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eDiscoveryDaily

2017 eDiscovery Case Law Year in Review, Part 1

Once again, it’s time for our annual review of eDiscovery case law!  This is our seventh annual review of cases that we covered on the eDiscovery Daily blog over the past year.  As always, we had a number of interesting cases related to various eDiscovery topics.  So, as we have done for the last six(!) years, let’s take a look back at 2017!

Last year, eDiscoveryDaily published 78 posts related to eDiscovery case decisions and activities over the past year, covering 62 unique cases!  We’ve had nearly 600 lifetime case law related posts, covering over 440 unique cases since our inception back in 2010.  And, believe it or not, we still didn’t cover every case that had eDiscovery impact.  Sometimes, you want to cover other topics too.

Nonetheless, as always for the cases we did cover, we grouped them into common subject themes and will review them over the next few posts (a few of them could be categorized in more than one category, so we took our best shot).  Perhaps you missed some of these?  Now is your chance to catch up!

It’s also worth noting that Tom O’Connor and I will be discussing some of these cases – and what the legal profession can learn from those rulings – on Thursday’s webcast Important eDiscovery Case Law Decisions of 2017 and Their Impact on 2018 at noon CT (1pm ET, 10am PT).  The webcast is CLE accredited in selected states, so come check it out!

And, here we go…

ADMISSIBILITY, PROPORTIONALITY AND COOPERATION

Can’t we all just get along?  Again this year, there were plenty of disputes the scope and content of production.  Oh, and how would you like to have $10M shaved off your bill for document review?  Here are fourteen cases related to admissibility of ESI and the proportionality for preserving and producing that ESI:

Judge Cuts Over $10M from Attorney Fees Due to Use of Temporary Attorneys for Document Review: The use of temporary associates for document review (and billing at normal staff associate rates) caused a federal judge in Manhattan to reduce the request for attorney fees by $10.3 million in a settlement of a securities case against Bank of America.

Court Defines Narrowed Scope for Requests for Social Media Data: In Scott v. United States Postal Service, Louisiana Magistrate Judge Erin Wilder-Doomes granted the defendant’s Motion to Compel Discovery in part, ordering the plaintiff to provide complete responses to the defendant’s interrogatory and request for production, but only after she limited the scope of both requests, determining them to be “overly broad”.

Court Denies Untimely Motion to Compel Production of Text Messages: In Healthwerks, Inc. et. al. v. Stryker Spine, et. al., Wisconsin District Judge Pamela Pepper denied a motion to compel production of text messages issued by the plaintiffs and third party defendants against the defendant Stryker, agreeing with Stryker that filing the motion almost six months after discovery had closed was untimely.

Lack of Cooperation Leads to Court to Order Scope of Discovery for Defendant: In Bird v. Wells Fargo Bank, after the parties could not agree on the parameters and scope of discovery, California Magistrate Judge Erica P. Grosjean ordered the defendant to produce several categories of documents related to the plaintiff’s former employment, disclose its discovery plan, search terms and custodians, produce its document retention policies regarding the destruction of employee emails and produce an initial privilege log.

Court Approves Defendant’s Proposed Random Sampling Production Plan: In Duffy v. Lawrence Memorial Hospital, Kansas Magistrate Judge Teresa J. James granted the Motion to Modify Discovery Order from the defendant (and counterclaimant), where it asked the Court to enter a protective order directing it to produce a random sampling of 252 patient records, along with five spares, in order to respond to the plaintiff/relator’s document requests.

Despite Parties’ “Significant Animosity”, Court Orders Them to Meet and Confer: In Elhannon LLC v. F.A. Bartlett Tree Expert Co., Vermont District Judge William K. Sessions, III granted in part and denied in part the plaintiff’s renewed motion to compel, denied motions for sanction by each party against the other, and ordered the parties to engage in further meet-and-confer efforts to narrow their differences on the appropriate scope of discovery.

Court Limits Burden for Defendant to Search Loan Numbers, Splits Costs Between Parties: In Phoenix Light SF Ltd. v. Deutsche Bank Nat’l Trust Co., New York Magistrate Judge Debra Freeman granted the plaintiffs’ motion to compel in part, ordering the defendant to search for 16,000 loan numbers proposed by the plaintiffs’ and ordered the parties to split the costs for performing the searches.

Plaintiff Can Review Documents Deemed as Non-Responsive, But Has to Bear its Own Costs: In Nachurs Alpine Solutions, Corp. v. Banks, Iowa Chief Magistrate Judge C. J. Williams granted in part and denied in part the plaintiff’s motion to compel ESI discovery, by ordering the defendants to produce all of the ESI documents it identified as unresponsive under an Attorneys Eyes Only label and that the plaintiff bear its own costs of reviewing the documents for the categories it believes may hold relevant documents.

