joe B. Brown (not to be confused with TV’s Judge Joe Brown) reviewed the case. One category of costs the plaintiffs objected to involved eDiscovery expenses.

The court noted that the defendants requested over $40,000 in costs for eDiscovery, approximately half of which was to compensate a third-party vendor for its services. Other costs were for expenses related to in-house eDiscovery work performed by defendants’ counsel Waller, Lansden, Dortch & Davis, LLP. The court also noted that the parties had agreed to the eDiscovery procedures they would use in their Case Management Order, and these processes included producing electronic data in a TIFF format.

Noting simply that precedent gives courts wide discretion in determining which costs are taxable, the court concluded that certain eDiscovery expenditures submitted by the defendants in their bill of costs were reasonably taxable and some were not:

The Magistrate Judge has reviewed these charges and believes some are unreasonable and should be reduced or eliminated. The Document Solutions charges are reasonable and necessary. Pursuant to the Case Management Order, costs for processing documents into specific formats were required to be borne by each party. Moreover, further processing that document for production by, for example, searching for specific custodians, is also a necessary cost of this litigation.

With respect to the in-house “Technology Services” charges, however, the Magistrate Judge is persuaded that the per hour charge of $150 is unreasonable. Document Solutions billed “tech time” at $175 per hour, which would presumably be significantly higher than the rates billed to Waller clients by Waller’s in-house technical staff. The Magistrate Judge believes that a rate comparable to an experienced paralegal would be more appropriate. The technology services technologists have specialized expertise and training similar to a paralegal. Therefore, the Magistrate Judge will set a more reasonable billing rate of $100/hour for Technology Services billing.

Additionally, the Magistrate Judge concluded that several other costs were “not properly taxed” to the plaintiffs, including costs for “[w]ork on discovery budget”; and “[p]reparation of deposition transcripts for review” and “[p]reparation of documents for hearing,” as they represented “paralegal work.” Finally, an entry for an attorney to “[p]repare for and attend [a] telephonic deposition of IT vendor” was deemed non-taxable by the court as it was “unnecessary.”

Accordingly, the court reduced the total taxable costs for eDiscovery to $36,196.90.

So, what do you think?  Should the costs have been reimbursed?  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).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

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.

Emails Between Husband and Wife Are Not Privileged, If Sent from Work Computer – eDiscovery Case Law

In United States v. Hamilton, No. 11-4847, 2012 U.S. App. (4th Cir. Dec. 13, 2012), the Fourth Circuit found that the district court had not abused its discretion in finding that e-mails between the defendant and his wife did not merit marital privilege protection because the defendant had used his office computer and his work e-mail account to send and receive the communications and because he had not taken steps to protect the e-mails in question, even after his employer instituted a policy permitting inspection of e-mails and he was on notice of the policy.

This appeal arose after a jury convicted Phillip A. Hamilton, who had been a state legislator, of bribery and extortion under color of official right for using his legislative position to obtain funding for a public university in exchange for employment at the university. Hamilton appealed on several bases, including that the district court had improperly determined that the marital privilege was waived for e-mails sent between Hamilton and his wife. The appeals court reviewed the district court’s determination using an abuse of discretion standard.

E-mails sent between Hamilton and his wife through his work e-mail account spoke of their financial difficulties, his plan to meet with officials at Old Dominion University (“ODU”) to attempt to secure employment, and the salary he hoped to secure. Other messages that Hamilton sent and received (also from his work e-mail) from ODU officials helped show an inextricable connection between his proposed employment with the school and his plan to secure funding for the school.

