As we have said before, predictive coding (also known as Technology Assisted Review or TAR) is taking the globe by storm. First the United States, then Ireland and England, and now Australia. Ediscovery practitioners take heed: significant predictive coding developments are afoot in Australia.
(Special Note: If you are looking to stay informed on ediscovery around the world, don’t miss this whitepaper, “A Practical Guide to Cross-Border Ediscovery.”)
Predictive Coding: From New York City to the Australian Outback
Late last year, Australia joined the list of countries tackling predictive coding issues when Justice Vickery from the Supreme Court of the State of Victoria issued a key opinion in McConnell Dowell Constructors v. Santam.
In this case, the parties faced massive costs to review 1,400,000 documents, and they could not agree on a review method. Justice Vickery appointed a Special Referee to deliver a report to the court addressing the appropriate management of discovery in the proceeding. Relying on previous TAR decisions from the U.S. and Europe, as well as the Special Referee’s recommendation to use TAR, the court approved predictive coding as an effective method of document review when “the cost of traditional discovery processes in a case such as this dictates that [such processes] are not appropriate.”
Notably, the McConnell opinion made it clear that the courts, not the parties, would have the final determination in whether predictive coding will be employed in civil proceedings in Victoria state court. Specifically, Justice Vickery held that “the Court may order discovery by technology assisted review, whether or not it is consented to by the parties” in cases where the volume of ESI is substantial and “the costs of research may not be reasonable and proportionate.”
However, McConnell was not Victorian litigators’ first exposure to TAR in the courtroom. Three months before the McConnell decision, the Supreme Court of Victoria released a Standard Operating Procedure (TEC SOP 5 [TAR]) to provide litigants with interim measures for using TAR in construction and engineering cases. On January 30, 2017, the court replaced TEC SOP 5 with Technology in Civil Litigation Practice Note SC Gen 5, opening up TAR for general use in Victoria’s commercial courts.
Consent or No Consent: That is the Predictive Coding Question
While predictive coding is gaining traction as an effective tool to tackle massive document sets, there is no bright line on whether a party can be required to use TAR. Contrary to the holding in McConnell, U.S. courts have not compelled parties to leverage TAR. In 2016, two key opinions, Hyles v. New York City, 2016 U.S. Dist. LEXIS 100390 (S.D.N.Y. Aug. 1, 2016), and In re Viagra (Sildenafil Citrate) Prods. Liab. Litig., 2016 BL 347130 (N.D. Cal. Oct. 14, 2016), acknowledged the efficiencies associated with predictive coding, but refused to force a party to leverage the cutting-edge technology. That being said, U.S. attorneys need to be prepared that the days of insisting on manual review may one day soon be bygone. As noted by Judge Peck in Hyles, “[t]here may come a time when . . . it might be unreasonable for a party to refuse to use TAR . . . [but][w]e are not there yet.”
What’s Next for the Land Down Under?
Victoria is not the only state in Australia getting in on the ediscovery action. Courts in New South Wales abide by their state Supreme Court’s 2008 Practice Note No. SC Gen & for Use of Technology encouraging parties to consider technology to discover and inspect documents. While this practice note and other similar guidance in the Australian federal court system do not specifically reference TAR, savvy Australian practitioners know that this will likely change in the near future.
Looking to stay up to speed on global ediscovery practices? Don’t miss this whitepaper, “A Practical Guide to Cross-Border Ediscovery.”
Today marks the last day of #LTNY17! Congrats to everyone on another successful Legaltech New York. For those of you that did not get a chance to attend, here’s a recap of two key developments from our industry’s busiest conference.
Legaltech 2017, Now Known as Legalweek (the Experience)
Building on the popularity of its annual Legaltech New York conference, this year, ALM launched a new event, “Legalweek, The Experience,” in an effort to broaden its reach past the technology sector. Legalweek was designed to focus on seven key areas of legal business: Legaltech, LegalExecutive, LegalCIO, LegalPros, LegalMarketing, LegalSmallFirm and LegalWomensForum.
Habitual LTNY attendees were happy to report that the stalwart event remained largely unchanged as part of the greater Legalweek experience, with many attendees appreciating the additional keynotes occurring throughout the week. The LegalWomensForum and LegalCIO breakouts seemed to gain the most traction in Legalweek’s inaugural year, with plenty of room to grow the experience in years to come.