Court Denies Plaintiff’s Request for Defendant’s Source Code Production: In Congoo, LLC v. Revcontent LLC, et al, New Jersey Magistrate Judge Tonianne J. Bongiovanni, finding that the plaintiff “has not met its burden of demonstrating that production of the source code is relevant and necessary”, denied the plaintiff’s Motion to Compel the inspection and production of the defendants’ source code.

Defendant’s Request for Social Media Data is Reasonably Calculated to Be Overbroad: In Ehrenberg v. State Farm Mut. Auto. Ins. Co., Louisiana Magistrate Judge Janis van Meerveld, rejecting the defendant’s request for the plaintiff’s social media data as “reasonably calculated to lead to the discovery of admissible evidence”, identified a level of social media data to be produced by the plaintiff that considered “weighing relevance and proportionality”.

Court Adds Some of the Custodians Requested by Plaintiffs to Discovery, But Not All: In Mann, et al. v. City of Chicago, et al, Illinois Magistrate Judge Mary M. Rowland granted in part and denied in part the plaintiffs’ Motion to Compel the defendant to include certain custodians in their email search, ordering the defendant to search emails of five additional custodians (including the Mayor of Chicago), but not requiring the defendant to search emails for an additional three custodians requested by the plaintiff.  Judge Rowland also denied the plaintiffs’ request for sanctions, finding that the defendant’s conduct was not sanctionable.

Court Denies Motions to Compel Against Various Defendants, For Various Reasons: In Blosser v. Ashcroft, Inc., et al., Washington District Judge Benjamin H. Settle settled this dispute for now between the plaintiffs and three defendants over discovery disputes by denying the plaintiffs’ motions to compel against all three defendants, two of them without prejudice.

Court Chastises Parties for Turning Case into a “Discovery Slugfest”: In UnitedHealthcare of Fla., Inc. et al. v. Am. Renal Assoc., Inc. et al., Florida Magistrate Judge William Matthewman granted in part and denied in part the plaintiffs’ Motion for Reconsideration or Modification of Omnibus Discovery Order, clarifying the Court’s previous order regarding custodians and search terms, while denying the remainder of the plaintiff’s motion.  Judge Matthewman also chastised both parties for their lack of cooperation on search terms.

No Dismissal of Claim Against Defendant Accused of Transferring Company Info to Dropbox Account: In Abbott Labs. v. Finkel, Colorado District Judge Christine M. Arguello denied the defendant-movant’s motion to dismiss the plaintiff-respondent’s conversion claim that the defendant disclosed the plaintiff’s confidential information and trade secrets to a third party and transferred that information to his personal online cloud storage Dropbox account.

EDISCOVERY COST REIMBURSEMENT

We usually have at least a couple of rulings related to reimbursement of eDiscovery costs and legal fees, but we don’t usually get a SCOTUS decision in the mix.  Here are two cases related to eDiscovery cost and legal fee reimbursement.

SCOTUS Reverses and Remands Circuit Court Award of Fees for Discovery Misconduct: In Goodyear Tire & Rubber Co. v. Haeger, the Supreme Court of the United States, in a decision delivered by Justice Kagan reversed and remanded the decision by the US Court of Appeals, Ninth Circuit, for further proceedings, stating that “because the court here granted legal fees beyond those resulting from the litigation misconduct, its award cannot stand.”

Court Grants Most of Plaintiff’s Cost Recovery Request, Including All eDiscovery Costs: In Ariel Inv., LLC v. Ariel Capital Advisors LLC, Illinois District Judge Matthew F. Kennelly granted the prevailing plaintiff’s request to tax most requested costs in the amount of $99,378.32, including the entire amount ($85,666.51) requested for reimbursement for eDiscovery costs.

We’re just getting started!  Tomorrow, we will cover cases related to discovery about discovery, technology assisted review, form of production disputes, objections to production requests and an interesting dispute between an eDiscovery provider and their former sales people.  Stay tuned!

Want to take a look at cases we covered the previous six years?  Here they are:

So, what do you think?  Did you miss any of these?  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.

A New Partner for eDiscovery Daily!: eDiscovery Trends

When we first started the eDiscovery Daily blog back in September 2010, it took a while for us to gain traction.  In fact, we were happy when we had 100 views in a given day on the blog.  Now we get several times that number daily.  Even on a holiday like Christmas Day, we still considerably exceed those early blog view numbers.  Back then, you could only view our blog from within our own site, but that’s not true anymore.  And, we’ve just added a new partner to the mix this week!

This week, the LexBlog Network began covering the eDiscovery Daily Blog and linking to our posts on their site.  The LexBlog Network is a community of more than 15,000 lawyers publishing on more than 1,000 blog sites. The network curates the best posts of members and shares them to network members via a consolidated website, blog feeds, and emails.  Our posts can be found on the site in the E-Discovery channel here.

LexBlog was founded by Kevin O’Keefe, who has his own LexBlog blog Real Lawyers Have Blogs, which is a terrific blog site about various legal, technology, social media and (of course) blogging topics (that sentence may have just set a record for the most times “blog” was used in a sentence).  LexBlog also made a recent significant announcement over the holidays that Bob Ambrogi, author of the terrific LawSites blog (which has been one of our favorite sources for stories over the years), has joined as publisher and editor-in-chief.

