Don’t Stipulate to Not Follow the Form of Production Rules

No-jackintheboxHere is my advice: NEVER agree to a stipulation to produce native files when “it is more practical to do so” and agree to productions in PAPER, PDF’s, or TIFFs. Melian Labs v. Triology LLC, 2014 U.S. Dist. LEXIS 124343 (N.D. Cal.Sept. 4, 2014).

That is what happened in Melian Labs v. Triology LLC. It reads like a personal Sum of All Fears for anyone who has spent years working with ESI, because the Court denied motions to compel email and spreadsheets in native files with metadata, because of the parties’ Rule 26(f) stipulation.

The Requesting Party challenged the Producing Party’s email production, because the production was “7 large PDF image documents, which each appear to be a  compilation of ESI improperly collected and produced” and the collection was not forensically sound.  Melian Labs, at *4.

The Producing Party claimed it did not need to forensically collect discovery. Further, the Producing Party claimed the email was printouts directly from Gmail or Microsoft. Id. 

ScreamingMad

The Court stated that the Requesting Party was complaining about the form of production and not that the production was incomplete. As the parties had agreed to the form of production being paper, PDF’s, or TIFFs,  Fed. R. Civ. P. 34(b)(2)(E) did not control, but instead the parties’ stipulation. Melian Labs, at *4-5.

The Court stated the following on the stipulation and the discovery dispute:

Instead, it states that ESI may be produced in paper, PDF or TIFF. That producing the documents in a searchable format would ease Triology’s review does not render Melian’s production deficient. Triology fails to articulate why metadata is important to emails, when every email should contain the information sought on the face of the document. To the extent that emails have this information cut off or it is not apparent from the face of the email (i.e. as may be the case with BCC), Triology is entitled to the complete email with the agreed upon metadata, and Melian must provide it upon request.

Melian Labs, at *5 (Emphasis added).

Based on the above, the Court DENIED the moving party’s request  to compel the production of all emails in a searchable or native format is denied. Id. 

Things get equally frustrating for spreadsheets.

The Producing Party admitted reading some of the spreadsheets were difficult and produced those ones in native file upon request. Melian Labs, at *5-6. However, the Producing Party stood their ground that they agreed to produce native files “when it is more practicable to do so.” Id. 

The Court held again that the joint stipulation controlled and that the Producing Party could NOT be compelled to produce spreadsheets in native file format. Melian Labs, at *6 (emphasis added). However, the Court did end with a subtle suggestion the Producing Party would produce spreadsheets that were “easily readable without seeking court intervention” in the event of any disputes over the readability/legibility of spreadsheets. Id. 

Bow Tie Thoughts

I hate stipulations like this one. Producing in native file format is the only practical option when it comes to ESI. If I were a Federal Judge, I would summarily deny any such Rule 26(f) stipulations that called for the production of ESI as paper, PDFs, or TIFFs, on the grounds that the agreement would violate Federal Rule of Civil Procedure Rule 1 by unnecessarily driving up costs. The fact the parties end up shackled to a bad form of production agreement should serve as a warning label to never let this happen again.

I worked on a case where over 2000 documents were produced as 8 non-searchable PDF’s. To say it was a mess was an understatement. We were able to correct the production gamesmanship with a useable production, but it made document review very difficult until it was corrected.

There is value in native files, because it provides objective coding for databases and expedites review, both of which further the goals of Rule 1. Moreover, there is amazing review technology that empowers lawyers to identify communication patterns, key players, and other useful information. Printing Gmail as PDF’s dramatically undercuts that ability to make use of these tools.

That being said, the Requesting Party could have very forceful deposition questions on what was done to preserve ESI, the steps to identify responsive discovery, and what methodology was employed to ensure substantive and embedded metadata was not destroyed after the duty to preserve triggered. Additional questions could be asked to identify formulas in printed spreadsheets of Excel files. This might force the production of un-produced native file spreadsheets.

Discovery must be collected in a defensible manner. Many people call this process “forensically sound.” This might not mean that every computer has a mirror image made of it, but a targeted collection. Using targeted collection tools can also be done in a defensible manner, with many great technology options to use. That being said, I would question the adequacy of a product done where the collection process was printing email as PDF’s. It might be justified in a small case, but if in Federal Court with high stakes, I would strongly encourage having a mirror image done of the subject computers.

