About bowtielaw

I am an attorney CLE presenter on e-Discovery issues.

Put the Brakes on Self-Collection

There is no question that automotive product liability litigation is complex. However, self-collection is never a good idea. The Ford Unintended Acceleration Litigation is a case study on why it is a good idea to use archiving solutions and have expert witnesses conduct data collection.

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The Plaintiffs argued that Ford did not have a reasonable search and collection methodology, because the data from custodians was all “self-collected.” Moreover, the self-collection appeared to be conducted by custodians using search terms in the internal email system, which were then stored on the company server. Burd v. Ford Motor Co., 2015 U.S. Dist. LEXIS 88518, *9-11 (S.D. W. Va. July 8, 2015).

The case continued down a bumpy road with bi-weekly conference calls with the Court. As the Court was faced with contradictory statements from both sides, the Plaintiffs were directed to take depositions of the custodians to investigate whether the search methodology was reasonable. Burd, at *13. Deposition testimony showed that key employees performed limited searches or no searches at all. Burd, at *35-36.

The parties also attempted to meet and confer over how to search for the responsive ESI. The Defendant took the position they would not share their search terms because 1) the search terms were work product; and 2) there actually was no list of search terms used, because each custodian developed their own search terms after discussing the case with counsel. Burd, at *14-15.

Ford argued against producing their own document retention policies as being irrelevant “non-merits” discovery. Burd, at *30. Moreover, Ford argued that information regarding their collection and production methodology was irrelevant “discovery on discovery” that invaded attorney work product. Burd, at *30-31.

The Court stated that the generic objections to “discovery on discovery” and “non-merits” discovery are outmoded and unpersuasive. Burd, at *34 (emphasis added). The Court went on to state:

Here, there have been repeated concerns voiced by Plaintiffs regarding the thoroughness of Ford’s document search, retrieval, and production. Although Ford deflects these concerns with frequent complaints of overly broad and burdensome requests, it has failed to supply any detailed information to support its position. Indeed, Ford has resisted sharing any specific facts regarding its collection of relevant and responsive materials. At the same time that Ford acknowledges the existence of variations in the search terms and processes used by its custodians, along with limitations in some of the searches, it refuses to expressly state the nature of the variations and limitations, instead asserting work product protection. Ford has cloaked the circumstances surrounding its document search and retrieval in secrecy, leading to skepticism about the thoroughness and accuracy of that process. This practice violates “the principles of an open, transparent discovery process.”

Burd, at *34.

The Court explained that document retention policies can be discovered through a Rule 30(b)(6) witness and were not contingent on a claim of spoliation. Burd, at *34-35. Moreover, the Court rejected the claim that the search terms used to identify responsive discovery was protected by the work product doctrine. Burd, at *36. Simply because an attorney discussed how to search with a custodian does not make the search terms and the results protected by the work product doctrine. Burd, at *36-37. The search terms could be produced without disclosing any substances of discussion with an attorney. Id.

The Court granted the Plaintiff’s motion for a deposition of a Rule 30(b)(6) witness on the Defendant’s search and collection methodology for a more transparent process and their collection methods. Burd, at *40-41. However, the Court did not rule on the issue of whether the Defendant had a reasonable collection process or adequate production, because the issue was premature. Id. Witnesses still had to be deposed. That being said, the Plaintiffs could file a new motion if the facts justified it. Id.

Bow Tie Thoughts

Self-collection is like driving a car without brakes. Defensibility requires that litigants document how electronically stored information is identified for collection. This traditionally is done by expert witnesses who use a chain of custody form, documenting search terms, processes, and results as they conduct their investigation. Custodians who are simply looking for ESI in Outlook, not documenting their process with any form of notes, run the huge risk of having an indefensible collection methodology. Moreover, one can argue that a lawyer could not certify the production under Rule 26(g) because the collection process was unreasonable.

Archiving solutions are a huge help to large organization in enacting litigation holds. Many have the ability to sequester custodians by date range and keywords. Alternatively, an expert witness can develop the proper collection methodology for the computer system in use. Once the data is defensibly collected, it can be reviewed for relevance by attorneys.

There is always a justified desire to control litigation costs. However, the discovery workflow of preservation, collection, review, and analysis cannot be shifted to custodians performing self-collection. Litigation requires forensic software used by experts and eDiscovery software used by attorneys to competently practice law.