Over the years, we’ve been able to partner with other organizations to expand the reach of our blog.  In March of 2015, we announced that we had become an Education partner with EDRM and the EDRM site has a dedicated eDiscovery Daily page with links to our posts.  In October of 2016, we joined the JDSupra network as a partner and many of our posts are distributed through that network as well (and available here, try to ignore the picture of my big fat head).  That partnership has extended the reach of the blog considerably and we’ve even made the monthly most read list a few times (and won an award too, as you can see below).  :o)

We’re grateful to all of our partners to helping us extend the reach of this blog and excited about our new partner, The LexBlog Network.  Check it out!

Next week, starting Monday or Tuesday, we will be publishing our seventh annual case law review, with a recap of over 60 case law decisions we covered last year.  If you missed any, this is your opportunity to catch up!

So, what do you think?  Do you get your eDiscovery Daily directly from our site or via one of our partners?  Please share any comments you might have with us or let us know 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.

Your “Mashup” of eDiscovery Market Estimates Can’t Possibly Be Any Earlier: eDiscovery Trends

It’s become an annual tradition – the release of the eDiscovery Market Size Mashup that Rob Robinson compiles and presents on his Complex Discovery site each year.  It’s also become an annual tradition for him to release it earlier and earlier each year.  So, over the holidays, Rob released his worldwide eDiscovery services and software overview for 2017 to 2022.

Since this is the sixth year we have covered the “mashup”, we can now start to gauge how accurate those first predictions were.  The first “mashup” covered estimates for 2012 to 2017, so we can see how close the estimate was for 2017 way back when.  We’ve also covered the estimates for 2013 to 2018, 2014-2019 (in two parts), 2015 to 2020 and 2016 to 2021.

Taken from a combination of public market sizing estimations as shared in leading electronic discovery publications, posts, and discussions (sources listed on Complex Discovery), 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 2017 and 2022.

Here are some highlights (based on the estimates from the compiled sources on Rob’s site):

  • The eDiscovery Software and Services market is expected to grow an estimated 15.42% Compound Annual Growth Rate (CAGR) per year from 2017 to 2022 from $9.24 billion to $18.93 billion per year. Services will comprise approximately 69.8% of the market and software will comprise approximately 30.2% by 2022.
  • The eDiscovery Software market is expected to grow at an estimated 15.82% CAGR per year from $2.74 billion in 2017 to $5.71 billion in 2022. In 2018, software comprises 29.8% of the market and, by 2022, 70% of the eDiscovery software market is expected to be “off-premise” – a.k.a. cloud 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 15.26% CAGR per year from 2017 to 2022 from $6.5 billion to $13.22 billion per year. The breakdown of the services market by 2022 is expected to be as follows: 66% review, 19% processing and 15% collection.

If we look at the original “mashup” that we covered for 2012 to 2017, the original eDiscovery Software and Services market estimate for 2017 was $9.81 billion, the original Software portion of the estimate was $2.78 billion and the original Services portion of the estimate was $7.03 billion.  So the software estimate was almost “spot on”, while the services estimate was overstated by about half a billion.  Pretty darn close.

A couple of other notable stats:

  • The U.S. constitutes approximately 65% of worldwide eDiscovery software and services spending in 2017, with that number decreasing to approximately 60% by 2022.
  • Off-Premise software spending constitutes approximately 50% of worldwide eDiscovery software spending in 2017, with that number increasing to approximately 70% by 2022.

So, what do you think?  Do any of these 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.

It’s 2018! How Confident Are You in the State of eDiscovery Business?: eDiscovery Trends

We’re back!  Happy New Year!  It’s a new year and a new chance to voice your opinion in the latest quarterly eDiscovery Business Confidence Survey!  This time, it’s the Winter 2018 eDiscovery Business Confidence Survey created by Rob Robinson and conducted on his terrific Complex Discovery site.

It’s the third year of the quarterly survey and we’ve covered every round of the survey so far (2016 coverage of results are here, here, here and here, 2017 coverage of results are here, here, here and here).  As always, the eDiscovery Business Confidence Survey is a non-scientific survey designed to provide insight into the business confidence level of individuals working in the eDiscovery ecosystem.  To date, the survey has been administered eight times over two years with 842 individual responses. Survey participants range from eDiscovery experts and educators to analysts and commentators in all sectors of the eDiscovery ecosystem to include corporations, law firms, governmental agencies, research firms, and industry associations.

It’s a simple nine question survey that literally takes about a minute to complete.  Who hasn’t got a minute to provide useful information?  As always, individual answers are kept confidential.

The Winter 2018 Survey response period is between today and achievement of 100 responses or February 28, 2018 (whichever comes first).  If the past is any indication, chances are the survey will be closed way before February 28.  So, vote early if you want to be counted!  What more do you need?  Click here to take the survey yourself.

