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Electronic Discovery

Battle Continues between Attorneys and Client over Attorneys’ Failure to Review Documents – eDiscovery Case Law

In Price Waicukauski & Riley v. Murray, 1:10-cv-1065-WTL-TAB (S.D. Ind. Sept. 18, 2014), Indiana District Judge William T. Lawrence granted the plaintiff’s request for summary judgment for failure to pay attorney’s fees of over $125,000, and refused to issue summary judgment for either party related to a legal malpractice claim for the plaintiff’s admitted failure to review documents produced in the defendants’ case against another party because of a factual dispute regarding the plaintiff’s knowledge of the documents produced.

Case Background

This case was filed in August 2010 by the Plaintiff, Price Waicukauski & Riley, LLC, (“PWR”) against the Defendants, Dennis and Margaret Murray and DPM, Ltd. (“Murrays”), to recover $127,592.91 in attorneys’ fees owed to the plaintiff. The attorneys’ fees stem from the plaintiff’s representation of the defendants in a rather contentious lawsuit against Conseco that spanned more than six years, ultimately settling.  In November 2010, unhappy with the plaintiff’s representation, the defendants filed a counterclaim against the plaintiff alleging legal malpractice.

Legal Malpractice Claim of Breach of Duty of Loyalty

The defendants alleged several allegations of legal malpractice against the plaintiff, including conflict of interest, failure to properly plead federal subject matter jurisdiction and failure to take depositions and conduct discovery as they requested, among other allegations.  One allegation related to the defendants’ claim that the plaintiff breached the duty of loyalty to the defendants by failing (despite the defendant’s request to do so) to review documents before production in the case that revealed a Trust set up on behalf of the plaintiffs that wasn’t disclosed in interrogatory responses.  The plaintiff informed Mr. Murray that it reviewed the documents; however, it ultimately admitted that it did not.  As a result of the misleading interrogatory responses, Conseco filed a motion for sanctions which was granted, resulting in the defendants being ordered to pay over $85,000 in attorneys’ fees to their opponent’s lawyers.

The defendants claimed that the plaintiff knew about the Trust from the outset of its representation; however, the plaintiff (“falsely and underhandedly”, according to the defendants) represented to the magistrate judge assigned to the Underlying Litigation that it had no knowledge of the Trust until the defendants’ accountant produced the Murrays’ tax returns.

Judge’s Analysis and Ruling

The plaintiffs referenced Niswander v. Price Waicukauski & Riley, LLC, where the court held that “[w]hether . . . the Plaintiffs’ attorneys had a duty to review the documents personally before producing them in discovery . . . is simply not something within the knowledge of a layperson.”  However, Judge Lawrence noted, “[t]he Murrays have no expert testimony on either of these two related claims; however, they claim they fall into the above-mentioned exception for when no expert testimony is needed: ‘when the question is within the common knowledge of the community as a whole or when an attorney’s negligence is so grossly apparent that a layperson would have no difficulty in appraising it.’”  Judge Lawrence also agreed with the defendants differentiation of Niswander to this case in that they specifically directed the plaintiff to review the documents while the plaintiffs in Niswander did not.

Judge Lawrence also stated that “[t]he same rings true with the Murrays’ allegation that PWR falsely denied knowledge of the Trust… Again, the Court believes that it is well within the knowledge of a layperson that attorneys should not lie and falsely implicate their own clients in order to shield themselves from liability. Thus, the Court agrees that no expert testimony is needed on this claim regarding the standard of care.”

However, Judge Lawrence decided that “neither party is entitled to summary judgment on this issue” because “there is a factual dispute that precludes granting summary judgment on this claim. PWR maintains that it did not lie; it steadfastly maintains that it had no knowledge of the Trust at the outset of the litigation. Thus, when asked by the magistrate judge when it found out about the Trust, it informed her truthfully. Therefore, whether or not PWR breached a duty that caused injury to the Murrays depends on whom the jury believes: Mr. Murray or PWR.”

Ultimately, Judge Lawrence granted the summary judgment on behalf of the plaintiffs for the attorney’s fees of $127,592.91 (which the defendant did not dispute, but argued that “[t]he successful pursuit of [their] claims would effectively eliminate PWR’s claim”) and denied the defendant’s summary judgment request, but refused a final judgment as outstanding claims remained against the plaintiff.  Judge Lawrence concluded his ruling by noting that “The only claims that remain to be tried are the proximate cause issue with regard to the federal subject matter jurisdiction claim and the allegation of malpractice committed by PWR as a result of its alleged failure to review certain documents that led to sanctions being imposed on Mr. Murray.”

