Seven Steps to Cost-Savings and Efficiency
As anyone who has been involved in litigation within the past 10 years can attest, e-Discovery has the potential of consuming a case in at least two ways. First, depending on the level of civility and collaboration between adversaries and the amount of Electronically Stored Information (ESI) the parties possess, the costs of production and related motion practice can dwarf those related to litigation on the merits. Second, allegations of spoliation and who failed to preserve ESI can quickly overshadow all other aspects of the case.
The dimensions and complexity of the challenge grow daily. According to digital consultant International Data Corporation, in 2010, the amount of digital information created in the world exceeded a zettabyte for the first time. A zettabyte is one trillion gigabytes. According to this same source—which has carefully studied data storage, handling, and analysis trends since 2007—the size of the digital universe is doubling every two years and the growth of the digital universe continues to outpace the growth of available storage capacity.
The implications of this data explosion for litigators and litigants alike is that old-style document review and production—commonly referred to as “linear document review”—is giving way to a new kind of automated review, conducted with the aid of litigation-changing technologies. Linear document review, by which individual reviewers manually review and tag documents ordered by date, keyword, custodian, or other identifier, has been the accepted standard within the legal industry for decades. Linear document review was more than ample when documents were stored in file cabinets or warehouses, and even later when typical ESI volumes were measured in megabytes or perhaps a few gigabytes. The proliferation of digitally stored data over the past decade, however, has exposed the limitations of traditional linear review and even of such time-honored document management tools as Bates-stamping. As a result, linear review is increasingly regarded as inefficient, cost-prohibitive, and less reliable than newly available alternatives.1
Enter the third-party vendors and the e-Discovery specialists many companies and law firms have brought in-house. Wielding tools and technology unheard of even a few years ago, these technicians—who are often times lawyers—are charged with taming digital chaos in order to allow for meaningful discovery during litigation. Through cutting edge resources like predictive coding—a computer-assisted, attorney-driven review process by which a system of ESI is “trained” through search term iterations to code documents with various levels of relevance—more and more companies are seeing significant litigation cost-savings and, in most cases, dramatically improved accuracy over traditional “keyword” searches, and certainly over manual human review.
At the same time, courts are becoming increasingly conversant in both the practical challenges of modern-day e- Discovery and the technologies that have emerged to address them.
A recent gender discrimination case involving more than three million documents in the Southern District of New York, Da Silva Moore v. Publicis Groupe & MSL Group, 11 Civ. 1279 (S.D.N.Y. Feb. 22, 2012), illustrates this point. Moore is significant for what it says about progress in litigation technology: the issue in this case is not whether predictive coding should be used, but rather how. In addressing one of the plaintiffs’ concerns about how the parties’ agreed-upon predictive coding protocols would determine relevancy, the court responded that computer-assisted review “works better than most of the alternatives, if not all of the [present] alternatives. So the idea is not to make this perfect, it’s not going to be perfect. The idea is to make it significantly better than the alternatives without nearly as much cost.” The court was careful not to endorse any particular technology, but rather opined that “[w]hat the Bar should take away from this Opinion is that computer-assisted review is an available tool and should be seriously considered for use in large-data-volume cases where it may save the producing party (or both parties) significant amounts of legal fees in document review. Counsel no longer have to worry about being the ‘first’ or ‘guinea pig’ for judicial acceptance of computer-assisted review.”2
If Moore can be seen as ushering in a growing judicial acceptance of or comfort with litigation technology, another recently decided New York case reinforces the importance of early recognition of data preservation obligations. In Voom Holding LLC v. EchoStar Satellite L.L.C., 2012 NY Slip Op 00658, 2012 WL 265833 (1st Dep’t Jan. 31, 2012), a New York State appellate court adopted the preservation standards set out in the groundbreaking Zubulake case nine years ago. See Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003). In Voom, the defendant issued a notice of breach of contract to the plaintiff in June 2007. After negotiations faltered, the defendant issued a second letter in January 2008, indicating that it was proceeding with “the plan for a full termination,” effective February 1, 2008. Plaintiff commenced suit the next day, at which point defendant implemented a litigation hold for the first time. The litigation hold did not suspend the company’s seven-day e-mail auto-deletion policy, which remained in effect for another four months.
