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January 2013

Home – E-Discovery Checkpoints: A 360-Degree View-Part 1

E-Discovery Checkpoints: A 360-Degree View-Part 1

Any image of a judge luxuriating on the bench like a silent referee on the elevated sidelines of the proceedings quickly melts away like tiny birthday candles when it comes to electronic discovery. To use a boxing metaphor, judges are clearly the "third man (or woman) in the ring," intent on making sure the fight doesn't get out of hand.


What boundaries are in place and what questions are asked early in the life of a case will prove critical to keep the proceedings in general-and costs in particular-from going through the roof. LexisNexis recently assembled four speakers to address the critical early stages of discovery, presenting the perspectives of a U.S. Magistrate Judge, an experienced e-discovery attorney, a corporate data security executive and a litigation technology expert. This is the first in a four-part series covering what the speakers had to say.


The Webinar was designed to call out critical decision points and questions that will or should arise in the timeline of a complicated, data-drenched dispute. In this instance, the speakers followed the timeline of a hypothetical case-called Beta Co. v. Alpha Co.-involving allegations of everything from patent infringement to corporate espionage in a contentious, high-stakes battle between two video game companies. Beta Co. v. Alpha Co. involved massive volumes of data (e.g., 20 million emails), many formats (e.g., voice mail, video), many levels of sensitivity (e.g., employee records, Social Security Numbers), with servers located in several states and countries.


A Radical Transformation


U.S. Magistrate Judge John M. Facciola of the U.S. District Court for the District of Columbia, started off the discussion, sharing what his immediate questions for the litigants would be and what he would expect of them.


"The way a judge is going to approach litigation these days is a radical transformation from the way it used to be," he warned. "We have entered a period of extremely aggressive management of the pretrial process [by judges] due to the massive amounts of data involved.  If the judge doesn't do so, he's asking for trouble."


The judge noted the adoption of protocols that supplement the Rules of Civil Procedure, pointing to courts in California and New York, as examples. These courts are "trying to make the Civil Rules meaningful to resolve discovery problems before they arise," Judge Facciola said.


For example, courts are beginning to require certifications from attorneys that certain tasks on a checklist have been completed. The theory behind this is that the lawyers will make sure they discuss e-discovery challenges early and have proposals to handle them.


Preservation Expectations


Courts will start off making sure preservation of evidence is tackled. The judge will want to know what kind of agreement the parties have crafted to preserve data. Are they going to use a custodian? Are they going to identify the appropriate people who are knowledgeable about the data? Will they have a bird's eye perspective of the data? Are there any objections right away that any information is not being preserved? He or she wants to be sure all forms of communication are taken into account. People in general and the younger generation in particular no longer rely solely on email, he said, which is often replaced by text messaging, instant messaging and social media sites.


Based on the enormous universe of information potentially involved in Beta v. Alpha, the judge assumed that the parties would retain vendors. Also, he will want to know about, and expect, liaisons selected for each party so he can get quick answers. These data liaisons are becoming "essential and crucial" in complex cases, the judge said.




"The single most important aspect of this case-the thing that is going to cause the most headaches," the judge said, "is that these are competitors. There will be awful fights about the availability and accessibility of ESI in terms of who can see which documents under what circumstances. How are we going to draft a protective order? Are we going to have fact discovery first, then turn to expert witnesses? I want to know more about this hack [Beta] is complaining about. Is that the source that helped [Alpha] beat [Beta] to market? If so, then who was responsible?" The judge wants to know.


Judge Facciola said he also will want to know more about the theories of recovery, saying they will be an indicator of discovery demands and challenges down the road. "I certainly don't want [the parties] to argue a motion for summary judgment, but I want to know a lot more about the nature of the case because that is going to drive the single most important issue here-and that is the proportion of the discovery I am going to permit against the ultimate cost of this case."  


A Terrifying Matter


"This is the kind of case that terrifies me, because just looking at it, I know that if everybody goes crazy we are going to spend a lot more on discovery than we should and therefore going to create a situation in which people are going to settle not because they should settle or because justice suggests they settle, but simply to be relieved of unreasonable costs."


Next, the judge said he will want to look at the methodology the parties will use to gather and search information. The Southern District of New York is being very specific, he said, discussing things like key words, hit reports, response rates, machine learning or other advanced analytics, limitations on data fields, and whether the parties are going to search backups and legacy data.


"These questions suggest that the lawyers already have an extraordinary level of competence in the search capability, which is developing rapidly," Judge Facciola said. "I am going to think very early on about the search methodology."


In terms of a protective order, the judge says he has them on hand for cases involving competitors, but they are often "more restrictive than they should be," not even allowing the parties to work at home, for example. Judge Facciola referenced an article appearing in the Federal Courts Law Review (www.fcrlr.org) titled "Computer Software-Related Litigation: Discovery and the Overly-Protective Order," which says tight restraints can dramatically increase the cost of litigation in complex intellectual property cases. The authors-Lydia Pallas Loren, a professor with the Lewis & Clark Law School in Portland, Oregon, and Andy Johnson-Laird, a long-time forensic software analyst and president of Johnson-Laird Inc. in Portland-wrote that even when sensitive information is protected by a strict protective order, disclosing that information can be accomplished without undue costs.


Weapons of Mass Protection


"Lawyers often agree to protective orders that significantly and unnecessarily increase the costs of discovery," the authors wrote. "Attorneys should pay careful attention to the provisions addressing the requirements of production and analysis. Additionally, attorneys must understand the consequences of the clauses contained in protective orders in these types of litigation . . . [I]t is possible," the authors say, "to provide robust protection for disclosed source code while at the same time not unnecessarily and dramatically increasing the cost of discovery by weaponizing the protective order." "[A]ppropriately scoped discovery and protective orders will assist in minimizing the costs associated with discovery. We have seen a clear relationship between the number of restrictions placed on forensic software analysts and the cost of the resulting analysis," Loren and Johnson-Laird say.


In the spirit of demanding cooperation on the scope of discovery and protections, Magistrate Judge Facciola said he will not accept lip service. "If I sense that [there] has been a drive-by meet-and-confer where ten minutes before the hearing [the attorneys] had a cup of coffee in the cafeteria, I assure you they are going back to the cafeteria and coming back with an order that I can live with."


"If I don't take the aggressive approach early on and [instead] wait until all Hell has broken loose, it is difficult to put the pieces back together again," the judge said.


Note: Magistrate Judge Facciola was joined on the panel by Mollie C. Nichols with Redgrave LLP; Matthew McKeever, VP Security & Compliance with Reed Elsevier; and Trent Walton, president of Electronic Legal LLC and Cumulus Data LLC.  In Parts 2, 3 and 4 we will cover their insights and contributions to the Webinar. If you missed it, you can still learn from the Webinar as we have posted it online-for free with registration. Click here to go to the registration page.


Key Takeaways

  • ● Expect to certify that you have followed a checklist of e-discovery items to cover with opposing counsel.
  • ● Expect your judge to look for proportionality as you set your discovery expectations.
  • ● Plan to incorporate data generated by newer forms of electronic communication, beyond email, in your discovery.
  • ● Identify a knowledgeable and available data liaison for your judge.
  • ● Look for ways to control discovery even when litigating against a competitor over high-value intellectual property.
  • ● Take meet-and-confer sessions very seriously, and be prepared to demonstrate that you did, or plan to spend more time in the cafeteria.

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