Always Document Services to Explain eDiscovery Services for Taxation of Costs

A prevailing party sought $61,548.65 in costs. They got $7,106.65. Kwan Software Eng’G v. Foray Techs., 2014 U.S. Dist. LEXIS 63933, 10-19 (N.D. Cal. May 8, 2014).

United States District Judge Susan Illston is very good at eDiscovery disputes. This case highlights the importance of not just knowing how to conduct eDiscovery services, but how to invoice for them.

The non-prevailing party challenged eight eDiscovery invoices on the grounds the prevailing party sought 1) eDiscovery costs that went beyond the costs associated with the actual production of the documents; and 2) failed to provide sufficient detail of its e-discovery costs to allow the Court to determine what are actual copying costs and what are non-taxable intellectual efforts. Kwan Software Eng’G, at *13.

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The “Document Processing” invoice included fees for conversion from native files to TIFFs; “Bates stamping” each page (which is down by the processing engine, not someone actually stamping); and exporting the associated metadata. Kwan Software Eng’G, at *14. These fees are generally recoverable, but the Court stated that there was insufficient information to determine whether the costs were taxable. Id. Moreover, the prevailing party produced only 229,000 pages of discovery (assuming each TIFF is being counted as a page), but the invoices showed 344,445 pages had been processed (again, assuming TIFFs as pages and not files). Id.

The Court stated that the charges included documents that were not produced, thus not used in the litigation. As such, the Court only awarded costs of $6,870, which represented a charge of $0.03 per document for bates stamping and TIFF conversion for 229,000 documents. Kwan Software Eng’G, at *14-15.

The Court further denied costs for data hosting and management, because those costs are not recoverable. The Court also denied costs for production hard drive not actually produced to the opposing party (which otherwise would have been recoverable if actually produced). Kwan Software Eng’G, at *15-16.

Judge Illston also denied the producing party’s project management costs, because it was “unclear from the invoices whether the project management fees were actually related to document processing as opposed to other non-taxable activities.” Kwan Software Eng’G, at *16.

Bow Tie Thoughts

Judges cannot award costs to prevailing parties if there is not sufficient documentation to explain how the services were necessary for the litigation in producing discovery. This requires service providers to go into detail in their invoicing to explain each step of the workflow.

Consider the project management costs. Those could be recoverable, if there is sufficient information to explain how it was part of processing that went to actual copying, opposed to just intellectual efforts.

eDiscovery requires a specialized skill set and knowledge. Processing is not something done in a vacuum, but takes knowledge of how the application works and understanding what is needed in the case to be done effectively. A party cannot simply invoice “processed data for production” and hope a Judge will opine why those actions were necessary for the case. This takes documentation to educate the Judge on why the actions were done in order to produce the discovery in the litigation.

If You Agree to Produce Excel as Native Files, Don’t Produce Tiffs

Judge Paul Cherry wrote a masterful opinion involving an EEOC motion to compel production of agreed upon production formats. The case is an excellent example of the issues very alive over the form of production, understanding technology, educating the Court with expert affidavits, and the value of the meet and confers.

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The EECO requested in writing that ESI be produced as Tiffs with Concordance Load Files (strangely referenced as near-native) and spreadsheets/databases in native format. The Defendants agreed to the production formats. EEOC v. SVT, LLC, 2014 U.S. Dist. LEXIS 50114, 3-4 (N.D. Ind. Apr. 10, 2014).

The Defendant produced spreadsheets in Tiff format and employment applications as single-page, non-unitized PDF and TIFF format without a load file. SVT, LLC, at *4.

The Defendants claimed that they had produced their discovery “pursuant to industry standards.” SVT, LLC, at *4.

The EEOC took the very brilliant step of having their Litigation Support Manager explain by affidavit the issues with the Defendant’s production. The Litigation Support Manager explained that the static images of the spreadsheets were “unusable because they cannot be searched or manipulated for analysis.” SVT, LLC, at *4-5.

The Litigation Support Manager further explained how exporting the data from the Defendant’s Kronos system as spreadsheets was not unduly burdensome, as the application had the built-in functionality to run searches, reports and export the data. SVT, LLC, at *5-6.

The Litigation Support Manager further explained that the static images of policies, handbooks, and contracts were “bulk scanned” without any logical unitization or a load file. The production lacking any document breaks made the production unusable. SVT, LLC, at *5-6.

