Discovery Spotlight 2015

11/19/15:  Preservation by Keywords.  We often see keywords used to search through large volumes of data to identify documents for review, analysis and possible production.  The subject of today’s blog is an order that approves keyword searching at the preservation stage.

You v. Japan, No. C 15-03257 WHA, 2015 WL 5542539 (N.D. Cal. Sept. 16, 2015), is a putative class action filed against the Japanese government, high-ranking government officials and Japanese corporations in connection with alleged sexual violence against Plaintiffs during World War II when they were kept as “comfort women” for members of the Japanese military.  (You at 1-2.)  One named defendant in this case involving such horrific historical events is Sankei Shimbun, a Japanese daily newspaper accused of conspiring to make defamatory statements about Plaintiffs by publishing articles stating they were “voluntary prostitutes.”  (Id. at 2.)

To comply with a previous order in this case dealing with the preservation of electronic evidence, Sankei had set up a fully searchable database of all its articles since 1992.  (Id.)  In a separate repository, Sankei also retained versions of articles that have not yet been finalized or published – but only for 90 days.  The newspaper claimed a storage system to retain draft versions of all documents indefinitely would cost $18 million and take up to eight months to establish.  (Id.)  Instead, Defendant proposed preserving potentially discoverable documents by using selected search terms to identify them; and then placing them in a searchable application not subject to auto-delete processes.  (Id. at 2-3.)

The court sided with Defendant by approving the proposed alternative preservation protocol, but required the inclusion of an additional search term identified by Plaintiffs to ensure that preservation would be sufficiently broad.  (Id. at 3.) 

10/15/15:  Rules of the Road -- Changes Ahead.  As many of you know, amendments to some key e-discovery provisions in the FRCP are scheduled to go into effect before the bejeweled ball drops in Times Square later this year.  Included are modifications that focus on enhancing cooperation among parties to litigations; proportionality; early, proactive judicial case management; and the preservation of ESI. 

See Imminent Changes to FRCP E-Discovery Rules for a write-up of the proposed tweaks,  which will go into effect as of 12/01/15 unless Congress takes countervailing action.  And prepare for implementation! 

09/17/15:  Fall into the Gap.  U.S. ex rel. Guardiola v. Renown Health, 2015 WL 5056726 (D. Nev. Aug. 25, 2015), is the rare case in which a court orders the restoration of backup tapes so discoverable materials can be produced.  As many of you e-disco dancers know, restoring magnetic backup tapes (typically maintained for recovering stored data in case of a disaster), can be time-consuming and expensive.  Technicians with specialized skills, software and/or hardware are required.  Data on these types of media are usually considered not to be reasonably accessible for the purposes of discovery, and a party in control of such tapes need not produce them absent a very strong showing by the requesting party.

Guardiola is a whistleblower case involving the alleged overbilling to Medicare by the medical center for which Relator worked.  During discovery, Relator identified a gap of almost two years in the emails produced by Defendant.  (Guardiola at 1.)  This gap was the result of Defendant's email retention policies and its use of a specific email archiving product, which saved email to magnetic backup tapes during the 2-year gap.  (Id. at 2.)   Based on the costs Defendant incurred to restore a single month's tapes, the estimated cost to restore, host and review the rest was almost $250,000.  (Id.)  Relator maintained that the emails in question were vitally important to her case.  (Id.)

We'll spare you the court's grinding application of the FRCP and case law relating to the accessibility of data, the burden and cost to produce, etc.  The main point is that the court deemed the emails reasonably accessible despite being available only on backup tapes, and also said that production would be ordered even if the data were found not to be reasonably accessible.  (Id. at 17.)  The highlights of the findings:

1.  Backup tapes are not inaccessible per se -- a court's analysis of the burden dictates whether or not data are reasonably accessible, not the media format alone (Id. at 4-5); 

2.  Document review and storage costs are not counted toward the undue costs analysis (Id. at 6);

3.  The costs do not make the data inaccessible in light of the small amount they represent when considered as a percentage of Defendant's annual revenues (Id. at 8); and 

4.  Cost shifting is improper where data have been deemed reasonably accessible (Id. at 12-14).

Consider this decision a bit of a "Twilight of the Idols" moment for all who consider backup tapes to be safely on the dark side of the reasonably accessible side of the tracks.... 

08/20/15:  California Competence (Redux).  Last year, we reported on the California State Bar's Standing Committee on Professional Responsibility and Conduct's adoption of an interim opinion addressing the ethical duties of counsel on the e-disco dance floor.  Well, cue the "Burn Baby Burn" music, because it's official now!