Two Great Companies, One New Name: KrolLDiscovery
Legaltech was not the only entity to reveal a new name this week. In December 2016, Kroll Ontrack was acquired by LDiscovery, and LTNY17 was the perfect opportunity to unveil the combined companies’ new name brand. Now, two renowned ediscovery companies are coming together to form one global leader: KrolLDiscovery.
KrolLDiscovery will use the combined resources of both companies to provide our clients with the best ediscovery services on the market with the same reliability they have come to expect. Having served clients for over 30 years, the combined organization will have offices in 19 countries with approximately 1,300 employees worldwide.
Legaltech was a buzz over the new KrolLDiscovery brand and, not surprisingly, many Legaltech attendees turned to social media to express their excitement. If you are looking to stay up to speed on all things KrolLDiscovery, make sure you follow us on our new LinkedIn page.
For those of us in the legal technology realm, next week is the most anticipated week of the year: Legaltech New York (LTNY). While it has a new name, “Legal Week, the Experience,” it will likely be the same, familiar LTNY with its informative sessions, reunion-like networking and enjoyable celebrations.
Just as in past years, Kroll Ontrack (an LDiscovery company) will be at LTNY en masse. We are excited to once again send a contingent of people to brush up on their CLEs and RCEs (Relativity Continuing Education credits), pass out trinkets at our popular booth and conduct enlightening sessions. As you are building your itinerary for the show, make sure to include the three sessions in Kroll Ontrack’s “Ediscovery Everywhere” educational track.
- Cathleen Peterson will be presenting the session 3 Situations, 2 Lawyers, 1 Corporation: Using Relativity in a Data Breach, an Investigation and Litigation. Brian Hengesbaugh from Baker Mackenzie will join Cathleen in presenting this session. Learn how Relativity works in a real world situation and how a fictitious corporation uses new document review work streams to assist with three different types of hypothetical legal matters—a data breach response, an investigation and litigation.
- Jason Bergerson will be moderating the session Mobile Device Investigations: From Android to iPhone and Back. Check out this session to learn from a mobile forensics expert, a law firm attorney and in-house legal teams about how mobile data might be helpful during litigation and how it differs from other ESI. Joining Jason on this panel will be: Rich Robinson, Ediscovery & Information Manager at JCPenney, Michael J. Burg, Corporate Counsel at DISH Network, and Clifford E. Nichols, Senior Counsel at Day Pitney.
- Tom Barce will be moderating the session Information Governance – Hindsight is 20/20: A Moderated Debate. Attend this panel featuring speakers Patrick J. Burke, Seyfarth Shaw, Ben Hubble, Wendy’s, and Jessica Escalera, Barclays, to watch the information governance showdown as the panelists debate the merits of taking a reactive approach versus applying a proactive model in a global ediscovery matter.
Learn more about everything LDiscovery and Kroll Ontrack have planned for the show by visiting our Legaltech events page. Also, before you head out next week, make sure you stay connected with your mobile device: Search for “Legaltech” in your app-store and download the free app!
Failure to Preserve Interactive Website Data Held Insufficient to Impose Sanctions Under Rule 37(e)
FTC v. Directv, Inc., 2016 U.S. Dist. LEXIS 176873 (N.D. Cal. Dec. 21, 2016)
Jury to Decide Issue of Intent for Spoliation
Cahill v. Dart, 2016 U.S. Dist. Lexis 166831 (N.D. Ill. Dec. 2, 2016)
Australian Court Takes Predictive Coding Down Under
McConnell Dowell Constructors (Aust) Pty Ltd v. Santam Ltd & Ors (No 1),
 VSC 734 (Dec. 2, 2016)
Illinois State Court Leverages Proportionality Standards in FRCP 26(b)(1) to Determine if Forensic Imaging is too Intrusive
Carlson v. Jerousek, 2016 IL App (2d) 151248 (Ill. App. Ct. 2d Dist. 2016)
Kansas Court Rejects Proportionality Arguments and Boilerplate Objections
Duffy v. Lawrence Mem. Hosp., 2016 U.S. Dist. LEXIS 176848 (D. Kan. Dec. 21, 2016)
The 2015 FRCP amendments are now one year old and there are a full twelve months of case law to guide practitioners through the contours of the new rules. The last year in case law has seen stark developments on how courts interpret the proportionality, levy sanctions, utilize new technologies and reconsider costs to make ediscovery “just, speedy and inexpensive.”