The Court explained that the EEOC could request the Defendants to produce in specific forms pursuant to Federal Rule of Civil Procedure Rule 34(b)(1)(C). In this case, TIFF’s and a load file for some ESI and native file for spreadsheets. SVT, LLC, at *8.

The Defendants produced the ESI without a load file. That did not happen.

The Court rejected the Defendants’ argument that the third-party cloud application used by the Defendant was outside of their “control.” The Court noted testimony from Defendant’s HR representatives on how they could generate reports in Excel from the application. SVT, LLC, at *9-11.

The Defendant did produce the spreadsheets as native files during the briefing of the motion. However, the Court granted the EEOC’s motion AND further ordered the parties to conduct an in-person meet and confer. All discussions over the production had been by written communications, without an in-person meeting. Given the disputes that came up, the Court went so far as saying the Litigation Support Manager was “uniquely qualified” to participate in a meet and confer with the opposing side. SVT, LLC, at *19-20.

Bow Tie Thoughts

Reviewing Excel spreadsheets converted to non-searchable TIFFs is about as fun as looking at the sun with binoculars. Heck, if it happened to me, you would think I was hunting bear from the motion to compel I would write.

Battles over the form of production and Rule 26(f) conferences will not go away, even as we debate amending the proposed amendments to the Federal Rules of Civil Procedure.

Form of production disputes tend to happen because 1) the lawyers are simply fighting for the sake of fighting or 2) they do not know how to conduct eDiscovery. When both reasons occur at the same time, things can get very unpleasant.

The meet and confer can be a very effective time for the parties to come to an understanding about the tech issues in the case. This almost always requires having an eDiscovery attorney or litigation support professional at the meeting to help focus on the solutions to the technology issues.

The EEOC should be commended on having their Litigation Support Manager provide an affidavit that educated the Judge on the form of production and technology to review ESI. Such individuals are extremely important internally to successfully manage cases and can be mission critical in working with the other side.

The Empire State Strikes Back (On the Form of Production)

In an insurance dispute over coverage, a Plaintiff sought production of electronically stored information in native file AND TIFF format after the Defendant produced discovery in hard-copy format. The Defendant opposed re-producing in native file format and sought cost-shifting if required to produce natively. Mancino v Fingar Ins. Agency, 2014 N.Y. Misc. LEXIS 30 (N.Y. Misc. 2014).

EmpireStateBuildingNew York law allows the “full disclosure of all matter material and necessary” in a lawsuit. Mancino, at *3 citing CPLR §3101(a).

The Plaintiff sought the ESI in native file format with TIFF images in order to view objective metadata including the author(s), dates of creation, and dates of edits on a key file to know whether an “Activity Report” was changed after the initial creation or the start of the lawsuit.  Mancino, at *7.

The Defendant countered that issues of metadata were “not involved” in the lawsuit and such a production was unnecessary. Id. the Defendant further argued the Plaintiff should have incurred the $3,500 native production costs and that the TIFFing would be a “laborious task.” Mancino, at *8.

Judge Rakower quickly listed the Zubulake cost-shifting factors (cited in U.S. Bank Nat. Ass’n v. GreenPoint Mortgage Funding, Inc., 94 A.D. 3d 58, 63-64 [1st Dept 2012]) and held that cost-shifting was not justified and that the producing party was to pay their own production costs. The Court clearly ordered the production of the ESI in both native file format with TIFFs. Mancino, at *8-9.

Bow Tie Thoughts

State court litigation is often overlooked by eDiscovery commentators.  Mancino is a very good reminder that over 90% of litigation in this country is in state court about regular people. The Plaintiffs in this case had their home burglarized and the resulting litigation was over coverage to recover stolen property. The key discovery focused on a file over who changed what and when on an insurance document. Few examples better highlight the need for metadata.

One big difference between this case and Federal Court is that a producing party need only produce in one form. A producing party would have to produce in native file format or with TIFF and metadata, not both. That being said, a production cost of $3,500 on a case of this size might be on the high side (it is unclear how many computers were at issue, number of hours spent, cost of production media, etc). Moreover, most processing software could do such a production with a few keystrokes (and I would bet at a lower cost then argued to the Court, depending on the volume of data to be collected pertaining to one insured party and other relevant files). There are of course other factors that could drive up costs, but I would need more information to understand why there was a $3,500 production cost estimate for the specific discovery sought.

