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Friday the 13th is Unlucky for the City of New Orleans. Almost. Maybe.: Cybersecurity Trends

In Friday’s post about Norton Rose Fulbright’s 2019 Litigation Trends Annual Survey, one of the most notable trends was that 44 percent of corporate respondents identified Cybersecurity/data privacy as the most likely new source of dispute for their business on the horizon, which was more than four times the next likely sources.  Cybersecurity is also a big challenge for municipalities as we saw on Friday.

According to Forbes (New Orleans Declares State Of Emergency Following Cyber Attack, written by Davey Winder), the City of New Orleans suffered a cybersecurity attack last Friday serious enough for Mayor LaToya Cantrell to declare a state of emergency.

The attack started at 5 a.m. CST on Friday, according to the City of New Orleans’ emergency preparedness campaign, NOLA Ready, managed by the Office of Homeland Security and Emergency Preparedness. NOLA Ready tweeted that “suspicious activity was detected on the City’s network,” and as investigations progressed, “activity indicating a cybersecurity incident was detected around 11 a.m.” As a precautionary measure, the NOLA tweet confirmed, the city’s IT department gave the order for all employees to power down computers and disconnect from Wi-Fi. All city servers were also powered down, and employees told to unplug any of their devices.

During a press conference, Mayor Cantrell confirmed that this was a ransomware attack. A declaration of a state of emergency was filed with the Civil District Court in connection with the incident.

NOLA Ready said that emergency communications had not been affected. Although the “Real-Time Crime Center” had been powered down, public safety cameras were still recording, and incident footage would be available if needed. The police and fire departments continued to operate as usual, and the ability to respond to 911 calls was not impacted.

The ransomware attack that has hit New Orleans follows another that targeted the state of Louisiana in November. Louisiana school district computers were also taken offline, and a state of emergency declared, in response to a ransomware attack in July. It isn’t yet known if the two were connected. However, in August, 23 government agencies were taken offline by a cyber-attack on the State of Texas. Which suggests that U.S. municipalities are firmly in the crosshairs of ransomware threat actors.

Gee, you think?  Apparently, any business is in the crosshairs these days, if they have enough money.  After all, why do hackers hack, if not for the money.

So, what do you think?  Does your organization have a plan if it’s hit by a ransomware attack?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.

Just in Time for the Holidays! Norton Rose Fulbright’s 2019 Litigation Trends Survey: eDiscovery Trends

No, that’s not Tom O’Connor, it just looks like him… ;o)

Hard to believe it’s the fifteenth edition, but here it is: Norton Rose Fulbright’s 2019 Litigation Trends Annual Survey.  We’ve covered it a few times over the years, but I don’t remember it ever being released this close to the holidays.  Nonetheless, the survey, as always, had some interesting findings.  Let’s take a look.

287 corporate counsel participated in the survey, all respondents were US-based or represent US-based organizations.  The breakdown was as follows: General Counsel 39 percent, Head of Litigation 19 percent, Associate/Deputy/Assistant GC 27 percent, Other 16 percent.

Some notable statistics include:

  • $1.5 million spent on disputes per $1 billion of revenue (median average);
  • 17 percent of respondents expect to increase their team sizes, with only 2 percent predicting a decrease;
  • 66 percent of respondents are using Alternate Fee Agreements (AFAs), but generally for only a minority of spend;
  • 62 percent of respondents now have to balance cross-border discovery with jurisdictional data protection regulations;
  • Greater than 50 percent feel more exposed to cybersecurity and data protection issues, while 11 percent feel less exposed (the second number is the one that surprises me);
  • 35 percent expect volume of disputes to rise moving forward, while only 9 percent expect the volume to decrease (a 26 percent net, which is a rise of 9 percent over 2018 and the third year in a row that the net went up);
  • The most common types of litigation pending against respondent companies over the past 12 months were Labor/Employment 49 percent (up 7 percent from 2018), Contracts 42 percent (up 1 percent), Personal Injury 18 percent (down 1 percent) and IP/Patents 18 percent (up 3 percent);
  • 44 percent of respondents identified Cybersecurity/data privacy as the most likely new source of dispute for their business on the horizon (more than four times the next likely sources: Regulatory and Climate/environment at 10 percent each).

That’s just a sampling of numbers, you can go to the Norton Rose Fulbright site here to download your own copy of the free report.

