Electronic Discovery Law

New Jersey Considers e-Discovery Rules for Criminal Cases

K&L Gates — Wed, 16 May 2012 14:09:10 -0800

In April 2009, Chief Justice Rabner of the Supreme Court of New Jersey appointed the Supreme Court Special Committee on Discovery in Criminal and Quasi-Criminal Matters (hereinafter the Committee). The Committee “was appointed to recommend solutions to a variety of issues that had arisen as the result of the increasing use of electronically stored information in criminal cases.” After significant investigation, the Committee has recently reported its recommendations, which include both proposed amendments to several rules as well as “non-rule recommendations.”

Issues identified for serious consideration by the Committee included many that are familiar to practitioners on the “civil side,” such as problems with incompatibility between the format of production and the equipment/software available to defense counsel, discovery related costs, and discovery-related delays as well as problems that are unique to criminal cases, including issues related to attorney-client visitation in county jails, for example. With so many issues to consider, the resulting report and recommendations are significant and too sweeping to succinctly summarize. For those who want to learn more, however, a copy of the full report is available here.

Additionally, for those who are interested, comments on the proposals are invited; the deadline for submission is June 4.

More Happenings in Da Silva Moore

K&L Gates — Wed, 16 May 2012 09:53:25 -0800

It seems every day brings something new in this case. Today we report that on Monday, May 14, Magistrate Judge Peck entered an order staying MSL’s production of ESI, “pending Judge Carter’s decision on plaintiffs’ motions for collective action certification and to amend their complaint.” That order is available here.

Also of interest, on Tuesday, May 15, District Court Judge Andrew L. Carter, Jr. denied a motion from Richard E. Flamm, Esq. to file an amicus brief in support of plaintiffs’ Motion for Recusal or Disqualification. The motion, the underlying amicus brief, and the court’s order are available below:

Notice of Motion & Memorandum in Support of Motion for Leave to File a Brief Amicus Curiae in Support of Plaintiffs’ Motion for Recusal or Disqualification

Brief Amicus Curiae in Support of Plaintiffs’ Motion for Recusal or Disqualification

Order (denying motion)

Da Silva Moore: Plaintiffs File Reply in Support of Motion for Recusal or Disqualification

K&L Gates — Mon, 14 May 2012 09:19:58 -0800

On May 10, 2012, Plaintiffs filed their reply in support of their motion for recusal or disqualification. Those pleadings are available below.

• Reply Memorandum of Law in Support of Plaintiffs’ Motion for Recusal or Disqualification

• Declaration of Steven L. Wittels in Support of Plaintiffs’ Reply in Support of Plaintiffs’’ Motion for Recusal or Disqualification

Twitter Seeks To Quash Order Requiring Production of Account Holder's User Information, Tweets

K&L Gates — Wed, 09 May 2012 10:36:14 -0800

People v. Harris, No. 2011NY080152 (N.Y. Crim. Ct.)

Following up on the case summary from last week (posted May 1, 2012) in which the court denied defendant’s motion to quash the District Attorney's subpoena and issued an order requiring the production of defendant’s user information and Tweets from Twitter, Inc., this week brings us Twitter, Inc.’s motion to quash the court’s order. Filed on May 7, 2012, the motion seeks to quash the court’s order on the grounds that the order imposes an undue burden on Twitter for reasons including that it requires them to violate the law.

Opening its brief, Twitter notes that section 2703(d) of the Stored Communications Act provides that “[a] court issuing an order pursuant to this section, on a motion made promptly by the service provider, may quash or modify such order, if. . . compliance with such order otherwise would cause an undue burden on such provider." Twitter argues that the order compelling its production of the defendant’s information imposes an undue burden for three reasons.

First, Twitter argues that the court’s determination that the defendant has no proprietary interest in the requested information, and thus no standing to challenge the subpoena, was in direct contradiction to Twitter’s Terms of Service, which specifically state that users “retain [their] rights to any Content [they] submit, post or display on or through” Twitter. Moreover, 18 U.S.C. § 2704(b) “expressly permits users to challenge demands for their records.” To hold otherwise, Twitter argues, would “impose a new and overwhelming burden on Twitter to fight for its users’ rights” since the Order precludes users from fighting for themselves when faced with a subpoena from New York state.

Second, Twitter argues that the order forces it to “violate federal law.” Specifically, Twitter argues that the Stored Communications Act (SCA) has been held to violate the Fourth Amendment “to the extent that it requires providers to disclose the contents of communications in response to anything less than a search warrant” (U.S. v. Warshak, 631 F.3d 266, 288 (6th Cir. Dec. 2010)) and that “the Fourth Amendment applies even when the government seeks information about allegedly public activities.” (U.S. v. Jones, 132 S. Ct. 945, 949 (2012)) Additionally, “the terms of the SCA provide that an order issued under § 2703(d) can only compel a provider to produce content that is more than 180 days old," and much of the information sought by the District Attorney’s subpoena is not.

Finally, Twitter argues that pursuant to the California Uniform Act to Secure the Attendance of Witnesses from Without a State in Criminal Proceedings, “a criminal litigant cannot compel production of documents from a California resident like Twitter without presenting the appropriate certification to a California court, scheduling a hearing and obtaining a California subpoena for production.” Thus, because neither the subpoena nor the court’s order comply with those requirements, production is precluded.

The motion provides additional detail as to each argument and is available in full here.

