Return to the TAR-Pit

Take note all, there is a new predictive coding case by Judge Andrew Peck. The good Judge waded into the TAR-pit of transparency, which in my opinion has caused much unnecessary problems with judges and parties who believe “transparency” is required when predictive coding is used, mandating the disclosure of seed sets. I do not think the Federal Rules of Civil Procedure place such a burden on producing parties by attacking the work-product doctrine or compelling the production of irrelevant information.

Judge Peck summarized that “where the parties do not agree to transparency, the decisions are split and the debate in the discovery literature is robust.” Rio Tinto Plc v. Vale S.A., 2015 U.S. Dist. LEXIS 24996, 8 (S.D.N.Y. Mar. 2, 2015).

Judge Peck’s new opinion did not rule on the issue of seed transparency, because the parties had agreed to an ESI protocol that “disclosed all non-privilege documents in the control sets.” Rio Tinto Plc., at *10. However, Judge Peck provided his thoughts on what I would call a bias against technology-assisted review:

One point must be stressed -it is inappropriate to hold TAR to a higher standard than keywords or manual review. Doing so discourages parties from using TAR for fear of spending more in motion practice than the savings from using TAR for review.

Rio Tinto Plc, at *10, emphasis added.

Business team enjoying victory

That statement is extremely important. There is no valid reason to treat “predictive coding,” or any other form of analytics such as conceptual searching, email threading, or clustering, to higher discovery standards because “technology” is used.

The issue is whether or not the production is adequate. A producing party should not have to disclose attorney work product in analyzing their case or proving the technology functions. Courts do not hold competency hearings on whether an attorney properly knows how to conduct online legal research to ensure attorneys are maintaining their ethical duty of candor to the court. The same logic applies to technology-assisted review and productions.

Judge Peck did state while he generally believed in cooperation, “requesting parties can insure that training and review was done appropriately by other means, such as statistical estimation of recall at the conclusion of the review as well as by whether there are gaps in the production, and quality control review of samples from the documents categorized as now responsive.” Rio Tinto Plc., at *9-10, referencing Grossman & Cormack, Comments, supra, 7 Fed. Cts. L. Rev. at 301-12.

The focus of discovery should be whether or not a production is adequate. Are there production gaps? Is the parent-child relationship maintained between email messages and attachments? Is the producing party conducting quality assurance testing? Is the producing party documenting their efforts?

Judge Peck’s latest opinion will not be the final word on the issue of “transparency.” However, Judge Peck is a well-respected jurist who understands technology-assisted review. His statement that “it is inappropriate to hold TAR to a higher standard than keywords or manual review” is a very welcome one.

WHOA! A Prevailing Party Recovered $57,873.61 in eDiscovery Costs!

thumb-456698_1280My God, is it true? Did a Prevailing Party recover virtually all of its eDiscovery costs?

The answer is yes, thanks to a case in Colorado.

United States District Judge Christine M. Arguello opened her order denying the Plaintiff’s motion to review the clerk’s taxation of costs with the following:

Because Defendants’ costs related to the electronically stored information (“ESI”) are expenses enumerated in 28 U.S.C. § 1920(4), and Plaintiffs were aware that Defendants would have to retain an outside consultant to retrieve and convert the ESI into a retrievable format, Plaintiffs’ Motion is denied.

Comprehensive Addiction Treatment Ctr. v. Leslea, 2015 U.S. Dist. LEXIS 17878, 1.

Rock on. Let’s review the Court’s reasoning.

The Plaintiff took the position that the Defendants’ eDiscovery cost award be reduced from $57,873.61 to $2,387.03, striking the work of a third-party eDiscovery service provider who performed the “retrieving, restoring, and converting data,” on the grounds the work did not constitute “copying.” Leslea, at *2.

The Court explained the Defendants hired their eDiscovery service provider to retrieve and restore ESI in order to respond to the Plaintiff’s Interrogatories and Requests for Productions. The requested discovery included “correspondence, summaries, emails, reports, and memos” relating to specific subject matter. Leslea, at *4-5. The Court noted that the work was complex and time-intensive, requiring three consecutive tolling agreements. Id.

The Defendants communicated with the Plaintiffs three times on the challenges over ESI, including providing detailed information on the scope of the data, archiving, and retention periods on multiple sources of data (hard drives, back-up tapes, etc). Leslea, at *5. In the second communication, the Defendants explained how the service provider restored 83 back-up tapes; and in the third the service provider’s forensic investigator detailed the difficulties in restoring the subject ESI. Id

The Court noted that the Plaintiffs were aware of the ESI challenges, did not recommend any changes to the scope of discovery, and even filed a new complaint with additional allegations. Leslea, at *5-6.

wealth-69524_1280

The Court held that the ESI expenses were “reasonably necessary for use in the case” and not done for the mere convenience of the parties. Leslea, at *6. The Court concluded the order as follows:

Indeed, Plaintiffs were aware of the monumental effort to retrieve and convert the data into a retrievable format in response to their Interrogatories and Requests for Production. The costs incurred by Defendants, the prevailing party, in responding to Plaintiffs’ requests are expenses that are shifted to Plaintiffs, the losing party. Indeed, Plaintiffs own litigation choices and aggressive course of discovery necessarily resulted in “heightened” defense costs. Plaintiffs have not demonstrated that these costs are improper. Accordingly, Defendants are entitled to recover their costs in full measure as determined by the Clerk, which it has identified as $57,873.61.