In affirming the trial court’s determination that the defendant was grossly negligent for not having “reasonably anticipated” litigation and implemented a litigation hold at least as early as June 2007, the appellate court rejected the defendant’s complaint that “reasonable anticipation of litigation” is too vague a term to be applied meaningfully and predictably. According to the appellate court, “[t]he ‘reasonable anticipation of litigation,’ as discussed by Zubulake and its progeny, is such time when a party is on notice of a credible probability that it will become involved in litigation.” Terms like “credible probability” and “reasonable anticipation” may not be as bright-line as many would like, but they signal an approach by the courts to assess each case according to its own circumstances and to hold parties accountable for their conduct based on what is appropriate under those circumstances.
Against this backdrop are the following best practices for managing— or rather not mismanaging—ESI, both before and after you reasonably anticipate litigation.
1. Carefully consider relying on internal IT departments to collect and preserve ESI.
Many companies elect to have their own internal IT departments collect relevant data needed for litigation. This can be problematic on a number of levels. Generally speaking, corporate IT departments treat data as data, not as “evidence,” but courts and opposing counsel often take a decidedly different view. In most cases, IT departments do not have the proper software, knowledge, skills, or experience to collect and preserve data as “evidence.” As a result, they may inadvertently contaminate, modify, or alter the data they collect, creating authenticity, admissibility, or even spoliation issues down the road. By the same token, corporate IT personnel often overlook data that may reside at third-party locations, such as telecom providers, outsourced e-mail providers, internet cloud data, and most importantly the hard drives of employee devices such as laptops, desktops, and smart phones. Lastly, there is a very real “independence” issue when individuals on the company payroll either “don’t” or “can’t” find relevant data.
2. Take affirmative steps to avoid under-collection.
Cost concerns often outweigh evidentiary and discovery concerns when it comes to scoping out litigation data collection. Not identifying and producing critical data that may be subject to discovery demands can result in sanctions, including adverse inferences, fines, or even the striking of pleadings. The collection phase has become extremely inexpensive and is often priced at a fixed rate (often per gigabyte) schedule due to the commodity nature of that task. As a result, courts are exhibiting less and less patience with litigants that have not properly segregated and collected their own data, regardless of the excuse.
3. Make sure IT/Legal education is a two-way street.
Many e-Discovery failures result from a lack of communication between the lawyers and the IT professionals, such that the lawyers don’t understand the technology and the IT people don’t know the law (and in particular, the company’s discovery obligations). As a matter of company policy and ongoing education, it is critical that these gaps be bridged. Otherwise, it is almost certain that collection and preservation problems will develop. For example, often times, there is ancillary data that is created on an IT infrastructure that may be central to the litigation. These data sets may include firewall logs, telephone logs, router and switch logs, anti-virus logs, and other nonstandard data repositories. Yet many lawyers have never heard of these locations and many IT professional don’t sufficiently understand discovery obligations to know the value of information residing there. In addition, coordination of the collection of the more standard data such as the hard drives of devices issued to employees, smart phones, tablets such as iPad’s, network file share data, network e-mail data, and server application data can be cumbersome to properly obtain and collect correctly without complete support from the corporate IT department, support that is possible only if they understand what is important and why.
4. Technology is your friend—really.
With the advent of more advanced and intelligent e-Discovery processing applications, which cull and filter large data sets down to smaller, more responsive data sets, reasonably priced and highly effective automated review alternatives are readily available to litigators and litigants. As with any new technology, these applications may cost slightly more to deploy on the front end than traditional methods. Moreover, because most lawyers remain, as one e-Discovery blogger puts it, “paper lawyers in a digital world,”3 the legal team often looks for reasons not to leverage cutting edge technology. But technologies such as predictive coding are increasingly being embraced for their efficiencies, in terms of both dollars and time. In document-intensive cases, manual review can cost millions and take many months to complete. Exacerbating the runaway costs for attorneys and anachronistic computerized searches, keyword searches can leave up to 80% of relevant ESI undiscovered.4 Thus, a carefully calibrated, technology-based ESI management system will inevitably lead to more complete collection, more efficient review, and more accurate disclosures during litigation. At the same time, developing this system before it must perform in the heat of litigation will allow for all the necessary stakeholders to weigh in—and buy in.
