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Inadvertent Disclosure Part II: Strategies to Avoid Waiver Under Federal Rule of Evidence 502
The following aritcle, Inadvertent Disclosure Part II: Strategies to Avoid Waiver Under Federal Rule of Evidence 502, is an exclusive contribution to the ACEDS Expert’s Corner, a collection of e-discovery articles and white papers authored by leading organizations and practitioners around the world. To submit a piece for editorial review, please contact Robert Hilson at rhilson@aceds.org.
In Part I of this article, we examined certain provisions of Federal Rule of Evidence 502 (FRE 502) in relation to inadvertent disclosure and gauging “reasonable standards of care.” In this Part II, we offer some practical strategies litigants “in the trenches” can employ to help minimize the risk of inadvertent disclosure. These are not the only potential strategies. We have highlighted those that are most likely to apply to the majority of cases.
Will Taxation Control the Costs of e-Discovery?
The costs of e-discovery have grown significantly as companies rely more and more on electronically stored documents in their day-to-day operations. Litigants and courts have struggled with the issue of e-discovery as parties on both sides request a growing number of documents that have been stored electronically. This has helped to increase costs, as firms often hire e-discovery vendors to assist in the highly technical process of retrieving and procesing electronically stored information. Several recent district court rulings may go a long way toward reducing some of the costs of e-discovery.
Vendor Costs
A May 6th opinion in the Western District of Pennsylvania, July and October rulings in the Eastern District of Pennsylvania, and an October opinion in the Southern District of California, all approved taxation of the costs of e-discovery in separate cases. In Race Tires America Inc, v. Hoosier Racing Tire Corp., the court ruled that approximately $370,000 in vendor costs were not done at the convenience of defense counsel, but to meet the e-discovery demands of the plaintiff. In Hank’s Beverage Co. v. Ajinomoto Co., the clerk of the Eastern District of Pennsylvania permitted taxation of approximately $560,000 in e-discovery costs. The clerk held that the hiring of a vendor to search for and recreate documents by the defendant were a direct result of e-discovery requests by the plaintiff. The Eastern District ruled again, on October 5th, that approximately $500,000 in e-discovery costs should be taxed (In re Aspartame Antitrust Litigation), and an October 12th opinion from the Southern District of California upheld taxation of $70,000 in e-discovery costs (Jardin V. Datallegro, Inc.).
Convenience v. Necessary
The recent rulings seem to indicate that the federal courts are in agreement ontaxation for scanning of documents. Most federal courts have held that costs for scanning paper documents into an electronic format are necessary for use in the case. One Iowa district court described scanning as the modern version of “exemplification and copies of paper.” However, courts are generally taking notice of whether costs of e-discovery are incurred necessarily or for the convenience of counsel, leaving the determination of whether particular services are taxable, such as conversion of electronic files to other formats, up to interpretation. For example, the Aspartame court approved taxation of costs associated with creating a litigation database, processing and hosting electronic data, making documents OCR searchable, and extracting metadata, but drew the line at visual clustering and conceptual analytics technologies as “for the convenience of counsel.”
Effect on e-Discovery
These cases seem likely to impact the way parties will approach e-discovery in the future. Should the courts continue to find that e-discovery costs are taxable, litigants may be less likely to provide broad-spectrum e-discovery requests due to the potential for being penalized monetarily. Despite the fact that attorney review of documents is typically the most costly aspect of e-discovery, and are not taxable, vendor fees can be a significant part of the costs of e-discovery. Litigants will need to adequately track e-discovery costs and provide documentation regarding court orders and demands from opposing parties as proof that e-discovery costs were necessary to respond to requests and not for the convenience of counsel.
There is little question that the recent district court rulings will have an effect on the costs of e-discovery. What remains to be seen is how extensive the effect will be and whether other courts will follow these precedents when determining the taxability of e-discovery costs. For more information on how taxation may affect the costs of e-discovery and for strategies to reduce e-discovery costs, call Advanced Discovery at (866) 560-5898 or visit the Contact Us section of our website!
Why Archive Email?