In reviewing the district court’s refusal to grant marital-privilege protection to e-mails between Hamilton and his wife, the court turned to the Supreme Court’s analysis of the marital privilege in Wolfle v. United States. In Wolfle, the Court pointed out, “‘Communications between . . . spouses, privately made, are generally assumed to have been intended to be confidential, and hence they are privileged.’” But, “‘voluntary disclosure’ of a communication waives the privilege.” The court analogized the circumstances here to the ones in Wolfle in which the Supreme Court deemed the marital privilege waived:

In Wolfle, the Court held that a defendant’s communication with his wife did not come “within the privilege because of [his] voluntary disclosure” of the communication “to a third person, his stenographer.” (citation omitted) The Court explained that, “[n]ormally husband and wife may conveniently communicate without stenographic aid, and the privilege of holding their confidences immune from proof in court may be reasonably enjoyed and preserved without embracing within it the testimony of third persons to whom such communications have been voluntarily revealed.” (citation omitted) Because “[t]he privilege suppresses relevant testimony,” it “should be allowed only when it is plain that marital confidence cannot otherwise reasonably be preserved,” and “[n]othing in this case suggests any such necessity.” (citation omitted)

Likewise, in Hamilton’s case, with e-mail as “the modern stenographer,” Hamilton waived the marital privilege when he used his work e-mail account on his office computer to communicate with his wife, although he was able to “‘conveniently communicate without’” doing so.

Moreover, the court found, Hamilton’s argument that at the time he sent the e-mails to his wife there was no employer-instituted computer usage policy was without merit. The court pointed out that by the time the investigation into Hamilton was underway, such a policy was in place, Hamilton had signed his agreement to it, and Hamilton reaffirmed acknowledgment of the policy “every time he logged onto his work computer” when he “press[ed] a key to proceed to the next step of the log-on process.” The district court found that these facts were sufficient to establish waiver of the marital privilege, and the appellate court agreed. (Nevertheless, the court appeared to say, even if Hamilton had had a reasonable expectation of privacy in his e-mails—before the employer enacted a policy regarding the e-mails, the prior Wolfle analysis precluded any privilege from attaching in these circumstances.)

The appellate court acknowledged the protection deservedly extended to certain marital communications, but ultimately it concluded that this case fell outside those bounds:

Hamilton himself contends that he did not waive the privilege because he “had no reason to believe, at the time he sent and received the e-mails, that they were not privileged,” and he could not waive his privilege retroactively. Amicus, the Electronic Privacy Information Center, adds that it seems “extreme” to “require an employee to scan all archived e-mails and remove any that are personal and confidential every time the workplace use policy changes,” when “employees may not even be aware that archived e-mails exist or know where to find them.” (citation omitted)

In an era in which e-mail plays a ubiquitous role in daily communications, these arguments caution against lightly finding waiver of marital privilege by e-mail usage. But the district court found that Hamilton did not take any steps to protect the e-mails in question, even after he was on notice of his employer’s policy permitting inspection of e-mails stored on the system at the employer’s discretion.

Accordingly, that one may generally have a reasonable expectation of privacy in e-mail, at least before a policy is in place indicating otherwise, does not end our inquiry.

So, what do you think?  Should the privilege have been waived?  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).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

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.

Chances Are that Delaware Has Been as Busy as Any State in eDiscovery – eDiscovery Trends

In December of 2011, as previously reported in eDiscoveryDaily, the U.S. District Court for the District of Delaware revised the “Default Standard for Discovery, Including Discovery of Electronically Stored Information (ESI)” to reflect changes in technology and to address concerns of attorneys regarding the discovery of ESI.  As of January 1, 2013, more changes are in effect in Delaware.

As announced in a press release on the Delaware State Courts web site, The Court of Chancery has amended its Rules regarding discovery, effective January 1, 2013.  Rules 26, 30, 34 and 45 have been updated to account for modern discovery demands and will bring the Court’s rules in line with current practice.  The amendments refer to discovery of “electronically stored information” (“ESI”) in addition to “documents” and “tangible things,” and explain how parties should respond to requests for ESI.  These changes are consistent with similar amendments to the Federal Rules of Civil Procedure.  Rule 26(c) also was revised to make clear that an out-of-state non-party from whom discovery is sought may move for a protective order in this state.  Thoughtfully, they used tracked changes to make it easy to see the revisions.  🙂

In addition to amendments to the Rules, the Court also expanded itsGuidelines for Practitioners, originally released in January 2012, to include guidelines regarding discovery.  These guidelines explain the Court’s expectations regarding parties’ responsibility to confer early and often regarding discovery, including expectations and guidelines regarding:

  • Electronic Discovery Procedures,
  • Overall Scope of Discovery,
  • Preferred Procedures for Collection and Review of Discoverable Material (including ESI),
  • Privilege Assertion Process, and
  • The Role of Delaware Counsel in the Discovery Process.

