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Electronic Discovery

Court Denies Defendant’s Motion to Overrule Plaintiff’s Objections to Discovery Requests

Defendant Ordered to Reproduce ESI in Native Format, As Originally Requested by Plaintiffs: eDiscovery Case Law

In Morgan Hill Concerned Parents Assoc. v. California Dept. of Education, No. 2:11-cv-3471 KJM AC (E.D. Cal. Feb. 2, 2017), California Magistrate Judge Allison Claire granted the plaintiffs’ motion to compel the defendant to produce emails in native format with all metadata attached, but denied the plaintiffs’ motion for sanctions without prejudice to its renewal using Sacramento rates for attorneys’ fees.  Judge Claire also denied the defendant’s motion for a protective order regarding production of the native format data, and its motion for sanctions.

Case Background

In this case regarding alleged violations of the Individuals with Disabilities Education Improvement Act, the plaintiffs served their First Set of Requests for Production of Documents in April 2013. The request specified that the ESI should be produced “in their native electronic format together with all metadata and other information associated with each document in its native electronic format.”  One month later, the defendant responded, but did not object to the instruction that ESI be produced in native format and did not propose any other format for producing the ESI, instead objecting to nearly every individual request in the First Set on the grounds that they were “unduly burdensome”, “not relevant to the present litigation,” and protected by the attorney client and deliberative process privileges.

In October 2013, the defendant submitted a proposed protective order to the court where it “observe[d]” that “the question whether to produce metadata generally involves a balancing test ….”.  The defendant subsequently claimed this was its original objection to the production of ESI in native format – they didn’t explicitly object to native format production until a letter sent to the plaintiffs in August 2016.  According to the defendant, they had produced ESI “as load files, a standard format approved by the Special Master on April 7, 2016.”  The parties met and conferred on the format of production issue in October 2016 without success.

Judge’s Ruling

With regard to the defendant’s argument that “[a] requesting party cannot demand production in one format versus another just because one would allegedly ease a party’s review process,” Judge Claire stated: “This argument runs directly contrary to the governing Rules, which expressly state just the opposite: the requester ‘may specify the form or forms in which electronically stored information is to be produced.’… Indeed, CDE’s dismissive rejection of ‘ease’ of review as a valid reason for specifying the format is difficult to understand, since ease of review is precisely why the requesting party would specify the format, and it is the very reason the requester is permitted to do so.”

With regard to the defendant’s argument that it can ignore the plaintiffs’ request for native format and produce it in some other format so long as the production is in a “`usable form, e.g., electronically searchable and paired with essential metadata’”, Judge Claire noted that the “The Rules specify that the responding party may produce ESI ‘in a reasonably usable form’ if the request ‘does not specify a form for production.’”  Since the plaintiffs’ request did specify it, Judge Claire ruled that “there was no basis for CDE to simply ignore it and produce it in a format of CDE’s own choosing.”  Judge Claire also rejected the defendant’s “attempt to drag the Special Master into this dispute” via undocumented recollection of an ex parte phone call approval from the Special Master, by noting that the Special Master is a technical consultant only, “not a judge who could ‘approve’ or disapprove of discovery production formats.”

Judge Claire also rejected even the defendant’s earliest claimed date of objection (October 2013) as untimely, since it was “six months after the document requests were served” and also ruled the more explicit objection in August 2016 as untimely as well.

As for the defendant’s argument that reproducing the ESI in native form would be burdensome, Judge Claire stated: “The court rejects this argument because this is a problem of CDE’s own making. CDE created the problem it now complains about by engaging in an ESI production in a format of its choosing — the ‘load file format’ — rather than the native format, with all metadata attached, as plaintiffs had requested.”  Judge Claire also noted that the defendant could have produced it originally in the requested format or objected in a timely manner and worked to meet and confer with the plaintiff – neither of which happened.

As a result, Judge Claire granted the plaintiffs’ motion to compel the defendant to produce emails in native format with all metadata attached.  Judge Claire denied the plaintiffs’ motion for sanctions without prejudice to its renewal using Sacramento rates for attorneys’ fees and also denied the defendant’s motion for a protective order regarding production of the native format data, and its motion for sanctions.