So, what do you think?  Does the failure by the plaintiff to review the defendant’s production constitute legal malpractice?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

If You Have a Flashlight App on Your Phone, You Need to Read This – Mobile eDiscovery

Yesterday, we discussed a case where a company faced a recommended severe default judgment sanction, in part because of the company’s failure to preserve data on “bring your own device” (BYOD) personal smart phones used by employees for work purposes.  This is merely one challenge associated with BYOD policies in organizations.  Another is the greater potential for spyware to capture data through installed apps.  Here is one reported example.

If you have a smartphone or tablet, you probably like to install various apps for everything from tracking your fantasy football team to playing games to keeping up with friends on Facebook or Twitter.  You can even use your smartphone as a flashlight, I do.  Apparently, doing so may introduce spyware onto that smartphone, especially on Android phones and tablets, if you believe one company’s new report.

At the beginning of the month, SnoopWall issued a threat assessment report entitled Summarized Privacy and Risk Analysis of Top 10 Android Flashlight Apps, where they stated that they tested and installed the Top 10 Android Flashlight Apps on various smartphones and tablets and found that all of the applications that they tested appear to obtain access and information way beyond the needs of a Flashlight. According to SnoopWall, some appear specifically designed to collect and expose your personal information to cybercriminals or other nation states, taking permissions to do everything from modifying or deleting USB storage contents, modifying system settings, control vibration, disable your screen lock and capture GPS and network location.  At least one of them has been sued by the FTC for doing so.

If you believe the report and you’re using your smartphone for work purposes, that potentially puts company data at risk as well.  If you’re using one of those flashlight apps, SnoopWall’s strong recommendation is to uninstall it immediately.  They also note that you might need to reset your phone completely after the uninstall or even go to FACTORY RESET or a WIPE.

They also provide a list of what we think are best practices for increasing privacy and security on your device without spending any money, but they vary in practicality (#5 is to “either put masking tape over your webcam and microphone when not in use or pull the battery out of your smartphone when you are not using it” – not exactly practical).

As for the Apple iPhone and iPad or Microsoft WindowsPhone flashlight apps, SnoopWall states that the “flashlight app pre-installed on the Apple iPhone appears to be safe”, but notes that in both the iTunes store and on the Windows Phone app store, third party flashlight apps access various hardware ports including Webcam, Location Services and GPS.  So, there are stated risks on those platforms if you are using those apps.

Conveniently (hmmm), SnoopWall has developed their own free flashlight app, touted to install no ads, spyware or “bloatware”.  They also offer privacy apps that they state are designed to find apps that are spying on you, protect you when conducting financial transactions on your mobile device, etc.

Is it true?  Or is it just a very clever marketing campaign?  The myth debunking site Snopes states that these apps are pre-screened for malware, while acknowledging that one specific flashlight app was cited by the FTC for selling data to advertisers (that case was settled last December).

So, what do you think?  Do you have a third party flashlight app on your smartphone or tablet?  If so, how seriously do you take the report from SnoopWall?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

Failure to Preserve Data on Various Devices Causes Special Master to Recommend Default Judgment – eDiscovery Case Law
 

In Small v. University Medical Center of Southern Nevada, No. 2:13-cv-00298-APG-PAL (D. Nev. Aug. 18, 2014), Special Master Daniel B. Garrie, calling the defendant’s widespread failure to preserve data a “mockery of the orderly administration of justice”, recommended that the court enter an order of default judgment, along with further sanctions, in favor of the plaintiffs.

This employment law dispute had required to date “a fully briefed motion to compel with accompanying oral argument; seven discovery status conferences over eight months before Magistrate Judge Peggy A. Leen; the appointment of Special Master Daniel B. Garrie; five in person, all day hearings conducted by the Special Master; 14 telephonic hearings before the Special Master; over 20 declarations submitted by employees and agents of UMC (many supplementing or amending prior incomplete or inaccurate declarations); and written submissions by counsel and ESI experts.”

A partial chronology within the Special Master’s report demonstrated that the defendant did not issue or put any litigation hold in place until after the plaintiffs had deposed a defendant witness, which was more than 250 days after the plaintiffs initiated the action.  As Special Master Garrie noted, “In fact, these proceedings confirmed UMC has no ‘litigation hold’ policy, and did not institute any "litigation hold" procedures in response to this lawsuit.”