5. Involve your specialists early on in litigation.
As made clear in points 1–3 above, and just as with traditional fact investigation, the data collection phase of litigation is critical for evaluating the strength or weakness of the case. Because of the inherent limitations of most corporate IT departments, consideration should be given to bringing in experienced consultants early on in the process. While, just as with new technology, there are some costs associated with this exercise, the stakes most often are sufficiently high to warrant the investment, which, like most technology-related products and services, is becoming more and more reasonable.
6. Formulate, implement, and enforce comprehensive document destruction/preservation policies.
Internal data retention/destruction policies are growing in importance, for purposes of corporate governance and litigation. Too often, companies do not have a sound data retention policy or are inconsistently applying their policy. Key elements of a robust data retention scheme that often go unaddressed are: e-mail policies, social media policies, smart phone/PDA policies, and litigation hold policies. While the process of updating, documenting, and communicating corporate policies can be tedious and time-consuming, the long-term benefit will be invaluable when litigation arises.
7. Insist on production of ESI in its native format.
Many times litigators will agree on the format of production without talking to their clients or their vendors/consultants. This often results in the production by your adversary of PDF documents that have no useful metadata. As a result, the PDFs have to be re-processed for extractable text, searching, and review. By contrast, documents produced as TIFF with metadata and text arrive in an optimal format to be loaded up for review and have all the fields that allow for enhanced searching and review. Your opponent may well object to your request, but savvy judges are increasingly open to requests for data in its native format. Indeed, this issue arose in a recent case out of the Southern District of Ohio, in which the plaintiffs requested that the defendant produced its ESI in native format together with associated metadata.5 The defendant objected to the plaintiffs’ request on the ground that the native format “invites significant control risks in such documents can be altered after production … and cannot be Bates numbered, thus leading to significant monitoring costs.” The defendant proposed providing its ESI in PDF or tiff format and to produce specific documents in native format only after the plaintiffs showed relevance. Citing FRCP 34 (b)(1)(C), the court determined that the plaintiffs were entitled to specify production form, regardless of relevance, unless the defendant demonstrated undue burden in complying with the request. Given the relatively small amount of ESI at issue, the court ruled that the defendants’ concerns did not demonstrate undue burden. Accordingly, the court granted the plaintiffs’ motion and ordered the defendant to follow plaintiffs’ production request. Because much of an electronic document’s value exists “behind the scenes,” your insistence on native format production is critical in today’s litigation.
- Final Report on the Joint Project of the American College of Trial Lawyers and the Institute for the Advancement of the American Legal System (2009), at 15.
- On March 16, 2012, the District Judge in the Moore case granted the plaintiffs’ application for additional briefing on the scope and particulars of the parties’ disclosure obligations. Regardless of the outcome of this additional briefing, the fact remains that courts are increasingly aware of the way new technologies are transforming the way ESI is managed, collected, reviewed, and disclosed.
- Ralph Losey, http://e-discoveryteam.com.
- The Sedona Conference Best Practices Commentary on the Use of Search and Information Retrieval Methods in E-Discovery, at 206, August 2007.
- In re Porsche Cars N. Am. Inc. Plastic Coolant Tubes Prods. Liab. Litib., 2012 WL 203493 (S.D. Ohio Jan. 24, 2012).
John G. Horn is a business litigator at Harter Secrest & Emery LLP with more than ten years of experience.
Michael McCartney is CEO and President of DIGITS LLC. McCartney is a 22-year veteran member of the law enforcement community. He has also served as the head of the Analytical and Forensic Technologies Unit in the Midwest for a national Big 4 Consulting firm.