So, what do you think?  Do any of those numbers surprise you?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.

Away CEO Resigns After “Slack Bullying” Revealed in Report from The Verge: eDiscovery Trends

“Yes”, you say, “this is an interesting story, but what does it have to do with eDiscovery?”  And, why is there a picture of Yogi Berra on this story?  Read on and you’ll find out.

After an article (Emotional Baggage, written by Zoe Schiffer) by The Verge last week exposed a story where ex-employees claimed Away, a luggage startup hid a “toxic work culture”, the travel brand announced it hired the Lululemon executive Stuart Haselden as the company’s new CEO to replace current CEO Steph Korey, who is stepping down just four days after the article.

Like many fast-growing startups, Away’s workplace is organized around digital communication. It’s how employees talk, plan projects, and get feedback from co-workers and higher-ups. Away used the popular chat app Slack, which has the motto ‘where work happens.”  Away embraced Slack in more ways than one — its co-founder, Jen Rubio, is engaged to its CEO Stewart Butterfield — but it took things further than most startups. Employees were not allowed to email each other, and direct messages were supposed to be used rarely (never about work, and only for small requests, like asking if someone wanted to eat lunch). Private channels were also to be created sparingly and mainly for work-specific reasons, so making channels to, say, commiserate about a tough workday was not encouraged.

The rules had been implemented in the name of transparency, but employees say they created a culture of intimidation and constant surveillance. Once, when a suitcase was sent out with a customer’s incomplete initials stenciled onto the luggage tag, Korey said the person in charge must have been “brain dead” and threatened to take over the project.  Korey often framed her critiques in terms of Away’s core company values: thoughtful, customer-obsessed, iterative, empowered, accessible, in it together. Empowered employees didn’t schedule time off when things were busy, regardless of how much they’d been working. Customer-obsessed employees did whatever it took to make consumers happy, even if it came at the cost of their own well-being.

An example of that was the Slack message that Korey sent the day before Valentine’s Day in 2018, when she decided she was going to stop the team from taking any more time off. In a series of Slack messages that began at 3AM, she said, “I know this group is hungry for career development opportunities, and in an effort to support you in developing your skills, I am going to help you learn the career skill of accountability. To hold you accountable…no more [paid time off] or [work from home] requests will be considered from the 6 of you…I hope everyone in this group appreciates the thoughtfulness I’ve put into creating this career development opportunity and that you’re all excited to operate consistently with our core values.”  Four days later, when she noticed two managers still had time off on the calendar, she was livid. “If you all choose to utilize your empowerment to leave our customers hanging…you will have convinced me that this group does not embody Away’s core values,” she said.  In both cases, the emphasis was Korey’s.

Throughout, the article talks about how overworked the small customer team was in keeping up with customer emails and how responses from Away management (especially Korey) continued to drive and berate them.

Away indicated that the plan to change its CEO had been in the works for months.  For her part, Korey posted a message on Twitter last Friday (before the CEO announcement) admitting to her “mistakes” and promising that the company “will continue to work to improve.” As for those mistakes, she notes: “At times, I expressed myself in ways that hurt the team. … I was appalled and embarrassed reading [the messages]. … I’m sincerely sorry for what I said and how I said it. It was wrong, plain and simple.”

The follow-up article from The Verge that discussed Korey’s resignation also discussed the use of Slack as part of the story, noting that “executives may begin rethinking the use of Slack. The kind of type-first, think-later style of communication that it inspires is categorically different than email, the technology that preceded it in companies like Away.”

So, what does this article have to do with eDiscovery?  It illustrates how communications in organizations are changing these days.  While the communication policies at Away are an extreme example, they certainly illustrate how communication is about much more than email these days – communications with colleagues via text and other messaging apps like Skype and Slack are routine in organizations these days as those messages are often the quickest way to get a response versus wading through a sea of emails.  When it comes to emails and urgent communications, as Yogi Berra once said about a popular restaurant in New York, “nobody goes there anymore, it’s too crowded.”  And, all of that data is discoverable.

So, what do you think?  Does your organization use Slack or another messaging app for internal communications?  Please share any comments you might have or if you’d like to know more about a particular topic.  It’s never over ’til it’s over.  ;o)

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.