The defendant had two policies for mobile devices: a “company-issued, personally enabled” (COPE) device policy and a “bring your own device” (BYOD) policy where employees used personal smart phones. Ultimately, it was determined that the devices under the COPE policy were not put under litigation hold until after a number of the devices were wiped clean, which resulted in the loss of 26,310 messages. As for devices under the BYOD policy, the defendant did not issue a litigation hold on the devices at all, which resulted in the loss of approximately two years of ESI that would have been potentially responsive to the case. 

The defendant also failed to identify and preserve network file shares, two laptops belonging to key custodians and work computers used by 24 of the 27 custodians, among other data sources.  As Special Master Garrie noted, “Not a single UMC executive took any of the steps necessary to ensure the preservation of evidence. No UMC executive took responsibility for instituting or enforcing a ‘litigation hold,’ or otherwise acting to ensure the preservation of documents in this case.”

As a result, Special Master Garrie recommended sanctions, stating, “Defendant UMC's extraordinary misconduct and substantial and willful spoliation of relevant ESI in this case resulted in substantial prejudice to Plaintiffs and the classes, and misled Plaintiffs, the Court, and the Special Master on numerous discovery issues…The level of intentional destruction of evidence by UMC shocks the conscious. As such, as to the 613 Opt-In Plaintiffs, default judgment should be entered against UMC pursuant to Rule 37(b)(2)(A)(iii) & (vi) and the Court's inherent powers.”  He also stated his belief that “Plaintiffs are entitled to sanctions in the form of specific factual findings relating to class certification, and a rebuttable presumption regarding certain merit issues.”  Finally, he recommended that the defendant “be ordered to reimburse Plaintiffs' reasonable costs and fees in these proceedings, including their costs in bringing a motion to compel production, in attending discovery status conferences before Magistrate Judge Leen, and for time spent in the proceedings before Special Master Garrie.”

So, what do you think?  Do the actions by the defendant merit such a harsh sanction?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine 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.

Microsoft Acquires Equivio (Reportedly) and Everyone Speculates what that Means for eDiscovery – eDiscovery Trends

The acquisitions just keep coming.  The Wall Street Journal reported on October 7 that Microsoft has signed a letter of intent to acquire Israeli text-analysis vendor, Equivio.  The Journal said Microsoft may pay $200 million for the startup, though Bloomberg’s report on the same day stated “Microsoft will pay materially less than that, the person with knowledge of the matter said”.  So, what does it mean for the eDiscovery industry?

Leave it to Ralph Losey to get some thought leader input on the subject.  In his most recent blog post from his excellent e-Discovery Team® blog (e-Discovery Industry Reaction to Microsoft’s Offer to Purchase Equivio for $200 Million – Part One), Ralph takes an in-depth look at the acquisition and clearly, based on the “Part One” in the title, he still has more to say.

Ralph starts with a business press view of the deal, noting that “as the WSJ article that broke the news exemplifies, they do not even seem to know that a e-discovery industry exists, nor that Equivio is part of it” and that “the WSJ just describes Equivio as a startup company that has created… text analysis software that can group together relevant texts from large amounts of documents”.  Ralph notes (or perhaps bemoans) the lack of understanding of the industry and of predictive coding by the average business journalist and states “Whatever the final price may be, the Two Hundred Million number sounds about right to me. No one else I talked to seemed shocked by the price either, which was certainly not true about Hewlett Packard’s ill-fated purchase of Autonomy for $10 Billion.” (here is a link to our previous coverage of that deal, which included an $8.8 billion write-down the following year).

Ralph then goes on to include comments from several industry insiders – most of which are on the record – from notables such as Jason R. Baron, Craig Ball, Kenneth J. Withers, Bill Hamilton, Rob Robinson and others.  Three of the comments are off-the-record (perhaps by competitors?), but the collection of comments provides an interesting perspective not only of the deal, but also of the industry overall.  Speculation runs the gamut, with a lot of comments directed toward impact on the Information Governance space and/or Microsoft’s simple desire to acquire Equivio’s artificial intelligence technology.  You can review all of the comments in Ralph’s blog here.

Having attended several of the twice yearly EDRM meetings over the years, I have noticed that Microsoft has been sending representatives to recent meetings, so there is certainly interest in eDiscovery and Information Governance at some level within the organization.  It will be interesting to see to what extent.

