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Preservation

eDiscovery Case Law: Written Litigation Hold Notice Not Required

The Pension Committee case was one of the most important cases of 2010 (or any year, for that matter).  So, perhaps it’s not surprising that it is starting to become frequently cited by those looking for sanction for failure to issue a written litigation hold.

In Steuben Foods, Inc. v. Country Gourmet Foods, LLC, No. 08-CV-561S(F), (W.D.N.Y. Apr. 21, 2011), a U.S. District Court in the Western District of New York declined to follow the Pension Committee decision in the Southern District of New York to the extent that the Pension Committee decision held “that implementation of a written litigation hold notice is required in order to avoid an inference that relevant evidence has been presumptively destroyed by the party failing to implement such written litigation hold.”

Steuben Foods alleged that Country Gourmet breached its exclusive supply contract with Steuben when County Gourmet sold all its assets except the supply contract to Campbell Soup. Campbell sought sanctions against Steuben when several emails were not produced by Steuben and Steuben conceded that its litigation hold procedure had not included a written notice. Steuben’s corporate counsel had orally directed each of eight managers and corporate officers to identify all electronically stored information, including paper documents and email communications, pertaining to Country Gourmet or Campbell and not to discard or delete or otherwise destroy such documents pending the litigation.

Campbell pointed to the Pension Committee decision, Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, 685 F. Supp. 2d 456, 476 (S.D.N.Y. 2010), “in which the court found that the absence of a written litigation hold notice supported its conclusion that plaintiffs had been grossly negligent in their obligations to preserve relevant electronically stored documents and that plaintiffs’ document production failures, coupled with the absence of a timely written litigation hold, permitted the inference that relevant documents were culpably destroyed or lost as a result.”

The court declined to infer from the absence of a written litigation hold, as the Pension Committee court did, that relevant documents were culpably destroyed or lost:

“Accordingly, the court in this case declines to hold that implementation of a written litigation hold notice is required in order to avoid an inference that relevant evidence has been presumptively destroyed by the party failing to implement such written litigation hold.”

The court noted that the relatively small size of Steuben with 400 employees “lends itself to a direct oral communication of the need to preserve documents relevant to Plaintiff’s case” and was a reason “why a written litigation hold is not essential to avoid potential sanctions for spoliation.” In any event, according to the court, Campbell was not prejudiced by any failure of Steuben to produce email because Country Gourmet provided copies of the email to Campbell and Campbell could show no prejudice resulting from any claimed negligence of Steuben in not having a written litigation hold.

So, what do you think?  Should a written litigation hold be required in every case?  Would that have made a difference in this one?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: Applied Discovery (free subscription required).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

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

eDiscovery Best Practices: What Are the Skeletons in Your ESI Closet?
 

At eDiscoveryDaily, we try not to re-post articles or blog posts from other sources.  We may reference them, but we usually try to add some commentary or analysis to provide a unique spin on the topic.  However, I read a post Thursday on one of the better legal blogs out there – Ride the Lightning from Sharon Nelson – that was a guest post by Jim McGann, VP of Information Discovery at Index Engines that I thought was well done and good information for our readers.  Jim has been interviewed by eDiscoveryDaily here and here and always has terrific insight on ESI issues.  You can click here to read the post directly on Ride the Lightning or simply read below.

Law firms and corporations alike tend to keep data storage devices well beyond what their compliance requirements or business needs actually dictate.  These so-called “skeletons in the closet” pose a major problem when the entity gets sued or subpoenaed. All that dusty data is suddenly potentially discoverable. Legal counsel can be proactive and initiate responsible handling of this legacy data by defining a new, defensible information governance process.