The Court also developed guidelines for expedited discovery in advance of a preliminary injunction hearing.

So, what do you think?  Where does your state stand with regard to rules changes to support discovery of ESI?  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.

$2.9 Billion? Gartner Predicts eDiscovery Software Market to Double by 2017 – eDiscovery Trends

As reported by Evan Koblentz in Law Technology News, electronic data discovery software sales reached $1.4 billion worldwide in 2012 and will reach $2.9 billion by 2017 according to Gartner Inc.  Their latest forecast for the eDiscovery industry is discussed in Forecast: Enterprise E-Discovery Software, Worldwide, 2012-2017, available here.

As noted in the summary to the report (not surprisingly), “[d]ouble-digit revenue growth is expected because of increased litigation and ever-expanding volumes of content and data that must be searched”.  Some notable statistics:

  • According to Gartner’s prediction, the eDiscovery software market is expected to grow by more than 15 percent annually over the next five years.  This is more than twice the growth rate for overall business software, which is growing at less than 7 percent annually.
  • Last year, Gartner forecasted $1.5 billion in eDiscovery software sales for 2013.  That figure has been raised to $1.67 billion in the latest report.
  • Part of the reason for increased growth is an increase in the international market.  According to Gartner’s evaluation of 2011 data, 82 percent of eDiscovery software revenue came from North America, 12 percent from Europe, the Middle East, and Africa, 5 percent from the Asia-Pacific region, and 1 percent from Latin America.  That’s a 5 percent rise in revenue in Europe, the Middle East, and Africa and a 3 percent rise in the Asia-Pacific region since 2008.

The report can be purchased here for $1,495.

Of course, the Gartner forecast is considerably different from this forecast from last August.

So, what do you think?  Do you think the Gartner forecast is reasonable, or perhaps possibly even too conservative?  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.

Defendant Had Duty to Preserve Despite No Physical Possession of Documents – eDiscovery Case Law

In Haskins v. First American Title Insurance Co., No. 10-5044 (RMB/JS), 2012 U.S. Dist. (D.N.J. Oct. 18, 2012), a court found that an insurance company had a duty to issue a litigation hold to its independent title agents because litigation was reasonably foreseeable and the duty to preserve extends to third parties, as long as the documents are “within a party’s possession, custody, or control.” Although it did not have physical possession, the insurance company controlled the agents’ documents because it had “‘the legal right or ability to obtain the documents from [the agents] upon demand.’”

Customers sued First American Title Insurance Company for its alleged scheme to overcharge for title insurance when they refinanced their residential mortgages. During discovery, the plaintiffs sought access to closing documents that were not physically held by First American but by its independent title agents. Because Rule 34(a) of the Federal Rules of Civil Procedure permits a requesting party to seek access only to documents that are within another party’s “possession, custody, or control,” the court considered whether that “control” extended to documents in the hands of the independent title agents.

First establishing that control exists when “a party ‘has the legal right or ability to obtain the documents from another source upon demand’” and that “a party is not required to have physical possession of documents for control to be present,” the court highlighted the specific language in contracts between First American and its independent title agents that conferred control upon the company: “make all Documentation available for inspection and examination by COMPANY at any reasonable time” and “permit First American to examine, audit and copy all financial information and records upon reasonable prior notice.”

That some of the contracts contained language indicating that the files were the agent’s property did not negate First American’s “continued right of access to and use of its agents’ files” or disrupt its control “of the files within the meaning of Rule 34.” Moreover, any attempted argument by First American that it could not “‘force’ its agents to comply” with the company’s production request would be without merit because “First American [could] claim that the agent breached its contract if the agent [did] not produce the requested files.”

