A lawyer and veteran legal journalist, Bob advises Catalyst on strategic communications and marketing matters. He is also a practicing lawyer in Massachusetts and is the former editor-in-chief of The National Law Journal, Lawyers USA and Massachusetts Lawyers Weekly. A fellow of the College of Law Practice Management, he also writes the blog LawSites.
As big data makes it more complicated for enterprises to respond to discovery and regulatory requests in U.S. legal matters, many are finding that there are multiple advantages in moving their e-discovery efforts to the cloud. Recently, based on its interview with Catalyst founder and CEO John Tredennick, the digital magazine eWeek published a slideshow, E-Discovery Management More Effective in the Cloud: 10 Reasons Why. Click the image below to go to the full slideshow.
[The following is a guest post written by William "Bill" Hamilton, partner at Quarles & Brady and executive director of the UF Law E-Discovery Project. He was the principal instructor for the course he describes.]
This spring, the University of Florida Levin College of Law and Catalyst teamed up to break new law school ground by offering an ambitious, experimental e-discovery course, “Electronic Discovery Data Analysis and Review.” The course followed the “basic” e-discovery course that the University of Florida law school has offered since 2007, and which uses Catalyst’s products for demonstration purposes. This time, however, the students would get their hands on the data.
Bill Hamilton
The course quickly attracted more than 30 UF law students. The course also caught the attention of the University of Florida Department of Computer & Information Science and Engineering. Two of its students audited the course. (The department has collaborated with UF Law to build a random sampling tool that will shortly be available for a fee download.)
To power the course, Catalyst built and provided the students with an e-discovery “sandbox” consisting of over 800,000 Enron documents where students were able to perform class assignments and experiment with the cloud-based search technology of Catalyst Insight. It is truly impressive to be able to search hundreds of thousands of documents in less than a second. For the students, huge data volume suddenly became a real problem and a real opportunity.
The course featured virtual presentations by Jim Edelman, senior search and analytics consultant at Catalyst, on keyword search problems that featured “war stories” and lessons learned; training on Catalyst Insight by the Catalyst training team; in-class presentations by Catalyst search consultant Ron Tienzo on predictive coding and review design; and a dynamic presentation by Catalyst’s CEO John Tredennick on predictive coding processes given at the recent UF/EDRM conference on electronic discovery for the small and medium case.
Practical Learning for Law Students
The Data Analysis and Review course progressed by tracking Catalyst’s product development trajectory. Simple free-form search exercises soon became enhanced with faceted searches that then became Catalyst defensible tracked searches and that were ultimately complemented with machine learning processes. At each step in Catalyst’s evolution, the class tracked the case law and articles that have pushed forward the search revolution of the past two years.
We even broke up into teams and tested ourselves in mock Rule 26(f) conferences based on real search problems. We also discussed the trials and tribulations of designing a review (passes, quality control, reviewers, batching, coding, privilege, etc.) and then had to design a review using Catalyst’s graphic tool. Doing it yourself requires thought, perseverance, imagination and a certain mental toughness. Application is the real learning moment.
This UF Law course featured a unique combination of participation by Catalyst professionals who dedicated their time and energy and a non-traditional practical problem-focused law school course designed to prepare students for real-world experiences. We read case law but also watched a UF Law Information Services team break down a PC and explain data storage, memory, and processing. We studied case law and secondary sources, but we also learned that developing actual search queries in a real-time environment is not easy. It takes practice, practice and practice. We studied the Catalyst user manual, but learned that even a program with an intuitively designed user interface has power features that are manageable only with experience.
E-discovery education can only meet its challenge when legal service providers offer hands-on data analysis and management experience. E-discovery education must not only talk the talk, but, as Craig Ball has emphasized for years, must walk the data walk if it is to produce competent e-discovery professionals. Hats off to Catalyst for helping to make this happen.