Email has become an integral part of the business world today, yet many companies are still wondering “why archive email?” The fact is that email growth has created significant security issues as well as storage problems as companies rely more heavily on email for critical business transactions. As an e-discovery company, Advanced Discovery is aware of the research by Osterman that found a large number of business email users store more than half of their critical information within the messaging system itself, often in personal archives that are not backed up nor easily searched at the enterprise level. Courts now consider email correspondence a record, making email subject to retention as determined by statutes. Email archiving is a systematic approach to preserving email messages in a centralized location so they can be quickly accessed at a later date.
Litigation
During e-discovery, an organization can be required to produce emails related to the case no matter how many years prior the email was generated. Unfortunately, emails can be stored on virtually any type of media used by the company. Employees can store them on PDA’s, desktop or laptops, or they may be stored on special servers. The problem is that searching every device that exists in the company can be costly, and courts have ruled that the party required to provide the e-discovery may have to do so without reimbursement. Therefore, another reason why to archive emails in a centralized location is to allow access to the data quickly and more efficiently than storing it randomly in various locations In addition, email archive systems typically include the capability to index and search, and also provide logs for authenticity and chain of custody.
Compliance
Even if a company is not facing litigation, there are compliance regulations that may force a company to be more stringent in archiving email. Any record that pertains to a business’s activity is subject to compliance, and some industries are more regulated than others. Compliance requires that data be retained in its original state, without alteration or deletion. In addition, compliance statutes require that data, including email, must be protected from security threats that could damage or endanger the information. Data must also be easily accessible whenever required. Email archiving stores messages in their original format. Some systems use rules to classify which emails require archiving, and can automatically delete messages when the statutory period expires.
Two Methods for Archiving Email
Companies that are asking “why archive email?” are also asking “how do I archive email?” There are two main methods for archiving email – an in-house solution or a hosted solution through a third party. An in-house solution archives emails on a server located within the company. Because the company’s own employees handle the archived documents, there is better control over data integrity and confidentiality. However, in-house systems can be very expensive and can put significant pressure on an organization’s IT department. Hosted solutions have much lower costs, but some confidentiality is lost since outside parties are responsible for handling the information. Most vendors, however, offer significant security measures that make confidentiality problems less significant.
Email correspondence is considered by the courts as a record of your company’s business transactions. Therefore, it is crucial to develop a quality email archive program to insure that your company meets compliance statutes and will be prepared should it face litigation. If you need assistance on how to properly archive email in order to prepare for discovery, call Advanced Discovery (866) 560-5898 or visit the Contact Us section of our website.
EDRM-XML : The Evolution of E-Discovery Standards
There is little question surrounding the need for standardization in the e-discovery field, as the amount of electronically stored information (ESI) generated daily continues to grow. It is vital that any e-discovery company be apprised of the changing standards. One example of efforts to encourage cohesion in the e-discovery community is the Electronic Discovery 
Reference Model (EDRM). This organization developed and released the first version of its EDRM-XML to the public in February 2008. From their website, the EDRM overviews its EDRM-XML specification as follows: “The EDRM XML specification exists to enable vendor-neutral data interchange from one step of the e-discovery process to the next, from one software program to the next, and from one organization to the next.” EDRM-XML endeavors in the short term to replace proprietary load file formats in the processing, analysis and review stages of the e-discovery lifecycle. The long term vision for EDRM-XML appears to extend its industry usefulness to the identification, preservation and collection phases as well.
Are Such Standards Still Necessary?
In the “dark ages” of e-discovery, issues such as the formatting of load files often fueled disagreements between parties. Since that time, the industry has been both evolving and coming together. Some industry software platforms have self-regulated, in a manner of speaking, so that many are able to read other platforms’ load file formats or convert data to a useable format without undue burden. This includes integration of the EDRM-XML as an option for import/export. Although the industry has been evolving toward finding more common ground, there continues to be areas of contention in the proper handling of ESI. Whether or not one of these areas of contention would be resolved in the standardized use of the EDRM-XML, however, has been questioned by some.