As we have noted a couple of times in the past, Rob Robinson’s Complex Discovery site keeps a running list of mergers, acquisitions and investments in the eDiscovery industry and goes all the way back to 2001.  And, another great resource for details about some of these transactions is Litigation Support Industry: eDiscovery Business News and Information Blog, published by Brad Jenkins, the President and CEO of CloudNine Discovery (shameless plug warning!), who just happens to be my boss (here is his coverage of the deal).

As always, leave it to Craig Ball for the best analogy of the deal: “it’s a windfall for Equivio; but for Microsoft, the price is as impactful as it would be for you or I to purchase a good steak.”

So, what do you think?  Does the acquisition signal Microsoft’s entry into eDiscovery?  Was the price fair?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

Court Rules that Joint Stipulation Supports Plaintiff’s Production of Images Instead of Native Files – eDiscovery Case Law

In Melian Labs, Inc. v. Triology LLC, No. 13-cv-04791-SBA (N.D. Cal. Sept. 4, 2014), California Magistrate Judge Kandis A. Westmore denied the plaintiff’s motion to compel discovery in native form because the production format had been agreed upon under the parties’ ESI protocol under the Joint Rule 26(f) Report filed by the parties that supported production in “paper, PDF, or TIFF format”.

In this trademark dispute, the plaintiff sought a declaratory judgment that its website did not infringe upon the defendant’s trademark, but rather, that the defendant’s use of the trademark infringed on the plaintiff’s senior trademark rights.

On March 26, 2014, the parties filed a case management conference statement (referred to as the “Joint Rule 26(f) Report”), and informed the district court that:

“With respect to the production of electronic data and information, the parties agree that the production of metadata beyond the following fields are not necessary in this lawsuit absent a showing of a compelling need: Date Sent, Time Sent, Date Received, Time Received, To, From, CC, BCC, and Email Subject. The parties agree to produce documents electronic form in paper, PDF, or TIFF format, and spreadsheets and certain other electronic files in native format when it is more practicable to do so.”

The plaintiff began its document production on June 23 and had produced 1218 pages of documents to date.  On August 1, the defendant complained about the format of the plaintiff’s document production of its electronically stored information (“ESI”), claiming that the produced PDFs were stripped of all metadata in violation of the agreement of the parties and that the spreadsheets were not produced in native format.  The defendant contended that the plaintiff’s production of “7 large PDF image documents, which each appear to be a compilation of ESI improperly collected and produced,” were violative of Federal Rule of Civil Procedure 34(b)(2)(E), because they were not produced in their native format and are not reasonably usable.  The defendant also contended that the plaintiff failed to comply with the Joint Rule 26(f) Report by refusing to produce all spreadsheets in native format – the plaintiff acknowledged that some of its spreadsheet printouts were difficult to read, and, in those cases, it produced the spreadsheets in native format (Excel) upon request, but contended that the parties never agreed to produce all spreadsheets in native format.

Judge Westmore stated that “Triology’s complaint is purely one of form and, at this juncture, it is not claiming that Melian’s production is incomplete. Rule 34(b) only requires that the parties produce documents as they are kept in the usual course of business or in the form ordinarily maintained unless otherwise stipulated. Fed. R. Civ. P. 34(b)(2)(E). The parties’ Joint Rule 26(f) Report is a stipulation, and, therefore, Rule 34(b) does not govern. Further, the Joint Rule 26(f) Report does not require that all ESI be produced electronically. Instead, it states that ESI may be produced in paper, PDF or TIFF.”

Judge Westmore also noted that “Triology fails to articulate why metadata is important to emails, when every email should contain the information sought on the face of the document.”  As a result, he ruled that the defendant’s “request to compel the production of all emails in a searchable or native format is denied”.

So, what do you think?  Did the Joint Rule 26(f) Report allow the plaintiff to produce PDFs with no metadata or was the defendant still entitled to native files with at least the email metadata?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

Twitter Sues for the Right to be More Transparent – Social Tech eDiscovery

Back in July, we took a look at Twitter’s Transparency Report to show government requests for data over the last six months of 2013 (we had previously looked at their very first report here).  However, because Twitter is barred by law from disclosing certain details on government surveillance requests, the Transparency Report is not as transparent as Twitter would like.  So, on Tuesday, Twitter filed suit against the FBI and the Justice Department, seeking the ability to release more detailed information on government surveillance of Twitter users.