You Might Want a Glass of Wine: No Costs for Native File Processing

It is sad when good arguments fail. Taxation of cost cases frequently deny processing costs of native files, unless there is conversion to a static image. Conversion of native files to static images can significantly increase processing costs, opposed to keeping native files in their original format.

RedWinePourIt is fitting that a taxation of cost case involved wine, because an attorney will want a glass of wine if unsuccessful on a cost motion.

In Country Vintner of N.C. v. E. & J. Gallo Winery, the Court summarized Gallo’s arguments as follows:

Gallo argues that its ESI-processing charges are taxable as fees for “making copies” under § 1920(4) because ESI has “unique features”: ESI is “more easily and thoroughly changeable than paper documents,” it contains metadata, and it often has searchable text. Opening Br. 23, 26-27. Gallo contends that converting native files to PDF and TIFF formats “produce[ d] static, two-dimensional images that, by themselves, [we]re incomplete copies of dynamic, multi-dimensional ESI”; other “processing . . . was necessary to copy all integral features of the ESI.” Id. at 28 (emphasis in original). Gallo argues that it had to remove ESI from container files, extract and index text to make it searchable, copy metadata, and load the data onto a “review platform” to allow “the native files and their associated metadata [to] be viewed and their text [to] be searched as if the native files were being opened in the software applications that created them.” Id. at 28-29. Gallo concedes that this process was far more involved than that necessary to copy paper documents but argues that just as copying a table or dress requires a different approach than copying a paper document, copying ESI also requires a different approach. Id. at 26.

Country Vintner of N.C. v. E. & J. Gallo Winery, 2013 U.S. App. LEXIS 8629, 25-27 (4th Cir. 2013).

Gallo made a very good argument, like a bold cabernet, with a hint of carmel and oak. Unfortunately, the Court poured it down the drain like it was vinegar.

Country Vinter claimed Gallo distorted “the plain meaning of the statute” and “misconstrue[d] the act of processing.” Moreover, Country Vinter argued processing was “not required in order to produce copies to Country Vintner, only to assist Gallo with its review.” Country Vintner of N.C., at *27.

Country Vintner disputed the argument that Gallo “had no choice but to process the ESI . . . in order to comply with its discovery obligations,” because “Country Vintner never demanded that Gallo produce processed ESI replete with metadata and searchable text.” Id.

Sommelier

The Court took a wine tasting tour of Race Tires America, Inc. v. Hoosier Racing Tire Corp and when eDiscovery processing could be recoverable.

The Court summarized Race Tires as follows:

In Race Tires America, Inc., the Third Circuit held that, “of the numerous services [that] [electronic discovery] vendors [had] performed” in that case, “only the scanning of hard copy documents, the conversion of native files to TIFF, and the transfer of VHS tapes to DVD involved ‘copying'” within the meaning of § 1920(4). Race Tires Am. Inc., 674 F.3d at 171. The court reasoned that [s]ection 1920(4) does not state that all steps that lead up to the production of copies of materials are taxable. It does not authorize taxation merely because today’s technology requires technical expertise not ordinarily possessed by the typical legal professional. It does not say that activities that encourage cost savings may be taxed. Section 1920(4) authorizes awarding only the cost of making copies. Id. at 169 (footnote omitted). The court recognized that “extensive ‘processing'” may be “essential to make a comprehensive and intelligible production” of ESI. Id. Hard drives may need to be imaged, the imaged drives may need to be searched to identify relevant files, relevant files may need to be screened for privileged or otherwise protected information, file formats may need to be converted, and ultimately files may need to be transferred to different media for production. Id. Nonetheless, the court reasoned, “that does not mean that the services leading up to the actual production constitute ‘making copies.'” Id. The process employed in the pre-digital era to produce documents in complex litigation similarly involved a number of steps essential to the ultimate act of production. First, the paper files had to be located. The files then had to be collected, or a document reviewer  had to travel to where the files were located. The documents, or duplicates of the documents, were then reviewed to determine those that may have been relevant. The files designated as potentially relevant had to be screened for privileged or otherwise protected material. Ultimately, a large volume of documents would have been processed to produce a smaller set of relevant documents. None of the steps that preceded the actual act of making copies in the pre-digital era would have been considered taxable. And that is because Congress did not authorize taxation of charges necessarily incurred to discharge discovery obligations. It allowed only for the taxation of the costs of making copies. Id. The Third Circuit further reasoned that the Supreme Court has “accorded a narrow reading to the cost statute in other contexts,” and “[n]either the degree of expertise necessary to perform the work nor the identity of the party performing the work of ‘making copies’ is a factor that can be gleaned from § 1920(4).” Id. at 169, 171. “Nor may the courts invoke equitable concerns . . . to justify an award of costs for services that Congress has not made taxable.” Id. at 170.