Predictive coding purists might argue that the process is tainted if it is preceded by the use of keyword searching to reduce the document set. As a matter of fact, that was exactly what the plaintiffs argued in the multi-district litigation against Biomet over its M2a Magnum hip implant. But in a ruling last week, U.S. District Judge Robert L. Miller Jr. said that proportionality trumped purity, and that even if predictive coding might unearth additional relevant documents, the cost would far outweigh the likely benefits.
The ruling came in a highly contentious matter in which Biomet has already produced 2.5 million documents out of a universe of 19.5 million. The plaintiffs say Biomet has not produced enough and that the production should total closer to 10 million documents.
Biomet began the process of producing documents in the summer of 2012, before the multiple lawsuits over its hip implant were centralized under the Judicial Panel on Multidistrict Litigation. It started by using keyword culling, reducing the number of documents from 19.5 million to 3.9 million, or 1.5 terabytes of data. Deduplication further reduced the number of documents to 2.5 million.
Biomet then employed predictive coding to identity relevant and privileged documents from among the 2.5 million that remained after keyword searching and deduplication. It also invited the plaintiffs to suggest additional search terms and offered to produce the rest of the non-privileged documents so that plaintiffs could verify that it was producing the relevant documents.
This process has cost Biomet $1.07 million so far and will end up costing between $2 million and $3.25 million, according to Judge Miller’s ruling.
The plaintiffs objected that Biomet’s initial use of keyword searching tainted the predictive coding process. They argued that keyword searching is less accurate than predictive coding, citing a recent article that said that keyword searches generate only a 20 percent responsive rate, compared to at least a 75 percent responsive rate for predictive coding. Because Biomet started with the less-accurate keyword searches, the entire process is flawed. The only remedy, they asserted, is for Biomet to go back to where it started and employ predictive coding against the original set of 19.5 million documents, with plaintiffs and defendants sitting together and jointly going through the process.
Balancing Cost against Benefits
Against this backdrop, Judge Miller framed the issue this way:
The issue before me today isn’t whether predictive coding is a better way of doing things than keyword searching prior to predictive coding. I must decide whether Biomet’s procedure satisfies its discovery obligations and, if so, whether it must also do what the Steering Committee seeks.
Judge Miller easily decides that Biomet’s process complied with the Federal Rules of Civil Procedure and with the Seventh Circuit Principles Relating to the Discovery of Electronically Stored Information, as well as with principles set forth by The Sedona Conference.
By contrast, he says that plaintiffs’ request that Biomet go back to Square One “sits uneasily with the proportionality standard in Rule 26(b)(2)(C).” The cost of this, he notes, would run in the “low seven figures,” but Biomet’s testing suggests it would find only a “comparatively modest number of documents.”
It might well be that predictive coding, instead of a keyword search, at Stage Two of the process would unearth additional relevant documents. But it would cost Biomet a million, or millions, of dollars to test the Steering Committee’s theory that predictive coding would produce a significantly greater number of relevant documents. Even in light of the needs of the hundreds of plaintiffs in this case, the very large amount in controversy, the parties’ resources, the importance of the issues at stake, and the importance of this discovery in resolving the issues,I can’t find that the likely benefits of the discovery proposed by the Steering Committee equals or outweighs its additional burden on, and additional expense to, Biomet.
Judge Miller concludes by stating that he assumes Biomet will remain open to meeting and conferring on additional, reasonable search terms and to producing the non-privileged documents included in the statistical sample. “Beyond that,” he writes, “if the Steering Committee wishes production of documents that can be identified only through re-commenced processing, predictive coding, review, and production, the Steering Committee will have to bear the expense.”
The full text of Judge Miller’s order is below. (If you are not able to see the embedded document below, click here to see it.)
In San Francisco next week, Catalyst is hosting a unique lunch and learn opportunity—a special presentation on the use of Catalyst’s Predictive Ranking technology to cut the cost and time of e-discovery review.
Using intelligent algorithms, Predictive Ranking can help significantly reduce the volume of data in a matter, saving review time and cost. Predictive Ranking offers the ability to prioritize the documents most responsive to a matter, so your review team gets to them earlier and can quickly make key decisions about the case.