As reported by The Huffington Post, Twitter is asking a judge for permission to publish its full transparency report, including the number of so-called “national security letters” and Foreign Intelligence Surveillance Act orders that it receives. Twitter claims that restrictions on its ability to speak about government surveillance requests are unconstitutional under the First Amendment.

“We’ve tried to achieve the level of transparency our users deserve without litigation, but to no avail,” Twitter said in a blog post announcing the lawsuit, which was filed in federal court.  “It’s our belief that we are entitled under the First Amendment to respond to our users’ concerns and to the statements of U.S. government officials by providing information about the scope of U.S. government surveillance – including what types of legal process have not been received. We should be free to do this in a meaningful way, rather than in broad, inexact ranges.

So, today, we have filed a lawsuit in federal court seeking to publish our full Transparency Report, and asking the court to declare these restrictions on our ability to speak about government surveillance as unconstitutional under the First Amendment. The Ninth Circuit Court of Appeals is already considering the constitutionality of the non-disclosure provisions of the NSL law later this week.”

Transparency reports are typically issued by companies to disclose numerous statistics related to requests for user data, records, and website content. These reports indicate the frequency and authority that governments request data or records over the given period. Due to the creation of these reports, the public may be informed of the private information governments gain access to via search warrants, court subpoenas and other methods.  Many other major communication platforms provide Transparency Reports as well, such as Facebook, LinkedIn, Google and Microsoft.

In Twitter’s most recent Transparency Report, they received 2,058 requests for information on its users over the previous six months from governments around the world – a 46 percent increase from 1,410 requests received the previous six months.  Over 61 percent of those requests (1,257 total) came from the US Government (Japan was next on the list with a mere 192 requests).

Twitter said it supports the USA Freedom Act of 2014, which was introduced earlier this year by Sen. Patrick Leahy (D-Vt.). The bill would allow for greater public reporting about government surveillance requests.

A copy of Twitter’s filed complaint can be found here.

So, what do you think?  Do you agree with Twitter that they deserve the right to greater transparency?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

eDiscovery Throwback Thursdays – How things evolved, part 3

So far in this blog series, we’ve taken a look at the ‘litigation support culture’ circa 1980, and we’ve covered how databases were built and used.  We’ve come a long way since then, and in the past couple of weeks we’ve discussed how things have evolved — we’ll continue that this week. First, though, If you missed the earlier posts in this series, they can be found here, here, here, here, here, here, here, here, here, here and here.

In the past couple of weeks we’ve talked about the form in which document collections were stored and the evolution – first in paper form, then on microfilm, then microfiche, and then as digital images.  Database content has evolved too.  Early databases included coded information only.  In the mid 1980’s, litigation support professionals starting thinking about and talking about OCR (optical character recognition) technology, mostly because one of the main-stream litigation support vendors promoted the advantages of full-text databases.

The primary advantage was, of course, the availability of all words on a document for searching.  There was a price-tag though, because the starting point was still paper.  Text was captured in an OCR scanning process.  Like image technology, full-text took a while to catch on in our industry.  The biggest hurdle initially was a lack of confidence in the results – with good reason.  At the time, searching the internet wasn’t mainstream, so the average litigation team member wasn’t comfortable with employing a less-than-rigid search method.

In addition, search technology was less advanced than it is today, so there was a greater burden on the user to get a search right.  And, OCR technology wasn’t as advanced either, so there were a lot of errors in the scanning process – errors that affected search results. Over time, however, these things changed.  Average business people became more and more comfortable searching text (thanks in large part to Google); search technology advanced; and OCR technology advanced.

Eventually, including full-text in a database became the norm, and even started replacing coded information.  Another factor that contributed to the evolution of full-text was the cost to store data.  It used to be expensive.  I remember sitting in meetings where attorneys debated on things like using abbreviations and punctuation in databases because of the expense of storage – they looked for every way they could to cut down on the data that was stored.  As storage costs went down over the years, it became easier to justify including full-text in databases.

These changes — databases that included images and full-text, coupled with advanced search technology – made a huge change in how litigation databases were used.  Databases were no longer a ‘back-office’ tool – they were used directly by attorneys, and they provided attorneys with very, very fast access to their documents.  By the mid 1990’s litigation databases were not only main stream, but they were regularly portable.  Not only did attorneys have almost-immediate access to their documents – they had that access even when not in the office.