Our webinar, The Top Ediscovery Cases of 2016, updates practitioners on the ediscovery highlights of the past year and features three ediscovery experts, offering the perspective of both counsel and judges:
- Patrick Oot, Shook, Hardy & Bacon
- Magistrate Judge Hildy Bowbeer, District of Minnesota
- Magistrate Judge David J. Waxse, District of Kansas
Rule 26(b)(1): Proportionality Today
The webinar first discusses that the most drastic change of Rule 26(b)(1) is the essential change of mindset. The case Gilead Scis. v. Merck is used as an example to illustrate the place of proportionality in ediscovery. Gilead reveals the required sound reasoning both a party requesting discovery and a party objecting to discovery need to employ. In other words, “now the scope of discovery is neither broad nor liberal…it is proportional.” Attorneys that ignore proportionality do so at their own risk: the case Fulton v. Livingston Fin. is also used to show how the court imposed sanctions on a litigant who made arguments based on the old rule.
Rule 37(e): Sanctions Illustrated
The webinar then discusses the scope of Rule 37(e) and addresses the need to utilize “reasonable steps” to prevent sanctions, as this rule was formed with the intent of curtailing excessive ESI storage. The webinar uses the case Marten Transp. v. Plattform Adver. to show that the scope of a preservation duty is focused: courts expect “reasonable steps,” not perfection. The case Living Color is also used to highlight the fact that parties cannot simply make conclusory statements about prejudice resulting from ESI spoliation without any evidence and expect the court to levy sanctions.
One reason for excessive ediscovery costs is a cultural one and the webinar highlights that Rule 37(e) fits with Rule 1, which was amended for this reason. Cooperation between litigants is a key component of successful preservation, and a panelist observed, “Lawyers too often ignore their obligation to cooperate.”
Predictive Coding: New Frontiers
There are two myths underlying document review discussed in the webinar. The first is the myth that a response to discovery needs to be perfect when in fact the rules call only for “reasonable inquiry.” The second myth is that human review is the best way to ensure responsive documents are not missed when manual review has been shown to be imperfect. In this webinar, the discussion of these two myths sets the stage for asserting that predictive coding technology can be utilized to make ediscovery a more efficient practice.
2017: The Year of Ediscovery
In 2017, one common wish is that attorneys become better educated in ediscovery and the new technologies available. Courts will continue to dissect what constitutes reasonable steps for ESI preservation and also provide additional guidance for when discovery is proportional. Even though counsel may not be proficient in proportionality, the webinar concludes by stating that judges “recognize proportionality when they see it.”
With new opinions continuing to emerge, we expect the ediscovery landscape in 2017 to continue to evolve. Watch this webinar, The Top Ediscovery Cases of 2016, to learn more about the impact of the 2015 FRCP amendments and predictions for the upcoming year.
Editor’s note: this article originally appeared in Legaltech News.
Of the many changes that emerged from the 2015 FRCP amendments, none has spurred uncertainty within the legal community as much as Rule 26(b)(1) and its emphasis on proportionality. Judges and counsel alike have wrestled to apply the new rule, leaving 2016 case law rife with complex, fact-based interpretations. Even the Sedona Conference issued a publication addressing this issue in their recent publication, Commentary on Proportionality in Electronic Discovery (with public comments due Jan. 31, 2017). As we head into 2017, one conclusion is certain: Proportionality is here to stay.
What Is Proportionality?
Rule 26(b)(1) provides a list of factors, requiring parties to take into account “the amount in controversy,” “the parties’ resources” and “the importance of the issues at stake in the action,” among other factors. At its core, proportionality is about balance, ensuring that parties receive the information they need to plead their claims and argue their defenses, while curtailing expensive and time-consuming waste. While the concept of proportionality seems simple enough, applying it can be difficult for parties.
One mistake counsel make is to look at the factors involving monetary expenditures and stop their analysis there. However, as the Sedona Conference Publication indicates, this is just the beginning of the analysis. Courts care about the claims at issue, and they still have the same commitment to ensuring that parties will have the relevant information that they need. Relevance still matters, but it no longer stands alone. Courts are now more likely to say “no” to requests that are designed to burden parties and have relatively little value.