Concluding that First American possessed control over the agents’ documents requested by the plaintiffs, the court considered next whether First American had a legal obligation to issue a litigation hold ordering its agents to preserve requested documents. Because the “duty to preserve documents arises when a party ‘knows or reasonably should know’ that litigation is foreseeable,” and because the duty extends even to third parties, as long as the documents are “within a party’s possession, custody, or control,” First American, which was already engaged in litigation with the plaintiffs, had a duty to issue the litigation hold to its independent title agents.

Therefore, the court ordered First American to (1) send requests for copies of closing documents to its independent title agents who had closing documents that the parties had agreed would be produced and (2) issue a litigation hold to its agents to preserve the documents requested by the plaintiffs.

So, what do you think?  Was the court correct to order First American to issue the hold?  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).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

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.

Sanctions for Violating Motion to Compel Production? Not Yet. – eDiscovery Case Law

In Fidelity National Title Insurance Co. v. Captiva Lake Investments, LLC, No. 4:10-CV-1890 (CEJ), 2012 U.S. Dist. (E.D. Mo. Nov. 16, 2012), where a party’s “conduct [did not] rise[ ] to the level of a willful violation of the order compelling production” because it was continually working toward the proper production of documents requested by its adversary, a court concluded that the adversary’s motion for sanctions was premature.

Involved in a declaratory judgment action related to policy coverage, Captiva Lake Investments asked insurer Fidelity National to produce the claims file and documents in its possession that were related to Fidelity’s “evaluation of coverage under the policy at issue.”

Fidelity responded but did not produce or include in its privilege log two categories of documents: the Major Claims Reports and data maintained in Fidelity’s Claims Processing System (“CPS”). When Captiva discovered this, it requested the data, but Fidelity merely produced an updated privilege log, claiming it could withhold the documents under privilege. Captiva filed a motion to compel, and the court granted it, ordering Fidelity to produce the information. Fidelity, however, still failed to produce only some of the requested data. Captiva then filed this motion for sanctions.

The court noted that under Rule 37 of the Federal Rules of Civil Procedure, “‘there must be an order compelling discovery, a willful violation of that order, and prejudice to the other party’” in order for the court to properly impose sanctions. Here, although Fidelity had produced only some of the information requested by Captiva, and although “the proceedings in this case present an extremely unflattering picture of Fidelity’s document and data management practices,” Fidelity was continuing to attempt to locate additional missing reports and was producing ones that it found; in addition, after producing some—but not complete—information from the CPS, Fidelity indicated to Captiva that it “‘was in contact with e-discovery specialists to figure out what else can be done with respect to the information in CPS.’”

Therefore, the court found that Fidelity’s failure to produce the data was not a willful violation of the order compelling production and denied Captiva’s motion for sanctions.

So, what do you think?  Should Fidelity have been sanctioned for failing to complete production?  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).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

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.

Problems with Review? It’s Not the End of the World – eDiscovery Best Practices

If you’re reading this, the Mayans were wrong… 🙂

If 2012 will be remembered for anything from an eDiscovery standpoint, it will be remembered for the arrival of Technology Assisted Review (TAR), aka Computer Assisted Review (CAR), as a court accepted method for conducting eDiscovery review.  Here are a few of the recent TAR cases reported on this blog.

Many associate TAR with predictive coding, but that’s not the only form of TAR to assist with review.  How the documents are organized for review can make a big difference in the efficiency of review, not only saving costs, but also improving accuracy by assigning similar documents to the same reviewer.  Organizing documents with similar content into “clusters” enables each reviewer to make quicker review decisions (for example, by looking at one document to determine responsiveness and applying the same categorization to duplicates or mere variations of that first document).  This also promotes consistency by enabling the same reviewer to review all similar documents in a cluster avoiding potential inadvertent disclosures where one reviewer marks a document as privileged while another reviewer fails to mark a copy of the that same document as such and that document gets produced.

Hot Neuron’s Clustify™ is an example of clustering software that examines the text in your documents, determines which documents are related to each other, and groups them into clusters, labeling each cluster with a set of keywords which provides a quick overview of the cluster, as well as a “representative document” against which all other documents in the cluster are compared.