Today’s Webcast Will Help You Learn about Important eDiscovery Developments for 2019: eDiscovery Webcasts

2019 was another busy year from an eDiscovery, cybersecurity and data privacy standpoint.  So busy, we couldn’t fit it all into a single webcast!  Nonetheless, what do you need to know about those important 2019 events?  Today’s webcast will discuss what you need to know about important 2019 events and how they impact your eDiscovery, data privacy and cybersecurity efforts.

Today at noon CST (1:00pm EST, 10:00am PST), CloudNine will conduct the webcast 2019 eDiscovery Year in Review.  In this one-hour webcast that’s CLE-approved in selected states, we will discuss key events and trends in 2019, what those events and trends mean to your discovery practices and provide our predictions for 2020. Key topics include:

  • How Much Data is Being Transmitted Every Minute on the Internet in 2019
  • What a Lawyer’s Notification Duty When a Data Breach Occurs
  • General Data Protection Regulation (GDPR) and Data Privacy Fines
  • Biometric Security and Data Privacy Litigation
  • Cell Phone Passwords and the Fifth Amendment
  • How Organizations Are Doing on Compliance with the California Consumer Privacy Act (CCPA)
  • Social Media and Judges Accepting “Friend” Requests from Litigants
  • How #metoo and Investigations are Impacting eDiscovery within Organizations
  • Whether Emojis Are the Next eDiscovery Challenge
  • The Challenge to Obtain Significant Spoliation Sanctions under the New Rule 37(e)
  • Whether Lawyers Are “Failing” at Cybersecurity?
  • Outside Hackers vs. Internal Employees As Cybersecurity Threat
  • Sanctions Resulting from Inadvertent Disclosure of Privileged Information

As always, I’ll be presenting the webcast, along with Tom O’Connor.  To register for it, click here – it’s not too late! Even if you can’t make it, go ahead and register to get a link to the slides and to the recording of the webcast (if you want to check it out later).  If you want to learn how key events and trends in 2019 can affect your eDiscovery practice in 2020, this webcast is for you!

So, what do you think?  Do you have FOMO (fear of missing out) on important info for 2019?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.

This is What WON’T Be On Our 2019 eDiscovery Year in Review Webcast Tomorrow: eDiscovery Trends

Tomorrow, CloudNine will conduct the webcast 2019 eDiscovery Year in Review.  As 2019 has been a busy year, we have a lot of topics planned for tomorrow – everything from key case law decisions to important data privacy trends to whether lawyers are “failing” at cybersecurity and it will be a challenge to get through them all.  But, we still couldn’t cover everything – there was simply too much that happened this year to cover it all.  So, here are some notable events and trends that we covered on eDiscovery Daily this year that we won’t have time to discuss tomorrow.  Enjoy!

To Preserve Sanction Potential, Plaintiff Fights To NOT Have Claim Against Them Dismissed: Yes, you read that right. In DR Distrib., LLC v. 21 Century Smoking, Inc., Illinois District Judge Iain D. Johnston denied the defendants’ Motion for Leave to Amend their counterclaim to remove their own defamation counterclaim (Count VIII) against the plaintiffs – a move to which the plaintiffs objected, because it could eliminate their chance to pursue sanctions against the defendants for ESI spoliation.

Discovery Can’t Be Stayed While Motion to Dismiss is Considered, Court Says: In Udeen v. Subaru of America, Inc., New Jersey Magistrate Judge Joel Schneider denied the defendants’ request that all discovery be stayed until their Motion to Dismiss is decided, but, with the proviso that only limited and focused discovery on core issues would be permitted.

Firm IT Director Predicts “Carnage” in Legal Tech Consolidation: Not since Clubber Lang predicted “pain” in Rocky III has the state of legal tech consolidation been stated quite this way. Is that good news or bad news for consumers of legal tech software and services?

Is eDiscovery “Too Practical” to Offer as Part of Law School Curriculums?: We’ve certainly noted before how slow law schools are to provide eDiscovery education. But, are they slow to push for it because eDiscovery is “too practical”? At least one law school dean suggests that might be the case.

Another Case Where Intent to Deprive is Put in the Hands of the Jury: In Woods v. Scissons, Arizona Chief District Judge G. Murray Snow granted in part and denied in part the plaintiff’s motion for sanctions for spoliation of video footage of an arrest incident involving the plaintiff and the defendant (a police officer with the Prescott Police Department), ruling that non-party City of Prescott violated a duty to preserve evidence of the alleged incident, but that the question of intent should be submitted to the jury to determine appropriate sanctions.

