Proportionality Archives

James D. Zinn, Managing Director of Huron Consulting Group – eDiscovery Trends

February 28, 2014

This is the third of the 2014 LegalTech New York (LTNY) Thought Leader Interview series. eDiscoveryDaily interviewed several thought leaders after LTNY this year (don’t get us started) and generally asked each of them the following questions:

What significant eDiscovery trends did you see at LTNY this year and what do you see for 2014?
With new amendments to discovery provisions of the Federal Rules of Civil Procedure now in the comment phase, do you see those being approved this year and what do you see as the impact of those Rules changes?
It seems despite numerous resources in the industry, most attorneys still don’t know a lot about eDiscovery? Do you agree with that and, if so, what do you think can be done to improve the situation?
What are you working on that you’d like our readers to know about?

Today’s thought leader is James D. Zinn. James is Managing Director of Huron Consulting Group. James leads the technology team at Huron Legal, which includes the data collection, processing, hosting, production, and forensic analysis services along with infrastructure, support, and software development. James has extensive experience managing the strategic and tactical use of technology within investigative and litigation consulting matters.

What significant eDiscovery trends did you see at LTNY this year and what do you see for 2014?

The Legal Tech conference was another good experience for us as a company. It was an overall good conference for us with good traffic at our booth, great meetings throughout the week and good business opportunities coming from the show. So, overall our impressions were positive and we felt good about the experience all around. In fact, I would say that it was one of the best LegalTech experiences ever from our perspective.

As I look around the conference in terms of trends, the biggest trend that I noted was an increase in the discussion about Information Governance. The whole concept of Information Management and Information Governance has become a popular topic. There were lots of exhibitors using Information Governance or related language when talking about their products. There were also several sessions and panel discussions about it, as well. So, that stood out to me as the biggest trend I saw at the show over the previous year. I think that observation is reflective of an overall trend toward a greater focus on Information Governance and the impact it has on a number of things, including discovery costs and workflow.

The other trend that I see for 2014 is more stratification among the service providers. Part of the reason for that is continued industry consolidation. I think there is a growing differentiation between service providers, which we feel from our own experience, as well. On one hand, a number of providers are continuing to mature and develop their full service offerings while on the other hand; there are new entrants into the market focusing on the application of technology as a differentiator from legacy service providers.

A related trend is greater acceptance of cloud-based solutions. I think a number of providers are focusing on leveraging cloud-based infrastructures and technologies in their solutions. I’m sensing an increased acceptance within the marketplace for cloud-based solutions.

With new amendments to discovery provisions of the Federal Rules of Civil Procedure now in the comment phase, do you see those being approved this year and what do you see as the impact of those Rules changes?

I don’t have any particular source of information that would lead me to do anything more than speculate on the timing of their approval, but I do see them being accepted this year. While the amendments have generated a fair amount of discussion, I think they represent a positive trend and will be approved and enacted. I think the impact on the up front preparation and speed of litigation has been talked about extensively and will be a natural evolution for those who are already well prepared in that area. They will cause even more pain than the last amendments for those who are not as organized. The impact on the early calendar of litigation may come as a shock to the litigants who aren’t as organized as they need to be. I also think the introduction of proportionality via the amendments is a good thing and will bring some reasonableness to the burden of discovery that many of our clients face.

It seems despite numerous resources in the industry, most attorneys still don’t know a lot about eDiscovery? Do you agree with that and, if so, what do you think can be done to improve the situation?

That’s an interesting question because I wonder how much my experience personally and our experience as an organization is influenced by attorneys who are self-selecting. In other words, do we see a representative sample of attorneys in the marketplace? I would argue that we’ve seen an increase in the sophistication of our clients, both our clients at law firms and those at corporate legal departments. To generalize them as a group, they are definitely more educated and more knowledgeable around eDiscovery issues than they were a few years ago. But, I don’t know if that’s because of the nature of the types of clients we tend to attract are those that have recurring needs for discovery services and have been dealing with it for a number of years.

I do think that, as an industry, there are a lot of resources available to educate, so for those who do not avail themselves of those resources, it may be a reflection of their lack of a regular need for those services. It’s easy to say that there could always be more education provided, but I think that you’re correct in the assessment that there are a number of good resources already.

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

We pride ourselves on being close to our clients and their needs and so we are continuing the development of our full-service offerings. Our focus continues to be around holistic solutions to our clients’ problems, discovery being one of them, Information Governance certainly being another, compliance being a third, and so on. So, in each of these areas, our focus is on how we can provide a complete solution to our clients. By “complete”, I’m referring to everything from strategy and organizational assistance to help with the implementation of technologies or procedures and then on to the actual provision of services. Huron is continuing within eDiscovery and beyond eDiscovery within the legal industry to focus on providing relevant, holistic solutions.

Thanks, James, 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!

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.

Dispute over Production Format and Search Terms for Electronic Discovery Highlights the Need for Cooperation – eDiscovery Case Law

February 21, 2014

In Saliga v. Chemtura Corp., No. 3:12cv832 (RNC), 2013 U.S. Dist. (D. Conn. Nov. 25, 2013), a discrimination case heard by Connecticut Magistrate Judge Donna F. Martinez, the plaintiff and the defendants had spent a year arguing over the format of production for Electronically Stored Information (ESI) to be used in discovery, as well as relevant search terms, before the plaintiff filed a motion to compel.