As always, eDiscovery Daily will cover the results, looking at quarter over quarter and year over year trends to see how confident we all are in the business of eDiscovery.

So, what do you think?  Are you confident in the state of business within the eDiscovery industry?  Share your thoughts in the survey and, as always, please share any comments you might have with us or let us know 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.

The Gifts that Keep on Giving: eDiscovery Holiday Wishes and Webcasts

Not only have we had a very successful year in presenting CLE-accredited webcasts this year, we’re already getting started on next year with a new webcast in January!  If you want to see how key case law decisions in 2017 may affect how you conduct discovery in 2018 AND how you can still get CLE credit for 2017’s webcasts, read on.

I thought I’d start by taking a look back at the webcasts we conducted this year.  A couple of days ago, I met with a client prospect who had attended a couple of our webcasts and had requested (and received) CLE credit for attending them.  She had very complimentary things to say about the webcasts she attended, which was a great feeling, and seemed to appreciate how easy it was to obtain CLE credit for attending.

We’ve conducted several CLE-accredited webcasts this year, covering such topics as what attorneys (and other legal professionals) need to know about eDiscovery in 2017, best practices for eDiscovery searching, how to avoid 20 different “pitfalls” and “potholes” that could derail your eDiscovery projects, what you need to know about cybersecurity and privacy in 2017, how cloud automation is revolutionizing eDiscovery for solo and small firms as we speak, considerations for selecting on-premise and/or off-premise eDiscovery solutions, what to do (or what you should have already done) when the case is actually filed, lessons learned from recent eDiscovery disasters and how to thwart Murphy’s Law and keep what could go wrong from actually going wrong.  And, because we couldn’t wait until the end of the year to analyze key case law, we took a look at key eDiscovery case law decisions for the first half of 2017.

These are just some of the twenty-three webcasts that are currently up on our webcasts page (launched less than a year ago, I might add), that also includes some product demonstrations and educational and additional informative webcasts (some of those CLE-accredited as well) that we’ve conducted through our partnership with ACEDS.

What a lot of people don’t realize is that CLE-accreditation is not just available for those who attended these webcasts live, it’s also available for those who view the webcasts on demand.  They are truly the gift that keeps on giving – CLE credits.  While each of these webcasts were accredited in selected states, CLE accreditation is available in additional states via reciprocity credit.  So, if you want to ask about CLE credit on any particular webcast, feel free to email me at daustin@cloudnine.com.

Also, feel free to sign up for our first webcast of 2018: Important eDiscovery Case Law Decisions of 2017 and Their Impact on 2018.  Tom O’Connor and I will cover key 2017 case law decisions covered by the eDiscovery Daily blog and what the legal profession can learn from those rulings – which is one reason why I was “catching up” on a couple of cases earlier this week.  :o)  To sign up for the webcast, click here.  You won’t want to miss Tom and I talking case law – there will be plenty to talk about and we can hopefully fit it all into one hour.

I want to thank everyone who participated in the webcasts this year, including Karen DeSouza, Julia Romero Peter and (of course) Tom O’Connor.  And, thanks to BrightTalk for being a terrific channel on which to conduct our webcasts.  And, a special thanks to Rob Robinson for coordinating the webcasts, including posting and promoting them (literally thousands of you have signed up for them) and kicking them off with introductions of the speakers.

Most of all, thanks to you for attending our webcasts and reading our blog (and a special thanks to those who’ve provided feedback and comments).  We’re into our eighth year for eDiscovery Daily, and (other than the couple of weeks I take off from blog writing at the end of each year to “recharge my batteries”), still going strong.  As we always say, please share any comments you might have or if you’d like to know more about a particular topic.  We love your feedback!

Merry Christmas, Happy Holidays and Happy New Year!!  eDiscovery Daily will resume with new posts after the new year on January 3.

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.

Clawback Agreement Doesn’t Save Documents Inadvertently Produced Twice from Privilege Waiver: eDiscovery Case Law

This is another case from earlier this year that we never got around to covering.  Why are we catching up on covering cases this week?  Find out tomorrow… :o)

In Irth Solutions, LLC v. Windstream Communications LLC, No. 2:16-CV-219 (S.D. Ohio Aug. 2, 2017), Ohio Magistrate Judge Kimberly A. Jolson, rejecting the idea that a clawback agreement always protects against waiver of privilege for inadvertently disclosed materials, found that privilege was waived by the defendant’s inadvertent but “completely reckless” production of privileged materials – not once, but twice.

Case Background

In this breach of contract case, the parties “agreed that a formal court order under Fed. R. Evid. 502(d) was not necessary based on the scale of the case”, but did enter into a clawback agreement that included a provision that “[i]nadvertent production of privileged documents does not operate as a waiver of that privilege.”  During discovery, the defendant produced 2,200 hundred pages which inadvertently included 43 privileged documents totaling 146 pages.  Defense counsel realized the mistake twelve days later while preparing a privilege log and immediately sought to claw the documents back, but plaintiff’s counsel refused to return or destroy the documents; however, they did represent that once the dispute arose, they sequestered the documents and refrained from discussing them with their client.

