Case Blurb: Covad; Don’t blame the processing platform

Post Process: Previous decisions in this contentious case required, among other things, that the producing party submit itself to a third party forensics expert for an examination of its search protocol. In the instant decision, producing party was defending the fact that, after having produced e-mail in hard copy format, and then being ordered to re-produce it in native format, it only produced a native sub-set of the original imaged production. The producing party, in effect, blamed the processing platform for its difficulties in reconciling the two production sets. The court responded:
While the nature of the discrepancy is not explained, I have to assume that fewer e-mails have been produced in native format than were produced on paper. Revonet explains that the platform that Revonet originally used to search for documents was only capable of exporting documents to an HTML format. Thus, Revonet had to use a different platform to obtain .pst files and therefore could not re-run the original search exactly. This may explain the discrepancy. Neither party provides information about the magnitude of the discrepancy, however, largely because Revonet claims that it would be too burdensome for it to cross-reference the electronic documents against the hard copies to determine how many and which e-mails are missing.

While I appreciate that it would be difficult for Revonet to go back through its papers to determine whether all of the documents contained therein have since been produced and that Revonet’s present counsel did not supervise or conduct the August, 2008 search for e-mails, I also appreciate that it is a burden of Revonet’s own making. Covad should not be penalized by Revonet’s failure to maintain its discovery materials in some sort of organized fashion or keep some record of its own actions in this lawsuit. Wyeth v. Impax Labs., Inc., 248 F.R.D. 169, 171 (D. Del. 2006) (“[P]roducing party must preserve the integrity of the electronic documents it produces. Failure to do so will not support a contention that production of documents in native format is overly burdensome.”).

Post Process: In other words, a burden of one’s own making is not a basis for asserting undue burden. Another maxim: choose your platform wisely.

Covad Communs. Co. v. Revonet, Inc., 2009 U.S. Dist. LEXIS 75325 (D.D.C. Aug. 25, 2009).

Case Summary: Heriot; Vendor Error resulting in Production of Privileged Documents did not Waive Privilege

Heriot v. Byrne, 2009 U.S. Dist. LEXIS 22552 (N.D. Ill. Mar. 20, 2009)

To assist them in complying with a production request, responding party hired a vendor to provide scanning and other services associated with discovery. The Vendor created a “master database” that responding party used to conduct their document review. Documents designated for production were then copied to a “production database,” where they would be “marked” with an appropriate confidentiality designation.

Responding party sent hard copy versions of immigration documents to the vendor with instructions to digitize the documents, load them into the Master Database, copy them to the Production Database, apply the appropriate confidentiality legend and bates numbers, and include them in the next production. The vendor, however, mistakenly exported not only the requested documents, but other, privileged documents as well. This resulted in the inadvertent production of privilege. The error was not in the instructions given to the vendor, but was in the vendor’s execution of those instructions. Requesting party then filed a motion

During the production, requesting party asked the responding party if any documents had been withheld due to privilege. Responding party answered in the negative. Responding party subsequently learned of the error, and informed opposing counsel while requesting the documents be destroyed. Opposing counsel destroyed all documents but one set, which it filed under seal with the court. They then filed motions with the court requesting, inter alia, that the court prevent the “claw back” of the documents and instead compel their production. Responding party asserted that the documents were privileged.

The court began its analysis by determining that FRE 502 applied to the case, and crafting a new protocol for deciding whether inadvertent production necessitates the waiver of privilege (see our case blurb here).
Based on the results of an in camera review, the court decided that the documents at issue were privileged, and that the crime-fraud exception does not apply.

The court applied FRE 502(b) by considering: 1) whether disclosure was inadvertent; 2) whether responding party took reasonable steps to prevent disclosure; and 3) whether responding party took prompt steps to rectify the inadvertent disclosure. The court noted that prior to the promulgation of the new rule, the burden rested with the party claiming privilege to prove its contentions. The court saw no reason to shift this burden.

In determining whether a production was inadvertent, the court weighed such factors as: the total number of documents reviewed, the procedures used to review the documents before they were produced, and the actions of producing party after discovering that the documents had been produced.