So, what do you think?  Could the defendant have gotten its way if it had objected in a timely manner?  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. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

The Impact of Cybersecurity Concerns on M&A Activities is Growing: eDiscovery Trends

This is the second story that I’ve covered in the past several months where cybersecurity concerns impacted merger and acquisitions.  See below for more on the first one…

After Verizon Communications took a $350 million discount on its purchase of Yahoo based on the massive data breaches disclosed by the Internet company last year, it may be time for cybersecurity and data privacy lawyers to take a more active role in merger and acquisition discussions.

In Bloomberg Law (Are Cyber Lawyers Poised to Play Bigger Role in M&A?, written by Rebecca Beyer), the author notes that, in two attacks in 2013 and 2014, more than a billion Yahoo users’ personal account info was hacked.  Yes, that’s billion with a “b”.

The resulting acquisition of Yahoo by Verizon, negotiated over several months, may be the first time a merger price has been discounted because of a data breach, said Craig A. Newman, a global cybersecurity partner at Patterson Belknap Webb & Tyler in New York.  Yahoo tapped Hunton & Williams to handle the cyber issues in its amended agreement with Verizon, according to a company representative. The firm’s privacy and cybersecurity practice is led by Lisa J. Sotto, a noted expert who chairs the Department of Homeland Security’s Data Privacy and Integrity Advisory Committee.

Sotto was quoted in the article observing: “Privacy and data security really had for years been on the back burner in M&A transactions…It’s only in the last few years that privacy and cyber security lawyers have been brought into the due diligence and document negotiation process.”

After Yahoo announced the hacks of its users’ data, many people asked whether Verizon would try to back out of the deal — or if it would be able to.

But walking away from a merger agreement is almost impossible, according to Steven Davidoff Solomon, a professor at UC Berkeley School of Law. To exit a deal, a company would need to prove that a data breach counts as a material adverse event or change as defined by so-called MAC clauses in merger agreements, he said.

Proving a material adverse event often requires battling in court over questions like whether an incident was “significant” and “durational,” said Solomon, who has written in the past that about the Yahoo/Verizon deal. He noted that it’s not at all clear whether data breaches — even of the size disclosed by Yahoo — would rise to that level.

As a result, buyers are asking their counsel to look long and hard at targets’ IT departments so they can at least be informed in advance about potential problems. According to a survey by West Monroe Partners, 80 percent of respondents said cybersecurity due diligence was highly important in reaching a deal (and 77 percent said that issue had “increased significantly” in importance in the past two years).

So, it may be a good idea to get your cyber lawyers involved in the early stages of M&A discussions.  And, make sure you’re on the same page when talking about mergers and acquisitions.  :o)

The first post I mentioned at the top of this post related to this merger of law firms where the lead attorney of one firm decided to merge with a larger law firm, at least in part over her concerns about cybersecurity.  Concerns about cybersecurity are not only impacting mergers, they are also causing them, at least in some instances.

So, what do you think?   Do concerns about cybersecurity and data privacy play a role in M&A discussions at your organization?  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. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

EDRM Releases New Security Questionnaire: eDiscovery Trends

As promised when they announced the project last August, EDRM announced last week the release of a new Security Audit Questionnaire, which is designed to be a practical tool for evaluating the security capabilities of corporations, law firms, cloud providers, and third parties offering electronic discovery or managed services.

The security survey evaluates an organization’s data security and practices, allowing potential customers to assess the risk of entrusting sensitive data to the vendor. The tool can be used to assess data protection from destruction or unauthorized access, as well as to assure regulatory compliance with data-related legislation such as HIPAA, the Sarbanes-Oxley Act, and security breach notification laws.

The evaluation allows the assessor to determine the level of risk the organization may be assuming by engaging the vendor or partner and to make suggestions to improve security practices and enhance the service provided.  The tool is also suited for organizations who wish to conduct a self-audit to assess security capabilities and identify areas for improvement.

The seven security disciplines addressed in the audit questionnaire include 74 separate criteria, as follows:

  • General Security (2 questions)
  • Security and Risk Management (17 questions)
  • Asset Security (5 questions)
  • Communications and Network Security (23 questions)
  • Identity and Access Management (10 questions)
  • Security Operations (15 questions)
  • Software Development Security (2 questions)

The rank scale is dependent on the category, as some categories have “yes/no” questions only and others have a rank scale from 1 to 10.  Each question allows for recording of additional notes and a summary sheet keeps track of the scores across the seven security disciplines.