  1. Understand all data sources. The first choice when faced with an ESI collection is to look at current online network data. However, many other sources of email and files exist on corporate networks, sources that may be more defensible and even cost effective to collect from, including offsite storage typically residing on backup tapes. Tape as a collection source has been overlooked because it was historically difficult and expensive to collect from legacy backup tapes.
  2. Get proactive with legal requirements. Defining what ESI data should be kept and placed on litigation hold and what can be purged are the first steps in a proactive strategy. These legal requirements will allow clients to put a policy in place to save specific content, certain custodians and intellectual property so that it is identifiable and ready for on demand discovery.
  3. Understand technology limitations. Only use tools that index all the content, and don’t change any of the metadata. Some older search solutions compromise the indexing process, and this may come to haunt you in the end.
  4. Become a policy expert. As new technology comes on the market, it tends to improve and strengthen the discovery process. Taking the time to understand technology trends allows you to stay one step ahead of the game and create a current defensible collection process and apply policy to it.

So, what do you think?  Do you have “skeletons” in your ESI closet?   Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Trends: Sedona Conference Database Principles
 

A few months ago, eDiscovery Daily posted about discovery of databases and how few legal teams understand database discovery and know how to handle it.  We provided a little pop quiz to test your knowledge of databases, with the answers here.

Last month, The Sedona Conference® Working Group on Electronic Document Retention & Production (WG1) published the Public Comment Version of The Sedona Conference® Database Principles – Addressing the Preservation & Production of Databases &Database Information in Civil Litigation to provide guidance and recommendations to both requesting and producing parties to simplify discovery of databases and information derived from databases.  You can download the publication here.

As noted in the Executive Overview of the publication, some of the issues that make database discovery so challenging include:

  • More enterprise-level information is being stored in searchable data repositories, rather than in discrete electronic files,
  • The diverse and complicated ways in which database information can be stored has made it difficult to develop universal “best-practice” approaches to requesting and producing information stored in databases,
  • Retention guidelines that make sense for archival databases (databases that add new information without deleting past records) rapidly break down when applied to transactional databases where much of the system’s data may be retained for a limited time – as short as thirty days or even thirty seconds.

The commentary is broken into three primary sections:

  • Section I: Introduction to databases and database theory,
  • Section II: Application of The Sedona Principles, designed for all forms of ESI, to discovery of databases,
  • Section III: Proposal of six new Principles that pertain specifically to databases with commentary to support the Working Group’s recommendations.  The principles are stated as follows:
    • Absent a specific showing of need or relevance, a requesting party is entitled only to database fields that contain relevant information, not the entire database in which the information resides or the underlying database application or database engine.
    • Due to differences in the way that information is stored or programmed into a database, not all information in a database may be equally accessible, and a party’s request for such information must be analyzed for relevance and proportionality.
    • Requesting and responding parties should use empirical information, such as that generated from test queries and pilot projects, to ascertain the burden to produce information stored in databases and to reach consensus on the scope of discovery.
    • A responding party must use reasonable measures to validate ESI collected from database systems to ensure completeness and accuracy of the data acquisition.
    • Verifying information that has been correctly exported from a larger database or repository is a separate analysis from establishing the accuracy, authenticity, or admissibility of the substantive information contained within the data.
    • The way in which a requesting party intends to use database information is an important factor in determining an appropriate format of production.

To submit a public comment, you can download a public comment form here, complete it and fax (yes, fax) it to The Sedona Conference® at 928-284-4240.  You can also email a general comment to them at tsc@sedona.net.

eDiscovery Daily will be delving into this document in more detail in future posts.  Stay tuned!

So, what do you think?  Do you have a need for guidelines for database discovery?   Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Case Law: Conclusion of Case Does Not Preclude Later Sanctions

In Green v. Blitz U.S.A., Inc., (E.D. Tex. Mar. 1, 2011), the defendant in a product liability action that had been settled over a year earlier was sanctioned for “blatant discovery abuses” prior to the settlement. Defendant was ordered to add $250,000 to its settlement with plaintiff, to provide a copy of the court’s order to every plaintiff in every lawsuit against defendant for the past two years or else forfeit an additional $500,000 “purging” sanction, and to include the order in its first responsive pleading in every lawsuit for the next five years in which defendant became involved.