As requested by the Court, defense counsel submitted the 43 documents for in camera inspection, which revealed that nearly a third of them (14 documents) contained the word “legal” and the signature block of in-house counsel was referenced in two others.  Nonetheless, defense counsel insisted the documents had been reviewed for privilege.

Then, six weeks later, while dispute over the first production “ensued”, the defendant once again produced the 43 privileged documents to the plaintiff as part of re-producing the same 2,200 pages because the first production wasn’t text searchable.  Defense counsel indicated that they performed a “spot check” of the documents before they were produced via FTP, but did not observe that they contained the same privileged documents from the original production.

Judge’s Ruling

Judge Jolson, while noting that she did not get to hear from the “second-year associate who allegedly performed the privilege review prior to the first production and the litigation support staff member who allegedly erred during the second production”, nonetheless assumed “arguendo, that Defendant has met its burden of showing that the two productions qualify as inadvertent.”

Judge Jolson then turned to the “impact” of the parties’ clawback agreement on the question of waiver, citing three frameworks applied by other courts: “(1) if a clawback is in place, it always trumps Rule 502(b); (2) a clawback agreement trumps Rule 502(b) unless the document production itself was completely reckless; and (3) a clawback agreement trumps Rule 502(b) only if the agreement provides concrete directives regarding each prong of Rule 502(b)”.

Rejecting the first approach as it would “undermine the lawyer’s responsibility to protect the sanctity of the attorney-client privilege”, Judge Jolson then considered the second and third frameworks.  Determining that defense counsel “reviewed a limited number of documents and made critical and reckless mistakes”, Judge Jolson stated that she “need not choose” between the second and third frameworks because “when taking into account the careless privilege review, coupled with the brief and perfunctory clawback agreement, following either approach leads to the same result: Defendant has waived the privilege.”  As a result, Judge Jolson ruled that the defendant had waived privileged on the twice inadvertently produced documents.

So, what do you think?  Should clawback agreements protect parties from any inadvertent disclosure?  Would a 502(d) order have protected the defendant here?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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 Issues Adverse Inference Sanction for Failing to Preserve Non Party’s Text Messages: eDiscovery Case Law

This is a case from earlier this year that we never got around to covering.  It’s hard to believe that it’s been over 40 years since the Lynyrd Skynyrd plane crash that took the life of lead singer and guitarist Ronnie Van Zant and five other people.  To read a retrospective on one of rock music’s most notable airplane disasters, here’s a terrific article from Rolling Stone.  To check out case law that relates to use of the band’s name – less dramatic, but still interesting (at least to some of us), read below.

In Ronnie Van Zant, Inc. v. Pyle, No. 17 Civ. 3360 (RWS) (S.D.N.Y. Aug. 28, 2017), New York District Judge Robert W. Sweet, among other rulings, issued an adverse inference sanction against one of the defendants for its failure to preserve text messages in the possession of a non-party, finding that defendant had control of the non-party’s text messages, given that he was contracted by the defendant and provided documents and gave a deposition during discovery.

Case Background

In this dispute over alleged violation of a Consent Order (which controlled the circumstances under which surviving band members could use the name Lynyrd Skynyrd) and efforts by Cleopatra Records to make a film about the crash (working with Artimus Pyle, the drummer for Lynyrd Skynyrd and a survivor of the 1977 crash, who was a signatory “under protest” to the Consent Order), the plaintiffs initially sent a cease and desist letter and ultimately filed suit against Pyle and Cleopatra alleging violation of the Consent Order.

Several weeks after the suit was filed and after filming of the disputed movie, Jared Cohn (who had been hired by Cleopatra as the director and screenwriter, but was a non-party to the litigation), switched cell phone providers and acquired a new phone.  Some data, such as pictures, were transferred while other data, such as text messages (including those exchanged with Pyle) was not transferred and was lost.  As a result, the plaintiffs sought an adverse inference sanction against Cleopatra for failure to preserve the text messages.

In response to the plaintiffs’ motion, Cleopatra argued that it could not be sanctioned for a non-party’s actions and that the phone was not within its control, that the plaintiffs’ had not issued a valid subpoena and that the plaintiffs had not shown prejudice because they could have acquired the text messages from Pyle and because Defendants have produced a large number of other documents, rendering the missing messages cumulative.