From The Sedona Conference®: a Commentary on Ethics & Metadata

K&L Gates — Tue, 08 May 2012 14:24:33 -0800

In March, The Sedona Conference® released a public comment version of its latest publication: Commentary on Ethics & Metadata. The commentary is the first “to move beyond [Working Group 1’s] previously exclusive focus on aspects of discovery or records management/preservation” and focuses on ethical obligations surrounding metadata in both the discovery and non-discovery context.

The commentary is available for download from The Sedona Conference®, here.

N.D. California Court Declines to Follow Race Tires, Allows Taxation of e-Discovery Costs

K&L Gates — Wed, 02 May 2012 16:14:36 -0800

In re Online DVD Rental Antitrust Litig., No. M 09-2029 PJH, 2012 WL 1414111 (N.D. Cal. Apr. 20, 2012)

Plaintiffs moved for review of the clerk’s taxation of costs, including those related to electronic discovery. Noting the recent decision of the Third Circuit in Race Tires America Inc. v. Hoosier Racing Tire Corp, which narrowly interpreted 28 U.S.C. § 1920(4) and which vacated a lower court’s approval of many costs related to electronic discovery, the California court nonetheless declined to disallow the costs related to electronic discovery in this case:

The court declines to disallow remaining costs on the grounds argued by plaintiffs (e.g., TiFF conversion costs; copying/”blowback” costs purportedly not documented; document productions purportedly not delivered; professional fees re visual aids). Furthermore, although the court takes note of the Third Circuit's well-reasoned opinion in Race Tires Am., Inc. v. Hoosier Racing Tire Crop., ––– F.3d ––––, 2012 WL 887593 (3d Cir. Mar.16, 2012), the court concludes that in the absence of directly analogous Ninth Circuit authority, and in view of the court's prior order in connection with the Blockbuster subscriber plaintiffs' motion for review of the clerk's taxation of costs, broad construction of section 1920 with respect to electronic discovery production costs—under the facts of this case—is appropriate. See also Taniguchi v. Kan Pacific Saipan, Ltd., 633 F.3d 1218, 1221 (9th Cir.2011) (although the court is restricted in awarding costs to the categories enumerated in § 1920, “[d]istrict courts are free to interpret the meaning of the cast of categories listed within § 1920”).

Following adjustments to the clerk's original award to omit disallowed costs, the total award to Netflix equaled $710,194.23.

A copy of the order is available here.

Defendant Files Response to Plaintiffs' Motion for Recusal

K&L Gates — Wed, 02 May 2012 09:34:57 -0800

Da Silva Moore v. Publicis Groupe SA, No. 11 Civ. 1279 (ALC) (AJP) (S.D.N.Y.)

On Monday, Defendant MSL Group Americas, Inc. filed its response in opposition to Plaintiffs’ Motion for Recusal or Disqualification. Those pleadings are available below.

Defendant’s Memorandum of Law in Opposition to Plaintiffs’ Motion for Recusal or Disqualification

Declaration of Brett M. Anders in Support of Defendant MSLGroup Americas, Inc’s Opposition to Plaintiffs’ Motion for Recusal or Disqualification

Criminal Defendant has No Standing to Quash Twitter Subpoena

K&L Gates — Tue, 01 May 2012 10:25:52 -0800

People v. Harris, ---N.Y.S.2d---, 2012 WL 1381238 (N.Y. Crim. Ct. Apr. 20, 2012)

In this case, the court held that the defendant did not have standing to move to quash a subpoena seeking production of his Tweets and the user information associated with his Twitter account because the defendant “had no proprietary interests” in the information sought and because his claimed privacy interest was “understandable” but “without merit.”

The defendant was arrested and charged with disorderly conduct after marching onto the Brooklyn Bridge as a participant in the Occupy Wall Street protests. In furtherance of its prosecution, the District Attorney’s Office sent a subpoena duces tecum to Twitter, Inc., seeking user information and Tweets from a particular time period for the Twitter account @destructuremal—the account allegedly used by the defendant. The defendant sought to quash the subpoena.

The court’s analysis focused largely on the public nature of Twitter and its Terms of Service, which establish that users have no expectation of privacy and no proprietary interest in their Tweets—quite the opposite, in fact. The court also analogized the information sought to bank records of a customer’s account, which have been held by the United States Supreme Court to be the business records of the bank, over which the customer can assert neither ownership nor possession. New York courts have consistently held that "an individual has no right to challenge a subpoena issued against a third-party bank."

Turning to the court’s discussion of the Terms of Service, the court first concluded that the defendant had no proprietary interests in the at-issue information and specifically cited Twitter’s Terms of Service, which state that by submitting a post or displaying content, a user has granted Twitter “a worldwide, non-exclusive, royalty-free license to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such Content in any and all media or distribution methods (now known or later developed).” Thus, the court reasoned, "defendant's inability to preclude Twitter's use of his Tweets demonstrates a lack of proprietary interest" in them.

Turning next to the question of privacy, the court found that “defendant’s contention that he has privacy interests” were “understandable, but without merit.” Again, the court relied on Twitter’s Terms of Service, which clearly inform users that their information will be viewable by others and which specifically state that “[w]hat you say on Twitter may be viewed all around the world instantly … [t]his license is you authorizing us to make your Tweets available to the rest of the world and to let others do the same.” Other sections, the court noted, inform users of the information collected by Twitter upon a user's registration and use of the service.

