As we have done for the past four years, Falcon’s team recently attended the Corporate Enterprise Investigations Conference (“CEIC”) in Las Vegas. CEIC is one of the largest international gatherings of legal, IT, corporate, law enforcement and government attendees that focus on the latest developments in the digital investigations and e-discovery fields.

This year the conference seemed to draw a far higher number of international participants than in past years, with a marked increase in the number of participants from the Asia Pacific region.

Here are some key takeaways from CEIC 2012:

Judicial Perspectives on Current Electronic Discovery Case Law

Judge Andrew J. Peck, United States District Court, Southern District of New York,

Judge John M. Facciola, United States District Court, The District of Columbia,

Judge Herbert B. Dixon, Superior Court of DC,

Ken Withers, The Sedona Conference

 

Cloud Computing

Judges on the panel underscored:

• The risks associated with moving corporate information into the cloud, particularly where the client/customer does not have a good handle on where their data is being stored and how it can be readily accessed for legal discovery.
• The dangers associated with corporate IT groups unilaterally moving ahead with cloud-based solutions without consulting legal about discovery and security implications.
• That the anticipated cost savings of moving data into the cloud may be outweighed by the additional costs associated with the cloud provider enhancing security and ensuring compliance with discovery obligations.

Social Media

The admissibility of data retrieved from social media sources can be challenging, particularly since it is often difficult to establish through direct evidence who posted the information contained on the social media site.

• Circumstantial evidence is often the only way to establish ownership, but direct evidence could be relied upon if the social media content is preserved and collected similar to the way in which other data sources (e.g., laptops or desktops) are collected.

Predictive Coding

There was consensus among that panel that the use of advanced technology to perform document review will grow, and the hope is that it will be used more frequently in an effort to reduce the costs of privilege review.  Additionally, the Judges commented on the following:

• The use of advanced technology for review does not implicate Rule 702 concerning experts, but instead the key factors in demonstrating the efficacy of the technology will be (i) explaining how the technology works and (ii) what has been done to test the accuracy of the technology.
• It is imperative to address the possibility of using advanced technology early-on in the meet and confer stage.
• The Department of Justice is implementing new guidelines for e-discovery, and these encourage an early meet and confer to address issues like the use of advanced technology. This is an important development because the high costs of discovery are forcing more defendants to request court-appointed counsel, which costs the taxpayers more money.

Government E-Discovery: Implementing Appropriate Processes and Solutions for Public Sector Legal Needs

Jamie Brown (CFTC), U.S. Commodity Futures Trading Commission,

David Shonka, FTC

The panelists highlighted a number of important points, including:

• E-discovery is a challenge for government agencies much the same way it is for the parties to whom the government issues requests. For example, government agencies often have to respond to congressional inquiries that require extensive discovery.
• As such, while government requests are often broad and far reaching at first (in order to preserve the government’s right to request additional information throughout an investigation), government agencies understand the challenges and dangers of ‘scorched earth’ discovery and will often negotiate the scope of discovery when asked.
• It is surprising how often outside counsel does not meet and confer with government agencies, and instead outside counsel appear to be telling clients that they must engage in a massive effort to deliver over everything that the government is requesting.

International E-Discovery: Data Protection, Privacy, & Cross-Border Issues

M. James Daley, Daley & Fey LLP,

Dominic Jaar, KPMG Canada,

Quentin Archer, Hogan Lovells International LLP,

Chris Dale, eDisclosure Information Project

 

This was an engaging and lively discussion among the panel.  Much of the discussion focused on the E.U. Data Protection Directive (95/46), and included a number of important points on the following topics:

“Processing” and “Personal Data”

• E.U. member States should implement laws to restrict all manner of “processing” of “personal data” and prohibits the transfer of personal data outside the E.U.
• Exception: the country to which it is transferred provides “adequate protection” of personal data (E.U. Directive Article 25).
• Consensus among the panel is that remotely accessing data in the E.U. from countries outside the E.U. may qualify as “processing” of data.