Prior to this motion, Judge Martinez had held a status conference and chastised both parties concerning the issue of cooperation, noting that discussions about ESI should begin early in the case under Rule 26(f), which requires that both parties confer in order to develop a discovery plan that addressed “any issues about disclosure or discovery of [ESI], including the form or forms in which it should be produced.” However, it was determined that given the current state of impasse, another meeting between parties would not reach a resolution, necessitating court intervention.

The format for production was the first matter addressed. Originally, the plaintiff had asked that the defendant produce emails for discovery in native format, which would contain application metadata and could also contain system metadata relevant to the litigation, such as file creation dates or the identity of the computer on which the email was created. The defendants’ objection stated that “standard practice is to produce ESI in searchable PDF or TIFF and there is ‘no basis or need’ to produce the emails in native format.”

However, the defendants did not claim any undue burden or expense with regards to the requested production format, nor did they offer a reason why they were unable to comply. Therefore according to Rule 34(b)(1)(c), which states that the requesting party, in this case the plaintiff, may “specify the form or forms in which electronically stored information is to be produced,” Judge Martinez ordered the defendant to produce the requested emails in native format.

The next issue addressed was a complaint by the defendant that two of the requests for production from the plaintiff were overly broad, and therefore unduly burdensome. The plaintiff listed 14 employees to search, and the defendant stated that search results for the employees’ emails yielded more than 925,000 hits. In addition, the complaint claimed this request was a duplicate of the plaintiff’s requested search terms, which caused similar problems.

Prior to the complaint, the parties had failed to agree on the search terms to be used, or how the search should proceed. The unresolved dispute necessitated Judge Martinez’s intervention, despite the fact that the court was “loath to decide the search terms to be used because the parties are far better positioned to do so.” In the discovery request, the plaintiff asked for the defendants to use 12 relevant words and phrases, variously combined with versions of the custodians’ names to create 37 search terms in total. The defendants objected to one of the 12 base search terms, “India Audit,” and claimed that inclusion of the custodians’ names would be “cumulative and unnecessary.”

Judge Martinez agreed that it would be “superfluous” to incorporate the names of the custodians into the search terms, but denied the defendants’ request to discard the contested search term “India Audit” and ordered that it be included.

Finally, the plaintiff’s request for information on the defendants’ data collection process was considered, in light of a letter the plaintiff had submitted to the defendants three months prior that contained “three pages of technical questions about the defendant’s system configuration, acquisition methods and data extraction” and told the defendant “not to produce any ESI discovery until the plaintiff was satisfied that her concerns and questions were resolved.” Judge Martinez rejected this request, stating that “the plaintiff’s questions may not impede the defendant’s production, which must take place immediately.” The plaintiff was advised to address the opposing counsel should she have any legitimate concerns about the procedures for data collection.

So, what do you think? Should the court step in to define search terms when both parties fail to agree on them? Should the plaintiff’s right to specify a production form for ESI supersede standard practices? Please share any comments you might have or if you’d like to know more about a particular topic.

Search Process for ESI Called into Question, but Court Denies Sanctions for Plaintiff – eDiscovery Case Law

February 13, 2014

In Brown v. West Corp., No. 8:11CV284, 2013 U.S. Dist. (D. Neb. Dec. 4, 2013), the plaintiff filed a motion to compel, claiming the defendant had been insufficient in its handling of searching for Electronically Stored Information (ESI) relevant to discovery. The plaintiff additionally contested a prior order from a magistrate judge, requiring the defendant to explain its search processes to the defendant. Ultimately, Nebraska Senior District Judge Lyle E. Strom denied the requested sanctions and rejected the challenge to the prior order.

The most recent motion saw the plaintiff asking for sanctions under Federal Rule of Civil Procedure 37(b), stating that the defendant failed to comply with the prior order, the purpose of which was stated to “lay bare the defendant’s search process and expose any deficiencies that might be a basis for plaintiff’s motion to compel a more stringent search of potentially relevant ESI for preservation.” In addition, the plaintiff asked that additional discovery be permitted.

However, the defendant had in fact complied with the prior order and explained its search processes regarding ESI, noting that its system did not permit a “‘global search’ of all electronic information in West’s possession.” The substance of the magistrate judge’s concerns regarding the prior order had concerned preservation of ESI, and not necessarily discovery requests. Judge Strom noted that the plaintiff had misinterpreted the prior order, and that the defendants had addressed concerns by “explaining the process by which West employees were directed to identify, preserve, and search potentially relevant materials.” Therefore, “the court finds no reason to require more from the defendant by way of evidence of a proper search.”

In the same motion and combined with the efforts to seek expanded discovery, the plaintiff raised two issues of spoliation. One that the defendant had erased the data of three potential custodians who had left the company, and two, that the defendant had failed to halt the automatic deletion of e-mail which may have been relevant to discovery.

Regarding these issues, Judge Strom once again rejected the contentions, stating that the defendant had repurposed the computers of former employees in apparent good faith, and as a regular business practice, “only after making a determination that all of the relevant information stored on those computers was preserved.” Additionally, the objection to automatic email deletion was dismissed because the plaintiff had not identified relevant emails or email categories that are “not subject to defendant’s preservation process or that have been deliberately destroyed in an attempt to thwart discovery.”