Concluding its discussion, the court once again made the analogy to bank records, which, like Tweets (and related user information) can contain personal information, but concluded that the expectation that any disclosure of (Twitter-related) information would first be requested from, and require the approval of the user was “understandable, but wrong.” The court explained:

While the Fourth Amendment provides protection for our physical homes, we do not have a physical “home” on the Internet. What an Internet user simply has is a network account consisting of a block of computer storage that is owned by a network service provider. As a user, we may think that storage space to be like a “virtual home,” and with that strong privacy protection similar to our physical homes. However, that “home” is a block of ones and zeroes stored somewhere on someone's computer. As a consequence, some of our most private information is sent to third parties and held far away on remote network servers. A Twitter user may think that the same “home” principle may be applied to their Twitter account. When in reality the user is sending information to the third party, Twitter. At the same time the user is also granting a license for Twitter to distribute that information to anyone, any way and for any reason it chooses. In United States v. Lifshitz, (369 F3d 173 [2d Cir2004] ), the Second Circuit held that individuals do not have a reasonable expectation of privacy in internet postings or e-mails that have reached their recipients. “Users would logically lack a legitimate expectation of privacy in materials intended for publication or public posting” (Id. at 190 citing Guest v. Leis, 255 F3d 325, 333 [6 Cir2001] ).

While a Twitter account's user information and Tweets contain a considerable amount of information about the user, Twitter does not guarantee any of its users complete privacy. Additionally, Twitter notifies its users that their Tweets, on default account settings, will be available for the whole world to see. Twitter also informs its users that any of their information that is posted will be Twitter's and it will use that information for any reason it may have. The @destructuremal account's Tweets were, by definition public. The defendant had knowledge that Twitter was to instantly distribute his Tweets to Twitter users and non-Twitter users, essentially anyone with Internet access. Indeed, that is the very nature and purpose of Twitter. Accordingly, this Court finds that the defendant has no standing to move to quash the subpoena

The court also denied the defendant’s motion to intervene and, upon analysis of the Stored Communications Act, concluded that the subpoena was proper (i.e., “‘legal,’ relevant, and not overbroad”).

A copy of the court’s order is available here.

District Court Judge Adopts Orders Approving Use of Predictive Coding, Denies Plaintiffs' Objections

K&L Gates — Thu, 26 Apr 2012 12:54:24 -0800

Da Silva Moore v. Publicis Groupe SA, No. 11 Civ. 1279 (ALC) (AJP) (S.D.N.Y. Apr. 25, 2012)

In a much anticipated opinion, District Court Judge Andrew L. Carter, Jr. has denied the objections of Plaintiffs and upheld Magistrate Judge Peck’s orders approving Defendant’s use of predictive coding to review its own documents and adopting Defendant's proposed protocol.

In this case, as has been discussed previously on this blog, Magistrate Judge Andrew Peck approved the use of predictive coding and largely adopted Defendant's then-proposed protocol over Plaintiffs’ objections.

Upon review of those objections, the District Court upheld the orders of Magistrate Judge Peck. In so doing, the court acknowledged the highly deferential standard to which its review was subject. Summarizing broadly, the court indicated several reasons for its decision, including that Magistrate Judge Peck’s rulings were “well reasoned” and considered both the “potential advantages and pitfalls of the predictive coding software;” that the protocol contained standards for measuring reliability and allowed for Plaintiffs’ participation; that there was “insufficient evidence to conclude that the use of the predictive coding software [would] deny Plaintiffs access to liberal discovery;” and that Plaintiffs’ arguments concerning reliability were “premature.” Specifically as to Plaintiffs’ objections based on reliability, the court assured Plaintiffs that “[i]f the method provided in the protocol does not work or if the sample size is indeed too small to properly apply the technology, the Court will not preclude Plaintiffs from receiving relevant information, but to call the method unreliable at this stage is speculative.” Similarly, the court noted several times that Plaintiffs would be allowed to raise their concerns regarding the success of the approved methodology before the court.

Closing its discussion of predictive coding, the court noted that there is “no review tool that guarantees perfection” and that the parties and Magistrate Judge Peck have acknowledged that “there are risks inherent in any method of reviewing electronic documents.” Thus, the court concluded:

Judge Peck concluded that under the circumstances of this particular case, the use of predictive coding software as specified in the ESI protocol is more appropriate than keyword searching. The Court does not find a basis to hold that his conclusion is clearly erroneous or contrary to law. Thus, Judge Peck’s orders are adopted and Plaintiffs’ objections are denied.

The court also declined to reject Magistrate Judge Peck’s rulings concerning production of W-2s.

A copy of the court’s order is available here.

Virginia State Court Judge Allows Defendants to Use Predictive Coding

K&L Gates — Wed, 25 Apr 2012 13:13:16 -0800

Global Aerospace, Inc. v. Landow Aviation, L.P., No. CL 61040 (Vir. Cir. Ct. Apr. 23, 2012)

In this Virginia state court case, the defendants asked to be allowed to use predictive coding for the processing and production of their own ESI. The Loudon County Circuit Judge granted the request, and "allowed" the defendants to use predictive coding, subject to objections plaintiffs may want to raise once they obtain the resulting production from the defendants. The Virginia court's one-paragraph order states, in its substantive entirety:

Having heard argument . . . it is hereby ordered Defendants shall be allowed to proceed with the use of predictive coding for purposes of the processing and production of electronically stored information, with processing to be completed within 60 days and production to follow as soon as practicable and in no more than 60 days. This is without prejudice to a receiving party raising with the Court an issue as to completeness or the contents of the production or the ongoing use of predictive coding.