Catalyst’s Predictive Ranking is unique among systems for technology-assisted review in its ability to respond to the dynamics of real-world litigation, including rolling collections. This seminar will start with an overview of Predictive Ranking and other forms of TAR and then demonstrate how Catalyst’s system differs.
The speakers at the seminar will be:
This free seminar will be held Thursday, May 2, noon to 1 p.m., at the offices of Kirkland & Ellis LLP in downtown San Francisco. To register and for more information, view the event page.
Changes to the Federal Rules of Civil Procedure designed to enhance cooperation and proportionality in discovery and to standardize sanctions rules came a step closer to fruition last week, as the Advisory Committee on Civil Rules, meeting in Norman, Okla., April 11 and 12, voted to send
the proposed changes to the Standing Committee on Rules of Practice and Procedure for consideration at its meeting June 3 and 4 in Washington, D.C.
The package of proposed rules evolved out of the 2010 Duke Civil Litigation Conference, a major two-day conference sponsored by the Advisory Committee that brought together judges, lawyers and academics to explore possible solutions to the rising cost of civil litigation and discovery.
The proposals approved last week are designed to reduce cost and delay in litigation by encouraging cooperation, proportionality and early hands-on case management. They also attempt to define a uniform set of rules for judges to follow in considering sanctions for failures to preserve.
Milberg lawyer Henry Kelston published an insightful overview of the proposed changes in Law Technology News earlier this week. What follows is our breakdown of the proposals.
With regard to proportionality, the most significant change would be to Rule 26(b)(1), governing the scope of discovery. The proposal would amend this section to read (text in italics is new):
Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case considering the amount in controversy, the importance of the issues at stake in the action, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.
A corresponding change would be made to Rule 26(b)(2)(C)(iii) to cross-refer to (b)(1) and to make clear that the court can and should act on its own, even without a motion, to limit the frequency or extent of discovery that exceeds these limits.
Proportionality would also be addressed by amending the presumptive numerical limits in Rules 30, 31, 33 and 36.
Three further changes proposed to address proportionality would be to Rule 34, governing objections and responses to discovery requests. First, Rule 34(b)(2)(B) would be amended to require that the grounds for objecting to a request be stated with specificity. Second, Rule 34(b)(2)(C) would require that an objection “state whether any responsive materials are being withheld on the basis of that objection.” This is to address situations where a response provides a laundry list of objections, but then produces documents, leaving the recipient unsure whether anything has been withheld.
Third, Rule 34(b)(2)(B) would be amended so that, when a party opts to produce copies of documents or ESI rather than permit inspection, it must make that production within the time for inspection stated in the discovery request or a later reasonable time specified in the response. A corresponding change to Rule 37 would permit a motion to compel when a party fails to produce documents in accordance with this provision.
Encouraging greater cooperation among litigants is also a goal of the proposed rules. To that end, the proposal calls for what is described as a “modest” addition to Rule 1:
[T]hese rules should be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.
The Committee Note explains that this is intended to emphasize that, just as the court should construe and administer the rules to secure the just, speedy and inexpensive determination of every case, so do the parties share the responsibility to employ the rules in the same way.
The committee took this modest approach, it explained, because of the difficulty of imposing a direct duty or definition of cooperation. “It is difficult to identify a proper balance of cooperation with legitimate, even essential, adversary behavior,” it noted.
The proposed amendments would replace the current Rule 37(e) with new language intended to provide a uniform national standards to guide courts in evaluating what constitutes reasonable preservation and what curative measures or sanctions to employ. The new rule would apply to all forms of discoverable information, not just ESI.
A memorandum prepared for last week’s meeting summed up the key provisions of the proposed Rule 37(e):
[T]he revisions to the rule should express more clearly four basic propositions: First, curative measures should be available without any need to find fault in the failure to preserve. Second, “sanctions” should not be imposed on a party that acted reasonably even though information was nevertheless lost. Third, sanctions are proper when loss of information imposes substantial prejudice on a party and resulted from willful or bad-faith failure to preserve. And fourth, sanctions may be imposed when the loss of information completely stymies a party’s ability to litigate, but only when the failure to preserve resulted from some fault of the party on whom sanctions are imposed.
