E-Discovery Law Alert : New York & New Jersey Attorneys for Electronic Discovery and Corporate Information Management Law

On May 14, 2012, in a move that appears to be more "give 'em enough rope" and less an "about face" Judge Peck issued an order reconsidering his prior denial of plaintiffs' request to stay defendant's ESI production. In his order, Judge Peck noted that defendants consented to the stay, and, further, that "[j]urisdictional discovery regarding Publicis, and discovery between plaintiff and MSL unrelated to MSL's ESI production, are not stayed." As such, Judge Peck specifically observed that "[p]laintiffs' May 9, 2012 objections to my prior denial of the stay (Dkt. No. 190) are moot."

So what will happen next? Our crystal ball is out of service, but we certainly do not think it likely that Judge Carter will remove Judge Peck from the case. Thus, whatever the result on plaintiffs' pending motions, you can be sure that the fireworks will continue and this case will continue to be hotly litigated for some time.

Phillip J. Duffy is a Director on the Gibbons E-Discovery Task Force.

Against this background, District Judge Carter clearly had much to contend with in reviewing and considering plaintiffs' objections. The Court began by summarizing plaintiffs' arguments, to the effect that Judge Peck’s decision was erroneous and contrary to law because the ESI protocol lacks "generally accepted reliability standards" and, as such, its use violates Fed. R. Civ. P. 26 and Fed R. Evid. 702, and that Judge Peck failed to hold an evidentiary hearing and therefore adopted the protocol on an insufficient record and further went beyond the record by considering documents not discussed in the parties initial submissions. Although Judge Carter next proceeded to set forth the case law establishing the applicable "highly deferential standard of review", the Court might just as well have started or even abbreviated its discussion with the concluding sentence of its opinion: "[t]he Court reminds the parties that it affords Judge Peck's non-dispositive rulings great deference and that magistrate judges generally have broad latitude with respect to discovery issues."

Judge Carter adopted Judge Peck's rulings, characterizing them as well-reasoned and generally praising their consideration of the "potential advantages and pitfalls" of predictive coding software. Rejecting plaintiffs' objections, the Court specifically noted that the protocol contained "standards for measuring the reliability of the process" and that "the protocol builds in levels of participation by Plaintiffs." The Court highlighted plaintiffs’ ability to raise concerns about the relevance of culled documents with Judge Peck before final production and found "insufficient evidence" to conclude that the parties’ use of predictive coding software would deprive plaintiffs of "liberal discovery."

The Court also found plaintiffs' reliability arguments "premature" and rejected their arguments regarding the need for an evidentiary hearing, explaining that "if the method appears unreliable as the litigation continues and the parties continue to dispute its effectiveness," Judge Peck could hold the evidentiary hearing later to address those issues. Judge Carter concluded the point by noting that "if 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." In concluding his review, Judge Carter observed "[t]here simply is no review tool that guarantees perfection" and specifically identified the risks inherent in manual and keyword searching. Ultimately finding no basis to disturb Judge Peck's findings that the use of predictive coding software was "more appropriate than keyword searching" in "this particular case," Judge Carter upheld Judge Peck's rulings and denied plaintiffs' objections.

In our initial blog posting discussing Judge Peck's decision, we indicated that Da Silva Moore is significant because it opened the door for parties to consider the use of computer assisted review in appropriate cases without the fear that a party or judge will resist based on a perceived lack of acceptance. Judge Carter's adoption of Judge Peck's rulings constitutes a big, bold underlining of that statement, and regardless of the outcome of any further proceedings, we can expect a great deal of interest in and use of predictive coding technology going forward.

Phillip J. Duffy is a Director on the Gibbons E-Discovery Task Force.

In addressing plaintiffs' objections, Judge Peck underscored the cost-savings rationale expressed in his article and carried over to his decision: "computer-assisted review 'works better than most of the alternatives, if not all of the [present] alternatives. So the idea is not to make this perfect, it's not going to be perfect. The idea is to make it significantly better than the alternatives without nearly as much cost.'" Consistent with Judge Peck's directive, the parties submitted a Joint ESI Protocol, which Judge Peck "so ordered " despite plaintiffs' continuing objections.

On February 22, 2012, plaintiffs filed objections to Judge Peck's rulings with District Judge Carter. In sum, plaintiffs contended Judge Peck's acceptance of defendants' protocol allowed defendants to violate FRCP 26(g)'s requirement to certify defendants' document production is complete and further is not sufficiently reliable to pass muster under Federal Rule of Evidence 702 and the U.S. Supreme Court's decision in Daubert. In the opinion, Judge Peck addressed and ultimately dismissed plaintiffs' objections. The Court reasoned that plaintiffs misunderstood Rule 26(g), which does not require such certification and observed that it would be impossible to certify the completeness of a document production of this magnitude. Moreover, Judge Peck stated that Rule 702 and Daubert are inapplicable to the manner in which parties search for documents in discovery. Judge Peck also explained, in detail, the reasons for his decision to endorse predictive coding in appropriate cases and took the time to offer some "lessons for the future."