A copy of defendants’ motion for a protective order to allow predictive coding is available here.

A copy of plaintiffs’ opposition to defendants’ motion for a protective order is available here. (Exhibits to this opposition are not currently available.)

A copy of the court’s order granting defendants’ motion is available here.

Court Orders Mirror-Imaging of Personal Computers for Purpose of Preservation

K&L Gates — Tue, 17 Apr 2012 12:18:53 -0800

United Factory Furniture Corp. v. Alterwitz, No. 2:12-cv-00059-KJD-VCF, 2012 WL 1155741 (D. Nev. Apr. 6, 2012)

Here, the court granted plaintiff’s motion to compel mirror-imaging of defendants’ personal computers for the purpose of preservation where plaintiff alleged that defendants had wrongfully accessed its computer systems using the personal computers at issue, where plaintiff asserted that defendants’ ongoing use of the computers would result in the loss of relevant data, and where the court determined that in light of the circumstances of the case (and following analysis of the relevant factors) the need for mirror-imaging outweighed the burden.

This case was filed under interesting circumstances: defendants were terminated from United Factory Furniture Corporation (“UFFC”) upon UFFC’s discovery that they were wrongfully accessing the company’s information systems and manipulating data, among other things. Following that termination, defendant Alterwitz filed suit against UFFC. While that litigation was pending, UFFC became concerned that defendants continued to access its information systems using a “back door” to the company server that was set up by defendant Green (Alterwitz’s husband), whose prior employment with UFFC involved managing and maintaining its computer server and network services. These fears were exacerbated by defendant Alterwitz’s statement that she knew “what is being written in company emails” and her production of emails which were neither sent to, nor from, defendant Alterwitz or her husband. Closer investigation confirmed that tampering with UFFC’s information systems was ongoing. Thus, UFFC filed its own action, which underlies the opinion summarized here.

Fearful of the loss of relevant information, UFFC filed a motion seeking a preliminary injunction/preservation order and an order compelling the creation of mirror-images of defendants’ personal computers. Initially, the court found that there was good cause to permit expedited discovery. Taking up the motion for a preliminary injunction/preservation order, the court determined that no such injunction was necessary where defendants were already under an obligation to preserve relevant evidence and because the court would grant the motion to compel mirror-imaging.

Turning then to the motion for mirror-imaging, UFFC was particularly concerned that ongoing use of the computer equipment at issue would result in information being overwritten or lost. Defendants objected, arguing that taking mirror-images of their personal computers would be unduly intrusive and would violate the federal rules because discovery had not yet commenced. “Considering the circumstances of this case,” the court disagreed and found mirror-imaging to be “appropriate to maintain the status quo.” The court’s analysis also weighed the benefit and burden of the requested imaging considering 1) the needs of the case, 2) the amount in controversy, 3) the importance of the issues at stake, 4) the potential for finding relevant material, and 5) the importance of the proposed discovery in resolving the issues. The court determined that all factors weighed in favor of mirror-imaging. The court also noted plaintiff's willingness to bear the costs associated with the imaging.

Accordingly—and recognizing the defendants’ privacy interests—the court outlined a protocol which would result in the mirror-imaging of defendants’ personal computers and other functional electronic devices by a neutral examiner who would be subject to a protective order and would serve as an officer of the court. The resulting mirror-images would then be secured in the Clerk’s Office vault. The mirror-images would remain there unless UFFC had reason to believe that spoliation had occurred, at which time a motion to compel access would have to be filed. If no such motion was filed, the mirror-images would be disposed of upon resolution of the action.

A copy of the order is available here.

Plaintiffs File Formal Motion for Recusal or Disqualification in Da Silva Moore

K&L Gates — Tue, 17 Apr 2012 10:17:11 -0800

On Friday April 13, 2012, Plaintiffs in this matter filed a formal motion for recusal or disqualification, following up on their prior, informal request for the same.

• A copy of the Notice of Motion for Recusal or Disqualification is available here.
• A copy of the Memorandum of Law in Support of Plaintiffs’ Motion for Recusal or Disqualification is available here.
• A copy of the Declaration of Steven L. Wittels in Support of Plaintiffs’ Motion for Recusal or Disqualification (without exhibits attached) is available here. Exhibits are available on PACER (http://www.pacer.gov/)

More in Da Silva Moore: Magistrate Judge Peck Responds to Request for Recusal

K&L Gates — Wed, 04 Apr 2012 10:42:42 -0800

On Monday, Magistrate Judge Andrew Peck issued an order in response to Plaintiffs’ request for his recusal, which, according to Judge Peck, was contained in a letter dated March 28, 2012 (and is not publicly available at this time).

A copy of the order is available here.

Following Comments on Cost Allocation, Court Orders Parties to Split Some Costs and that Plaintiff Post Bond to Receive other Requested Discovery

K&L Gates — Thu, 29 Mar 2012 11:34:29 -0800

Lubber Inc. v. Optari, LLC, No. 3:11-0042, 2012 WL 899631 (M.D. Tenn. Mar. 15, 2012)

In this case, the court considered defendants’ motion for a protective order to restrict the relevant time frame for additional electronic searches and plaintiff’s motion to compel discovery in nine categories. Upon consideration of the issues, the court denied defendants’ motion, but ordered the parties to split the expenses related to material not already produced. Regarding plaintiff’s motion to compel, the court indicated its concern that “Plaintiff will be able to win on these issues” and therefore required that plaintiff post a $10,000 bond, intended to “allow the Plaintiff to secure this information if they wish to pursue this discovery, while at the same time offering some protection to the Defendants should they prevail.”