Country Vintner of N.C., at *27-29.

Despite rejecting Gallo’s processing cost argument, the Court stated the following in footnote 19:

We are mindful that converting ESI from editable to non-editable formats, or copying ESI in its native format, often encompasses the copying of metadata. If, for instance, a case directly or indirectly required production of ESI-unique information such as metadata, we assume, without deciding, that taxable costs would include any technical processes necessary to copy ESI in a format that includes such information. This case does not fall within those limited circumstances.

Country Vintner of N.C., at *30, fn 19.

Based on the above, the Court upheld the District Court’s holding that the only recoverable costs for “making copies” under § 1920(4) were the conversion of native files to TIFF and PDF formats, and the transfer of files onto CDs. Country Vintner of N.C., at *32.

SpilledRedWine

Bow Tie Thoughts

I think the legal definition of “making copies” only applying to converting native files to static images is wrong legally and technically. I believe one of these cases can be successful if the moving party understands the issue and has an expert who can explain how data is “copied” in eDiscovery processing to a judge knowledgeable about eDiscovery workflow.

A copy of ESI is made by the very act of data collection and processing the data for a review platform. After conducting review, data is often processed again from the producing party to the requesting party, due to privilege or the simple fact the parties have different review platforms. Moreover, producing “metadata” or searchable text is not “extensive processing”; it is normal processing.

To put it bluntly, a request for production of electronically stored information not to include metadata or searchable text is like asking for a paper production without ink on the pages.

Let’s consider the following:

The taxation of cost statute states:

Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case;

28 USCS § 1920(4).

Federal Rule of Civil Procedure Rule 34(a)(1)(A) permits a party to request electronically stored information that is “stored in any medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form.” The requesting party can state its form of production. In the event no form is stated, the ESI must be produced in the form it is “ordinarily maintained or in a reasonably usable form or forms.” Federal Rule of Civil Procedure Rule 34(b)(2)(E). Electronically stored information is ordinarily maintained in its native applications with metadata.

The defensible “collection” of ESI produces a copy of the data. This data is then “processed” to be loaded into a review platform for discovery review.

Many Court opinions recognize the need for substantive or embedded metadata. Moreover, many opinions recognize that a production as non-searchable static images is not in a reasonably useable form (see Jannx Med. Sys. v. Methodist Hosps., Inc., 2010 U.S. Dist. LEXIS 122574 (N.D. Ind. Nov. 17, 2010)). Additionally, metadata is needed to leverage the search technology that can organize communications based on time and other analytical tools vital to understand electronically stored information.

The fact that the Federal Rules of Civil Procedure create a default for ESI to be produced as it is ordinarily maintained should not be a prohibition on later recovering processing costs. Each step in the process of collecting data and processing it for a review platform and ultimately production is a technological necessity to make a copy. Simply put, requiring native files to be be converted into static images for taxation of costs drives up the production costs. Worse yet, producing static images dramatically reduces the data’s utility in any review platform. This is contrary to Federal Rule of Civil Procedure Rule 1’s mandate to control costs, creating a cost incentive for inefficiency.

Hands-on eDiscovery: California Seminar on Responding to Discovery Requests

I had the good fortune to organize a seminar on responding to electronic discovery requests for the Santa Clara County Bar Association’s Civil Practice Committee on February 27, 2013. However, this seminar was different from other eDiscovery CLE’s, because the attendees spent a full hour conducting searches for responsive ESI to requests for production. The speakers included Santa Clara County Judge Socrates Manoukian (currently assigned to civil discovery), Tyler Atkinson of McManis Faulkner and Charlie Kaupp of Digital Statra.

Our seminar first focused for one hour on the California eDiscovery Act, California Rules of Court on eDiscovery, search and strategies for conducting document review.