Finally, the plaintiff’s request to overturn the magistrate judge’s order that limited discovery to certain custodians was denied. Regarding Federal Rule 26(b), which states in part that requests for discovery should be limited due to “relevance and the balance between likely benefit and the burden on the producing party,” the magistrate judge had found nothing that would “suggest sufficient benefit [to the plaintiff] to warrant the expansive scope of the requested discovery” as outlined by the plaintiff. Such a scope, the magistrate judge felt, would be “grasping at the periphery by reviewing thousands or tens of thousands of emails,” and further that, “a few pointed questions in a deposition [would be] less burdensome.”

So, what do you think? Should defendants be permitted to limit responses to discovery when producing ESI due to the limitations of their technology? Please share any comments you might have or if you’d like to know more about a particular topic.

ESI Cost Budget Calculator – eDiscovery Best Practices

January 28, 2014

Last month, we discussed budget calculators available from the Metrics section of the Electronic Discovery Reference Model (EDRM) web site. So far, we have reviewed three budget calculators, the E-Discovery Cost Estimator for Processing and Review, the Doc Review Cost Calculator and the EDRM UTBMS eDiscovery Code Set Calculator. Here is the fourth and final calculator (currently) on the site, the ESI Cost Budget Calculator, provided by Browning Marean, DLA Piper law firm.

As described on the site, this budget calculator estimates costs by project phase. The phases are:

ESI Collection
ESI Processing
Paper Collection and Processing
Document Review
Early Data Assessment
Phase 1 Review
Phase 2 Review
Production
Privilege Review
Review of Opposition’s Production
Hosting Costs

This single-sheet Excel cost calculator is nice and straightforward. It covers collection through production, even including a section for review of your opponent’s production and hosting costs (which are becoming more commonplace as more organizations choose cloud-based solutions for their eDiscovery needs). Two things that I particularly like is that it provides a sequential “line” column to make it easier to refer to a particular line item and also a comments/assumptions column for documenting (what else?) your comments and assumptions. I also like that all of the numbers are in one column (column C), making it easier to follow the cost computations. The sheet also includes a header at the top with a place to enter the matter name and date of the estimate.

Suggestions for improvement:

As the site indicates, cost calculations, by phase and in total, are shown in the yellow cells. However, there are several other calculated cells that are in white (the same color as the enterable cells). It would be easier and clearer to identify the enterable cells if all of the calculated cells were in a different color to differentiate them from the enterable cells (maybe a third color to differentiate them from the cost calculations cells);
Protect the sheet and lock down the computed cells (at least in the main sheet) to avoid accidental overwriting of calculations (with the ability to unprotect the sheet if a formula requires tweaking);
Tie a pie chart to the numbers to represent the portion of each phase to the total eDiscovery cost for the project.

This workbook would certainly be useful for tracking eDiscovery costs from collection to production, using the metrics appropriate for each section (e.g., custodians and GB for collection, total files and review rate for the review phases, etc.). It would also be great to update as the phases progress to continue to refine your project estimate. You can download this calculator individually or a zip file containing all four calculators here.

So, what do you think? How do you estimate eDiscovery costs? Please share any comments you might have or if you’d like to know more about a particular topic.

Federal Circuit Reduces Award for Defendants Based on Costs of Digital Copies – eDiscovery Case Law

January 27, 2014

In Phillip M. Adams & Associates, L.L.C. v. Sony Electronics Inc., No. 1:05-CV-64 TS, 2013 U.S. Dist. LEXIS 160728 (D. Utah Nov. 7, 2013), a Federal Circuit court limited awards for the defendant with regard to the costs of digital copies, in a decision that followed the reasoning of the Third Circuit and Fourth Circuit in prior cases.

The initial case and jury trial was brought by plaintiff Phillip M. Adams & Associates, with allegations of patent infringement and trade secret misappropriation against Sony Electronics. In this Federal Circuit case brought on appeal, the court reversed an adverse interference sanction against the defendant imposed by the district court during the jury trial. However, the Federal Circuit upheld the grant of summary judgment in favor of the plaintiff.

After the decision to reverse the sanction, the Federal Circuit turned to the defendants’ request to seek their court costs in the case. The Clerk of Courts taxed costs in favor of the defendants in the amount of $168,812.39, a decision that resulted in motions filed by both the plaintiffs and defendants—the plaintiffs seeking to deny the request, and the defendants looking for allowance of additional costs.

The plaintiffs contested the award for several reasons, one being that the defendants had destroyed evidence, as found by the district court and upheld by the Federal Circuit. However, the court did not grant the plaintiffs’ request for dismissal due to the finding that the district court’s adverse interference sanction had been improper, and further that the plaintiffs “failed to present substantial evidence of infringement within the United States after May 3, 2001.” Additionally, the court stated that with the improper sanction, “it seems to follow that sanctions in the form of reduced or eliminated costs would also not be proper.”

However, the reward was reduced by 25%, due in part to the admittance of the defendant that some costs did not relate to a particular claim for which the two parties had previously agreed to bear their own costs.