Additionally, the court examined “the extent of the disclosure” and “the scope of discovery,” while commenting that these two factors operated on a sliding scale: the broader the scope of the discovery, the more extensive a party’s disclosure of confidential materials may be without waiving the privilege, and vice versa. The court noted that the privileged documents comprised 5% of the volume of pages produced, and 13% of the volume of the documents produced, labeling these figures neither apoplectically large nor astonishingly small. The court described the extent of the disclosure as being “broad” and the magnitude of the percentages as “not insignificant.” Nevertheless, the court found other factors more significant for the purpose of its analysis, particularly the actions of the producing party upon discovering the mistake. Because the responding party took immediate action, the court decided that the first factor weighed in favor of responding party, concluding that the production was inadvertent. The court then addressed the second factor of its test, the party’s steps to remedy the inadvertent disclosure. Therefore, as long as reasonable procedures were in place prior to “turning the documents over to the vendors,” the responding party met its obligations. The court concluded, therefore, that responding party did take reasonable measures to prevent inadvertent production.

In beginning the second part of its three-step analysis, the court cited the advisory committee’s notes that it may, in making this determination, consider several factors, including “the number of documents to be reviewed and the time constraints for production”; whether “a party that use[d] advanced analytical software applications and linguistic tools in screening for privilege and work product”; and whether “[t]he implementation of an efficient system of records management before litigation.” The court emphasized that the producing party was not required to engage in a post-production audit, although it was required to follow up on any obvious indications that a protected communication or information has been produced inadvertently.

In the third and final part of its analysis, the court stated that case law it unearthed stood for the proposition that how the disclosing party discovers and rectifies the disclosure is more important than when after the inadvertent disclosure the discovery occurs. In the case at bar, responding party discovered the error earlier than had the responding parties in the cases examined by the court, and were as diligent. In those cases, the disclosing parties were found to have acted appropriately. Therefore, the court found that Plaintiffs took prompt steps to rectify their inadvertent disclosure.

The court concluded that the responding party’s disclosure was inadvertent and that they did not waive the attorney-client privilege as to the Sequestered Documents.

Blogging LegalTech West 2008: Keynote Speech by Chevron’s Charles James

First, if you aren’t able to attend LegalTech, you can watch a live feed, including an occasional interview, at a live feed provided by Orange Legal Technologies.

The Keynote speech was made by Charles James, VP and General Counsel of Chevron Corp. Mr. James received his bachelor’s degree from Weslayan, and earned his law degree from the National Law Center at George Washington University.

Mr. James discussed his role in helping to modernize the legal department, and to help it navigate the choppy waters caused by the emergence of ESI and electronic discovery as a substantial factor in litigation. He pointed to three major areas that had been affected by the modernization: legal billing, the incorporation of an e-discovery processing platform into in-house IT processes, and the implementation of a document management system. While Chevron is justifiably proud of its progress, Mr. James said that the process had been very difficult; more difficult than he had imagined that it would be when he started the overhaul.

He listed the three major “failings” for which Chevron had been responsible during the process:

1. The desire to elicit input from all constituencies caused confusion and created something of a politically charged atmosphere where turf wars broke out, and decisions devolved into contests that parties “won” or “lost.” In retrospect, more guidance from technical experts was needed.
2. He and other leaders were “overly seduced” by the lure of the idea of automation. By striving for maximum automation and minimal human intervention, Chevron’s managers produced convoluted workflows that needed a “dose of reality.”
3. Finally, Chevron underestimated the scope of change management necessary to implement the new systems. Mr. James noted that the average attorney at Chevron at the time he assumed his position was 52, and that to have expected these lawyers to have an hour of training, and adapt to the new environment was unrealistic.

He listed his top three frustrations with vendors in the eDiscovery space:

1. The common practice of “grossly overselling” practicality, functionality, and inter-operability of our solutions. He said that the three phrases had come to loathe are: “seamless integration;” “complete enterprise solution;” and “that functionality isn’t included now, but it’s coming in the next upgrade, which will be in beta…soon.”
2. The lack of inter-operability between different programs, residing in different areas of the EDD workflow. Quoth Mr. James, “as Rodney King said, can’t we all just get along?”
3. Finally, he wished that vendors would quote realistic conversion and implementation costs.

His final remark was a challenge to vendors: he said that after the country’s legal system “is fixed,” effectively ending the e-discovery gold rush, he hoped that vendors would put as much zeal into crafting KM solutions as they currently do with EDD.

The three main tracks available for attendees today were:

• Evolving E-Discovery Issues and Methods;
• Corporate Perspectives on EDD; and
• Advanced IT

There were also tracks on Practice Management and Emerging Technology. I attended presentations on the Corporate Perspectives track for the first two blocks of time, and then had to leave for a couple of events with clients. I’ll blog more about those presentations (“Building a Discovery Task Force,” and “Navigating the Legal Hold Process and Technology”) later.

Does Outsourcing Lit Support to other Countries endanger Constitutional Protections?

K&L Gates has posted an article describing one law firm’s effort to obtain guidance on the issue whether transmitting data to foreign service providers waives fourth amendment protections with respect to that data.