Unfortunately, there is very little published California case law on eDiscovery. We have two main cases to explore, specifically Toshiba America Electronics Components v. Superior Court, 124 Cal. App. 4th 762, 764 (Cal. App. 6th Dist. 2004), which addressed mandatory cost-shifting for translation of back-up tapes into a reasonably useable form and Doppes v. Bentley Motors, Inc., 174 Cal. App. 4th 967 (Cal. App. 4th Dist. 2009), which does not address the eDiscovery Act, but unstated litigation hold issues and eDiscovery abuses resulting in an answer stricken and a default judgment entered.

However, at least one unpublished California opinion hints Courts want more than mere speculation that a discovery production was inadequate:

Following remand, Sukumar asked Nautilus to disclose its e-mails and all other electronically stored information concerning the Med-Fit order. After Nautilus responded that it had already disclosed all relevant documents, Sukumar filed a motion to compel. The trial court denied the motion, concluding that Nautilus’s response was sufficient and Sukumar “has offered only speculation that additional documents exist.” On appeal, Sukumar asserts that the trial court’s order denying his motion to compel should be reversed.

Sukumar v. Med-Fit Sys., 2012 Cal. App. Unpub. LEXIS 3309 (Cal. App. 4th Dist. May 2, 2012).

The appeal in the above case was denied, however it a glimpse at how California courts are handling production issues. Unfortunately, California discovery orders are not published and unpublished cases cannot be cited for any precedential value.  We literally have to watch for tentative orders to see how these issues are being presented to the courts to determine any trends. 

Review-TeamThe second hour required attendees to work as teams in a review database finding responsive discovery from the ENRON dataset, which was provided by Digital Strata in their InControl review platform.

Searching for responsive electronically stored information is a frequent topic at continuing legal education seminars, but infrequently a hands-on experience for attorneys. Our attendees were very engaged and diligently worked through the different hypothetical discovery requests.

We gave several case law examples of “bad” discovery requests, such as the following:

Produce any and all information related to email, including messages, from 1997 to 2006. 

Using the above as a reminder that production requests must be reasonably tailored to secure the production of documents relevant to the issues in a Federal lawsuit (See,Thompson v. Jiffy Lube Int’l, 2006 U.S. Dist. LEXIS 27837 (D. Kan. May 1, 2006)), we developed Requests for Production such as the following for the attendees:

Request for Production 3:

Any and all electronically stored information pertaining to the $56 million loss on Catalytica Energy Systems, sent between 12/01/2000 to 12/31/2001, in native file format, with the following extracted text or metadata:

From, To, CC, BCC, Date, Time, Subject, Document Author, Document Name, Custodian, Control Number, Folder (System File Pathway).

Request for Production 4: 

Any and all electronically stored information authored by Will Nolen, Sally Beck, Susie Ayala, Shona Wilson or David Port relating to project “jedi” sent between 1/01/2000 to 12/31/2001, in native file format with extracted text, substantive and embedded metadata.

One hour of conducting searches is only the beginning of how to respond to discovery requests. However, it is a very good first hour for attorneys who want to learn how to effectively search and respond to discovery requests.

Working with virtual screen

I would like to put together a future program focused on conducting privilege review, redaction, production and privilege log creation at a future seminar. I also think attorneys would benefit from a half to full day conference focusing on practical eDiscovery, such as issuing litigation holds, tracking hold compliance, document review strategies, developing search strings, testing different search tools (i.e., concept, complex Boolean, predictive coding), and production.

Conducting discovery is a skill. Like any skill, it is best to learn it by actually doing it. I believe our profession needs more hands-on eDiscovery events for attorneys to build their comfort level and confidence to competently represent their clients.

Please Don’t Bates Stamp eDiscovery

Silly ClownThis case is my eDiscovery nightmare.

Worse than a clown with snakes.

Let’s review what happened.

The case involved numerous allegations of discovery wrongdoing against the Plaintiff.

The Defendants brought a motion for “discovery abuses intended to harass defendants, cause unnecessary delay, and needlessly increase the cost of litigation.”

The Defendants claimed they had spent $51,122 in legal fees and expenses related to the Plaintiffs’ “document dump.”

The motion was granted and denied in part. Branhaven, LLC v. Beeftek, Inc., 2013 U.S. Dist. LEXIS 13364, 13-14, 22 (D. Md. Jan. 4, 2013).