My advice: put the brakes on self-collection.

Remembering Jack Halprin

JackHalprinJack Halprin was a great legal mind in eDiscovery. Jack was smart, had a sharp sense of humor, and a profoundly decent person. His passing leaves a void for those who called him friend.

I met Jack shortly after I began my career in eDiscovery in 2006. One of his colleagues said his nickname was “Happy Jack,” because of his cheerful personality. I found his nickname to be extremely accurate. Every project with him was a grand adventure.

We first presented together at CEIC, focusing on how to preserve electronically stored information and computer forensics. We had a seminar series together where we went from computer forensics to the Federal Rules of Civil Procedure and trial presentation. I had a lot of fun on that series with Jack.

Jack unknowingly called me with a job prospect within an hour of my mother’s death. He knew I had been laid off and was looking for a new job. He called out of thoughtfulness and offered kind words for my mother’s passing.

Those who knew Jack will miss him. I offer his family my sincere condolences. Jack was an outstanding human being who left this Earth far too early.

Pinning Down Admissibility

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Admissibility of electronically stored information cases are almost always in criminal cases.

The Pinterest v Pintrips infringement litigation has excellent analysis by US District Court Judge Haywood Gilliam, Jr., on the admissibility of email messages and news articles in civil litigation.

Email Admissibility

Pinterest offered two email messages as evidence of confusion. Pinterest argued the emails put Pintrips on notice of confusion by third parties. Pinterest, Inc. v. Pintrips, Inc., 2015 U.S. Dist. LEXIS 76545, *2 (N.D. Cal. June 12, 2015). As such, Pinterest argued the evidence would be relevant to Pintrips state of mind for the allegation of willfulness and intent. Id.

The Court agreed the emails could be admitted for the non-hearsay purpose of showing Pintrips’ knowledge and intent. Pinterest, at *3. Moreover, Pintrips objections to the relevancy of the email went to the weight of the evidence, not its admissibility. Id.

The first email exhibit was a consumer email to Pintrips’ customer support regarding her password and log in credentials for her Pinterest account. Id. The Court held this email was relevant and admissible to show confusion. Id.

The Court rejected the hearsay exception arguments for the second email. The email was a message from a third party to Pintrip’s CEO with the statement, “[w]hen you say it out loud it sounds like [P]intrips . . .” Pinterest, at *4.

The Court explained the declarant was not expressing confusion herself at the names of the companies, but her opinion that the names sounded similar. Id. The declarant’s statement did not qualify under the “present sense impression” or “state of mind” exceptions to the hearsay rule and thus were inadmissible hearsay. Id.

The Court admitted both messages for the non-hearsay purpose of Pintrip’s knowledge and intent, however, only the first email exhibt was admitted as evidence of consumer confusion. Id.

Admissibility of News Articles

News articles, books, and releases were offered by Pintrips to demonstrate the generic uses of “pin” and “pinning” online. Pinterest, at *4-5. Pinterest opposed, arguing the prospective exhibits were hearsay. Pinterest, at *5.

The Court stated that there “can be no dispute that evidence of the use of the terms “pin” and “pinning”—both by media publications and other companies—is relevant to the Court’s inquiry.” Id.

The Court found that Pinterest had not cited any authority excluding news articles to show generic uses of terms in trademark cases. Pinterest, at *6. The Court noted that other courts had considered the materials for “the non-hearsay purpose of determining whether a word or phrase is used to refer to the specific goods or services of the plaintiff, as opposed to an entire class of goods or services in general.” Id.

The Court ultimately admitted the exhibits as “evidence that ‘pin’ and ‘pinning’ are words that companies and the media use to describe a particular action in the computing and internet context,” but not for the truth of the matter asserted in the articles. Pinterest, at *7.

Bow Tie Thoughts

Judge Haywood Gilliam, Jr., issued a solid opinion on the admissibility issues in this case.

We do not see many opinions on admissibility in civil litigation, because most civil cases do not get to trial. I have seen admissibility issues arise in summary judgment motions, but most of our admissibility cases are criminal.