Judge’s Ruling

With regard to Cleopatra’s argument regarding lack of control over the text messages, Judge Sweet stated: “Here, while Cohn is a non-party, his text messages were, practically speaking, under Cleopatra’s control. Cohn was contracted by Cleopatra to work on the Film, and the evidence has establishes that he worked closely with Cleopatra for over the past year. Over the course of the instant litigation, Cohn has participated by providing documents and took a deposition sought by Plaintiffs during discovery…As has been found relevant in other cases determining the relationship between a party and non-parties, Cohn also has a financial interest in the outcome of this litigation, since he is entitled to a percentage of the Film’s net receipts, which would be zero should Plaintiffs prevail…In sum, while determining practical control is not an exact science, ‘common sense’ indicates that Cohn’s texts with Pyle were within Cleopatra’s control, and in the face of pending litigation over Pyle’s role in the Film, should have been preserved.”

Judge Sweet also rejected the argument that a subpoena was required, noting “what the rules require is independent of a proper subpoena and simply that the lost information ‘should have been preserved,’ and there has been no dispute that the missing texts would have been relevant to the instant matter.”  He also rejected the lack of prejudice argument, indicating that, of the evidence already produced by Cleopatra, “none speak directly to an important piece of this puzzle that would have been covered by the texts: the quality of interaction between Pyle, the Consent Order’s signatory, and Cohn, the principal writer and singular director of the Film, a relationship that evidence established was principally developed through text messages.”  In granting the motion for adverse inference sanction, Judge Sweet noted that Cohn’s actions of retaining his pictures but not his text messages “evince the kind of deliberate behavior that sanctions are intended to prevent and weigh in favor of an adverse inference.”

So, what do you think?  Should the defendant have been sanctioned for the actions of a non-party?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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 Disagrees with Plaintiff’s Contentions that Defendant’s TAR Process is Defective: eDiscovery Case Law

In Winfield, et al. v. City of New York, No. 15-CV-05236 (LTS) (KHP) (S.D.N.Y. Nov. 27, 2017), New York Magistrate Judge Katharine H. Parker, after conducting an in camera review of the defendant’s TAR process and a sample set of documents, granted in part and denied in part the plaintiffs’ motion, ordering the defendant to provide copies of specific documents where the parties disagreed on their responsiveness and a random sample of 300 additional documents deemed non-responsive by the defendant.  Judge Parker denied the plaintiff’s request for information about the defendant’s TAR process, finding no evidence of gross negligence or unreasonableness in their process.

Case Background

In this dispute over alleged discrimination in the City’s affordable housing program, the parties had numerous disputes over the handling of discovery by the defendant in the case.  The plaintiffs lodged numerous complaints about the pace of discovery and document review, which initially involved only manual linear review of documents, so the Court directed the defendant to complete linear review as to certain custodians and begin using Technology Assisted Review (“TAR”) software for the rest of the collection.  After a dispute over the search terms selected for use, the plaintiffs proposed over 800 additional search terms to be run on certain custodians, most of which (after negotiation) were accepted by the defendant (despite a stated additional cost of $248,000 to review the documents).

The defendant proposed to use its TAR software for this review, but the plaintiffs objected, contending that the defendant had over-designated documents as privileged and non-responsive, using an “impermissibly narrow view of responsiveness” during its review process.  To support its contention, the plaintiffs produced certain documents to the Court that the defendant produced inadvertently (including 5 inadvertently produced slip sheets of documents not produced), which they contended should have been marked responsive and relevant.  As a result, the Court required the defendant to submit a letter for in camera review describing its predictive coding process and training for document reviewers.  The Court also required the defendant to provide a privilege log for a sample set of 80 documents that it designated as privileged in its initial review.  Out of those 80 documents, the defendant maintained its original privilege assertions over only 20 documents, finding 36 of them non-privileged and producing them as responsive and another 15 of them as non-responsive.

As a result, the plaintiffs filed a motion requesting random samples of several categories of documents and also sought information about the TAR ranking system used by the defendant and all materials submitted by the defendant for the Court’s in camera review relating to predictive coding.

Judge’s Ruling

Judge Parker noted that both parties did “misconstrue the Court’s rulings during the February 16, 2017 conference” and ordered the defendant to “expand its search for documents responsive to Plaintiffs’ document requests as it construed this Court’s prior ruling too narrowly”, indicating that the plaintiffs should meet and confer with the defendant after reviewing the additional production if they “believe that the City impermissibly withheld documents responsive to specific requests”.

As for the plaintiffs’ challenges to the defendant’s TAR process, Judge Parker referenced Hyles v. New York City, where Judge Andrew Peck, referencing Sedona Principle 6, stated the producing party is in the best position to “evaluate the procedures, methodologies, and technologies appropriate for preserving and producing their own electronically stored information.”  Judge Parker also noted that “[c]ourts are split as to the degree of transparency required by the producing party as to its predictive coding process”, citing cases that considered seed sets as work product and other cases that supported transparency of seed sets.  Relying on her in camera review of the materials provided by the defendant, Judge Parker concluded “that the City appropriately trained and utilized its TAR system”, noting that the defendant’s seed set “included over 7,200 documents that were reviewed by the City’s document review team and marked as responsive or non-responsive in order to train the system” and that “the City provided detailed training to its document review team as to the issues in the case.”