In this highly contentious case involving a “great deal of tit-for-tat” between parties who “themselves do not like each other” and counsel that, “in some cases,” threw “gasoline on the fire,” defendants sought a protective order “that they not be obligated to conduct an electronic search for electronically-stored information on Plaintiff’s claims other than from the period of October 4, 2010, until February 8, 2011, or in the alternative, that the Plaintiff be required to pay for all of the Defendants’ costs in connection with such discovery.” Defendants’ arguments relied on a prior settlement between the parties and on comments made by the President of Lubber, Inc., both of which arguably limited the timeframe for recovery. Defendants further indicated that the costs for the additional searching could “run at least $10,000 and produce gigabytes of ESI material.”

Before deciding the issue, the court noted that Rule 26(b)(2)(C)(iii) "gives the Court a great deal of latitude in controlling discovery" and offered its comments on cost allocation:

One of the concerns of discovery is the allocation of costs. In general, costs are borne by the producing party. While this works in the vast majority of cases, the requesting parties have little incentive not to ask for everything possible. This leads to interrogatories and requests for production that are expressed in the broadest possible terms.

It is the Magistrate Judge’s experience and the view of a number of economists who have studied this issue that where the requesting party bears a part of the cost of producing what they request, the amount of material requested drops significantly. When a party has to contemplate whether the last possible bit of information will cost them more than it is worth, they quit asking for items of marginal relevance. As long as requesting the last bit of information costs them nothing they have little, if any, incentive not to request it. Even if they choose never to look at it, they have put the opposing party to the cost of production. In some cases discovery becomes a tool with which to bludgeon the other side into submission. The Magistrate Judge believes that both sides are doing that in this case.

Ultimately, “in an effort to cut this Gordian knot,” the court denied defendants’ motion and ordered each party to bear one-half of the expenses associated with materials not already produced. In so deciding, the court noted defendants’ own willingness to request information outside of the date restrictions they sought to enforce.

Turning to the plaintiff’s motion to compel, the court determined that plaintiff made a sufficient showing of relevancy but indicated its concerns regarding plaintiff’s ability to win on the issues before it in light of an underlying separation agreement which had not been rescinded. Accordingly, the court ordered plaintiff to post a bond to receive the requested discovery:

Because of the separation agreement, which has not been rescinded, the Magistrate Judge does have concerns that the Plaintiff will be able to win on these issues and, therefore, the costs to the Defendants in producing this material is a consideration. If the separation agreement is valid, the Plaintiff may well be responsible for costs to the Defendant in seeking this information. The Magistrate Judge believes that the Plaintiff, in order to secure this information, should post a bond in a reasonable amount, which the Magistrate Judge believes would be $10,000, for costs to the Defendant of producing the information they seek prior to August 30th. The claims, counterclaims, defenses, and credibility issues do open up the need for discovery prior to August 30th.

The court further commented that “the issue is so close that the Magistrate Judge believes that a bond is necessary to protect the Defendants from producing material which, in the end, may be protected under the separation agreement,” and also reasoned that the bond would “allow the Plaintiff to secure this information if they wish to pursue this discovery, while offering some protection to the Defendants should they prevail.”

A copy of the full order is available here.

Da Silva Moore Plaintiffs File Reply Brief In Support of Objections to Discovery Rulings

K&L Gates — Wed, 21 Mar 2012 09:34:19 -0800

Da Silva Moore v. Publicis Groupe SA, No. 11 Civ. 1279 (ALC) (AJP) (S.D.N.Y.)

As expected, on March 19, 2012, plaintiffs in this case filed their Reply in Support of Rule 72(a) Objection to Magistrate Judge Peck’s February 8, 2012 Discovery Rulings. In it, plaintiffs summarize their arguments as follows:

Extrajudicial activities aside, what should matter is whether MSL’s Method will ensure that MSL fulfills its obligations under Rule 26 to produce reasonable discovery. Here, the answer is a resounding no. Judge Peck’s adoption of MSL’s Method was contrary to law and/or clearly erroneous for two main reasons. First, Judge Peck adopted MSL’s Method on an insufficient record; Judge Peck failed to hold an evidentiary hearing or obtain expert testimony as to its reliability and accuracy. Second, MSL’s Method fails to meet basic standards for reliability; the protocol risks failing to capture up to 65% of the documents material to Plaintiffs’ case. Accordingly, Plaintiffs respectfully request that the Court reverse Judge Peck’s ESI rulings.

In support of their position, plaintiffs also filed declarations from their attorney, Siham Nurhussein, and their expert in this case, Paul J. Neale. All that remains now is for District Court Judge Andrew Carter, Jr. to issue his ruling, which will be reported on this blog when it becomes available.

For a copy of Plaintiffs' Reply, click here.
For a copy of the Declaration of Siham Nurhussein, click here.
For a copy of the Declaration of Paul J. Neale, click here.