Defendant, a manufacturer of gasoline containers, was named in several product liability lawsuits, including this case in which plaintiff alleged that her husband’s death was caused in part by the lack of a flame arrestor on defendant’s gas cans. The jury in plaintiff’s case returned a verdict for defendant after counsel for defendant argued that “science shows” that flame arrestors did not work. The case was settled after the jury verdict for an undisclosed amount, but two years later, counsel for plaintiff sought sanctions and to have the case reopened after learning in another case against defendant that while the gas can lawsuits were underway, defendant had been instructing its employees to destroy email.

The court described defendant’s failure to implement a litigation hold as gas can cases were filed. A single employee met with other employees to ask them to look for documents, but he did not have any electronic searches made for documents and he did not consult with defendant’s information technology department on how to retrieve electronic documents.

The court held that defendant willfully violated the discovery order in the case by not producing key documents such as a handwritten note indicating a desire to install flame arrestors on gas cans and an email noting that the technology for flame arrestors existed given the common use of flame arrestors in the marine industry. “Any competent electronic discovery effort would have located this email,” according to the court, through a key word search. Defendant’s employee in charge of discovery did not conduct a key word search and, despite acknowledging that he was as computer “illiterate as they get,” did not seek help from defendant’s information technology department, which was routinely sending out instructions to employees to delete email and rotating backup tapes every two weeks while the litigation was underway.

The court declined to reopen the case since it had been closed for a year. However, based on its knowledge of the confidential settlement of the parties, the court ordered defendant to pay plaintiff an additional $250,000 as a civil contempt sanction to match the minimum amount that the settlement would have been if plaintiff had been provided documents withheld by defendant. The court also ordered a “civil purging sanction” of $500,000 which defendant could avoid upon showing proof that a copy of the court’s decision had been provided to every plaintiff in a lawsuit against defendant for the past two years. The court added a requirement that defendant include a copy of the court’s opinion in its first pleading in any lawsuit for the next five years in which defendant became a party.

As Yogi Berra would say, “It ain’t over ‘til it’s over”.

So, what do you think?  Should cases be re-opened after they’re concluded for discovery violations?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: Applied Discovery (free subscription required).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

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

eDiscovery Case Law: Destroy Data, Pay $1 Million, Lose Case

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

In Rosenthal Collins Group, LLC v. Trading Techs. Int’l, No. 05 C 4088, 2011 WL 722467 (N.D. Ill. Feb. 23, 2011), U.S. District Judge Sharon Johnson Coleman assessed a sanction of $1 million to Rosenthal Collins (RCG) and granted defendant/counter-plaintiff Trading Technologies’ (TT) motion for evidentiary sanctions and default judgment.  Much of the reason was due to the actions of RCG’s agent, Walter Buist.  Here’s why:

  • During Buist’s deposition, he admitted to “turning back the clock” to change the “last modified” date on the previously modified source code to make it appear that the modifications had occurred much earlier.  Despite clear evidence of these facts, RCG continued to deny them, even calling the claims “libelous,” “audacious,” and “Oliver Stone-esque.”
  • Buist also later admitted “wiping” six of seven zip disks that originally contained the relevant source code.  While he did not admit wiping the seventh disk, it was also wiped, and the Court found that it was “impossible to believe that it is merely coincidence that the seventh disk happened to be wiped on May 2, 2006, which just happened to be the same day that TT was scheduled to inspect it.”
  • The Court found that here was evidence that “virtually every piece of media ordered produced by the Court in May 2007 and July 2008 was wiped, altered, or destroyed.”
  • Despite RCG’s (and its counsel’s) attempts to distance itself from “its own agent, employed for the purposes of pursuing this litigation” and disavowing any “actual knowledge” of wrongdoing, Buist was RCG’s agent and, therefore, RCG was bound by Buist’s behavior and actions.
  • Even if RCG and its counsel had no knowledge of the destruction of the evidence, the destruction might have been avoided if RCG had complied with the Court’s orders in a timely manner to produce the materials and/or preserved the evidence by taking custody of it.