A team of EDRM members representing e-discovery providers, corporate legal, and law firms convened in August 2016 to discuss security and compliance requirements and create a plan for the Security Audit Questionnaire.  Amy Sellars, assistant general counsel, litigation support for Walmart Legal, and Julie Hackler, account executive at Avansic, led the team of 14 professionals with backgrounds in e-discovery, security, IT technologies, and litigation support in creating the tool. Over several months of collaborative effort, the team identified the seven key security areas for audit, developed checklists and audit questions, and built and tested the questionnaire.

“E-discovery increasingly involves very large volumes of potentially sensitive data, and multiple organizations may play a role in processing, hosting, review and production of documents,” said George Socha, EDRM co-founder. “It’s critical that decision makers assess the security capabilities of e-discovery providers, and the questionnaire was designed to guide that assessment.”

A copy of the questionnaire can be downloaded from the EDRM/Duke Law website here.

So, what do you think of the questionnaire?  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. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Court Denies Defendant’s Motion to Overrule Plaintiff’s Objections to Discovery Requests

Delaware Supreme Court Affirms $7 Million Sanction for Discovery Misconduct: eDiscovery Case Law

In Shawe v. Elting, Case No. 487, 2016 (Supreme Court of Delaware, Feb. 13, 2017), the Delaware Supreme Court found that the Court of Chancery followed the correct legal standards and made no errors of law in its sanctions award of over $7 million against the appellant, agreeing with the lower court that his behavior was “unusually deplorable”.

Case Background

The plaintiff appealed an order of the Court of Chancery sanctioning him for misconduct throughout litigation with his current business partner and former romantic partner, where, after an evidentiary hearing, the Court of Chancery found that the plaintiff committed several violations, including:

  • Breaking into the defendant’s office, having the President of the company’s forensic technology business image her hard drive, concealing the activities with a write blocker, and replacing the computer to cover his tracks (several times over a two year period);
  • Remote accessing the defendant’s computer at least 44 times on 29 different occasions, gaining access to 19,000 emails, including 12,000 privileged communications between the defendant and her attorney;
  • Hiring another third party to break into the defendant’s office, take pictures, and remove hard copies of documents;
  • Claiming (after the suit was filed) that his niece dropped his phone in a cup of soda and he ultimately threw it away because he found it in a drawer with rat droppings;
  • Deleting nearly 19,000 files from his laptop, which was discovered because his computer had made volume shadow copies and his own expert discovered it;
  • Lying about his activities in his discovery responses and at his deposition, as well as giving false trial testimony and submitting a false affidavit during post-trial briefing.

The court also found that the plaintiff’s improper conduct impeded the administration of justice, unduly complicated the proceedings, and caused the court to make false factual findings. The Court of Chancery ordered the plaintiff to pay 100% of the fees the defendant incurred in connection with bringing the motion for sanctions, and 33% of the fees the defendant incurred litigating the merits of the case, awarding the defendant a total of $7,103,755 in fees and expenses.

On appeal, the plaintiff argued that the Court of Chancery erred in three respects: (1) by finding that he acted in bad faith when he deleted the files from his laptop and failed to safeguard his cell phone; (2) for failing to afford him criminal due process protections before sanctioning him for “perjury”; and (3) by awarding the defendant an excessive fee.

Judge’s Ruling

With regard to intent, the Court noted that the plaintiff/appellant “deleted 41,000 files from his laptop in December 2014 in the face of two litigation hold notices, one of which he issued, and an expedited discovery order that permitted Elting to conduct forensic discovery of Shawe’s laptop.”  Even though most of those files were recovered due to the laptop’s volume shadow copy system, the Court ruled that “does not negate his illicit intent” and also found that the “Court of Chancery was well within its discretion to sanction Shawe for his litigation misconduct” for throwing out his cell phone.

With regard to the “perjury” sanction, the Court stated: “While Shawe’s conduct may have constituted perjury, the court did not charge or convict him of perjury. Rather, the court imposed a civil sanction against him for his repeated lies under oath in interrogatory responses, at deposition, at trial, and in a post-trial affidavit to cover up what he had done. Shawe’s falsehoods wasted the court’s time, needlessly complicated and expanded the proceedings, and caused the court to find erroneous facts in its Merits Opinion. The Court of Chancery thus acted well within its discretion to sanction him for lying during the litigation.”