Third Circuit Addresses Taxable Costs: Vacates Award of the District Court, Remands with Instructions to Re-Tax Costs in Accordance with Opinion

K&L Gates — Tue, 20 Mar 2012 11:07:20 -0800

Race Tires Amer., Inc. v. Hoosier Racing Tire, Corp., 674 F.R.D. 158 (3d Cir. 2012)

On appeal, the Third Circuit vacated the District Court’s approval of taxable costs related to electronic discovery and remanded with instruction to re-tax in accordance with this opinion. Specifically, the court concluded that the relevant vendors’ charges “would not qualify as fees for ‘exemplification’” and that “of the numerous services the vendors performed, only the scanning of hard copy documents, the conversion of native files to TIFF, and the transfer of VHS tapes to DVD involved ‘copying’” and were thus recoverable.

Following the District Court’s grant of the defense summary judgment motions, the Clerk for the District Court considered the Bills of Costs submitted by the defendants and ultimately concluded that “electronic discovery costs would be consider[ed] … taxable, as opposed to just … the cost of litigating.” In response, Plaintiff filed a Motion to Appoint a Special Master Regarding E-Discovery Issues and a Motion to Review Taxation of Costs. “[O]n May 6, 2011, the District Court declined to appoint a Special Master and affirmed the Clerk’s taxation of the electronic discovery vendor charges.” In so deciding, the court “essentially found that ‘the steps the third-party vendor(s) performed appeared to be the electronic equivalent of exemplification and copying.’” Plaintiff timely appealed.

The question presented on appeal was whether 28 U.S.C. § 1920(4) "authorizes the taxation of an electronic discovery consultant’s charges for data collection, preservation, searching, culling, conversion, and production as either ‘exemplification [or] the . . . making [of] copies of any materials where the copies are necessarily obtained for use in this case.’” "[W]hether a particular expense falls within the purview of section 1920, and thus may be taxed in the first place, is an issue of statutory construction, subject to de novo review."

In short, the court held that none of the work performed by the vendors would qualify as “exemplification” and that only “the scanning of hard copy documents, the conversion of native files to TIFF, and the transfer of VHS tapes to DVD, involved ‘copying.’” Briefly summarizing its underlying analysis, the court stated:

Neither the language of § 1920(4), nor its history, suggests that Congress intended to shift all the expenses of a particular form of discovery— production of ESI—to the losing party. Nor can such a result find support in Supreme Court precedent, which has accorded a narrow reading of the cost statute in other contexts. See, e.g., Crawford Fitting Co., 482 U.S. at 442. Although there may be strong policy reasons in general, or compelling equitable circumstances in a particular case, to award the full cost of electronic discovery to the prevailing party, the federal courts lack the authority to do so, either generally or in particular cases, under the cost statute. FN12

FN12. Cost-shifting may be effected during the course of litigation, either by agreement or pursuant to court order issued under the authority of Fed.R.Civ.P. 26. After litigation, cost-shifting may be ordered as a sanction for vexatious conduct that reflects bad faith, as opposed to “misunderstanding, bad judgment, or well-intentioned zeal.” LaSalle Nat'l Bank v. First Conn. Holding Grp., LLC, 287 F.3d 279, 289 (3d Cir.2002) (citations omitted).

Accordingly, the court determined that “none of the charges imposed by [defendant] DMS’s vendor are taxable” and also reduced the award in favor of defendant Hoosier from $125,580.55 to $30,370.42, a difference of $95,210.13.

A copy of the court’s opinion is available here.

District Court Judge to Have Last Word on Computer-Assisted Review, Grants Plaintiffs' Motion to Allow Additional Briefing

K&L Gates — Fri, 16 Mar 2012 13:41:50 -0800

Da Silva Moore v. Publicis Groupe SA, No. 11 Civ. 1279 (ALC) (AJP) (S.D.N.Y.)

On March 13, 2012, approximately 2 ½ weeks after Magistrate Judge Andrew Peck issued his much-talked about opinion approving “computer-assisted review,” District Court Judge Andrew L. Carter, Jr. has granted plaintiffs’ request to submit additional briefing on their objections to the ruling.

Briefly summarizing the procedural posture of this case, the parties attended a hearing on February 8, 2012 to discuss their discovery protocol, and in particular the use of computer-assisted review (“predictive coding”). At that hearing, Magistrate Judge Andrew Peck issued an oral ruling which approved the use of computer-assisted review and required the parties to submit a draft protocol for court approval. On February 22, 2012, over plaintiffs’ objection (indicated in the last paragraph of the proposal: “Plaintiffs object to this ESI protocol in its entirety”), Magistrate Judge Peck approved the proposed protocol that had been submitted. On that same day, plaintiffs filed their lengthy objections to the February 8th discovery rulings, asserting that the “Magistrate’s decision to adopt [defendant] MSL’s predictive coding protocol is clearly erroneous and contrary to law.” Specifically, plaintiffs argued that the use of “predictive coding” in the present case (employment discrimination) violates Federal Rule of Civil Procedure 26 and criticized the court’s adoption of a “novel discovery methodology” without “supporting evidence” or “standards for assessing reliability,” among other things. On February 24, 2012, Magistrate Judge Peck issued his written opinion memorializing his rulings from the February 8th hearing. Thereafter, on March 7, 2012, defendant filed its opposition to plaintiffs’ objections.