Another mistake that counsel make is to tell a judge that a discovery request is not proportional but then offer no suggestion as to how a request can be altered to make it so. If a discovery request is too broad, offer a suggestion as to how it can be narrowed, and be prepared to show the court documentation for costs involved. Where scope of discovery is in dispute, show the court a willingness to cooperate and be in contact with the opposing party when issues arise, rather than filing a motion to compel at the first sign of conflict. In 2017, more Rule 26(b)(1) opinions will have judges admonishing parties for failing to attempt to cooperate with each other. In fact, in the latter part of 2016, judges were increasingly reminding parties that the court is a last resort—not the first—when it comes to managing scope of discovery.
What We Have Learned in 2016
A blanket rule cannot be crafted to determine whether a request is proportional. In many of the Rule 26(b)(1) opinions in 2016, the courts took each specific discovery request and applied proportionality to the facts at hand. While judges might not be able to define proportionality, they recognize it when it is presented to them. When the proportionality analysis is so fact-specific, the job of counsel is to demonstrate to a judge how proportionality can work in the case. In a world buried in data, to be successful in gaining access to the most critical information, counsel must see proportionality as a tool and not a constraint.
In 2017, the expectation will be even higher for counsel to have adopted and be proficient with the new rules. Judges will have less and less patience for those who still apply the old “reasonably-calculated” language of Rule 26(b)(1). While in 2016, some courts themselves were still applying the old standard, in 2017, courts will expect parties to have fully acclimated themselves to the new rule. Courts are getting tired of paring down broad discovery requests and instead are sending the dispute back to the parties with orders to attempt to resolve the issue themselves.
Before the 2015 amendments took effect, the legal community was unsure whether the new emphasis on proportionality meant a material change in ediscovery. The opinions of 2016 have shown that judges have more than wrestled with proportionality; they have embraced it. Gone are the days in which parties can ask for everything and, frankly, strategic litigators know they do not want to be overwhelmed with all that useless data. 2017 will be the year of proportionality, and it is up to counsel to keep pace.
A smartphone from a key employee lands on your desk, what next? From employment matters and IP theft cases to Foreign Corrupt Practices Act violations and corporate fraud, mobile devices are the modern reservoir for key data in litigation and investigations. However, this new data source is still uncharted territory for many legal and technology professionals working in law departments and law firms.
Last month, Kroll Ontrack’s own Jason Bergerson presented a useful webinar, Mobile Device Investigations: From Android to iPhone and Back, that provided an introduction to the world of mobile device investigations.
The Complex World of Mobile Data
The webinar began with an introduction to the world of mobile data and it was highlighted that there are many different types of data on mobile phones, each one needing a certain process to identify and extract data properly. While smart phones have been equated to computers, it is important to remember that they are not computers and to treat them the same can be a sanctions-worthy mistake.
The webinar walked through the computer forensic investigative process and provided helpful tips to keep in mind regarding the content in various apps and which data might be the most useful in litigation. The webinar highlighted the complexity of the varieties of data and things to consider when pursuing a forensics investigation.
Not All Phones Are the Same
This webinar also discussed at length the fact that cell phones themselves are a diverse category. Modern smart phones, burner phones, older flip phones and international models each have their own systems and methods of storing data. Furthermore, it needs to be considered where the data is physically located. Is it in the cloud? Or in the device in-hand? Each of these impacts the forensic method and the likelihood of success. The webinar provided various considerations for practitioners, depending on the sort of device at issue in their case.
It Was Deleted; Is It Gone?
In this webinar, various scenarios were explained in which mobile device data might be seemingly lost, but could still be recovered. Also, it was shown how some deleted data can be recovered, but there is a very short time frame in which to do so. The webinar provided guidance for practitioners on how to proceed, so that investigative team can have the best odds of successfully obtaining the needed data.
We at Kroll Ontrack know that time demands and schedules make it difficult to attend webinars. Therefore, we have all our webinars online to view on demand, so that you won’t miss out on information that matters.
All good things must come to an end; even a great year in ediscovery.
As another year wraps up, we look back at a year that brought great changes to ediscovery. There is no better time than now to remember the highlights of ediscovery case law in 2016. The arrival of the FRCP amendments in December 2015 altered ediscovery practice and set new precedents. The duty to preserve, a new emphasis on proportionality and the intent to deprive dominated ediscovery judicial opinions as courts applied the new FRCP amendments.
Beyond the domination of preservation, proportionality and production, Kroll Ontrack’s analysis of 57 significant state and federal ediscovery opinions led to the classification of 4 major categories that arose most commonly in 2016 ediscovery case law. The most important of these cases are summarized in Kroll Ontrack’s guide, Top Ediscovery Cases of 2016. This guide includes the following topics and cases:
56 percent of opinions dealt with disputes involving production and the methods used, and arguments about proportionality and the scope of discovery.