Interpreting Rules 3-100 and 3-110 from the Rules of Professional Conduct in the Golden State, B&P Code 6068(e) and Evidence Code Sections 952, 954 and 955, Formal Opinion No. 2015-193 details the ethical duties of attorneys handling ESI.  The opinion states that (a) duties are evolving as emerging technologies are integrated into the practice of law; (b) minimum requirements for litigators include a basic understanding of the discovery of ESI and facility with related issues; (c) on a case-by-case basis, the duty of competence may require higher levels of technical knowledge; and (d) these competence requirements may compel an otherwise highly experienced attorney to seek help with ESI.  (Formal Opinion Interim No. 2015-93 at 1.)
 
The Committee goes on to list three options available to an attorney who lacks the required level of competence:
  1. Get up to speed before performing services;
  2. Associate with competent counsel and/or technical consultants; or
  3. Decline representation of the client.  (Id.)
The language in this final-final opinion has been softened a bit compared to the interim version, but it's still a grave warning that a lack of competence in the ESI arena can lead to ethical violations of attorneys' duties of confidentiality, candor and the non-suppression of evidence.

The Committee's hypothetical lists nine specific tasks that attorneys must be able to perform.  (Id. at 3-4.)  Some of these functions are technical; others are very much "on the ground."  It will be very interesting to see how this guidance plays out both in the practice of law in California, and in future proceedings before the State Bar. 

07/16/15:  Hate the Google, Not the Feds.  U.S. v. Lizarraga-Tirado, WL 3772772 (9th Cir. June 18, 2015), is an appeal to the 9th Circuit of Plaintiff's criminal conviction under U.S.C. § 1326 for illegal reentry to the United States as a previously removed alien.  (Lizarraga-Tirado at 2-3.)  Ah, but had Plaintiff really re-entered?  At trial, Plaintiff claimed he was not actually in the U.S. when border patrol agents detained him, but that the agents had crossed over to the Mexican side of the border.  (Id. at 3-5.)  However, with a handheld GPS device, one of the the border agents had used Google Earth's satellite technology to map the location of the arrest, and the image produced by Google Earth was instrumental in Plaintiff's conviction at the trial court.  (Id. at 4-5.)

On appeal as at trial, Plaintiff claimed that the satellite image and the digitally added tack (i.e., a location marker) and coordinates were impermissible hearsay, and should have been excluded at trial.  (Id. at 5.)  The appellate court disposed of the question of the image's status as evidence easily, likening it to a photograph.  Citing precedent, the court reasoned that, like a photograph, the satellite image had not asserted anything at all, but merely existed as a depiction of a scene (apparently a north-of-the-border scene) at a specific time.  (Id. at 6.)

Resolution of the status of the tack and coordinates, which provide information about the scene, was less clear-cut for the court.  It stated, "[i]n short, labeled markers on a satellite image assert that the labeled item exists at the location of the marker."  (Id.)  If the tack were placed manually and labeled, said the court, it would be "classic hearsay," like drawing an X on a map and marking it "hidden treasure."  (Id.)

In this instance, however,  the court determined that the tack and coordinates had been generated automatically by Google Earth.  (Id. at 7.)  Since the program -- not a person -- had analyzed the GPS coordinates and placed a labeled tack on the image, the court ruled that the tack and coordinates did not constitute a statement in the sense of the hearsay rule.  (Id. at 7-8.) 

Those of us concerned about machine malfunctions -- if not malfeasance -- can take come comfort from the fact that the court did recognize the possibility of challenges to automatically generated statements.  In this case, however, Plaintiff did not raise the authentication issues that would be required to mount such a challenge to the evidence.  (Id. at 8-9.) 

06/18/15:  The Unfriendly Skies.  Crews v. Avco Corp.,. No. 70756-6-I, 2015 WL 1541179 (Wash. Ct. App. Apr. 6, 2015), is a case about a tragic plane crash, in which the pilot of a small plane and her two passengers were killed.  On behalf of the decedents, Plaintiffs sued numerous defendants involved with the plane's manufacture and care, alleging injuries and wrongful death.  (Crews at 2.)  Avco Corp., which made and sold the plane's engine, was one such defendant.  (Id.) 

From 2010-2013, spanning the tenures of two judges and a discovery master, Plaintiffs battled with Avco about the company's production of documents, claiming that key documents about Avco's role in testing and certification of airplane parts, and knowledge of defects in those parts, were being withheld.  (Id. at 3-8.)  Plaintiffs knew the documents existed because similar ones were produced by another defendant.  (Id. at 4.) 

Defendant argued that its records retention policy did not require retention of the documents in question; notably, however, the company failed to produce a copy of this policy during the discovery disputes!  (Id. at 6.)  Not until trial did Avco proffer a copy of the policy, and the judge decided it was not clear if the documents in dispute were even covered by the policy.  (Id. at 8.)  The court levied the ultimate sanction on Avco, deeming all of Plaintiffs' allegations admitted and all defenses against them stricken.  (Id. at 9.)  The jury awarded over $34 million in damages to Plaintiffs.  (Id.)