U.S. – E.U. “Safe Harbor” Framework

• The U.S. – E.U. “Safe Harbor” framework is only available for companies that are subject to the jurisdiction of the Federal Trade Commission or the Department of Transportation.
• This framework is really intended for business to business transfer.
• Under the “Safe Harbor” framework data can be transferred to the U.S. but when it is transferred, it needs to be treated with same safeguards in the U.S. as it is in the E.U. (including the right of the data subject to be informed of the transfer and the ability to withdraw consent).
• Transmission of data outside the E.U. may require permission from the local Data Protection Agency in the applicable country.

New Technologies and New Problems for E-Discovery

Renee Meisel, Dell,

Andy Drake, Nationwide Insurance,

Kia Hakimi, Best Buy

 

This panel focused heavily on new technologies and problems that impact in-house legal and IT teams.  The panelists addressed a wide range of topics, including:

Cloud Computing and Privacy

• It is critical to get a commitment from the cloud provider to identify where the hosted data will be stored and how it can be accessed and collected for legal discovery.
• Remote access to ESI from the U.S. may be considered “processing” of data under the E.U. Data Protection Directive.
• As such, consider leaving ESI in the host country and performing review in that country in order to avoid the complications of transferring data outside the country.

In-House Discovery Management

• Nearly all panelists described an effort to move more discovery functions in-house, principally to gain better control of corporate information and to reduce outside legal costs.
• One challenge is that it is difficult to hire FTEs to carry out these functions, which underscores the need to enlist providers to deliver these services.
  • Important to strike a balance between internal employees performing these functions and enlisting outside providers who can augment in-house staffing capabilities.
  • Searching for the ‘cheapest’ vendor or technology solution can often have negative consequences.

Social Media and Instant Messaging

• Sharp increase in the use of social media for business purposes, which requires that companies create a formal policy and framework for how social media is to be used.
• It is taking some time to develop an effective workflow to identify and capture social media for litigation and regulatory requests.
• It is challenging to capture social media because the content is dynamically created and updated, and collections are only a snapshot in time.
  • Collecting social media content created by employees often turns on whether the content was created for business purposes.
  • Instant messaging content is also challenging to capture, and some companies simply turn off the logging of instant messaging as part of its records management policy.
  • For such companies, the preservation of instant messaging for custodians on legal hold may require activating the logging or collection of the messages but this will depend on the nature and factual circumstances of the legal matter.

Bring Your Own Device (BYOD)

• While there is a push for employees to use their own devices at work, this presents unique security and privacy challenges.

The anticipated cost savings of encouraging employees to use their own device (rather than a corporate device) are often outweighed by the additional risk and costs associated with protecting and accessing information stored on the employee’s device when necessary.

Session 1:  Paying your opponent’s E-discovery bills
Speakers: John Barkett, Robert Barth, Jeffrey Jacobson, Helen Bergman Moure

The panel focused on the use of 28 USC Section 1920(4) to retrieve specific E-discovery costs.

Mr. Barth laid out the facts of the Race Tires of America case:

The defendant, after summary judgment, was favored and the judge found that the plaintiff had failed to establish antitrust injury.  The defendant filed bills of cost against the plaintiff under Federal Rule 54(d), which provides that costs can be given to the prevailing party. Federal statute 28 U.S.C. § 1920 enumerates the kinds of “costs” that may be awarded. Section 1920(4) permits taxing costs that cover fees for exemplification and the costs of making copies of any materials.

• The district court affirmed the Clerk of the Court’s assessment to award the defendant all of their e-discovery costs and awarded $367,000.
• The Third Circuit reversed the decision regarding the costs with respect to the defendant’s expenses to scan paper documents into electronic image format, concluding that the 2008 amendment of §1920(4) was intended to expand the reach of the statute to costs beyond making copies of paper documents such as creating electronic copies BUT not as far as all e-discovery services.
• The panel discussed the ramifications of this case for federal cases but cautioned that states have different rules.
• Mr. Barth’s most valuable piece of advice was that, prior to submitting a bill of cost, be sure to attach extensive and detailed e-discovery cost documentation.