Leslea, at *6-7, citing In re Williams Sec. Litig-WCG Subclass, 558 F.3d at 1150.

Bow Tie Thoughts

Thank you Judge Arguello for understanding a simple truth: eDiscovery requires technology to retrieve information and translate it into reasonable useable forms that are necessary for the case. This technology and expertise costs money. Yes, this case had an expert who explained what was being done during the litigation. Not every case has such powerful facts explaining the why and how of restoring ESI to make it reasonably useable, but this is an epic victory for taxation of eDiscovery costs.

Thank You Judge John Facciola

facciola2

Thanksgiving time is one for reflection. I have been thinking about Judge John Facciola’s impact on the world of eDiscovery with his upcoming retirement. I am very thankful we had such a dedicated judge who has been such a leader in electronic discovery.

Judge Facciola had his share big cases, but the important ones are the cases that give a nuts and bolts framework on how to actually litigate issues surrounding electronically stored information.

Judge Facciola excelled at these cases and showed a profound willingness to be hands on in solving issues, from search term efficiency to hosted repositories. The Judge’s commanding use of language is second to none, with many memorable quotes.

The good Judge is a profoundly thoughtful individual, whose interests include sailing, baseball, history, and a strong dedication to our justice system. I wanted to share a couple of stories I had with the Judge over the years.

First Time I Met the Judge

I met Judge Facciola on Super Tuesday 2008 in Washington, DC. I was in DC for a conference and had a webinar planned with him later in the month. I wanted to take the opportunity to meet him in person since I was in town.

After going through security at the Federal Courthouse, I eventually found the waiting room for his department’s chambers. Observing large format photos of boats on the wall (one was a dory) and magazine on the America’s Cup, I thought, “Cool, we can talk about sailing.”

The Judge greeted me in one of his signature bow ties. Ironically, I did not know he wore bow ties at that time. My react was simply, “Awesome.”

We had lunch in the judges’ dining room that overlooks the US Capital Building. It is still surreal to remember, seeing other judges eating lunch and discussing matters of importance. To this date it is still one of the most memorable events in my career so far.

Judge Facciola and I discussed search terms and discovery requests. I shared with him my concern that “text speak” such as “LOL” type acronyms should be included when conducting searches of text messages and instant messages. He actually sat-up and said, “I had not thought of that.”

After leaving the Courthouse, I met up with some attorney friends. We watched the Super Tuesday results at different campaign parties at some of DC’s more entertaining pubs, but that adventure is another story.

An Evening at the Cosmos Club

I visited DC in 2013 for a business trip. I contacted the Judge if he had time to meet for lunch or coffee while I was in town. He offered to meet for dinner at the Cosmos Club.

I am normally well versed in history, but I had to look up the Cosmos Club. The Club was founded in 1878 dedicated to the advancement of art, science, and literature. Its members included Alexander Graham Bell, Woodrow Wilson, and virtually every Secretary of State.

There is no question the Cosmos Club was the most regal institution I have ever entered. For me, it represented those dedicated to knowledge with a true sense of class. The library was simply majestic, where one could be lost for hours in study.

The Judge and I enjoyed a good meal, discussing the law, film, boats, and of course US History. At a prior dinner before Legal Tech 2009, we discussed the sinking of the USS Indianapolis and the unfair court martial of Captain Charles McVay III, leaving the others looking at us in respectful confusion.

While we were discussing topics from eDiscovery to President Garfield, another dinner party walked by our table. The person in the lead looked familiar, but I could not identify the dinner guest.

Once the other party was seated, the Judge said, “That’s General Petraeus.”

A True Statesman

Jessica Mederson and I invited Judge Facciola to record an Independence Day podcast for our blog The Legal Geeks. Judge Facciola truly loves the United States. The Judge shared his thoughts on the 4th of July, the meaning of Independence, and the role of the Judiciary in upholding the promise of the Declaration of Independence. Jess and I were clearly in awe of what the Judge had to say about our country and freedom.

Legacy on the Court

Judge Facciola leaves a powerful legacy of civic duty, honor, and a strong work ethic. I wish him well in his future adventures, whether they are out sailing or well-earned time with family. Thank you for your service, Your Honor.