The Federal Circuit then addressed the additional costs requested by the defendants totaling more than $60,000 for exemplification and for making copies. The breakdown of costs cited by the defendant included “producing TIFF images, OCR, bates labeling, and copying on CDs and DVDs.” Ultimately, the court granted in part and denied in part the request, basing the decision on prior case outcomes for the Third Circuit in Race Tires America, Inc. v. Hoosier Racing Tire Corp. and the Fourth Circuit in The Country Vintner of North Carolina, LLC v. E & J. Gallo Winery, Inc.

Despite the defendants’ argument that “all activities related to the production of ESI [electronically stored information ] should be taxable,” the court rejected approximately half of the costs sought, reasoning that “the process employed in the pre-digital era to produce documents in complex litigation” excluded those steps from taxation that the defendant sought to recover. Therefore, the defendant was allowed only the costs of nearly $30,000 for TIFF imaging and approximately $2,400 for copying to CDs and DVDs. The remaining requests were rejected.

So, what do you think? Should the costs related to digital copying be taxable by courts? Are awards in the production of ESI too generous? Please share any comments you might have or if you’d like to know more about a particular topic.

2013 eDiscovery Year in Review: eDiscovery Case Law, Part 3

January 20, 2014

As we noted on Thursday and Friday, eDiscoveryDaily published 78 posts related to eDiscovery case decisions and activities over the past year, covering 62 unique cases! Friday, we looked back at cases related to production format disputes, search disputes and technology assisted review. Today, let’s take a look back at cases related to proportionality and the first half of the cases related to sanctions (yes, there were that many).

We grouped those cases into common subject themes and will review them over the next few posts. Perhaps you missed some of these? Now is your chance to catch up!

PROPORTIONALITY / COOPERATION

There were certainly at least a handful of cases where proportionality of eDiscovery and cooperation between parties was at issue, including the most viewed post in the history of this blog. Here are three such cases:

Is a Blended Document Review Rate of $466 Per Hour Excessive? Remember when we raised the question as to whether it is time to ditch the per hour model for document review? One of the cases we highlighted for perceived overbilling was ruled upon last month. In the case In re Citigroup Inc. Securities Litigation, New York District Judge Sidney H. Stein rejected as unreasonable the plaintiffs’ lead counsel’s proffered blended rate of more than $400 for contract attorneys—more than the blended rate charged for associate attorneys—most of whom were tasked with routine document review work.

Court Rejects Defendants’ Claim of Undue Burden in ERISA Case. In the case In re Coventry Healthcare, Inc.: ERISA Litigation, Maryland Magistrate Judge Jillyn K. Schulze rejected the defendants’ claim of undue burden where they failed to suggest alternatives to using the plaintiffs’ search terms and where they could enter a clawback order to eliminate the cost of reviewing the data for responsiveness and privilege.

Court Agrees with Defendant that Preserving 5 Terabytes of Data is Enough. In United States ex rel. King v. Solvay, S.A., Texas District Judge Gray Miller granted the defendant’s request for a protective order where the plaintiffs only offered generalized, unsupported claims to support their request to extend and expand discovery.

SANCTIONS

Yes, once again, the topic with the largest number of case law decisions related to eDiscovery is those decisions related to sanctions. Of the 62 cases we covered this past year, over 40% of them (26 total cases) related to sanctions, either due to spoliation issues or inadequate or untimely productions, many of which were granted, but some were denied. Here are the first 13 cases:

Company Should Have Preserved Personal eMails, But No Sanctions (Yet). In Puerto Rico Telephone Co. v. San Juan Cable LLC, Puerto Rico Magistrate Judge Bruce J. McGiverin found that “plaintiff has proffered sufficient evidence to establish that [the defendant] OneLink failed to preserve relevant emails within its control”, but denied the plaintiff’s request for sanctions at this time because of the “absence of bad faith” on the defendant’s part and the plaintiff’s failure to demonstrate prejudice.

The Ubiquitous Apple Samsung Case and “Patentgate”. When something gets the “gate” suffix added to it, that’s not a good thing. It’s hard to believe that a case can get more intense than when a billion dollar verdict is awarded (later reduced to a measly $599 million, then increased back up to $930 million), but the Apple v. Samsung case seems to only be getting more intense, due to the disclosure of confidential agreements that Apple had with Nokia, Ericsson, Sharp and Philips – now widely referred to as “patentgate”.

Duty to Preserve Triggered When Litigation is “Imminent”, Not “Reasonably Foreseeable”. In the case In re Pradaxa (Dabigatran Etexilate) Products Liability Litigation, Chief District Judge David R. Herndon ruled that at least in the Seventh Circuit, the duty to preserve is triggered not when litigation is “reasonably foreseeable” but when “a litigant knew or should have known that litigation was imminent.”

Leaving Your Hard Drives in a Rental House is Negligent, Court Rules. In Net-Com Services, Inc. v. Eupen Cable USA, Inc., the plaintiff’s destruction of evidence was negligent where its principal failed to take steps to preserve evidence he had stored in a home he rented to nonaffiliated lessees.