- Fulton v. Livingston Fin., 2016 U.S. Dist. LEXIS 96825 (W.D. Wash. July 25, 2016)
- Carr v. State Farm Mut. Auto. Ins., 312 F.R.D. 459 (N.D. Tex. 2015)
- Jackson v. E-Z-Go. Div. of Textron, 2016 U.S. Dist. LEXIS 146951 (W.D. Ky. Oct. 24, 2016)
- Gilead Scis. v. Merck, 2016 U.S. Dist. LEXIS 5616 (N.D. Cal. Jan. 13, 2016)
32 percent of opinions dealt with disputes involving preservation, spoliation and motions for sanctions.
- Orchestratehr v. Trombetta, 2016 U.S. Dist. LEXIS 51405 (N.D. Tex. Apr. 18, 2016)
- Living Color Enters. v. New Era Aquaculture, 2016 U.S. Dist. LEXIS 39113 (S.D. Fla. Mar. 22, 2016)
- Marten Transp. v. Plattform Adver., 2016 U.S. Dist. LEXIS 15098 (D. Kan. Feb. 8, 2016)
- GN Netcom v. Plantronics, 2016 U.S. Dist. LEXIS 93299 (D. Del. July 12, 2016)
- Cat3 v. Black Lineage, 2016 U.S. Dist. LEXIS 3618 (S.D.N.Y. Jan. 12, 2016)
4 percent of opinions addressed cost considerations, such as cost shifting and taxation of costs.
- R. Med. Emergency Grp. v. Iglesia Episcopal Puertorriqueña, 2016 U.S. Dist. LEXIS 99391 (D.P.R. July 26, 2016)
- Elkharwily v. Franciscan Health Sys. 2016 U.S. Dist. LEXIS 99795 (W.D. Wash. July 29, 2016)
9 percent of opinions discussed procedural issues, such as search and predictive coding protocols.
- Dynamo Holdings v. Comm’r of Internal Revenue, 2016 WL 4204067 (T.C. July 13, 2016)
- Hyles v. New York City, 2016 U.S. Dist. LEXIS 100390 (S.D.N.Y. Aug. 1, 2016)
- Pyle v. Selective Ins. Co. of Am., 2016 U.S. Dist. LEXIS 140789 (W.D. Pa. Sept. 30, 2016)
- In re Viagra (Sildenafil Citrate) Prods. Liab. Litig., 2016 U.S. Dist. LEXIS 144925 (N.D. Cal. Oct. 14, 2016)
The guide also includes a special section on International Predictive Coding, discussing the major opinions to emerge from overseas.
- Pyrrho Investments Ltd. v. MWB property Ltd.,  EWHC 256 (Ch)
Looking for more? Check out our Top Ediscovery Cases of 2016 guide to review these significant ediscovery cases.
Snow flakes, steaming drinks and friendly gatherings are some of the best parts of December – and no classic winter gathering is complete without a roaring fire. But practitioners know not all fires bring great memories: legal hold wildfires and resulting sanctions can dampen winter joy. Fortunately, Kroll Ontrack has just released a newly updated guide, Preventing a Legal Hold Wildfire, so that nothing ruins your winter delights.
The Sanctions Outside are Frightful
The December 1, 2015 FRCP amendments and this year’s court decisions, such as GN Netcom v. Plantronics, 2016 U.S. Dist. LEXIS 93299 (D. Del. July 12, 2016), reiterate the importance of the duty to preserve electronically stored information (ESI). Recognizing your company’s or client’s duty to preserve, when it begins, what it entails and when it ends are key strategies that can save your organization time, money and stress.
But Proper Preservation is so Delightful
The newly updated guide from Kroll Ontrack, Preventing a Legal Hold Wildfire, has tips and tricks so that you do not get caught in the flames. This compact guide features 2016 case law and gives practitioners the starting points that they need to make their own strategies for navigating legal holds.
Since We Know Just Where to Go
Knowing what your organization needs to do and how to do it are two very different tasks; parties need to have their legal hold processes and systems in check. Kroll Ontrack has professional consultants for every aspect of the ediscovery process. And, when it comes to legal holds and how to implement them, Jackie Warner, one of our legal hold consultants, is a pro. Contact Jackie today for an initial legal hold consultation.