The issues posed arising a scenario in which a service provider (in this case, Indian based Acumen Legal Services (India) Pvt., Ltd.) seeking to provide services to a law firm (Newman McIntosh & Hennessey, LLP of Bethesda, Maryland, “NMH”) is probably already providing services to attorneys who either compete with NMH or who represents interests that are adversarial to NMH’s clients. The questions posed in the complaint were whether:

1) its own electronic transmission of client data will affect a waiver of Fourth
Amendment protections to that data,
2) John Doe Esq. or Jane Doe, Esq.’s electronic transmission of non-client
data (such as data produced to John Doe, Esq. and Jane Doe, Esq. during civil discovery)
will waive Fourth Amendment protections to such data,
3) NMH, John Doe, Esq., and Jane Doe, Esq. are required to obtain prior
consent of the owner of such data prior to electronically transmitting it to a foreign
national residing overseas,
4) LPOs, such as Acumen, have an obligation to disclose the likelihood of
Fourth Amendment waiver with respect to data that is electronically transmitted to
foreign nationals residing overseas, and
5) President Bush has an obligation to establish intelligence gathering
protocols for the purpose of safeguarding Fourth Amendment rights with respect to
attorney communications to and from foreign nationals residing overseas.

K&L’s post has a link to the complaint, for those interested. Although this particular case applies to criminal cases, decisions here will affect all types of cases in a myriad of ways. One concerned Outsourcing company has posted its opinion on the matter.

Selecting E-Discovery Vendors

Ahh…a favorite topic (likely…not)! And the second installment on our series on effectively managing e-discovery.

The first item of business is to determine why (or even if) you need a vendor. Vendors fill niches from pre-dispute planning (document management, records management, providing a litigation hold plan) to data collection, to pre-review filtering and searching, to EDD processing, to providing Web-based review platforms for attorney review, for production, and for running Trial presentation systems, and for a hundred things in between. Some projects, especially smaller ones, are completely handled by outside counsel. A few corporations have processing capabilities in-house as well. In looking at large e-discovery projects, the management team (whoever is making the decision) has various models of vendor selection from which to choose.

First, there is an approach similar to that of hiring a general contractor. A knowledgeable and experience person is hired for the position of coordinator, or project manager who manages the project, on behalf the client company. This could be an attorney specializing in e-discovery law and related areas, or could be an expert who concentrates on the technical processes involved. One of the advantages of this approach is that allows some insulation for both the client and outside counsel with regard to liability for improper methodologies and approaches. The other main advantage is the one most hoped for: that the project is run expertly and competently, and is therefore free of any errors that might result in any substantial inefficiencies during the project itself, or (worse) deficiencies in production. Disadvantages include a lack of control over the process, and the requirement of fashioning an effective method of hiring the right manager. Also, that insulation that might be provided is certainly not absolute, as the hiring decision, and any progress monitoring program should be conducted with the thought of them holding up to a court’s scrutiny down the road. More often, either outside counsel or in-house counsel, or one of the litigation support professionals attached to the law firm or client end up managing the project. Disadvantages to this approach include the exposure to liability for the manner in which the project was managed and for any defects in the production.

No matter who manages the project, someone will have to collect, process, cull, house, review, and produce the documents. This can be a one-vendor solution (usually except for the “review” portion, often the domain of contract attorneys) or it may be broken down by segment and divvied up to vendors based on criteria such as price, competence, relationships, or some combination of such factors. A one vendor solution may reduce problems associated with communication and different technologies, capacities, and methodologies. Multiple vendors working together on large projects often are forced to reconcile incompatibilities in data formats, and must communicate clearly and frequently to avoid undue inefficiencies during the project. Personality differences and natural competitiveness must also be put aside for the sake of the common good. I’ve seen examples where minor mistakes were blown out of proportion by vendors who, upon discovering the issue, sent e-mails to everyone in the project team trumpeting their discovery. On the other hand, there is a level of quality checking that is accomplished by this arrangement.

It is my view that the process used to select a vendor (or vendors) is one of those key points of time in the litigation, with respect to discovery. A thorough vetting of a vendor’s capabilities, technology, experience and reputation is essential to defending that decision in the future should the need arise. Both law firms and corporate legal departments should request extensive information from candidates that outline their qualities necessary to the tasks they will be eligible perform. Preferred vendor lists should be built, examined periodically, and modified according to ever-changing circumstances. The primary purpose of the process is to select capable vendors. An important secondary purpose, however, is to craft a process that can be defended should something go wrong.