Despite Missing and Scrambled Hard Drives, Court Denies Plaintiff’s Request for Sanctions. In Anderson v. Sullivan, a Pennsylvania court found “that no sanctions are warranted” despite the disappearance of one hard drive, “scrambling” of another hard drive and failure to produce several e-mails because the evidence was not relevant to the underlying claims and because there was no showing the defendants intentionally destroyed evidence.

Court Awards Sanctions, But Declines to Order Defendants to Retain an eDiscovery Vendor – Yet. In Logtale, Ltd. v. IKOR, Inc., California Magistrate Judge Donna M. Ryu granted the plaintiff’s motion to compel responses to discovery and awarded partial attorney’s fees as a result of defendants’ conduct. The judge did not grant the plaintiff’s request to order Defendants to retain an eDiscovery vendor to conduct a thorough and adequate search for responsive electronic documents, but did note that the court would do so “if there are continuing problems with their document productions”.

Imagine if the Zubulake Case Turned Out Like This. You’ve got an employee suing her ex-employer for discrimination, hostile work environment and being forced to resign. During discovery, it was determined that a key email was deleted due to the employer’s routine auto-delete policy, so the plaintiff filed a motion for sanctions. Sound familiar? Yep. Was her motion granted? Nope.

Scheindlin Reverses Magistrate Judge Ruling, Orders Sanction for Spoliation of Data. If you’re hoping to get away with failing to preserve data in eDiscovery, you might want to think again if your case appears in the docket for the Southern District of New York with Judge Shira Scheindlin presiding.

Permissive Adverse Inference Instruction Upheld on Appeal. In Mali v. Federal Insurance Co., the Second Circuit explained the distinctions between two types of adverse inference instructions: a sanction for misconduct versus an explanatory instruction that details the jury’s fact-finding abilities. Because the lower court opted to give a permissive adverse inference instruction, which is not a punishment, the court did not err by not requiring the defendant to show that the plaintiffs acted with a culpable state of mind.

Default Judgment Sanction Upheld on Appeal. In Stooksbury v. Ross, the Sixth Circuit upheld the entry of default judgment as a sanction against defendants that repeatedly failed to comply with discovery obligations, including producing a “document dump” of tens of thousands of pages of nonresponsive information that prejudiced the plaintiffs.

Spoliation Sanctions Can Apply to Audio Files Too. In Hart v. Dillon Cos., Colorado Magistrate Judge David L. West granted the plaintiff’s Motion for Sanctions for Spoliation of Evidence for failing to preserve a tape recorded interview with the plaintiff and set a hearing and oral argument as to what sanctions should be imposed for October.

Printed Copies of Documents Not Enough, Spoliation Sanctions Upheld for Discarding Computer. On May 30, the Appellate Division of the Supreme Court of New York, First Department upheld a spoliation sanction against a plaintiff that failed to preserve electronic files and discarded his computer containing those files.

Appellate Court Denies Sanctions for Routine Deletion of Text Messages. In PTSI, Inc. v. Haley, the appellate court denied a motion for spoliation sanctions where the defendants routinely deleted text messages and other data to “clean up” their personal electronic devices: the volume of messages and limited amount of phone storage made it difficult to retain all data and still use the phone for messaging.

Tune in tomorrow for the remaining thirteen sanctions cases in 2013!

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.

2013 eDiscovery Year in Review: eDiscovery Case Law, Part 1

January 16, 2014

It’s time for our annual review of eDiscovery case law! We had more than our share of sanctions granted and denied, as well as disputes over admissibility of electronically stored information (ESI), eDiscovery cost reimbursement, production formats and search parameters, among other things. So, as we did last year and also the year before, let’s take a look back at 2013!

Last year, eDiscoveryDaily published 78 posts related to eDiscovery case decisions and activities over the past year, covering 62 unique cases! 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, 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!

ADMISSIBILITY AND DUTY TO PRESERVE AND PRODUCE

Admissibility of ESI, and the duty to preserve and produce it, is more at issue than ever. As always, there are numerous disputes about data being produced and not being produced. Here are ten cases related to admissibility and the duty to preserve and produce ESI:

Court Rules Defendant Doesn’t Have Controls of PCs of Former Members, Denies Plaintiff’s Motion to Compel. To require a party to produce evidence in discovery, the party must have “possession, custody, or control” of the evidence. In Kickapoo Tribe of Indians of the Kickapoo Reservation in Kansas v. Nemaha Brown Watershed Joint District No. 7, the defendant did not have control over the personal computers of its former members, employees, or staff; it did not have the legal right to obtain information from them “on demand.” Therefore, the court rejected the plaintiff’s motion to compel and refused to order the forensic examination of the personal computers of current or former members, employees, or staff.

Court Rejects Defendant’s “Ultra-Broad” Request, Denies Motion to Compel Production. In NOLA Spice Designs, LLC v. Haydel Enters., Inc., Louisiana Magistrate Judge Joseph C. Wilkinson, Jr. denied a motion to compel a plaintiff and its principal (a third-party defendant) to produce their passwords and usernames for all websites with potentially relevant information and to compel a forensic examination of its computers.

Plaintiff Needs More Than “Mere Hope” to Discover Defendant’s Personal Info. In Salvato v. Miley, a wrongful death action, Florida Magistrate Judge Philip R. Lammens denied the plaintiff’s motion to compel the defendant’s responses to discovery requests “based on Plaintiff’s very limited showing as to the relevance of the requested discovery and the broadly drafted discovery requests”.