Under this proposed rule, a court would be permitted to impose sanctions for the failure to preserve only if one of two conditions is met. Either the court must find that the failure “caused substantial prejudice in the litigation and was willful or in bad faith,” or it must find that the failure “irreparably deprived a party of any meaningful opportunity to present or defend against the claims in the action and was negligent or grossly negligent.”
In addition to addressing proportionality, cooperation and sanctions, a fourth component of these proposed rules are designed to advance early and effective case management. Among changes proposed here:
The proposed amendments will be presented to the Standing Committee at its meeting on June XX. If the Standing Committee gives the go-ahead, the proposals will be published for a six-month period of public comment and public hearings. After the comment period, the Advisory Committee can consider whether to make any further changes and, if so, whether to solicit any further public comment.
Ultimately, the Advisory Committee will send the package back to the Standing Committee for final approval. From there, the rules would go to the Judicial Conference for approval and then to the Supreme Court.
Catalyst today announced the release of “Insight Mo Bettah Review,” a suite of seven new e-discovery review applications designed to help clients manage problem data and help review teams break up the monotony of their daily work.
Emoticon Integration is one of the new apps
The apps, which are fully integrated with Insight, Catalyst’s flagship e-discovery cloud repository, include Read-acted, a tool that helps you remove text you wish a document didn’t contain; Privlish, an app that applies intelligent algorithms to calculate the level of legalese required to allow a document to be tagged as privileged; and Defensible Deletion, Catalyst’s proprietary one-step deletion process.
Other apps announced today include Gaming & Social Media, Emoticon Integration, Pizza! and the Morgan Freemanizer. For details on what these apps do, read the full press release.
“We are excited to announce the launch of these new review enhancement applications,” stated John Tredennick, Catalyst’s CEO, founder and person who most often runs the dishwasher. “Review costs make up over 73% of the e-discovery spend so we are focused on ways to reduce the volume of documents that have to be reviewed. Even with our Predictive Ranking engine, we can’t get rid of all the documents and many have troublesome information in them that our clients wish would just go away.”
“We knew our clients wanted better ways to get rid of unpleasant facts but we also know that our reviewers were bored to death reading the kind of irrelevant pablum that remained after we cleaned out the good stuff,” added Larry Barela, Catalyst’s head of Product. he added. “These seven review applications addressed both problems creating a win/win for everyone involved. I can’t wait to see their smiling faces.”
As e-discovery reaches across borders into Asia, global companies face new and often unfamiliar challenges. Whatever the nature of the case, if it involves electronic information stored in China, Japan, Korea or elsewhere in Asia, be advised: You’ll be managing case files differently than you would be if you were in the United States.
The challenges presented in managing electronic files in Asia stem from many causes—some geographical, some technical and some cultural.
In Asian countries, the laws governing data and privacy are quite different than in the U.S. For example, in China, collecting and exporting data involving “state secrets” can get you thrown in jail. In Japan, taking data out and hosting it in the U.S. may cause you to lose your client.
Language, too, presents multiple challenges. The so-called CJK languages (Chinese, Japanese and Korean) are the most difficult to process, search and review. Mangle the processing and you lose your data. Mess up the search and you may as well have lost your data. Either way, your review becomes costly and ineffective.
In an article published in the February/March 2013 issue of Todays General Counsel magazine, “Challenges of Asian Language E-Discovery,” John Tredennick, President and CEO of Catalyst, and W. Peter Cladouhos, Esq., firm-wide Practice Support Electronic Discovery Consultant for Paul Hastings LLP, outline some of the most common, and the most critical, challenges companies face when handling Asian data and keeping Asian e-discovery on track and on budget.
Among e-discovery practitioners, it was a major milestone last year when U.S. Magistrate Judge Andrew J. Peck issued Da Silva Moore v. Publicis Groupe, the first judicial opinion expressly approving the use of technology-assisted review. In the context of real-world litigation, however, using TAR may be only half the battle — there is also the issue of having to pay for it.