It Started Like Any Other eDiscovery Dispute…

The litigation had the “traditional” eDiscovery dispute with the Plaintiffs not producing email ESI, because they had not accessed the information, and other significant production delays. As the rather hot bench explained:

Plaintiff’s delay in addressing the lack of access to these email servers is inexcusable. There is no more obvious and critical source of information in the 21st century than a company’s email accounts.  Plaintiff’s counsel’s failure to identify and produce this discovery in a timely fashion and in an acceptable form and manner while suggesting — if not misleading defendants — that it had identified responsive documents is sanctionable.

Branhaven, at *13-14.

Things continued to be problematic for the Plaintiffs, who claimed ESI from laptops would be produced in what the Court described as “blithely” assertions that discovery would be produced “at a mutually convenient time.” In reality, the subject laptops had not been sent to the client (presumedly to for review, raising the issue why hadn’t the hard drives been imaged), until a new associate attorney found them. Branhaven, at *14. Their conduct ultimately resulted in sanctions in the form of fees and costs.

…and then Came the PDFs and Whether the ESI Should Have Been Produced as TIFFs with Bates Numbers to be in a Reasonably Useable Form

BatesNumberingThe Plaintiffs produced their ESI as PDF’s. The Defendants challenged the production, because the production was untimely and not in TIFF format with Bates Numbers on every page. Branhaven, at *14-15.

The nightmare of a TIFF over a PDF production with Bates Stamps included the Plaintiffs arguing that the discovery request did not request Bates Stamps; nor is it an express requirement in the Federal Rules of Civil Procedure, case law or the local discovery guidelines. Branhaven, at *16.

Moreover, the Protocol for Discovery of Electronically Stored Information (Local Rules of District of Maryland) which states that TIFF is the preferred format is only advisory. The Court called this a “weak defense.” Id.

The Court stated the following on the production:

Moreover, as defendants point out, Fed. R. Civ. P. 34(b)(2)(E)(ii) provides two options regarding the form in which a party may produce documents and plaintiff did not satisfy either. The July 20 production was not in a form “in which it is ordinarily maintained” or in “a reasonably usable form” — as Mr. McNeil showed (especially considering the lateness of the production with depositions looming in a few days). The Advisory Committee Notes to Rule 34 warn that: “[a] party that responds to a discovery request by simply producing electronically stored information in a form of its choice, without identifying that form in advance of the production in the response required by Rule 34(b) runs the risk that the requesting party can show that the produced form is not reasonably usable . . .” (emphasis added). That is precisely what happened here. Branhaven did not advise of the intended form of its production in its March response. Defendant was blindsided by the volume of the documents (since the prior productions consisted of 388 pages). Moreover, defendants had every reason to think that the documents would be completely Bates-stamped, as prior productions were and further defendants had no reason to think that this production would be so incredibly voluminous, as to require special arrangements and explicit agreement.

Branhaven, at *16-17.

The crux of production issue was whether or not the PDF’s were in a reasonably useable form. The Court held they were not, because of the lack of Bates Numbers and the fact they were not in TIFF format. Branhaven, at *17. Additionally, because of the production, the Court awarded the Defendants “the reasonable litigation support costs involved in receiving and processing” the document production. Branhaven, at *19.

Bow Tie Thoughts

Why is this a case a nightmare for me? Because it applies a paper model of discovery to electronically stored information, requiring a conversion of ESI into a TIFF with Bates Stamps (a conversion which can triple processing costs with some service providers). What is even stranger about it is the form of production battle centered on PDFs vs TIFF, both of which are static images. One difference is a PDF can be either non-searchable (thus like a TIFF) or searchable (thus more like a native file).

Demanding electronically stored information be converted to a static image with Bates Numbers is right up there with demanding MP3s be reversed burned to 8 Track. A party should have a good reason to take a native file, that is fully searchable and strip its searchable features. This truly makes it like a piece of paper, rendering the review tools that can do everything from sorting data in chronological order to technology assisted review be useless. It is like trying to fuel a hybrid car with coal.

Removing ESI’s searchable features also violate the Federal Rules of Civil Procedure and a substantial body of case law.

Moreover, claiming there is a functional difference between PDF vs TIFF as static images is like fighting over VHS vs Beta. The problem with such fights is we are in the 21st Century and not the 1970s. It is almost like arguing Beta is better than Video on Demand, because the issue is not the form, but whether you can analyze the content.