With regard to the claim that the defendant was awarded an excessive fee, the Court noted that the “Court of Chancery has broad discretion in fixing the amount of attorneys’ fees to be awarded” and “[a]bsent a clear abuse of discretion”, declined to reverse the award.

As a result, the Court affirmed the award, stating: “After a careful review of the record, we find that the Court of Chancery followed the correct legal standards and made no errors of law in its sanctions ruling. Shawe’s behavior was ‘unusually deplorable,’ and thus the Court of Chancery acted well within its discretion by sanctioning him for his bad faith conduct.”

So, what do you think?  Did the actions merit such a stiff sanction?  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. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Lawyer’s Pants Literally Catch on Fire and Alexa to “Testify”: eDiscovery Trends

OK, this first story isn’t exactly an eDiscovery story, but it’s too good to pass up…

Here’s a question for you: Would you believe what a lawyer was telling you during closing arguments if his pants were, literally, on fire?

According to this story from the Miami Herald, this actually happened on Wednesday as Miami defense lawyer Stephen Gutierrez began his closing arguments in front of a jury — in an arson case.

Gutierrez, who was arguing that his client’s car spontaneously combusted and was not intentionally set on fire (hmmm…), had been fiddling in his pocket as he was about to address jurors when smoke began billowing out his right pocket, witnesses told the Miami Herald.

Gutierrez rushed out of the Miami courtroom, leaving spectators stunned. After jurors were ushered out, Gutierrez returned unharmed, with a singed pocket, and insisted it wasn’t a staged defense demonstration gone wrong, instead blaming a faulty battery in an e-cigarette, observers said.

Miami-Dade police and prosecutors are now investigating the episode. Officers seized several frayed e-cigarette batteries as evidence.  Miami-Dade Circuit Judge Michael Hanzman, in the coming days, could decide to hold Gutierrez in contempt of court.

Despite his own demonstration of spontaneous combustion, Gutierrez’s client, Claudy Charles, was convicted of second-degree arson.

Now, on to the eDiscovery story…

Those who remember last year’s battle between Apple and the Justice Department over the Judge’s order for Apple to give investigators access to encrypted data on the iPhone used by one of the San Bernardino shooters may also remember that the Justice Department asked the court to vacate its order requiring Apple to assist when an unnamed third party was able to access the iPhone.  Here’s another battle that was shaping up over access to data on a device that has ended shortly after it began.

According to Legaltech News (Amazon, Avoiding First Amendment Clash, Drops Objections to Echo Warrant, written by Ben Hancock), Amazon Inc. has agreed to hand over recordings from an “Echo” device that was in the home of a murder suspect in Arkansas, after initially resisting doing so on First Amendment grounds.

In a stipulation filed Monday in the Circuit Court of Benton County, Arkansas, Amazon’s attorneys at Davis Wright Tremaine wrote that defendant James Bates had consented to the production of the recordings from his Echo, and that its motion to quash a warrant seeking the data was now moot.

A hearing on the motion had been set for Wednesday. Bates’s attorney, Kathleen Zellner (most notable for her work in wrongful conviction advocacy and current representation of Steven Avery), said in a tweet Tuesday morning: “We agreed to release recordings-my client James Bates is innocent.”

Amazon’s fight against the warrant seeking data from Bates’ Echo had been closely watched by legal experts as a test of the limits of privacy protections for data gathered by connected devices in consumers’ homes. I guess we’ll have to save that first battle over privacy rights by Echo owners for another case.

Having an Echo in our home and hearing Alexa often say “I didn’t get that” when we’re in normal conversation and not making an Echo request, I can only imagine how much data there is, or how long it’s retained.  Cases like these will continue to illustrate the amount of ESI that IoT devices may hold.

So, what do you think?  Should individuals have privacy rights to the data on their IoT devices, like the Amazon Echo?  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. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Court Denies Defendant’s Motion to Overrule Plaintiff’s Objections to Discovery Requests

Spoliation of Truck Evidence Precludes Plaintiffs’ Use of That Evidence “As a Sword”: eDiscovery Case Law

In Below v. Yokohama Tire Corp., No. 15-cv-529 (W.D. Wisc. Feb. 27, 2017), Wisconsin District Judge William M. Conley, deciding on several pre-trial motions, granted (to an extent) the defendants’ motion for relief due to spoliation of evidence for failing to preserve the truck involved in a crash, stating that “defendants persuasively argue that the absence of this evidence should at minimum preclude plaintiffs from using it as a sword, even if defendants cannot use it as a shield.”