Clustering can make review more efficient and effective for these types of documents:

  • Email Message Threads: The ability to group messages from a thread into a cluster enables the reviewer to quickly identify the email(s) containing the entire conversation, categorize those and either apply the same categorization to the rest or dismiss as duplicative (if so instructed).
  • Routine Reports: Periodic reports – such as a weekly accounts receivable report – that are generated can be grouped together in a cluster to enable a single reviewer to make a relevancy determination and quickly apply it to all documents in the cluster.
  • Versions of Documents: The content of each draft of a document is often similar to the previous version, so categorizing one version of the document could be quickly applied to the rest of the versions.
  • Published Documents: Publishing a file to Adobe PDF format generates an exact copy (from Word, Excel or other application) of the original file in content, but different in format, so these documents won’t be identified as “dupes” based on their HASH value.  With clustering, those documents still get grouped together so that those non-HASH dupes are still identified and addressed.

Within the parameters of a review tool like OnDemand®, which manages the review process and delivers documents quickly and effectively for review, clustering documents can speed decision making during review, saving considerable time and review costs, yet improving consistency of document classifications.

So, what do you think?  Have you used clustering software to organize documents for review?  Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Daily will take a break for the holidays and will return on Wednesday, January 2, 2013. Happy Holidays from all of us at Cloudnine Discovery and eDiscovery Daily!

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.

Class Action Plaintiffs Required to Provide Social Media Passwords and Cell Phones – eDiscovery Case Law

We’ve seen several cases where social media data was requested – with some requests granted (including this one, this one and this one) and other requests denied (including this one, this one and this one).  Here is a recent case where the request was granted.

Considering proportionality and accessibility concerns in EEOC v. Original Honeybaked Ham Co. of Georgia, 11-cv-02560-MSK-MEH, 2012 U.S. Dist. (D. Colo. Nov. 7, 2012), Colorado Magistrate Judge Michael Hegarty held that where a party had showed certain of its adversaries’ social media content and text messages were relevant, the adversaries must produce usernames and passwords for their social media accounts, usernames and passwords for e-mail accounts and blogs, and cell phones used to send or receive text messages to be examined by a forensic expert as a special master in camera.

Case Background

This case began when the EEOC sued employer The Original Honeybaked Ham Company of Georgia (“HBH”) on behalf of a class alleging sexual harassment and retaliation. During discovery, HBH requested “numerous categories of documents designed to examine the class members’ damages—emotional and financial—as well as documents going to the credibility and bias of the class members,” and the company moved the court to compel their production.

Among the documents HBH requested were “full unredacted” social media content and text messages. HBH requested such electronically stored information (ESI) because “[m]any of the class members ha[d] utilized electronic media to communicate—with one another or with their respective insider groups—information about their employment with/separation from Defendant HBH, this lawsuit, their then-contemporaneous emotional state, and other topics and content that [HBH] contend[ed] may be admissible in this action.” For example, HBH had “obtained one affected former employee’s Facebook pages” and found that they “contain[ed] a significant variety of relevant information, and further, that other employees posted relevant comments on this Facebook account.”

Court Analysis of Document Request

Judge Hegarty noted that the variety of topics that class members discussed via electronic communications could be viewed “logically as though each class member had a file folder titled ‘Everything About Me,’ which they have voluntarily shared with others.” Therefore, because the documents—if they were in hard copy—would be discoverable if relevant, their existence in electronic form made them likewise discoverable: “The fact that [documents] exist[ ] in cyberspace on an electronic device is a logistical and, perhaps, financial problem, but not a circumstance that removes the information from accessibility by a party opponent in litigation.” Moreover, the fact that the “Everything About Me” folder was stored in this instance on Facebook made the documents perhaps more susceptible to discovery: “There is a strong argument that storing such information on Facebook and making it accessible to others presents an even stronger case for production, at least as it concerns any privacy objection. It was the claimants (or at least some of them) who, by their own volition, created relevant communications and shared them with others.”

As for their relevance, Judge Hegarty ticked through the categories of documents on the Facebook page that HBH had already obtained and noted that each were potentially relevant. Accordingly, and because “other employees posted relevant comments on this Facebook account,” Judge Hegarty required the production of each class member’s social media content.