On March 9, 2012, plaintiffs submitted a letter to District Court Judge Andrew L. Carter, Jr. asking for leave to file a reply to defendant’s response. In that letter, plaintiffs argued that Magistrate Judge Peck’s written ruling, issued two days after their objections were filed, “expanded on the reasoning for the rulings he had made from the bench,” including relying on “a number of articles that were not addressed in the parties’ submissions” and making observations about plaintiffs’ objections. Accordingly, plaintiffs sought the opportunity to “squarely address Magistrate Judge Peck’s complete rulings.” Plaintiffs also argued that allowing their reply would not result in prejudice where the defendant had “the benefit” of filing its opposition to plaintiffs’ objections after the written ruling was issued and thus had the opportunity to consider Magistrate Judge Peck’s analysis when crafting their response.

On March 13, 2012, Judge Carter granted plaintiffs’ request and ordered their reply be submitted by March 19, 2012.

A copy of plaintiffs’ objections is available here.
A copy of Magistrate Judge Peck’s written ruling is available here.
A copy of defendant’s response is available here.
A copy of plaintiffs’ March 9, 2012 letter to Judge Carter is available here.

Eastern District of Texas Adopts its own [Model] Order Regarding E-Discovery in Patent Cases

K&L Gates — Wed, 14 Mar 2012 13:54:01 -0800

Signed by Chief District Judge Leonard Davis on February 27, 2012, amendments to the Local Rules in the Eastern District of Texas include a [Model] Order Regarding E-Discovery in Patent Cases similar to an order adopted by the Federal Circuit late last year. The new [Model] Order is different in several respects, however. The treatment of email, for example, differs in several important ways, including that the presumptive limitation on the allowable number of custodians is raised from five to eight, that the presumptive limitation on the allowable number of search terms is raised from five to ten, and that the court may consider requests for additional or fewer custodians without limitation. The [Model] Order in the Eastern District of Texas also includes instruction on the production of ESI, including, for example, requiring production in TIFF format and specifying that no party has an obligation to make its production text-searchable unless it already exists in that form or is being converted for use in the litigation, including for use by the producing party’s counsel. Unlike in the Federal Circuit, the [Model] Order in the Eastern District also limits a party’s obligation to restore backup media absent a showing of good cause and likewise precludes the obligation to collect and preserve voicemails, PDAs, and mobile phones (deemed “not reasonably accessible”) absent the same showing.

Although the rules are effective immediately, comments regarding the amendments will be accepted by the Clerk of Court until Friday, March 23, 2012.

A copy of the General Order Amending Local Rules is available here.

A redline/strikeout of the [Model] Order (identifying the differences between it and the Federal Circuit’s [Model] Order) is available here.

Court Imposes Sanctions for Failure to Conduct Reasonable Inquiry and Late Production

K&L Gates — Thu, 08 Mar 2012 09:35:31 -0800

In re Delta/AirTran Baggage Fee Antitrust Litig., ---F. Supp. 2d---, 2012 WL 360509 (N.D. Ga. Feb. 3, 2012)

After repeated representations that all responsive documents had been produced, a defendant belatedly discovered and produced an additional 60,000 pages. Upon plaintiffs' motion for sanctions, the court found that the defendant “did not conduct a reasonable inquiry” to ensure production of all responsive documents and had run “afoul” of Rule 26(e). Accordingly, the court ordered discovery re-opened and that the defendant pay plaintiffs’ reasonable expenses and attorneys’ fees caused by the defendant’s failure, including the cost of the necessary motions and the extended discovery period.

Throughout the discovery process a defendant made approximately 20 representations that all responsive documents had been produced. Despite this, approximately 60,000 additional pages were belatedly discovered and eventually produced after the close of discovery. The late-produced documents were of two types: documents discovered on individual hard drives and documents discovered on backup tapes. According to the defendant, the late-discovered documents from individual hard drives were originally overlooked as the result of a misunderstanding with its IT personnel. In short, the defendant believed that the contents of all collected hard drives had been uploaded to its e-discovery software to be searched and ultimately produced. Unfortunately, defendant failed to specifically confirm this belief, and learned later than some hard drives had been inadvertently overlooked. Similarly, as to the late discovered backup tapes, the defendant explained that they had been belatedly and unexpectedly discovered in an evidence locker and that no one was certain who put them there.

Plaintiffs moved for discovery to be re-opened and for sanctions (as well as other relief not relevant to the discussion in this summary). The defendant conceded that re-opening discovery was appropriate. Regarding sanctions, the court acknowledged plaintiffs’ claims related to alleged document destruction, but noted they offered “nothing more than speculation” in support of that theory. Thus, the court focused on the question of whether sanctions should be imposed for the defendant’s late discovery and production of responsive documents, particularly in light of its repeated representations that all responsive discovery had been produced and its failure to correct its misstatements until after the court had denied plaintiffs' then-pending motion for spoliation sanctions. Indeed, even after learning of the incompleteness of its production, the defendant continued to proactively oppose plaintiffs' motion for spoliation sanctions but made no mention of the incompleteness of its discovery until after a ruling was issued.