What drives these all too frequent fights? It is attorneys who want pieces of paper to have Bates Stamps. This worked up until the 1990s, but we now live in a world where the content on a smartphone can fill the first floor of a library. Data needs to be reviewed as data for there to be any chance to meaningfully understand its content. Moreover, as to the Bates Numbering to organize the ESI issue, native files can have a “control number” that is the functional equivalent of a Bates Number for management in a review platform. If there is still a concern about whether a file has been changed, parties can use MD5 hash values instead, to ensure the ESI has not been modified.

Finally, I believe forward thinking local rules are extremely helpful for litigants. However, as technology changes, these rules need to be updated to incorporate how computer-assisted review can cut costs, advances in processing or even the cost-effectiveness of remote depositions. What was forward thinking in 2006 can be outdated in 2013.

In the end, converting standard ESI like email to TIFFs to brand Bates Numbers should give lawyers nightmares of high processing costs, slow manual review and unhappy clients. It should only be done when the native file itself is not in a reasonably useable form, thus the static image is the only reasonably useable form.

All I Want For Christmas Are Taxable eDiscovery Costs

Nothing says Merry Christmas like winning eDiscovery costs. One party was able to get over half the gifts on their Christmas List from the Court as taxable costs.

C

The Defendants submitted eDiscovery costs over $40,000, which was nearly two-thirds of the Defendant’s bill of costs. A service provider made up over half of the eDiscovery costs with a bill of $22,706.90. The rest of the bill was from internal eDiscovery costs. Moore v. Weinstein Co. Llc, 2012 U.S. Dist. LEXIS 178738, 9-10 (M.D. Tenn. Dec. 18, 2012).

Like any Christmas List, the Court found some items to be unreasonable. However, the Court found the service provider’s costs of $22,706.90 to be “reasonable and necessary.” Moore, at *8.

The Case Management Order required production as single-page TIFF’s with Summation DII and LFP load files. Id. The Court stated that the CMO required the processing costs to be incurred by each party. Id. The Court also found that “processing…document[s] for production by, for example, searching for specific custodians, is also a necessary cost of this litigation.” Id.

The Court found that the in-house charges at $150 an hour were “unreasonable.” The Court noted that the service provider hourly rate was $175, “which would presumably be significantly higher than the rates billed” to the Defendant. Moore, at *8-9.

Broken Ornament

The Court found the following:

The Magistrate Judge believes that a rate comparable to an experienced paralegal would be more appropriate. The technology services technologists have specialized expertise and training similar to a paralegal. Therefore, the Magistrate Judge will set a more reasonable billing rate of $100/hour for Technology Services billing.

Moore, at *9.

The Court found several time entries unnecessary, including:

         Work on discovery budget;

         Preparation of deposition transcripts for review;

         Preparation of documents for hearing; and

         Prepare for and attend telephonic deposition of IT vendor

The Court found that the above totaled 134.9 billable hours at the Court-reduced rate hourly rate of $100 for a total of $13,490.00. Moore, at *9.

Based on the reduction of $13,490.00, the new total taxable costs for eDiscovery were $36,196.90. Moore, at *9-10.

Bow Tie Thoughts

No child ever gets EVERYTHING they want for Christmas. However, the Defendant in this case got a lot in their taxable costs, even if it was at a reduced rate.

In determining eDiscovery costs, it is important to understand what work is actually being done when a Court discusses “processing.” Processing is defined by the Sedona Conference as follows:

Processing Data: An automated computer workflow where native data is ingested by any number of software programs designed to extract text and selected metadata and then normalize the data for packaging into a format for the eventual loading into a review platform.

May also entail identification of duplicates/deduplication and rendering of data into delimited format.

The Sedona Conference Glossary, September 2010

eDiscovery specialists who perform advanced searches, processing, data reduction, recommend technology to use on a case are truly well-educated professionals. It was very good to see a Court recognize their abilities in awarding costs.

Production Requirements Under Federal Rule of Civil Procedure Rule 34 (Video)

Form of Production in eDiscovery

A discussion of the form of production under Federal Rule of Civil Procedure Rule 34, plus one recent case.

Rationally Organized Productions pursuant to Federal Rule of Civil Procedure Rule 34(b)(2)(E)

Production requirements for documents and electronically stored information under Federal Rule of Civil Procedure Rule 34(b)(2)(E) and a short summary of City of Colton v. Am. Promotional Events, Inc., 2011 U.S. Dist. LEXIS 126848, 47-48 (C.D. Cal. Oct. 13, 2011).