Mary Mack and Kaylee Walstad acquire the EDRM from Duke Law: In a rare two-post day for us at eDiscovery Daily, we broke the news that Mary Mack and Kaylee Walstad, the former executive director and former vice president of client engagement, respectively, of The Association of Certified E-Discovery Specialists (ACEDS) announced that they have acquired the Electronic Discovery Reference Model (EDRM) from the Bolch Judicial Institute at Duke Law School.  Before that, ACEDS announced its new leadership as well.

Why Process in eDiscovery? Isn’t it “Review Ready”?: I’ve been asked a variation of this question for years. But, perhaps the best answer to this question lies in Craig Ball’s new primer – Processing in E-Discovery.

Despite Email from Defendants Instructing to Destroy Evidence, Court Declines Sanctions: In United States et al. v. Supervalu, Inc. et al., Illinois District Judge Richard H. Mills, despite an email produced by the defendants with instructions to their pharmacies to destroy evidence, denied the relators’ motion for sanctions, stating: “Upon reviewing the record, the Court is unable to conclude that Defendants acted in bad faith. If the evidence at trial shows otherwise and bad faith on the part of the Defendants is established, the Court can revisit the issue and consider one or both of the sanctions requested by the Relators or another appropriate sanction.”  {OK, we might mention this one}

Court Infers Bad Faith for Plaintiffs Use of Ephemeral Messaging App: In Herzig v. Arkansas Foundation for Medical Care, Inc., Arkansas District Judge P.K. Holmes, III indicated his belief that the use and “necessity of manually configuring [the messaging app] Signal to delete text communications” on the part of the plaintiffs was “intentional and done in bad faith”. However, Judge Holmes declined to consider appropriate sanctions, ruling that “in light of the [defendant’s] motion for summary judgment, Herzig and Martin’s case can and will be dismissed on the merits.”

Despite Email from Defendants Instructing to Destroy Evidence, Court Declines Sanctions: In United States et al. v. Supervalu, Inc. et al., Illinois District Judge Richard H. Mills, despite an email produced by the defendants with instructions to their pharmacies to destroy evidence, denied the relators’ motion for sanctions, stating: “Upon reviewing the record, the Court is unable to conclude that Defendants acted in bad faith. If the evidence at trial shows otherwise and bad faith on the part of the Defendants is established, the Court can revisit the issue and consider one or both of the sanctions requested by the Relators or another appropriate sanction.”  {OK, we might mention this one}

If this is what didn’t make the cut, tune in tomorrow (noon CST, 1:00pm EST, 10:00am PST) to see what did!

So, what do you think?  What do you think was most notable about eDiscovery in 2019?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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 Infers Bad Faith for Plaintiffs Use of Ephemeral Messaging App: eDiscovery Case Law

We’re catching up on notable cases from earlier in the year.  Here’s one that’s notable regarding the use of ephemeral messaging and spoliation sanctions.

In Herzig v. Arkansas Foundation for Medical Care, Inc., No. 2:18-CV-02101 (W.D. Ark. July 3, 2019), Arkansas District Judge P.K. Holmes, III indicated his belief that the use and “necessity of manually configuring [the messaging app] Signal to delete text communications” on the part of the plaintiffs was “intentional and done in bad faith”.  However, Judge Holmes declined to consider appropriate sanctions, ruling that “in light of the [defendant’s] motion for summary judgment, Herzig and Martin’s case can and will be dismissed on the merits.”

Case Background

In this case where the plaintiffs alleged unlawful termination due to age discrimination, the parties conferred and agreed that the defendant might request data from the plaintiffs’ mobile phones and that the parties had taken reasonable measures to preserve potentially discoverable data from alteration or destruction.  In July 2018, the defendant served requests for production on the plaintiffs and, in September 2018, Plaintiffs Brian Herzig and Neal Martin produced screenshots of parts of text message conversations from Martin’s mobile phone, including communications between Herzig and Martin, but nothing more recent than August 20, 2018, even after a motion to compel.