Session 2:  How predictive coding and other emerging forms of intelligent review are altering the E- discovery landscape
Speakers: Dale Beauchamp, Stephanie Giammarco, Michele Lange, Jay Leib, Vance McMurray
Moderators: Ervin Gonzalez and Seth Row

The panel discussed how document review has changed from traditional linear paper review into online review, and how the current landscape is transitioning into the world of intelligent review.

• Intelligent review is based on humans and technology working together to create a better product.
• Mr. Lieb explained that you need four things for a successful technology assisted review:

1.    Domain expert
2.    Analytical engine
3.    Statistical validation
4.    Training professional

• Da Silva Moore is evidence that properly training a seed set is vital.  There are two methods to achieve this:

1.    Random sample – documents generated by the software itself using algorithms for the subject matter expert to review.
2.    Subjective review set – documents generated by search terms or known responsive documents feed into the software.

• Challenges of intelligent review:

o    Wrong strategy – have a qualified subject matter expert review the data.
o    Expectation setting – understanding the goal of the project.
o    Review team training – having the budget and time to train the review team and subject matter experts.
o    Communication – having the review team understand the benefits of intelligent review.

• Mr. Beauchamp pointed out that, even if you have the tools in place, unless you know how to use them, the project will not be successful.

 

After completing a rigorous training and examination process, Matthew Porter, Falcon Discovery’s Director of Legal Technology, has been recognized with the LAW PreDiscovery EDD Certification from Lexis Nexis. With this accomplishment, Mr. Porter has added another valuable component to his growing list of certifications.

About LAW PreDiscovery:

LAW PreDiscovery™ software offers the power to produce and organize paper and electronic files with a dynamic imaging and electronic discovery processing application. With LAW PreDiscovery, pre-reviewing and culling non-responsive e-discovery and scanned documents before reviewing and processing helps eliminate unnecessary costs and reduce time.

Session 1:  Two similar cases.  Two very different outcomes.  Recap of Driven presentation about the decisions in Da Silva Moore and Pippins.

While Da Silva Moore and Pippins were heard in the same jurisdiction and involved similar arguments, each resulted in strikingly different outcomes.  This session highlighted that transparency, specification and cooperation were the deciding factors for a favorable outcome.

Da Silva Moore:

• Explained and documented a detailed procedure.

• Included an expert to explain the steps and answer any questions.

• Allowed plaintiff to review the seed sets and sample the non-responsive sets to make sure they agreed.

• Were agreeable with plaintiff’s changes.

Pippins:

• The defendant presented a partial plan regarding preserving hard drives that could not explain how the set of hard drives would be sampled

• Approached the discussion as a take it or leave it proposition

Session 2:  E-discovery malpractice
Speakers:  Rafael Bernardino, Noah Lang, Alvin Lindsay, Nancy Stuparich
Moderators: Robert Hilson and Charles Intriago

Rafael Bernadino explained the events that lead to the malpractice action against McDermott, Will and Emery.

• McDermott had hired Navigant Consulting and Stratify and instructed them to run a privilege filter.

• The privilege filter was never run.

• The review team did not tag the documents privileged.

• 3,000+ privilege documents were produced to the government who also turned over the documents to the plaintiffs.

• Both the government and plaintiffs’ counsel alerted McDermott of the issue and returned the documents even though there was not a claw-back agreement in place.

• McDermott produced the data a second time.

• The production had the same number of documents and same number of pages as the documents previously returned.

• Plaintiffs’ alerted McDermott of the issue once again, but this time refused to give the documents back.

• McDermott was removed from the case and Shepard Mullin took over.

• Shepard Mullin proceeded to produce privilege documents.

• Shepard Mullin was able to get documents back because they sought a claw-back agreement.

• Shepard Mullin was removed from the case based on a conflict and Bert and Marella became counsel.

• Bert and Marella produced privileged documents to the state of Tennessee.

• Bert and Marella were also able to have the documents retrieved based on the claw-back agreement that was in place.

Mitigating the risks/lessons learned:

• Have a claw-back agreement in place.

• Create document review procedures:

o    Teach the review team about all aspects of the case
o    Provide material
o    Real time assistance and engagement by outside counsel
o    Ensure and enforce quality control monitoring

•  Always review the production disk prior to delivering to opposing counsel.