This brings us up to the 1990’s, at which point electronic discovery quickly emerged as the next big advancement.  I won’t cover the evolution of it in this series… CloudNine has documented that well here in its eDiscovery Daily Blog.

This post concludes the Throwback Thursday blog series. I hope you enjoyed this look back at the way things used to be in our industry!

Please let us know if there are eDiscovery topics you’d like to see us cover in eDiscoveryDaily.

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.

Survey of Corporate Counsel Finds that there is Much Room for Improvement in Handling eDiscovery – eDiscovery Trends

Yesterday, we discussed a new self-assessment test that enables organizations to measure their eDiscovery “maturity”.  Today, we look at a new survey of corporate counsel from BDO Consulting that shows that they feel there is substantial room for improvement when evaluating their organizations’ effectiveness in managing eDiscovery.

According to BDO’s press release promoting their inaugural Inside E-Discovery Survey by BDO Consulting, corporate counsel give their internal and external resources a grade of 6.5 out of 10 for overall effectiveness in handling and managing their eDiscovery.  The survey was completed by 100 senior in-house counsel and is scheduled to be released in late October.

Here are the top critical factors identified by in-house legal professionals as impacting their eDiscovery process:

  • Nearly half (48.4 percent) of respondents ranked understanding the universe of potentially responsive evidence early in the case as the most critical factor, more than three times as much as the next ranked factor;
  • 15.6 percent of respondents ranked predicting the total cost of eDiscovery as the most critical factor;
  • 14.1 percent of respondents ranked reducing eDiscovery review fees as the most important factor; and
  • 12.5 percent of respondents reported the ability to use previously collected and processed electronically stored information (ESI) for other matters as the most important factor, pointing to a desire among corporate counsel to achieve efficiencies by reusing prior work product.

When it comes to selecting eDiscovery providers, quality of provider (47.6 percent of respondents) is twice as important as cost (23.8 percent) as the most important factor for provider selection.

Other findings:

  • Response to Challenges: To respond to the increasing challenges of eDiscovery, 31.4 percent of respondents reported implementing new guidelines or policies within the past year to streamline and improve their response to litigation. Just over one in four (25.5 percent) say they have adopted tools and technologies, while 15.7 percent say they have hired an outside vendor.
  • Top eDiscovery Challenges Going Forward: When asked about key forward-looking challenges with regards to eDiscovery management, the largest percentage of in-house counsel (22.5 percent) say managing mobile and social networking data is the number one issue they will face in the near future, followed by cost control (17.5 percent), new regulations (15 percent) and automating processes (12.5 percent).
  • Few Organizations are Ahead of the Curve: Only 5.4 percent of respondents identify their organization as an “early adopter” when it comes to its willingness to adopt new tools and technologies. In addition, only 17.6 percent currently use customized customer portals to view and track project statistics and only 16.2 percent use data visualization techniques to assist in priority processing or review.
  • Spending on the Rise: 43.2 percent of corporate counsel respondents predict eDiscovery spend will increase within the next year, while a mere 6.2 percent expect it to decrease.

An infographic of the survey results is available from BDO Consulting here.

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

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

How Mature is Your Organization in Handling eDiscovery? – eDiscovery Best Practices

A new self-assessment resource from EDRM helps you answer that question.

A few days ago, EDRM announced the release of the EDRM eDiscovery Maturity Self-Assessment Test (eMSAT-1), the “first self-assessment resource to help organizations measure their eDiscovery maturity” (according to their press release linked here).

As stated in the press release, eMSAT-1 is a downloadable Excel workbook containing 25 worksheets (actually 27 worksheets when you count the Summary sheet and the List sheet of valid choices at the end) organized into seven sections covering various aspects of the e-discovery process. Complete the worksheets and the assessment results are displayed in summary form at the beginning of the spreadsheet.  eMSAT-1 is the first of several resources and tools being developed by the EDRM Metrics group, led by Clark and Dera Nevin, with assistance from a diverse collection of industry professionals, as part of an ambitious Maturity Model project.

The seven sections covered by the workbook are:

  1. General Information Governance: Contains ten questions to answer regarding your organization’s handling of information governance.
  2. Data Identification, Preservation & Collection: Contains five questions to answer regarding your organization’s handling of these “left side” phases.
  3. Data Processing & Hosting: Contains three questions to answer regarding your organization’s handling of processing, early data assessment and hosting.
  4. Data Review & Analysis: Contains two questions to answer regarding your organization’s handling of search and review.
  5. Data Production: Contains two questions to answer regarding your organization’s handling of production and protecting privileged information.
  6. Personnel & Support: Contains two questions to answer regarding your organization’s hiring, training and procurement processes.
  7. Project Conclusion: Contains one question to answer regarding your organization’s processes for managing data once a matter has concluded.