After the August production, Martin installed the application Signal (which allows users to send and receive encrypted text messages accessible only to sender and recipient, and to change settings to automatically delete these messages after a short period of time) on his phone.  Herzig had done so while working at the defendant.  Herzig and Martin set the application to delete their communications and, as a result, disclosed no additional text messages to the defendant, which was unaware of their continued communication using Signal until Herzig disclosed it in his deposition near the end of the discovery period.  The defendant filed a motion for dismissal or adverse inference on the basis of spoliation.

Judge’s Ruling

In assessing the defendant’s motion, Judge Holmes stated that “Herzig and Martin had numerous responsive communications with one another and with other AFMC employees prior to responding to the requests for production on August 22, 2018 and producing only some of those responsive communications on September 4, 2018. They remained reluctant to produce additional communications, doing so only after AFMC’s motion to compel. Thereafter, Herzig and Martin did not disclose that they had switched to using a communication application designed to disguise and destroy communications until discovery was nearly complete. Based on the content of Herzig and Martin’s earlier communications, which was responsive to the requests for production, and their reluctance to produce those communications, the Court infers that the content of their later communications using Signal were responsive to AFMC’s requests for production. Based on Herzig and Martin’s familiarity with information technology, their reluctance to produce responsive communications, the initial misleading response from Martin that he had no responsive communications, their knowledge that they must retain and produce discoverable evidence, and the necessity of manually configuring Signal to delete text communications, the Court believes that the decision to withhold and destroy those likely-responsive communications was intentional and done in bad faith.”

However, Judge Holmes also stated: “This intentional, bad-faith spoliation of evidence was an abuse of the judicial process and warrants a sanction. The Court need not consider whether dismissal, an adverse inference, or some lesser sanction is the appropriate one, however, because in light of the motion for summary judgment, Herzig and Martin’s case can and will be dismissed on the merits.”  As a result, the requested sanctions were denied as moot.

So, what do you think?  Should use of an ephemeral messaging app when a duty to preserve attaches lead to significant sanctions?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.

eDiscovery Markets Are Growing and Legal Tech Investments Are “Skyrocketing”. So, Who’s Buying?: eDiscovery Trends

No, I don’t mean who’s buying the drinks.  Though the growth of the markets and the growth in legal tech investment is certainly worth celebrating (especially for those who’ve seen their investments pay off).  ;o)  But what I’m asking is: who’s buying the technology?

First, the investment part.  As discussed earlier this week in Legaltech News® (As Legal Tech Investments Skyrocket, Startups Combat Tech Adoption Perceptions, written by Victoria Hudgins), it’s been a record-setting year for investments in legal tech, with the industry reaching the $1.2 billion threshold this year for the first time, according to Bob Ambrogi’s excellent LawSites blog.  And, that was as of the middle of September!

Hudgins has some excellent quotes from several C-Suite execs from legal tech companies that have received funding from investors and part of the tone of the article is the challenge associated with convincing investors that tech-averse lawyers will really buy the software.  As an example, Litify chief revenue officer Terry Dohrmann, whose law firm management software company raised $2.5 million in 2018 and $50 million last June, noted that there are differences in pitching legal tech to investors.

“The short answer is yes, there is a difference,” Dohrmann said. “A lot of that is driven by the universal acceptance that law firms are a little behind in adoption of technology.”

So, it’s the law firms that are fueling this growth in the market?  Maybe partially, but I’m not so sure they are the major factor.

As we’ve covered many times before, Rob Robinson on his terrific Complex Discovery site tracks the eDiscovery specific mergers, acquisitions and investments here (he’s got them all the way back to 2001).  By my count, we’ve had 44 such transactions so far this year (that we know of), with a total estimated amount (at least where amounts are available) of over $560 million, just for eDiscovery company investments.  And, that doesn’t include two investments of over $2.5 billion which have been announced, but not closed.  So, that $1.2 billion threshold could be shattered before year’s end.  Crikey!

Also, as we covered just last week, Rob presented his worldwide eDiscovery services and software overview for 2019 to 2024 on Complex Discovery last month and his annual “mashup” of industry estimates shows the eDiscovery Software and Services market is expected to grow an estimated 12.93% Compound Annual Growth Rate (CAGR) per year from 2019 to 2024 from $11.23 billion to $20.63 billion per year.  Here’s the combined eDiscovery markets for 2019 to 2024, represented graphically:

Of that, the eDiscovery Software market is expected to grow at an even larger estimated 13.05% CAGR per year from $3.39 billion in 2019 to $6.26 billion in 2024, growing about 85% in five years.  Here’s the eDiscovery software market for 2019 to 2024:

Which leaves the eDiscovery Services market, which is expected to grow at an estimated 12.88% CAGR per year from 2019 to 2024 from $7.84 billion to $14.37 billion per year.  Here’s the eDiscovery services market for 2019 to 2024:

Charts courtesy of Complex Discovery.