Malpractice Insurance

• Oregon is the only state in the union where insurance is mandatory.

• Review current policy to see if you have proper coverage for the type of work you do.

• Update your policy as your practice changes.

Control Reputation

• Get your firm name out in the public domain.

• Write positive articles out in the public domain regarding how you mitigate malpractice risks. Therefore, if you get sued for malpractice, there are already articles that are positive about your firm regarding malpractice.

• Have diverse content.

• Sign your firm up for social media.

• Shift around content.

Session 3:  Curing cross-border language, norms, custodian and venue headaches
Speakers: Stephen Fernelius, Stephanie Giammarco, Adam Landa, Jon Talotta
Moderators: Ervin Gonzalez and Alvin Lindsay

The panel discussed vendors, personnel and new protocols released by the DOJ.

Vendors

• Not many vendors in foreign countries due to the privacy laws.

• Find a vendor that you have worked with in the past, whom you can trust, and that is Safe Harbor Certified.

Personnel

• Have experienced personnel because in most countries you are not trusted and all eyes are upon you, waiting for you to make a mistake.

• Confer with local individuals to understand where electronic data exists.

• Once you understand where data exists have your experienced personnel lock it down to preserve the data.

• Create a plan to collect the data and execute the plan.

DOJ Protocol

• New Protocol was released in February of 2012.

• Joint Electronic working group was created with the goal of creating best practices for government and criminal matters.

• The group looked at ways to decrease costs, increase efficiency and security.

• The protocol came up with ten categories that can be put in three buckets:

o    Understanding, experience and knowledge of ESI
o    Meet and Confer
o    The need for discovery coordinators on multi-defendant matters

Session 4:  Roadblocks & Detours: Navigating Pan-Asia Privacy Laws
Secret Session:  This session was not announced and did not appear on the agenda…a nice little treat from ACEDs.
Speaker:  John Bace, an adjunct professor from John Marshall Law School in Chicago.

The session covered issues that arise when collecting data in Asian countries.

Mr. Bace discussed how many Asian Pacific countries have enacted, or are in the process of enacting, data privacy legislation since the Federal Rules of Civil Procedure were amended in 2006.

• Different countries have very different laws that govern the retrieval of data.

• Many of the individuals attending the session shared stories and strategies when dealing with specific countries.

Session 5:  Do-It-Yourself (DIY) Discovery
Speakers: Michele Lange, Arnaldo Perez, Kimarie Stratos, Pradeep Victor, David Yerich
Moderators: James Bickley

The panel discussed how to evaluate what to bring in-house and how each corporate environment impacts those decisions.

• Consider what resources your corporation has available, the company’s ability to manage products, internal politics and most importantly budget dollars.

• Where you should start:

o    Information management – this area will allow you to keep costs down.
o    Preservation management – implement a legal hold tool and stop automated purging processes.
o    Collection management – allows you to limit interference with employees’ day to day work.
o    Culling and Early Case Assessment – if you can cull down data in-house, you are limiting your risk because only a small set of corporate data is actually going beyond the corporate firewall.

• David Yerich urged in-house counsel everywhere to start with something to get your feet wet, explaining that there are plenty of low cost tools that you can start with.

Session 6:  Asking the right questions and getting the right answers
Speakers: Dale Beauchamp, James Bickley, Julie Brown, David Yerich
Moderators: Michele Lange and Emma Quinn

The panel highlighted that there are many vendors and given how varied their experience levels are, an organization must FIRST evaluate corporate needs and case needs in order to determine the right fit.

• Look to your own company’s resources.

• Research vendors and create a short list.

• Specific things to take into consideration when evaluating:

o    Vendor references
o    Vendor experiences
o    Company financial/stability
o    Capacity
o    Vendor location
o    Project management experience
o    Confidentiality
o    Security
o    Costs

Session 7:  International E-discovery
Speakers: Ervin Gonzalez, Alvin Lindsay, Adam Pollitt, Emma Quinn, Jon Talotta
Moderators: Charles Intriago and Kimarie Stratos

The panel discussed the obstacles for both plaintiff and defense counsel to show respect for foreign companies, individuals, courts and laws.