Judge Battaglia
Thus, another judicial milestone may have been reached recently when a federal judge in San Diego awarded $2.8 million for costs associated with the use of TAR in a complex patent lawsuit that involved “voluminous” quantities of electronically stored information.
The fee award in Gabriel Technologies Corp. v. Qualcomm Inc. was part of a much-larger $12.4 million attorneys’ fees award in favor of Qualcomm. U.S. District Judge Anthony Battaglia entered the fee award after determining that the plaintiffs’ claims “were objectively baseless and brought in subjective bad faith.”
As part of its fee request, Qualcomm and its lead counsel, Cooley LLP, sought to recover $391,928.91 for use of an outside document-review vendor and $2,829,349.10 for fees associated with the outside vendor’s use of TAR.
Turning first to the fees for the review vendor, Judge Battaglia found that Cooley’s use of the vendor, Black Letter, was reasonable and that the fees charged by the vendor were reasonable.
The Black Letter attorneys billed a total of 6,949.5 hours of document review at rates of $55 to $67 per hour. As Defendants note in their motion, Plaintiffs’ claims involved 92 patents resulting in voluminous document production. For this reason, Cooley reasonably decided to have Black Letter perform document review in this matter. Had Cooley performed the document review themselves, the resulting attorneys’ fees would have undoubtedly been exponentially higher than those charged on behalf of Black Letter. In light of the circumstances and the amount of discovery required, the Court concludes that the rates charged and hours spent by Black Letter are reasonable and, thus, finds the resulting lodestar amount of $391,928.91 to be reasonable as well.
Turning next to the use of technology-assisted review supplied by a different vendor, H5, Judge Battaglia begins his analysis by quoting Qualcomm’s explanation for the use of TAR:
Over the course of this litigation, Defendants collected almost 12,000,000 records — mostly in the form of Electronically Stored Information (ESI). . . . Rather than manually reviewing the huge volume of resultant records, Defendants paid H5 to employ its proprietary technology to sort these records into responsive and non-responsive documents.
Here again, Judge Battaglia found both the use and the cost of TAR to be reasonable:
The review performed by H5 and Black Letter accomplished different objectives with the H5 electronic process minimizing the overall work for Black Letter. Again, the Court finds Cooley’s decision to undertake a more efficient and less time-consuming method of document review to be reasonable under the circumstances. In this case, the nature of Plaintiffs’ claims resulted in significant discovery and document production, and Cooley seemingly reduced the overall fees and attorney hours required by performing electronic document review at the outset. Thus, the Court finds the requested amount of $2,829,349.10 to be reasonable.
From what I have been able to find, this is the first published opinion in which a federal judge expressly awarded fees to cover the cost of technology-assisted review. Just as Da Silva Moore opened the door to other cases endorsing the use of TAR in e-discovery, perhaps so will this case open the door to other cases awarding fees for TAR.
New Hampshire has become the latest state to weigh in on the ethics of using cloud computing in the practice of law. The Ethics Committee of the New Hampshire Bar Association recently published Advisory Opinion #2012-13/4, in which it adopted the consensus opinion among states that a lawyer may use cloud computing consistent with his or her ethical obligations, as long as the lawyer takes reasonable steps to ensure that sensitive client information remains confidential.
While the opinion mirrored much of what other states have said on the ethics of cloud computing, it took a slightly different tack from some of the other opinions in its discussion of lawyer competence as it relates to cloud computing.
Last August, I wrote here about the American Bar Association’s vote to amend the Model Rules of Professional Conduct to make clear that a lawyer’s duty of competence extends to technology. In a revised comment to Model Rule 1.1 governing competence, the ABA said that a lawyer has a duty to “keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.”
Referring to this change, the NHBA’s Ethics Committee said that the duty of competence requires a lawyer who uses the cloud to “understand and guard against the risks inherent in it.”