Case Background

In this product liability case related to a truck crash due to an alleged defective tire produced by the defendants that left the plaintiff severely injured, the defendants contended that the plaintiff’s pickup truck was destroyed at a salvage yard before plaintiffs filed this lawsuit.  The defendants argued that destruction of the truck hampered their defense because they were unable to evaluate, among other things, the suspension and steering systems, the seatbelt, the electronic data recorder and the other three tires.  Asserting that the plaintiffs or their “agents” sold the plaintiff’s pickup truck to a salvage yard with the knowledge that it would be destroyed after inspecting it, taking photographs and preserving the failed tire, defendants moved for a spoliation instruction.  Because of the plaintiffs’ actions, as well as receipt of $22,000 in insurance proceeds from the sale of the truck to the plaintiffs, the defendants argued that the plaintiffs’ bad faith could be inferred.

The plaintiffs asserted that the salvage yard agreed to the request from an investigator (retained by plaintiffs’ counsel) to preserve the truck in October 2013 (about a month and a half after the accident). In May of 2014, another of its investigators (Tom Malone) followed-up with the salvage yard to ask them to continue to preserve the truck and to notify him about any storage charges. Despite these efforts, plaintiffs’ counsel later “discovered” in the fall of 2015 that the truck had been destroyed on October 23, 2014.

Judge’s Ruling

Judge Conley noted that “A spoliation instruction is only obtainable if the proponent shows an intentional act or bad faith by the party in possession of the destroyed evidence.”

With regard to the plaintiffs’ failure to preserve all but the allegedly defective tire from the truck, Judge Conley stated: “Left unexplained is how plaintiffs ended up with the single, allegedly defective tire without preserving the other three; why other steps were not taken to preserve similar evidence, including possible electronic evidence that must be preserved under Fed. R. Civ. P. 37(e); and perhaps most important, why plaintiffs waited another, two full years after the accident without notifying Yokohama of the availability of this piece of key evidence, despite knowing that it was the focus of plaintiffs’ liability claims within months of the accident itself. These questions are all the more troubling because plaintiffs were represented by a sophisticated personal injury law firm, who know full well of their duty to maintain evidence relevant to likely litigation, to provide notice of a possible claim, and notice of ‘the existence of evidence relevant to that claim.’…Plus, Malone’s letter to the salvage yard presents many more questions than it answers, as to timing and whether any agreement ever existed with the salvage yard.”

As a result, Judge Conley ruled, as follows: “Based on this record, plaintiffs’ counsel certainly should have taken additional steps to ensure that the truck (or at least potentially key evidence) was preserved, as well as notified likely defendants timely of the opportunity to inspect it. The failure to do so falls somewhere between negligence and gross negligence, but perhaps short of bad faith or intentional conduct requiring an adverse inference instruction. Even so, defendants persuasively argue that the absence of this evidence should at minimum preclude plaintiffs from using it as a sword, even if defendants cannot use it as a shield. Therefore, the defendants motion is GRANTED to the extent that (1) defendants may explore how information from an inspection of Below’s truck could have affected the experts’ opinions at trial; and (2) plaintiffs may not argue that defendants or their experts failed to explore or prove something if prevented from doing so by plaintiffs’ negligence in preserving evidence. Defendants’ motion is otherwise RESERVED pending a further proffer and argument at the final pretrial conference, including defendants request for a spoliation instruction.”

So, what do you think?  Did the judge go far enough in addressing the spoliation of truck evidence?  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. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

What are the Current Trends in eDiscovery? Catch this Webinar to Find Out: eDiscovery Trends

A lot is happening in eDiscovery these days and it’s harder than ever to keep up.  I have no choice to keep up with current eDiscovery trends – I write a daily blog, so I have to continue to find new topics to write about.  Thankfully, you don’t have to do that – you can attend a one hour webcast later this month for a recap of recent key eDiscovery trends and case law to stay current with today’s trends in eDiscovery, information governance and cybersecurity.