Many industry insiders who have had years of experience with data transfer and conversion see a real need for solid e-discovery standards now, rather than waiting to see what the future will bring. As long as such standards are currently relevant and continue to evolve, they believe that we have to start somewhere and that the EDRM-XML in its current state is not only a good start, it will become better upon further development.
Will the Adoption of Such Standards Decrease Costs?
One excellent reason to push toward more universal standards in e-discovery is to decrease the overall cost of handling ESI in the discovery phase of litigation or during an investigation. There are many costs, while industry standards remain undefined, that are related only to ensuring one party can access and review the other’s ESI. If e-discovery standards, such as the EDRM-XML, were to gain momentum in the industry such superfluous expenses could arguably become a thing of the past.
Is the Adoption of Such Standards Supported in the e-Discovery Community?
According to the EDRM website, there are 32 vendors currently involved in the EDRM-XML effort, 21 of which support this specification for import, export or both. As the EDRM continues its outreach in the e-discovery community, and continues its work on the 2012 release of EDRM-XML version 2.0, those numbers should increase. In the interim, some industry insiders appear to be taking a “wait and see” approach before deciding on whether they feel standards such as the EDRM-XML are even necessary. Others seem to believe that any lag in support of industry standardization may be directly related to less experienced vendors’ misunderstanding of their role in such a model
We would appreciate reader feedback on standardization methods, such as the EDRM-XML, and how you believe these will (or will not) shape the future of e-discovery.
If you need assistance in navigating the current “standards” for handling ESI in discovery, or for an investigation, call Advanced Discovery at (866) 560-5898 or visit us at the Contact Us page on our website.
Creating a More Proactive FRCP E-Discovery Approach
According to recent statistics, the volume of electronically stored data doubles every 18 months, which is one reason why it is important for companies to create a more proactive FRCP e-discovery approach. A big problem with e-discovery is that many companies have a reactive approach to litigation, and their legal, records and compliance departments take a silo approach to e-discovery. Hiring an e-discovery company is one proactive approach, however, here are some best practices to stay proactive.
Silo Approach
In a silo a e-discovery approach, each team involved in the preservation and collection of electronic documents works independently. The legal team works separately from the records team while the compliance team works separately from both teams. The silo approach results in data custodians providing duplicate and irrelevant documents that increase the costs of document recovery. In fact, there are estimates that 30 to 70% of all data collected is duplicative. A significant volume of personal, non-business related materials are collected as well. Millions of dollars have been unnecessarily spent using antiquated methods to harvest and process data that’s not even relevant to the litigation.
Technology Plus
Technology has created the e-discovery monster and, although technology will play a big role in taming the e-discovery beast, it will take the implementation of strict procedures, quality control and better documentation of information as well. Many companies are beginning to see the need for a proactive e-discovery approach and are utilizing methods such as data maps for knowing where potentially relevant data resides. Unfortunately, a majority of businesses are not well prepared for full-scale e-discovery in advance of litigation, placing them in a reactive mode rather than a proactive role.
Records Retention
In addition to using technology to build a more proactive e-discovery approach, companies must devote careful attention to their records retention policies. Every electronic document, from email to customer files to contracts, contains information that could one day be relevant to litigation. However, it is impossible for companies to retain every single document, email and data link indefinitely on the premise that it may one day apply to a legal issue. And while the option exists to utilize cloud computing as a method to retain large chunks of data, these types of systems offer their own risks, as they are often unstructured and stored in various locations. Therefore it’s important for companies to contemplate which documents much be retained, how they’ll be retained, and for how long – taking into account business, legal, and regulatory requirements. Implementing an organized, standard records retention policy is a vital step toward a proactive e-discovery approach.
Technology continues to grow which means that electronic document use will also continue to grow in litigation. As the volume of electronic documents increases, the need for companies to develop a proactive e-discovery approach becomes even more critical. If you need assistance or consultation for an upcoming case involving electronically stored information, call Advanced Discovery at (866) 560-5898 or visit the contact us section of our website.