• Work carefully through the foreign countries so that they can retrieve data needed to satisfy court obligations without being criminally charged and fined due to privacy laws and blocking statutes.

• Protective orders are a good method to show respect and concern for the laws of the country and the privacy of their citizens.

• US judges can be persuaded to call a foreign judge to get an agreement regarding collecting data.

• Presently, neither the Supreme Court nor the European high courts have weighed in on the this issue, but Ervin Gonzalez believes we will see a decision in the next year or so.

• The most hotly debated issue is whether data being sent back and forth between a company headquartered in France with subsidiaries in the U.S. is protected by the privacy laws due to the data being created in France, or if it is not protected since it was sent to the US.

 

As the snow began to fall again in Denver, Falcon Discovery’s ACEDS certified Project Management team retreated to the sunshine of Hollywood, Florida to share ideas and insights with industry leaders and e-Discovery certification experts at the annual ACEDS conference.

For those who were unable to attend the conference this year, we’ve posted our notes from day 1.  Please visit again this week for regular updates on each day at ACEDS 2012.

Session 1:  Succeeding in Catastrophic Cases

Speakers: John Bagby (Penn State), Stephen Fernelius (Fernelius Alvarez, LLC), Ervin Gonzalez (Colson Hicks Eidson), Jeffrey Jacobson (Debevoise & Plimpton LLP)
Moderators: Charles Intriago and Helen Bergman Moure

• Since many catastrophic cases cross borders, cooperating and understanding other sovereigns’ laws and rules will allow you to meet regulatory agency requests and court obligations (Jeffery Jacobson).
• Best practice is to have scheduled meetings with the judge or magistrate, for example every Friday, to deal with discovery issues, which allows discovery to move forward productively since each side will need to report to the judge frequently.
• A discovery team should be made up of:
1. Expert on e-Discovery Process
2. Trial lawyer
3. Key Client Representative
4. Vendor Technology Team
5. In-house Counsel
6. In-house IT Representative

• Plaintiff and defense counsel should be in agreement that cooperation is important to both sides.
• You need to know the way people speak in the industry, and understand where and how long the data is stored by your client.
• You need to be able to create and iterate specific search terms that will retrieve the documents that will prove your case.
• Many defense counsel believe that being cooperative allows the plaintiff to save money without compromising their case.

Session 2:  Harnessing Social Media

Speakers: John Bagby (Penn State), Jett Hanna (Texas Lawyers’ Insurance Exchange), Noah Lang (Reputation.com), Seth Row (Holland & Knight)
Moderators: Dale Beauchamp and Helen Bergman Moure

• Understand and discuss the dangers of social media with your clients.
• Work with your clients to create training programs for the use of social media.
• Weigh the business implications of prohibiting social media use during litigation. This does not destroy any information; rather, it hinders opposing counsel’s ability to regularly review your client’s material, and it limits what your client is saying out in the public domain.
• The use of social media brings ethical issues into consideration, including inappropriate contact with opposing parties.

Session 3:  Special Maters; referees, liaisons and neutrals

Speakers: John Barkett (Shook, Hardy & Bacon LLP), Robert Barth (US District Court for the Western of Pennsylvania Clerk), Seth Row (Holland & Knight), John Upchurch (Upchurch Watson White & Max)
Moderators: Steve Fernelius and Ervin Gonzalez

• The decision to request a Special Master should be made on a case-by-case basis.
• The Western District of Pennsylvania is the only district that has developed ground rules regarding Special Masters.
• Pennsylvania ground rules include creating ways to certify Special Masters and the creation of a list of experts who may be considered for the position.
• Special Masters are needed when parties can’t agree and the court needs to appoint someone to make decisions on open issues.  If parties CAN potentially agree, a neutral should be put in place to mediate rather than using a Special Master.

Session 4:  E-discovery Knowledge Nirvana

Speakers: 50 Great E-Discovery Service Provider Subject Matter Experts

• ACEDs has grown and is more widely accepted.  Certain e-discovery firms now require that their project managers become Certified E-discovery Specialists (CEDS).
• The conference has more than doubled in size since last year.
• Over 50 experts were given an opportunity to share one best practice.