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E-Discovery Cases — Herding Cats would be easier


Two disturbing cases for different, but similar reasons.

When did parties jump from collection and culling of documents to simply turning over all possible evidence blindly and relying on a claw back agreement to protect the producing party? Putting aside that works entirely in favor of the receiving party, this may be a viable solution in a very small percentage of cases, but for a defendant to argue to a Court that the Plaintiff should blindly produce backup tapes with only a claw back agreement as protection is ludicrous.  That is one side of the argument made in Dynamo Holdings Limited Partnership, et al, Petitioner vs the Commissioner of Internal Revenue; Beekman Vista, Inc vs the Commissioner of Internal Revenue (Docket Nos. 2685-11, 8393-12).

To further the muddled situation, the Petitioner (Dynamo) argues for the use of predictive coding to help identify responsive information. Dynamo suggests “it will take many months and cost at least $450,000 to fulfill respondent’s request” for documents and data. Petitioners want to use predictive coding, which is referenced in terms of the solution to an expensive collection and culling project. Respondent insists the metadata is needed to verify the documents have not been changed or altered.

The Court’s opinion issued on September 17, 2014 describes the body of sought after discovery as:

“Respondent seeks two of the backup tapes, specifically, the “Month End August 2010 ORANGE” and the “Month End Jan 08 ORANGE”. These tapes contain data backed up from (1) an exchange server and (2) a domain controller and file server (KSH-DC). The exchange server database has approximately 200 mailboxes ranging in size from 500 megabytes to 1 gigabyte each. The KSH-DC has a common group and a user group. The common group has shares where assigned users may store data to be shared with other assigned users. The common group has approximately 50 common top-level file shares and an undetermined number of subfolders, and ownership of these files may not be limited to the authors of the documents. The user group is in a section of the network assigned to a specific individual and has approximately 200 user share folders.”

Not straight forward, “vanilla” data sets.


The Petitioners assert that the discovery universe will include documents subject to HIPAA protection and other confidential information that must be protected. The Court probably recognized and the Respondent should have realized that this element alone prohibits of the use of a claw back agreement.

The Court quite appropriately notes that the situation is somewhat unusual. The Rules call for the parties to meet, confer and communicate on discovery; mediate the universe of discovery; and arrive at the best methods for collection, culling and production. Here, the parties are effectively asking the Court to tell them what methods and approaches to use.

The Court, citing to an opinion in DeSilva v Publicis Groupe authored by Magistrate Judge Andrew Peck, in which Judge Peck made the quantum leap to embracing predictive coding as a near end all to discovery complications in ESI. In the instant case, the judge describes predictive coding as: “…an expedited and efficient form of computer-assisted review that allows parties in litigation to avoid the time and costs associated with the traditional, manual review of large volumes of documents. Through the coding of a relatively small sample of documents, computers can predict the relevance of documents to a discovery request and then identify which documents are and are not responsive.”

The Respondent asserts that predictive coding is an “unproven technology”. I think the Respondent overstated that claim and the Court, further embracing predictive coding, said the “technology industry now considers predictive coding to be widely accepted for limiting e-discovery to relevant documents and effecting discovery of ESI without an undue burden.”

The Court does note in its conclusion that if the Respondent believes the response to discovery is lacking, he may file a motion to compel at that time. It is very likely that by the time the Petitioner has spent the time and expense of formulating predictive coding subsets and tested those subsets to arrive at a reasonable formulated search criteria, the Court will find that the costs already expended by them are significant enough that the Court will be loathe for a “do over”.

The jump to predictive coding is both erroneous and a dangerous trend. Is predictive coding an important tool in the collection and culling of documents? Yes, but it is no more important than keyword searching, concept searching, emotive searching and other approaches to collection and culling. The success of any of these approaches really revolves around the level of cooperation and participation between the parties. Costs, as well, are largely driven by the cooperation or lack of cooperation of the parties.

A recent article in e-discovery Law Review about the case of the United States v. University of Nebraska at Kearny (case no. 4:11CV3209) illustrates how parties too often find themselves losing the war after winning the battles because they could not cooperate.

The short story in the USA v U of N relates to allegations that the university discriminated against those with disabilities in providing housing. The specific instance involved the refusal by the university to allow a prospective student to have a dog on premises; even though the dog was allegedly an emotional assistance animal required by the prospective student.

Agree or disagree; a viable case was pleaded and the discovery process began.

The United States maintained it had a right to a very extensive universe of discovery; intimating the university had discriminated broadly and in other cases. The United States suggested the university simply produce the entire discovery, without review and agree to a clawback agreement.

Sound familiar?

So, once again, what is the real problem? Over reaching, under cooperating and refusing to be reasonable in arriving at solutions.

Produce everything with a claw back agreement is seldom going to be a reasonable approach to a discovery problem and anyone proposing it, with rare exception, is simply doing so to gain an unfair advantage.

Sadly, in this case, the protracted discovery disputes and unreasonable demands (largely by the US) led the Court to, in part; conduct an economics vs benefit analysis. The Court concluded:

“The court will not order the university to produce ESI without first reviewing the disclosure, even with the protection afforded under a clawback order. And if UNK must review the more than 51,000 documents requested by the government’s proposed ESI requests, the cost in both dollars and time exceeds the value to be gained by the government’s request.”

The United States focused on forcing a production of an unreasonable universe of data in total blindness; but, they failed to approach the discovery in terms of standard discovery tools such as depositions, interrogatories and requests for production.

It is surprising the Court showed the patience she did and all the government has done is to create an opinion from a court that others will point to as an analysis of cost vs. benefit in the context of e-discovery. In fact, it is a good case to illustrate a failure of mutual cooperation and, perhaps a much too patient court.

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Posted By: Bud Wilder