When to Use Predictive Coding: Electronic Discovery
In an increasingly electronic world, many companies are faced with the problem of how to review electronically stored information for litigation, and many of them are turning to predictive coding electronic discovery using text analytics. Promising more efficient e-discovery gathering at significantly lower cost, predictive coding analytics may well be the next big thing in electronic discovery. However, before firms turn toward predictive coding analytics, understanding when using such software is warranted is extremely important as well as when to use an e-discovery company.
Document Volume
Predictive coding analytics is designed to work with large volumes of documents that are too costly to review manually; firms may find that the software is not as accurate with smaller volumes. Predictive coding analytics uses intelligent algorithms to determine what documents are relevant and which are not by “learning” from a subset of the total volume. For this reason, the larger the document volume, the more accurate the results are likely to be.
Software is “Trained” by Senior Attorneys
Unlike manual review where lower level attorneys or paralegals are responsible for “first pass” coding determinations, predictive coding analytics is programmed at the start of the review by a senior-level attorney. The attorney works with the system to “train” it in what to look for as relevant and non-relevant to the specific matter. This process was time consuming in the past, but technology has significantly sped it up along with making the software easy-to-use for even non-technical attorneys. This has resulted in dramatic time and cost savings in a very short time frame.
Know What to Expect
Firms who choose to use predictive coding analytics must have excellent communication with the vendor. Different predictive coding systems can serve different purposes; for example, some are used in place of manual review, some are used to enhance keyword-based review, others promote “accelerated” review, and some have the flexibility to improve workflow in multiple ways depending on the requirements of the review. Demonstration of the workflow and explanation of how the system can be used should be required of the vendor to be sure that the firm, client and vendor all have the same expectations.
Cost Savings
There is no doubt that predictive coding analytics will be less costly than manual review simply because manpower is more expensive than computer power. However, the concept of predictive coding is still relatively new, making it difficult to predict pricing. Litigators may need to shop around to find a vendor offering the best predictive coding analytics and support for their needs at a reasonable price.
Cooperation is Key
One of the most important factors to remember when considering the use of predictive coding analytics is that it’s best to work closely with opposing counsel in advance. If both sides can agree to the use of predictive coding analytics, both can benefit from the advantages, and the likelihood of disputes over the methodology will be lessened.
Predictive coding is one of the most discussed factors in electronic discovery today. Because it’s a relatively new technology, some firms are reluctant to be the “test case” to see if predictive coding analytics will be a viable alternative to manual review. Many firms believe that judges prefer the keyword search approach, despite the fact that U.S. Magistrate Judge Andrew Peck recently pointed out that keyword searches had never been sanctioned by the courts either. For more information on when to use predictive coding analytics, visit www.advanceddiscovery.com.
Inadvertent Disclosure: Avoiding Waiver Under Rule 502 as Featured on ACEDS.org
The following aritcle, Inadvertent Disclosure: Avoiding Waiver Under Rule 502, is an exclusive contribution to the ACEDS Expert’s Corner, a collection of e-discovery articles and white papers authored by leading organizations and practitioners around the world. To submit a piece for editorial review, please contact Robert Hilson at rhilson@aceds.org.
Few things raise the legal blood pressure more than the prospect of an inadvertent disclosure of information that waives attorney-client or work product protections. The potential for waiver often leads producing parties, particularly those dealing with large volumes of ESI, to incur hundreds of thousands of dollars in costs for document-by-document privilege review.
Read the whole article at: http://aceds.org/inadvertent-disclosure-waiver-fre-502
Advanced Discovery is Proud to be a Gold Sponsor for YPA360
Advanced Discovery, an e-discovery company, is excited to be a sponsor of YPA360!
We are also proud to have John Isaza as a featured speaker at the YPA360 Fall 2011 Conference.
Mr. Isaza has over a decade of experience as a trial lawyer specializing in business, environmental contamination, products liability and construction defects. At present, he is an active speaker in the ARMA, AIIM, ABA and IT compliance circuits. Mr. Isaza co-authored a book entitled “7 Steps for Legal Holds of ESI & Other Documents” released in July 2009. He is the 2008 recipient of ARMA’s prestigious Britt Literary Award, and his writings have been featured in The American Lawyer’s Law.com and countless regional publications.