On March 30 at noon CST (1:00pm EST, 10:00am PST), CloudNine will conduct the webcast Key eDiscovery Trends and Case Law for 2017.  This one hour webcast will cover key events, trends, and developments that occurred over the course of last year (or so) and how they impact those in the eDiscovery community.  Examples of trends being covered include:

  • Evolution of eDiscovery Technology
  • Privacy Trends in the US and Internationally
  • Key Trends in Cybersecurity and Data Breaches
  • Continued Evolution of Artificial Intelligence in the Legal Space
  • What Happens Every Minute on the Internet
  • Proliferation of Rules Regarding Attorney Technical Competence
  • Important Cases in Technology Assisted Review
  • Key 2015 Federal Rules Changes and How They Impacted Case Law

I’ll be presenting the webcast with Julia Romero Peter, Esq., General Counsel and VP of Sales at CloudNine and we will condense over a year’s worth of key stories and trends down to a one hour presentation.  When I conducted this presentation recently at the February meeting of Houston Association of Litigation Support Managers, it was called “insightful and thought provoking”.

To register for the webcast, click here.  I write a daily blog and keep abreast of current eDiscovery trends to make it easier for you to keep up with those same trends – now, here’s an opportunity to do so in an hour.  Hope you can attend!

So, what do you think?  Are you up to date in the latest trends in eDiscovery?  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. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Court Denies Defendant’s Motion to Overrule Plaintiff’s Objections to Discovery Requests

Judge Peck Objects to Defendant’s Form of Objections: eDiscovery Case Law

In Fischer v. Forrest, Nos. 14 Civ. 1304 (PAE) (AJP), 14 Civ. 1307 (PAE) (AJP) (S.D.N.Y. Feb. 28, 2017), New York Magistrate Judge Andrew J. Peck ordered the defendants “to revise their Responses to comply with the Rules”, specifically Rule 34(b)(2)(B) and Rule 34(b)(2)(C), amended in December 2015 requiring objections to be stated with specificity and directing that an objection must state whether any responsive materials are being withheld on the basis of that objection.

Judge Peck wasted no time getting to the point in his ruling, stating:

“It is time, once again, to issue a discovery wake-up call to the Bar in this District: the Federal Rules of Civil Procedure were amended effective December 1, 2015, and one change that affects the daily work of every litigator is to Rule 34. Specifically (and I use that term advisedly), responses to discovery requests must:

  • State grounds for objections with specificity;
  • An objection must state whether any responsive materials are being withheld on the basis of that objection; and
  • Specify the time for production and, if a rolling production, when production will begin and when it will be concluded.

Most lawyers who have not changed their ‘form file’ violate one or more (and often all three) of these changes.”

In these related cases asserting claims for, among other things, copyright and trademark violations, the defendants’ amended Rule 34 Responses contained (according to Judge Peck) “17 ‘general objections,’ including General Objections No. I stating that ‘Defendant objects to the requests to the extent that they call for the disclosure of information that is not relevant to the subject matter of this litigation, nor likely to lead to the discovery of relevant, admissible evidence.’”

Judge Peck proceeded to “count the ways” that the defendants had violated the Rules:

“First, incorporating all of the General Objections into each response violates Rule 34(b)(2)(B)’s specificity requirement as well as Rule 34(b)(2)(C)’s requirement to indicate whether any responsive materials are withheld on the basis of an objection. General objections should rarely be used after December 1, 2015 unless each such objection applies to each document request (e.g., objecting to produce privileged material).”

“Second, General Objection I objected on the basis of non-relevance to the ‘subject matter of this litigation.’…The December 1, 2015 amendment to Rule 26(b)(1) limits discovery to material ‘relevant to any party’s claim or defense…’ Discovery about ‘subject matter’ no longer is permitted. General Objection I also objects that the discovery is not ‘likely to lead to the discovery of relevant, admissible evidence.’ The 2015 amendments deleted that language from Rule 26(b)(1), and lawyers need to remove it from their jargon…”

“Third, the responses to requests 1-2 stating that the requests are ‘overly broad and unduly burdensome’ is meaningless boilerplate. Why is it burdensome? How is it overly broad? This language tells the Court nothing. Indeed, even before the December 1, 2015 rules amendments, judicial decisions criticized such boilerplate objections…”

“Finally, the responses do not indicate when documents and ESI that defendants are producing will be produced.”