The court’s analysis was broken into two discussions: first, whether sanctions were appropriate under Rule 26(g) and second, whether sanctions were appropriate under Rule 37. Pursuant to its analysis of a party’s discovery obligations under Rule 26(g)—which the court determined requires counsel to make a reasonable inquiry under the circumstances—the court found that the defendant “did not conduct a reasonable inquiry.” Specifically, the court faulted the defendant for failing to confirm with its IT personnel that each hard drive collected had actually been run through the e-discovery software, characterizing the failure to do so as “a huge hole” in the defendant’s electronic discovery process. Similarly, the court took issue with the defendant’s failure to timely identify the existence of responsive backup tapes which were stored in an evidence locker controlled by the IT personnel. Although the defendant alleged that the tapes were not expected to be stored there, thus resulting in their delayed discovery, the court noted that the defendant had also indicated that the locker was used to store tapes collected for litigation and investigation, making it a somewhat obvious place to look in the course of defendant’s efforts to identify responsive information. These discovery failures, compounded by the defendant’s repeated representations that it had produced all responsive documents and its delay in correcting its misstatements upon discovering the truth (which the defendant waited to do until after the court denied plaintiffs' prior spoliation motion), resulted in the court’s finding that sanctions were appropriate and an order for the defendant to pay reasonable expenses, including attorneys’ fees, caused by its violation. The defendant’s generally cooperative behavior following its discovery of the unproduced information and the lack of any late-discovered “smoking gun” evidence resulted in the court’s imposition of these “lesser sanctions” and refusal to preclude the defendant’s use of the evidence in future proceedings.

Turning to its analysis pursuant to Rule 37, the court likewise determined that sanctions were appropriate under Rule 37(c)(1). Rule 37 incorporates obligations imposed under Rule 26(e), which requires timely supplementation of a party’s document production when it learns that its prior production was incomplete or when ordered by the court. In the present case, the court determined that because the late-produced responsive documents had always been in the defendant’s possession and because it was defendant’s lack of diligence and dilatory behavior that resulted in the late discovery of those documents, the defendant’s behavior ran “afoul” of Rule 26(e). In so finding, the court noted that 26(e) does not provide a “safe harbor” for a “lack of diligence.” Once again, the court noted the particularly egregious nature of the discovery failures in light of the defendant’s repeated misrepresentations regarding the completeness of its production and the defendant's delay in correcting its misstatements until after plaintiffs' pending motion for spoliation was denied. Accordingly, the court found that an appropriate sanction would be to require the defendant to pay plaintiffs’ “reasonable expenses and attorneys’ fees caused by [Defendant’s] failure, which includes Plaintiffs’ request for fees and expenses related to this motion, the extended discovery period, and its motion for spoliation sanctions.”

A copy of the full opinion is available here.

Magistrate Judge Peck Issues Written Opinion Addressing Computer-Assisted Review

K&L Gates — Mon, 27 Feb 2012 11:17:29 -0800

Da Silva Moore v. Publicis Groupe & MSL Group, No. 11 Civ. 1279 (ALC) (AJP) (S.D.N.Y. Feb. 24, 2012)

Magistrate Judge Andrew Peck issued an opinion on Friday, February 24, 2012, approving of the use of computer-assisted review of electronically stored information (“ESI”) by the parties in this case. The opinion, which discusses both the details of the underlying case and the topic of computer-assisted review more generally, addresses a myriad of issues including how computer-assisted review works (generally) and what benefits it may provide. The court appears to be the first to recognize that “computer-assisted review is an acceptable way to search for relevant ESI in appropriate cases.”

The first portion of the opinion deals largely with the specific details of the underlying case and the parties’ negotiation of an agreed protocol for the computer-assisted review. While an agreed protocol was eventually signed by the court (and attached to the opinion), the court acknowledged the possibility that efforts beyond those memorialized in the parties’ protocol could be required and approved the parties’ proposed protocol, which included seven iterative “seeding” reviews, with the following caveat:

But if you get to the seventh round and [plaintiffs] are saying that the computer is still doing weird things, it’s not stabilized, etc., we need to do another round or two, either you will agree to that or you will both come in with the appropriate QC information and everything else and [may be ordered to] do another round or two or five or 500 or whatever it takes to stabilize the system.

Later, the opinion provides “Further Analysis and Lessons for the Future” in which several, more general topics surrounding computer-assisted review are addressed, including concerns about accuracy and the need for cooperation and transparency.

The court concludes that computer-assisted review, or predictive coding, is a tool that should be considered, along with existing and more established tools, in large volume ESI cases:

This Opinion appears to be the first in which a Court has approved of the use of computer-assisted review. That does not mean computer-assisted review must be used in all cases, or that the exact ESI protocol approved here will be appropriate in all future cases that utilize computer-assisted review. Nor does this Opinion endorse any vendor … nor any particular computer-assisted review tool. What the Bar should take away from this Opinion is that computer-assisted review is an available tool and should be seriously considered for use in large-data-volume cases where it may save the producing party (or both parties) significant amounts of legal fees in document review. Counsel no longer have to worry about being the “first” or “guinea pig” for judicial acceptance of computer-assisted review. As with keywords or any other technological solution to e-discovery, counsel must design an appropriate process, including use of available technology, with appropriate quality control testing, to review and produce relevant ESI while adhering to Rule 1 and Rule 26(b)(2)(C) proportionality. Computer-assisted review now can be considered judicially-approved for use in appropriate cases.

Also of note in this opinion was the court’s clarification (in footnote 1 on page 2) that use of computer-assisted review in this case was agreed to by the parties and not ordered by the court and that the court’s involvement was instead focused on “disputes over the scope and implementation, which the court ruled on, thus accepting the use of computer assisted review in this lawsuit.”

A full copy of the opinion is available here.