On appeal, the court largely upheld the sanctions that effectively ended the case against Avco, basing its judgment in large part on its evaluation of the records retention policy dispute.  (Id. at 14-15.)  On that issue, the court noted that it took Avco 16 months to come up with a copy of the policy; and that the record did not support the company's position that the disputed documents were covered.  (Id.)  Together with the other discovery failures of Avco, this point was more than enough to overcome Avco's appeal and leave the trial court's ruling standing, aside from a remand of the issue of discovery offsets.  (Id. at 25-26.)

This case is a good example of just how hard a court can come down on a party that shirks its discovery duties badly enough and long enough....

05/21/15:  Sad But True....  Gentle Reader, as a repeat offender who's visited this space more than once, you won't be too surprised to hear that the state of e-discovery practice is not as ship-shape as it should be.  Now, we're far from naive around here, but it's still a bummer to see that (a) many attorneys are not up to snuff in their e-discovery capabilities; and (b) federal judges know it.

A recent article, based on a survey of federal district and magistrate judges, puts in black and white.  See What the Judges Think, published last month in The Journey of the Allegheny County Bar Association and subsequently re-published with permission, for a write-up of the survey results.

Of the two main takeaways, one is more disturbing than the other.  The fact that judges think many attorneys fail to play nicely in the e-discovery sandbox is unfortunate, but no shock -- as we said above, there are no innocents here.  Worse than that is the jurists' collective evaluation that attorneys' knowledge of their own clients' e-discovery environments is deficient, which leads directly to problems with discharging discovery duties in the preservation area, among others.

The solution?  As always, knowledge is power, so continuing education is crucial to attorneys improving their e-disco chops. 

04/16/15:  Tax Time?  No, we don't mean the IRS -- although we hope you all did the right thing by yesterday's deadline!  But as geeks within our field, if nothing else, we're talking about "taxable" e-discovery costs.  Colosi v. Jones Lang LaSalle Americas, Inc., 2015 WL 1186765 (6th Cir. Mar. 17, 2015), is the rare appellate case to address the issue of which e-discovery costs are properly charged to the losing party in a litigation, and which are not.

Costs incurred for imaging the opposing party's hard drive are in fact taxable, at least in the 6th Circuit.  Colosi is an appeal by Plaintiff of costs awarded to Defendant by the trial court after Plaintiff lost her wrongful termination suit.  (Colosi at 1-2.)  The question for the appeals court to resolve as regards the imaging of Plaintiff's computer was whether or not this activity fell into the category of "making copies."  (Id. at 3.)

Citing sources as vetted and vaunted as the OED, and invoking such luminous luminaries as the Sedona Conference, the 6th Circuit placed the task of imaging a hard drive into the "making copies" category.  (Id. at 4.)  In so doing, the 6th Circuit rejected 3rd Circuit precedent as construing taxable e-discovery costs too narrowly.  (Id. at 5.)  The Colosi court also found that the costs were reasonable and necessary, likely in no small part because Plaintiff did not produce selected documents responsive to Defendant's discovery requests; instead simply delivering her entire computer to Defendant.  (Id. at 6.)

The net-net for Plaintiff here is that she basically out-sourced her e-discovery costs to the other side.  If she didn't want to incur the costs and trouble of responding sooner, she sure wound up paying the piper later -- and likely more than she otherwise would have.  Isn't this a little like returning the rental car with no gas, and then being charged $8/gallon to have it filled up at the end?  (And yes, we do mean to suggest that the relationship with a car rental agency can be every bit as adversarial as that with the party on the other side of litigation!)

Anyway, we call your attention to this admittedly less-than-sexy case because it's important.  The allocation of e-discovery costs can have a meaningful impact on how parties litigate their cases -- or even on the decision to initiate them in the first place.... 

03/19/15:  Magistrate Judge Andrew Peck knows predictive coding, aka Technology Assisted Review ("TAR").  Citing none other than his own bad self, MJ Peck writes an opinion in Rio Tinto PLC v. Vale S.A., 2015 WL 872294 (S.D.N.Y.), that is as much a victory lap as a judicial decision.  If you've watched this space over the past few years, you'll remember several pieces on MJ Peck and predictive coding, most notably on his landmark TAR case, Da Silva Moore v. Publicis Groupe, 287 F.R.D. 182 (S.D.N.Y. 2012).

The Rio Tinto case declares that what was groundbreaking three years earlier is now old hat, or better yet, so 2012:  "In the three years since Da Silva Moore, the case law has developed to the point that it is now black letter law that where the producing party wants to utilize TAR for document review, courts will permit it."  (Rio Tinto at 1.)  MJ Peck also makes clear that TAR should not be held to a higher standard than keyword searches or manual review.  (Id. at 3.)