There is no hard and fast rule as to what a lawyer must do with respect to each client when using cloud computing. The facts and circumstances of each case, including the type and sensitivity of client information, will dictate what reasonable protective measures a lawyer must take when using cloud computing. ….
Competent lawyers must have a basic understanding of the technologies they use. Furthermore, as technology, the regulatory framework, and privacy laws keep changing, lawyers should keep abreast of these changes.
In other respects, the opinion tracked those issued by other states. It addressed a lawyer’s duty to maintain the confidentiality of client information stored in the cloud and to ensure that the cloud provider will take steps to safeguard client data. It also analogized a cloud provider to a nonlawyer assistant under the ethics rules, cautioning that “the lawyer must make reasonable efforts to ensure that the provider understands and is capable of complying with its obligation to act in a manner consistent with the lawyer’s own professional responsibilities.”
Similar to what some other states’ opinions have done, the NHBA opinion set out 10 points a lawyer should consider before using a cloud computing service:
In summing up its opinion, the NHBA Ethics Committee once again emphasizes a lawyer’s duty of competence with respect to technology:
The New Hampshire Ethics Committee concurs with the consensus among states that a lawyer may use cloud computing in a manner consistent with his or her ethical duties by taking reasonable steps to protect client data. Granted, a lawyer may not find a provider of cloud computing services whose terms of service address all of the issues addressed above, but it bears repeating, that while a lawyer need not become an expert in data storage, a lawyer must remain aware of how and where data is stored and what the service agreement says. Although the New Hampshire Rules of Professional Conduct do not impose a strict liability standard, the duties of confidentiality and competence are ongoing and not delegable. The requirement of competence means that even when storing data in the cloud, a lawyer must take reasonable steps to protect client information and cannot allow the storage and retrieval of data to become nebulous.
For other posts on this blog about legal ethics and cloud computing, view the posts collected in the ethics category.
For the last several years, year-end reports on e-discovery have highlighted sanctions as the lead headline. (For examples from this blog, see Report: Sanction Requests Rise But Awards Hold Steady for 2011 and E-Discovery Sanctions Reach an All-Time High, Survey Finds.) For 2012, however, a different story took the lead spot — the rise of predictive coding.
Such is the conclusion of the 2012 Year-End Electronic Discovery and Information Law Update published by the law firm Gibson Dunn.
In our prior electronic discovery mid-year and year-end reports, the lead story was sanctions, as numerous decisions imposing onerous penalties for real or perceived e-discovery failures caught the attention of the legal community. By contrast, 2012 was the year of predictive coding, and of meaningful rules reform becoming an important step closer.
What made predictive coding the story of 2012, says the report, were the several court decisions that discussed and even endorsed it.
In the absence of judicial approval, many litigants were unwilling to use this technology. That may well change now, following several decisions approving review methodologies involving predictive coding.
Of course, the increasing acceptance of predictive coding and other forms of technology-assisted review was not the only big e-discovery story last year. Among others cited by Gibson Dunn in its report were:
Sanctions awarded by type and percentage of cases where sanctions granted
Even though the sanctions story is no longer the lead in Gibson Dunn’s year-end report, it is by no means gone away. However, rather than focus on punitive sanctions, courts have shifted towards pragmatic solutions.
“Decisions have increasingly noted that remedial monetary sanctions, as well as other measures such as reopening discovery and hiring forensic analysts to search for spoliated data, are generally fairer and better at making the aggrieved party whole than punitive sanctions such as a default judgment,” the report says.
An area that gained increasing attention in 2012 among e-discovery professionals and courts is the discoverability of social networking information, the report finds. Courts increasingly face difficult questions about the extent to which parties are required to preserve social media and about whether changes to social media sites constitute spoliation. “One court this year even required a defendant in a trademark infringement case to recreate a Facebook page as it had previously existed, so that the Facebook page showed plaintiff in a photo that displayed ‘infringing trade dress,’” the report explains.
Additional key issues from 2012 identified by the report are:
The full Gibson Dunn year-end report is available on the website and in PDF format.