As a result, Judge Peck ordered the defendants “to revise their Responses to comply with the Rules”, stating:

“The December 1, 2015 amendments to the Federal Rules of Civil Procedure are now 15 months old. It is time for all counsel to learn the now-current Rules and update their ‘form’ files. From now on in cases before this Court, any discovery response that does not comply with Rule 34’s requirement to state objections with specificity (and to clearly indicate whether responsive material is being withheld on the basis of objection) will be deemed a waiver of all objections (except as to privilege).”

So, what do you think?  Do you still encounter boilerplate objections in discovery?  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. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Your “Mashup” of eDiscovery Market Estimates is Even Earlier This Year: eDiscovery Trends

We look forward to the eDiscovery Market Size Mashup that Rob Robinson compiles and presents on his Complex Discovery site each year.  Each of the first three years that we covered it, the Mashup was released in July – with estimates for 2012 to 2017, for 2013 to 2018 and 2014-2019 (in two parts).  Last year, the Mashup was released early, at the end of April for 2015 to 2020.  This year, the Mashup is even earlier: Rob has released his worldwide eDiscovery software overview for 2016 to 2021 now!

Taken from a combination of public market sizing estimations* as shared in leading electronic discovery publications, posts, and discussions, the following eDiscovery Market Size Mashup** shares general market sizing estimates for the software and services area of the electronic discovery market for the years between 2016 and 2021.

Here are some highlights (based on the estimated from the compiled sources):

  • The eDiscovery Software and Services market is expected to grow an estimated 15.31% Compound Annual Growth Rate (CAGR) per year from 2016 to 2021 from $7.997 billion to $16.304 billion per year. Services will comprise approximately 69.9% of the market and software will comprise approximately 30.1% by 2021.
  • The eDiscovery Software market is expected to grow at an estimated 16.61% CAGR per year from $2.279 billion in 2016 to $4.915 billion in 2021. Software currently comprises 28.5% of the market and, by 2021, 74% of the eDiscovery software market is expected to be “off-premise” – which includes cloud-based and other Software-as-a-Service (SaaS)/Platform-as-a-Service (PaaS)/Infrastructure-as-a-Service (IaaS) solutions.
  • The eDiscovery Services market is expected to grow at an estimated 14.78% CAGR per year from 2016 to 2021 from $5.717 billion to $11.389 billion per year. The breakdown of the services market by 2021 is expected to be as follows: 67% review, 19% processing and 14% collection (basically unchanged from last year with review down a point and collection up a point).

Growth rates are up after being down the past two years, with the overall, software and services markets estimated to grow at two percent faster than the estimates from the last two years.

Here are the sources that Rob states were used in compiling the “mashup” (including his own, how clever!):

  • Annual eDiscovery Market Size Mashups – 2012 – 2017, ComplexDiscovery, March 4, 2017.
  • eDiscovery Business Confidence Surveys – Running Listing. ComplexDiscovery. February 28, 2017.
  • Zion Market Research. “eDiscovery Market for Government, Regulatory Agencies, Enterprises, and Law Firms.” November 23, 2016.
  • Markets and Markets. “E-Discovery Market by Solution, Service, Deployment Type, and Vertical – Global Forecast to 2021.” November 2016.
  • Future Market Insights (FMI). “eDiscovery Market Analysis – Global Industry Analysis and Opportunity Assessment.” July 5, 2016.
  • “Worldwide eDiscovery Software Market Forecast, 2016-2020: Back to Basics.” Angela Gelnaw. June 30, 2016.
  • Gartner, Inc. “Market Guide for E-Discovery Solutions.” Jie Zhang. June 30, 2016.
  • S. Department of Commerce, International Trade Administration. “2016 Top Markets Report – Cloud Computing.” April 14, 2016.
  • “Worldwide eDiscovery Services Forecast 2014-2019.” Sean Pike, Angela Gelnaw. December 2015.
  • Gartner, Inc. “Critical Capabilities for E-Discovery Software.” Jie Zhang, Garth Landers. October 6, 2015.
  • Transparency Market Research. “eDiscovery Market – Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2014-2022.” July 6, 2015
  • Markets and Markets. “E-Discovery Market By Solution, Deployment, Industry, & Region – Global Forecast to 2020.” July 2015.
  • Global Industry Analysts, Inc. “eDiscovery (Software and Services) Global Strategic Business Report.” May 28, 2015.
  • Gartner, Inc. “Magic Quadrant for E-Discovery Software.” Jie Zhang, Garth Landers. May 18, 2015.
  • The Radicati Group. “eDiscovery Market, 2014-2018.” Sara Radicati. December 3, 2014.
  • Transparency Market Research. “eDiscovery Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2014-2020).” June 2014.
  • Gartner, Inc. “Magic Quadrant for E-Discovery Software.” Jie Zhang, Debra Logan, Garth Landers. June 19, 2014.
  • “Worldwide eDiscovery Software 2014-2018 Forecast.” Sean Pike. May 2014.
  • The Radicati Group. “eDiscovery Market, 2013-2017.” Sara Radicati. August 2013.
  • Gartner, Inc. “Magic Quadrant for E-Discovery Software.” Debra Logan, Alan Dayley, Sheila Childs. June 10, 2013.
  • The Radicati Group. “eDiscovery Market, 2012-2016.” Sara Radicati, Todd Yamasaki. October 2012.
  • Transparency Market Research. “World e-Discovery Software & Service Market Study.” August 2012.
  • Rand Institute For Civil Justice. “Where the Money Goes: Understanding Litigant Expenditures for Producing Electronic Discovery.” Nicolas Pace and Laura Zakaras. April 2012.
  • “MarketScape: Worldwide Standalone Early Case Assessment Applications Vendor Analysis.” Vivian Tero. September 19, 2011.
  • Industry Observer Estimations (Multiple Observers)