So, what do you think?  Should parties and their counsel be liable for the actions of an agent on their behalf?  Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Case Law: Deliberately Produce Wrong Cell Phone, Get Sanctioned
 

In Moreno v. Ostly, No. A127780, (Cal. Ct. App. Feb. 22, 2011), the California Court of Appeals affirmed the trial court’s award of monetary sanctions imposed against the plaintiff and her law firm in the amount of $13,500 for counsel and plaintiff’s discovery misconduct related to the preservation of text messages.

The plaintiff sued her former law firm employer alleging sexual harassment, retaliation and failure to pay back wages.  She claimed that a partner at the firm “forced himself on her sexually” on a daily basis and that she was fired when she notified the partner that she wished to sever the “intimate aspect of their relationship.”  In discovery, defendants sought copies of relevant e-mails and text messages between the plaintiff and the partner.  After the parties' meet and confer efforts failed, the court ordered the plaintiff to produce her personal computer and cell phone for inspection.  The inspection revealed that the cell phone produced was different from the one plaintiff had during her course of employment.  When questioned regarding the discrepancy, plaintiff’s counsel responded that the defendants would have to undertake further discovery efforts to determine what happened to the relevant equipment.  The plaintiff’s attorney conceded that many of the text messages on the prior phone had been used against the defendants before the EEOC, but had not been preserved prior to the disposal of the cell phone.

The defendants filed a motion for terminating and monetary sanctions or, in the alternative, a willful suppression of evidence jury instruction.  The trial court awarded monetary sanctions, finding the plaintiff and her counsel deliberately withheld the fact that the plaintiff failed to preserve her cell phone data, causing opposing counsel and the court to expend unnecessary resources.  The court found plaintiff’s counsel’s conduct willful and his explanation citing a conflict between the duty of loyalty to the client and the duty of candor to opposing counsel and the court “not very credible.”

The court of appeals concluded the trial court's award of monetary sanctions was supported by substantial evidence, and was well within the discretion of the court.

So, what do you think?  Are you aware of any other blatant examples of evasive discovery?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: eDiscovery Case Law Update, by Littler Mendelson P.C.

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

eDiscovery Case Law: Spoliate Evidence, Don’t Go to Jail, but Pay a Million Dollars
 

As previously referenced in eDiscovery Daily, defendant Mark Pappas, President of Creative Pipe, Inc., was ordered by Magistrate Judge Paul W. Grimm to  “be imprisoned for a period not to exceed two years, unless and until he pays to Plaintiff the attorney's fees and costs that will be awarded to Plaintiff as the prevailing party pursuant to Fed. R. Civ. P. 37(b)(2)(C).”.  Judge Grimm found that “Defendants…deleted, destroyed, and otherwise failed to preserve evidence; and repeatedly misrepresented the completeness of their discovery production to opposing counsel and the Court.”

However, ruling on the defendants’ appeal, District Court Judge Marvin J. Garbis declined to adopt the order regarding incarceration, stating: “[T]he court does not find it appropriate to Order Defendant Pappas incarcerated for future possible failure to comply with his obligation to make payment of an amount to be determined in the course of further proceedings.”

So, how much is he ordered to pay?  Now we know.

On January 24, 2011, Judge Grimm entered an order awarding a total of $1,049,850.04 in “attorney’s fees and costs associated with all discovery that would not have been un[der]taken but for Defendants' spoliation, as well as the briefings and hearings regarding Plaintiff’s Motion for Sanctions.”  Judge Grimm explained, “the willful loss or destruction of relevant evidence taints the entire discovery and motions practice.” So, the court found that “Defendants’ first spoliation efforts corresponded with the beginning of litigation” and that “Defendants’ misconduct affected the entire discovery process since the commencement of this case.”