Each question is a separate sheet, with five answers ranked from 1 to 5 to reflect your organization’s maturity in that area (with descriptions to associate with each level of maturity).  Default value of 1 for each question.  The five answers are:

  • 1: No Process, Reactive
  • 2: Fragmented Process
  • 3: Standardized Process, Not Enforced
  • 4: Standardized Process, Enforced
  • 5: Actively Managed Process, Proactive

Once you answer all the questions, the Summary sheet shows your overall average, as well as your average for each section.  It’s an easy workbook to use with input areas defined by cells in yellow.  The whole workbook is editable, so perhaps the next edition could lock down the calculated only cells.  Nonetheless, the workbook is intuitive and provides a nice exercise for an organization to grade their level of eDiscovery maturity.

You can download a copy of the eMSAT-1 Excel workbook from here, as well as get more information on how to use it (the page also describes how to provide feedback to make the next iterations even better).

The EDRM Maturity Model Self-Assessment Test is the fourth release in recent months by the EDRM Metrics team. In June 2013, the new Metrics Model was released, in November 2013 a supporting glossary of terms for the Metrics Model was published and in November 2013 the EDRM Budget Calculators project kicked off (with four calculators covered by us here, here, here and here).  They’ve been busy.

So, what do you think?  How mature is your organization in handling eDiscovery?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine 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.

Court Approves Use of Predictive Coding, Disagrees that it is an “Unproven Technology” – eDiscovery Case Law
 

In Dynamo Holdings v. Commissioner of Internal Revenue, Docket Nos. 2685-11, 8393-12 (U.S. Tax Ct. Sept 17, 2014), Texas Tax Court Judge Ronald Buch ruled that the petitioners “may use predictive coding in responding to respondent's discovery request” and if “after reviewing the results, respondent believes that the response to the discovery request is incomplete, he may file a motion to compel at that time”.

The cases involved various transfers from one entity to a related entity where the respondent determined that the transfers were disguised gifts to the petitioner's owners and the petitioners asserted that the transfers were loans.

The respondent requested for the petitioners to produce the electronically stored information (ESI) contained on two specified backup storage tapes or simply produce the tapes themselves. The petitioners asserted that it would "take many months and cost at least $450,000 to do so", requesting that the Court deny the respondent's motion as a "fishing expedition" in search of new issues that could be raised in these or other cases. Alternatively, the petitioners requested that the Court let them use predictive coding to efficiently and economically identify the non-privileged information responsive to respondent's discovery request.  The respondent opposed the petitioners' request to use predictive coding, calling it "unproven technology" and added that petitioners could simply give him access to all data on the two tapes and preserve the right (through a "clawback agreement") to later claim that some or all of the data is privileged.

Judge Buch called the request to use predictive coding “somewhat unusual” and stated that “although it is a proper role of the Court to supervise the discovery process and intervene when it is abused by the parties, the Court is not normally in the business of dictating to parties the process that they should use when responding to discovery… Yet that is, in essence, what the parties are asking the Court to consider – whether document review should be done by humans or with the assistance of computers. Respondent fears an incomplete response to his discovery. If respondent believes that the ultimate discovery response is incomplete and can support that belief, he can file another motion to compel at that time.”

With regard to the respondent’s categorization of predictive coding as “unproven technology”, Judge Buch stated “We disagree. Although predictive coding is a relatively new technique, and a technique that has yet to be sanctioned (let alone mentioned) by this Court in a published Opinion, the understanding of e-discovery and electronic media has advanced significantly in the last few years, thus making predictive coding more acceptable in the technology industry than it may have previously been. In fact, we understand that the technology industry now considers predictive coding to be widely accepted for limiting e-discovery to relevant documents and effecting discovery of ESI without an undue burden.”

As a result, Judge Buch ruled that “[p]etitioners may use predictive coding in responding to respondent's discovery request. If, after reviewing the results, respondent believes that the response to the discovery request is incomplete, he may file a motion to compel at that time.”

So, what do you think?  Should predictive coding have been allowed in this case?  Please share any comments you might have or if you’d like to know more about a particular topic.

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