Court Compels Discovery of Plaintiff’s Facebook Posts as Relevant. In Moore v. Miller, Colorado Senior District Judge John L. Kane ruled (over the plaintiff’s privacy objections) that the plaintiff’s Facebook posts and activity log must be produced because they related to his claims of physical injury and emotional distress and because the plaintiff put his posts directly at issue by discussing the incident giving rise to the lawsuit online.

Court Rules that Stored Communications Act Applies to Former Employee Emails. In Lazette v. Kulmatycki, the Stored Communications Act (SCA) applied when a supervisor reviewed his former employee’s Gmails through her company-issued smartphone; it covered emails the former employee had not yet opened, but not emails she had read but not yet deleted.

Google Compelled to Produce Search Terms in Apple v. Samsung. In Apple v. Samsung, California Magistrate Judge Paul S. Grewal granted Apple’s motion to compel third party Google to produce the search terms and custodians used to respond to discovery requests and ordered the parties to “meet and confer in person to discuss the lists and to attempt to resolve any remaining disputes regarding Google’s production.”

Plaintiff Granted Access to Defendant’s Database. In Advanced Tactical Ordnance Systems, LLC v. Real Action Paintball, Inc., Indiana Magistrate Judge Roger B. Cosbey took the unusual step of allowing the plaintiff direct access to a defendant company’s database under Federal Rule of Civil Procedure 34 because the plaintiff made a specific showing that the information in the database was highly relevant to the plaintiff’s claims, the benefit of producing it substantially outweighed the burden of producing it, and there was no prejudice to the defendant.

Yet Another Request for Facebook Data Denied. In Potts v. Dollar Tree Stores, Inc., Tennessee District Judge William Haynes ruled that the defendant “lacks any evidentiary showing that Plaintiff’s public Facebook profile contains information that will reasonably lead to the discovery of admissible evidence” and, therefore, denied the defendant’s motion to compel regarding same.

Stored Communications Act Limits Production of Google Emails. In Optiver Australia Pty. Ltd. & Anor. v. Tibra Trading Pty. Ltd. & Ors., California Magistrate Judge Paul S. Grewal granted much of the defendant’s motion to quash subpoena of Google for electronic communications sent or received by certain Gmail accounts allegedly used by employees of the defendant because most of the request violated the terms of the Stored Communications Act.

Another Social Media Request Denied as a “Carte Blanche” Request. In Keller v. National Farmers Union Property & Casualty Co., the defendants filed a motion to compel the plaintiff’s to respond to various discovery requests. While Magistrate Judge Jeremiah Lynch granted their request to compel the plaintiffs to produce medical records, he denied the defendant’s request “to delve carte blanche into the nonpublic sections of Plaintiffs’ social networking accounts”.

EDISCOVERY COST REIMBURSEMENT

As usual, eDiscovery cost reimbursement was a “mixed bag” as the cases where the prevailing party was awarded reimbursement of eDiscovery costs and the cases where requests for reimbursement of eDiscovery costs was denied (or only partially granted) was about even. Here are six cases, including one where the losing plaintiff was ordered to pay $2.8 million for predictive coding of one million documents(!):

Cost-Shifting Inappropriate when Data is Kept in an Accessible Format. In Novick v. AXA Network, New York Magistrate Judge Kevin Nathaniel Fox ruled that cost-shifting was inappropriate where data was kept in an accessible format.

Apple Wins Case, But Loses its Bid to Have Most of its Costs Covered. In Ancora Technologies, Inc. v. Apple, Inc., California District Judge Yvonne Gonzalez Rogers granted in part and denied in part Ancora’s Motion for Review of Clerks’ Order on the Bill of Costs of prevailing party Apple, reducing the awarded amount from $111,158.23 down to $20,875.48, including disallowing over $71,000 in storage and hosting costs.

Another Case where Reimbursement of eDiscovery Costs are Denied. In The Country Vintner of North Carolina, LLC v. E. & J. Gallo Winery, Inc., when deciding which costs are taxable, the Fourth Circuit chose to follow the Third Circuit’s reasoning in Race Tires America, Inc. v. Hoosier Racing Tire Corp., which read 28 U.S.C. § 1920(4) narrowly. Specifically, the court approved taxation of file conversion and transferring files onto CDs as “[f]ees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case” but no other tasks related to electronically stored information (ESI).

In False Claims Act Case, Reimbursement of eDiscovery Costs Awarded to Plaintiff. In United States ex rel. Becker v. Tools & Metals, Inc., a qui tam False Claims Act litigation, the plaintiffs sought, and the court awarded, costs for, among other things, uploading ESI, creating a Relativity index, and processing data over the objection that expenses should be limited to “reasonable out-of-pocket expenses which are part of the costs normally charged to a fee-paying client.” The court also approved electronic hosting costs, rejecting a defendant’s claim that “reasonableness is determined based on the number of documents used in the litigation.” However, the court refused to award costs for project management and for extracting data from hard drives where the plaintiff could have used better means to conduct a “targeted extraction of information.”