As a result, the court awarded $901,553.00 in attorney’s fees and $148,297.04 in costs.  Those costs included $95,969.04 for the Plaintiff’s computer forensic consultant that was “initially hired . . . to address the early evidence of spoliation by Defendants and to prevent further destruction of data”.  The Plaintiff’s forensic consultant also provided processing services and participated in the preparation of plaintiff’s search and collection protocol, which the court found “pertained to Defendants’ spoliation efforts.”

So, what do you think?  Will the defendant pay?  Or will he be subject to possible jail time yet again?  Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Case Law: No Sanctions for Scrubbing Computers Assumed to be Imaged
 

When scrubbing data from a computer drive related to litigation, it’s a good idea to make absolutely sure that there is another copy of that data, via backup or forensic image.  Don’t just take someone’s word for it.

In Federal Trade Commission v. First Universal Lending, LLC, No. 09-82322-CIV, (S.D. Fla. Feb. 17, 2011), the FTC investigated the defendants for their mortgage modification practices by alleging that defendants had violated the Federal Trade Commission Act and that defendants had acted in violation of the Telemarketing Sales Rule. For the duration of the investigation, the court appointed a temporary receiver who took control of defendants’ business premises.

During the discovery stage, the FTC wanted to preserve relevant data that was on defendants’ computers and servers by imaging them. When defendants’ were ask about the locations of all relevant computers and servers, they failed to reveal the location of servers with relevant data. As a result, these servers were not imaged and thus the data was not preserved. Due to misleading testimony by defendants, the receiver believed that all computers and servers had been imaged. Because of the incorrect belief that all of the relevant data had been preserved, the receiver permitted defendants to scrub the computers and sell them. It turned out that some of these were the ones that had not been imaged.

Defendants filed a motion to enjoin the prosecution and/or moved for dismissal of the case due to plaintiff’s spoliation of evidence. Defendants asserted that the FTC had either destroyed or caused to be destroyed computer evidence that would prove all of the defendants’ defenses.

The court found no basis for imposing sanctions against the FTC for the destruction of defendants’ computer system and denied defendants’ motion. The court established that it can impose an adverse inference against a party where the court finds that the party has engaged in spoliation of evidence. For this inference to be applicable there has to be a finding of bad faith. A court can make this finding through direct evidence or circumstantial evidence. If bad faith is based on circumstantial evidence, the following prerequisites must be present: (1) evidence once existed that could fairly be supposed to have been material to the proof or defense of a claim at issue in the case; (2) the spoliating party engaged in an affirmative act causing the evidence to be lost; (3) the spoliating party did so while it knew or should have known of its duty to preserve the evidence; and (4) the affirmative act causing the loss cannot be credibly explained as not involving bad faith by the reason proffered by the spoliator.

The court found that there was no direct evidence of bad faith. Further it pointed out that defendants failed to establish bad faith by circumstantial evidence, since the FTC had not destroyed the computer systems, but rather, the defendants did. The court went on to state, that even assuming, arguendo, that defendants destroyed the hard drives due to the receiver’s agent’s instruction, it did not change the fact that neither the receiver, nor the agent is the FTC.

Furthermore, the court went on that to the extent that defendants’ position could be construed to seek to attribute blame to the FTC for the receiver’s instruction to scrub the computers based on the FTCs misstatement, there was no malicious motive on the FTC’s investigator evident. This was at most negligent, and negligence is not sufficient for an adverse inference instruction as a sanction for spoliation.

Further, the defendants did not demonstrate that the absence of the missing data was fatal to their defense because it was established that alternative sources of information existed.

At last, the court emphasized that the FTC was under no obligation to preserve defendants’ evidence, especially considering the fact that the FTC never had control or dominion over the computers – the receiver did.