Did you ever think that you could go to jail for hitting the delete button on an email? Mr. Isaza is widely recognized as one of the country’s foremost experts on information governance, electronic discovery, the revised Federal Rules of Civil Procedure and other RIM issues.
This event will be held on November 3rd, 2011. For more information on YPA360 and the Fall 2011 Conference visit their website at http://www.ypa360.com
About YPA360
YPA360 harnesses the professional and social synergy between young professional advisors in law, accounting, real estate, banking, business & finance, and investments.
YPA360 is an advisor-only community where advisors learn and sharpen their technical and business development skills, cross sell services to hundreds of advisors, and relax and party with other equally hardworking advisors.
YPA360 was founded upon two powerful business development premises:
- Business development with other industry advisors (A2A Networking) who have access to thousands of potential client referrals is more reliable and sustainable than prospecting for individual clients, one at a time.
- The primetime to plug into another advisor’s referral network is when that advisor has yet to develop an entrenched advisor referral network. Every advisor has clients who will at one point need a third-party advisor in law, accounting, real estate, banking, business & finance, and investments.
What Is Predictive Coding? Is it the Future of e-Discovery?
Manual review of ESI has become nearly impossible with the increasing volume of electronic information avalable, leading many companies to ask “what is predictive coding and should we use it?” Based on a recent article by U.S. Magistrate Court Judge, Andrew Peck, which was published in Law Technology News, the answer is yes – there are cases thatshould take advantage of predictive coding in e-discovery.
What Is Predictive Coding?
Predictive coding is also known as technology-assisted coding. In predictive coding, documents are reviewed by one or a team of senior partners and a “seed set” of documents is coded using a specialized computer program. As documents are coded, the system begins to understand the meaning of each code. In some cases, the reviewers are asked for feedback from the system to insure validity. Once the reviewer’s coding and the computer’s predictions coincide, it is determined that the system can confidently predict coding for the remaining documents to be reviewed.
Defensibility
Other judges seem to agree with Judge Peck in supporting the use of technology-assisted coding. In Disability Rights Council of Greater Washington v. Washington Metro Transit Authority 242 F.R.D. 139 (D.D.C. 2007), Magistrate Judge John Facciola pointed out that concept searching is more likely to produce comprehensive results and is more efficient than keyword searches. However, the question remains as to whether litigants can demonstrate that the results are defensible to the courts.
Judge Peck indicates that if the litigants could explain what was done and demonstrate that predictive coding provided reliable results with reasonably high recall and precision, he would approve the use of the system. In addition, Magistrate Judge Paul Grimm of the District of Columbia stated in Victor Stanley, Inc v. Creative Pipe, Inc. 250 F.R.D. 251 (D. Md. 2008) that litigants should expect to support the method they use for search and retrieval with affidavits or testimony from qualified individuals. Therefore, when using predictive coding it is imperative to document how the coding was done, to validate the results, and to have a competent team member available to explain the methodology.
No Judicial Endorsement of Keyword Searches
For many who are asking “what is predictive coding?” the belief is that judges have sanctioned the use of keywords, and new technology like predictive coding is going to open them up for challenges. Some point to comments made by Judge Facciola in a later decision, United States v. O’Keefe, 37 F. Supp. 2d 14 (D.D.C. 2008), where he discussed the importance of compliance with Rule 702 of the Federal Rules of Evidence. However, as Judge Peck points out, that discussion was in the context of a challenge to the sufficiency of keywords. According to Judge Peck, the bench has actually criticized keyword searches quite often, including opinions by Judges Grimm and Facciola.
Despite the fact that many companies believe that keyword searches with manual review are the best method for seeking electronic documents, two recent studies have shown otherwise. Researchers for the Electronic Discovery Institute, as well as Maura Grossman, a litigation attorney, and Gordon Cormack, a university professor, conducted studies comparing human review to predictive coding and found that technology-assisted review provided equal or better results than manual review with less effort. In addition, because keyword searches issue many false positives, litigants must use expensive manual review to find documents that are relevant. For this reason, firms must not only ask themselves “what is predictive coding” but “when should I begin using predictive coding?”