So, who’s buying?  Seems a lot of the technology is being purchased by the service providers, who are (in turn) using it to provide services to corporations, law firms and government entities, who are buying those services.  Obviously, corporations, law firms and government entities are buying some of the technology as well and law firms providing some of the eDiscovery services.  But, it seems like it’s the service providers who have the biggest impact on the growth of the market.  Do you agree?

So, what do you think?  Will the growth of the market and the “skyrocketing” investment in legal tech continue?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.

Despite Email from Defendants Instructing to Destroy Evidence, Court Declines Sanctions: eDiscovery Case Law

In United States et al. v. Supervalu, Inc. et al., NO. 11-3290 (C.D. Ill. Nov. 18, 2019), Illinois District Judge Richard H. Mills, despite an email produced by the defendants with instructions to their pharmacies to destroy evidence, denied the relators’ motion for sanctions, stating: “Upon reviewing the record, the Court is unable to conclude that Defendants acted in bad faith. If the evidence at trial shows otherwise and bad faith on the part of the Defendants is established, the Court can revisit the issue and consider one or both of the sanctions requested by the Relators or another appropriate sanction.”

Case Background

In this case, the defendants produced in discovery a January 27, 2012 email from a pharmacy district manager for 33 Shop ‘n Save pharmacies, instructing those pharmacies to “throw away all your competitor’s price matching lists and get rid of all signs that say we match prices.” The email was sent seven days after the January 20, 2012 government agents’ visits to the defendants’ pharmacies, including one of the district manager’s pharmacies, five days after the manager learned of the visit by a Special Agent with the Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), and three days after the defendants received a subpoena from the Government requesting documents regarding the price match program.

The relators further alleged it appeared that another district manager ordered the destruction of signage promoting the defendants’ price match program after visits by government agents and service of the HHS-OIG subpoena and also alleged the defendants waited until almost the end of discovery to produce the January 27, 2012 email.  As a result, they requested the entry of an Order imposing appropriate sanctions against the defendants for what they alleged was (1) Defendants’ failure to timely issue a litigation hold; (2) the intentional destruction of material evidence relating to defendants’ price match program; and (3) their subsequent efforts to conceal and obstruct discovery of their spoliation of evidence, including the wrongful withholding of material evidence of the spoliation until just days before the close of discovery in this case.

The defendants, in turn, claimed (1) they timely issued a litigation hold in this matter; (2) did not intentionally destroy material evidence; and (3) did not attempt to conceal and obstruct discovery of any alleged spoliation of evidence.  The Defendants claimed they issued three litigation holds: (1) one to individuals in the corporate business department on January 30, 2012; (2) one to all Pharmacy District Managers on February 20, 2012; and (3) one to the corporate marketing and advertising executives on March 15, 2012.  Alleging there were inconsistencies in both the number and timing of the litigation holds between defendant declarations, the relators asked the Court for an in camera review of the three litigation holds noted above.

Judge’s Ruling

Judge Mills, in noting that “A showing of bad faith—like destroying evidence to hide adverse information—is a prerequisite to imposing sanctions for missing evidence”, ruled as follows:

“The Court does not believe that an in camera review of the Defendants’ litigation holds is necessary at this time. At this time, the Court does not believe that sanctions are warranted based on the Defendants’ alleged failure to timely issue a litigation hold, their intentional destruction of evidence relating to the price match program, or their efforts to conceal and obstruct discovery of the spoliation of evidence. Upon reviewing the record, the Court is unable to conclude that Defendants acted in bad faith. If the evidence at trial shows otherwise and bad faith on the part of the Defendants is established, the Court can revisit the issue and consider one or both of the sanctions requested by the Relators or another appropriate sanction.

Ergo, the Relators’ motion for sanctions [d/e 205] is DENIED.”

So, what do you think?  Do the defendants’ actions seem to be in bad faith or was the Court’s ruling appropriate?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.