Moreover, thank you for the tip about Beau Ties Ltd of Vermont. Wonderful collection of bow ties.

Producing as PDFs When Native Files Are Not in a Reasonably Useable Form

Not all native files are in a “reasonably useable form.” To borrow from the Dark Knight, sometimes, producing native files as PDF’s with metadata is the “reasonably useable” form you deserve, but not the one you need for convenient document review.

Search-DataA Plaintiff sought a native file production from a computer system that maintained medical files of prison inmates in a database application called “Centricity.” The Defendant produced the medical records as PDF’s in reverse chronological order and a motion to compel ensued. Peterson v. Matlock, 2014 U.S. Dist. LEXIS 152994, at *3-4(D.N.J.Oct. 29, 2014).

A requesting party can state the form of production in their request. A producing party must produce the information as it is “kept in the usual course of business or must organize and label them to correspond to the categories in the request.” Peterson, at *6, Fed. R. Civ. P. 34(b)(2)(E).

If a producing party objects to producing as native files (or any form of production), they have the burden of showing the “undue hardship or expense” prohibiting the production in the stated form. Peterson, at *7, citing Susquehanna Commercial Fin., Inc. v. Vascular Res., Inc., 2010 U.S. Dist. LEXIS 127125, at *13 (M.D. Pa. Dec. 1, 2010).

The Defendants explained that they had limited control on the export of the medical records, thus could not produce the information the way the Plaintiff requested in a piecemeal fashion or chart form. Peterson, at *5. Moreover, to produce the information in “chart format and organized into various categories as they are viewed through Centricity ‘would be an inordinate drain of time and manpower’ because staff from the DOC would be required to ‘sort through each page of the medical record and make the determination as to which category it fits into.’” Peterson, at *5-6.

The Court held that even though the PDF production was “less convenient” for the Requesting Party, “requiring staff from the DOC to sort and identify each page of every inmate medical record would create a substantial hardship and/or expense, which outweighs Plaintiff’s interests in receiving the records in their native format.” Peterson, at *7.

Bow Tie Thoughts

Document review and medical records can become complicated. I worked on a case where we as the plaintiff produced medical records to an insurance company in a personal injury case. We were given the Plaintiff’s medical records on easy-to-use interactive DVDs that had an impressive viewer where X-Rays were in 3D and could be rotated in any direction. It was extremely dynamic in analyzing the Plaintiff’s injuries.

The attorney at the insurance company did not want to use the DVDs and requested we produced everything as PDFs, thereby destroying the insurance company’s ability to review anything. The lawyer claimed the DVDs were “too complex” for him. Despite conferring directly with the IT support for the insurance company, we produced the information again as PDFs.

The case of Peterson v. Matlock is different, because here we have an export issue that does not match the stated format in the request. One option might be to give the Plaintiff access to a database with the information. Such access would likely NOT be proportional to the case given the cost to do so, but there are situations where this could happen.

The Court’s very short ruling is based on proportionality based on cost of producing the  information stated in the request against the value of the information to the Plaintiff. This case easily could have been decided as a form of production case, in that the native files were not in a reasonably useable form, thus required translation to PDFs. This might be the less conventional approach, but would be statutorily correct in my opinion.

Did a Judge Say Scanning of a Native File and OCR?

Taxation of cost cases can get funky. One such example is where a party sought costs for discovery to be produced in “OCR” format. The Court went on to state: “The scanning and conversion of native files to the agreed-upon format for production of ESI constitutes ‘making copies of materials’ as pursuant to §1920(4)” and found the OCR costs recoverable. Kuznyetsov v. West Penn Allegheny Health Sys., 2014 U.S. Dist. LEXIS 150503 (W.D. Pa.Oct. 23, 2014).

Surprised

The Court further held that that cost of 5 cents per page for TIFF-ing was not unreasonable and the cost of 24 cents per page for scanning paper documents to also not be unreasonably high.  Id.

What is strange is seeing the words “native file” and “scanning” and “OCR format” in the same sentence. Native files are already electronically stored information. Business data such as email messages, text messages, Word documents, Excel files, are already searchable. These is no reason to print the ESI to paper, then scan them, and then perform optical character recognition on them. All of that would be extremely strange and drive up costs.

There is a chance the Court was discussing both scanning paper and conversion of native files in the same sentence, without directly saying “paper documents” before “conversion of native files.” Even if that was the case, I would recommend producing native files natively to keep costs down. Only convert privileged or confidential native files to TIFFs or PDFs for redaction.

If native files need to be converted to static images such as TIFFs in order to redact confidential information, making the static images searchable with OCR would make sense, because you want to produce information that is searchable, but not with the confidential information also searchable. However, if these native files converted into static images did not need to be redacted, there would be no reason to make them OCR searchable. A producing party could simply produced the “extracted text” from the native files, thus including searchable information for a review database to comply with the Federal Rules of Civil Procedure.