Two additional points are of interest in this decision.  First, MJ Peck addresses the important question of whether or not a party using TAR should provide transparency of the documents used in its "seed set" (which is sort of the sourdough starter that TAR applications use to build their decision-making algorithms), without resolving said important question.  Dicta indicate it's a good idea, but not necessary in theory, as there are other ways to ensure the viability and defensibility of a party's approach.  (Id.)  With all due respect to the good judge, we say proceed without a stipulation or at least disclosing your seed set at your peril!

Second, the parties' cover letter and agreed-upon ESI protocol are attached to the decision and well worth reviewing.  (Id. at 4-9.)  Their cooperative approach shows how much easier it is to implement a TAR strategy when both parties have high volumes of data to review, and are motivated to use technology to control e-discovery costs.

02/19/15:  To Be Or Not To Be A Pack Rat.  That is the question. Actually, the question in United Corp. v. Tutu Park Ltd., 2015 WL 457853 (V.I. Super.), is whether or not a party should be punished for not being enough of a pack rat.  In this case, Kmart was required to produce documents to Plaintiff in response to a subpoena and in response to a subsequent motion to compel.  Although productions were made, Plaintiff believed the productions to be inadequate, moving for sanctions and for Kmart to be held in contempt for failing to heed the court's order to comply with the subpoena.  (United Corp. at 2-3.) 

After taking Plaintiff to task for failing to comply with certain technical requirements to sustain its motion (Id. at 2), the court dug into the substance of the dispute.  Some of the discovery requests at issue sought sales, revenue and profit data from over 20 years ago.  (Id. at 3-4.) While Kmart produced some documentation, as well as summaries to capture the aggregate information sought by Plaintiff, the company did not produce everything requested.

In some instances, Kmart claimed it had disposed of materials in accordance with its records retention policies.  In others, the company blamed changes in software and programs for rendering data unreadable and unable to be restored properly.  As regards still other categories of documents, Kmart cited internal reorganizations relating to its bankruptcy and merger with Sears as reasons that it no longer could locate, identify and produce records.  (Id. at 3-4, 5-6.)

These defenses carried the day.  After considering the two parties' positions, the court decided that Kmart had made "a diligent attempt to comply in a reasonable manner" with the court's discovery order.  (Id. at 6.)

This case reinforces a maxim we often encounter in our work for corporate clients -- it pays to keep your garden free of weeds.  The timely execution of records/information management policies may not be sexy work, and sometimes it's perceived as a cost without a benefit.  But it sure does avoid some major headaches -- and expenses -- when litigation or an investigation begins.  The more you know. 

01/15/15:  I've Got Your Search Terms Right Here!  Armstrong Pump, Inc. v. Hartman, 2014 WL 6908867 (W.D.N.Y.), is a licensing dispute between the owner of patents and the company that licensed them, in which each side claims the other violated key terms of the licensing agreement.  (Armstrong Pump at 1-2.)  In a recent order entered in this case, a judge short-circuits a party’s inadequate discovery attempts by drafting and imposing customized search terms....

A series of earlier discovery disputes (and the inevitable accompanying bad blood) had led Defendant to file a motion to compel, which was granted, and in which the court warned Plaintiff “not to engage in piecemeal production” of relevant materials found.  (Id. at 2.)  So naturally, Plaintiff enthusiastically avoided following the court’s instructions over the next few years of litigation, making at least nine separate document productions in this time period. (Id. at 3.)

But the truth always comes out in the end, doesn’t it?  OK, maybe not always, but often enough that the hopeless romantics among us in the e-discovery racket would expect parties and counsel not to delay, omit and obfuscate quite as much as they do.  But enough misty-eyed hand-wringing.  A depo of one of Plaintiff’s key employees led Defendant to believe that not all relevant documents had been produced.  (Id. at 1, 3.)

Citing two previous successful motions to compel by Defendant, and specific past warnings to Plaintiff not to produce documents in the manner it nevertheless continued to produce them, the court makes its frustration manifest.  “Four and a half years later, discovery is far from complete, depositions have barely begun, and this case is nowhere near ready for trial.”  (Id. at 5.)  With one word, the judge calls an end to the shenanigans:  “Enough.”  (Id. at 6.)  With a friendly reminder that a lawsuit is actually supposed to be about the search for the truth (who knew!), the court takes over discovery by issuing 13 search terms that it orders Plaintiff to apply to all of its documents that fall within a specific time frame, and gives Plaintiff a hard deadline by which it must comply, or face Rule 37 sanctions.  (Id.)

In our opinion, Plaintiff got off easy.  The court did not order Plaintiff to cough up any cash, although it seems that there were grounds to do so.

 

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