As a result, Judge Parker ordered the defendant “to produce the five ‘slip-sheeted’ documents and the 15 NR {non-responsive documents reclassified from privileged} Documents”, “to provide to Plaintiffs a sample of 300 non-privileged documents in total from the HPD custodians and the Mayor’s Office” and to “provide Plaintiffs with a random sample of 100 non-privileged, non-responsive documents in total from the DCP/Banks review population” (after applying the plaintiffs’ search terms and utilizing TAR on that collection).  Judge Parker ordered the parties to meet and confer on any disputes “with the understanding that reasonableness and proportionality, not perfection and scorched-earth, must be their guiding principles.”  Judge Parker denied the plaintiffs’ request for information about the defendant’s TAR process (but “encouraged” the defendant to share information with the plaintiffs) and denied the plaintiffs’ request to the defendant’s in camera submissions as being protected by the work product privilege.

So, what do you think?  Should TAR ranking systems and seed sets be considered work product or should they be transparent?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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 and the GDPR: Ready or Not, Here it Comes, Part Four: eDiscovery Best Practices

Editor’s Note: Tom O’Connor is a nationally known consultant, speaker, and writer in the field of computerized litigation support systems.  He has also been a great addition to our webinar program, participating with me on several recent webinars, including our webinar last Friday on E-Discovery Day (Murphy’s eDiscovery Law – How to Keep What Could Go Wrong From Going Wrong), which was great.  If you missed it, you can check out the replay here.  Now, Tom has written a terrific informational overview on Europe’s General Data Protection Regulation (GDPR) titled eDiscovery and the GDPR: Ready or Not, Here it Comes.  Enjoy! – Doug

Tom’s overview is split into four parts, so we’ll cover each part separately.  Part One was last Monday, Part Two was last Wednesday and Part Three was last Friday.  Here’s the fourth and final part.

Part Four: Now That I Understand The GDPR, What Do I Do?

In preparing for GDPR, all companies should start by doing the following:

Determine Their Role Under the GDPR: Any organization that decides on why and how personal data is processed is essentially a “data controller”, regardless of geographic location.

Appoint a Data Protection Officer: This is especially critical if the organization is a public body or is doing regular large-scale processing.

Prepare for Data Subjects Exercising Their Rights: These include the right to data portability and the right to be informed as well as the right to be forgotten.

And then, companies should continue by taking the following steps:

  • Build a data map
  • Identify all privacy-related data
  • Analyze all privacy-related data
  • Conform all data handling practices to GDPR standards
  • Ensure compliance policies and procedures meet GDPR standards
  • Secure all systems against data theft
  • Obtain ISO 27001 Certification
  • Hire a Consumer Data Ombudsman specifically for dealing with requests and complaints from data subjects.

This new GDPR regulatory framework will be the strictest privacy doctrine in the world and appears to be on a collision course with some US based discovery rules.

Bart Willemsen, research director at Gartner, recently commented that, “The GDPR will affect not only EU-based organizations, but many data controllers and processors around the globe and with the renewed focus on individual data subjects and the threat of fines of up to €20 million or 4% of annual global turnover for breaching GDPR, organizations have little choice but to re-evaluate measures to safely process personal data.”

Despite this warning and even though many organizations have been monitoring and preparing for the GDPR during the past few years of negotiation, more than a few have not. Gartner predicts that on May 28 of next year, more than half of companies affected by the GDPR will not comply fully with its requirements.

So immediate preparation is essential.  Keep in mind that the goal of the GDPR is not to punish business entities but rather the public policy purpose of ensuring that companies and public bodies increase their ability to detect and deter breaches.

Fines are designed to be proportional to the effort by companies to comply with the new regulations and will focus on those which systematically either fail to comply with the law or disregard it altogether. They can be avoided by companies which are transparent in their policies and procedures, make a good faith effort to develop that transparency and report any data breaches swiftly.

Prepare now to put into place policies and procedures for both compliance and reporting, especially if you have multiple business locations and/or handle data from inside the EU.  Various consulting firms and trusted advisors such as CloudNine can help provide guidance but don’t delay.  Remember that given the Gartner figures above, organizations in compliance with the GDPR may find themselves have a true competitive differentiator on May 25, 2018.

So, what do you think?  Are you ready for the GDPR? Read more about this important event in this overview and see how it may impact you and your organization.  And, as always, 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.

eDiscovery and the GDPR: Ready or Not, Here it Comes, Part Three: eDiscovery Best Practices

Editor’s Note: Tom O’Connor is a nationally known consultant, speaker, and writer in the field of computerized litigation support systems.  He has also been a great addition to our webinar program, participating with me on several recent webinars, including our webinar last Friday on E-Discovery Day (Murphy’s eDiscovery Law – How to Keep What Could Go Wrong From Going Wrong), which was great.  If you missed it, you can check out the replay here.  Now, Tom has written a terrific informational overview on Europe’s General Data Protection Regulation (GDPR) titled eDiscovery and the GDPR: Ready or Not, Here it Comes.  Enjoy! – Doug

Tom’s overview is split into four parts, so we’ll cover each part separately.  Part One was Monday, Part Two was Wednesday.  Here’s the third part.