In sum, the Court found the use of predictive coding appropriate in Da Silva Moore based on the parties' agreement with the concept, the vast data set of more than 3 million documents, the superiority of computer-assisted review to the alternatives (manual review or keyword searches) the need for cost effectiveness and proportionality under FRCP 26(b)(2)(C) and the “transparent” process defendants proposed.

In this regard, Judge Peck stressed the importance of cooperation among counsel and reiterated the Court's endorsement of The Sedona Conference® Cooperation Proclamation. Moreover, and notwithstanding plaintiffs' expressed concerns, Judge Peck praised defendants' transparency and credited their agreement to provide to plaintiffs all of the documents used to create the seed set, both relevant and non-relevant, as essentially paving the way for the Court's decision.

So, what does all of this mean? Is predictive coding the only way to proceed with large scale document review in the future? Will it eliminate the need for attorney involvement in the document review process? Is computer assisted review the panacea that frustrated and cash strapped litigants have been searching for to solve the incredible cost and manpower burdens of e-discovery. Well, the short answer to these questions is "no." As Judge Peck made clear in his opinion, the Court did not order the use of predictive coding, the parties agreed to it (at least some form of it); there is no requirement that computer-assisted review be used in all cases. Nor, the Court was careful to note, is Da Silva Moore a pronouncement that the ESI Protocol used in that case (which is attached to the opinion will be appropriate in other cases that use predictive coding. Finally, the Court avoided endorsing any particular e-discovery service provider or technology.

As for the continued need for attorney involvement in the review process, as noted in this blog's prior June 2011 posting, while e-discovery software may make lawyers more efficient, "human knowledge, reaction and intuition as to facts, issues and nuances of legal theories make the role of the live attorney indispensable." Indeed, Judge Peck acknowledged as much in his opinion: "[t]he Court recognizes that computer-assisted review is not a magic, Staples-Easy-Button, solution appropriate for all cases. The technology exists and should be used where appropriate, but it is not a case of machine replacing humans: it is the process used and the interaction of man and machine that the courts need to examine."

Da Silva Moore is most significant in that it opens the door for parties to consider the use of computer assisted review or predictive coding in appropriate cases without the fear that a party or judge will resist on the basis that no court has accepted the use of this modern technology in the e-discovery process. The courts have now officially “taken the plunge,” and we predict that the pool will get crowded quickly.

Phillip J. Duffy is a Director on the Gibbons E-Discovery Task Force.

Regardless of how the software is utilized, the role of a live attorney is not lost. While document processing and analysis will cull down documents to a substantially smaller review set, best practices suggests that an attorney must ultimately review whatever documents have been sorted or culled before they can be produced. As noted by "The Sedona Conference^®, Commentary on Achieving Quality in the E-Discovery Process," May 2009, quality and procedural safeguards must be built into the e-discovery protocol in order to ensure the discoverability of key evidence, accord the proper privilege or work product protections to documents, provide a defensible process, reduce the need to re-do e-discovery because of deficiencies and to avoid motion practice. The Sedona Conference^® recommends:

1. Judgmental Sampling - the selection of sample documents, whether either culled by a e-discovery software program or by a reviewer, to determine if the documents are truly responsive or relevant to the issues at hand.
2. Independent Testing - Tests by third-party reviewer to confirm a software’s “reported efficacy at completely extracting files from an e-mail container, accurately displaying such files for review, and completely indexing the searchable text in such files.”
3. Reconciliation Techniques - Comparison of the amount of ESI processed and the resulting review set in order to confirm that the ESI was handled correctly or to identify gaps in the processing.
4. Inspection to Verify and Report Discrepancies - Attorneys, particularly senior attorneys, should be available to assist reviewers, address issues and to sample review data sets to confirm and to ensure the quality of the review.
5. Statistical Sampling - Confirm or de-confirm the effectiveness of search terms and other automated tools in identifying responsive information.

The logical question is then whether the need for the number of attorney reviewers will greatly diminish as a result of enhancements in e-discovery software. The New York Times article indicates that not everyone agrees on the extent of the impact on the labor force of the legal profession. One commentator stated that advances in technology will reduce the number of jobs in the legal sector. A second commentator, however, stated that while technology may not adversely affect the unemployment rate, the concept of automation would negatively affect job growth and individuals’ abilities to identify better jobs. In other words, despite its title, the article did not conclusively determine that lawyers were in danger of losing their jobs en masse.

So what’s the take away? Certainly, computers have made undeniable advances as evidenced by Watson, the computer that recently defeated its human opponents on “Jeopardy,” the popular trivia quiz show. In response to that computer’s performance, however, “It’s elementary my dear Watson” that technology will never completely replace lawyers. There is no doubt that e-discovery software makes lawyers more efficient and productive, but human knowledge, reaction and intuition as to facts, issues and nuances of legal theories make the role of the live attorney indispensable.