Also driving Judge Hegarty’s decision was a concern for proportionality: “The cumulative exposure to the Defendant is most definitely well into the low-to-mid seven-figure range. This is important to note when addressing whether the potential cost of producing the discovery is commensurate with the dollar amount at issue.”

Judge’s Ruling

Ultimately, Judge Hegarty held that each class member should produce the following ESI and related devices: cell phones used to send or receive text messages during the relevant period, information necessary to access social media websites used during the relevant period, and information necessary to access “any e-mail account or web blog or similar/related electronically accessed internet or remote location used for communicating with others or posting communications or pictures” during the relevant period.

Protocol for Production Using a Special Master

Though the relevant information was discoverable, Judge Hegarty established a specific protocol for its production. First, the court would appoint a forensic expert to serve as a Special Master to review the produced ESI in camera. “[T]he parties [would] collaborate to create (1) a questionnaire to be given to the Claimants with the intent of identifying all such potential sources of discoverable information; and (2) instructions to be given to the Special Master defining the parameters of the information he will collect.” Judge Hegarty gave the parties specific procedures to follow in the instance of a disagreement during this process. The Special Master could then begin review.

Following in camera review by the special master, Judge Hegarty stipulated that it would also “review the information in camera and require the production to Defendant of only that information which the Court determines is legally relevant under the applicable rules.” The court would then provide the material to the EEOC, which would have an opportunity to conduct a privilege review. The EEOC would then produce nonprivileged information to HBH along with a privilege log. The court would return irrelevant materials to the EEOC and provide a method for the EEOC to contest any relevancy determinations.

Regarding costs of the review, Judge Hegarty ordered the cost of forensic evaluation to be split equally between the parties. Judge Hegarty noted, “The information ordered to be produced is discoverable—information which, if it exists, was created by the Claimants.” However, the court reserved the option to revisit the allocation of costs and to relieve the Plaintiff/Claimants of monetary responsibility if the effort produced little or no relevant information.

So, what do you think?  Was the judge correct in requiring production of user names, passwords and cell phones for each class member?  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).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

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.

According to IDC, Big Data is Only Getting Bigger – eDiscovery Trends

According to the International Data Corporation (IDC), big data is only getting bigger.  In the publication IDC iView “Big Data, Bigger Digital Shadows, and Biggest Growth in the Far East,” (sponsored by EMC), which is excerpted here, the “digital universe” is growing even faster than we thought.

As the report notes: “at the midpoint of a longitudinal study starting with data collected in 2005 and extending to 2020, our analysis shows a continuously expanding, increasingly complex, and ever more interesting digital universe.”  IDC’s sixth annual study of the digital universe contains some interesting findings, including:

  • From 2005 to 2020, the digital universe will grow by a factor of 300, from 130 exabytes to 40,000 exabytes, or 40 trillion gigabytes (more than 5,200 gigabytes for every man, woman, and child in 2020). From now until 2020, the digital universe will about double every two years.
  • The investment in spending on IT hardware, software, services, telecommunications and staff that could be considered the “infrastructure” of the digital universe and telecommunications will grow by 40% between 2012 and 2020. As a result, the investment per gigabyte (GB) during that same period will drop from $2.00 to $0.20. Of course, investment in targeted areas like storage management, security, big data, and cloud computing will grow considerably faster.
  • A majority of the information in the digital universe, 68% in 2012, is created and consumed by consumers — watching digital TV, interacting with social media, sending camera phone images and videos between devices and around the Internet, and so on. Yet enterprises have liability or responsibility for nearly 80% of the information in the digital universe.
  • Only a tiny fraction of the digital universe has been explored for analytic value. IDC estimates that by 2020, as much as 33% of the digital universe will contain information that might be valuable if analyzed.
  • By 2020, nearly 40% of the information in the digital universe will be “touched” by cloud computing providers — meaning that a byte will be stored or processed in a cloud somewhere in its journey from originator to disposal.
  • The first Digital Universe Study was published in 2007.  At that time, IDC’s forecast for the digital universe in 2010 was 988 exabytes (in 2002, there were 5 exabytes in the world, representing an estimated growth of 19,760% in eight years).  Based on actuals, it was later revised to 1,227 exabytes (an actual growth of 24,540% in eight years).  So far, data is growing even faster than anticipated.