Part Three: eDiscovery and the GDPR

Initial hopes were that the GDPR would promote eDiscovery cooperation between the US and Europe by standardizing data protection laws and regulations among the 31 EEA nations and the US.  But instead, some sections of the new regulation emphasize even further the difference between US law and the European countries mentioned in Part One.

US discovery comes from the UK common law system, but the other EU countries do not share that background and typically have no discovery at all or it is only available through specific requests to a judge. The regulations tend to favor that approach and thus make things difficult for US eDiscovery practitioners in several areas set out below.

First and perhaps most important is the issue of litigation holds.  In the US, data being held pursuant to a litigation hold is not considered to be data undergoing “processing”.  The GDPR definition of processing, however, is much broader and makes no provisions for holding personal data for an unlimited period of time simply because of the possibility of impending litigation in the US.

Other areas of disconnect include:

DPO Requirement: There are concerns that when a company must create a DPO position, it will exacerbate relations with any US concern seeking data by institutionalizing the resistance to data requests under the new GDPR compliance structure.

Privacy Impact Assessment (PIA) Obligation: Data that is inadvertently deleted and is potentially relevant to an ongoing investigation or litigation in the US could result in a request for a company to produce data audit information. But the company’s compliance with the GDPR’s PIA requirements would appear to create a shield against any such discovery request.

Transfer of Data to Third Countries: Article 48 of the GDPR expressly states that orders or judgments by non-EU courts and administrative authorities requiring transfer or disclosure of personal data are not a valid basis for transferring data to third countries. Article 48 states, rather, that such orders or requests will be recognized only in so far as they are based on international agreements or treaties between the third country and the EU or member state, such as The Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters.

It would appear then at first blush that no request for a data transfer to a third country outside the EU will stand unless supported by a treaty or trade agreement. None of those options is well suited for a US-based discovery suit.

Data Portability Rights: Custodians who request the deletion and/or transfer of their own data, especially during a government investigation or litigation, may create a conflict between US preservation requirements and the GDPR right to forget provisions.

Sanctions: The new GDPR privacy requirements may push US litigants to early settlements rather than proceed with litigation discovery that may lead to high fines in Europe or ethical issues with regards to preservation or “complete” discovery under FRCP Rule 26(g) in the US

Extraterritorial Effects: As noted in the Introduction, the GDPR covers not only data stored in the EU but also any data created or stored in the US that concerns an EU citizen.

THE BUSINESS OF THE GDPR: CONTROLLERS AND PROCESSORS

The GDPR defines two distinct roles for business entities, that of “controller” and that of “processor”. A “controller” determines the purposes and means of the processing of personal data whether on-premises or while using a third-party cloud provider’s IT technology, whereas a “processor” actually processes the personal data on behalf of a controller.

An organization cannot be both a controller and a processor of the same data, but it can be a controller of one set of data and a processor of yet another. For example, a software company such as Microsoft or IBM may be a controller with respect to personal data that it collects from its employees but can also be a processor with respect to personal data that its commercial customers collect and the company processes on their behalf through their own solutions such as Office 365 or Watson.

With respect to data sets where the company is the controller, they are directly responsible for responding to data subject requests under the GDPR.  When they are a processor, they must ensure that its customers (who are the controllers) are using a trusted platform and have the capabilities needed to respond to such requests.

Any organization that decides on how personal data is processed is essentially a data controller.  Companies which are primarily controllers will be concerned with addressing all aspects of the GDPR.  Regardless of the specific business structure, every controller will need to be sure that:

  • Compliance policies and procedures are in place
  • Business management controls are implemented
  • Users are properly trained
  • Data is properly secured
  • IT properly implements a secure system

Service providers acting as data processors have increased obligations to meet the GDPR privacy standards.  As such, a processor who demonstrates compliance with the heightened GDPR standards will likely be recognized as a preferred provider within the industry.

Processors should also have audit trials for all processing activities including:

  1. Data quality control
  2. Purpose limitations
  3. Data relevance

Processors should also demonstrate accountability and transparency in all decisions regarding personal data processing activities to maintain compliance for both present and future personal data processing activities.

Third-party service providers which are only data processors should also meet these standards. The GDPR standards require proper data subject consent and that consent and consent withdrawal must be documented scrupulously. Implied consent will no longer be accepted as an approval method.

In parts one through three in this series we have established a baseline for understanding the intent and impact of the GDPR and highlighted its impact on eDiscovery. On Monday, in the final part of our series, we will look at some recommendations for companies seeking to prepare and comply with the GDPR.

So, what do you think?  Are you ready for the GDPR? Read more about this important event in this overview and see how it may impact you and your organization.  And, as always, 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.