So, what do you think?  What are your procedures for ensuring data backup before destruction?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: eLessons Learned Blog.

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

eDiscovery Trends: George Socha of Socha Consulting
 

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

  1. What do you consider to be the current significant trends in eDiscovery on which people in the industry are, or should be, focused?
  2. Which of those trends are evident here at LTNY, which are not being talked about enough, and/or what are your general observations about LTNY this year?
  3. What are you working on that you’d like our readers to know about?

Today’s thought leader is George Socha.  A litigator for 16 years, George is President of Socha Consulting LLC, offering services as an electronic discovery expert witness, special master and advisor to corporations, law firms and their clients, and legal vertical market software and service providers in the areas of electronic discovery and automated litigation support. George has also been co-author of the leading survey on the electronic discovery market, The Socha-Gelbmann Electronic Discovery Survey.  In 2005, he and Tom Gelbmann launched the Electronic Discovery Reference Model project to establish standards within the eDiscovery industry – today, the EDRM model has become a standard in the industry for the eDiscovery life cycle and there are eight active projects with over 300 members from 81 participating organizations. George has a J.D. for Cornell Law School and a B.A. from the University of Wisconsin – Madison.

What do you consider to be the current significant trends in eDiscovery on which people in the industry are, or should be, focused?

On the very “flip” side, the number one trend to date in 2011 is predictions about trends in 2011.  They are part of a consistent and long-term pattern, which is that many of these trend predictions are not trend predictions at all – they are marketing material and the prediction is “you will buy my product or service in the coming year”.

That said, there are a couple of things of note.  Since I understand you talked to Tom about Apersee, it’s worth noting that corporations are struggling with working through a list of providers to find out who provides what services.  You would figure that there is somewhere in the range of 500 or so total providers.  But, my ever-growing list, which includes both external and law firm providers, is at more than 1,200.  Of course, some of those are probably not around anymore, but I am confident that there are at least 200-300 that I do not yet have on the list.  My guess when the list shakes out is that there are roughly 1,100 active providers out there today.  If you look at information from the National Center for State Courts and the Federal Judicial Center, you’ll see that there are about 11 million new lawsuits filed every year.  I saw an article in the Cornell Law Forum a week or two ago which indicated that there are roughly 1.1 million lawyers in the country.  So, there are 11 million lawsuits, 1.1 million lawyers and 1,100 providers.  Most of those lawyers have no experience with eDiscovery and most of those lawsuits have no provider involved, which means eDiscovery is still very much an emerging market, not even close to being a mature market.  As fast as providers disappear, through attrition or acquisition, new providers enter the market to take their place.

Which of those trends are evident here at LTNY, which are not being talked about enough, and/or what are your general observations about LTNY this year?

{Interviewed on the second afternoon of LTNY}  Maybe this is overly optimistic, but part of what I’m seeing in leading up to the conference, on various web sites and at the conference itself, is that a series of incremental changes taking place over a long period are finally leading to some radical differences.  One of those differences is that we finally are reaching a point where a number of providers can make the claim to being “end-to-end providers” with some legitimacy.  For as long as we’ve had the EDRM model, we’ve had providers that have professed to cover the full EDRM landscape, by which they generally have meant Identification through Production.  A growing number of providers not only cover that portion of the EDRM spectrum but have some ability to address Information Management, Presentation, or both   By and large, those providers are getting there by building their software and services based on experience and learning over the past 8 to 10 to 12 years, introducing new offerings at the show that reflect that learned experience.

A couple of days ago, I only half-jokingly issued “the Dyson challenge” (as in the Dyson vacuum cleaner).  Every year, come January, our living room carpet is strewn with pine tree needles and none of the vacuum cleaners that we have ever had have done a good job of picking up those needles.  The Dyson vacuum cleaner claims it cyclones capture more dirt than anything, but I was convinced that could not include those needles.  Nonetheless I tried, and to my surprise it worked like a charm!  I want to see the providers offering products able to perform at that high level, not just meeting but exceeding expectations.