So, what do you think?  Do you think the eDiscovery software and services markets are on the rise?  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. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

New Survey Says 75 Percent of Respondents Unfamiliar with China’s New Cybersecurity Law: eDiscovery Trends

Are you familiar with it?

According to a survey conducted by Consilio and released earlier this week, 75 percent of legal technology professionals responding to the survey indicated that they are not familiar with China’s new Cybersecurity Law, which was passed by the Standing Committee of the National People’s Congress, China’s top legislature, in November 2016.  The new law is set to go into effect on June 1.

China’s new Cybersecurity Law will require foreign companies conducting business in the country to localize their data within mainland China which may contain sensitive privacy data or state secrets. Organizations that do not adhere to this provision will face potential financial penalties, including the possible loss of their ability to conduct business in mainland China. Individuals can face civil and criminal penalties, up to and including imprisonment and the death penalty for particularly egregious cases.

For more on China’s Cybersecurity Law, you can read Understanding China’s Cybersecurity Law, by Chris Mirasola on the LawFare blog here.  An unofficial translation of the law can be found on the China Law Translate site here.

Consilio’s survey of 118 legal technology professionals, from in-house law departments, law firms and government affiliated entities, was conducted at the Legalweek | Legaltech® New York 2017 conference held January 31 – February 2.  Some key findings of the survey include:

  • 75 percent of legal technology professionals cited that they are not familiar with China’s new Cybersecurity Law;
  • Only 14 percent of respondents indicated that they are “very concerned” about the new law;
  • Yet, 57 percent of respondents indicated having at least one legal matter that touched China within the last two years (i.e. internal or government investigations, litigation, M&A, etc.), with 27 percent indicating that they knew of at least ten Chinese legal matters that their organizations were involved in during that time.

“China is now the world’s second largest economy, and for global corporations and those that aspire to be global, it is critical for them to have a full understanding of the data requirements and regulatory landscape of that region,” said Dan Whitaker, Managing Director of Consilio’s China operations, headquartered in Shanghai. “Since 2012, cyber walls have been going up in multiple regions around the world, and as countries continue to create new regulations, organizations must continually educate themselves on the quickly evolving nuances of data privacy laws in every jurisdiction, specifically as it relates to the ability to move data in and out of the countries in question.”

In addition to China’s new Cybersecurity Law, when polled about other international compliance laws their organizations are most concerned about, respondents identified the Foreign Corrupt Practices Act, or FCPA as the most concerning (40 percent), with the General Data Protection Regulation, or GDPR (22 percent) and the UK Bribery Act (8 percent) as other regulations respondents are concerned about.

Consilio has prepared a summary infographic to illustrate the results, which can be found here.

So, what do you think?  Are you familiar with China’s new Cybersecurity Law?  Are you concerned about it?  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. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.