It’s E-Discovery Day 2019! Check Out Today’s Webcasts and In Person Events!: eDiscovery Best Practices

It’s time for another E-Discovery Day!  By my count, this is the fifth annual event that includes a combination of webcasts and in-person events to promote discussion and education of eDiscovery (we won’t hold it against them that they want to spell it with that pesky dash).  Here are links to some of the webcasts and in-person events happening today!

According to Exterro, the organizer of the event, there were 2,660 participants in 19 webcasts and 14 in-person events last year.  This year, I count a whopping 22 webcasts and 16 in-person events and the earliest webcast started at midnight Pacific time!  You may have already missed it!  And that’s only the ones officially listed on the E-Discovery Day webcasts page here, there are others I’ve seen as well.  You can participate by hosting your own educational webcast and submit one for the list.  Eeegads! (or is it E-eegads?)… ;o)

In addition, there are also several in-person events and networking opportunities around the country – here is a link to those.  Some are happy hours and other networking events, others are actual local educational events.  Click on the event in your area to RSVP and find out more – there’s still time!

So, what do you think?  Are you “celebrating” E-Discovery Day?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.

Here’s Something that Canada and South Carolina Have in Common: eDiscovery Trends

They both just recently adopted changes to their rules of professional conduct that include a duty of technology competence.

Leave it to Bob Ambrogi – the source of all duty of technology competence updates on his excellent LawSites blog for the information.  Here’s the lowdown:

Canada

As Bob reported way back in 2017, the Federation of Law Societies of Canada had proposed changes to its Model Code of Professional Conduct that would include a duty of technology competence similar to ABA Model Rule 1.1, Comment 8.  On Oct. 19, the Federation formally amended its Model Code to include that duty of technology competence. Similar to the ABA rule, the Federation’s duty is embodied in comments to its rule on maintaining competence, Rule 3.1-2. These new comments say:

[4A] To maintain the required level of competence, a lawyer should develop an understanding of, and ability to use, technology relevant to the nature and area of the lawyer’s practice and responsibilities. A lawyer should understand the benefits and risks associated with relevant technology, recognizing the lawyer’s duty to protect confidential information set out in section 3.3.

[4B] The required level of technological competence will depend on whether the use or understanding of technology is necessary to the nature and area of the lawyer’s practice and responsibilities and whether the relevant technology is reasonably available to the lawyer. In determining whether technology is reasonably available, consideration should be given to factors including:

(a) The lawyer’s or law firm’s practice areas;

(b) The geographic locations of the lawyer’s or firm’s practice; and

(c) The requirements of clients.

Bob notes that “Just as individual states must adopt an ABA model rule, the individual Canadian provincial and territorial law societies must adopt this rule.”  So, we’ll see how quickly that happens.

South Carolina

The day before Thanksgiving, the Supreme Court of South Carolina approved a package of amendments to the state’s Rules of Professional Conduct, all based on the 2012 amendments to the ABA Model Rules of Professional Conduct, which included a duty of technology competence as embodied in ABA Model Rule 1.1, Comment 8.  This made South Carolina the 38th state to adopt a duty of technology competence based on ABA Model Rule 1.1, Comment 8.  See the map above and Bob’s post here for all 38 states.

The new South Carolina provision is a modified version of the ABA model rule. It is found in a new Comment 6 to Rule 1.1, and reads:

“To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including a reasonable understanding of the benefits and risks associated with technology the lawyer uses to provide services to clients or to store or transmit information related to the representation of a client, engage in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject.”

In its order, the Supreme Court also amended Rule 1.6 (and comment 20 to Rule 1.6), pertaining to confidentiality of information, to add a paragraph (c), which reads:

“A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.”

Bob notes that South Carolina’s rule adds a restrictive clause to that, so that the duty extends only to “technology the lawyer uses to provide services to clients or to store or transmit information related to the representation of a client” and I agree with Bob that lawyers need to also understand the technology that their clients use as well.  So, maybe it’s more like 37 1/2 states have adopted a duty of technology competence?  ;o)  Regardless, Bob’s posts linked above provide more information on the updates from both jurisdictions.

So, what do you think?  Are you surprised that we still have 12 states that haven’t adopted a duty of technology competence?  Please share any comments you might have or if you’d like to know more about a particular topic.

Image Copyright © LawSites

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.