The Pinterest v Pintrips litigation gives a good look at the admissibility of ESI in civil litigation. Admissibility is often not conducted in document review during the first pass because it increases time and review costs. I recommend issue coding for admissibility in large cases after the dataset has been narrowed down to what will be used in deposition and motion practice. If email, text messages, or social media posts need to be authenticated, depositions are an ideal time to seek those answers. Determining what exhibits need to be explored at deposition are ideal during admissibility review.

Always Explain How Requested Information Moves a Case Forward for Proportionality

A requesting party issued a third party subpoena on the ATF for email messages created between 2000 to 2009. The Court denied the production of the messages on the grounds the emails were not reasonably accessible because of being stored on back-up tapes. The moving party also failed to demonstrate good cause to order the production of the requested information. The Court also addressed the proportionality of the request under Federal Rule of Civil Procedure Rule Rule 26(b)(2)(C). Baranski v. United States, 2015 U.S. Dist. LEXIS 71584, *52-54 (E.D. Mo. June 3, 2015).

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The Court began the proportionality analysis highlighting the emails were between six to eight years old and stored on back-up tapes for disaster recovery. Baranski, at *52.

The Court further noted that the production of the emails would “involve substantial costs and time and the active intervention of computer specialists,” which had been explained by expert affidavit. Id.

An added factor included that the emails would have to be searched by specific users and the requesting party had not identified any users to be searched. Id. This made the discovery request not sufficiently specific. Baranski, at *53.

The Court further drove home the proportionality analysis that the cost could not be justified for the requested information without some showing that the requested emails contained information to resolve the issues in the lawsuit. Id. As such, the Court denied the requesting party’s subpoena.

Bow Tie Thoughts

Proportionality is the balancing of two factors: 1) What must be done to make the data accessible (including cost, time on the project, what technology must be used) and 2) How is the information going to be beneficial to the case.

Cost is irrelevant if the information has not objective value to a lawsuit. A party seeking information that especially requires translation into a reasonably useable form should be ready to state why it supports the causes of action in a case, with specific custodians, time frames, and any other information to assist the Judge in making her ruling. Without knowing how the information will move the case forward, a Court will be hard pressed to order expensive data recovery procedures.

You Don’t Want Discovery Overdraft Charges

Discovery deadlines matter. Wells Fargo learned that the hard way with producing a relevant email 8 months after the close of discovery. Given the nature of the relevancy to the lawsuit, limited additional discovery was reopened.

Opps_iStock_Here is the short overview of the case: Plaintiff’s asked Wells Fargo if the other Defendants (now dismissed) were a legitimate business engaged in securities sales. The bank said yes and the Plaintiff transferred $80,000 to the Defendant’s bank account in order to purchase securities that would yield a return of $280,000.

The second transaction involved reinvesting $250,000 of the promised $280,000 to fund a $500,000 loan to renovate an office building, plus an additional $50,000 transaction fee. Gazian v. Wells Fargo Bank Na, 2015 U.S. Dist. LEXIS 69701, *2-3.

The Plaintiffs attempted to withdraw $30,000 and transfer the $250,000 to the Defendants. Wells Fargo informed the Plaintiffs that the dismissed Defendants accounts had been emptied and no money would be transferred to the Plaintiffs. Id.

The Plaintiff’s sued Wells Fargo on the theory the bank “knowingly or negligently made false representations to Plaintiffs” about the dismissed Defendants. Gazian, at *3.

Enter the late-produced email message:

From: BROWN, Patrick [Wells Fargo]

Sent: Tue 8/2/2011 5:36:42 PM

Re: HSBC Bank Guarantee Registration Number BH5843[.]

I have conducted a review on the signor, Craig Cason, for this account, [redacted]7443 — Increase Capital Investments LLC and found several items of concern . . .

This individual has been investigated by the SEC for securities violations and accusations of fraud.

The address on the account is a virtual office that can be rented for $50/month, used frequently by shell companies to give the appearance of legitimacy even though no actual business is conducted there.

The client has filed multiple bankruptcies and has several outstanding judgments (some in excess of $100K), which is not consistent with someone purporting to have $250mil in assets.

Please do not process the receipt of this security. We will be restricting the account and referring the matter to our Security Fraud group. Additionally, please DO NOT disclose this information to the client or the outcome of our review. Please advise the client that we cannot assist him with his request.

Gazian, at *4.

The Defendants claimed this messaged pertained to another securities deal and was not relevant. Gazian, at *5. The Plaintiff and the Court did not agree.