Court Says Scanning Documents to TIFF and Loading into Database is Taxable. In Amana Society, Inc. v. Excel Engineering, Inc., Iowa District Judge Linda R. Reade found that “scanning [to TIFF format] for Summation purposes qualifies as ‘making copies of materials’ and that these costs are recoverable”.

Must Losing Plaintiff Pay Defendant $2.8 Million for Predictive Coding of One Million Documents? Court Says Yes. In Gabriel Technologies Corp. v. Qualcomm Inc., District Judge Anthony J. Battaglia awarded the defendant over $12.4 million in attorneys’ fees to be paid by the losing plaintiff in the case. The amount included over $2.8 million for “computer-assisted, algorithm-driven document review” and nearly $392,000 for contract attorneys to review documents identified by the algorithm as responsive.

We’re just getting started! Tomorrow, we will cover cases related to production format disputes, search disputes and technology assisted review. Stay tuned!

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.

Six eDiscovery Predictions for 2014, Part One – eDiscovery Trends

January 10, 2014

It’s that time of year, where people make predictions for the coming year for all sorts of things, including electronic discovery trends for the coming year. Though I have to say, I’ve seen fewer predictions this year than in past years. Nonetheless, I feel compelled to offer some of my own predictions. If they turn out right, you heard it here first!

Prediction 1: Predictive coding technologies will become more integrated into the discovery process, for more than just review.

Two or three years ago, predictive coding (a.k.a., technology assisted review or computer assisted review) was a promising technology that had yet to be officially accepted in the courts. Then, in 2012, cases such as Da Silva Moore v. Publicis Groupe & MSL Group, Global Aerospace Inc., et al, v. Landow Aviation, L.P. dba Dulles Jet Center, et al and In re Actos (Pioglitazone) Products Liability Litigation, predictive coding was approved (and there was at least two other cases where it was contemplated). So, it’s beginning to be used, though most attorneys still don’t fully understand how it works or understand that it’s not a “turn-key” software solution, it includes a managed process that uses the software.

It’s not going out on a limb to say that this year predictive coding technologies will be more widely used; however, I think those technologies will branch out beyond review to other phases of the eDiscovery life cycle, including Information Governance. Predictive coding is not new technology, it’s basically artificial intelligence applied to the review process, so it’s logical that same technology can be applied to other areas of the discovery life cycle as well.

Prediction 2: The proposed amendments will be adopted, but it will be a struggle.

Changes to Federal Rules for eDiscovery have been drafted and have been approved for public comment. However, several people have raised concerns about some of the new rules. Judge Shira Scheindlin has criticized proposed Rule 37(e), intended to create a uniform national standard regarding the level of culpability required to justify severe sanctions for spoliation, for creating “perverse incentives” and encouraging “sloppy behavior.”

U.S. Sen. Christopher Coons (D-Del.), who chairs the Subcommittee on Bankruptcy and the Courts, predicted that some proposed restrictions – such as reducing the number of depositions, interrogatories and requests for admission for each case – “would do nothing about the high-stakes, highly complex or highly contentious cases in which discovery costs are a problem.” Senator Coons and Sherrilyn Ifill, president of the NAACP Legal Defense and Educational Fund Inc., also expressed concerns that those limits would likely restrict plaintiffs in smaller cases in which discovery costs are not a problem.

Needless to say, not everybody is a fan of all of the new proposed rules, especially Rule 37(e). But, the proposed rules have gotten this far and there are a number of lobbyists pushing for adoption. So, I think they’ll be adopted, but not without some controversy and struggle.

Prediction 3: The eDiscovery industry will continue to consolidate and many remaining providers will need to continue to reinvent themselves.

Every year, I see several predictions that more eDiscovery vendors will fail and/or there will be more consolidation in the industry. And, every year there is consolidation. Here’s the latest updated list of mergers, acquisitions and investments since 2001, courtesy of Rob Robinson. But, every year there also new players in the market, so the number of providers never seems to change dramatically. Last year, by my count, there were 225 exhibitors at Legal Tech New York (LTNY), with many, if not most of them in the eDiscovery space. This year, the partial list stands at 212. Not a tremendous drop off, if any.

Nonetheless, there will be more pressure on eDiscovery providers than ever before to provide services at reasonable prices, yet turn a profit. I’ve seen bold predictions, like this one from Albert Barsocchini at NightOwl Discovery in which he predicted the possible end of eDiscovery processing fees. I’m not sure that I agree that they’re going away entirely, but I do see further commoditization of several eDiscovery services. The providers that offer truly unique software offerings and/or expert services to complement any commodity-based services that they offer will be the ones best equipped to meet market demands, profitably.

On Monday, I predict I’ll have three more predictions to cover. Hey, at least that’s one prediction that should come true!

So, what do you think? Do you have any eDiscovery predictions for 2014? Please share any comments you might have or if you’d like to know more about a particular topic.

EDRM UTBMS eDiscovery Code Set Calculator – eDiscovery Best Practices

January 9, 2014

Last month, we discussed budget calculators available from the Metrics section of the Electronic Discovery Reference Model (EDRM) web site. So far, we have reviewed two of the budget calculators, beginning with the E-Discovery Cost Estimator for Processing and Review workbook provided by Julie Brown at Vorys law firm and the Doc Review Cost Calculator provided by an eDiscovery vendor. Today, we will continue our review of the calculators with a look at the EDRM UTBMS eDiscovery Code Set Calculator provided by Browning Marean, DLA Piper law firm; and George Socha, Socha Consulting (and, of course, co-founder of EDRM).