I also see a feeling of excitement and optimism that wasn’t apparent at last year’s show.

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

As I mentioned, we have launched the Apersee web site, designed to allow consumers to find providers and products that fit their specific needs.  The site is in beta and the link is live.  It’s in beta because we’re still working on features to make it as useful as possible to customers and providers.  We’re hoping it’s a question of weeks, not months, before those features are implemented.  Once we go fully live, we will go two months with the system “wide open” – where every consumer can see all the provider and product information that any provider has put in the system.  After that, consumers will be able to see full provider and product profiles for providers who have purchased blocks of views.  Even if a provider does not purchase views, all selection criteria it enters are searchable, but search results will display only the provider’s name and website name.  Providers will be able to get stats on queries and how many times their information is viewed, but not detailed information as to which customers are connecting and performing the queries.

As for EDRM, we continue to make progress with an array of projects and a growing number of collaborative efforts, such as the work the Data Set group has down with TREC Legal and the work the Metrics group has done with the LEDES Committee. We not only want to see membership continue to grow, but we also want to continue to push for more active participation to continue to make progress in the various working groups.  We’ve just met at the show here regarding the EDRM Testing pilot project to address testing standards.  There are very few guidelines for testing of electronic discovery software and services, so the Testing project will become a full EDRM project as of the EDRM annual meeting this May to begin to address the need for those guidelines.

Thanks, George, for participating in the interview!

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

eDiscovery Trends: Deidre Paknad of PSS Systems
 

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

  1. What do you consider to be the current significant trends in eDiscovery on which people in the industry are, or should be, focused?
  2. Which of those trends are evident here at LTNY, which are not being talked about enough, and/or what are your general observations about LTNY this year?
  3. What are you working on that you’d like our readers to know about?

Today’s thought leader is Deidre Paknad.  Deidre is President & CEO of PSS Systems, an IBM Company.  Deidre is widely credited with having conceived of and launched the first commercial applications for legal holds, collections and retention management in 2004. A well-known thought leader in the legal and information governance domain, Deidre founded the Compliance, Governance and Oversight Council (CGOC), a professional community on retention and preservation that analyst firm IDC labeled a "think tank." She has been a member of several Sedona working groups since 2005 and leads the EDRM Information Management Reference Model (IMRM) working group.  Deidre is a seasoned entrepreneur and executive with 20 years' experience applying technology to poor-functioning business processes to reduce cost and risk. Prior to PSS, she helped Certus launch its Sarbanes Oxley software solution. Deidre previously founded and was CEO of CoVia Technologies from 1996 to 2000, where she was inducted into the Smithsonian Institution for innovation in 1999 and again in 2000.

What do you consider to be the current significant trends in eDiscovery on which people in the industry are, or should be, focused?

Well, certainly the social media explosion is one of the most talked about current trends.  Social media has brought about a huge change in the way we communicate, both personally and within organizations.  It’s one of the factors that is causing organizations to revisit where information comes from, where “messages” come from.  And, now there are more communications via social media than email.  In 2010, there were an estimated 1 trillion emails sent worldwide, but 89% of all emails sent is spam, so the number of “true emails” is far less, only about 110 billion.  Conversely, there were nearly 400 billion Facebook communications last year, over 700 billion views on YouTube and over 200 billion Twitter messages.  Organizations will have to face forward in addressing new sources of data and how to handle them as there will continue to be more social media communications (many viewed via mobile devices) with customers, employees, etc.  While most corporate social media tools today aren’t “discovery ready”, social and mobile media may level the information playing field between small and large litigants.