The report excerpt breaks out several graphs to illustrate where the digital universe is now and where it’s headed, showing how, as IT costs rise, the costs per GB will fall considerably and also showing the “geography” of the digital universe, with the US currently accounting for 32% of the digital universe.  According to IDC, the share of the digital universe attributable to emerging markets is up to 36% in 2012 and is expected to be 62% by 2020.

Obviously, this has considerable eDiscovery ramifications as data within organizations will continue to grow exponentially and a combination of good information governance programs and effective retrieval technology will be even more vital to keep eDiscovery manageable and costs in check.

So, what do you think?  Do you have a plan in place to manage exponential data growth?  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.

Trend Has Shifted Against Reimbursement of eDiscovery Costs – eDiscovery Case Law

Last year, the trend seemed to be to award the prevailing party reimbursement of eDiscovery costs, including in this case and this case.  Now, that trend appears to have been reversed with those requests being denied (or reversed) by the courts, including this case and this case.  Now, here is another case where reimbursement of eDiscovery costs was denied.

In adhering to the Third Circuit’s 2012 decision in Race Tires America, Inc. v. Hoosier Racing Tire Corp., a district court declined to permit a prevailing party to bill its opponent under 28 U.S.C. § 1920(4) in Abbott Point of Care, Inc. v. Epocal, Inc., No. CV-08-S-543-NE, 2012 U.S. Dist. (N.D. Ala. Nov. 5, 2012) for costs associated with its eDiscovery database because such a request did not comport with a strict interpretation of the statute.

In a lawsuit originally based on Abbott’s allegations that Epocal infringed four of its patents and tortiously interfered with the employment contracts of some of its former employees, a jury awarded Epocal a fully favorable decision. The judgment provided that all costs associated with the lawsuit were taxed to Abbott; accordingly, Epocal filed a bill of costs with the court. This dispute arose when Abbott objected to Epocal’s bill of costs.

The points of the bill that Abbott disputed included “$175,390 in eDiscovery database charges through discovery (item 5) [and] $165,108 in eDiscovery database charges through trial (item 6).” The court pointed out that although “Abbott object[ed] to Epocal’s recovery of any costs for the creation and maintenance of an electronic discovery database under § 1920(4),” the Eleventh Circuit had not issued any controlling guidance on how courts within its limits should interpret the language of Section 1920(4). {emphasis added}

The court noted that Abbott relied on, and many district courts—including those within the Eleventh Circuit—also turned to Race Tires, where “[t]he Third Circuit emphasized that the determination of whether a particular cost can be awarded pursuant to § 1920 is purely a matter of statutory construction.” Section 1920(4) permits taxation only for “‘exemplification’ or ‘making copies,’” and the Third Circuit further explained that those actions meant “‘produc[ing] illustrative evidence or the authentication of public records.’” The court noted that because the statute did not provide for such relief, “[t]he Third Circuit refused to give any weight to equitable considerations, including the importance of database services to the ultimate act of production, the technical skill required to create a database, and the ‘efficiencies and cost savings resulting from the efforts of electronic discovery consultants.’” Moreover, the Third Circuit “refused to allow costs for any of the steps that might lead up to the actual copying of documents or other materials, including ‘gathering, preserving, processing, searching, culling, and extracting’ discoverable information.”

Although the court was “sympathetic to the practical arguments advanced by Epocal,” it declined to extend the scope of the Third Circuit’s interpretation of Section 1920(4). Noting that “[u]nfortunately . . . the law does not always favor efficiency or practicality,” the court followed the Third Circuit’s “thorough, reasonable, and persuasive interpretation of that statute.” As such, it found that Epocal would “not be permitted to recover any costs for the maintenance of an electronic discovery database” and therefore it did not need to distinguish between the costs Epocal requested for eDiscovery charges incurred at different times during the litigation.

So, what do you think?  Should the costs have been reimbursed?  Should prevailing parties have some means for recouping their eDiscovery costs?  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).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

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.