Guest Post on Everlaw: Is An Attorney Responsible for Manually Reviewing Discovery Before Production?

Review-TeamI prepared a guest post for Everlaw’s blog on an attorney’s ethical duty to follow a client’s instruction to manually review documents prior to production.

Is expert testimony required to show a lawyer breached their standard of care or is this issue one a jury can decide on their own?

Check out the case summary and tips on document review at Everlaw:

What is an attorney’s Duty of Loyalty to review discovery documents before producing them to an opposing party? That issue recently arose in a summary judgment battle between a client and his former attorneys.

The Case:

The client claimed that the law firm had committed malpractice because the attorneys failed to review discovery responses before production to the opposing party – after being directed to do so by their client. Things really went wrong when the client was hit with sanctions, and the law firm denied knowledge of certain documents in court. Price Waicukauski & Riley v. Murray, 2014 U.S. Dist. LEXIS 130680 (S.D. Ind.Sept. 18, 2014).

 Continue reading at Is An Attorney Responsible for Manually Reviewing Documents?

How Apple Successfully Recovered eDiscovery Production Costs

Apple-Bite-1Taxation of cost cases involving eDiscovery often end with the prevailing party not recovering any costs. However, in the true spirit of “think different,” Apple was able to recover $238,102.66 in costs for “the amounts associated with electronic preparation and duplication, not the intellectual effort involved in the production, such as searching or analyzing the documents.” Apple Inc. v. Samsung Elecs. Co., 2014 U.S. Dist. LEXIS 132830, at *88, 91 (N.D. Cal. Sept. 19, 2014). The production work included processing documents, uploads, and document productions. Id.

Apple initially sought $1,486,475.01 in costs for the use of their online hosted repository, which uploaded and produced documents to Samsung, in the amount of $287,555.45 between two law firms, and service providers that collected and processed paper and electronic documents that were uploaded to the repository for $1,198,919.56. This amount was later reduced by $9,509.40, for a new total of $1,476,965.61. Apple, at *87-88.

A declaration provided by one of Apple’s attorneys stated the fees did not contain the intellectual effort involved in producing the discovery, but only the amounts associated with the electronic preparation and duplication. Apple, at *88. Moreover, the fees did not include costs from hosting the data, licensing fees for the software, or vendor consulting time. Id.

In the Northern District of California, Local Rule 54-3(d)(2) allows for eDiscovery costs analogous to “making copies,” but not “intellectual effort.” Id. Moreover, these costs must be connected to discovery produced to the adverse party. Apple, at *89.

The issue for the Court ultimately on what was recoverable was what was actually produced to the opposing party.

Math-Student

Based upon the different motions, the Court stated that Apple had produced 338,860 documents, totaling 2,944,467 pages, each document averaging 8.69 pages; however, Apple, uploaded a total of 2,101,808 documents. Apple, at *90.

The Court surmised that if the “same average page count of 8.69 for all documents that Apple produced, Apple uploaded a total of 18,264,712 pages in this litigation.” Apple, at *91.

The Court explained based on Apple’s estimation that it had “uploaded a total of 18,264,712 pages of which 2,944,467 pages were ultimately produced.” Id. As such, the Court determined that 16.12% of Apple’s eDiscovery costs were spent on productions to Samsung and awarded Apple $238,102.66. Id.

Bow Tie Thoughts

I want to congratulate Apple’s attorneys for successfully recovering over $200,000 in eDiscovery product costs. Many taxation of cost cases do not end with the prevailing party taking anything home.

eDiscovery costs cases can make some lawyers do their best Chevy Chase/Gerald Ford impression of, “It was my understanding no math would be involved.” However, no taxation of cost case has the luxury of not determining how much was spent on a production.

Taxation of cost cases are complicated. While some Court would like costs cases to be as simple as a Rob Schneider saying, “Makin’ Copies,” eDiscovery requires special skills to collect and produce ESI.

Some jurisdictions take a fairly hard view that processing and all of the steps in doing a production are not recoverable, because the process does not result in a “copy.” The local rule in the Northern District is fairly forward thinking comparatively thinking when it comes to recovering costs associated with production ESI.

Another factor making taxation cases complicated is the fact how service providers invoice. Most service providers do not have attorneys on staff giving advice on how to document each step to explain how processing is “necessary for the production.” Documenting how a production is de-NISTed, de-duplicated, or emails excluded by domain name (such as irrelevant news services or sales messages), are all steps that enable a Court to decided whether that step was necessary for production.

My best advice on how to navigate this area of the law is to understand your local rules (or Court of Appeal case law). The next step is to work with your service provider at the beginning of the case on how they invoice to demonstrate how every step they take produce ESI is necessary to the case for the production, and not merely “intellectual efforts.”