As described on the site, this budget calculator uses the ABA’s Uniform Task Based Management System (UTBMS) eDiscovery codes as a starting point for calculating estimated eDiscovery expenses. Users enter anticipated average hour rates for:

Partners
Associates
Paralegals
Contract reviewers
In-house resources
Vendors

For each relevant L600-series UTMBS code, users enter (a) total estimated hours for each relevant group and (b) total estimated associated disbursements. The spreadsheet then displays:

A summary of the estimated costs
Details of the estimated costs for each combination, such as estimated costs of time partners spend planning discovery (Partner and L601)
Totals by type of person, such as Partner
Totals by individual UTMBS code, such as L601
Totals by higher level UTBMS codes, such as L600

This spreadsheet is quite clear and easy to use. It provides a summary section at the top of the sheet for the top level codes from L600 (Identification) to L690 (Project Management), which are fed by the enterable cells to the left and below. All of the enterable cells are in yellow to make it easy to identify where the data needs to be entered (the hourly rates for each of the positions are top left and the total estimated hours are enterable for each position and subcode).

Based on the entered rates and hours within each subcode, costs are calculated and displayed in green for each position within each subcode, as well as a total for each subcode which rolls up to a total for the top level code displayed in blue at the top of the sheet. There is also a column to enter associated disbursements for each code and subcode to reflect those disbursements that don’t tie to an hourly rate. The sheet is protected to avoid inadvertent overwriting of formulas, but there is no password so that the user can tweak formulas if necessary.

This workbook would certainly be useful for tracking eDiscovery costs according to the UTBMS codes, especially for hourly billed activities. It’s not a spreadsheet for estimating costs based on estimated data volumes but rather estimated hours spent by key staff on each phase of discovery. You can download this calculator individually or a zip file containing all four calculators here.

So, what do you think? How do you estimate eDiscovery costs? Please share any comments you might have or if you’d like to know more about a particular topic.

Plaintiff’s Attorney’s Fee Request Slashed because they “Transformed what should Have Been a Simple Case into a Discovery Nightmare” – eDiscovery Case Law

January 6, 2014

In Fair Housing Center of Southwest Michigan v. Hunt, No. 1:09-cv-593, 2013 U.S. Dist. (W.D. Mich. Oct. 21, 2013), Michigan Magistrate Judge Joseph G. Scoville ruled that the plaintiffs were prevailing parties in its settlement agreement with the defendants and were entitled to an award of attorney’s fees, but slashed the plaintiff’s fee request, “both because the hours devoted to this case were excessive and because the fee request makes no effort to account for the limited success that plaintiffs achieved in this case”.

In this housing discrimination case, the parties entered a settlement agreement that referred the question of attorney's fees and costs to magistrate Judge Scoville. The plaintiffs filed a motion seeking $605,507.92, consisting of $587,905.00 in attorneys’ fees and $17,602.92 in taxable costs. The defendants opposed the motion “on every possible ground”, contending that the plaintiffs did not enjoy “prevailing party” status entitling them to an award of attorney's fees and, if they were entitled to fees, that the amount sought was “grossly excessive”.

Noting that a prevailing party is one who achieves “a material alteration of the legal relationship of the parties”, Judge Scoville ruled that the plaintiffs are prevailing parties due to the court-approved Settlement Agreement, which awarded the plaintiffs a monetary award in the amount of $47,500.00. Because the plaintiffs were ruled as prevailing parties, he also ruled that they were entitled to the full amount of the taxable costs because they were for transcript fees for depositions and hearings.

However, when it came to attorney’s fees of $587,905.00, Judge Scoville found that the “expenditure of 2,614 hours by three partners, two associates, and two paralegals” was “a truly extravagant expenditure of time and resources on what should have been a relatively simple case”. He further noted:

“It is virtually impossible to see how the exercise of billing judgment would lead a law firm to invest 2,600 hours, by seven different billers, in the pursuit of such a simple case. A hardworking attorney lucky enough to bill 40 hours a week, 50 weeks per year, would bill only 2,000 hours per year. Thus, 2,600 hours represents significantly more than one year of attorney time, expended in pursuit of a single case, without distraction.”

Judge Scoville also noted that the plaintiff’s “single-minded focus on discovery of ESI engendered predictable disputes over discovery” and that it “appeared to this court on more than one occasion that plaintiffs were treating the case as a litigation workshop on discovery of ESI rather than a lawsuit.”

Judge Scoville stated that it “would be well within the court's discretion to deny plaintiffs' motion for attorney's fees in its entirety. This approach, however, would be unduly harsh under the specific facts of this case because plaintiffs were clearly prevailing parties on some claims and counsel's reasonable efforts should be compensated, even though their overall approach to the case was clearly excessive.” Therefore, he applied several reductions of partner, associate and paralegal hours, reducing the total awarded to $223,444.80.

So, what do you think? Should the full attorney’s fees have been awarded? Or perhaps denied entirely? Please share any comments you might have or if you’d like to know more about a particular topic.

Proportionality