Another trend on which organizations are finally focusing more, that has been a significant focus of mine for some time, is information governance.  Since the Federal evidence rules were extended to electronic data in 2006, preservation sanctions are at an all-time high, despite the fact that organizations have adopted a mindset of “save everything”, which has led to unrestrained growth in data within organizations.  So, saving more data did not translate to less risk for organizations, but it did translate to more cost.  As noted in the 2009 Fulbright & Jaworski Litigation Report, the average cost to collect, cull and review information per case for large organizations has risen to $3 million, but the amount of that reviewed data that needed to be retained was only 30% and 70% was wasteful legal effort.   Even worse, organizations are spending 3.5% of revenues on information management – for the Fortune 50, that’s several billion dollars and a good chunk of it goes to managing unnecessary information and infrastructure.

Last year, the CGOC conducted a survey of legal, records management (RIM) and IT practitioners in Global 1000 companies and published the findings in an October report titled Information Governance Benchmark Report in Global 1000 Companies (You can request a copy of the report here and read eDiscovery Daily’s blog post about it here.).  75% of respondents identified the inability to defensibly dispose of data as their greatest challenge, and 70% of respondents indicated that they depend on “liaisons and people glue” to link discovery and regulatory obligations to information.  It’s an enterprise issue where Legal understands the obligations for data, business teams know the information value of the data and IT has the data, but no visibility to its obligations or business value.  So, there’s a big disconnect.

I think you’ll see that information governance and eDiscovery in general will become more connected to the overall business strategy.  When asked what they believe are the essential elements of information governance, 77% agreed retention schedules that reflect both regulatory and business needs and 85% of respondents agreed consistent collaboration and systematic linkage across legal, records and IT and were essential elements.  I think the Information Governance Benchmark Report has opened some eyes as to the importance of associating the legal obligations for and value of information to the assets IT is managing and the benefits of connecting legal, records and IT stakeholders and processes as an essential corporate strategy.

Which of those trends are evident here at LTNY, which are not being talked about enough, and/or what are your general observations about LTNY this year?

{Interviewed on the second afternoon of LTNY}  I think there’s some “retreading” of topics at this year’s show, for example, the Legal vs. IT keynote speech.  That’s really more of an issue for 2 or 3 years ago.  Legal and IT do collaborate narrowly on discovery responsiveness.  But the issues of the day are more at an overall company level – high costs and high risk associated with the unrestrained growth in data are caused by practices across the company, not just in the legal department.   Responding to discovery simply deals with the symptoms, but doesn’t treat the disease.

I think discussion about FRCP reform aimed at easing the burden of discovery is more timely and survey data from the CGOC community published in the legal holds and information governance benchmark reports provided evidence in the FRCP Preservation Comment of November 10, 2010 of the need to reshape the rules to reflect current needs.

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

Well, in addition to the significant reception that the information governance benchmark report has received, CGOC just conducted its 2011 Summit last month, with participation from a number of large corporations including Exxon Mobil, Travelers, Bank of America and Novartis.  The Summit included a number of presentations, and a mock discovery hearing conducted by Judge {Andrew J.} Peck {Magistrate Judge, SDNY} on how prevailing practices break down in cases like Harkabi where everyone took the right steps but still got the wrong results.  It also included breakout sessions for Legal, RIM and IT to discuss prevailing practices for discovery, retention and data disposal, improving processes within each of these departments to support the enterprise as well as starting and advancing the cross-functional dialogue between the departments.

I’m also very excited about the IMRM project within EDRM, a group I co-chair.  It aims to offer guidance and a responsibility framework for Legal, IT, Records Management, line-of-business leaders and other business stakeholders within organizations.  It’s an entirely new reference model that is a separate counterpart to EDRM and the model links the duty and value to information assets to result in efficient and effective management of information.

There is nothing I’m more excited about, however, than working with my new colleagues at IBM on solutions that help our customers to do rigorous, efficient eDiscovery, value-based retention, smarter archiving and defensible disposal. 

Thanks, Deidre, for participating in the interview!

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