The Court reopened discovery so the Plaintiffs could conduct 5 additional depositions of no more than 20 hours of depo time; 10 additional requests for production; and 10 additional interrogatories. The Court went further to say that the additional depositions and written discovery could inquire into the preservation of emails sent to and from one of the Wells Fargo custodians. Gazian, at *7-8.

Bow Tie Thoughts

A lawsuit can hinge on one smoking gun email that was produced late. This sort of situation is one that needs to be avoided by litigants. The problem when this happens is often one of not having an effective information governance solution, or not issuing a litigation hold correctly, or not collecting ESI, or not knowing how to leverage early case assessment tools to find potentially relevant information. To put it mildly, disaster can happen for many reasons.

How can parties avoid these situations? Use sound technologies to manage data that can issue a litigation hold and preserve relevant ESI. This does require determining what is relevant, but these are problems that can be solved by knowing what actions to take and the tools to properly litigate a case.

There are no Magic Words for Taxation of Processing Costs, but there is the Law

Taxation of cost cases can be dull. However, when the Judge shoots down an argument with a YouTube video in the opinion, you know it’s a party.

The prevailing party in a trademark infringement case between companies that make portable electronic fitness tracking devices sought $88,888.86 in costs and the clerk awarded $54,089.15. The Court ultimately granted $63,660.94 in costs. Fitbug Ltd. v. Fitbit, Inc., 2015 U.S. Dist. LEXIS 62879, *2 (N.D. Cal. May 13, 2015).

The opposing party made a procedural argument against awarding costs based on the fact the declaration filed in support of the Bill of Costs with statutory citations did not include the three words “allowable by law.” The Court rejected this argument, stating:

… the requirement a party say the “three little words,” “allowable by law,” is merely a reminder that the Court expects them to submit costs they believe are taxable, not a set of magic words necessary to receive any costs. Cf. Sarah Vaughan, Three Little Words, on Live at the London House (Mercury Records 1958), available at: https://www.youtube.com/watch?v=9WSZ6IRC-ys

Fitbug Ltd., at *4-5.

With that, Judge Samuel Conti simultaneously invoked one of the greatest jazz singers of the 20th Century and reminded us that legal arguments do not come out of book of spells. Well played. Fitbug Ltd., at *6.

Taxation of eDiscovery Costs

The Court noted that Section 1920 was enacted in 1853 and did not speak on electronic discovery costs (largely because “new” technology at that time included typewriters and telegraphs). Fitbug Ltd., at *6.

Judge Conti summarized that taxation for “exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case . . .” applies to some electronic discovery expenses. Fitbug Ltd., at *7.

Granting Data Extraction and Processing Costs

The Court allowed $32,282.05 in processing and data extraction costs to be taxed. Fitbug Ltd., at *11. There are many cases where processing costs are denied, so this is a significant award.

The supporting declarations explained that the costs related “to collection, scanning and conversion of documents, and related processes necessary to the eDiscovery process,” and these entries specifically “concern document collection, including scanning and related processes.” Fitbug Ltd., at *8. In a supplemental declaration, the prevailing party explained the costs were necessary to prepare discovery documents for production to the opposing party in the format to which the parties agreed to produce ESI. Fitbug Ltd., at *8-9.

The Court held the processing expenses were properly taxed for complying with the parties’ ESI agreement. Furthermore, the Court also allowed the costs for extracting metadata, because “these too are necessarily incurred, allowable exemplification costs because they were incurred not for the convenience of counsel, but to comply with the parties’ agreement.” Fitbug Ltd., at *10-11.

The Court also held that the cost of converting document formats as required per the parties’ agreement were also taxable. The Court explained the costs were “expressly contemplated by the parties’ agreement and are necessarily incurred exemplification costs.” Fitbug Ltd., at *11-12.

Bow Tie Thoughts

ESI Protocols determined at the Rule 26(f) Conference and codified in a Court Order at the Rule 16(b) Hearing matter. This case highlights that production formats agreed to by the parties can be taxable. However, if the parties had agreed that discovery costs were to be carried by the parties, this case could have turned out very differently.

A lawyer cannot cry “I Cast Ye Costs Out!” as if these were magic words that would prohibit a prevailing party from recovering agreed to costs for the production of ESI. However, a well prepared ESI Protocol that addresses costs could have that very effect.