Year in review: 2012 judicial opinions emphasized ediscovery process and best practices
MINNEAPOLIS – Dec. 4, 2012 – Kroll Ontrack, the leading provider of ediscovery, information management, and data recovery products and services, today announced its yearly analysis of reported 2012 electronic discovery opinions and notable ediscovery themes.
“Year over year, ediscovery issues evolve at the speed of light, and 2012 was no exception, with significant judicial opinions impacting the electronically stored information landscape,” said Michele Lange, director of ediscovery thought leadership and industry relations, Kroll Ontrack. “Across the entire electronic discovery reference model many notable ediscovery trends emerged in 2012, but none promises to change the status quo more than the line of opinions approving the use of technology-assisted review. As courts in the last year progressively embraced advanced technologies, such as TAR, opinions from the bench showed increased scrutiny over procedural issues.”
The numbers: sanctions cases (narrowly) stayed on top, but ediscovery procedural disputes doubled
In the past year, Kroll Ontrack experts summarized 70 of the most significant state and federal judicial opinions related to the preservation, collection, review and production of electronically stored information (ESI). The breakdown of the major issues that arose in these ediscovery cases is as follows:
- Thirty-two percent of cases addressed sanctions regarding a variety of issues, such as preservation and spoliation, noncompliance with court orders and production disputes
- Twenty-nine percent of cases addressed procedural issues, such as search protocols, cooperation, production and privilege considerations
- Sixteen percent of cases addressed discoverability and admissibility issues
- Fourteen percent of cases discussed cost considerations, such as shifting or taxation of ediscovery costs
- Nine percent of cases discussed technology-assisted review (TAR) or predictive coding
Compared to 2011, cases addressing procedural issues more than doubled, while cases addressing sanctions dropped by approximately 10 percent. The judiciary devoted a considerable amount of attention to all elements of litigants’ discovery protocols in 2012, whether it was their collection method, search protocols or cooperation with the opposition. The judiciary’s increased level of procedural scrutiny was best on display in cases where the parties leveraged advanced technologies, such as in Da Silva Moore v. Publicis Groupe, 2012 WL 607412 (S.D.N.Y. Feb. 24, 2012), the first opinion to ever discuss and approve the use of TAR. In Da Silva Moore, U.S. Magistrate Judge Andrew Peck and U.S. District Court Judge Andrew Carter clearly noted that they were primarily concerned with the overall results and defensibility of a particular protocol, rather than the “black box” behind the technology. Furthermore, Peck closed by stating that “counsel must design an appropriate process,” leveraging available technologies with adequate quality control and testing in any ediscovery exercise. As litigants grow increasingly tech-savvy, the judiciary will continue to review counsels’ procedures to ensure they have implemented an ediscovery methodology that adequately accounts for the particular needs of the case.
The overall number of cases discussing sanctions edged procedural issues just slightly in 2012 as the most discussed topic in ediscovery opinions. Much of the discussion of sanctions in 2012 stemmed from counsel trying to keep pace with proliferating data volumes, also known as the “big data” problem. In Coquina Invs. v. Rothstein, 2012 WL 3202273 (S.D. Fla. Aug. 3, 2012), over 200 defense lawyers tasked with collecting, reviewing and producing ESI constituted, in the eyes of the Southern District of Florida, “a case of too many cooks spoiling the broth,” which further amounted to insufficient production, a finding of gross negligence, and sanctions in the form of attorney’s fees and costs. Coquina, and cases like it, serve as cautionary tales, evincing the fact that counsel must appropriately understand their client’s data before attempting to preserve or collect it.
Many ediscovery opinions discussing sanctions in 2012 revolved around preservation and spoliation, yet courts were all over the map regarding an appropriate preservation standard for ediscovery – especially in the era of big data. In Chin v. Port Auth. of New York & New Jersey, 2012 WL 2760776 (2d Cir. July 10, 2012), the court diverged from the Zubulake gold-standard, finding that failure to institute a litigation hold did not constitute negligence per se. Instead, the court in Chin favored a case-by-case approach, where the failure to preserve documents was one of several factors considered to determine whether to issue sanctions.However, many courts in 2012 stuck with the Zubulake standard, such as Voom Holdings LLC v. EchoStar Satellite LLC, 2012 WL 265833 (N.Y. App. Div. Jan. 31, 2012), in which the court found the defendant’s failure to issue a litigation hold and suspend automatic deletion of corporate e-mails before litigation commenced constituted gross negligence and warranted severe sanctions.
Looking ahead: TAR goes mainstream while social media and cost allocation case law keep developing
The judiciary’s approval of TAR – also known as predictive coding, intelligent review, machine learning or computer assisted review – was the single biggest story to emerge in 2012 ediscovery case law. Prior to 2012, there was no reported opinion discussing the use of this developing technology in document review. In 2013, courts will continue to push this narrative as they fine-tune the most appropriate instances and best practices for TAR adoption. Following the Da Silva opinion, numerous courts issued opinions approving TAR, such as Global Aerospace v. Landow Aviation in Virginia, No. CL 61040 (Vir. Cir. Ct. April 23, 2012), and In re Actos (Pioglitazone) Products Liability Litigation, 6:11-md-2299 (W.D. La. July 27, 2012). Like Da Silva, both of these opinions approved TAR due to detailed procedures that accounted for thorough training, sampling and quality control to ensure defensible results. However, TAR opinions were not limited to cases where it was proposed by one of the parties, as the Delaware Court of Chancery recently ordered sua sponte that both parties leverage TAR and share a vendor for an indemnity suit in EORHB v. HOA Holdings, LLC.
Finally, in 2013, expect continued buzz regarding discoverability of social media and ediscovery cost allocation – two salient topics in 2011 and 2012. Regarding social media, some courts, such as in Robinson v. Jones Lang LaSalle Americas, Inc. allotted broad discovery of social media data, finding that such data was useful in proving or disproving a party’s allegations. Conversely, the court in Mailhoit v. Home Depot U.S.A. Inc., found that requests for social media data failed to satisfy Fed. R. Civ. P. 34’s “reasonable particularity” requirement and denied the bulk of the requests. Similarly, when it comes to which party pays for ediscovery costs, courts across the country have yet to settle on a standard. Ediscovery cost allocation remains ripe for consideration by the Advisory Committee on Civil Rules in 2013 when evaluating amendments to the Federal Rules of Civil Procedure.
About the year in review research:
Findings are based on 70 prominent ediscovery cases selected between January and December 2012. Each opinion selected was summarized, categorized and added to an ongoing database of ediscovery case law summaries, available at: https://www.krollontrack.com/resource-library/case-law/.
About Kroll Ontrack Inc.
Kroll Ontrack provides technology-driven services and software to help legal, corporate and government entities as well as consumers manage, recover, backup, search, analyze, produce and present data efficiently and cost-effectively. In addition to its award-winning suite of software, Kroll Ontrack provides data recovery, data backup, data destruction, electronic discovery and document review. Kroll Ontrack is a subsidiary of Altegrity, an industry-leading provider of information solutions. For more information about Kroll Ontrack and its offerings please visit: www.krollontrack.com.
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